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, 20192020
OR
☐[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________ to _______________


Commission File NumberRegistrant; State of Incorporation; Address and Telephone NumberIRS Employer Identification No.
1-11178Revlon, Inc.13-3662955
Delaware
Commission File NumberRegistrant; State of Incorporation; Address and Telephone NumberIRS Employer Identification No.
1-11178Revlon, Inc.13-3662955
Delaware
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 10004
212-527-4000
33-59560Revlon Consumer Products Corporation13-3662953
Delaware
One New York Plaza
New York, New York 10004
212-527-4000
Securities registered pursuant to Section 12(b) or 12(g) of the Act:
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



Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Revlon, Inc.
Yes x☒
No ¨☐
Revlon Consumer Products Corporation
Yes ¨☐
No x☒



Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x☒ No ¨



Indicate by check mark whether each 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 accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filerAccelerated filerNon-accelerated filerSmaller Reporting CompanyEmerging Growth Company
Revlon, Inc.
Yes ¨ ☐No x☒
Yesx ☒No ¨☐
Yes ¨ ☐No x☒
Yes☒
Yes x No ¨☐
Yes☐
Yes ¨ No x☒
Revlon Consumer Products Corporation
Yes ¨ ☐No x☒
Yes ¨ ☐No x☒
Yes x ☒No ¨☐
Yes☒
Yes x No ¨☐
Yes☐
Yes ¨ No x☒
1

If an emerging growth company, indicate by check mark if the registrants 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 each registrant is a shell company (as defined in Rule 12b-2 of the Act).
Revlon, Inc.Yes☐
Yes ¨
No x☒
Revlon Consumer Products CorporationYes☐
Yes ¨
No x☒



Number of shares of common stock outstanding as of September 30, 2019:
2020:
Revlon, Inc. Class A Common Stock:53,035,41253,330,303
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 Revlon Consumer Products Corporation ("Products Corporation") Common Stock were held by Revlon, Inc.


Revlon Consumer Products Corporation meets the conditions set forth in General InstructionInstructions 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 November 13, 2020 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 thea reduced disclosure format applicable to Revlon Consumer Products Corporation.



2



REVLON, INC. AND SUBSIDIARIES
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
INDEX


PART I - Financial Information
Item 1.
Financial Statements of Revlon, Inc. and Subsidiaries
4
Financial Statements of Revlon Consumer Products Corporation and Subsidiaries
8
Item 2.
Item 3.
Item 4.
PART II - Other Information
Item 1.
Item 1A.
Item 5.
Item 6.





1
Table of Contents

REVLON, INC. AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION


Item 1. Financial Statements of Revlon, Inc. and Subsidiaries


REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)
September 30, 2020December 31, 2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$268.3 $104.3 
Trade receivables, less allowance for doubtful accounts of $12.4 and $11.4 as of September 30, 2020 and December 31, 2019, respectively340.8 423.4 
Inventories, net525.5 448.4 
Prepaid expenses and other assets140.8 135.3 
Total current assets1,275.4 1,111.4 
Property, plant and equipment, net of accumulated depreciation of $530.3 and $488.1 as of September 30, 2020 and December 31, 2019, respectively355.8 408.6 
Deferred income taxes230.5 175.1 
Goodwill563.2 673.7 
Intangible assets, net of accumulated amortization and impairment of $286.7 and $226.4 as of September 30, 2020 and December 31, 2019, respectively435.9 490.7 
Other assets112.5 121.1 
Total assets$2,973.3 $2,980.6 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Short-term borrowings$2.0 $2.2 
Current portion of long-term debt704.5 288.0 
Accounts payable219.9 251.8 
Accrued expenses and other current liabilities387.9 414.9 
Total current liabilities1,314.3 956.9 
Long-term debt2,926.5 2,906.2 
Long-term pension and other post-retirement plan liabilities166.7 181.2 
Other long-term liabilities148.7 157.5 
Stockholders’ deficiency:
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 57,674,817 and 56,470,490 shares issued as of September 30, 2020 and December 31, 2019, respectively0.5 0.5 
Additional paid-in capital1,080.5 1,071.9 
Treasury stock, at cost: 1,771,032 and 1,625,580 shares of Class A Common Stock as of September 30, 2020 and December 31, 2019, respectively(35.2)(33.5)
Accumulated deficit(2,397.9)(2,012.7)
Accumulated other comprehensive loss(230.8)(247.4)
Total stockholders’ deficiency(1,582.9)(1,221.2)
Total liabilities and stockholders’ deficiency$2,973.3 $2,980.6 
 September 30, 2019 December 31, 2018
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$60.7
 $87.3
Trade receivables, less allowance for doubtful accounts of $12.4 and $15.6 as of September 30, 2019 and December 31, 2018, respectively454.9
 431.3
Inventories522.0
 523.2
Prepaid expenses and other assets155.9
 152.0
Total current assets1,193.5
 1,193.8
Property, plant and equipment, net of accumulated depreciation of $474.9 and $425.2 as of September 30, 2019 and December 31, 2018, respectively413.7
 354.5
Deferred income taxes159.3
 131.8
Goodwill673.4
 673.9
Intangible assets, net of accumulated amortization of $217.7 and $187.3 as of September 30, 2019 and December 31, 2018, respectively496.7
 532.0
Other assets122.9
 130.8
Total assets$3,059.5
 $3,016.8
    
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY   
Current liabilities:   
Short-term borrowings$5.1
 $9.3
Current portion of long-term debt363.5
 348.1
Accounts payable322.3
 332.1
Accrued expenses and other current liabilities368.3
 430.9
Total current liabilities1,059.2
 1,120.4
Long-term debt2,906.6
 2,727.7
Long-term pension and other post-retirement plan liabilities162.0
 169.0
Other long-term liabilities159.2
 56.5
Stockholders’ deficiency:   
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 56,800,236 and 55,556,466 shares issued as of September 30, 2019 and December 31, 2018, respectively0.5
 0.5
Additional paid-in capital1,071.5
 1,063.8
Treasury stock, at cost: 1,624,719 and 1,533,320 shares of Class A Common Stock as of September 30, 2019 and December 31, 2018, respectively(33.5) (31.9)
Accumulated deficit(2,038.5) (1,855.0)
Accumulated other comprehensive loss(227.5) (234.2)
Total stockholders’ deficiency(1,227.5) (1,056.8)
Total liabilities and stockholders’ deficiency$3,059.5
 $3,016.8










See Accompanying Notes to Unaudited Consolidated Financial Statements

2

Table of Contents
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in millions, except share and per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 20182020201920202019
       
Net sales$596.8
 $655.4
 $1,720.2
 $1,822.9
Net sales$477.1 $596.8 $1,277.7 $1,720.2 
Cost of sales269.0
 305.0
 750.7
 807.2
Cost of sales234.3 269.0 600.7 750.7 
Gross profit327.8
 350.4
 969.5
 1,015.7
 Gross profit242.8 327.8 677.0 969.5 
Selling, general and administrative expenses308.1
 340.8
 973.2
 1,087.1
Selling, general and administrative expenses253.4 308.1 739.1 973.2 
Acquisition and integration costs0.1
 3.4
 0.7
 12.0
Acquisition, integration and divestiture costsAcquisition, integration and divestiture costs0.9 0.1 4.2 0.7 
Restructuring charges and other, net2.9
 3.9
 11.6
 13.9
Restructuring charges and other, net(0.7)2.9 44.8 11.6 
Loss on disposal of minority investment—
 —
 —
 20.1
Operating income (loss)16.7
 2.3
 (16.0) (117.4)
Impairment chargesImpairment charges0 0 144.1 0 
Gain on divested assetsGain on divested assets(1.1)0 (0.5)0 
Operating (loss) income Operating (loss) income(9.7)16.7 (254.7)(16.0)
Other expenses:       Other expenses:
Interest expense50.2
 46.4
 145.7
 129.1
Interest expense, net Interest expense, net68.7 50.2 178.0 145.7 
Amortization of debt issuance costs3.7
 3.8
 10.4
 9.1
 Amortization of debt issuance costs7.8 3.7 17.8 10.4 
Foreign currency losses, net7.6
 1.1
 9.0
 10.7
Gain on early extinguishment of debt Gain on early extinguishment of debt(31.2)0 (43.1)0 
Foreign currency (gains) losses, net Foreign currency (gains) losses, net(9.8)7.6 9.1 9.0 
Miscellaneous, net1.7
 0.4
 7.6
 0.6
 Miscellaneous, net(2.6)1.7 13.9 7.6 
Other expenses63.2
 51.7
 172.7
 149.5
 Other expenses32.9 63.2 175.7 172.7 
Loss from continuing operations before income taxes(46.5) (49.4) (188.7) (266.9)Loss from continuing operations before income taxes(42.6)(46.5)(430.4)(188.7)
Benefit from income taxes(2.1) (38.7) (3.2) (43.1)
Provision for (benefit from) income taxesProvision for (benefit from) income taxes1.9 (2.1)(45.2)(3.2)
Loss from continuing operations, net of taxes(44.4) (10.7) (185.5) (223.8)Loss from continuing operations, net of taxes(44.5)(44.4)(385.2)(185.5)
(Loss) income from discontinued operations, net of taxes(0.3) (0.4) 2.0
 (0.1)(Loss) income from discontinued operations, net of taxes0 (0.3)0 2.0 
Net loss$(44.7) $(11.1) $(183.5) $(223.9)Net loss$(44.5)$(44.7)$(385.2)$(183.5)
Other comprehensive income (loss):       Other comprehensive income (loss):
Foreign currency translation adjustments(1.8) (4.9) (0.5) (12.3) Foreign currency translation adjustments2.2 (1.8)7.3 (0.5)
Amortization of pension related costs, net of tax(a)(b)
2.3
 2.3
 7.2
 6.5
Amortization of pension related costs, net of tax(a)(b)
2.8 2.3 9.3 7.2 
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax(c)
—
 —
 —
 0.7
Other comprehensive income (loss), net0.5
 (2.6) 6.7
 (5.1)
Other comprehensive income, netOther comprehensive income, net5.0 0.5 16.6 6.7 
Total comprehensive loss$(44.2) $(13.7) $(176.8) $(229.0)Total comprehensive loss$(39.5)$(44.2)$(368.6)$(176.8)
       
Basic (loss) earnings per common share:       
Basic and Diluted (loss) earnings per common share:Basic and Diluted (loss) earnings per common share:
Continuing operations$(0.84) $(0.20) $(3.50) $(4.24)Continuing operations$(0.83)$(0.84)$(7.22)$(3.50)
Discontinued operations—
 (0.01) 0.04
 —
Discontinued operations0 0 0 0.04 
Net loss$(0.84) $(0.21) $(3.46) $(4.24)Net loss$(0.83)$(0.84)$(7.22)$(3.46)
       
Diluted (loss) earnings per common share:       
Continuing operations$(0.84) $(0.20) $(3.50) $(4.24)
Discontinued operations—
 (0.01) 0.04
 —
Net loss$(0.84) $(0.21) $(3.46) $(4.24)
       
Weighted average number of common shares outstanding:       Weighted average number of common shares outstanding:
Basic53,129,004
 52,834,879
 53,057,154
 52,777,883
 Basic53,476,354 53,129,004 53,371,986 53,057,154 
Diluted53,129,004
 52,834,879
 53,057,154
 52,777,883
 Diluted53,476,354 53,129,004 53,371,986 53,057,154 


(a)
(a)Net of a $0.5 million tax expense and $0.3 million of tax expense of $0.3 million and $0.3 million for the three months ended September 30, 2019 and 2018, respectively, and net of tax expense of $0.9 million and $0.8 million for the nine months ended September 30, 2019 and 2018, respectively.
(b)
This amount is included in the computation of net periodic benefit costs (income). See Note 11, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).
(c) Net of tax benefit of nil for the three months ended September 30,2018 2020 and $0.52019, respectively, and net of a $0.7 million tax benefit and $0.9 million of tax expense for the nine months ended September 30, 2018.2020 and 2019, respectively.

(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 Consolidated Financial Statements


Table of Contents
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
(dollars in millions, except share and per share amounts)

Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2020$0.5 $1,071.9 $(33.5)$(2,012.7)$(247.4)$(1,221.2)
Treasury stock acquired, at cost (a)
— — (0.4)— — (0.4)
Stock-based compensation amortization— 2.4 — — — 2.4 
Net loss— — — (213.9)— (213.9)
Other comprehensive (loss) income, net (b)
— — — — (2.7)(2.7)
Balance, March 31, 20200.5 1,074.3 (33.9)(2,226.6)(250.1)(1,435.8)
Treasury stock acquired, at cost (a)
— — (1.3)— — (1.3)
Stock-based compensation amortization— 1.1 — — — 1.1 
Net loss— — — (126.8)— (126.8)
Other comprehensive (loss) income, net (b)
— — — — 14.3 14.3 
Balance, June 30, 20200.5 1,075.4 (35.2)(2,353.4)(235.8)(1,548.5)
Treasury stock acquired, at cost (a)
— — — — — — 
Stock-based compensation amortization— 5.1 — — — 5.1 
Net loss— — — (44.5)— (44.5)
Other comprehensive (loss) income, net (b)
— — — — 5.0 5.0 
Balance, September 30, 2020$0.5 $1,080.5 $(35.2)$(2,397.9)$(230.8)$(1,582.9)

Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2019$0.5 $1,063.8 $(31.9)$(1,855.0)$(234.2)$(1,056.8)
Treasury stock acquired, at cost (a)
— — (1.6)— — (1.6)
Stock-based compensation amortization— 0.4 — — — 0.4 
Net loss— — — (75.1)— (75.1)
Other comprehensive (loss) income, net (b)
— — — — 0.9 0.9 
Balance, March 31, 20190.5 1,064.2 (33.5)(1,930.1)(233.3)(1,132.2)
Treasury stock acquired, at cost (a)
— — 0 — — 0 
Stock-based compensation amortization— 3.4 — — — 3.4 
Net loss— — — (63.7)— (63.7)
Other comprehensive (loss) income, net (b)
— — — — 5.3 5.3 
Balance, June 30, 2019$0.5 $1,067.6 $(33.5)$(1,993.8)$(228.0)$(1,187.2)
Treasury stock acquired, at cost (a)
— — — — — — 
Stock-based compensation amortization— 3.9 — — — 3.9 
Net loss— — — (44.7)— (44.7)
Other comprehensive (loss) income, net (b)
— — — — 0.5 0.5 
Balance, September 30, 2019$0.5 $1,071.5 $(33.5)$(2,038.5)$(227.5)$(1,227.5)

(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 756 and NaN shares of Revlon Class A Common Stock during the three months ended September 30, 2020 and 2019, and 127,725 and 85,607 shares of Revlon Class A Common Stock during the nine months ended September 30, 2020 and 2019, 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 $8.50 and NaN during the

Table of Contents
 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Deficiency
            
Balance, January 1, 2019$0.5
 $1,063.8
 $(31.9) $(1,855.0) $(234.2) $(1,056.8)
Treasury stock acquired, at cost (a)
—
 —
 (1.6) —
 —
 (1.6)
Stock-based compensation amortization—
 0.4
 —
 —
 —
 0.4
Net loss—
 —
 —
 (75.1) —
 (75.1)
Other comprehensive income, net (b)    
—
 —
 —
 —
 0.9
 0.9
Balance, March 31, 20190.5
 1,064.2
 (33.5) (1,930.1) (233.3) (1,132.2)
Treasury stock acquired, at cost (a)
—
 —
 —
 —
 —
 —
Stock-based compensation amortization—
 3.4
 —
 —
 —
 3.4
Net loss—
 —
 —
 (63.7) —
 (63.7)
Other comprehensive income, net (b)
—
 —
 —
 —
 5.3
 5.3
Balance, June 30, 20190.5
 1,067.6
 (33.5) (1,993.8) (228.0) (1,187.2)
Treasury stock acquired, at cost (a)
—
 —
 —
 —
 —
 —
Stock-based compensation amortization—
 3.9
 —
 —
 —
 3.9
Net loss—
 —
 —
 (44.7) —
 (44.7)
Other comprehensive income, net (b)
—
 —
 —
 —
 0.5
 0.5
Balance, September 30, 2019$0.5
 $1,071.5
 $(33.5) $(2,038.5) $(227.5) $(1,227.5)
three months ended September 30, 2020 and 2019, and $12.99 and $18.86 during the nine months ended September 30, 2020 and 2019, 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 $6,400 and NaN during the three months ended September 30, 2020 and 2019, $1.6 million and $1.6 million during the nine months ended September 30, 2020 and 2019, See Note 11, "Stock Compensation Plan," for details regarding restricted stock awards and RSUs under the Stock Plan.

 Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Deficiency
            
Balance, January 1, 2018$0.5
 $1,040.0
 $(21.7) $(1,560.8) $(228.4) $(770.4)
Treasury stock acquired, at cost (a)
—
 —
 (2.9) —
 —
 (2.9)
Stock-based compensation amortization—
 7.7
 —
 —
 —
 7.7
Net loss—
 —
 —
 (90.3) —
 (90.3)
Other comprehensive income, net (b)
—
 —
 —
 —
 0.2
 0.2
Balance, March 31, 20180.5
 1,047.7
 (24.6) (1,651.1) (228.2) (855.7)
Treasury stock acquired, at cost (a)
—
 —
 (0.6) —
 —
 (0.6)
Stock-based compensation amortization—
 0.8
 —
 —
 —
 0.8
Net loss—
 —
 —
 (122.5) —
 (122.5)
Other comprehensive loss, net (b)
—
 —
 —
 —
 (2.7) (2.7)
Balance, June 30, 20180.5
 1,048.5
 (25.2) (1,773.6) (230.9) (980.7)
Treasury stock acquired, at cost (a)
—
 —
 (0.1) —
 —
 (0.1)
Stock-based compensation amortization—
 6.3
 —
 —
 —
 6.3
Net loss—
 —
 —
 (11.1) —
 (11.1)
Other comprehensive loss, net (b)
—
 —
 —
 —
 (2.6) (2.6)
Balance, September 30, 2018$0.5
 $1,054.8
 $(25.3) $(1,784.7) $(233.5) $(988.2)
(b) 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, 2020 and 2019, respectively.


(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 nil and 5,493 shares of Revlon Class A Common Stock during the three months ended September 30, 2019 and 2018, respectively, and 85,607 and 167,297 shares of Revlon Class A Common Stock during the nine months ended September 30, 2019 and 2018, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares and restricted stock units 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 nil and $15.60 during the three months ended September 30, 2019 and 2018, respectively, and $18.86 and $21.42 during the nine months ended September 30, 2019 and 2018, 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 nil and $0.1 million during the three months ended September 30, 2019 and 2018, respectively, and $1.6 million and $3.6 million during the nine months ended September 30, 2019 and 2018, respectively.


(b)See Note 14, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three and nine months ended September 30, 2019 and 2018, respectively.





See Accompanying Notes to Unaudited Consolidated Financial Statements


Table of Contents
REVLON, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Nine Months Ended September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(385.2)$(183.5)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization108.3 124.6 
   Foreign currency losses from re-measurement9.1 9.0 
   Amortization of debt discount1.3 1.2 
   Stock-based compensation amortization8.6 7.7 
Impairment charges144.1 0 
Benefit from deferred income taxes(54.4)(19.0)
   Amortization of debt issuance costs17.8 10.4 
   Gain on divested assets(0.5)0 
   Pension and other post-retirement cost4.2 6.3 
Gain on early extinguishment of debt(43.1)0 
Paid-in-kind interest accrued on the 2020 BrandCo Facilities6.2 0 
   Change in assets and liabilities:
Decrease (increase) in trade receivables78.0 (30.5)
Increase in inventories(79.4)(4.9)
Increase in prepaid expenses and other current assets(1.7)(5.5)
(Decrease) increase in accounts payable(27.8)9.1 
Decrease in accrued expenses and other current liabilities(25.2)(81.0)
Pension and other post-retirement plan contributions(7.5)(7.8)
Purchases of permanent displays(16.5)(28.4)
Other, net6.8 25.5 
Net cash used in operating activities(256.9)(166.8)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(7.4)(20.0)
Net cash used in investing activities(7.4)(20.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(0.7)(22.4)
Borrowings under the 2020 BrandCo Facilities880.0 0 
Repurchases of the 5.75% Senior Notes(114.1)0 
Net borrowings under the Amended 2016 Revolving Credit Facility19.5 13.4 
Net borrowings under the 2019 Term Loan Facility (a)
(200.0)200.0 
Repayments under the 2018 Foreign Asset-Based Term Loan(31.4)0 
Repayments under the 2016 Term Loan Facility(9.2)(13.5)
Payment of financing costs(108.3)(13.4)
Tax withholdings related to net share settlements of restricted stock and RSUs(1.6)(1.6)
Other financing activities(0.3)(0.9)
Net cash provided by financing activities433.9 161.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(0.4)(1.4)
   Net increase (decrease) in cash, cash equivalents and restricted cash
169.2 (26.6)
   Cash, cash equivalents and restricted cash at beginning of period (b)
104.5 87.5 
   Cash, cash equivalents and restricted cash at end of period (b)
$273.7 $60.9 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$182.2 $157.9 
Income taxes, net of refunds12.6 6.9 
Supplemental schedule of non-cash investing and financing activities:
Non-cash roll-up of participating lenders from the 2016 Term Loan Facility to the 2020 BrandCo Facilities$846.0 $0 
Paid-in-kind debt issuance costs capitalized to the 2020 BrandCo Facilities29.1 0 
 Nine Months Ended September 30,
 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss$(183.5) $(223.9)
Adjustments to reconcile net loss to net cash used in operating activities:   
   Depreciation and amortization124.6
 119.4
   Foreign currency losses from re-measurement9.0
 10.7
   Amortization of debt discount1.2
 0.9
   Stock-based compensation amortization7.7
 14.8
   Benefit from deferred income taxes(19.0) (61.5)
   Amortization of debt issuance costs10.4
 9.1
   Non-cash loss on disposal of minority investment—
 18.6
 Loss on sale of certain assets0.2
 0.6
   Pension and other post-retirement cost6.3
 2.0
   Change in assets and liabilities:   
      Increase in trade receivables(30.5) (7.0)
      Increase in inventories(4.9) (100.3)
      Increase in prepaid expenses and other current assets(5.5) (60.5)
      Increase in accounts payable9.1
 39.3
      Decrease in accrued expenses and other current liabilities(81.0) (1.6)
      Pension and other post-retirement plan contributions(7.8) (6.1)
      Purchases of permanent displays(28.4) (57.0)
      Other, net25.3
 5.8
Net cash used in operating activities(166.8) (296.7)
CASH FLOWS FROM INVESTING ACTIVITIES:   
Capital expenditures(20.0) (41.6)
Net cash used in investing activities(20.0) (41.6)
CASH FLOWS FROM FINANCING ACTIVITIES:   
Net (decrease) increase in short-term borrowings and overdraft(22.4) 2.3
Net borrowings under the Amended 2016 Revolving Credit Facility13.4
 251.3
Net borrowings under the 2019 Term Loan Facility200.0
 —
Net borrowings under the 2018 Foreign Asset-Based Term Loan—
 89.4
Repayments under the 2016 Term Loan Facility(13.5) (13.5)
Payment of financing costs(13.4) (9.4)
Tax withholdings related to net share settlements of restricted stock units and awards(1.6) (3.6)
Other financing activities(0.9) 0.1
Net cash provided by financing activities161.6
 316.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1.4) (3.2)
   Net decrease in cash, cash equivalents and restricted cash
(26.6) (24.9)
   Cash, cash equivalents and restricted cash at beginning of period (a)
87.5
 87.4
   Cash, cash equivalents and restricted cash at end of period (a)
$60.9
 $62.5
Supplemental schedule of cash flow information:(b)
   
   Cash paid during the period for:   
Interest$157.9
 $131.4
Income taxes, net of refunds6.9
 11.7
(a) The Company fully repaid the 2019 Term Loan Facility in May 2020.

(a)(b)These amounts include restricted cash of $0.2$5.4 million and $0.7$0.2 million as of September 30,2020 and 2019, and 2018, respectively, and $0.2 million and $0.3 millionrespectively. The balance as of December 31, 2018 and 2017, respectively, which representSeptember 30, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility,Facility; and (ii) cash on deposit to support

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outstanding undrawn letters of credit. The balance as of September 30, 2019 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit, whichcredit. These balances were included within prepaid expenses and other current assets and other assets in the Company's consolidated balance sheets.Unaudited Consolidated Balance Sheets as of September 30, 2020 and September 30, 2019, respectively.
(b) See Note 5, "Leases," for supplemental disclosure of non-cash financing and investing activities in relation to the lease liabilities arising from obtaining right-of-use assets following the implementation of ASC Topic 842, Leases.






See Accompanying Notes to Unaudited Consolidated Financial Statements


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REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)
September 30, 2020December 31, 2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$268.3 $104.3 
Trade receivables, less allowance for doubtful accounts of $12.4 and $11.4 as of September 30, 2020 and December 31, 2019, respectively340.8 423.4 
Inventories, net525.5 448.4 
Prepaid expenses and other assets136.9 131.4 
Receivable from Revlon, Inc.168.7 161.2 
Total current assets1,440.2 1,268.7 
Property, plant and equipment, net of accumulated depreciation of $530.3 and $488.1 as of September 30, 2020 and December 31, 2019, respectively355.8 408.6 
Deferred income taxes211.9 158.1 
Goodwill563.2 673.7 
Intangible assets, net of accumulated amortization and impairment of $286.7 and $226.4 as of September 30, 2020 and December 31, 2019, respectively435.9 490.7 
Other assets112.5 121.1 
Total assets$3,119.5 $3,120.9 
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Short-term borrowings$2.0 $2.2 
Current portion of long-term debt704.5 288.0 
Accounts payable219.9 251.8 
Accrued expenses and other current liabilities390.8 418.2 
Total current liabilities1,317.2 960.2 
Long-term debt2,926.5 2,906.2 
Long-term pension and other post-retirement plan liabilities166.7 181.2 
Other long-term liabilities153.6 162.7 
Stockholder's deficiency:
Products Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively54.6 54.6 
Products Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively0 0 
Additional paid-in capital1,005.1 996.5 
Accumulated deficit(2,273.4)(1,893.1)
Accumulated other comprehensive loss(230.8)(247.4)
Total stockholder's deficiency(1,444.5)(1,089.4)
Total liabilities and stockholder's deficiency$3,119.5 $3,120.9 
 September 30, 2019 December 31, 2018
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$60.7
 $87.3
Trade receivables, less allowance for doubtful accounts of $12.4 and $15.6 as of September 30, 2019 and December 31, 2018, respectively454.9
 431.3
Inventories522.0
 523.2
Prepaid expenses and other assets151.9
 148.0
Receivable from Revlon, Inc.158.3
 151.7
Total current assets1,347.8
 1,341.5
Property, plant and equipment, net of accumulated depreciation of $474.9 and $425.2 as of September 30, 2019 and December 31, 2018, respectively413.7
 354.5
Deferred income taxes141.2
 114.8
Goodwill673.4
 673.9
Intangible assets, net of accumulated amortization of $217.7 and $187.3 as of September 30, 2019 and December 31, 2018, respectively496.7
 532.0
Other assets122.9
 130.8
Total assets$3,195.7
 $3,147.5
    
LIABILITIES AND STOCKHOLDER'S DEFICIENCY   
Current liabilities:   
Short-term borrowings$5.1
 $9.3
Current portion of long-term debt363.5
 348.1
Accounts payable322.3
 332.1
Accrued expenses and other current liabilities371.6
 434.7
Total current liabilities1,062.5
 1,124.2
Long-term debt2,906.6
 2,727.7
Long-term pension and other post-retirement plan liabilities162.0
 169.0
Other long-term liabilities162.6
 59.7
Stockholder's deficiency:   
Products Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively54.6
 54.6
Products Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively—
 —
Additional paid-in capital996.0
 988.4
Accumulated deficit(1,921.1) (1,741.9)
Accumulated other comprehensive loss(227.5) (234.2)
Total stockholder's deficiency(1,098.0) (933.1)
Total liabilities and stockholder's deficiency$3,195.7
 $3,147.5
















See Accompanying Notes to Unaudited Consolidated Financial Statements



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REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in millions)
Three Months Ended September 30,Nine Months Ended September 30,
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 20182020201920202019
       
Net sales$596.8
 $655.4
 $1,720.2
 $1,822.9
Net sales$477.1 $596.8 $1,277.7 $1,720.2 
Cost of sales269.0
 305.0
 750.7
 807.2
Cost of sales234.3 269.0 600.7 750.7 
Gross profit327.8
 350.4
 969.5
 1,015.7
 Gross profit242.8 327.8 677.0 969.5 
Selling, general and administrative expenses306.3
 339.1
 968.1
 1,082.1
Selling, general and administrative expenses251.4 306.3 733.2 968.1 
Acquisition and integration costs0.1
 3.4
 0.7
 12.0
Acquisition, integration and divestiture costsAcquisition, integration and divestiture costs0.9 0.1 4.2 0.7 
Restructuring charges and other, net2.9
 3.9
 11.6
 13.9
Restructuring charges and other, net(0.7)2.9 44.8 11.6 
Loss on disposal of minority investment—
 —
 —
 20.1
Operating income (loss)18.5
 4.0
 (10.9) (112.4)
Impairment chargesImpairment charges0 0 144.1 0 
Gain on divested assetsGain on divested assets(1.1)0 (0.5)0 
Operating (loss) income Operating (loss) income(7.7)18.5 (248.8)(10.9)
Other expenses:       Other expenses:
Interest expense50.2
 46.4
 145.7
 129.1
Interest expense, net Interest expense, net68.7 50.2 178.0 145.7 
Amortization of debt issuance costs3.7
 3.8
 10.4
 9.1
 Amortization of debt issuance costs7.8 3.7 17.8 10.4 
Foreign currency losses, net7.6
 1.1
 9.0
 10.7
Gain on early extinguishment of debt Gain on early extinguishment of debt(31.2)0 (43.1)0 
Foreign currency (gains) losses, net Foreign currency (gains) losses, net(9.8)7.6 9.1 9.0 
Miscellaneous, net1.7
 0.4
 7.6
 0.6
 Miscellaneous, net(2.6)1.7 13.9 7.6 
Other expenses63.2
 51.7
 172.7
 149.5
 Other expenses32.9 63.2 175.7 172.7 
Loss from continuing operations before income taxes(44.7) (47.7) (183.6) (261.9)Loss from continuing operations before income taxes(40.6)(44.7)(424.5)(183.6)
Provision (benefit) from income taxes(1.8) (38.2) (2.4) (42.0)
Provision for (benefit from) income taxesProvision for (benefit from) income taxes2.3 (1.8)(44.2)(2.4)
Loss from continuing operations, net of taxes(42.9) (9.5) (181.2) (219.9)Loss from continuing operations, net of taxes(42.9)(42.9)(380.3)(181.2)
(Loss) income from discontinued operations, net of taxes(0.3) (0.4) 2.0
 (0.1)(Loss) income from discontinued operations, net of taxes0 (0.3)0 2.0 
Net loss$(43.2) $(9.9) $(179.2) $(220.0)Net loss$(42.9)$(43.2)$(380.3)$(179.2)
Other comprehensive income (loss):       Other comprehensive income (loss):
Foreign currency translation adjustments(1.8) (4.9) (0.5) (12.3) Foreign currency translation adjustments2.2 (1.8)7.3 (0.5)
Amortization of pension related costs, net of tax(a)(b)
2.3
 2.3
 7.2
 6.5
Amortization of pension related costs, net of tax(a)(b)
2.8 2.3 9.3 7.2 
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax(c)
—
 —
 —
 0.7
Other comprehensive income (loss), net0.5
 (2.6) 6.7
 (5.1)
Other comprehensive income, netOther comprehensive income, net5.0 0.5 16.6 6.7 
Total comprehensive loss$(42.7) $(12.5) $(172.5) $(225.1)Total comprehensive loss$(37.9)$(42.7)$(363.7)$(172.5)
       


(a)
(a)Net of a $0.5 million tax expense and $0.3 million of tax expense of $0.3 million and $0.3 million for the three months ended September 30, 2019 and 2018, respectively, and net of tax expense of $0.9 million and $0.8 million for the nine months ended September 30, 2019 and 2018, respectively.
(b)
This amount is included in the computation of net periodic benefit costs (income). See Note 11, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).
(c) Net of tax benefit of nil for the three months ended September 30,2018 2020 and $0.52019, respectively, and net of a $0.7 million tax benefit and $0.9 million of tax expense for the nine months ended September 30, 2018.2020 and 2019, respectively.

(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 Consolidated Financial Statements



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REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY
(dollars in millions)

 Preferred Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Deficiency
          
Balance, January 1, 2019$54.6
 $988.4
 $(1,741.9) $(234.2) $(933.1)
Stock-based compensation amortization—
 0.4
 —
 —
 0.4
Net loss—
 —
 (73.5) —
 (73.5)
Other comprehensive income, net (a)
—
 —
 —
 0.9
 0.9
Balance, March 31, 201954.6
 988.8
 (1,815.4) (233.3) (1,005.3)
Stock-based compensation amortization—
 3.4
 —
 —
 3.4
Net loss—
 —
 (62.5) —
 (62.5)
Other comprehensive income, net (a)
—
 —
 —
 5.3
 5.3
Balance, June 30, 201954.6
 992.2
 (1,877.9) (228.0) (1,059.1)
Stock-based compensation amortization—
 3.8
 —
 —
 3.8
Net loss—
 —
 (43.2) —
 (43.2)
Other comprehensive income, net (a)
—
 —
 —
 0.5
 0.5
Balance, September 30, 2019$54.6
 $996.0
 $(1,921.1) $(227.5) $(1,098.0)
Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2020$54.6 $996.5 $(1,893.1)$(247.4)$(1,089.4)
Stock-based compensation amortization— 2.4 — — 2.4 
Net loss— — (212.2)— (212.2)
Other comprehensive (loss) income, net (a)
— — — (2.7)(2.7)
Balance, March 31, 202054.6 998.9 (2,105.3)(250.1)(1,301.9)
Stock-based compensation amortization— 1.1 — — 1.1 
Net loss— — (125.2)— (125.2)
Other comprehensive (loss) income, net (a)
— — — 14.3 14.3 
Balance, June 30, 202054.6 1,000.0 (2,230.5)(235.8)(1,411.7)
Stock-based compensation amortization— 5.1 — — 5.1 
Net loss— — (42.9)— (42.9)
Other comprehensive (loss) income, net (a)
— — — 5.0 5.0 
Balance, September 30, 2020$54.6 $1,005.1 $(2,273.4)$(230.8)$(1,444.5)


Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2019$54.6 $988.4 $(1,741.9)$(234.2)$(933.1)
Stock-based compensation amortization— 0.4 — — 0.4 
Net loss— — (73.5)— (73.5)
Other comprehensive (loss) income, net (a)
— — — 0.9 0.9 
Balance, March 31, 201954.6 988.8 (1,815.4)(233.3)(1,005.3)
Stock-based compensation amortization— 3.4 — — 3.4 
Net loss— — (62.5)— (62.5)
Other comprehensive (loss) income, net (a)
— — — 5.3 5.3 
Balance, June 30, 2019$54.6 $992.2 $(1,877.9)$(228.0)$(1,059.1)
Stock-based compensation amortization— 3.8 — — 3.8 
Net loss— — (43.2)— (43.2)
Other comprehensive (loss) income, net (a)
— — — 0.5 0.5 
Balance, September 30, 2019$54.6 $996.0 $(1,921.1)$(227.5)$(1,098.0)
 Preferred Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Deficiency
          
Balance, January 1, 2018$54.6
 $971.2
 $(1,452.8) $(228.4) $(655.4)
Stock-based compensation amortization—
 7.7
 —
 —
 7.7
Net loss—
 —
 (89.0) —
 (89.0)
Other comprehensive income, net (a)
—
 —
 —
 0.2
 0.2
Balance, March 31, 201854.6
 978.9
 (1,541.8) (228.2) (736.5)
Stock-based compensation amortization—
 0.8
 —
 —
 0.8
Net loss—
 —
 (121.1) —
 (121.1)
Other comprehensive loss, net (a)
—
 —
 —
 (2.7) (2.7)
Balance, June 30, 201854.6
 979.7
 (1,662.9) (230.9) (859.5)
Stock-based compensation amortization—
 6.3
 —
 —
 6.3
Net loss—
 —
 (9.9) —
 (9.9)
Other comprehensive loss, net (a)
—
 —
 —
 (2.6) (2.6)
Balance, September 30, 2018$54.6
 $986.0
 $(1,672.8) $(233.5) $(865.7)


(a)See Note 14, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three and nine months ended September 30, 2019 and 2018, respectively.

(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 September 30, 2020 and 2019, respectively.










See Accompanying Notes to Unaudited Consolidated Financial Statements



Table of Contents
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Nine Months Ended September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(380.3)$(179.2)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization108.3 124.6 
   Foreign currency losses from re-measurement9.1 9.0 
   Amortization of debt discount1.3 1.2 
   Stock-based compensation amortization8.6 7.7 
Impairment charges144.1 0 
  Benefit from deferred income taxes(53.1)(17.8)
   Amortization of debt issuance costs17.8 10.4 
   Gain on divested assets(0.5)0 
   Pension and other post-retirement cost4.2 6.3 
Gain on early extinguishment of debt(43.1)0 
Paid-in-kind interest accrued on the 2020 BrandCo Facilities6.2 0 
   Change in assets and liabilities:
Decrease (increase) in trade receivables78.0 (30.5)
Increase in inventories(79.4)(4.9)
Increase in prepaid expenses and other current assets(9.3)(12.2)
(Decrease) increase in accounts payable(27.8)9.1 
Decrease in accrued expenses and other current liabilities(24.3)(79.8)
Pension and other post-retirement plan contributions(7.5)(7.8)
Purchases of permanent displays(16.5)(28.4)
Other, net7.3 25.5 
Net cash used in operating activities(256.9)(166.8)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(7.4)(20.0)
Net cash used in investing activities(7.4)(20.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(0.7)(22.4)
Borrowings under the 2020 BrandCo Facilities880.0 0 
Repurchases of the 5.75% Senior Notes(114.1)0 
Net borrowings under the Amended 2016 Revolving Credit Facility19.5 13.4 
Net borrowings under the 2019 Term Loan Facility (a)
(200.0)200.0 
Repayments under the 2018 Foreign Asset-Based Term Loan(31.4)0 
Repayments under the 2016 Term Loan Facility(9.2)(13.5)
Payment of financing costs(108.3)(13.4)
Tax withholdings related to net share settlements of restricted stock and RSUs(1.6)(1.6)
Other financing activities(0.3)(0.9)
Net cash provided by financing activities433.9 161.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(0.4)(1.4)
   Net increase (decrease) in cash, cash equivalents and restricted cash169.2 (26.6)
   Cash, cash equivalents and restricted cash at beginning of period (b)
104.5 87.5 
   Cash, cash equivalents and restricted cash at end of period (b)
$273.7 $60.9 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$182.2 $157.9 
Income taxes, net of refunds12.6 6.9 
Supplemental schedule of non-cash investing and financing activities:
Non-cash roll-up of participating lenders from the 2016 Term Loan Facility to the 2020 BrandCo Facilities$846.0 $0 
Paid-in-kind debt issuance costs capitalized to the 2020 BrandCo Facilities29.1 0 
(a) The Company fully repaid the 2019 Term Loan Facility in May 2020.

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 Nine Months Ended September 30,
 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss$(179.2) $(220.0)
Adjustments to reconcile net loss to net cash used in operating activities:   
   Depreciation and amortization124.6
 119.4
   Foreign currency losses from re-measurement9.0
 10.7
   Amortization of debt discount1.2
 0.9
   Stock-based compensation amortization7.7
 14.8
  Benefit from deferred income taxes(17.8) (60.3)
   Amortization of debt issuance costs10.4
 9.1
   Non-cash loss on disposal of minority investment—
 18.6
 Loss on sale of certain assets0.2
 0.6
   Pension and other post-retirement cost6.3
 2.0
   Change in assets and liabilities:   
      Increase in trade receivables(30.5) (7.0)
      Increase in inventories(4.9) (100.3)
      Increase in prepaid expenses and other current assets(12.2) (69.0)
      Increase in accounts payable9.1
 39.3
      (Decrease) increase in accrued expenses and other current liabilities(79.8) 1.8
      Pension and other post-retirement plan contributions(7.8) (6.1)
      Purchases of permanent displays(28.4) (57.0)
      Other, net25.3
 5.8
Net cash used in operating activities(166.8) (296.7)
CASH FLOWS FROM INVESTING ACTIVITIES:   
Capital expenditures(20.0) (41.6)
Net cash used in investing activities(20.0) (41.6)
CASH FLOWS FROM FINANCING ACTIVITIES:   
Net (decrease) increase in short-term borrowings and overdraft(22.4) 2.3
Net borrowings under the Amended 2016 Revolving Credit Facility13.4
 251.3
Net borrowings under the 2019 Term Loan Facility200.0
 —
Net borrowings under the 2018 Foreign Asset-Based Term Loan—
 89.4
Repayments under the 2016 Term Loan Facility(13.5) (13.5)
Payment of financing costs(13.4) (9.4)
Tax withholdings related to net share settlements of restricted stock units and awards(1.6) (3.6)
Other financing activities(0.9) 0.1
Net cash provided by financing activities161.6
 316.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1.4) (3.2)
   Net decrease in cash, cash equivalents and restricted cash
(26.6) (24.9)
   Cash, cash equivalents and restricted cash at beginning of period (a)
87.5
 87.4
   Cash, cash equivalents and restricted cash at end of period (a)
$60.9
 $62.5
Supplemental schedule of cash flow information:(b)
   
   Cash paid during the period for:   
Interest$157.9
 $131.4
Income taxes, net of refunds6.9
 11.7

(a)(b)These amounts include restricted cash of $0.2$5.4 million and $0.7$0.2 million as of September 30,2020 and 2019, and 2018, respectively, and $0.2 million and $0.3 millionThe balance as of December 31, 2018 and 2017, respectively, which representSeptember 30, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility,Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit, whichcredit. The balance as of September 30, 2019 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; 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.Unaudited Consolidated Balance Sheets as of September 30, 2020 and September 30, 2019, respectively.
(b) See Note 5, "Leases," for supplemental disclosure of non-cash financing and investing activities in relation to the lease liabilities arising from obtaining right-of-use assets following the implementation of ASC Topic 842, Leases.




See Accompanying Notes to Unaudited Consolidated Financial Statements


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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 its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation beneficially 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 that develops, manufactures, markets, distributes and sells an extensive array of color cosmetics; hair color, hair care and hair treatments; fragrances; skin care; beauty tools; men’s grooming products; anti-perspirant deodorants; and other beauty care products across a variety of distribution channels.
The Company operates in four4 brand-centric reporting segments:units that are aligned with its organizational structure based on 4 global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances.Fragrances, which represent the Company's 4 reporting segments. For further information, refer to Note 14, "Segment Data and Related Information."
The accompanying Consolidated Financial Statements are unaudited. In management's opinion, all adjustments necessary for a fair presentation of the Company's financial information have been made. The Unaudited Consolidated Financial Statements include the Company's accounts after the elimination of all material intercompany balances and transactions.
Certain prior year amounts have been reclassified to conform to the current year presentation.
The preparation of the Company's Unaudited Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the Unaudited Consolidated Financial Statements in the period they are determined to be necessary. Significant estimates made in the accompanying Unaudited Consolidated Financial Statements include, but are not limited to: allowances 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; income taxes, including deferred tax valuation allowances and reserves for estimated tax liabilities; restructuring costs; 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. The Unaudited Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in respectively, Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (collectively, the “Company’s 20182019 (the "2019 Form 10-K").

The Company's results of operations and financial position for interim periods are not necessarily indicative of those to be expected for the full year.

Liquidity and Ability to Continue as a Going Concern
Recently Evaluated and/
The ongoing and prolonged COVID-19 pandemic has continued to adversely impact the Company’s business in the third quarter of 2020 and beyond, as social-distancing restrictions and related actions designed to curb the spread of the virus have remained in place or Adopted Accounting Pronouncementshave been reinstated as the COVID-19 pandemic spikes across the globe. 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.


In February 2016,As previously disclosed, on October 23, 2020, Products Corporation commenced an amended exchange offer (as amended, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02" or "ASC 842"“Exchange Offer”) to exchange any and all of its outstanding 5.75% Senior Notes due 2021 (the “5.75% Senior Notes”), which requires lessees to recognizeclosed on November 13, 2020. In the Exchange Offer, for each $1,000 principal amount of 5.75% Senior Notes validly tendered, holders received either, at their option, (i) $275 in cash (plus a right-of-use asset$50 early tender/consent fee payable if such 5.75% Senior Notes were tendered at or before 11:59 p.m. New York City time on November 10, 2020 (the “Expiration Time”)), for an aggregate of $325 in cash (the “Cash Consideration”), or (ii) a combination of (1) $200 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes were tendered at or before the Expiration Time), for an aggregate of $250 in cash, plus, (2) (A) the Per $1,000 Pro Rata Share (as hereinafter defined) of $50 million aggregate principal amount of new 2020 ABL FILO Term Loans (as hereinafter defined) and a related lease liability on(B) the balance sheet for all leases, with the exceptionPer $1,000 Pro Rata Share of short-term leases. The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to certain adjustments, such as initial direct costs. Leases will continue to be classified as either operating or finance leases in the income statement. This guidance is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The Company adopted ASU No. 2016-02 beginning as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at the effective date of January 1, 2019. In addition, the Company elected to apply the package of practical expedients identified under ASC 842. See Note 5, "Leases," for additional disclosures provided as a result of this ASU.

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which gives entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result$75 million aggregate principal amount of the Tax CutsNew BrandCo Second-Lien Term Loans (the “Mixed Consideration” and Jobs Act of 2017 (the "Tax Act") to retained earnings. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Entities are required to make additional disclosures, regardless of whether they elect to reclassify stranded amounts of tax effects. The Company has elected not to adopt this amendment and will include required financial statement disclosures, as applicable. No impact is expected tosuch loans, together with the Company’s results of operations and/or financial condition.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



2020 ABL FILO Term Loans, the “New Loans”), if the holder is: (a)(i) a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); (ii) an institutional accredited investor within the meaning of Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of the Securities Act; or (iii) a person that is not a “U.S. person” within the meaning of Regulation S under the Securities Act, (b) not a natural person and (c) not a “Disqualified Institution” (as defined under the Amended 2016 Revolving Credit Facility and related security documents and intercreditor agreements or the 2020 BrandCo Term Loan Facility and related security documents and intercreditor agreements) (an “Eligible Holder”). The “Per $1,000 Pro Rata Share” is (1) $1,000, divided by (2) the aggregate principal amount of 5.75% Senior Notes tendered for Mixed Consideration by all Eligible Holders and accepted for payment by Products Corporation.


On November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the indenture governing the 5.75% Senior Notes. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, 0 5.75% Senior Notes remained outstanding.

In addition, the Company’s Amended 2016 Revolving Credit Facility matures on September 7, 2021, and the Company is currently in discussions with various lenders to extend such maturity or refinance such facility.

The uncertainty as to Products Corporation’s ability to extend or refinance the Amended 2016 Revolving Credit Facility raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

For more information, please see the risk factors discussed in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q.
Recently IssuedEvaluated and/or Adopted Accounting Pronouncements

In August 2018, the FASB issued ASUAccounting Standard Update ("ASU") No. 2018-15, "Internal Use Software (Subtopic 350-40) - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract," which requires a customer in a cloud computing hosting arrangement that is a service contract to follow the existing guidance in ASC 350-40 on internal-use software to determine which implementation costs are to be deferred and recognized as an asset and which costs are to be expensed as incurred. The new guidance: (i) specifies the financial statement presentation of capitalized implementation costs and the related amortization; (ii) will require entities to disclose the nature of hosting arrangements that are service contracts and the amount of implementation costs capitalized, amortized and impaired in each reporting period; and (iii) provides disclosures about significant judgments made when applying the guidance. Implementation costs that are recognized as an asset under the new guidance would be expensed over the term of the hosting arrangement. The term of the hosting arrangement would be the non-cancellable period of the arrangement and certain periods covered by options to renew the arrangement. The Company currently presents the capitalized cost of acquired software as a component of property, plant and equipment in its consolidated financial statements. This guidance is effective for annual periods beginning after December 15, 2019, with early adoption permitted, and may be applied either retrospectively or prospectively to all software implementation costs incurred after adoption. The Company will adoptadopted ASU No. 2018-15 prospectively, beginning as of January 1, 2020,2020. The Company completed its assessment and expectsdetermined that this new guidance willdoes not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.

Recently Issued AccountingPronouncements
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The 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 LIBOR or another reference rate expected to be discontinued 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 Company is in the process of assessing the impact, if any, that ASU No. 2020-04 is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

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

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocations, calculating income taxes in interim periods and how a company accounts for future events. This ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This guidance is effective for annual periods beginning after December 15, 2020, with early adoption permitted, including adoption in any interim period. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. After reviewing this ASU, the Company decided that it will adopt this guidance beginning as of January 1, 2021. The Company completed its assessment of the possible effects of this ASU upon its implementation and determined that it is not expected to have significant impacts on the Company’s results of operations, financial condition and/or financial statement disclosures.
In August 2018, the FASB issued ASU No. 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” This new guidance removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. This guidance is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The Company will adopt this guidance (on a retrospective basis for certain new additional disclosures), beginning as of January 1, 2021. While the Company is currently assessing the impact of thisThis new pronouncement the new guidance, which only affects disclosure items and it is not expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In June 2016, the FASB issued ASU No. 2016-13, "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 "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 new 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. 2018-19 further clarifies that receivables arising from operating leases are not within2019-10, which, among other things, deferred the scopeapplication of Subtopic 326. Instead, impairment from receivables of operating leases should be accounted for in accordance with Topic 842, Leases. In October 2019, after considering comments received, the FASB affirmed a proposal to defer the effective date of ASU No. 2016-13 for certain companies. Consequently, the FASB is expected to issue a final ASU in November 2019, which will result in the new guidance on credit losses for smaller reporting companies ("SRC") to be effective for fiscal years beginning after December 15, 2022, 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. 2016-03, and the related ASU No. 2018-19 amendments, beginning as of January 1, 2023 and is in the process of assessing the impact, if any, that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.



2. RESTRUCTURING CHARGES


Revlon 2020 Restructuring Program

Building upon its previously-announced 2018 Optimization Program, in March 2020 the Company announced that it is implementing a worldwide organizational restructuring (the “Revlon 2020 Restructuring Program”) designed to reduce the Company’s selling, general and administrative expenses, as well as cost of goods sold, improve the Company’s gross profit and Adjusted EBITDA and maximize productivity, cash flow and liquidity. The Revlon 2020 Restructuring Program includes rightsizing the organization and operating with more efficient workflows and processes. The leaner organizational structure is also expected to improve communication flow and cross-functional collaboration, leveraging the more efficient business processes.

As a result of the Revlon 2020 Restructuring Program, the Company expects to eliminate approximately 1,000 positions worldwide, including approximately 650 current employees and approximately 350 open positions of which approximately 785 were eliminated by September 30, 2020. In March 2020, the Company began informing certain employees that were affected by the Revlon 2020 Restructuring Program. While certain aspects of the Revlon 2020 Restructuring Program may be subject to consultations with employees, works councils, unions and/or governmental authorities, the Company currently expects to substantially complete the employee-related actions by the end of 2020 and the other consolidation and outsourcing actions during 2021 and 2022.

In connection with implementing the Revlon 2020 Restructuring Program, the Company expects to recognize during 2020 approximately $60 million to $70 million of total pre-tax restructuring and related charges (the “2020 Restructuring Charges”), consisting primarily of employee-related costs, such as severance, retention and other contractual termination benefits. In

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

addition, the Company expects restructuring charges in the range of $75 million to $85 million to be charged and paid during 2021 and 2022. The Company expects that substantially all of these restructuring charges will be paid in cash, with approximately $55 million to $65 million of the total charges expected to be paid in 2020, approximately $40 million to $45 million expected to be paid in 2021, with the balance expected to be paid in 2022.

A summary of the 2020 Restructuring Charges incurred since its inception in March 2020 and through September 30, 2020 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
Cumulative charges incurred through September 30, 2020$44.4 $1.2 $45.6 $11.3 $4.3 $61.2 
(a) Lease-related charges are recorded within SG&A in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss. These lease-related charges include: (i) $3.5 million for accelerated recognition of rent expense related to certain abandoned leases; (ii) $3.0 million for the disposal of leasehold improvements and other equipment in connection with certain leases; (iii) $3.9 million of rent expense related to the Revlon 2020 Restructuring Program; and (iv) $0.9 million of disposal of leasehold improvements and other equipment in connection with the abandoned leases identified in clause (i) of this footnote (a).
(b) Other related charges are recorded within SG&A and cost of sales in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.

A summary of the 2020 Restructuring Charges incurred since its inception in March 2020 and through September 30, 2020 by reportable segment is presented in the following table:
Cumulative charges incurred through September 30, 2020
Revlon$17.9 
Elizabeth Arden10.0 
Portfolio10.6 
Fragrances7.1 
Total$45.6 

2018 Optimization Restructuring Program


In November 2018, the Company announced that it was implementing the 2018 Optimization Restructuring Program (the "2018 Optimization Program") designed to streamline the Company’s operations, reporting structures and business processes, with the objective of maximizing productivity and improving profitability, cash flows and liquidity. In connection with implementing theThe 2018 Optimization Program the Company expects to recognize approximately $30 million to $40 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as other related charges. The Company also expects to incur approximately $10 million of additional capital expenditures. The Company expects the 2018 Optimization Program to bewas substantially completed by December 31, 2019.


As of September 30, 2020, restructuring and related charges under the 2018 Optimization Program expected to be paid in cash are approximately $32 million of the total $39.6 million of recorded charges, of which $30.3 million were already paid through September 30, 2020, with any residual balance expected to be paid during the remainder of 2020.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




A summary of the 2018 Optimization Restructuring Charges incurred since its inception in November 2018 and through September 30, 20192020 is presented in the following table:
Restructuring Charges and Other, Net
Employee Severance and Other Personnel Benefits(a)
Other CostsTotal Restructuring Charges
Inventory Adjustments(b)
Other Related Charges(c)
Total Restructuring and Related Charges
Charges incurred through December 31, 2019$20.3 $0.3 $20.6 $4.9 $14.0 $39.5 
Charges incurred during the nine months ended September 30, 2020
(0.6)0 (0.6)0 0.7 0.1 
Cumulative charges incurred through September 30, 2020$19.7 $0.3 $20.0 $4.9 $14.7 $39.6 
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits Other Costs Total Restructuring Charges 
Inventory Adjustments(a)
 
Other Related Charges(b)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2018$4.5
 $—
 $4.5
 $—
 $1.2
 $5.7
Charges incurred during the nine months ended September 30, 201912.0
 0.5
 12.5
 4.2
 11.4
 28.1
Cumulative charges incurred through September 30, 2019$16.5
 $0.5
 $17.0
 $4.2
 $12.6
 $33.8
(a) Includes reversal due to true-up of previously-accrued restructuring charges.
(a)(b) Inventory adjustments are recorded within cost of sales in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.
(b) (c) Other related charges are recorded within SG&A in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.


A summary of the 2018 Optimization Restructuring Charges incurred since its inception in November 2018 and through September 30, 20192020 by reportable segment is presented in the following table:
Charges incurred during the nine months ended September 30, 2020Cumulative charges incurred through September 30, 2020
Revlon$(0.3)$8.5 
Elizabeth Arden(0.1)4.2 
Portfolio(0.1)3.9 
Fragrances(0.1)3.4 
     Total$(0.6)$20.0 
  Charges incurred during the nine months ended September 30, 2019 Cumulative charges incurred through September 30, 2019
Revlon $5.7
 $7.6
Elizabeth Arden 2.5
 3.4
Portfolio 2.3
 3.3
Fragrances 2.0
 2.7
     Total $12.5
 $17.0


Restructuring Reserve
The Company expects that approximately 85% of these restructuringliability balance and related charges will be paid in cash, of which approximately $15.8 million were paid through September 30, 2019. Substantially allactivity for each of the remainingCompany's restructuring programs are presented in the following table:
Utilized, Net
Liability
Balance at January 1, 2020		Expense, NetForeign Currency Translation

Cash

Non-cash
Liability Balance at September 30, 2020
Revlon 2020 Restructuring Program:
Employee severance and other personnel benefits$0 $44.4 $0 $(20.3)$0 $24.1 
Other0 1.2 0 (1.2)0 0 
Total Revlon 2020 Restructuring Program0 45.6 0 (21.5)0 24.1 
2018 Optimization Program:
Employee severance and other personnel benefits5.7 (0.6)0 (3.7)0 1.4 
Other immaterial actions:(a)
Employee severance and other personnel benefits4.3 (0.2)0.2 (0.4)0 3.9 
Total restructuring reserve$10.0 $44.8 $0.2 $(25.6)$0 $29.4 
(a) The balance is expected to be paid by the end of 2019, with any residual amount to be paid in 2020.

EA Integration Restructuring Program

In December 2016, in connection with integrating the Elizabeth Arden and Revlon organizations, the Company began the processother immaterial restructuring initiatives primarily consists 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 was designed to reduce the Company’s cost of goods sold and SG&A expenses. The EA Integration Restructuring Program was substantially completed by December 31, 2018 and the Company expects to incur limited further chargesbalances outstanding under this program, primarily related to its exit from certain leased spaces. In connection with implementing the EA Integration Restructuring Program implemented by the Company recognized $82.6 millionin December 2016, which was completed by December 2018. The reversal of total pre-taxcharges and payments made during the nine months ended September 30, 2020 primarily related to other individually and collectively immaterial restructuring charges (the "EA Integration Restructuring Charges"), consisting of: (i) $72.6 millioninitiatives.

As of employee-related costs, including severance, retentionSeptember 30, 2020 and 2019, all of the restructuring reserve balances were included within accrued expenses and other contractual termination benefits; (ii) $5.1 million of lease termination costs; and (iii) $4.9 million of other related charges. The Company expects that cash payments will total $80 million to $85 millioncurrent liabilities in connection with the EA Integration Restructuring Charges, of which $72.0 million were paid through September 30, 2019. The remaining balance is expected to be substantially paid by the end of 2020.Company's Consolidated Balance Sheets.



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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



3. INVENTORIES
A summary
As of September 30, 2020 and December 31, 2019, the Company's net inventory balances consisted of the EA Integration Restructuring Charges incurred throughfollowing:

September 30,December 31,
20202019
Finished goods$402.2 $326.5 
Raw materials and supplies106.8 110.4 
Work-in-process16.5 11.5 
$525.5 $448.4 


4. PROPERTY, PLANT AND EQUIPMENT
As of September 30, 2020 and December 31, 2019, is presented in the following table:Company's property, plant and equipment balances consisted of the following:
September 30,December 31,
20202019
Land and improvements$11.2 $11.0 
Building and improvements112.6 113.0 
Machinery and equipment295.9 296.0 
Office furniture, fixtures and capitalized software240.2 241.5 
Counters and trade fixtures51.9 52.9 
Leasehold improvements43.8 50.1 
Construction-in-progress7.0 14.0 
Right-of-Use assets123.5 118.2 
Property, plant and equipment and Right-of-Use assets, gross886.1 896.7 
Accumulated depreciation and amortization(530.3)(488.1)
Property, plant and equipment and Right-of-Use assets, net$355.8 $408.6 
 Restructuring Charges and Other, Net      
 
Employee Severance and Other Personnel Benefits(a)
 
Lease Termination and Other Costs(b)
 Total Restructuring Charges 
Inventory Adjustments(c)
 
Other Related Charges(d)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2018$72.2
 $5.1
 $77.3
 $1.9
 $3.0
 $82.2
Charges incurred during the nine months ended September 30, 20190.4
 —

0.4
 —
 —
 0.4
Cumulative charges incurred through September 30, 2019$72.6
 $5.1
 $77.7
 $1.9
 $3.0
 $82.6

(a) Includes reversal of previously accrued restructuring chargesDepreciation and amortization expense on property, plant and equipment and right-of-use assets was $18.3 million and $59.3 million during the three and nine months ended September 30, 2019.2020, respectively, and $19.2 million and $65.2 million during the three and nine months ended September 30, 2019, respectively.
(b) Lease termination liabilities related


5. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

In accordance with ASC Topic 350, “Intangibles – Goodwill and Other,” the Company performs 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 the carrying value of its goodwill may not be recoverable. After the close of each interim quarter, management assesses whether there exists any indicators of impairment requiring the Company to certain exited office space were adjusted followingperform an interim goodwill impairment analysis.

In performing its goodwill impairment assessments the implementationCompany uses the simplified approach allowed under ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment." Following the results of ASC 842. See Note 5, "Leases," for additional information.
(c) Inventory adjustments are recorded within cost of salessuch assessments, the Company records non-cash impairment charges in the Company’samount by which the carrying value of each reporting unit exceeded its respective fair value, limited to the amount of each reporting unit's goodwill. Impairment charges are included as a separate component of operating income within the "Impairment charges" caption on the face of the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss.
(d) Other related charges are recorded within SG&A inLoss for the Company’s Consolidated Statement of Operationsapplicable quarter-to-date and Comprehensive Loss.
A summary of the EA Integration Restructuring Charges incurred through September 30, 2019 by reportable segment is presented in the following table:year-to-date periods.

  Charges incurred during the nine months ended September 30, 2019 Cumulative charges incurred through September 30, 2019
Revlon $—
 $32.9
Elizabeth Arden 0.4
 13.7
Portfolio —
 13.1
Fragrances —
 18.0
     Total $0.4
 $77.7

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, 2019
 Expense, Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at September 30, 2019
2018 Optimization Program:(a)
           
Employee severance and other personnel benefits$3.7
 $12.0
 $—
 $(6.8) $—
 $8.9
Other1.2
 16.1
 —
 (8.2) —
 9.1
Total 2018 Optimization Program4.9
 28.1
 —
 (15.0) —
 18.0
            
EA Integration Restructuring Program:           
Employee severance and other personnel benefits13.8
 0.4
 (0.4) (7.7) —
 6.1
Other(b)
4.2
 —
 —
 (0.4) (3.5) 0.3
Total EA Integration Restructuring Program18.0
 0.4
 (0.4) (8.1) (3.5) 6.4
 
         
Other individually immaterial actions:(c)

          
Employee severance and other personnel benefits4.6
 (1.4) —
 (1.8) (1.1) 0.3
Other0.8
 0.3
 —
 (0.4) 

 0.7
Total other individually immaterial actions5.4
 (1.1) —
 (2.2) (1.1) 1.0
Total restructuring reserve$28.3
 $27.4
 $(0.4) $(25.3) $(4.6) $25.4

(a) $15.6 million relates to other restructuring-related charges that were reflected within SG&A and cost of sales in the Company’s September 30, 2019 Consolidated Statement of Operations and Comprehensive Loss.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




(b) Non-cash utilization relatesFirst and Second Quarter of 2020 Interim Goodwill Assessments

As of March 31, 2020 and June 30, 2020, as a result of COVID-19’s impact on the Company’s operations, the Company determined that indicators of potential impairment existed requiring the Company to approximately $3.5 millionperform interim goodwill impairment analyses. These indicators included a deterioration in the general economic conditions, adverse developments in equity and credit markets, deterioration in some of lease termination liabilities related to certain exited office space that were adjusted following the implementation of ASC 842. See Note 5, "Leases," for additional information.
(c) Consists primarilyeconomic channels in which the Company's operates (especially in the mass retail channel), the recent trading values of the Company's other individuallycapital stock and collectively immaterial restructuring initiatives, including thosethe corresponding decline in Denmark, Norwaythe Company’s market capitalization and Sweden.the revision of the Company's internal forecasts as a result of the ongoing and prolonged COVID-19 pandemic. For its first and second quarter of 2020 interim assessments, the Company examined and performed quantitative interim goodwill impairment assessments for all its reporting units, namely: (i) Revlon; (ii) Elizabeth Arden Skin and Color; (iii) Elizabeth Arden Fragrances; (iv) Fragrances; (v) Mass Portfolio; and (vi) Professional Portfolio.


For the first quarter of 2020, as of March 31, 2020:

•The Company determined that it was more likely than not that the fair values of each of its: (i) Revlon; (ii) Elizabeth Arden Skin; and (iii) Color and Fragrances reporting units exceeded their respective carrying amounts for the first quarter of 2020. As of March 31, 2020, prior to the recording of any impairment charges, the Revlon, Elizabeth Arden Skin and Color and Fragrances reporting units had goodwill balances of $264.7 million, $67.4 million and $120.8 million, respectively; and
•The Company also determined that indicators of impairment existed for each of its: (i) Elizabeth Arden Fragrances; (ii) Mass Portfolio; and (iii) Professional Portfolio reporting units. Accordingly, for the three months ended March 31, 2020, the Company recognized a total of $99.8 million of non-cash goodwill impairment charges consisting of: $54.3 million and $19.6 million for the Mass Portfolio and Professional Portfolio reporting units, respectively, within the Company's Portfolio segment and $25.9 million for the Elizabeth Arden Fragrances reporting unit within the Company's Elizabeth Arden segment. Following the recognition of these non-cash goodwill impairment charges, as of March 31, 2020, the Elizabeth Arden Fragrances, Mass Portfolio and Professional Portfolio reporting units had approximately $23.5 million, NaN and $97.2 million, respectively, in remaining goodwill.

For the second quarter of 2020, as of June 30, 2020:

•The Company determined that it was more likely than not that the fair values of each of its: (i) Revlon; (ii) Elizabeth Arden Skin and Color; and (iii) Fragrances reporting units exceeded their respective carrying amounts for the second quarter of 2020. As of June 30, 2020, prior to the recording of any impairment charges, the Revlon, Elizabeth Arden Skin and Color and Fragrances reporting units had goodwill balances of $264.9 million, $67.4 million and $120.8 million, respectively; and
•Primarily due to the continued worldwide effects of the ongoing and prolonged COVID-19 pandemic, the Company also determined that indicators of impairment existed for each of its: (i) Elizabeth Arden Fragrances; and (ii) Professional Portfolio reporting units. Accordingly, for the three months ended June 30, 2020, the Company recognized a total of $11.2 million of non-cash goodwill impairment charges consisting of: $9.6 million for the Professional Portfolio reporting unit within the Company's Portfolio segment and $1.6 million for the Elizabeth Arden Fragrances reporting unit within the Company's Elizabeth Arden segment. Following the recognition of these non-cash goodwill impairment charges, as of June 30, 2020, the Elizabeth Arden Fragrances and Professional Portfolio reporting units had approximately $22.0 million and $87.6 million, respectively, in remaining goodwill.

Third Quarter 2020 Interim Goodwill Assessment

As of September 30, 2019 and 2018, all2020, primarily due to the continued worldwide effects of the restructuring reserve balances were included within accrued expensesongoing and other current liabilities in the Company's Consolidated Balance Sheets.


3. DISCONTINUED OPERATIONS

In December 2013,prolonged COVID-19 pandemic, the Company announced restructuring actionsre-assessed whether further indicators of impairment arose during the third quarter of 2020 that primarily included exitingmight result in additional goodwill impairment charges. For the third quarter of 2020 interim assessment, the Company, in accordance with ASC 350, performed qualitative analyses for its direct manufacturing, warehousing(i) Revlon; (ii) Elizabeth Arden Skin and sales business operations in mainland China withinColor; (iii) Elizabeth Arden Fragrances; (iv) Professional Portfolio; and (v) Fragrances reporting units. As discussed above, the Revlon segment (the "December 2013 Program"). The December 2013 Program resulted inMass Portfolio reporting unit's goodwill was written down to NaN during the eliminationfirst quarter of approximately 1,100 positions in 2014, primarily in China. With2020. In performing its third quarter of 2020 qualitative interim goodwill assessment, the implementationCompany considered, among other factors, the financial performance of the December 2013 Program, the resultseach of the China discontinued operations, which relate entirely to the Revlon segment, are included within income from discontinued operations, net of taxes. The summary comparative financial results of discontinued operations were as follows for the periods presented:its reporting

 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net sales$—
 $—
 $—
 $—
(Loss) income from discontinued operations, before taxes(0.3) (0.4) 2.0
 (0.1)
Provision for income taxes—
 —
 —
 —
(Loss) income from discontinued operations, net of taxes(0.3) (0.4) 2.0
 (0.1)

As of September 30, 2019 and December 31, 2018, assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consisted of the following:
 September 30, December 31,
 2019 2018
Cash and cash equivalents$1.0
 $1.1
Trade receivables, net—
 0.2
Total current assets1.0
 1.3
Total assets$1.0
 $1.3
    
Accounts payable$—
 $0.5
Accrued expenses and other1.2
 3.3
Total current liabilities1.2
 3.8
Total liabilities$1.2
 $3.8


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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



units, the Company's revised expected future cash flows as affected by the ongoing and prolonged COVID-19 pandemic, as well as the results of the second quarter of 2020 quantitative interim analysis.
4. INVENTORIES

AsFor the third quarter of 2020, as of September 30, 20192020:

•The Company, in accordance with ASC 350, performed qualitative analyses for its: (i) Revlon; (ii) Elizabeth Arden Skin and December 31, 2018,Color; (iii) Elizabeth Arden Fragrances; (iv) Professional Portfolio; and (v) Fragrances reporting units; and
•Based upon such assessment, the Company determined that it was more likely than not that the fair value of each of its previously mentioned reporting units exceeded their respective carrying amounts as of September 30, 2020. Consequently, 0 impairment changes were recognized during the three months ended September 30, 2020.

Total non-cash impairment charges recorded on the Company's inventory balances consistedgoodwill were NaN and $111.0 million for the three and nine months ended September 30, 2020. NaN impairment charges were recognized during the nine months ended September 30, 2019.

Inputs and Assumptions Considerations

The above-mentioned fair values for the first and second quarter of 2020 quantitative interim assessments were primarily determined using a weighted average market and income approach. The income approach requires several assumptions including those regarding future sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) margins, and capital expenditures, which are the following:
 September 30, December 31,
 2019 2018
Raw materials and supplies$130.0
 $143.5
Work-in-process8.8
 5.6
Finished goods383.2
 374.1
 $522.0
 $523.2


5. LEASES

Products Corporation leases facilitiesbasis for executive offices, warehousing, research and development and sales operations and leases various types of equipment under operating and finance lease agreements. The majority of Products Corporation’s real estate leases, in terms of total undiscounted payments, are locatedthe information used in the U.S.
As discloseddiscounted cash flow model. The weighted-average cost of capital used in Note 1, in February 2016, the FASB issued ASU No. 2016-02, which requires that a lessee recognize, for both finance leases and operating leases, a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying leased assetincome approach for the lease term. first and second quarter of 2020 quantitative interim assessments ranged from 10.5% to 12.0%, with a perpetual growth rate of 2%. For the market approach, for the first and second quarter of 2020 quantitative interim assessments, the Company considered the market comparable method based upon total enterprise value multiples of other comparable publicly-traded companies.

The lease liability is equalkey assumptions used to determine the presentestimated fair value of the lease paymentsreporting units for the first and second quarter of 2020 quantitative interim assessments, as well as for the ROU asset is based onthird quarter of 2020 qualitative interim assessment, included the lease liability, subject to certain adjustments, such as pre-payments, initial direct costs, lease incentives and accrued rent.
The Company adopted ASU No. 2016-02 beginning asexpected success of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at the effective date of January 1, 2019. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods. Refer to Note 20, "Contingencies," in the Company's 2018 Form 10-K for detailfuture new product launches, the Company's achievement of its minimum rental commitments at December 31, 2018 under legacy ASC 840, "Leases".
The standard had a materialexpansion plans, the Company's realization of its cost reduction initiatives and other efficiency efforts, as well as certain assumptions regarding COVID-19's expected impact on the Company’s unaudited consolidated balance sheets but didCompany. If such plans and assumptions do not materialize as anticipated, or if there are further challenges in the business environment in which the Company's reporting units operate, a resulting change in actual results from the Company's key assumptions could have ana negative impact on the Company’s unaudited statementsestimated fair values of operations and comprehensive loss and cash flows.
As of January 1, 2019, the Company's adoption of ASU No. 2016-02 resulted in:
the recognition of ROU assets for operating leases and finance leases of approximately $109.3 million and $1.5 million, respectively;
the recognition of lease liabilities for operating leases and finance leases of approximately $123.4 million and $1.4 million, respectively; and
a decrease of approximately $11.3 million in accrued rent (ofreporting units, which $10.7 million was recorded in other long-term liabilities and $0.6 million was recorded in accrued expenses and other current liabilities), a decrease of approximately $3.5 million in lease termination liabilities and a decrease of approximately $0.7 million in prepaid rent, due to adjustments to balances previously recorded on the unaudited condensed consolidated balance sheets upon transition from the legacy ASC 840 to ASC 842.

Upon adoption of ASU No. 2016-02,could require the Company electedto recognize additional impairment charges in future reporting periods.

The inputs and assumptions utilized in the available practical expedients allowedquarterly interim impairment analyses are classified as Level 3 inputs in the fair value hierarchy as defined in ASC Topic 820, “Fair Value Measurements.”

The following table presents the changes in goodwill by segment for thenine months ended September 30,2020:
RevlonPortfolioElizabeth ArdenFragrancesTotal
Balance at January 1, 2020$264.9 $171.1 $116.9 $120.8 $673.7 
Foreign currency translation adjustment0.3 0.2 0 0 0.5 
Goodwill impairment charge0 (83.5)(27.5)0 (111.0)
Balance at September 30, 2020$265.2 $87.8 $89.4 $120.8 $563.2 
Cumulative goodwill impairment charges(a)
$(166.2)
(a) Amount refers to cumulative goodwill impairment charges related to impairments recognized in 2015, 2017, 2018 and 2020; NaN and $111.0 million of such impairment charges were recognized during the guidance under:three and nine months ended September 30, 2020, respectively.
ASC 842-10-15-37, by not separating lease components from non-lease components and instead accounting for all components as a single lease component for all of its classes of underlying assets, i.e., for any type of equipment leases and real estate leases; and
ASC 842-10-65-1, by not reassessing at the transition date: (i) whether any expired or existing contracts are or contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases.



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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



In connection with recognizing these goodwill impairment charges for the three and nine months ended September 30, 2020, the Company recognized a tax benefit of approximately NaN and $8.3 million, respectively, during such periods.
Intangible Assets, Net
Finite-Lived Intangibles
In accordance with ASC Topic 360, and in conjunction with the Company's performance of its interim impairment testing of goodwill for the first, second and third quarters of 2020, the Company reviewed its finite-lived intangible assets for impairment. In performing such review, the Company makes judgments about the recoverability of its purchased finite-lived intangible assets whenever events or changes in circumstances indicate that an impairment to its finite-lived intangible assets may exist. The Company determines if an arrangementalso considers several indicators of impairment, including, among other factors, the following: (i) whether there exists any significant adverse change in the extent or manner in which a long-lived asset and/or asset group is a lease at inception, consideringbeing used; (ii) whether the contract conveys a right to controlthere exists any projection or forecast demonstrating losses associated with the use of the identifieda long-lived asset for a period of time in exchange for consideration. Operating leases are included in operating lease ROU assets, recorded within “Property, Plant and Equipment”, and operating lease liabilities are recorded within either "Accrued expenses and other current liabilities" and/or "Other long-term liabilities"asset group; and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset and/or asset group will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. The carrying amount of a finite-lived intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the finite-lived intangible asset and/or asset group and the impairment loss is measured as the amount by which the carrying amount of the finite-lived intangible asset exceeds its fair value. NaN impairment charges were recognized related to the carrying value of any of the Company's finite-lived intangible assets as a result of the first, second and third quarters of 2020 impairment assessments.
Indefinite-Lived Intangibles
In connection with the interim impairment assessment for the first and second quarters of 2020, the Company also quantitatively reviewed indefinite-lived intangible assets, consisting of certain trade names, using March 31, 2020 and June 30, 2020 carrying values, respectively, similar to goodwill, in accordance with ASC Topic 350.

As a result of COVID-19’s impact on the Company’s operations and on the expected future cash flows of certain asset groups, in connection with the Company's quantitative interim assessment of goodwill in the Company’s unaudited consolidated balance sheets. Finance leases are included in finance lease ROUfirst and second quarters of 2020, the Company performed quantitative interim assessments for its indefinite-lived intangible assets recorded within “Property, Plant and Equipment”, and finance lease liabilities are recorded within either "Accrued expenses and other current liabilities" and/or "Other long-term liabilities"for the same periods, which resulted in the Company’s unaudited consolidated balance sheets.recognition of:
•$24.5 million of total non-cash impairment charges related to certain indefinite-lived intangible assets within the Company's Mass Portfolio, Elizabeth Arden Fragrances and Elizabeth Arden Skin and Color reporting units in the first quarter of 2020; and
•$8.6 million of total non-cash impairment charges related to certain indefinite-lived intangible assets within the Company's Elizabeth Arden Fragrances and Elizabeth Arden Skin and Color reporting units in the second quarter of 2020.

As mostof September 30, 2020, in accordance with the approach followed for the third quarter interim assessment of goodwill, the Company performed a qualitative assessment of its indefinite-lived intangible assets considering, among other factors, the financial performance of certain asset groups within its reporting units, the Company's revised, expected future cash flows (also as affected by COVID-19), as well as the results of the Company’s leases do not providesecond quarter of 2020 quantitative interim analysis of indefinite-lived intangibles. NaN impairment charges were recognized related to the lease implicit rates,carrying value of any of the Company uses its incremental borrowing ratesCompany's indefinite-lived intangible assets as a result of the discount rate, adjusted as applicable,third quarter of 2020 qualitative interim impairment assessment. Consequently, total non-cash impairment charges recorded on the Company's indefinite-lived intangible assets were NaN and $33.1 million for the three and nine months ended September 30, 2020.

Inputs and Assumptions Considerations

The fair values of the Company's intangible assets were determined based on the information available at the lease commencement dates to determine the present value of lease payments. The Company may use the lease implicit rate, when readily determinable, as the discount rate to determine the present value of lease payments. As of January 1, 2019, the Company used an average discount rate of approximately 16%,undiscounted cash flows method for its finite-lived intangibles and based on an estimatethe relief from royalty method for its indefinite-lived intangibles, respectively. The inputs and assumptions utilized in the impairment analyses are classified as Level 3 inputs in the fair value hierarchy as defined in ASC Topic 820, “Fair Value Measurements.” These impairment charges were included as a separate component of operating income within the "Impairment charges" caption on the face of the Company's incremental borrowing rates.
Lease terms may include options to extend or terminateUnaudited Consolidated Statement of Operations and Comprehensive Loss for the lease when itthree and nine months ended September 30, 2020. A summary of such impairment charges by segments is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the applicable lease term.
At lease commencement, for initial measurement, variable lease payments that do not depend on an index or rate, if any, are excluded from lease payments. Subsequent to initial measurement, these variable payments are recognized when the event determining the amount of the variable consideration to be paid occurs. Leases with an initial lease term of 12 months or less are not included in the lease liability or ROU asset.following table:
The following table includes disclosure related to the new ASC 842 lease standard, after application of the aforementioned practical expedients and short-term lease considerations:

  Nine Months Ended
  September 30, 2019
Lease Cost:  
Finance Lease Cost:  
    Amortization of ROU assets $0.2
    Interest on lease liabilities 0.1
Operating Lease Cost 31.4
Total Lease Cost 31.7
  ��
Other Information:  
Cash paid for amounts included in the measurement of lease liabilities:  
    Operating cash flows from finance leases 0.1
    Operating cash flows from operating leases 30.6
    Financing cash flows from finance leases 0.7
   
ROU assets for finance leases $1.2
ROU assets for operating leases 93.9
Amortization on ROU assets for finance leases 0.2
Amortization on ROU assets for operating leases 16.7
   
Weighted-average remaining lease term - finance leases 3.2 years
Weighted-average remaining lease term - operating leases 6.3 years
   
Weighted-average discount rate - finance leases 16.0%
Weighted-average discount rate - operating leases 15.8%


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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Three Months Ended
September 30, 2020
RevlonPortfolioElizabeth ArdenFragrancesTotal
Indefinite-lived intangible assets$0 $0 $0 $0 $0 
Total Intangibles Impairment$0 $0 $0 $0 $0 
Maturities of lease liabilities as of September 30, 2019 were as follows:
Nine Months Ended
September 30, 2020
RevlonPortfolioElizabeth ArdenFragrancesTotal
Indefinite-lived intangible assets$0 $(2.5)$(30.6)$0 $(33.1)
Total Intangibles Impairment$0 $(2.5)$(30.6)$0 $(33.1)

 Operating Leases Finance Leases
October 2019 through December 2019$9.3
 $0.2
202033.1
 0.6
202129.6
 0.5
202223.1
 0.3
202318.9
 —
Thereafter60.3
 —
Total undiscounted cash flows$174.3
 $1.6
    
Present value:

 

Short-term lease liability$13.9
 $0.7
Long-term lease liability92.3
 0.5
Total lease liability$106.2
 $1.2
Difference between undiscounted cash flows and discounted cash flows$68.1
 $0.4


6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following table presentsIn connection with recognizing these intangible assets impairment charges for the changes in goodwill by segment during thethree and nine months ended September 30, 2019:2020, the Company recognized a tax benefit of approximately NaN and $6.9 million, respectively, during such periods.
 Revlon Portfolio Elizabeth Arden Fragrances Total
Balance at January 1, 2019$265.0
 $171.2
 $116.9
 $120.8
 $673.9
Foreign currency translation adjustment(0.3) (0.2) —
 —
 (0.5)
Balance at September 30, 2019$264.7
 $171.0
 $116.9
 $120.8
 $673.4
          
Cumulative goodwill impairment charges(a)


 

 

 

 $(55.2)
(a) Amount refers to cumulative goodwill impairment charges related to impairments recognized in 2015, 2017 and 2018; no impairment charges were recognized duringThe following tables present details of the nine months endedCompany's total intangible assets as of September 30, 2019.2020 and December 31, 2019:


September 30, 2020
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$271.3 $(122.7)$0 $148.6 12
Customer relationships248.8 (107.4)0 141.4 11
Patents and internally-developed intellectual property23.7 (15.2)0 8.5 5
Distribution rights31.0 (7.0)0 24.0 14
Other1.3 (1.3)0 0 0
Total finite-lived intangible assets$576.1 $(253.6)$0 $322.5 
Indefinite-lived intangible assets:
Trade names$146.5 N/A$(33.1)$113.4 
Total indefinite-lived intangible assets$146.5 N/A$(33.1)$113.4 
Total intangible assets$722.6 $(253.6)$(33.1)$435.9 
December 31, 2019
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$271.2 $(110.9)$0 $160.3 13
Customer relationships248.3 (96.5)0 151.8 11
Patents and internally-developed intellectual property21.5 (12.1)0 9.4 5
Distribution rights31.0 (5.6)0 25.4 15
Other1.3 (1.3)0 0 0
Total finite-lived intangible assets$573.3 $(226.4)$0 $346.9 
Indefinite-lived intangible assets:
Trade names$143.8 N/A$0 $143.8 
Total indefinite-lived intangible assets$143.8 N/A$0 $143.8 
Total intangible assets$717.1 $(226.4)$0 $490.7 
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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




Intangible Assets, Net

The following tables present details of the Company's total intangible assets as of September 30, 2019 and December 31, 2018:
 September 30, 2019
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$271.1
 $(106.6) $164.5
 13
Customer relationships247.6
 (93.0) 154.6
 12
Patents and internally-developed intellectual property21.1
 (11.5) 9.6
 5
Distribution rights31.0
 (5.3) 25.7
 15
Other1.3
 (1.3) —
 0
Total finite-lived intangible assets$572.1
 $(217.7) $354.4
  
        
Indefinite-lived intangible assets:       
Trade names$142.3
 N/A
 $142.3
  
Total indefinite-lived intangible assets$142.3
 N/A
 $142.3
  
        
Total intangible assets$714.4
 $(217.7) $496.7
  
        
 December 31, 2018
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$272.3
 $(94.3) $178.0
 13
Customer relationships248.6
 (77.9) 170.7
 12
Patents and internally-developed intellectual property20.9
 (10.1) 10.8
 6
Distribution rights31.0
 (4.0) 27.0
 16
Other1.3
 (1.0) 0.3
 1
Total finite-lived intangible assets$574.1
 $(187.3) $386.8
  
        
Indefinite-lived intangible assets:       
Trade names$145.2
 N/A
 $145.2
  
Total indefinite-lived intangible assets$145.2
 N/A
 $145.2
  
        
Total intangible assets$719.3
 $(187.3) $532.0
  

Amortization expense for finite-lived intangible assets was $8.3 million and $10.1 million forin each of the three months ended September 30, 2020 and 2019, and 2018, respectively,$25.0 million and $31.9 million and $30.3 million for the nine months ended September 30, 2020 and 2019, and 2018, respectively. Amortization duringThe variance with the first three months of 2019previous comparable nine-month period was affected byattributable primarily to the accelerated amortization of the Pure Ice intangible assets during the quarter ended March 31, 2019 as a result of the revision of the brand’s intangible assets useful lives following the termination of a business relationship with itsthe brand's principal customer in 2018.customer.


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The following table reflects the estimated future amortization expense for each period presented, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of September 30, 2019:2020:
Estimated Amortization Expense
2020$8.7 
202133.4 
202232.4 
202330.9 
202427.6 
Thereafter189.5 
Total$322.5 

 Estimated Amortization Expense
2019$8.7
202034.1
202133.2
202232.3
202330.7
Thereafter215.4
Total$354.4


7.6. ACCRUED EXPENSES AND OTHER


As of September 30, 20192020 and December 31, 2018,2019, the Company's accrued expenses and other current liabilities consisted of the following:
September 30,December 31,
20202019
Sales returns and allowances$73.9 $89.7 
Advertising, marketing and promotional costs72.9 82.8 
Taxes (a)
48.1 54.3 
Compensation and related benefits40.1 42.1 
Interest22.0 34.0 
Professional services and insurance15.0 16.3 
Short-term lease liability19.0 14.5 
Freight and distribution costs3.1 13.2 
Restructuring reserve29.4 10.0 
Software3.1 4.0 
Other (b)
61.3 54.0 
Total$387.9 $414.9 
 September 30, December 31,
 2019 2018
Sales returns and allowances$87.9
 $97.7
Advertising and promotional costs76.8
 76.2
Compensation and related benefits32.7
 55.9
Taxes (a)
24.4
 30.9
Restructuring reserve15.2
 26.4
Interest20.2
 33.8
Other (b)
111.1
 110.0
Total$368.3
 $430.9
(a) Accrued Taxes for Products Corporation as of September 30, 20192020 and December 31, 20182019 were $27.8$51.1 million and $34.6$57.6 million, respectively.
(b) Accrued Other for Products Corporation as of September 30, 2019 and December 31, 2018 were $111.02019 includes approximately $2.3 million of severance to Mr. Fabian Garcia, the Company's former President and $110.1 million, respectively.Chief Executive Officer, which was paid in 2020.




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8. LONG-TERM7. DEBT


As of September 30, 2019 and December 31, 2018,The table below details the Company's debt balances consistedas of the following:September 30, 2020 and December 31, 2019. See also Note 19, "Subsequent Events," for recent debt activity updates.
September 30,December 31,
20202019
2020 BrandCo Term Loan Facility due 2025, net of debt issuance costs (see (a) below)$1,625.2 $0 
2019 Term Loan Facility due 2023, net of discounts and debt issuance costs (see (b) below)0 187.1 
2018 Foreign Asset-Based Term Facility due 2021, net of discounts and debt issuance costs (see (c) below)54.6 82.3 
Amended 2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (d) below)290.2 269.9 
2016 Term Loan Facility: 2016 Term Loan due 2023 and 2025, net of discounts and debt issuance costs (see (e) below)875.2 1,713.6 
5.75% Senior Notes due 2021, net of debt issuance costs (see (f) below)341.7 498.1 
6.25% Senior Notes due 2024, net of debt issuance costs (see (g) below)
443.8 442.8 
Spanish Government Loan due 20250.3 0.4 
Debt$3,631.0 $3,194.2 
Less current portion(*)
(704.5)(288.0)
Long-term debt$2,926.5 $2,906.2 
Short-term borrowings (see (h) below)
$2.0 $2.2 
 September 30, December 31,
 2019 2018
2019 Term Loan Facility due 2023, net of discounts and debt issuance costs (a)
188.4
 $—
2018 Foreign Asset-Based Term Facility due 2021, net of discounts and debt issuance costs (b)
79.5
 82.7
Amended 2016 Revolving Credit Facility due 2021, net of debt issuance costs (c)
345.4
 330.0
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (d)
1,716.3
 1,724.6
5.75% Senior Notes due 2021, net of debt issuance costs (e) 
497.7
 496.6
6.25% Senior Notes due 2024, net of debt issuance costs (f)
442.4
 441.4
Spanish Government Loan due 20250.4
 0.5
 $3,270.1
 $3,075.8
Less current portion(*)
(363.5) (348.1)
 $2,906.6
 $2,727.7
    
Short-term borrowings (g)
$5.1
 $9.3
(*) At September 30, 2019,2020, the Company classified $363.5$704.5 million as its current portion of long-term debt, comprised primarily of $345.4$341.7 million of Products Corporation's 5.75% Senior Notes due February 15, 2021 (the "5.75% Senior Notes"), net of debt issuance costs, $290.2 million of net borrowings under the Amended 2016 Revolving Credit Facility, net of debt issuance costs, $54.6 million of the 2018 Foreign Asset-Based Term Facility due July 9, 2021, net of debt issuance costs and $18debt discount, $9.2 million of amortization payments on the 2016 Term Loan Facility scheduled to be paid over the next four calendar quarters.quarters, and $8.6 million of amortization payments under the 2020 BrandCo Term Loan Facility due within one year. At December 31, 2018,2019, the Company classified $348.1$288.0 million as its current portion of long-term debt, comprised primarily of $330$269.9 million of net borrowings under the Amended 2016 Revolving Credit Facility, net of debt issuance costs, and $18$18.0 million of amortization payments on the 2016 Term Loan Facility.
(a) See "Current Year Debt Transactions" below in this Note 87, "Debt," and Note 19, "Subsequent Events," for additional details regarding the Company's recent debt-related transactions.
(a) The aggregate principal amount outstanding under the 2020 BrandCo Term Loan Facility at September 30, 2020 was $1,761.3 million, including $846.0 million of principal rolled-up from the 2016 Term Loan Facility to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility. See further details below, within this Note 7, "Debt," and Note 19, “Subsequent Events.”
(b) On May 7, 2020, in connection with closing the 2020 BrandCo Facilities, Products Corporation fully repaid the 2019 Term Loan Facility.
(b)Facility pursuant to that Term Credit Agreement, dated as of August 6, 2019 (the “2019 Term Loan Facility”). See Note 10,9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding the 2019 Term Loan Facility, which prior to its repayment was scheduled to mature on the earliest of: (x) August 6, 2023 and (y) the 180th day prior to the stated maturity of Products Corporation’s existing 2016 Term Loan Facility, if any loans under the 2016 Term Loan Facility remained outstanding and had not been replaced or refinanced by such date. The lenders under the 2019 Term Loan Facility participated in the 2020 BrandCo Term Loan Facility and, as a result, the Company determined that the full repayment of the 2019 Term Loan Facility represented a debt modification under U.S. GAAP. Accordingly, the Company recorded approximately $33.5 million in connection with fees paid to the lenders for the prepayment of the 2019 Term Loan Facility, as well as approximately $10.3 million in other lenders' fees, which were capitalized as part of the total debt issuance costs for the 2020 BrandCo Term Loan Facility. See further details below, within this Note 7, "Debt," and Note 19, “Subsequent Events.”
(c) The aggregate principal amount outstanding under the 2018 Foreign Asset-Based Term Facility at September 30, 2020 was the Euro equivalent of $56.8 million. In connection with the amendment described below, the Company repaid €5 million of the original aggregate principal amount of €77 million. See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding the euro-denominated senior secured asset-based term loan facility in an aggregate principal amount of €77 million that various foreign subsidiaries of Products Corporation entered into inon July 9, 2018 and which is scheduled to mature on July 9, 2021 (the “2018 Foreign Asset-Based Term Facility”). In May, 2020 the Company entered into an amendment to the 2018 Foreign Asset Based Term Facility to, among other things, increase the margin applicable to the interest rate from EURIBOR (with a floor of 0.50%) plus a margin of 6.50% to EURIBOR (with a floor 0.50%) plus a margin of 7.00%. See further details below, within this Note 7, "Debt."
(c)(d) Total borrowings at face amount under Tranche A of the Amended 2016 Revolving Credit Facility at September 30, 2020 were $291.9 million (excluding $1.4 million of outstanding undrawn letters of credit). See Note 10,9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's Amended 2016 Revolving Credit Facility. In April 2018, Products Corporation amended the Amended 2016 Revolving Credit Facility Agreement, as detailed below, to, among other things, add a new $41.5 million senior secured first in, last out "Tranche B," while the original $400 million tranche under such facility became a senior secured last in, first out "Tranche A." Tranche A matures on the earlier of: (x) September 7, 2021; and (y) the 91st day prior to the maturity 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 outstanding 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 million. On April 17, 2020, the maturity date of the 2018 Tranche B matures onwas extended from April 17, 2020. Total borrowings at face2020 to May 17, 2020 and was fully repaid on such extended maturity date.
(e) The aggregate principal amount under Tranche A and Tranche Boutstanding under the Amended 2016 Revolving CreditTerm Loan Facility at September 30, 2019 were $307.5 million (excluding $11.3 million of outstanding undrawn letters of credit) and $40.9 million, respectively (the 2016 Term Loan Facility and the Amended 2016 Revolving Credit Facility are collectively referred to as the "2016 Senior Credit Facilities" and the applicable agreements being the “2016 Credit Agreements”).
(d)2020 was $886.3 million. See Note 10,9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20182019 Form 10-K for certain details regarding Products Corporation's 2016 Term Loan Facility that matureswas originally scheduled to mature on the earlier of: (x) September 7, 2023; and (y) the 91st day prior to the maturity of Products Corporation’s

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5.75% Senior Notes due 2021 if, on that date (and solely for so long as), (i) any of Products Corporation's 5.75% Senior Notes remain outstanding 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 million. The aggregate principal amount outstanding undermillion (the “Original Maturity Date”). On May 7, 2020, in connection with closing the 2020 BrandCo Facilities, Products Corporation amended the 2016 Term Loan Facility atto, among other things, extend the maturity of a portion of the 2016 Term Loan Facility to June 30, 2025, subject to certain springing maturities (the “Extended Maturity Date”). See further details below within this Note 7, "Debt," and Note 19, “Subsequent Events.” As a result of such transaction, as of September 30, 2019 was $1,746 million.
(e) See Note 10, "Long-Term Debt,"2020, $855.6 million of the 2016 Term Loan Facility is scheduled to the Consolidated Financial Statements in the Company's 2018 Form 10-K for certain details regarding Products Corporation's 5.75% Senior Notes that mature on February 15, 2021.the Original Maturity Date and $30.7 million is scheduled to mature on the Extended Maturity Date.
(f) The aggregate principal amount outstanding under the 5.75% Senior Notes at September 30, 20192020 was $500$342.8 million.
(f) See Note 10,9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20182019 Form 10-K for certain details regarding Products Corporation's 6.25%5.75% Senior Notes that are scheduled to mature on August 1, 2024.February 15, 2021. During the nine months ended September 30, 2020, Products Corporation repurchased $157.2 million in aggregate principal face amount of the 5.75% Senior Notes, recording a gain on extinguishment of debt of approximately $43.1 million, which is included in "Gain on early extinguishment of debt" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020. See further details below within this Note 7, "Debt," and Note 19, “Subsequent Events.”
(g) The aggregate principal amount outstanding under the 6.25% Senior Notes at September 30, 20192020 was $450 million. See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's 6.25% Senior Notes that are scheduled to mature on August 1, 2024 (the "6.25% Senior Notes").

(h) There were 0 borrowings at September 30, 2020 under the Second Amended and Restated Unsecured 2019 Senior Line of Credit Facility between Products Corporation and MacAndrews & Forbes Group, LLC (“M&F”), dated as of September 28, 2020 (the “2020 Restated Line of Credit Facility”), which was amended and restated in anticipation of a Future Refinanced European ABL Facility (as hereinafter defined) and will provide Products Corporation with up to a $30 million tranche of a new facility of the 2018 Foreign Asset-Based Term Facility (the “New European ABL FILO Facility”) that would be secured on a “last-out” basis by the same collateral as the 2018 Foreign Asset-Based Term Facility or, if no Future Refinanced European ABL Facility is obtained, a stand-alone $30.0 million credit facility secured by the same collateral as the 2018 Foreign Asset-Based Term Facility when that facility is terminated, in each case, subject to a borrowing base.

Current Year Debt Transactions
5.75% Senior Notes Exchange Offer

See Note 19, “Subsequent Events” for important information regarding the Company’s debt-related transactions occurring after September 30, 2020. On September 29, 2020, Products Corporation commenced the “Exchange Offer” to exchange any and all of the then-outstanding 5.75% Senior Notes (the “Existing 5.75% Senior Notes”). As described in Note 19, the Exchange Offer was amended on October 23, 2020 and on November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, 0 5.75% Senior Notes remained outstanding as of the closing on November 13, 2020.


Amendments to the 2020 BrandCo Term Loan Facility
Prior to consummating the Exchange Offer, on September 28, 2020, Products Corporation and certain lenders under the 2020 BrandCo Term Loan Facility, representing more than a majority in aggregate principal amount of loans thereunder (the “Supporting BrandCo Lenders”), entered into a Transaction Support Agreement (the “BrandCo TSA”) under which the Supporting BrandCo Lenders agreed to take certain actions to facilitate the Exchange Offer and Consent Solicitation, including, among other things:
•Relinquishing certain rights of such Supporting BrandCo Lenders to “roll-up” loans held by such Supporting BrandCo Lenders under the 2016 Term Loan Facility into New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility (the “Roll-up Rights”);
•Tendering any Existing 5.75% Senior Notes held by such Supporting BrandCo Lenders into the Exchange Offer and Consent Solicitation;
•Consenting to amendments to the 2020 BrandCo Term Loan Facility to permit the exchange of Existing 5.75% Senior Notes for the New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility as contemplated by the Offering Memorandum and the payment of the BrandCo Support and Consent Consideration;
•Consenting to other amendments to the 2020 BrandCo Term Loan Facility and the Amended 2016 Revolving Credit Facility to permit the Exchange Offer and Consent Solicitation to be completed as contemplated by the Offering Memorandum; and
•Supporting and cooperating with Products Corporation to consummate the transactions contemplated by the BrandCo TSA and the Offering Memorandum, including the Exchange Offer and Consent Solicitation.
In connection with such amendments, Products Corporation agreed to provide the following consideration (collectively, the “BrandCo Support and Consent Consideration”) upon the successful consummation of the Exchange Offer:

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(g) There were no borrowings at September 30, 2019•$12.5 million aggregate principal amount of New BrandCo Second-Lien Term Loans as a fee to the Supporting BrandCo Lenders under the BrandCo TSA in connection with such Supporting BrandCo Lenders’ relinquishment of their Roll-up Rights;
•$10.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans to one of the Supporting BrandCo Lenders in exchange for $18.7 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 held by such Supporting BrandCo Lender; and
•to all lenders under the 2020 BrandCo Term Loan Facility (including the Supporting BrandCo Lenders), an amendment fee that was payable pro rata based on principal amount of loans consenting, consisting of, at Products Corporation's option, either (x) an aggregate of $2.5 million of cash or (y) $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans. Pursuant to the BrandCo Amendment, Products Corporation elected to pay this fee in-kind in the form of $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans.

On November 13, 2020, Products Corporation entered into that certain Amendment No. 1 (the “BrandCo Amendment”) to the 2020 BrandCo Credit Agreement in connection with the Exchange Offer in order to, among other things, provide for the incurrence of $75 million in aggregate principal amount of New BrandCo Second-Lien Term Loans. The New BrandCo Second Lien Term Loans are a separate tranche of “Term B-2 Loans” (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the BrandCo Credit Agreement. Except as to the use of proceeds, the terms of the New BrandCo Second-Lien Term Loans are substantially consistent with the other Term B-2 Loans. In connection with the BrandCo Amendment, Products Corporation paid certain fees to the lenders in-kind in the form of New BrandCo Second-Lien Term Loans in accordance with the BrandCo TSA.

MacAndrews & Forbes 2020 Restated Line of Credit Facility
In light of the upcoming maturity on July 9, 2021 of the 2018 Foreign Asset-Based Term Facility and the upcoming expiration on December 31, 2020 of the Amended 2019 Senior Line of Credit Facility, betweenthe Company sought to refinance or extend both the 2018 Foreign Asset-Based Term Facility and the Amended 2019 Senior Line of Credit Facility. Products Corporation sought to do so in order to reinforce its liquidity position to be better able to address the current business and economic environment and prepare for any further potential disruptions to its business and operations as may be brought on by the ongoing COVID-19 pandemic or other events.
As a result, and anticipating a future refinancing of the 2018 Foreign Asset-Based Term Facility (a “Future Refinanced European ABL Facility”), on September 28, 2020, Products Corporation and MacAndrews & Forbes Group, LLC,M&F entered into the Second Amended and Restated 2019 Senior Unsecured Line of Credit Facility (the “2020 Restated Line of Credit Facility”), which amended and restated the Amended 2019 Senior Line of Credit Facility and will provide Products Corporation with up to a related party, discussed below.$30 million tranche of a new facility of the 2018 Foreign Asset-Based Term Facility (the “New European ABL FILO Facility”) that would be secured on a “last-out” basis by the same collateral as the 2018 Foreign Asset-Based Term Facility or, if no Future Refinanced European ABL Facility is obtained, a stand-alone $30 million credit facility secured by the same collateral as the 2018 Foreign Asset-Based Term Facility when that facility is terminated, in each case, subject to a borrowing base. Upon the earlier of (x) the incurrence of a New European ABL FILO Facility and (y) December 31, 2020, the 2020 Restated Line of Credit Facility will terminate, such that M&F’s maximum committed amount under the 2020 Restated Line of Credit Facility will never exceed $30.0 million. As of September 30, 2020, there were 0 borrowings outstanding under the 2020 Restated Line of Credit Facility.

Current Year DebtThe New European ABL FILO Facility would mature on (x) the maturity date of any such Future Refinanced European ABL Facility or (y) if there is no Future Refinanced European ABL Facility, July 9, 2022. To the extent the Future Refinanced European ABL Facility exceeds $35.0 million in principal amount, the amount available under the New European ABL FILO Facility would decrease on a dollar-for-dollar basis, such that, if Products Corporation were able to obtain a Future Refinanced ABL Facility of $65.0 million from third parties, there would be no amounts available under the New European ABL FILO Facility. The interest rate for the New European ABL FILO Facility will be LIBOR + 10.00%. The covenants for the New European ABL FILO Facility would be substantially the same as those applicable to the 2018 European ABL Facility.

Consummation of 2020 BrandCo Refinancing Transactions


2019 Term Loan Facility
Principal and Maturity:On August 6, 2019,May 7, 2020 (the “BrandCo 2020 Facilities Closing Date”), Products Corporation entered into a term credit agreement (the “2020 BrandCo Credit Agreement”) with Jefferies Finance LLC, as administrative agent and collateral agent, and certain financial institutions (the “2020 Facilities Lenders”) that are lenders or the affiliates of lenders under Products Corporation’s Term Loan Credit Agreement, dated as of September 7, 2016 and amended on April 30, 2020 and as amended on the BrandCo 2020 Facilities Closing Date, as further described below (as amended to date, the “2016 Term Loan Facility”). Pursuant to the 2020 BrandCo Credit Agreement, the 2020 Facilities Lenders provided Products Corporation with new and roll-up senior

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secured term loan facilities (the “2020 BrandCo Facilities” and, collectively, the "2020 BrandCo Term Loan Facility" and, together with the use of proceeds thereof and the Extension Amendment, the “2020 BrandCo Refinancing Transactions”).

Principal and Maturity: The 2020 BrandCo Facilities consist of: (i) a senior secured term loan facility among certain affiliated funds, investment vehicles or accounts managed or advised by Ares Management LLC, as lender, in an initialaggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $815 million, plus the amount of certain fees and accrued interest that have been capitalized (the “2020 BrandCo Facility”); (ii) commitments in respect of a senior secured term loan facility in an aggregate principal amount of $950 million (the “Roll-up BrandCo Facility”); and (iii) a senior secured term loan facility in an aggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $3 million (the “Junior Roll-up BrandCo Facility”). Additionally, on May 28, 2020, Products Corporation borrowed from the 2020 Facilities Lenders an additional $65 million of term loans under the 2020 BrandCo Facility to repay in full the 2020 Incremental Facility under the 2016 Term Loan Facility, as a result of which the 2020 BrandCo Facility at June 30, 2020 had an aggregate principal amount outstanding of $910.6 million (including paid-in-kind closing fees of $29.1 million and paid-in-kind interest of $1.5 million that were capitalized). Additionally, during the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 had an aggregate principal amount outstanding of $846.0 million. The Company determined that the roll-up of such 2016 Term Loan Facility lenders into the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility represented a debt modification under U.S. GAAP, as the cash flow effect between the amount that Products Corporation owed to the participating lenders under the old debt instrument (i.e., the 2016 Term Loan Facility) and the amount that Products Corporation owed to such lenders after the consummation of the roll-up into the new debt instrument (i.e., the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were not considered to be substantially different within the meaning of ASC 470, Debt, under U.S. GAAP.

The proceeds of the 2020 BrandCo Facility were used: (i) to repay in full approximately $200 million (the “2019 Term Loan Facility” and such agreement being the “2019 Term Loan Agreement”), and Wilmington Trust, National Association (“Wilmington Trust”), as administrative and collateral agent. Net proceeds from theof indebtedness outstanding under Products Corporation’s 2019 Term Loan Facility, whichFacility; (ii) to repay in full and terminate commitments under the 2020 Incremental Facility; and (iii) to pay fees and expenses in connection with the 2020 BrandCo Facilities and the 2020 BrandCo Refinancing Transactions. The Company will be useduse the remaining net proceeds for general corporate purposes, were approximately $188 million, after taking into account approximately $12 millionincluding repurchasing, repaying or refinancing Products Corporation’s outstanding 5.75% Senior Notes. The proceeds of related fees and expenses. The 2019 Term Loanthe Roll-up BrandCo Facility will mature onare available prior to the earliest of: (x) the fourththird anniversary of the BrandCo 2020 Facilities Closing Date; (y) the 180th day priorDate to the maturitypurchase at par an equivalent amount of Products Corporation’s existing 2016 Term Loan Facility, if any remaining term loans under the 2016 Term Loan Facility remainheld by the lenders participating in the 2020 BrandCo Facility or their transferees. During the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 have not been replaced or refinanced by such date;an aggregate principal amount outstanding of $846.0 million, with a remaining capacity for the roll-up of loans under the 2016 Term Loan Facility of $107.0 million. See “Amendments to the 2020 BrandCo Term Loan Facility” regarding the Supporting BrandCo Lenders relinquishing certain Roll-up Rights and (z)Products Corporation’s issuance of the BrandCo Support and Consent Consideration.

The 2020 BrandCo Facilities will mature on June 30, 2025, subject to a springing maturity 91 days prior to the August 1, 2024 maturity date of any springing maturityProducts Corporation’s 6.25% Senior Notes if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remain outstanding.

The Company incurred approximately $119.3 million of new debt issuance costs in connection with closing the 2020 BrandCo Facility, which include paid-in kind amounts that are recorded as an adjustment to the carrying amount of the related liability and amortized to interest expense in accordance with the effective interest method over the term of the 2020 BrandCo Facilities.

Borrower, Guarantees and Security: Products Corporation is the borrower under the 2020 BrandCo Facilities and the 2020 BrandCo Facilities are guaranteed by certain of Products Corporation's indirect subsidiaries (the “BrandCos”) that hold certain intellectual property assets related to the Elizabeth Arden and American Crew brands, certain other Portfolio segment brands and certain owned Fragrance segment brands (the “Specified Brand Assets”). While the BrandCos do not guarantee the 2016 Term Loan Facility, all guarantors of the 2016 Term Loan Facility (i.e.,guarantee the 91st day prior to the maturity2020 BrandCo Facilities. All of the 5.75% Senior Notes due February 15, 2021 if any 5.75% Senior Notes remain outstandingassets of the BrandCos (including all capital stock issued by such date).
Guarantees and Security: Products Corporation and its restricted subsidiaries under the 2019 Term LoanBrandCos) have been pledged to secure the 2020 BrandCo Facility (collectively, the “Restricted Group”) are subject to the covenants under the 2019 Term Loan Agreement. The 2019 Term Loan Facility is guaranteed by each existing and future direct or indirect wholly-owned domestic restricted subsidiary of Products Corporation (subject to various exceptions), as well as by Revlon, on a limited recoursefirst-priority basis, the Roll-up BrandCo Facility on a second-priority basis and Elizabeth Arden (U.K.) Ltd., Revlon Canada Inc.the Junior Roll-up BrandCo Facility on a third-priority basis and Elizabeth Arden (Canada) Limited. The obligations of Revlon, Products Corporation andwhile such assets do not secure the subsidiary guarantors under the 2019 Term Loan Facility are secured by pledges of the equity of Products Corporation and the equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to customary exceptions, including equity of first-tier foreign subsidiaries in excess of 66% of the voting equity interests of such entity) and by substantially all tangible and intangible personal and real property of Products Corporation and the subsidiary guarantors (subject to customary exclusions). The 2019 Term Loan Facility and the existing 2016 Term Loan Facility, share the same guarantors and collateral, except that the 2019 Term Loan Facility is also2020 BrandCo Facilities are secured byon a first-priority lien on certain intellectual property of the American Crew business (the “Additional Collateral”) and is guaranteedpari passu basis by the entities established to hold such Additional Collateral. Pursuant to a first lien pari passu intercreditor agreement, dated August 6, 2019, among Revlon, Products Corporation, the subsidiary guarantors, Wilmington Trust and Citibank, N.A. (acting as administrative agent and collateral agent for the 2016 Term Loan Facility), the liens on the shared collateral securing the 2019 Term Loan Facility rank pari passu in priority with the liens on the shared collateralassets securing the 2016 Term Loan Facility.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


Contribution and License Agreement:Agreements: In connection with the pledge of such Additional Collateral,the Specified Brand Assets, Products Corporation and certain of its subsidiaries contributed the Specified Brand Assets to the BrandCos. Products Corporation entered into intercompany arrangements pursuant to which the Additional Collateral was contributed to a newly-formed subsidiary, Beautyge I, which then further contributed the Additional Collateral to its new wholly-owned subsidiary, Beautyge II, LLC. Products Corporation entered into a license and royalty arrangementarrangements on arm’s length terms with Beautyge II, LLCthe relevant BrandCos to provide for the Company’s continued use of the Additional CollateralSpecified Brand Assets by Products Corporation and its subsidiaries during the term of the 2019 Term Loan Facility.2020 BrandCo Facilities.

Interest and Fees: Interest accrues on Loans under the 2019 Term Loan2020 BrandCo Facility bear interest at a rate equal to LIBOR (with a LIBOR floor of 1.50%) plus (x) 10.50% per annum, payable not less than quarterly in arrears in cash and (y) 2.00% per annum payable not less than quarterly in-kind by adding such amount to the principal amount of one-month adjustedoutstanding loans under the 2020 BrandCo Facility. Loans under the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility bear interest at a rate equal to LIBOR (which has(with a LIBOR floor of 0%0.75%) plus a margin of 9.50%. Products Corporation is also obligated to pay customary fees and expenses3.50% per annum, payable not less than quarterly in connection with the 2019 Term Loan Facility. arrears in cash.

Affirmative and Negative Covenants:Covenants: The 2019 Term Loan Agreement contains2020 BrandCo Facilities contain certain affirmative and negative covenants that, among other things, limit the Restricted Group’sProducts Corporation’s and its restricted subsidiaries’ ability to: (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, unsecured or junior lien debt; (vii) enter into certain transactions with their affiliates; (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 20192020 BrandCo Facilities also restrict distributions and other payments from the BrandCos based on certain minimum thresholds of net sales with respect to the Specified Brand Assets. The 2020 BrandCo Facilities also contain certain customary representations, warranties and events of default, including a cross default provision making it an event of default under the 2020 BrandCo Credit Agreement if there is an event of default under Products Corporation’s existing 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement or the indentures governing each of Products Corporation’s 5.75% Senior Notes due 2021 and its 6.25% Senior Notes due 2024 (the “Senior Notes Indentures”). The lenders under the 2020 BrandCo Credit Agreement may declare all outstanding loans under the 2020 BrandCo Facilities to be due and payable immediately upon an event of default. Under such circumstances, the lenders under the 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement, and the holders under the Senior Notes Indentures may also declare all outstanding amounts under such instruments to be due and payable immediately as a result of similar cross default or cross acceleration provisions, subject to certain exceptions and limitations described in the relevant instruments.

Prepayments: The 2020 BrandCo Facilities are subject to certain mandatory prepayments, including from the net proceeds from the issuance of certain additional debt and asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property, subject to certain exceptions. The 2020 BrandCo Facilities may be repaid at any time, subject to customary prepayment premiums.

2016 Term Loan Agreement also contains additional covenants: (i) restrictingFacility Extension Amendment: Term loan lenders under the activities2016 Term Loan Facility were offered the opportunity to participate at par in the 2020 BrandCo Facilities based on their holdings of term loans under the 2016 Term Loan Facility. Lenders participating in the 2020 BrandCo Facilities, as well as other consenting lenders representing, in the aggregate, a majority of the entities establishedloans and commitments under the 2016 Term Loan Facility, consented to holdan amendment to the Additional Collateral; (ii) limiting2016 Term Loan Facility (the “Extension Amendment”) that, among other things, made certain modifications to the incurrencecovenants thereof and extended the maturity date of secured debt bytheir term loans (“Extended Term Loans”) to June 30, 2025, subject to (i) the Restricted Group to ansame September 7, 2023 springing maturity date of the non-extended term loans under the 2016 Term Loan Facility if, on such date, $75 million or more in aggregate principal amount of $50the non-extended term loans under the 2016 Term Loan Facility remains outstanding, and (ii) a springing maturity of 91 days prior to the August 1, 2024 maturity date of the 6.25% Senior Notes if, on such date, $100 million (excludingor more in aggregate principal amount of the Amended6.25% Senior Notes remains outstanding. The Extension Amendment became effective on the BrandCo 2020 Facilities Closing Date. As of September 30, 2020, approximately $30.7 million in aggregate principal amount of Extended Term Loans were outstanding after giving effect to the 2020 BrandCo Refinancing Transactions. The Extended Term Loans bear interest at a rate of LIBOR (with a LIBOR floor of 0.75%) plus 3.50% per annum, payable not less than quarterly in arrears in cash, consistent with the interest rate applicable to the non-extended term loans. Approximately $17.0 million of accrued interest outstanding on the 2016 Revolving CreditTerm Loan Facility and any refinancingwas paid on the BrandCo 2020 Facilities Closing Date. The aggregate principal amount of non-extended term loans under the 2016 Term Loan Facility as of September 30, 2020 was approximately $855.6 million.

Repurchases of 5.75% Senior Notes due 2021); (iii) restricting the transfer by the Restricted Group of material intellectual property to non-guarantor restricted subsidiaries or other affiliates; and (iv) limiting investments by2021

On May 7, 2020, Products Corporation used a portion of the proceeds from the 2020 BrandCo Facility to repurchase and its subsidiary guarantorssubsequently cancel $50 million in any non-guarantor subsidiary to an outstandingaggregate principal face amount of $50its 5.75% Senior Notes. Products Corporation also paid approximately $0.7 million plus $10of accrued interest outstanding on the 5.75% Senior Notes on May 7, 2020. After the BrandCo 2020 Facilities Closing Date, Products Corporation repurchased and subsequently canceled in July 2020 a further $62.8 million for ordinary course investments consistent with past practice. These negative covenants are subject to various exceptions, including an “available

in aggregate principal face amount of its 5.75% Senior Notes. Furthermore, during the three months ended September 30, 2020,
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amount basket” based on 50% of Products Corporation’s cumulative consolidated net income from October 1, 2016, subject to Products Corporation’s compliance with a 5.0 to 1.0 ratio of Products Corporation’s net debt to Consolidated EBITDA (as defined in the 2019 Term Loan Agreement), except such compliance is not required when such baskets are used to make investments.
Financial Covenants: The 2019 Term Loan Agreement contains financial covenants. First, Products Corporation cannot permit at any time both (x) therepurchased and subsequently canceled an additional $44.4 million in aggregate principal face amount of securedits 5.75% Senior Notes. Accordingly, as of September 30, 2020, Products Corporation had repurchased and structurally seniorsubsequently cancelled a total of approximately $157.2 million in aggregate principal face amount of its 5.75% Senior Notes, resulting in a gain on extinguishment of debt to exceed $2.5 billionof approximately $31.2 million and (y) the ratio of Products Corporation's net secured and structurally senior debt to Consolidated EBITDA to be greater than 5.0 to 1.0, subject to a one-time equity cure right. Second, Products Corporation’s Consolidated EBITDA cannot be less than $250$43.1 million for any test period endingthe three and nine months ended September 30, 2020, respectively, which were recorded within "Gain on or after March 31, 2021.early extinguishment of debt" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020.See Note 7, "Debt," and Note 19, “Subsequent Events” for more information regarding Products Corporation's5.75% Senior Notes and the related Exchange Offer.
Prepayments:The 2019 Term Loan Facility is subject to mandatory prepayments from: (i) the net proceeds from the issuance by Products Corporation or any of its restricted subsidiaries of certain additional debt; (ii) commencing with the excess cash flow calculation with respect to fiscal year ending December 31, 2020, 50% of excess cash flow, with step-downs to 25% and 0% upon achievement of certain first lien leverage ratios and reduced by voluntary prepayments
Prepayment of the 2019 Term Loan Facility due 2023

On the 2016 Term Loan Facility and revolving loans under the Amended 2016 Revolving Credit Facility (to the extent commitments thereunder are permanently reduced); and (iii) asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property that have not been reinvested to the extent in excess of certain minimum amounts (subject to an aggregate reinvestment cap of $50 million).BrandCo 2020 Facilities Closing Date, Products Corporation may voluntarilyused a portion of the proceeds from the 2020 BrandCo Facility to fully prepay the entire principal amount outstanding under its 2019 Term Loan Facility, at any time. All voluntary prepayments, certain mandatory prepaymentstotaling $200 million, plus approximately $1.3 million of accrued interest outstanding thereon, as well as approximately $33.5 million in prepayment premiums, $10.3 million in lenders' fees, $0.3 million in legal fees and repayments upon acceleration after an event of default of the 2019 Term Loan Facility must be accompanied by a fee (the “Applicable Premium”)approximately $2.0 million in an amount equal to: (i) prior to January 1, 2021, a make-whole amount with respect to interest payments through December 31, 2020 plus 10% of the aggregate principal amount prepaid, repaid or required to be repaid; (ii) on and after January 1, 2021, but prior to January 1, 2022, 10% of the aggregate principal amount prepaid, repaid or required to be repaid; (iii) on and after January 1, 2022, but prior to January 1, 2023, 7.5% of the aggregate principal amount prepaid, repaid or required to be repaid; or (iv) thereafter, 5% of the aggregate principal amount prepaid, repaid or required to be repaid. A 5% exit fee is also payable upon the final scheduled maturity of the 2019 Term Loan Facility or if the loans thereunder are accelerated upon an event of default. The 2019 Term Loan Agreement also contains certain customary representations, warranties and events of default.

Events of Default: The 2019 Term Loan Agreement includes customary events of default, including a cross default provision making it an event of default under the 2019 Term Loan Agreement if there is an event of default under Products Corporation’s existing 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement, the Amended 2019 Senior Line of Credit Agreement or the indentures for Products Corporation’s 5.75% Senior Notes or 6.25% Senior Notes. In addition,other third party fees. As the lenders under the 2019 Term Loan Agreement may declare all outstanding loans underFacility participated in the 2020 BrandCo Term Loan Facility, the Company determined that the full repayment of the 2019 Term Loan AgreementFacility represented a debt modification under U.S. GAAP as the cash flow effect between the old debt instrument (i.e., the 2019 Term Loan Facility) and the new debt instrument (i.e., the 2020 BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were not considered to be duesubstantially different within the meaning of ASC 470, Debt, under U.S. GAAP. Accordingly, the $33.5 million of prepayment premiums, as well as the $10.3 million in other lenders' fees were capitalized as part of the aforementioned $119.3 million of total new debt issuance costs for the 2020 BrandCo Term Loan Facility, while the aforementioned $0.3 million of legal fees and payable immediately upon an event$2.0 million in other third party fees were expensed as incurred in the Company's Unaudited Consolidated Statement of default. Under such circumstances,Operations and Comprehensive Loss for the lenders under the 2016 Credit Agreements, the Amended 2019 Senior Line of Credit Agreement andnine months ended September 30, 2020.

Amendment to the 2018 Foreign Asset-Based Term Facility

On May 4, 2020, the Company entered into an amendment to the 2018 Foreign Asset Based Term Facility, which had an original outstanding principal amount of €77 million. Such amendment provided for the following:

•increasing the interest rate on the loan from EURIBOR (with a floor 0.50%) plus a margin of 6.50% to EURIBOR (with a floor 0.50%) plus a margin of 7.00%;
•adding a springing maturity date of 91 days prior to the February 15, 2021 maturity of the 5.75% Senior Notes if any of Products Corporation's 5.75% Senior Notes remain outstanding on such date;
•requiring a mandatory prepayment of €5.0 million; and
•clarifying certain terms and waiving certain provisions in connection with the 2020 BrandCo Refinancing Transactions.

Approximately $0.4 million of amendment fees paid to the lenders under 2018 Foreign Asset-Based Term Facility were capitalized and are amortized to interest expense, together with any unamortized debt issuance costs outstanding prior to the amendment. As of September 30, 2020, there was the Euro equivalent of $56.8 million outstanding under the 2018 Foreign Asset-Based Term Facility, reflecting a repayment of €28.5 million made during the quarter ended June 30, 2020.

Incremental Revolving Credit Facility under the 2016 Term Loan Agreement

On April 30, 2020, Products Corporation entered into a Joinder Agreement may(the “2020 Joinder Agreement”), with Revlon, certain of their subsidiaries and certain existing lenders (the “Incremental Lenders”) under Products Corporation’s 2016 Term Loan Agreement to provide for a $65 million incremental revolving credit facility (the “2020 Incremental Facility”). On the closing of the 2020 Incremental Facility, Products Corporation borrowed $63.5 million of revolving loans for working capital purposes and subsequently on May 11, 2020 Products Corporation also declare allborrowed the additional $1.5 million of delayed funding revolving loans. Prior to its full repayment on May 28, 2020, amounts outstanding under the 2020 Incremental Facility bore interest at a rate of (x) LIBOR plus 16% or (y) an Alternate Base Rate plus 15%, at Products Corporation’s option. Except as to pricing, maturity and differences due to its revolving nature, the terms of the 2020 Incremental Facility were otherwise substantially consistent with the existing term loans under the 2016 Term Loan Facility. The 2020 Incremental Facility was repaid in full, and the commitments thereunder terminated, on May 28, 2020. Upon such facilities to be due and payable immediately as a resultrepayment, approximately $2.9 million of similar cross default provisions, and upon non-payment of any accelerated principal amount, the trustees or noteholders for the 5.75% Senior Notes and 6.25% Senior Notes may declare all outstanding notes to be due and payable immediately as a result of similar cross-acceleration provisions, subject to certain exceptions and limitations described in the relevant instruments.

Fees and expensesupfront commitment fees that Products Corporation incurred in connection with consummating the 2019 Term Loan Agreement2020 Incremental Facility were entirely expensed within "Miscellaneous, net" on the Company's Unaudited Consolidated Statement of approximately $12 million were capitalizedOperations and are being amortized to interest expense overComprehensive Loss for the term of the 2019 Term Loan Agreement using the effective interest method. The aggregate principal amount outstanding under the 2019 Term Loan Facility Agreement at nine months ended September 30, 2019 was $200 million.2020.

2019 Senior Line of Credit Agreement

In June 2019, Products Corporation entered into a 2019 Senior Unsecured Line of Credit Agreement (the "2019 Senior Line of Credit Agreement") providing Products Corporation with a $30 million senior unsecured line of credit (the "2019 Senior Line of CreditFacility") from MacAndrews & Forbes Group, LLC, a subsidiary of Revlon’s majority stockholder. The 2019 Senior Line of CreditFacility allows Products Corporation to request loans thereunder and to use the proceeds of such loans for working capital and other general corporate purposes until the facility matures on December 31, 2019. See Note 20, “Subsequent Events,” regarding the extension of the maturity of the 2019 Senior Line of Credit Agreement to December 31, 2020. As of September 30, 2019, there were no borrowings outstanding under this facility.


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Any loans outstanding under the 2019 Senior Line of CreditFacility shall bear interest at an annual rate of 8%, which is payable quarterly in arrears in cash. Products Corporation may, at its option, prepay any borrowings under the 2019 Senior Line of CreditFacility, in whole or in part (together with accrued and unpaid interest), at any time prior to maturity, without premium or penalty.  Products Corporation is required to repay any outstanding loans under the 2019 Senior Line of CreditFacility, together with accrued interest thereon, if for any reason Products Corporation or any of its subsidiaries has available unrestricted cash that Products Corporation determines, in its reasonable judgment, is not required to run their operations in the ordinary course of business, provided that such repayment would not result in material adverse tax consequences.
The 2019 Senior Line of Credit Agreement includes customary events of default, including a cross default provision making it an event of default under the 2019 Senior Line of Credit Agreement if there exists and continues an event default under Products Corporation’s existing bank term loan and revolver credit agreements, the 2018 Foreign Asset-Based Term Agreement or the indentures for Products Corporation’s 5.75% Senior Notes or 6.25% Senior Notes. If any such event of default occurs, MacAndrews & Forbes Group, LLC may declare all outstanding loans under the 2019 Senior Line of CreditFacility to be due and payable immediately. For the three and nine months ended September 30, 2019, there were no borrowings or repayments under this facility.

March 2019 Amendment to 2016 Revolving Credit Facility

On March 6, 2019, Products Corporation, Revlon and certain of their subsidiaries entered into Amendment No. 2 (“Amendment No. 2”)Amendments to the 2016 Revolving Credit Agreement (as amended by
On May 7, 2020, in connection with consummating the 2020 BrandCo Refinancing Transactions, Products Corporation entered into Amendment No. 2,4 to its Asset-Based Revolving Credit Agreement, dated as of September 7, 2016, as amended (the “2016 Revolving Credit Facility”). Amendment No. 4, among other things, made certain amendments and provided for certain waivers relating to the “Amended2020 BrandCo Refinancing Transactions under the 2016 Revolving Credit Agreement”) in respectFacility. In exchange for such amendments and waivers, the interest rate margin applicable to loans under Tranche A of the 2016 Revolving Credit Facility (as in effect after Amendment No. 2,increased by 0.75%. In connection with the “Amendedamendments to the 2018 Tranche B of the 2016 Revolving Credit Facility”). PursuantFacility (which was fully repaid on its May 17, 2020 extended maturity date), Products Corporation incurred approximately $1.1 million in lender's fees that upon its full repayment were entirely expensed within “Miscellaneous, net” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss as of September 30, 2020. See “Recent Developments” and Note 19, “Subsequent Events,” regarding, among other things, Amendment No. 5 to the terms of2016 Revolving Credit Facility.

Previously, on April 17, 2020 (the “FILO Closing Date”), Products Corporation entered into Amendment No. 2,3 to the 2016 Revolving Credit Facility (“Amendment No. 3”), pursuant to which, the maturity date applicable to $36.3 million of loans under the $41.5 million senior secured first in, last out 2018 Tranche B ofunder the Amended 2016 Revolving Credit Facility (the “2018 FILO Tranche”) was extended from April 17, 20192020 to AprilMay 17, 2020. Prior to2020 (the “Extended Maturity Date”). Products Corporation repaid the remaining approximately $5.2 million of the 2018 FILO Tranche loans as of the FILO Closing Date. In addition, Amendment No. 2,3 increased the Amended 2016 Revolving Credit Agreement provided thatapplicable interest margin for the “Liquidity Amount” (defined in the Amended 2016 Revolving Credit Agreement as the sum2018 FILO Tranche by 0.75%, subject to a LIBOR floor of each borrowing base less the sum of (x) the aggregate outstanding extensions of credit under the Amended 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such date) may exceed the aggregate commitments under the Amended 2016 Revolving Credit Facility by up to 5%0.75%. Amendment No. 2 limited the Liquidity Amount to no more than the aggregate commitments under the Amended 2016 Revolving Credit Facility. Prior to Amendment No. 2, under the Amended 2016 Revolving Credit Agreement, a “Liquidity Event Period” generally occurs if Products Corporation’s Liquidity Amount fell below the greater of $35 million and 10% of the maximum availability under the Amended 2016 Revolving Credit Facility. Amendment No. 2 changed these thresholds to $50 million and 15%, respectively, only for purposes of triggering certain notification obligations of Products Corporation increased borrowing base reporting frequency andfully repaid the ability of2018 FILO Tranche on the administrative agent to apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility. After entering into Amendment No. 2, in March 2019 Products Corporation’s availability under the Amended 2016 Revolving Credit Facility was $37.3 million, which was less than the greater of $35 million and 10% of the maximum availability under the Amended 2016 Revolving Credit Facility, which at such date equated to $41.3 million. Accordingly, effective beginning in March 2019 Products Corporation is required to maintain a consolidated fixed charge coverage ratio ("FCCR") of a minimum of 1.0 to 1.0 (which it currently satisfies), the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility, which the administrative agent began applying in March 2019, and Products Corporation is required to provide the administrative agent with weekly borrowing base certificates. Products Corporation will be required to: (i) maintain such 1.0 to 1.0 minimum FCCR until such time that availability under the Amended 2016 Revolving Credit Facility equals or exceeds the greater of $35 million and 10% of the maximum availability under such facility for at least 20 consecutive business days; and (ii) Products Corporation will continue to provide the administrative agent with weekly borrowing base certificates and the administrative agent may continue to apply amounts collected in controlled accounts as set forth above until such time that availability under such facility equals or exceeds the greater of $50 million and 15% of the maximum availability under such facility for at least 20 consecutive business days. Amendment No. 2 also adjusts, among other things, the “payment conditions” required to make unlimited restricted payments.Extended Maturity Date.


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Covenants


Products Corporation was in compliance with all applicable covenants under the 2020 BrandCo Credit Agreement, 2016 Credit Agreements, the 2019 Term Loan Agreement, the 2018 Foreign Asset-Based Term Agreement, and the 2019 Senior2020 Restated Line of Credit AgreementFacility, as well as with all applicable covenants under its Senior Notes Indentures, in each case as of September 30, 2019.2020. At September 30, 2019,2020, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:
CommitmentBorrowing BaseAggregate principal amount outstanding at September 30, 2020
Availability at September 30, 2020 (a)
Amended 2016 Revolving Credit Facility$400.0 $345.9 $291.9 $52.6 
2020 Restated Line of Credit Facility$30.0 N/A$0 $30.0 
 Commitment Borrowing Base Aggregate principal amount outstanding at September 30, 2019 
Availability at September 30, 2019 (a)
Tranche A of the Amended 2016 Revolving Credit Facility$400.0
 $400.0
 $307.5
 $81.2
Tranche B of the Amended 2016 Revolving Credit Facility41.5
 40.9
 40.9
 —
Total Tranche A & B of the Amended 2016 Revolving Credit Facility(a)
$441.5
 $440.9
 $348.4
 $81.2
2019 Senior Line of Credit Facility$30.0
 N/A
 $—
 $30.0
(a) Availability as of September 30, 20192020 is based upon the borrowing base then in effect under the Amended 2016 Revolving Credit Facility of $440.9$345.9 million, less $11.3$1.4 million of outstanding undrawn letters of credit and $348.4$291.9 million then drawn. As Products Corporation’s consolidated fixed charge coverage ratio was greater than 1.0 to 1.0 as of September 30, 2019,2020, all of the $81.2$52.6 million of availability under the Amended 2016 Revolving Credit Facility was available as of such date. The 2018 Tranche B under the Amended 2016 Revolving Credit Facility was fully repaid in May 2020.


The Company’s foreign subsidiaries held $57.3$93.7 million out of the Company's total $60.7$268.3 million in cash and cash equivalents as of September 30, 2019.2020. 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. The Company believes that 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 (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions), availability under the Amended 2016 Revolving Credit Facility, the Amended 2019 Senior2020 Restated Line of Credit Facility, andas well as other permissible borrowings, along with the option to further settle historical intercompany loans and payables with certain foreign subsidiaries. The Company also expects to generate additional liquidity from cost reductions resulting from thethe implementation of the 2018 OptimizationRevlon 2020 Restructuring Program, which was initiated during the fourthfirst quarter of 2020, the 2018 Optimization Program and cost reductions generated from other cost control initiatives.initiatives, including, without limitation, new interim measures to reduce costs in response to COVID-19 (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), as well as funds provided by selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) in connection with the Company's ongoing Strategic Review. For information regarding certain risks related to the Company’s indebtedness, see Item 1A. “Risk Factors” in the Company's 2019 Form 10-K, as supplemented by certain risk factors included

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in the Company’s Quarterly Reports on Form 10-Q and in certain Current Reports on Form 8-K, in each case as filed with the SEC during 2020.



9.
8. FAIR VALUE MEASUREMENTS


Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to value 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 September 30, 20192020 and December 31, 2018,2019, the Company did not0t have any financial assets and liabilities that were required to be measured at fair value.


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As of September 30, 2020, 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:
September 30, 2020
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$0 $2,068.4 $0 $2,068.4 $3,631.0 

As of December 31, 2019, 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:
December 31, 2019
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$0 $2,522.2 $0 $2,522.2 $3,194.2 
 September 30, 2019
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion(a)
$—
 $2,633.7
 $—
 $2,633.7
 $3,270.1

As of December 31, 2018, 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:
 December 31, 2018
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion(a)
$—
 $2,259.5
 $—
 $2,259.5
 $3,075.8
(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 issuances 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 $11.3$1.4 million and $10.1$11.4 million (including amounts available under credit agreements in effect at that time) were maintained as of both September 30, 20192020 and December 31, 2018,2019, respectively. Included in these amounts are approximately $8.2$0.1 million and $7.3$8.3 million in standby letters of credit that primarily support Products Corporation’s self-insuranceworkers compensation, general liability and automobile insurance programs, in each case as outstanding as of September 30, 20192020 and December 31, 2018,2019, respectively. The estimated liability under such programs is accrued by Products Corporation.

Derivative Financial Instruments

The Company may, from time to time, use derivative financial instruments, primarily FX Contracts, to manage foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates on the Company’s net cash flows. The Company does not hold or issue financial instruments for speculative or trading purposes.

Foreign Currency Forward Exchange Contracts

The FX Contracts may, from time to time, be 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 Company did not enter into any FX Contracts during the nine months ended September 30, 2019. The U.S. Dollar notional amounts of the FX Contracts outstanding at each of September 30, 2019 and December 31, 2018 were nil.

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 bank term loan that was incurred in connection with completing the October 2013 acquisition of The Colomer Group (the "Old Acquisition Term Loan" and the "Colomer Acquisition," respectively). The 2013 Interest Rate Swap, which initially had a floor of 1.00% that in December 2016 was amended to 0.75%, expired in May 2018. In connection with

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




entering into the 2016 Term Loan Facility, the 2013 Interest Rate 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 3-month LIBOR interest rate payments initially related to the $400 million notional amount under the Old Acquisition Term Loan over the 3-year term of the 2013 Interest Rate Swap (and subsequently to the $400 million notional amount under the 2016 Term Loan Facility). Under the terms of the 2013 Interest Rate Swap, Products Corporation received from the counterparty a floating interest rate based on the higher of the 3-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 fixed the interest rate on such notional amount at 5.5709% through May 2018).
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 issuance of its 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, 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 of such swap were 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, were fully amortized into earnings over the remaining term of the 2013 Interest Rate Swap, which expired in May 2018. See "Quantitative Information – Derivative Financial Instruments" below for additional information on the balance sheet balances related to this swap.
Credit Risk

Exposure to credit risk in the event of nonperformance by any of the counterparties to the Company's derivative instruments is limited to the gross fair value of these derivative instruments in asset positions, which was nil at each of September 30, 2019 and December 31, 2018. 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.

Quantitative Information – Derivative Financial Instruments

As of September 30, 2019 and December 31, 2018, the Company did not have any derivative financial instruments.
The effects of the Company's derivative financial instruments on its Unaudited Consolidated Statements of Operations and Comprehensive Loss were as follows for the periods presented:
Derivative Instruments Statement of Operations Classification Amount of Gain (Loss) Recognized in Net (Loss) Income
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Derivative financial instruments:        
2013 Interest Rate Swap Interest Expense $—
 $—
 $—
 $(1.2)
FX Contracts Foreign currency gain, net —
 —
 —
 0.2
2013 Interest Rate Swap Miscellaneous, net —
 —
 —
 0.2

 Amount of Gain Recognized in Other Comprehensive Loss
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Derivatives previously designated as hedging instruments:       
2013 Interest Rate Swap, net of tax (a)
$—
 $—
 $—
 $0.7
(a) Net of tax benefits of nil and $0.5 million for the three and nine months ended September 30, 2018, respectively.

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11.10. PENSION AND POST-RETIREMENT BENEFITS


Net Periodic Benefit Cost
The components of net periodic benefit costs for the Company's pension and the other post-retirement benefit plans for the three months ended September 30, 20192020 and 2018,2019, respectively, were as follows:


Pension Plans
Other
Post-Retirement Benefit Plans
Three Months Ended September 30,
2020201920202019
Net periodic benefit costs:
Service cost$0.5 $0.4 $0 $0 
Interest cost3.8 5.1 0.1 0.1 
Expected return on plan assets(5.7)(6.0)0 0 
Amortization of actuarial loss2.7 2.5 0.1 0.1 
Total net periodic benefit costs prior to allocation$1.3 $2.0 $0.2 $0.2 
Portion allocated to Revlon Holdings0 0 0 0 
Total net periodic benefit costs$1.3 $2.0 $0.2 $0.2 
 

Pension Plans		 
Other
Post-Retirement Benefit Plans
 Three Months Ended September 30,
 2019 2018 2019 2018
Net periodic benefit costs:       
Service cost$0.4

$0.5
 $—

$—
Interest cost5.1

4.6
 0.1

0.1
Expected return on plan assets(6.0)
(6.9) —

—
Amortization of actuarial loss2.5

2.4
 0.1

0.1
Curtailment gain—

—
 —

—
Total net periodic benefit costs prior to allocation$2.0

$0.6
 $0.2

$0.2
Portion allocated to Revlon Holdings—

—
 —

—
Total net periodic benefit costs$2.0

$0.6
 $0.2

$0.2

In the three months ended September 30, 2019,2020, the Company recognized net periodic benefit cost of $2.2$1.5 million, compared to net periodic benefit cost of $0.8$2.2 million in the three months ended September 30, 2018,2019, primarily due to lower interest costs partially offset by lower expected return on plan assets and higher interest cost.

amortization of actuarial loss.
The components of net periodic benefit costs for the Company's pension and the other post-retirement benefit plans for the nine months ended September 30, 20192020 and 2018,2019, respectively, were as follows:
Pension Plans Other
Post-Retirement Benefit Plans		Pension PlansOther
Post-Retirement Benefit Plans
Nine Months Ended September 30,Nine Months Ended September 30,
2019 2018 2019 20182020201920202019
Net periodic benefit costs:       Net periodic benefit costs:
Service cost$1.4
 $1.5
 $—
 $—
Service cost$1.3 $1.4 $0 $0 
Interest cost15.0
 13.9
 0.3
 0.3
Interest cost11.2 15.00.3 0.3
Expected return on plan assets(18.0) (20.8) —
 —
Expected return on plan assets(17.1)(18.0)0 0 
Amortization of actuarial loss7.5
 6.9
 0.2
 0.3
Amortization of actuarial loss8.3 7.50.3 0.2
Total net periodic benefit costs prior to allocation$5.9
 $1.5
 $0.5
 $0.6
Total net periodic benefit costs prior to allocation$3.7 $5.9 $0.6 $0.5 
Portion allocated to Revlon Holdings(0.1) (0.1) —
 —
Portion allocated to Revlon Holdings(0.1)(0.1)0 0 
Total net periodic benefit costs$5.8
 $1.4
 $0.5
 $0.6
Total net periodic benefit costs$3.6 $5.8 $0.6 $0.5 
In the nine months ended September 30, 2019,2020, the Company recognized net periodic benefit cost of $6.3$4.2 million, compared to net periodic benefit cost of $2.0$6.3 million in the nine months ended September 30, 2018,2019, primarily due to lower interest costs partially offset by lower expected return on plan assets and higher interest cost.amortization of actuarial loss.

Net periodic benefit costs are reflected in the Company's Unaudited Consolidated Financial Statements as follows for the periods presented:

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net periodic benefit costs:
Selling, general and administrative expense$0.5 $0.5 $1.3 $1.4 
Miscellaneous, net1.0 1.7 2.9 4.9 
Total net periodic benefit costs$1.5 $2.2 $4.2 $6.3 

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Net periodic benefit costs are reflected in the Company's Unaudited Consolidated Financial Statements as follows for the periods presented:
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net periodic benefit costs:       
Selling, general and administrative expense$0.5
 $0.5
 $1.4
 $1.5
Miscellaneous, net1.7
 0.3
 4.9
 0.5
Total net periodic benefit costs$2.2
 $0.8
 $6.3
 $2.0

The Company expects that it will have net periodic benefit cost of approximately $8.3$5.6 million for its pension and other post-retirement benefit plans for all of 2019,2020, compared with net periodic benefit cost of $2.6$7.2 million in 2018.2019.
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 2019, $3.2three months ended September 30, 2020, $1.8 million and $0.2 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During the nine months ended of 2019, $7.3September 30, 2020, $7.0 million and $0.5 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During 2019,2020, the Company expects to contribute approximately $12$19 million in the aggregate to its pension and other post-retirement benefit plans.

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 expects to defer approximately $9.3 million of contributions that were otherwise scheduled to be paid to its 2 qualified pension plans at different earlier dates during 2020. The first quarterly contributions for the 2 qualified plans were originally due by April 15, 2020. The Company had already made $1.6 million in contributions to its qualified pension plans during the first quarter of 2020, prior to adopting the aforementioned provision of the CARES Act. The deferral is in effect only for 2020 and under the CARES relief provisions the Company will be required to pay the contributions by no later than January 1, 2021, including interest at the plans’ 2020 effective interest rate ("EIR") from the original due date to the actual payment date.
Relevant aspects of the qualified defined benefit pension plans, non-qualified pension plans and other post-retirement benefit plans sponsored by Products Corporation are disclosed in Note 13,12, "Pension and Post-Retirement Benefits," to the Consolidated Financial Statements in the Company's2018 2019 Form 10-K.




12.11. STOCK COMPENSATION PLAN AND OTHER INCENTIVE PROGRAMS
Revlon maintains the Fourth Amended and Restated Revlon, Inc. Stock Plan (the(as amended, the "Stock Plan"), which 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. An aggregate of 6,565,000 shares were reserved for issuance as Awards under the Stock Plan, of which there remained approximately 1.71.2 million shares available for grant as of September 30, 2019.2020. In July 2014, the Stock Plan was amended to renew the Stock Plan for a 7-year renewal term expiring on April 14, 2021. In September 2019 the Stock Plan was amended in connection with the 2019 TIP, described below, to: (1) allow the Compensation Committee to delegate to Revlon’s Chief Executive Officer the authority to grant RSUs to the Company’s employees, other than its officers who are subject to Section 16 of the Securities Exchange Act of 1934, as amended (i.e., the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer & Controller); (2) allow for accelerated vesting of equity awards upon a termination without cause; (3) change the minimum vesting period for specified equity awards from 3 years to 2 years; and (4) to increase by 250,000 shares the number of shares of Revlon common stock that are not subject to the Stock Plan’s minimum vesting requirements.


Revlon 2019 Transaction Incentive Program


OnIn August 16, 2019, it was disclosed that MacAndrews & Forbes and Revlon have determined to explore strategic transactions involving Revlon and third parties.parties (the "Strategic Review"). In light of this, the Compensation Committee of Revlon’s Board of Directors approved a Revlon 2019 Transaction Incentive Program (the “2019 TIP”) that enables the Company to award cash-based and RSU-based retention grants and transaction bonus awards, as well as providing for the accelerated vesting of time-based RSUs and restricted shares following a termination without cause or due to death or disability. On

Each Tier 1 participant’s 2019 TIP award is payable two-thirds in cash and one-third in RSUs vesting in 50% tranches on each of December 31, 2020 and December 31, 2021, while Tier 2 awards are payable 100% in cash in one lump-sum on December 31, 2020, in each case subject to certain earlier vesting for a change of control or termination of employment without cause, as described below. As of September 5, 2019, Revlon’s Boardthe Company approved amendmentsa total of 206,812 time-based RSUs under Tier 1 of the 2019 TIP, which are scheduled to the Stock Plan: (1) to allow the Compensation Committee to delegate to Revlon’s Chief Executive Officer the authority to grant RSUs to the Company’s employees, other than its officers who arevest in equivalent amounts on each of December 31, 2020 and December 31, 2021, subject to Section 16continued employment (the “2019 TIP RSUs”). As of September 30, 2020, a total of 148,168 time-based RSUs under Tier 1 of the Securities Exchange Act of 1934, as amended (i.e., the Company’s Chief Executive Officer, Chief Financial Officer2019 TIP had been granted and Chief Accounting Officer & Controller); (2) to allow for accelerated vesting of equity awards upon a termination without cause; (3) to change the minimum vesting period for specified equity awards from 3 years to 2 years; and (4) to increase by 250,000 shares the number of shares of Revlon common stock that are not subject to the Stock Plan’s minimum vesting requirements.outstanding. The Company’s President and Chief Executive Officer declined an award under the retention program and will receive a transaction bonus only if the Company completes a transaction.



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Effective as of September 5,The 2019 the Company granted a total of 206,812 time-based RSUs under the 2019 TIP which are scheduled to vest in equivalent amounts on each of December 31, 2020 and December 31, 2021, subject to continued employment (the “TIP RSUs”). The TIP RSUs vest in full upon an involuntary termination, other than if due to cause; provided that if a change of control occurs or a brand or business segment is sold and (i) the impacted grantee accepts an offer of employment from the buyer, then: (A) if the buyer assumes the 2019 TIP RSUs, the grantee will continue to vest in the assumed awards (with the grantee having the continued right to accelerated vesting upon an involuntary termination, other than if due to cause); and (B) if the buyer does not assume the 2019 TIP RSUs, the grantee’s 2019 TIP RSUs will vest upon closing the change of control; and (ii) the impacted grantee declines an offer of employment from the buyer for substantially comparable total compensation and benefits, the grantee will forfeit their unvested 2019 TIP RSUs (collectively, the “Special Vesting Rules”).


The 2019 TIP also provides for the following cash-based awards payable to certain employees, subject to continued employment through the respective vesting dates:
•$6.8 (i) Tier 1 - $6.8 million payable in two2 equal installments as of December 31, 2020 and December 31, 2021; and
•$2.5 (ii) Tier 2 - $2.5 million payable in one1 installment as of December 31, 2020.
Such cash-based awards follow the same acceleration rules disclosed aboveSpecial Vesting Rules following a termination without cause or due to death or disability. During 2019 and through September 30, 2020, the Company granted $4.7 million and $2.3 million cash-based awards, net of forfeitures, under Tier 1 and Tier 2 of the 2019 TIP, respectively, which are being amortized over the period from the grant dates to December 31, 2021 and December 31, 2020, respectively. The total amount amortized for these cash-based awards since the program's inception and through September 30, 2020 is approximately $4.8 million, of which $1.0 million and $3.5 million were recorded during the three and nine months ended September 30, 2020, respectively, within "Acquisition, integration and divestiture costs" in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.


Long-Term Incentive Program

The Company's LTIP RSUs consist of time-based RSUs and performance-based RSUs. Time-based RSUs are generally scheduled to vest ratably over a 3-year service period, while performance-based RSUs are scheduled to vest based on the achievement of certain Company performance metrics and cliff-vest at the completion of a 3-year performance period.

The fair value of the LTIP and TIP RSUs is determined based on the NYSE closing share price on the grant date.

In connection with the announcement of the 2019 TIP, in August 2019 the Company also approved applying the Special Vesting Rules to outstanding, pre-existing LTIP RSUs, except that accelerated vesting in the case of termination of employment without cause will apply only to any tranche of outstanding, pre-existing LTIP RSUs scheduled to vest in the 12-month period following termination, with any future tranches being forfeited. Prior to the approval of these Special Vesting Rules, while the outstanding, pre-existing LTIP RSUs would generally have accelerated vesting upon a change of control, they did not feature accelerated vesting for termination and, in such cases, they were entirely forfeited upon termination. As of September 30, 2019, there were no acceleration of vesting for pre-existing LTIP RSUs under the above-mentioned provisions.

During the three months ended September 30, 2019,first quarter of 2020, the Company granted nilapproximately 1.3 million time-based and performance-based RSU awards under the Stock Plan (the "2019"2020 LTIP RSUs"). During the second and third quarter of 2020, there were 0 grants under the 2020 LTIP RSUs. See the roll-forward table in the following sections of this Note 11 for activity related to the nine months ended September 30, 2020.


Acceleration of Vesting
Under the aforementioned provisions for acceleration of vesting, as of September 30, 2020 and since the time these provisions became effective in September 2019, 36,452 LTIP RSUs and 27,356 2019 TIP Tier 1 RSUs were vested on an accelerated basis due to involuntary terminations, resulting in accelerated amortization of approximately $1.2 million. In addition, for the three and nine months ended September 30, 2020 and under the same accelerated vesting provisions, the Company also recorded approximately $0.2 million and $1.0 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. See the roll-forward table in the following sections of this Note 11 for activity related to the nine months ended September 30, 2020.
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During the nine months ended September 30, 2019,2020, 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 and 2019 TIP plans,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, 2019
2019 TIP RSUs (b)
200.6 16.44 n/a— 
LTIP RSUs:
2019425.6 22.55 425.6 22.55 
2018241.9 19.00 364.7 19.00 
2017 (a)
54.0 19.70 110.9 19.70 
Total LTIP RSUs721.5 901.2 
Total LTIP and TIP RSUs Outstanding as of December 31, 2019922.1 901.2 
Granted
2019 TIP RSUs Granted (b)
11.7 10.24 n/a— 
LTIP RSUs:
2020626.6 14.96 626.7 14.96 
20190 0 0 0 
20180 0 0 0 
2017 (a)
0 0 0 0 
Total LTIP RSUs Granted626.6 626.7 
Vested
2019 TIP RSUs Vested (b)(c)
(27.3)16.44 — — 
LTIP RSUs:
2019 (c)
(133.9)22.55 0 0 
2018 (c)
(108.5)19.32 0 0 
2017 (a)(c)
(53.4)19.70 (14.2)19.70 
Total LTIP RSUs Vested(295.8)(14.2)
Forfeited/Canceled
2019 TIP RSUs Forfeited/Canceled (b)
(36.8)16.44 n/a— 
LTIP RSUs:
2019(83.3)22.55 (112.1)22.55 
2018(49.0)17.56 (110.0)17.97 
2017 (a)
(0.6)19.70 (96.7)19.70 
Total LTIP RSUs Forfeited/Canceled(132.9)(318.8)
Outstanding as of September 30, 2020
2019 TIP RSUs148.2 15.95 n/a— 
LTIP RSUs:
2020626.6 14.96 626.7 14.96 
2019208.4 22.55 313.5 22.55 
201884.4 19.43 254.7 19.45 
2017 (a)
0 0 0 0 
Total LTIP RSUs919.4 1,194.9 
Total LTIP and TIP RSUs Outstanding as of September 30, 20201,067.6 1,194.9 
 Time-Based LTIP Performance-Based LTIP
 RSUs (000's) Weighted-Average Grant Date Fair Value per RSU RSUs (000's) Weighted-Average Grant Date Fair Value per RSU
Outstanding as of December 31, 2018       
LTIP RSUs:       
2018434.7
 $19.11
 434.7
 $19.11
2017 (a)
156.4
 19.70
 156.4
 19.70
Total LTIP RSUs Outstanding as of December 31, 2018591.1
   591.1
  
Granted       
2019 TIP RSUs Granted (b)
206.8
 16.44
 n/a  
LTIP RSUs Granted:       
2019446.0
 22.55
 446.1
 22.55
Total LTIP RSUs Granted446.0
 
 446.1
 
Vested       
2019 TIP RSUs Vested (b)
—
 —
 n/a  
LTIP RSUs Vested:       
2019—
 —
 —
 —
2018(132.8) 19.06
 —
 —
2017 (a)
(67.4) 19.70
 —
 —
Total LTIP RSUs Vested(200.2)   —
  
Forfeited/Canceled       
2019 TIP RSUs Forfeited/Canceled (b)
—
   n/a  
LTIP RSUs Forfeited/Canceled:       
2019(2.2) 22.55
 (2.2) 22.55
2018(45.5) 19.70
 (51.4) 19.70
2017 (a)
(28.1) 19.70
 (34.6) 19.70
Total LTIP RSUs Forfeited/Canceled(75.8)   (88.2)  
Outstanding as of September 30, 2019       
2019 TIP RSUs (b)
206.8
 16.44
 n/a  
LTIP RSUs:       
2019443.8
 22.55
 443.9
 22.55
2018256.4
 19.04
 383.3
 19.04
2017 (a)
60.9
 19.70
 121.8
 19.70
Total LTIP RSUs761.1
   949.0
  
Total LTIP and TIP RSUs Outstanding as of September 30, 2019967.9
   949.0
  
(a) The 2017 time-based and performance-based LTIP RSUs arewere recognized over a 2-year service and performance periods, respectively.period (i.e., 2018 and 2019).
(b) The 2019 TIP provides for RSU awards that are only time-based.


(c) Includes acceleration of vesting upon involuntary terminations for the nine months ended September 30, 2020 of 30,992 RSUs under the 2019 and 2018 LTIPs and of 27,356 RSUs under the 2019 TIP Tier I awards.
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Time-Based LTIP and TIP RSUs
The Company recognized a$2.1 million and $5.9 million of net adjustment to compensation expense related to the time-based LTIP and TIP RSUs of $3.0 million for the three and nine months ended September 30, 2019.2020, respectively. As of September 30, 2019,2020, the Company had $12.7$12.8 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. One tranche of time-based LTIP RSUs vested during the nine months ended September 30, 2019.


Performance-based LTIP RSUs
The Company recognized a$2.5 million and $1.3 million of net adjustment to compensation expense related to the performance-based LTIP RSUs for the three and nine months ended September 30, 2020, respectively. The amount of $2.4 million fornet compensation expense recognized during the nine months ended September 30, 2019.2020 was affected by adjustments to the awards' expected achievement rates made primarily as a result of the ongoing adverse impact of COVID-19 on the Company's results of operations. As of September 30, 2019,2020, the Company had $14.2$18.9 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. No performance-based LTIP RSUs vested during the nine months ended September 30, 2019.




13.12. 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., the limitation on the deductibility of interest, valuation allowances and other items. The Company’s tax provision changes quarterly based on various factors including, but not limited to, the geographical level and mix of earnings; enacted tax legislation; foreign, state and local income taxes; tax audit settlementssettlements; and the interaction of various global tax strategies.

For the three and nine months ended September 30, 2019,2020, the Company concluded that the use of the cut-off tax rate method was more appropriate than the annual effective tax rate method, because the annual effective tax rate method would not be reliable due to its sensitivity to minimal changes in forecasted annual pre-tax earnings.
The Company recorded a provision for income taxes of $1.9 million (Products Corporation - provision for income taxes of $2.3 million) for the three months ended September 30, 2020 and a benefit from income taxes of $2.1 million (Products Corporation - benefit from income taxes of $1.8 million) for the three months ended September 30, 2019, and a benefit from incomes taxes of $38.7respectively. The $4.0 million decrease (Products Corporation - $38.2$4.1 million) forin the benefit from income taxes in the three months ended September 30, 2018, respectively. The $36.6 million decrease (Products Corporation - $36.4 million) in2020, compared to the benefit from income taxes, of which $34.3 million was non-cash,three months ended September 30, 2019, was primarily due to: (i) the decreased loss from continuing operations before income taxes; (ii) the mix and level of earnings; (iii) the impact of the 2017 Tax Act mainly due to(ii) an adjustmentincrease in the third quarter of 2018U.S. tax on the Company's foreign earnings; and (iii) increased tax expense from return to provision adjustments, partially offset primarily by an increase in tax benefit from the net change in valuation allowances related to a new U.S. Treasury regulation issuedthe recognition of previously unrecognized tax losses in September 2018.Canada.
The Company recorded a benefit from income taxes of $45.2 million (Products Corporation - benefit from income taxes of $44.2 million) for the nine months ended September 30, 2020 and a benefit from income taxes of $3.2 million (Products Corporation - benefit from income taxes of $2.4 million) for the nine months ended September 30, 2019, and a benefit from income taxes of $43.1respectively. The $42.0 million increase (Products Corporation - $42.0$41.8 million) in the benefit from income taxes in the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, was primarily due to: (i) the increased loss from continuing operations before income taxes on which the tax benefit is recognized; (ii) the mix and level of earnings; and (iii) a reduction in the U.S. tax on the Company's foreign earnings, net of the impact of non-deductible impairment charges, partially offset by the net change in valuation allowances recorded related to the limitation on the deductibility of interest.
The Company's effective tax rate for the three months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due the mix and level of earnings and the change in valuation allowance related to the limitation on the deductibility of interest. The Company's effective tax rate for the nine months ended September 30, 2018, respectively. The $39.9 million decrease (Products Corporation - $39.6 million) in2020 was lower than the benefit from income taxes,federal statutory rate of which $34.3 million was non-cash, was21% primarily due to: (i)to the decreased loss from continuing operations before income taxes; (ii)impact of non-deductible impairment charges and the mix and levelvaluation allowance related to the limitation on the deductibility of earnings; (iii)interest, partially offset by the impact of the 2017 Tax Act mainly due to an adjustment"Coronavirus Aid, Relief and Economic Security Act" (the "CARES Act"), signed into law on March 27, 2020 by President Trump, which resulted in the third quartera partial release of 2018 related to a new U.S. Treasury regulation issued in September 2018. For a further discussion, see Note 15, "Income Taxes," to the Consolidated Financial Statements in the Company's 2018 Form 10-K and Item 1A. “Risk Factors-Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impactvaluation allowance on the Company's financial condition,2019 federal tax attributes associated with the limitation on the deductibility of interest.

The CARES Act, among other things, includes provisions providing for refundable payroll tax credits, the deferral of employer social security tax payments, acceleration of alternative minimum tax credit refunds and the increase of the net interest deduction limitation from 30% to 50%. The Company continues to examine the impact that the CARES Act may have on its results of operations, financial condition and/or cash flows”financial statement disclosures.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in the Company's 2018 Form 10-K.millions, except share and per share amounts)

The Company's effective tax rate for the three months and nine months ended September 30, 2019 was lower than the federal statutory rate of 21%, primarily due to the valuation allowance related to the limitation on the deductibility of interest and the U.S. tax on the Company's foreign earnings.
The Company expects 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.
The
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 for which it is more likely than not to realize a benefit.For any deferred tax asset in excess of the amount for which it is more likely than not that the Company will realize a benefit, the Company establishes a valuation allowance.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.

As of September 30, 2020, the Company concluded that, based on its evaluation of objectiveobjectively verifiable evidence, it does not require a valuation allowance on its federal deferred tax assets, other than those associated with the limitation on the deductibility of interest. The Company does have a valuation allowance on deferred tax assets associated with its activity in certain U.S. states and foreign jurisdictions. These conclusions regarding the establishment of valuation allowances on the Company's deferred tax assets foras of the nine months ended September 30, 2019end of the third quarter of 2020 are consistent with the Company's conclusions on such matters as compared to prior quarters.The key assumptions used to determine positive and negative evidence included the Company’s cumulative taxable loss for the past three years, future reversals of existing taxable temporary differences, the Company's cost reduction initiatives and other efficiency efforts, as well as certain assumptions regarding COVID-19's expected impact on the Company.Potential negative evidence, including, among other things, any further worsening of the year ended December 31, 2018. However, ifeconomies in the jurisdictions in which the Company does not generate sufficient taxable incomeoperates and any future reduced profitability in such jurisdictions could result in additional valuation allowances which would reduce the Company's future periods, its deferred tax assets may not be realizable on a more-likely-than-not basis, whichassets. In such event, the Company's tax expense would resultlikely materially increase in the period the valuation allowance is recognized and adversely impact the Company's results of operations and statement of financial condition in such period. The Company havingwill continue to monitor the circumstances that would require it to establish an additional valuation allowance against

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


on its deferred tax assets. The Company will continue to assess allAccordingly, depending on future evidence that may become available, evidence, both negative and positive, to determine whether such additionalthe Company's assessments regarding its valuation allowance is warranted.position may change.
For a further discussion,information, see Note 15,14, "Income Taxes," to the Consolidated Financial Statements in the Company's2018 2019 Form 10-K and Item 1A. “Risk Factors-Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impact on the Company's financial condition, results of operations and/or cash flows” in the Company's2018 2019 Form 10-K.


14.13. ACCUMULATED OTHER COMPREHENSIVE LOSS


A roll-forward of the Company's accumulated other comprehensive loss as of September 30, 20192020 is as follows:
Foreign Currency TranslationActuarial (Loss) Gain on Post-retirement BenefitsOtherAccumulated Other Comprehensive Loss
Balance at January 1, 2020$(27.3)$(219.8)$(0.3)$(247.4)
Foreign currency translation adjustment7.3 — — 7.3 
Amortization of pension related costs, net of tax of $0.7 million(a)
— 9.3 — 9.3 
Other comprehensive (loss) gain$7.3 $9.3 $0 $16.6 
Balance at September 30, 2020$(20.0)$(210.5)$(0.3)$(230.8)
 Foreign Currency Translation Actuarial (Loss) Gain on Post-retirement Benefits Other Accumulated Other Comprehensive Loss
Balance at January 1, 2019$(24.4) $(209.5) $(0.3) $(234.2)
Foreign currency translation adjustment(0.5) —
 —
 (0.5)
Amortization of pension related costs, net of tax of $(0.9) million(a)
—
 7.2
 —
 7.2
Other comprehensive (loss) income$(0.5)
$7.2

$—

$6.7
Balance at September 30, 2019$(24.9) $(202.3) $(0.3) $(227.5)
(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 11,10, "Pension and Post-retirement Benefits," for further discussion ofinformation on the Company’s pension and other post-retirement plans.


For the three and nine months ended September 30, 2020 and 2019, the Company did not have any activity related to financial instruments. As the 2013 Interest Rate Swap expired


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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in May 2018millions, except share and had been fully amortized into earnings as of June 30, 2018, there was no activity related to the 2013 Interest Rate Swap for the three months ended September 30, 2018. The following is a roll-forward of the amounts reclassified out of accumulated other comprehensive loss into earnings during the nine months ended September 30, 2018 related to the 2013 Interest Rate Swap:per share amounts)

  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2017 $(0.7)
Reclassifications into earnings (net of $0.5 million tax benefit)(a)
 0.7
Ending accumulated losses at September 30, 2018 $—

(a) Reclassified to interest expense.


15.14. SEGMENT DATA AND RELATED INFORMATION
Operating Segments
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. 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 Unaudited 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.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


As of September 30, 2019,2020, the Company’s operations are organized into the following reportable segments:
•Revlon - The Revlon segment is comprised of the Company's flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers and specialty cosmetic stores in the U.S. and internationally under brands such as Revlon in color cosmetics; Revlon ColorSilk and Revlon Professional in hair color; and Revlon in beauty tools.
•Elizabeth Arden - The Elizabeth Arden segment is comprised of the Company's Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and elizabetharden.com e-commerce website, in the U.S. and internationally, under brands such as Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference and Skin Illuminating in the Elizabeth Arden skin care brands; and Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue andElizabeth Arden Green Tea in Elizabeth Arden fragrances.
•Portfolio - The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as Almay and SinfulColors in color cosmetics; American Crew in men's grooming products (which are also sold direct-to-consumer on its americancrew.com website); CND in nail polishes, gel nail color and nail enhancements; Cutex nail care products; Pure Ice in nail polishes; and Mitchum in anti-perspirant deodorants. The Portfolio 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.; and a body care line under the Natural Honey brand and hair color line under the Llongueras brand (licensed from a third party) that are bothis sold in the mass retail channel, large volume retailers and other retailers, primarily in Spain.
•Fragrances - The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as: (i) JuicyCouture(which (which are also sold direct-to-consumer on its juicycouturebeauty.com website), JohnVarvatos and AllSaints in prestige fragrances; (ii) BritneySpears, Elizabeth Taylor, ElizabethTaylor, ChristinaAguilera, JenniferAniston and MariahCarey in celebrity fragrances; and (iii) Curve John Varvatos, Christina AguileraGiorgioBeverlyHills, Giorgio Beverly Hills,Ed Hardy, Charlie,Lucky Brand, ‹PS› (logo of former Paul Sebastian brand), AlfredSung, Jennifer Aniston, Mariah Carey, Halston, GeoffreyBeene, La Perla, White Shoulders, AllSaints and Wildfox.
WhiteDiamonds in mass fragrances.
The Company's management evaluates segment profit for 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. Segment profit also excludes the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance. Such items are shown below in the table reconciling segment profit to consolidated income from continuing operations before income taxes. 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 of Business and Summary of Significant Accounting Policies." The Company's assets and liabilities are managed centrally and

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

are reported internally in the same manner as the Unaudited 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 Unaudited Consolidated Financial Statements.

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 the periods presented.

Revlon, Inc.
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Segment Net Sales:
Revlon$166.0 $217.3 $482.8 $716.1 
Elizabeth Arden106.3 123.2 282.4 352.0 
Portfolio99.6 118.2 298.1 354.1 
Fragrances105.2 138.1 214.4 298.0 
Total$477.1 $596.8 $1,277.7 $1,720.2 
Segment Profit:
Revlon$13.5 $7.3 $41.4 $58.5 
Elizabeth Arden3.4 12.5 18.4 17.1 
Portfolio12.2 14.4 33.9 25.0 
Fragrances25.4 34.2 34.6 53.6 
Total$54.5 $68.4 $128.3 $154.2 
Reconciliation:
Total Segment Profit$54.5 $68.4 $128.3 $154.2 
Less:
Depreciation and amortization35.1 38.9 108.3 124.6 
Non-cash stock compensation expense5.1 3.9 8.6 7.7 
Non-Operating items:
Restructuring and related charges4.5 5.4 61.2 27.4 
Acquisition, integration and divestiture costs0.9 0.1 4.2 0.7 
Gain on divested assets(1.1)0 (0.5)0 
Financial control remediation and sustainability actions and related charges0.7 3.4 8.5 9.8 
Excessive coupon redemptions0 0 4.2 0 
COVID-19 charges9.7 0 35.1 0 
Capital structure and related charges9.3 0 9.3 0 
Impairment charges0 0 144.1 0 
      Operating (loss) income(9.7)16.7 (254.7)(16.0)
Less:
Interest Expense68.7 50.2 178.0 145.7 
Amortization of debt issuance costs7.8 3.7 17.8 10.4
   Gain on early extinguishment of debt(31.2)0 (43.1)0 
Foreign currency (gains) losses, net(9.8)7.6 9.1 9.0 
Miscellaneous, net(2.6)1.7 13.9 7.6 
Loss from continuing operations before income taxes$(42.6)$(46.5)$(430.4)$(188.7)
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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




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


Revlon, Inc.
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Segment Net Sales:       
Revlon$217.3
 $249.5
 $716.1
 $736.9
Elizabeth Arden123.2
 122.1
 352.0
 333.9
Portfolio118.2
 138.4
 354.1
 420.5
Fragrances138.1
 145.4
 298.0
 331.6
Total$596.8
 $655.4
 $1,720.2
 $1,822.9
        
Segment Profit:       
Revlon$7.3
 $36.8
 $58.5
 $75.6
Elizabeth Arden12.5
 6.6
 17.1
 2.3
Portfolio14.4
 2.1
 25.0
 (5.8)
Fragrances34.2
 26.9
 53.6
 41.2
Total$68.4
 $72.4
 $154.2
 $113.3
        
Reconciliation:       
Total Segment Profit$68.4
 $72.4
 $154.2
 $113.3
Less:       
Depreciation and amortization38.9
 40.1
 124.6
 119.4
Non-cash stock compensation expense3.9
 6.3
 7.7
 14.8
Non-Operating items:

 

   

Restructuring and related charges5.4
 3.8
 27.4
 14.8
Acquisition and integration costs0.1
 3.4
 0.7
 12.0
Loss on disposal of minority investment—
 —
 —
 20.1
Oxford ERP system disruption-related charges—
 16.5
 —
 49.6
Financial control remediation actions and related charges3.4
 —
 9.8
 —
Operating income (loss)16.7
 2.3
 (16.0) (117.4)
Less:  

    
Interest Expense50.2
 46.4
 145.7
 129.1
Amortization of debt issuance costs3.7
 3.8
 10.4
 9.1
Foreign currency losses, net7.6
 1.1
 9.0
 10.7
Miscellaneous, net1.7
 0.4
 7.6
 0.6
Loss from continuing operations before income taxes$(46.5) $(49.4) $(188.7) $(266.9)




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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


Products Corporation
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Segment Net Sales:
Revlon$166.0 $217.3 $482.8 $716.1 
Elizabeth Arden106.3 123.2 282.4 352.0 
Portfolio99.6 118.2 298.1 354.1 
Fragrances105.2 138.1 214.4 298.0 
Total$477.1 $596.8 $1,277.7 $1,720.2 
Segment Profit:
Revlon$14.2 $7.9 $43.6 $60.6 
Elizabeth Arden3.8 13.0 19.7 18.2 
Portfolio12.6 14.7 35.3 26.0 
Fragrances25.9 34.6 35.6 54.5 
Total$56.5 $70.2 $134.2 $159.3 
Reconciliation:
Total Segment Profit$56.5 $70.2 $134.2 $159.3 
Less:
Depreciation and amortization35.1 38.9 108.3 124.6 
Non-cash stock compensation expense5.1 3.9 8.6 7.7 
Non-Operating items:
Restructuring and related charges4.5 5.4 61.2 27.4 
Acquisition, integration and divestiture costs0.9 0.1 4.2 0.7 
Gain on divested assets(1.1)0 (0.5)0 
Financial control remediation and sustainability actions and related charges0.7 3.4 8.5 9.8 
Excessive coupon redemptions0 0 4.2 0 
COVID-19 charges9.7 0 35.1 0 
Capital structure and related charges9.3 0 9.3 0 
Impairment charge0 0 144.1 0 
      Operating (loss) income(7.7)18.5 (248.8)(10.9)
Less:
Interest Expense68.7 50.2 178.0 145.7 
Amortization of debt issuance costs7.8 3.7 17.8 10.4 
   Gain on early extinguishment of debt(31.2)0 (43.1)0
Foreign currency (gains) losses, net(9.8)7.6 9.1 9.0 
Miscellaneous, net(2.6)1.7 13.9 7.6 
Loss from continuing operations before income taxes$(40.6)$(44.7)$(424.5)$(183.6)
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Segment Net Sales:       
Revlon$217.3
 $249.5
 $716.1
 $736.9
Elizabeth Arden123.2
 122.1
 352.0
 333.9
Portfolio118.2
 138.4
 354.1
 420.5
Fragrances138.1
 145.4
 298.0
 331.6
Total$596.8
 $655.4
 $1,720.2
 $1,822.9
        
Segment Profit:       
Revlon$7.9
 $37.4
 $60.6
 $77.6
Elizabeth Arden13.0
 6.9
 18.2
 3.2
Portfolio14.7
 2.5
 26.0
 (4.6)
Fragrances34.6
 27.3
 54.5
 42.1
Total$70.2
 $74.1
 $159.3
 $118.3
        
Reconciliation:       
Total Segment Profit$70.2
 $74.1
 $159.3
 $118.3
Less:       
Depreciation and amortization38.9
 40.1
 124.6
 119.4
Non-cash stock compensation expense3.9
 6.3
 7.7
 14.8
Non-Operating items:       
Restructuring and related charges5.4
 3.8
 27.4
 14.8
Acquisition and integration costs0.1
 3.4
 0.7
 12.0
Loss on disposal of minority investment—
 —
 —
 20.1
Oxford ERP system disruption-related charges—
 16.5
 —
 49.6
Financial control remediation actions and related charges3.4
 —
 9.8
 —
Operating loss18.5
 4.0
 (10.9) (112.4)
Less:       
Interest Expense50.2
 46.4
 145.7
 129.1
Amortization of debt issuance costs3.7
 3.8
 10.4
 9.1
Foreign currency losses, net7.6
 1.1
 9.0
 10.7
Miscellaneous, net1.7
 0.4
 7.6
 0.6
Loss from continuing operations before income taxes$(44.7) $(47.7) $(183.6) $(261.9)


As of September 30, 2019,2020, the Company had operations established in approximately 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.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




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 September 30, 2020Nine Months Ended September 30, 2020
RevlonElizabeth ArdenPortfolioFragrancesTotalRevlonElizabeth ArdenPortfolioFragrancesTotal
Geographic Area(1):
 Net Sales
   North America$86.4 $30.5 $59.9 $79.2 $256.0 $265.6 $66.9 $182.8 $151.1 $666.4 
   EMEA*41.4 25.3 32.8 18.8 118.3 105.2 64.9 93.6 44.4 308.1 
   Asia12.1 43.3 0.4 2.7 58.5 33.6 135.5 1.6 8.1 178.8 
   Latin America*11.3 2.5 3.3 1.5 18.6 35.3 3.5 11.6 2.6 53.0 
   Pacific*14.8 4.7 3.2 3.0 25.7 43.1 11.6 8.5 8.2 71.4 
$166.0 $106.3 $99.6 $105.2 $477.1 $482.8 $282.4 $298.1 $214.4 $1,277.7 

Three Months Ended September 30, 2019Nine Months Ended September 30, 2019
 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019RevlonElizabeth ArdenPortfolioFragrancesTotalRevlonElizabeth ArdenPortfolioFragrancesTotal
Revlon Elizabeth Arden Portfolio Fragrances Total Revlon Elizabeth Arden Portfolio Fragrances Total
Geographic Area:                  
Geographic Area(1):
Geographic Area(1):
Net Sales Net Sales                    Net Sales
North America North America$100.0
 $29.5
 $71.4
 $98.6
 $299.5
 $367.9
 $83.9
 $214.5
 $198.4
 $864.7
 North America$100.0 $29.5 $71.4 $98.6 $299.5 367.983.9214.5198.4$864.7 
EMEA* EMEA*49.8
 53.5
 38.5
 28.3
 170.1
 157.8
 148.1
 111.4
 73.1
 490.4
 EMEA*48.1 37.3 38.4 26.8 150.6 153.395.8111.068.9429.0 
Asia Asia29.8
 30.7
 1.0
 2.9
 64.4
 77.8
 97.0
 3.2
 9.6
 187.6
 Asia30.1 46.5 1.0 4.0 81.6 78.4148.13.212.8242.5 
Latin America* Latin America*17.4
 1.8
 4.4
 2.7
 26.3
 52.3
 6.0
 15.8
 6.1
 80.2
 Latin America*18.8 2.2 4.5 3.1 28.6 56.27.216.27.186.7 
Pacific* Pacific*20.3
 7.7
 2.9
 5.6
 36.5
 60.3
 17.0
 9.2
 10.8
 97.3
 Pacific*20.3 7.7 2.9 5.6 36.5 60.317.09.210.897.3 
$217.3
 $123.2
 $118.2
 $138.1
 $596.8
 $716.1
 $352.0
 $354.1
 $298.0
 $1,720.2
$217.3 $123.2 $118.2 $138.1 $596.8 $716.1 $352.0 $354.1 $298.0 $1,720.2 


(1) During the first quarter of 2020, the Company changed the presentation of its Travel Retail business, which previously was included in its EMEA Region, as it is currently presented within each geographic area in accordance with the location of the retail customer. Travel Retail net sales represented approximately 2.0% and 4.6% of the Company's total net sales for the third quarter of 2020 and 2019, respectively, and 2.2% and 4.9% of the Company's total net sales for the nine months ended September 30, 2020 and 2019, respectively. Prior year amounts have been updated to reflect the current year presentation.
  Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018
 Revlon Elizabeth Arden Portfolio Fragrances Total Revlon Elizabeth Arden Portfolio Fragrances Total
Geographic Area:                  
 Net Sales                   
   North America$123.1
 $40.3
 $88.1
 $99.3
 $350.8
 $388.2
 $96.2
 $264.8
 $216.9
 $966.1
   EMEA*57.9
 48.3
 40.5
 33.2
 179.9
 166.5
 141.4
 126.0
 81.6
 515.5
   Asia28.6
 23.2
 1.1
 3.4
 56.3
 78.5
 71.6
 3.1
 9.9
 163.1
   Latin America*19.9
 3.2
 6.0
 3.4
 32.5
 49.3
 7.9
 16.8
 10.5
 84.5
   Pacific*20.0
 7.1
 2.7
 6.1
 35.9
 54.4
 16.8
 9.8
 12.7
 93.7
 $249.5
 $122.1
 $138.4
 $145.4
 $655.4
 $736.9
 $333.9
 $420.5
 $331.6
 $1,822.9


* The EMEA region includes Europe, the Middle East Africa and the Company's international Travel Retail business;Africa; the Latin America region includes Mexico;Mexico, Central America and South America; and the Pacific region includes Australia and New Zealand.

Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
2019 2018 2019
20182020201920202019
Classes of similar products:         Classes of similar products:
Net sales:         Net sales:
Color cosmetics$173.6
 29% $216.4
 33% $569.9
 33% $631.1
 35%Color cosmetics$104.7 22%$173.6 29%$305.3 24%$569.9 33%
Fragrance183.7
 31% 191.7
 29% 411.1
 24% 448.5
 25%Fragrance141.6 30%183.7 31%300.5 24%411.124%
Hair care120.5
 20% 129.6
 20% 379.0
 22% 391.0
 21%Hair care115.9 24%120.5 20%338.0 26%379.0 22%
Beauty care43.6
 7% 49.7
 8% 132.7
 8% 147.5
 8%Beauty care50.4 11%43.6 7%141.9 11%132.78%
Skin care75.4
 13% 68.0
 10% 227.5
 13% 204.8
 11%Skin care64.5 13%75.4 13%192.0 15%227.5 13%
$596.8
 $655.4
 $1,720.2
 $1,822.9
 $477.1 $596.8 $1,277.7 $1,720.2 

The following table presents the Company's long-lived assets by geographic area as of September 30, 2019 and December 31, 2018:

 September 30, 2019 December 31, 2018
Long-lived assets, net:       
United States$1,430.8
 84% $1,416.2
 84%
International275.9
 16% 275.0
 16%
 $1,706.7
  $1,691.2
  

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The following table presents the Company's long-lived assets by geographic area as of September 30, 2020 and December 31, 2019:
16.
September 30, 2020December 31, 2019
Long-lived assets, net:
United States$1,208.1 82%$1,414.0 83%
International259.3 18%280.1 17%
$1,467.4 $1,694.1 


15. REVLON, INC. BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Shares used in calculating Revlon's basic loss per share are computed using the weighted-average number of Revlon's common shares of Class A Common Stock outstanding during each period. Shares used in diluted loss per share include the dilutive effect of unvested restricted stock, RSUs, TIPLTIP RSUs and LTIPTIP RSUs under the Company’s Stock Plan using the treasury stock method. For the nine monthsrespective periods ended September 30, 2020 and 2019, Revlon's diluted loss per share equals basic loss per share, as the assumed vesting of restricted stock, RSUs, TIPLTIP RSUs and LTIPTIP RSUs would have an anti-dilutive effect. As of September 30, 20192020 and 2018,2019, there were no0 outstanding stock options under the Company's Stock Plan. See Note 12,11, "Stock Compensation Plan," for information on the LTIP and TIP RSUs.


Following are the components of Revlon's basic and diluted loss per common share for the periods presented:
Three months ended September 30,Nine months ended September 30,
2020201920202019
Numerator:
Loss from continuing operations, net of taxes$(44.5)$(44.4)$(385.2)$(185.5)
(Loss) income from discontinued operations, net of taxes0 (0.3)0 2.0 
Net loss$(44.5)$(44.7)$(385.2)$(183.5)
Denominator:
Weighted-average common shares outstanding – Basic53,476,354 53,129,004 53,371,986 53,057,154 
Effect of dilutive restricted stock and RSUs0 0 0 0 
Weighted-average common shares outstanding – Diluted53,476,354 53,129,004 53,371,986 53,057,154 
Basic and Diluted (loss) earnings per common share:
Continuing operations$(0.83)$(0.84)$(7.22)$(3.50)
Discontinued operations0 0 0 0.04 
Net loss per common share$(0.83)$(0.84)$(7.22)$(3.46)
Unvested restricted stock and RSUs under the Stock Plan(a)
0 314,478 0 406,854 
(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.



 Three months ended September 30, Nine months ended September 30,
 2019 2018 2019 2018
Numerator:       
Loss from continuing operations, net of taxes$(44.4) $(10.7) $(185.5) $(223.8)
(Loss) income from discontinued operations, net of taxes(0.3) (0.4) 2.0
 (0.1)
Net loss$(44.7) $(11.1) $(183.5) $(223.9)
Denominator:       
Weighted-average common shares outstanding – Basic53,129,004
 52,834,879
 53,057,154
 52,777,883
Effect of dilutive restricted stock—
 —
 —
 —
Weighted-average common shares outstanding – Diluted53,129,004
 52,834,879
 53,057,154
 52,777,883
Basic loss per common share:       
Continuing operations$(0.84) $(0.20) $(3.50) $(4.24)
Discontinued operations—
 (0.01) 0.04
 —
Net loss per common share$(0.84) $(0.21) $(3.46) $(4.24)
Diluted loss per common share:

      
Continuing operations$(0.84) $(0.20) $(3.50) $(4.24)
Discontinued operations—
 (0.01) 0.04
 —
Net loss per common share$(0.84) $(0.21) $(3.46) $(4.24)
        
Unvested restricted stock and RSUs under the Stock Plan(a)
314,478
 197,667
 406,854
 165,961
(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.

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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
17.
16. CONTINGENCIES

On August 12, 2020, UMB Bank, National Association (“UMB”), purporting to act as successor agent under the Term Credit Agreement, dated as of September 7, 2016 (as amended as of May 7, 2020 and as otherwise amended, restated, supplemented or otherwise modified from time to time, the “2016 Credit Agreement”), filed a lawsuit, titled UMB Bank, National Association v. Revlon, Inc. et al., against Revlon, Inc., Products Corporation, several of Products Corporation’s subsidiaries, and several of Products Corporation’s contractual counterparties, including Citibank, Jefferies Finance LLC, Jefferies LLC, and Ares Corporate Opportunities Fund V, in the U.S. District Court for the Southern District of New York (the “Complaint”). The Complaint alleged various claims, stemming from alleged breaches of the 2016 Credit Agreement. The Company believes that this lawsuit was without merit. On November 6, 2020, having failed to serve the lawsuit on any defendant or make any effort to pursue the case, UMB Bank dismissed the case without prejudice to its right to refile it at a later date.
The Company is also 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.




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18.17. RELATED PARTY TRANSACTIONS
Reimbursement Agreements

Revlon, Products Corporation and 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&O Insurance 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. In furtherance of such arrangement, on July 28, 2020, the Company made a payment of approximately $3.86 million to MacAndrews & Forbes under the Reimbursement Agreements. The Company expects to make a further payment of approximately $1.4 million in July 2021 in respect of its participation in the D&O Insurance Program.

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

The net activity related to services purchased under the Reimbursement Agreements during the nine months ended September 30, 2020 and 2019 was $0.6 million income and 2018 was $0.3 million expense, and $0.4 million income, respectively. As of September 30, 20192020 and December 31, 2018,2019, a receivable balance of nil and $0.3 million respectively, from, and a payable balance of $0.2 million to, MacAndrews & Forbes, respectively, were included in the Company's Unaudited Consolidated Balance Sheet for transactions subject to the Reimbursement Agreements.


2019 Senior2020 Restated Line of Credit Facility


See Note 8, "Long-term Debt" and Note 20, “Subsequent Events,”7, "Debt," in this Form 10-Q regarding the 2019 Senior2020 Restated Line of Credit AgreementFacility between Products Corporation and MacAndrews & Forbes Group, LLC.


Other


During the nine months ended September 30, 20192020 and 2018,2019, 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 $19.8$28.2 million and $16.9$19.8 million of coupon redemptions for the Company's retail customers for the nine months ended September 30, 20192020 and 2018,2019, respectively, for which the Company incurred fees of approximately $0.8 million and $0.5 million and $0.2 million for each of the nine months ended September 30, 2020 and 2019, and 2018,respectively, and other similar advertising, coupon redemption and raw material supply services, for which the Company had net payables aggregating to approximately $0.5$0.4 million and $0.2$0.5 million for the nine months ended September 30, 20192020 and 2018,2019, respectively. As of September 30, 20192020 and December 31, 2018,2019, a payable balance of approximately $5.3$1.7 million and nil,$5.5 million, respectively, were included in the Company's Consolidated Balance Sheet for the 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.



In April 2020, in connection with the organizational measures taken by the Company in response to COVID-19, the Company and Ms. Debbie Perelman, the Company’s President and Chief Executive Officer and a member of Revlon’s and Products Corporation’s Boards of Directors, agreed in writing that, effective on or about April 11, 2020, Ms. Perelman’s base salary would be reduced by 40% to $675,000, less all applicable withholdings and deductions, during the span of COVID-19. The Chairman of the Compensation Committee has the authority to reinstate Ms. Perelman’s base salary in effect immediately prior to such amendment at any time he deems appropriate, in his sole discretion, exercised reasonably. In July 2020, the Chairman of the Compensation Committee, acting pursuant to his delegated authority, partially reinstated Ms. Perelman’s base salary to the same 25% reduction applicable to the other members of the Company’s Executive Leadership Team. In late September 2020, the Company's CEO adjusted the initial COVID-driven 25% reduction in the base salary for members of its Executive Leadership Team to a 20% reduction. Also in connection with such COVID-19 measures, in March 2020, the Company agreed in writing with each of Ms. Mitra Hormozi and Mr. E. Scott Beattie that, effective April 1, 2020, their provision of advisory services to the Company was suspended, and payment of their consulting fees was also suspended. In connection with Ms. Hormozi’s resignation from the Board in July 2020, the Company and Ms. Hormozi terminated her Consulting Agreement, dated as of November 7, 2019, as amended, which Consulting Agreement had previously been suspended as part of the organizational cost-reduction measures taken by the Company in response to the ongoing COVID-19 pandemic. The Company’s CEO may reinstate Mr. Beattie’s advisory services and payment of his consulting fees at the appropriate time, in her sole discretion, exercised reasonably. See Note 19, "Subsequent Events."


As previously disclosed in the Company’s 2019 Form 10-K, prior to this suspension of services and payments, in March 2020, the Company and Mr. Beattie entered into an Amended and Restated Consulting Agreement (the “2020 Consulting Agreement”), pursuant to which he was scheduled to serve as Senior Advisor to the Company’s CEO for an additional year, subject to automatic 1-year renewals, unless either party elects not to renew, and subject to certain standard termination rights, in consideration for which, the Company would pay Mr. Beattie a fee of $250,000 per year, supplemental to the Board’s compensation program for non-employee directors. The foregoing description of the 2020 Consulting Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which was filed with the SEC on March 12, 2020 together with the Company’s 2019 Form 10-K.

MacAndrews & Forbes tendered approximately $15.5 million of 5.75% Senior Notes into the Exchange Offer and, in exchange, received the Mixed Consideration as described herein, in accordance with the terms and conditions of the Exchange Offer.

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19.18. 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 (the "5.75% Senior Notes Guarantors" and the "6.25% Senior Notes Guarantors," respectively, and together the "Guarantor Subsidiaries").


The following Condensed Consolidating Unaudited Financial Statements present the financial information as of September 30, 20192020 and December 31, 2018,2019, and for each of the three and nine months ended September 30, 20192020 and 20182019 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 do not guarantee Products Corporation's 5.75% Senior Notes and 6.25% Senior Notes (the "Non-Guarantor Subsidiaries") on a stand-alone basis; and (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 September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$167.8 $8.8 $91.7 $0 $268.3 
Trade receivables, less allowances for doubtful accounts54.6 107.7 178.5 0 340.8 
Inventories, net141.0 180.9 203.6 0 525.5 
Prepaid expenses and other215.0 31.2 59.4 0 305.6 
Intercompany receivables3,375.6 3,296.1 464.4 (7,136.1)0 
Investment in subsidiaries1,581.4 (0.1)0 (1,581.3)0 
Property, plant and equipment, net184.4 70.5 100.9 0 355.8 
Deferred income taxes243.5 (70.6)39.0 0 211.9 
Goodwill48.9 264.0 250.3 0 563.2 
Intangible assets, net10.8 192.1 233.0 0 435.9 
Other assets69.0 13.4 30.1 0 112.5 
      Total assets$6,092.0 $4,094.0 $1,650.9 $(8,717.4)$3,119.5 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$0 $0 $2.0 $0 $2.0 
Current portion of long-term debt649.0 0 55.5 0 704.5 
Accounts payable75.1 62.2 82.6 0 219.9 
Accrued expenses and other243.5 (48.2)195.5 0 390.8 
Intercompany payables3,496.2 3,013.9 625.9 (7,136.0)0 
Long-term debt2,926.2 0 0.3 0 2,926.5 
Other long-term liabilities172.9 109.3 38.1 0 320.3 
      Total liabilities7,562.9 3,137.2 999.9 (7,136.0)4,564.0 
Stockholder’s (deficiency) equity(1,470.9)956.8 651.0 (1,581.4)(1,444.5)
Total liabilities and stockholder’s (deficiency) equity$6,092.0 $4,094.0 $1,650.9 $(8,717.4)$3,119.5 



Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of September 30, 2019
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
          
ASSETS         
Cash and cash equivalents$1.2
 $3.2
 $56.3
 $—
 $60.7
Trade receivables, less allowances for doubtful accounts85.6
 130.1
 239.2
 —
 454.9
Inventories152.4
 182.9
 186.7
 —
 522.0
Prepaid expenses and other234.2
 27.4
 48.6
 —
 310.2
Intercompany receivables2,690.4
 2,601.9
 377.3
 (5,669.6) —
Investment in subsidiaries1,570.0
 14.5
 —
 (1,584.5) —
Property, plant and equipment, net212.5
 94.1
 107.1
 —
 413.7
Deferred income taxes178.1
 (20.4) (16.5) —
 141.2
Goodwill160.0
 263.9
 249.5
 —
 673.4
Intangible assets, net13.3
 353.3
 130.1
 —
 496.7
Other assets68.6
 19.8
 34.5
 —
 122.9
      Total assets$5,366.3
 $3,670.7
 $1,412.8
 $(7,254.1) $3,195.7
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$—
 $—
 $5.1
 $—
 $5.1
Current portion of long-term debt363.4
 —
 0.1
 —
 363.5
Accounts payable150.4
 79.4
 92.5
 —
 322.3
Accrued expenses and other139.2
 69.4
 163.0
 —
 371.6
Intercompany payables2,717.3
 2,464.1
 488.3
 (5,669.7) —
Long-term debt2,826.8
 —
 79.8
 —
 2,906.6
Other long-term liabilities251.7
 36.7
 36.2
 —
 324.6
      Total liabilities6,448.8
 2,649.6
 865.0
 (5,669.7) 4,293.7
Stockholder’s deficiency(1,082.5) 1,021.1
 547.8
 (1,584.4) (1,098.0)
Total liabilities and stockholder’s deficiency$5,366.3
 $3,670.7
 $1,412.8
 $(7,254.1) $3,195.7



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(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of December 31, 2019
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$0.8 $6.4 $97.1 $0 $104.3 
Trade receivables, less allowances for doubtful accounts95.5 92.3 235.6 0 423.4 
Inventories, net131.0 151.5 165.9 0 448.4 
Prepaid expenses and other219.7 26.4 46.5 0 292.6 
Intercompany receivables2,857.7 2,854.6 452.7 (6,165.0)0 
Investment in subsidiaries1,598.3 30.7 0 (1,629.0)0 
Property, plant and equipment, net208.7 89.5 110.4 0 408.6 
Deferred income taxes165.0 (37.8)30.9 0 158.1 
Goodwill159.9 264.0 249.8 0 673.7 
Intangible assets, net13.0 346.9 130.8 0 490.7 
Other assets67.8 16.2 37.1 0 121.1 
      Total assets$5,517.4 $3,840.7 $1,556.8 $(7,794.0)$3,120.9 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$0 $0 $2.2 $0 $2.2 
Current portion of long-term debt287.9 0 0.1 0 288.0 
Accounts payable108.4 39.9 103.5 0 251.8 
Accrued expenses and other124.1 70.0 224.1 0 418.2 
Intercompany payables3,030.3 2,668.7 466.0 (6,165.0)0 
Long-term debt2,822.2 0 84.0 0 2,906.2 
Other long-term liabilities220.4 118.2 5.3 0 343.9 
      Total liabilities6,593.3 2,896.8 885.2 (6,165.0)4,210.3 
Stockholder’s (deficiency) equity(1,075.9)943.9 671.6 (1,629.0)(1,089.4)
Total liabilities and stockholder’s (deficiency) equity$5,517.4 $3,840.7 $1,556.8 $(7,794.0)$3,120.9 


Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of December 31, 2018
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
          
ASSETS         
Cash and cash equivalents$7.3
 $6.6
 $73.4
 $—
 $87.3
Trade receivables, less allowances for doubtful accounts89.7
 103.5
 238.1
 —
 431.3
Inventories150.7
 196.5
 176.0
 —
 523.2
Prepaid expenses and other214.7
 25.0
 60.0
 —
 299.7
Intercompany receivables2,225.4
 2,177.2
 266.1
 (4,668.7) —
Investment in subsidiaries1,627.4
 30.4
 —
 (1,657.8) —
Property, plant and equipment, net197.1
 57.5
 99.9
 —
 354.5
Deferred income taxes105.9
 (6.9) 15.8
 —
 114.8
Goodwill159.9
 263.9
 250.1
 —
 673.9
Intangible assets, net21.2
 412.2
 98.6
 —
 532.0
Other assets71.8
 23.4
 35.6
 —
 130.8
      Total assets$4,871.1
 $3,289.3
 $1,313.6
 $(6,326.5) $3,147.5
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$—
 $—
 $9.3
 $—
 $9.3
Current portion of long-term debt348.0
 —
 0.1
 —
 348.1
Accounts payable148.8
 88.6
 94.7
 —
 332.1
Accrued expenses and other152.6
 87.0
 195.1
 —
 434.7
Intercompany payables2,226.8
 2,028.9
 413.0
 (4,668.7) —
Long-term debt2,644.6
 —
 83.1
 —
 2,727.7
Other long-term liabilities153.4
 11.2
 64.1
 —
 228.7
      Total liabilities5,674.2
 2,215.7
 859.4
 (4,668.7) 4,080.6
Stockholder’s deficiency(803.1) 1,073.6
 454.2
 (1,657.8) (933.1)
Total liabilities and stockholder’s deficiency$4,871.1
 $3,289.3
 $1,313.6
 $(6,326.5) $3,147.5


42
Table of Contents
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$95.7 $148.9 $232.4 $0.1 $477.1 
Cost of sales45.6 92.6 96.0 0.1 234.3 
Gross profit50.1 56.3 136.4 0 242.8 
Selling, general and administrative expenses84.4 47.7 119.3 0 251.4 
Acquisition and integration costs0.8 0 0.1 0 0.9 
Restructuring charges and other, net(8.4)2.7 5.0 0 (0.7)
Impairment charges(23.4)22.0 1.4 0 0 
Gain on divested assets(1.1)0 0 0 (1.1)
Operating (loss) income(2.2)(16.1)10.6 0 (7.7)
Other (income) expense:
Intercompany interest, net(0.5)0.7 (0.2)0 0 
Interest expense67.3 0 1.4 0 68.7 
Amortization of debt issuance costs7.8 0 0 0 7.8 
Gain on early extinguishment of debt(31.2)0 0 0 (31.2)
Foreign currency losses (gains), net1.0 (0.7)(10.1)0 (9.8)
Miscellaneous, net(1.8)(55.4)54.6 0 (2.6)
Other expense (income), net42.6 (55.4)45.7 0 32.9 
(Loss) income from continuing operations before income taxes(44.8)39.3 (35.1)0 (40.6)
(Benefit from) provision for income taxes(6.3)17.8 (9.2)0 2.3 
(Loss) income from continuing operations, net of taxes(38.5)21.5 (25.9)0 (42.9)
Equity in income (loss) of subsidiaries30.0 (10.0)0 (20.0)0 
Net (loss) income$(8.5)$11.5 $(25.9)$(20.0)$(42.9)
Other comprehensive income (loss)5.0 (7.1)1.6 5.5 5.0 
Total comprehensive (loss) income$(3.5)$4.4 $(24.3)$(14.5)$(37.9)


Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2019
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$118.4
 $174.8
 $303.9
 $(0.3) $596.8
Cost of sales64.9
 88.1
 116.3
 (0.3) 269.0
Gross profit53.5
 86.7
 187.6
 —
 327.8
Selling, general and administrative expenses90.5
 82.1
 133.7
 —
 306.3
Acquisition and integration costs0.1
 —
 —
 —
 0.1
Restructuring charges and other, net1.0
 0.5
 1.4
 —
 2.9
Operating (loss) income(38.1) 4.1
 52.5
 —
 18.5
Other (income) expense:         
Intercompany interest, net(1.1) 0.6
 0.5
 —
 —
Interest expense48.5
 —
 1.7
 —
 50.2
Amortization of debt issuance costs3.7
 —
 —
 —
 3.7
Foreign currency losses (gains), net0.9
 (0.1) 6.8
 —
 7.6
Miscellaneous, net(8.4) (10.0) 20.1
 —
 1.7
Other expense (income), net43.6
 (9.5) 29.1
 —
 63.2
(Loss) income from continuing operations before income taxes(81.7) 13.6
 23.4
 —
 (44.7)
(Benefit from) provision for income taxes(31.4) 18.9
 10.7
 —
 (1.8)
(Loss) income from continuing operations, net of taxes(50.3) (5.3) 12.7
 —
 (42.9)
Loss from discontinued operations, net of taxes—
 —
 (0.3) —
 (0.3)
Equity in income (loss) of subsidiaries30.8
 0.1
 —
 (30.9) —
Net (loss) income$(19.5) $(5.2) $12.4
 $(30.9) $(43.2)
Other comprehensive income (loss)0.5
 3.9
 (1.9) (2.0) 0.5
Total comprehensive (loss) income$(19.0) $(1.3) $10.5
 $(32.9) $(42.7)

43
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2019
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$118.4 $174.8 $303.9 $(0.3)$596.8 
Cost of sales64.9 88.1 116.3 (0.3)269.0 
Gross profit53.5 86.7 187.6 0 327.8 
Selling, general and administrative expenses90.5 82.1 133.7 0 306.3 
Acquisition and integration costs0.1 0 0 0 0.1 
Restructuring charges and other, net1.0 0.5 1.4 0 2.9 
Operating (loss) income(38.1)4.1 52.5 0 18.5 
Other (income) expense:
Intercompany interest, net(1.1)0.6 0.5 0 0 
Interest expense48.5 0 1.7 0 50.2 
Amortization of debt issuance costs3.7 0 0 0 3.7 
Foreign currency losses (gains), net0.9 (0.1)6.8 0 7.6 
Miscellaneous, net(8.4)(10.0)20.1 0 1.7 
Other expense (income), net43.6 (9.5)29.1 0 63.2 
(Loss) income from continuing operations before income taxes(81.7)13.6 23.4 0 (44.7)
(Benefit from) provision for income taxes(31.4)18.9 10.7 0 (1.8)
Loss (income) from continuing operations, net of taxes(50.3)(5.3)12.7 0 (42.9)
Income from discontinued operations, net of taxes0 0 (0.3)0 (0.3)
Equity in income (loss) of subsidiaries30.8 0.1 0 (30.9)0 
Net (loss) income$(19.5)$(5.2)$12.4 $(30.9)$(43.2)
Other comprehensive income (loss)0.5 3.9 (1.9)(2.0)0.5 
Total comprehensive (loss) income$(19.0)$(1.3)$10.5 $(32.9)$(42.7)


Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2018
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$149.3
 $196.5
 $308.5
 $1.1
 $655.4
Cost of sales77.2
 104.4
 122.3
 1.1
 305.0
Gross profit72.1
 92.1
 186.2
 —
 350.4
Selling, general and administrative expenses99.6
 98.0
 141.5
 —
 339.1
Acquisition and integration costs2.2
 0.4
 0.8
 —
 3.4
Restructuring charges and other, net0.7
 2.0
 1.2
 —
 3.9
Operating (loss) income(30.4) (8.3) 42.7
 —
 4.0
Other (income) expense:         
Intercompany interest, net(0.8) 0.6
 0.2
 —
 —
Interest expense44.7
 —
 1.7
 —
 46.4
Amortization of debt issuance costs3.8
 —
 —
 —
 3.8
Foreign currency losses, net0.5
 —
 0.6
 —
 1.1
Miscellaneous, net(4.7) (16.1) 21.2
 —
 0.4
Other expense (income), net43.5
 (15.5) 23.7
 —
 51.7
(Loss) income from continuing operations before income taxes(73.9) 7.2
 19.0
 —
 (47.7)
(Benefit from) provision for income taxes(41.5) 1.4
 1.9
 —
 (38.2)
Loss from continuing operations, net of taxes(32.4) 5.8
 17.1
 —
 (9.5)
Loss from discontinued operations, net of taxes—
 —
 (0.4) —
 (0.4)
Equity in (loss) income of subsidiaries22.5
 6.4
 —
 (28.9) —
Net (loss) income$(9.9) $12.2
 $16.7
 $(28.9) $(9.9)
Other comprehensive (loss) income(2.6) (0.5) (0.3) 0.8
 (2.6)
Total comprehensive (loss) income$(12.5) $11.7
 $16.4
 $(28.1) $(12.5)


44
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$305.9 $339.6 $632.2 $0 $1,277.7 
Cost of sales158.5 190.5 251.7 0 600.7 
Gross profit147.4 149.1 380.5 0 677.0 
Selling, general and administrative expenses247.6 163.8 321.8 0 733.2 
Acquisition, integration and divestiture costs4.0 0 0.2 0 4.2 
Restructuring charges and other, net32.3 7.0 5.5 0 44.8 
Impairment charges120.7 22.0 1.4 0 144.1 
Gain on divested assets(0.5)0 0 0 (0.5)
Operating (loss) income(256.7)(43.7)51.6 0 (248.8)
Other (income) expense:
Intercompany interest, net(3.5)1.8 1.7 0 0 
Interest expense173.0 0 5.0 0 178.0 
Amortization of debt issuance costs17.8 0 0 0 17.8 
Gain on early extinguishment of debt(43.1)0 0 0 (43.1)
Foreign currency losses, net1.6 1.7 5.8 0 9.1 
Miscellaneous, net(0.9)(71.5)86.3 0 13.9 
Other expense (income), net144.9 (68.0)98.8 0 175.7 
Loss from continuing operations before income taxes(401.6)24.3 (47.2)0 (424.5)
Benefit from for income taxes(58.4)19.2 (5.0)0 (44.2)
Loss from continuing operations, net of taxes(343.2)5.1 (42.2)0 (380.3)
Equity in (loss) income of subsidiaries0.7 (36.9)0 36.2 0 
Net (loss) income$(342.5)$(31.8)$(42.2)$36.2 $(380.3)
Other comprehensive (loss) income16.6 7.3 4.0 (11.3)16.6 
Total comprehensive (loss) income$(325.9)$(24.5)$(38.2)$24.9 $(363.7)


Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2019
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$429.4
 $428.9
 $865.4
 $(3.5) $1,720.2
Cost of sales205.1
 217.3
 331.8
 (3.5) 750.7
Gross profit224.3
 211.6
 533.6
 —
 969.5
Selling, general and administrative expenses329.5
 238.7
 399.9
 —
 968.1
Acquisition and integration costs0.6
 0.1
 —
 —
 0.7
Restructuring charges and other, net3.4
 3.4
 4.8
 —
 11.6
Operating (loss) income(109.2) (30.6) 128.9
 —
 (10.9)
Other (income) expense:         
Intercompany interest, net(3.5) 2.0
 1.5
 —
 —
Interest expense140.5
 —
 5.2
 —
 145.7
Amortization of debt issuance costs10.4
 —
 —
 —
 10.4
Foreign currency losses, net1.2
 0.2
 7.6
 —
 9.0
Miscellaneous, net(26.4) (36.2) 70.2
 —
 7.6
Other expense (income), net122.2
 (34.0) 84.5
 —
 172.7
(Loss) income from continuing operations before income taxes(231.4) 3.4
 44.4
 —
 (183.6)
(Benefit from) provision for income taxes(36.8) 19.3
 15.1
 —
 (2.4)
(Loss) income from continuing operations, net of taxes(194.6) (15.9) 29.3
 —
 (181.2)
Income from discontinued operations, net of taxes—
 —
 2.0
 —
 2.0
Equity in income (loss) of subsidiaries39.3
 11.8
 —
 (51.1) —
Net (loss) income$(155.3) $(4.1) $31.3
 $(51.1) $(179.2)
Other comprehensive income (loss)6.7
 2.7
 (1.8) (0.9) 6.7
Total comprehensive (loss) income$(148.6) $(1.4) $29.5
 $(52.0) $(172.5)


45
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2019
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$429.4 $428.9 $865.4 $(3.5)$1,720.2 
Cost of sales205.1 217.3 331.8 (3.5)750.7 
Gross profit224.3 211.6 533.6 0 969.5 
Selling, general and administrative expenses329.5 238.7 399.9 0 968.1 
Acquisition, integration and divestiture costs0.6 0.1 0 0 0.7 
Restructuring charges and other, net3.4 3.4 4.8 0 11.6 
Operating (loss) income(109.2)(30.6)128.9 0 (10.9)
Other (income) expenses:
Intercompany interest, net(3.5)2.0 1.5 0 0 
Interest expense140.5 0 5.2 0 145.7 
Amortization of debt issuance costs10.4 0 0 0 10.4 
Foreign currency losses, net1.2 0.2 7.6 0 9.0 
Miscellaneous, net(26.4)(36.2)70.2 0 7.6 
Other expense (income), net122.2 (34.0)84.5 0 172.7 
(Loss) income from continuing operations before income taxes(231.4)3.4 44.4 0 (183.6)
(Benefit from) provision for income taxes(36.8)19.3 15.1 0 (2.4)
(Loss) income from continuing operations, net of taxes(194.6)(15.9)29.3 0 (181.2)
Income from discontinued operations, net of taxes0 0 2.0 0 2.0 
Equity in income (loss) of subsidiaries39.3 11.8 0 (51.1)0 
Net (loss) income$(155.3)$(4.1)$31.3 $(51.1)$(179.2)
Other comprehensive income (loss)6.7 2.7 (1.8)(0.9)6.7 
Total comprehensive (loss) income$(148.6)$(1.4)$29.5 $(52.0)$(172.5)


Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2018
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$478.3
 $485.3
 $860.8
 $(1.5) $1,822.9
Cost of sales231.9
 239.4
 337.4
 (1.5) 807.2
Gross profit246.4
 245.9
 523.4
 —
 1,015.7
Selling, general and administrative expenses326.6
 314.0
 441.5
 —
 1,082.1
Acquisition and integration costs7.8
 1.4
 2.8
 —
 12.0
Restructuring charges and other, net5.1
 2.2
 6.6
 —
 13.9
Loss on disposal of minority investment20.1
 —
 —
 —
 20.1
Operating income(113.2) (71.7) 72.5
 —
 (112.4)
Other (income) expenses:         
Intercompany interest, net(4.7) 1.8
 2.9
 —
 —
Interest expense127.0
 —
 2.1
 —
 129.1
Amortization of debt issuance costs9.1
 —
 —
 —
 9.1
Foreign currency losses, net2.5
 0.4
 7.8
 —
 10.7
Miscellaneous, net(15.0) (41.8) 57.4
 —
 0.6
Other expense (income), net118.9
 (39.6) 70.2
 —
 149.5
(Loss) income from continuing operations before income taxes(232.1) (32.1) 2.3
 —
 (261.9)
(Benefit from) provision for income taxes(49.7) 6.5
 1.2
 —
 (42.0)
(Loss) income from continuing operations, net of taxes(182.4) (38.6) 1.1
 —
 (219.9)
Loss from discontinued operations, net of taxes—
 —
 (0.1) —
 (0.1)
Equity in (loss) income of subsidiaries(37.6) 1.6
 —
 36.0
 —
Net (loss) income$(220.0) $(37.0) $1.0
 $36.0
 $(220.0)
Other comprehensive (loss) income(5.1) (3.3) (9.3) 12.6
 (5.1)
Total comprehensive (loss) income$(225.1) $(40.3) $(8.3) $48.6
 $(225.1)


46
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities$(260.0)$6.6 $(3.5)$0 $(256.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities(6.0)(0.5)(0.9)0 (7.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft2.5 (3.8)0.6 0 (0.7)
Borrowings under the 2020 BrandCo Facilities880.0 0 0 0 880.0 
Repurchases of the 5.75% Senior Notes(114.1)0 0 0 (114.1)
Net borrowings under the Amended 2016 Revolving Credit Facility19.5 0 0 0 19.5 
Net borrowings under the 2019 Term Loan Facility (a)(200.0)0 0 0 (200.0)
Repayments under the 2018 Foreign Asset-Based Term Loan(31.4)0 0 0 (31.4)
Repayments under the 2016 Term Loan Facility(9.2)0 0 0 (9.2)
Payment of financing costs(109.4)0 1.1 0 (108.3)
Tax withholdings related to net share settlements of restricted stock and RSUs(1.6)0 0 0 (1.6)
Other financing activities(0.1)(0.1)(0.1)0 (0.3)
Net cash provided by (used in) financing activities436.2 (3.9)1.6 0 433.9 
Effect of exchange rate changes on cash, cash equivalents and restricted cash0.4 2.0 (2.8)0 (0.4)
Net increase (decrease) in cash, cash equivalents and restricted cash170.6 4.2 (5.6)0 169.2 
Cash, cash equivalents and restricted cash at beginning of period$1.0 $6.4 $97.2 $0 $104.5 
Cash, cash equivalents and restricted cash at end of period$171.6 $10.6 $91.6 $0 $273.7 


Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2019
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash (used in) provided by operating activities$(169.1) $5.6
 $(3.3) $—
 $(166.8)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Net cash used in investing activities(10.9) (2.0) (7.1) —
 (20.0)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net decrease in short-term borrowings and overdraft(11.5) (7.2) (3.7) —
 (22.4)
Net borrowings under the Amended 2016 Revolving Credit Facility13.4
 —
 —
 —
 13.4
Net borrowings under the 2019 Term Loan Facility200.0
 —
 —
 —
 200.0
Repayments under the 2016 Term Loan Facility(13.5) —
 —
 —
 (13.5)
Payment of financing costs(12.2) —
 (1.2) —
 (13.4)
Tax withholdings related to net share settlements of restricted stock units and awards(1.6) —
 —
 —
 (1.6)
Other financing activities(0.6) (0.1) (0.2) —
 (0.9)
Net cash provided by (used in) financing activities174.0
 (7.3) (5.1) —
 161.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash—
 0.4
 (1.8) —
 (1.4)
Net decrease in cash, cash equivalents and restricted cash(6.0) (3.3) (17.3) —
 (26.6)
Cash, cash equivalents and restricted cash at beginning of period$7.2
 $6.6
 $73.7
 $—
 $87.5
Cash, cash equivalents and restricted cash at end of period$1.2
 $3.3
 $56.4
 $—
 $60.9

47
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)



Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2019
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities$(169.1)$5.6 $(3.3)$0 $(166.8)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investing activities(10.9)(2.0)(7.1)0 (20.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(11.5)(7.2)(3.7)0 (22.4)
Net borrowings under the Amended 2016 Revolving Credit Facility13.4 0 0 0 13.4 
Net borrowings under the 2019 Term Loan Facility (a)200.0 0 0 0 200.0 
Repayments under the 2016 Term Loan Facility(13.5)0 0 0 (13.5)
Payments of financing costs(12.2)0 (1.2)0 (13.4)
Tax withholdings related to net share settlements of restricted stock and RSUs(1.6)0 0 0 (1.6)
Other financing activities(0.6)(0.1)(0.2)0 (0.9)
Net cash provided by (used in) financing activities174.0 (7.3)(5.1)0 161.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash0 0.4 (1.8)0 (1.4)
Net decrease in cash, cash equivalents and restricted cash(6.0)(3.3)(17.3)0 (26.6)
Cash, cash equivalents and restricted cash at beginning of period$7.2 $6.6 $73.7 $0 87.5 
Cash, cash equivalents and restricted cash at end of period$1.2 $3.3 $56.4 $0 $60.9 



Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2018
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash used in operating activities$(196.0) $(0.5) $(100.2) $—
 $(296.7)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Net cash used in investing activities(24.4) (5.0) (12.2) —
 (41.6)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net decrease (increase) in short-term borrowings and overdraft(3.6) 7.3
 (1.4) —
 2.3
Net borrowings under the Amended 2016 Revolving Credit Facility251.3
 —
 —
 —
 251.3
Net borrowings under the 2018 Foreign Asset-Based Term Loan—
 —
 89.4
 —
 89.4
Repayments under the 2016 Term Loan Facility(13.5) —
 —
 —
 (13.5)
Payments of financing costs(4.7) —
 (4.7) —
 (9.4)
Tax withholdings related to net share settlements of restricted stock units and awards(3.6) —
 —
 —
 (3.6)
Other financing activities0.3
 —
 (0.2) —
 0.1
Net cash provided by financing activities226.2
 7.3
 83.1
 —
 316.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash—
 (0.1) (3.1) —
 (3.2)
Net increase (decrease) in cash, cash equivalents and restricted cash5.8
 1.7
 (32.4) —
 (24.9)
Cash, cash equivalents and restricted cash at beginning of period$0.3
 $5.3
 $81.8
 $—
 87.4
Cash, cash equivalents and restricted cash at end of period$6.1
 $7.0
 $49.4
 $—
 $62.5



48
Table of Contents
REVLON, INC. AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


20.19. SUBSEQUENT EVENTS


Extension5.75% Senior Notes Exchange Offer

On October 23, 2020, Products Corporation amended its previously-announced Exchange Offer to exchange any and all of the Maturitythen-outstanding $342,785,000 in aggregate principal amount of its Existing 5.75% Senior Notes, as described in the amended and restated Offering Memorandum and Consent Solicitation Statement (the “Offering Memorandum”), dated October 23, 2020, which Exchange Offer closed on November 13, 2020. Concurrently with the Exchange Offer, Products Corporation solicited consents (the “Consent Solicitation”) to eliminate substantially all of the 2019restrictive covenants and certain events of default provisions from the indenture governing the 5.75% Senior LineNotes (the “5.75% Senior Notes Indenture”).

For each $1,000 principal amount of 5.75% Senior Notes validly tendered, holders received either, at their option, (i) $275 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes are tendered at or before 11:59 p.m. New York City time, on November 10, 2020 (the "Expiration Time"), for an aggregate of $325 in cash, or (ii) a combination of (1) $200 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes are tendered at or before the Expiration Time), for an aggregate of $250 in cash, plus, (2) (A) the Per $1,000 Pro Rata Share of $50 million aggregate principal amount of new 2020 ABL FILO Term Loans and (B) the Per $1,000 Pro Rata Share of $75 million aggregate principal amount of the New BrandCo Second-Lien Term Loans, if the holder is: (a)(i) a qualified institutional buyer as defined in Rule 144A under the Securities Act; (ii) an institutional accredited investor within the meaning of Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of the Securities Act; or (iii) a person that is not a “U.S. person” within the meaning of Regulation S under the Securities Act, (b) not a natural person and (c) not a “Disqualified Institution” (as defined under the Amended 2016 Revolving Credit Facility and related security documents and intercreditor agreements or the 2020 BrandCo Term Loan Facility and related security documents and intercreditor agreements).


On November 7, 2019,13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, 0 5.75% Senior Notes remained outstanding. Accrued and unpaid interest on the 5.75% Senior Notes that were tendered in the Exchange Offer was paid to, but not including, the settlement date of the Exchange Offer.

The 2020 ABL FILO Term Loans are new “Tranche B” term loans in the aggregate principal amount of $50 million, ranking junior in right of payment to the “Tranche A” revolving loans under the Amended 2016 Revolving Credit Agreement and equal in right of payment with all existing and future unsubordinated indebtedness of Products Corporation and MacAndrews & Forbes Group, LLC, Revlon’s majority stockholder, entered intothe guarantors under the Amended and Restated 2019 Senior Unsecured Line of2016 Revolving Credit Agreement (the “Amended 2019 Line of Credit Agreement”(such new Tranche B term loans, the “2020 ABL FILO Term Loans”) to extend. The 2020 ABL FILO Term Loans will mature six months after the maturity date of the 2019 Senior LineTranche A Loans (and any extension thereof in part or in whole). The 2020 ABL FILO Term Loans bear interest at a rate of Credit Agreement entered into on June 27, 2019 by 1-year, expiring December 31, 2020. As of September 30, 2019 and asLIBOR (subject to a 1.75% floor) plus 8.50% per annum, accruing from the settlement date of the NovemberExchange Offer. The borrowing base for the 2020 ABL FILO Term Loans consists of an advance rate of 100% of eligible collateral with a customary push down reserve, with collateral consisting of: (i) a first-priority lien on accounts receivable, inventory, cash, negotiable instruments, chattel paper, investment property (other than capital stock), equipment and real property of Products Corporation and the subsidiary guarantors, subject to customary exceptions (the “Priority Collateral”); and (ii) a second-priority lien on substantially all tangible and intangible personal property of Products Corporation and the subsidiary guarantors, subject to customary exclusions (other than the Priority Collateral).

The New BrandCo Second Lien Term Loans are “Term B-2 Loans” in the aggregate principal amount of $75 million (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the 2020 BrandCo Term Loan Facility (such Term B-2 Loans, the “New BrandCo Second-Lien Term Loans”). See Note 7, 2019 extension date, there were no borrowings“Debt,” and Note 19, “Subsequent Events,” regarding the 2020 BrandCo Refinancing Transactions for further details and amounts outstanding under this facility. Asthe 2020 BrandCo Credit Agreement).

In conjunction with the Exchange Offer, Products Corporation conducted the Consent Solicitation to effectuate amendments to the 5.75% Senior Notes Indenture, which eliminated substantially all of September 30, 2019, MacAndrews & Forbes Group, LLCthe restrictive covenants and its affiliates beneficially owned 46,223,321 sharescertain events of Revlon’s Class A common stock, representing approximately 87.2% of Revlon’s outstanding shares of voting capital stock as of such date.default provisions from the 5.75% Senior Notes Indenture.




49

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

Amendment No. 1 to BrandCo Credit Agreement

On November 13, 2020, Products Corporation entered into that certain Amendment No. 1 (the “BrandCo Amendment”) to the 2020 BrandCo Credit Agreement in connection with the Exchange Offer in order to, among other things, provide for the incurrence of $75 million in aggregate principal amount of New BrandCo Second-Lien Term Loans. The New BrandCo Second Lien Term Loans are a separate tranche of “Term B-2 Loans” (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the BrandCo Credit Agreement. Except as to the use of proceeds, the terms of the New BrandCo Second-Lien Term Loans are substantially consistent with the other Term B-2 Loans. In connection with the BrandCo Amendment, Products Corporation paid certain fees to the lenders in-kind in the form of New BrandCo Second-Lien Term Loans in accordance with the BrandCo TSA.

Amendment to Credit Facilities; New Tranche B ABL FILO Term Loan Facility

On October 23, 2020 (the “5th Amendment Effective Date”), Products Corporation entered into Amendment No. 5 (the “5th Amendment”) to the Amended 2016 Revolving Credit Agreement.

The 5th Amendment amended and restated the Amended 2016 Revolving Credit Agreement to add a new Tranche B consisting of $50 million aggregate principal amount of “first-in, last-out” Tranche B term loans (such new Tranche B, the “2020 ABL FILO Term Loan Facility” and the loans incurred thereunder, the “2020 ABL FILO Term Loans”). The 5th Amendment also required Products Corporation to maintain "Excess Availability" (as defined in the 5th Amendment) of at least $85 million from the 5th Amendment Effective Date until the transactions contemplated by the Exchange Offer were consummated (such date, the “Exchange Offer Effective Date”). As a result, on October 23, 2020, Products Corporation repaid $35 million of Tranche A loans under the Amended 2016 Revolving Credit Agreement.

On the Exchange Offer Effective Date, Products Corporation’s As-Adjusted Liquidity was required to be at least $175 million (which condition was satisfied) and Products Corporation cannot hold more than $100 million in cash or Cash Equivalents (as defined in the 5th Amendment). Furthermore, the 5th Amendment provides that a $30 million reserve will be automatically and immediately established against the Tranche A Borrowing Base (as defined in the 5th Amendment) if the results of ongoing appraisals and field exams are not delivered to the administrative agent prior to the occurrence of certain specified defaults.

Products Corporation will pay customary fees to Alter Domus (US) LLC as the administrative agent for the 2020 ABL FILO Term Loan Facility. Except as to maturity date, interest, borrowing base and differences due to their nature as term loans, the terms of the 2020 ABL FILO Term Loans are otherwise substantially consistent with the Tranche A Revolving Loans.

COVID-19-Related Compensation Actions

In November 2020, the Compensation Committee of Revlon’s Board of Directors ratified the following changes to the previously-disclosed COVID-19-related compensation arrangements for certain members of management and the Board: (i) the determination by Mr. Alan Bernikow, in his role as Chairman of the Compensation Committee, to reinstate Ms. Perelman’s annual base salary back to its pre-pandemic level of $1,125,000 per annum, pursuant to the Board’s delegation of such authority to Mr. Bernikow at the time such reductions were implemented in April 2020; and (ii) the determinations by Ms. Perelman, in her role as the Company’s President and Chief Executive Officer, to reinstate (A) the annual retainer fees for non-employee Board members, Audit Committee members and the chairmen of the Audit Committee and the Compensation Committee to their pre-pandemic levels (i.e., $115,000 per annum for Revlon Board members, $25,000 per annum for Products Corporation’s Board members, $10,000 per annum for Audit Committee members and $10,000 per annum for the chairman of each of the Audit Committee and Compensation Committee) and (B) the annual base salaries for certain members of the Company’s Executive Leadership Team back to their respective pre-pandemic levels, pursuant to the Board’s delegation of such authority to Ms. Perelman at the time such reductions were implemented in April 2020.



Table of Contents
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)






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


RECENT DEVELOPMENTS
Liquidity and Ability to Continue as a Going Concern

The ongoing and prolonged COVID-19 pandemic has continued to adversely impact the Company’s business in the third quarter of 2020 and beyond, as social-distancing restrictions and related actions designed to curb the spread of the virus have remained in place or have been reinstated as the COVID-19 pandemic spikes across the globe. 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.

As previously disclosed, on October 23, 2020, Products Corporation commenced an amended exchange offer (as amended, the “Exchange Offer”) to exchange any and all of its outstanding 5.75% Senior Notes due 2021 (the “5.75% Senior Notes”), which closed on November 13, 2020. In the Exchange Offer, for each $1,000 principal amount of 5.75% Senior Notes validly tendered, holders received either, at their option, (i) $275 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes were tendered at or before 11:59 p.m. New York City time on November 10, 2020 (the “Expiration Time”)), for an aggregate of $325 in cash (the “Cash Consideration”), or (ii) a combination of (1) $200 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes were tendered at or before the Expiration Time), for an aggregate of $250 in cash, plus, (2) (A) the Per $1,000 Pro Rata Share (as hereinafter defined) of $50 million aggregate principal amount of new 2020 ABL FILO Term Loans (as hereinafter defined) and (B) the Per $1,000 Pro Rata Share of $75 million aggregate principal amount of the New BrandCo Second-Lien Term Loans (the “Mixed Consideration” and such loans, together with the 2020 ABL FILO Term Loans, the “New Loans”), if the holder is: (a)(i) a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); (ii) an institutional accredited investor within the meaning of Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of the Securities Act; or (iii) a person that is not a “U.S. person” within the meaning of Regulation S under the Securities Act, (b) not a natural person and (c) not a “Disqualified Institution” (as defined under the Amended 2016 Revolving Credit Facility and related security documents and intercreditor agreements or the 2020 BrandCo Term Loan Facility and related security documents and intercreditor agreements) (an “Eligible Holder”). The “Per $1,000 Pro Rata Share” is (1) $1,000, divided by (2) the aggregate principal amount of 5.75% Senior Notes tendered for Mixed Consideration by all Eligible Holders and accepted for payment by Products Corporation.

On November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the indenture governing the 5.75% Senior Notes. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, no 5.75% Senior Notes remained outstanding.

In addition, the Company’s Amended 2016 Revolving Credit Facility matures on September 7, 2021, and the Company is currently in discussions with various lenders to extend such maturity or refinance such facility.

The uncertainty as to Products Corporation’s ability to extend or refinance the Amended 2016 Revolving Credit Facility raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

For more information, please see the risk factors discussed in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q.


Table of Contents
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)


5.75% Senior Notes Exchange Offer

On October 23, 2020, Products Corporation amended its previously-announced Exchange Offer to exchange any and all of the then-outstanding $342,785,000 in aggregate principal amount of its Existing 5.75% Senior Notes, as described in the amended and restated Offering Memorandum and Consent Solicitation Statement (the “Offering Memorandum”), dated October 23, 2020, which Exchange Offer closed on November 13, 2020. Concurrently with the Exchange Offer, Products Corporation solicited consents to eliminate substantially all of the restrictive covenants and certain events of default provisions from the indenture governing the 5.75% Senior Notes (the “5.75% Senior Notes Indenture”).

For each $1,000 principal amount of 5.75% Senior Notes validly tendered, holders received either, at their option, (i) $275 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes are tendered at or before 11:59 p.m. New York City time, on November 10, 2020 (the "Expiration Time"), for an aggregate of $325 in cash, or (ii) a combination of (1) $200 in cash (plus a $50 early tender/consent fee payable if such 5.75% Senior Notes are tendered at or before the Expiration Time), for an aggregate of $250 in cash, plus, (2) (A) the Per $1,000 Pro Rata Share of $50 million aggregate principal amount of new 2020 ABL FILO Term Loans and (B) the Per $1,000 Pro Rata Share of $75 million aggregate principal amount of the New BrandCo Second-Lien Term Loans, if the holder is an Eligible Holder.

On November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, no 5.75% Senior Notes remained outstanding. Accrued and unpaid interest on the 5.75% Senior Notes that were tendered in the Exchange Offer was paid to, but not including, the settlement date of the Exchange Offer.

The 2020 ABL FILO Term Loans are new “Tranche B” term loans in the aggregate principal amount of $50 million, ranking junior in right of payment to the “Tranche A” revolving loans under the Amended 2016 Revolving Credit Agreement and equal in right of payment with all existing and future unsubordinated indebtedness of Products Corporation and the guarantors under the Amended 2016 Revolving Credit Agreement (such new Tranche B term loans, the “2020 ABL FILO Term Loans”). The 2020 ABL FILO Term Loans will mature six months after the maturity date of the Tranche A Loans (and any extension thereof in part or in whole). The 2020 ABL FILO Term Loans bear interest at a rate of LIBOR (subject to a 1.75% floor) plus 8.50% per annum, accruing from the settlement date of the Exchange Offer. The borrowing base for the 2020 ABL FILO Term Loans consists of an advance rate of 100% of eligible collateral with a customary push down reserve, with collateral consisting of: (i) a first-priority lien on accounts receivable, inventory, cash, negotiable instruments, chattel paper, investment property (other than capital stock), equipment and real property of Products Corporation and the subsidiary guarantors, subject to customary exceptions (the “Priority Collateral”); and (ii) a second-priority lien on substantially all tangible and intangible personal property of Products Corporation and the subsidiary guarantors, subject to customary exclusions (other than the Priority Collateral).

The New BrandCo Second Lien Term Loans are “Term B-2 Loans” in the aggregate principal amount of $75 million (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the 2020 BrandCo Term Loan Facility (such Term B-2 Loans, the “New BrandCo Second-Lien Term Loans”). See Note 7, “Debt,” and Note 19, “Subsequent Events,” regarding the 2020 BrandCo Refinancing Transactions for further details and amounts outstanding under the 2020 BrandCo Credit Agreement).

In conjunction with the Exchange Offer, Products Corporation conducted the Consent Solicitation to effectuate amendments to the 5.75% Senior Notes Indenture, which eliminated substantially all of the restrictive covenants and certain events of default provisions from the 5.75% Senior Notes Indenture.

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Table of Contents
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)


Amendment No. 1 to BrandCo Credit Agreement

On November 13, 2020, Products Corporation entered into that certain Amendment No. 1 (the “BrandCo Amendment”) to the 2020 BrandCo Credit Agreement in connection with the Exchange Offer in order to, among other things, provide for the incurrence of $75 million in aggregate principal amount of New BrandCo Second-Lien Term Loans. The New BrandCo Second Lien Term Loans are a separate tranche of “Term B-2 Loans” (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the BrandCo Credit Agreement. Except as to the use of proceeds, the terms of the New BrandCo Second-Lien Term Loans are substantially consistent with the other Term B-2 Loans. In connection with the BrandCo Amendment, Products Corporation paid certain fees to the lenders in-kind in the form of New BrandCo Second-Lien Term Loans in accordance with the BrandCo TSA.

Amendment to Credit Facilities; New Tranche B ABL FILO Term Loan Facility

On October 23, 2020 (the “5th Amendment Effective Date”), Products Corporation entered into Amendment No. 5 (the “5th Amendment”) to the Amended 2016 Revolving Credit Agreement.

The 5th Amendment amended and restated the Amended 2016 Revolving Credit Agreement to add a new Tranche B consisting of $50 million aggregate principal amount of “first-in, last-out” Tranche B term loans (such new Tranche B, the “2020 ABL FILO Term Loan Facility” and the loans incurred thereunder, the “2020 ABL FILO Term Loans”). The 5th Amendment also required Products Corporation to maintain "Excess Availability" (as defined in the 5th Amendment) of at least $85 million from the 5th Amendment Effective Date until the transactions contemplated by the Exchange Offer were consummated (such date, the “Exchange Offer Effective Date”). As a result, on October 23, 2020, Products Corporation repaid $35 million of Tranche A loans under the Amended 2016 Revolving Credit Agreement.

On the Exchange Offer Effective Date, Products Corporation’s As-Adjusted Liquidity was required to be at least $175 million (which condition was satisfied) and Products Corporation cannot hold more than $100 million in cash or Cash Equivalents (as defined in the 5th Amendment). Furthermore, the 5th Amendment provides that a $30 million reserve will be automatically and immediately established against the Tranche A Borrowing Base (as defined in the 5th Amendment) if the results of ongoing appraisals and field exams are not delivered to the administrative agent prior to the occurrence of certain specified defaults.

Products Corporation will pay customary fees to Alter Domus (US) LLC as the administrative agent for the 2020 ABL FILO Term Loan Facility. Except as to maturity date, interest, borrowing base and differences due to their nature as term loans, the terms of the 2020 ABL FILO Term Loans are otherwise substantially consistent with the Tranche A Revolving Loans.

COVID-19-Related Compensation Actions

In November 2020, the Compensation Committee of Revlon’s Board of Directors ratified the following changes to the previously-disclosed COVID-19-related compensation arrangements for certain members of management and the Board: (i) the determination by Mr. Alan Bernikow, in his role as Chairman of the Compensation Committee, to reinstate Ms. Perelman’s annual base salary back to its pre-pandemic level of $1,125,000 per annum, pursuant to the Board’s delegation of such authority to Mr. Bernikow at the time such reductions were implemented in April 2020; and (ii) the determinations by Ms. Perelman, in her role as the Company’s President and Chief Executive Officer, to reinstate (A) the annual retainer fees for non-employee Board members, Audit Committee members and the chairmen of the Audit Committee and the Compensation Committee to their pre-pandemic levels (i.e., $115,000 per annum for Revlon Board members, $25,000 per annum for Products Corporation’s Board members, $10,000 per annum for Audit Committee members and $10,000 per annum for the chairman of each of the Audit Committee and Compensation Committee) and (B) the annual base salaries for certain members of the Company’s Executive Leadership Team back to their respective pre-pandemic levels, pursuant to the Board’s delegation of such authority to Ms. Perelman at the time such reductions were implemented in April 2020.


57
Table of Contents
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)


Overview


Overview of the Business
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 its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation beneficially owned by Ronald O. Perelman.

The Company operates in four brand-centric reporting segments that are aligned with its organizational structure based on four global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances. The Company manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; anti-perspirant deodorants; and other beauty care products.

Business Strategy

The Company remains focused on its 3 key strategic pillars to drive 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 productproducts where consumers shop, both in-store and increasingly online. OnThe Company also continues to deliver against the objectives of the Revlon 2020 Restructuring 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

In August 16, 2019, it was disclosed that MacAndrews & Forbes and Revlon havethe Company determined to explore strategic transactions involving Revlonthe Company and third partiesparties. This review is ongoing and remains focused on exploring potential options for the Company's portfolio and regional brands (the “Strategic Review”).


For additional information regardingCOVID-19 Impact on the Company'sCompany’s Business

While the Company continues to execute its business see "Part 1, Item 1 - Business" instrategy, the Company's 2018 Form 10-K.

Certain capitalized terms used in this Form 10-Q are defined throughout this Item 2.

Overview of Net Salesongoing and Earnings Results
Consolidatedprolonged COVID-19 pandemic has adversely impacted net sales in all major commercial regions around the third quarterglobe that are important to the Company's business. COVID-19’s adverse impact on the global economy has contributed to significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of 2019 were $596.8 million, a $58.6 million decrease, or 8.9%, comparedretailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; travel and transportation restrictions leading to $655.4 milliondeclines 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 third quartergeneral slowdown of 2018. Excluding the $12.1 million unfavorable impact of foreign currency fluctuations (referredglobal economy, in turn contributing to herein as "FX," "XFX" or on an "XFX basis"), consolidateda significant decline in net sales decreased by $46.5 million, or 7.1%, duringwithin each of the third quarter of 2019. The XFX net sales decrease inCompany’s reporting segments and regions. As the third quarter of 2019 was primarily due to: a $27.8 million, or 11.1%, decrease in Revlon segment net sales, a $17.2 million, or 12.4%, decrease in Portfolio segment net sales and a $5.6 million, or 3.9%, decrease in Fragrances segment net sales; partially offset by a $4.1 million, or 3.4%, increase in Elizabeth Arden segment net sales.

Consolidated net sales inCompany currently expects that the first nine months of 2019 were $1,720.2 million, a $102.7 million decrease, or 5.6%, compared to $1,822.9 million in the first nine months of 2018. Excluding the $48.8 million unfavorable FX impact, consolidated net sales decreased by $53.7 million, or 2.9%, during the first nine months of 2019. The XFX net sales decrease in the first nine months of 2019 was primarily due to: a $54.2 million, or 12.9%, decrease in Portfolio segment net sales; a $28.0 million, or 8.4%, decrease in Fragrances segment net sales and a $1.3 million, or 0.2%, decrease in Revlon segment net sales; partially offset by a $29.8 million, or 8.9%, increase in Elizabeth Arden segment net sales.

Consolidated loss from continuing operations, net of taxes, in the third quarter of 2019 was $44.4 million, compared to $10.7 million in the third quarter of 2018. The $33.7 million increase in consolidated loss from continuing operations, net of taxes, in the third quarter of 2019 was primarily due to:
a $36.6 million decrease in the benefit from income taxes, of which $34.3 million was non-cash, primarily due to: (i) the decreased loss from continuing operations before income taxes; (ii) the mix and level of earnings; (iii)COVID-19 pandemic, including the impact of the 2017 Tax Act mainly duepandemic’s “second wave,” will continue to impact its business going forward, the Company will continue to closely monitor the associated impacts and take appropriate actions in an adjustmenteffort to mitigate COVID-19’s negative effects on the Company’s operations and financial results.

The ongoing and prolonged COVID-19 pandemic has continued to adversely impact the Company’s business in Q3 2020, as social-distancing restrictions and related actions designed to curb the spread of the virus have remained in place or have been reinstated as the COVID-19 pandemic spikes across the globe. These restrictions could continue for the foreseeable future, as global economies face a “second-wave” of the pandemic as re-opening plans are implemented.

The ongoing and prolonged COVID-19 pandemic contributed an estimated $119 million ($119 million "XFX," as hereinafter defined), to the Company's $119.7 million decline in net sales for the three months ended September 30, 2020, compared to the prior year quarter, and an estimated $387 million ($392 million XFX) to the Company's $442.5 million decline in net sales for the nine months ended September 30, 2020, compared to the prior year period. During the three months ended September 30, 2020, the Company experienced increased net sales of Revlon-branded beauty tools, Revlon hair color products and certain Elizabeth Arden skincare products in certain markets, as well as growth in the third quarter of 2018 related to a new U.S. Treasury regulation issued in September 2018;Company's e-commerce net sales.

$22.6 millionof lower gross profit, primarily due to lower net sales;
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$6.5 millionof unfavorable variance in foreign currency, resulting from $7.6 million in foreign currency losses during the third quarter of 2019, compared to $1.1 million in foreign currency losses during the third quarter of 2018; and
a $3.8 million increase in interest expense, primarily due to higher average interest rates and higher debt balances primarily from the 2019 Term Loan Facility entered into in August 2019;

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For the third quarter of 2020, Revlon segment net sales declined $51.3 million ($51.9 million XFX) versus the prior year quarter, with the foregoingongoing and prolonged COVID-19 pandemic contributing an estimated $50 million ($50 million XFX) to such decline. During the third quarter of 2020, the Revlon segment experienced increased net sales of Revlon-branded beauty tools and hair color products in North America. COVID-19 had a similar negative impact on the Company's other reporting segments over such period, with COVID-19 contributing: (i) an estimated $25 million ($25 million XFX) to a $32.9 million ($33.1 million XFX) decline in the Fragrances segment; (ii) an estimated $24 million ($25 million XFX) to a $16.9 million ($18.4 million XFX) decline in the Elizabeth Arden segment; and (iii) an estimated $19 million ($19 million XFX) to a $18.6 million ($19.1 million XFX) decline in the Portfolio segment. Within the Company's Portfolio segment, during the third quarter of 2020 the Creme of Nature brand continued to deliver net sales growth versus the third quarter of 2019, driven by increased demand due to a shift in consumer buying preferences.

On a regional basis, the ongoing and prolonged COVID-19 pandemic had a similar negative impact on the Company's North America and International regions during the third quarter of 2020. Of a $43.5 million ($43.2 million XFX) decline in the Company's net sales in its North America region during the third quarter of 2020 compared to the third quarter of 2019, COVID-19 contributed an estimated $47 million ($47 million XFX) to such decline. Similarly, of a $76.2 million ($79.3 million XFX) decline in the Company's net sales in its International region over such period, COVID-19 contributed an estimated $72 million ($72 million XFX) to such decline. During the third quarter of 2020, on a regional basis, the Company also experienced increased net sales of Revlon-branded beauty tools, Revlon hair color products and certain Elizabeth Arden skincare products, predominantly in China, as well as growth in certain local and regional brands in various markets.

For the nine months ended September 30, 2020, Revlon segment net sales declined $233.3 million ($227.4 million XFX) versus the prior year period, with the ongoing and prolonged COVID-19 pandemic contributing an estimated $174 million ($176 million XFX) to such decline. During the nine months ended September 30, 2020, the Revlon segment experienced increased net sales of Revlon-branded beauty tools and Revlon hair color products in North America. COVID-19 had a similar negative impact on the Company's other reporting segments over such period, with COVID-19 contributing: (i) an estimated $93 million ($95 million XFX) to a $69.6 million ($66.8 million XFX) decline in the Elizabeth Arden segment, partially offset by:by higher net sales of Ceramide skin care products; (ii) an estimated $65 million ($65 million XFX) to a $83.6 million ($82.0 million XFX) decline in the Fragrances segment; and (iii) an estimated $56 million ($56 million XFX) to a $56.0 million ($52.2 million XFX) decline in the Portfolio segment.
$32.7
On a regional basis, the ongoing and prolonged COVID-19 pandemic had a similar negative impact on the Company's North America and International regions during the nine months ended September 30, 2020. Of a $198.3 million of lower SG&A expenses, primarily driven by cost reductions related($197.3 million XFX) decline in the Company’s net sales in its North America region during the nine months ended September 30, 2020, compared to the Company's cost optimization initiatives and lower incentive compensation; and
$3.3prior year period, COVID-19 contributed an estimated $162 million ($163 million XFX) to such decline. Similarly, of lower acquisition and integration costs.
Consolidated loss from continuing operations, net of taxes,a $244.2 million ($231.1 million XFX) decline in the firstCompany’s net sales in its International region over such period, COVID-19 contributed an estimated $225 million ($229 million XFX) to such decline. During the nine months ended September 30, 2020, on a regional basis, the Company also experienced increased net sales of 2019 was $185.5 million, comparedRevlon-branded beauty tools, Revlon hair color products and certain Elizabeth Arden skincare products, predominantly in China, as well as growth in Cutex nail care products, and certain local and regional brands, in certain markets.

In April 2020, the Company took several cost reduction measures designed to $223.8 million inmitigate the first nine monthsadverse impact of 2018. The $38.3 million decrease in consolidated loss from continuing operations,the ongoing and prolonged COVID-19 pandemic on its net of taxes, in the first nine months of 2019 was primarily due to:
$113.9 million of lower SG&A expenses, primarily driven by lowersales, including, without limitation: (i) reducing brand support, expenses as a result of planned lower activitythe 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 firstU.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 most of these measures still in place, including the Revlon 2020 Restructuring Program, the Company achieved cost reductions of approximately $78 million and $231 million during the three and nine months of 2019 and lower general and administrative expenses, primarily driven by cost reductions related to the Company's cost optimization initiatives and lower incentive compensation;
$20.1 million of lower loss on disposal of minority investment; and
$11.3 million of lower acquisition and integration costs;
with the foregoing partiallyended September 30, 2020, respectively, that have substantially offset by:
$46.2 millionof lower gross profit, primarily due to lower net sales;
a $39.9 million decrease in the benefit from income taxes, of which $34.3 million was non-cash, primarily due to: (i) the decreased loss from continuing operations before income taxes; (ii) the mix and level of earnings; (iii) the impact of the 2017 Tax Act mainly due to an adjustmentdecline in the third quarter of 2018 related to a new U.S. Treasury regulation issued in September 2018; and
a $16.6 million increase in interest expense, primarily due to higher average interest rates and higher borrowings under the Amended 2016 Revolving Credit Facility and higher indebtedness resulting from entering into the 2019 Term Loan Facility in August 2019 and the 2018 Foreign Asset-Based Term Facility in July 2018.

During 2018, the Company's ERP launch impacted the Company's ability to manufacture certain quantities of finished goods and fulfill shipments to retail customers in the U.S. and internationally and resulted in lost net sales over such period. However, with the ongoing and in the Company incurring incremental charges, mainly related to actions that the Company implemented to remediate the decline in customer service levels. Difficulties in implementing the Company’s new ERP system also impacted its internal control over financial reporting ("ICFR") and resulted in a material weakness in its ICFR as described in the Company’s 2018 Form 10-K. See Part I, Item 4, “Controls and Procedures,” in this Form 10-Q for a discussion of the Company’s adoption of a plan designed to improve its internal controls to remediate this material weakness in its ICFR and for a summary of the actions taken by the Company to implement such plan.


Recent Debt Transactions

2019 Term Loan Facility
Principal and Maturity: On August 6, 2019, Products Corporation entered into a senior secured term loan facility among certain affiliated funds, investment vehicles or accounts managed or advised by Ares Management LLC, as lender, in an initial aggregate principal amount of $200 million (the “2019 Term Loan Facility” and such agreement being the “2019 Term Loan Agreement”), and Wilmington Trust, National Association (“Wilmington Trust”), as administrative and collateral agent. Net proceeds from the 2019 Term Loan Facility, which will be used for general corporate purposes, were approximately $188 million, after taking into account approximately $12 million of related fees and expenses. The 2019 Term Loan Facility will mature on the earliest of: (x) the fourth anniversary of the Closing Date; (y) the 180th day prior to the maturity of Products Corporation’s existing 2016 Term Loan Facility, if any loans under the 2016 Term Loan Facility remain outstanding and have not been replaced or refinanced by such date; and (z) the date of any springing maturity of the 2016 Term Loan Facility (i.e., the 91st day prior to the maturity of the 5.75% Senior Notes due February 15, 2021 if any 5.75% Senior Notes remain outstanding by such date). See “Financial Condition, Liquidity and Capital Resources - 2019 Term Loan Facility” for additional details regarding the 2019 Term Loan Facility.

prolonged COVID-19
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pandemic, these mitigation actions may not prove to be effective in insulating the Company from any further damaging economic impacts from the pandemic.
2019 Senior Line of Credit Agreement
In June 2019, Products Corporation entered into a 2019 Senior Unsecured Line of Credit Agreement (the "2019 Senior Line of Credit Agreement") providing Products Corporation with a $30 million senior unsecured line of credit (the "2019 Senior Line of CreditFacility") from MacAndrews & Forbes Group, LLC, a subsidiary of Revlon’s majority stockholder. The 2019 Senior Line of CreditFacility allows Products Corporation to request loans thereunder and to use the proceeds of such loans for working capital and other general corporate purposes until the facility matures on December 31, 2019. See Part II, Item 5, “Other Information,”For additional information regarding the extensionCompany's business, see "Part 1, Item 1 - Business" in the Company's 2019 Form 10-K. Certain capitalized terms used in this Form 10-Q are defined throughout this Item 2.

Overview of Net Sales and Earnings Results
Consolidated net sales in the maturitythird quarter of 2020 were $477.1 million, a $119.7 million decrease, or 20.1%, compared to $596.8 million in the 2019 Senior Linethird quarter of Credit Agreement2019. Excluding the $2.8 million favorable impact of foreign currency fluctuations (referred to December 31,herein as "FX," "XFX" or on an "XFX basis"), consolidated net sales decreased by $122.5 million, or 20.5%, during the third quarter of 2020. As of The ongoing and prolonged COVID-19 pandemic contributed an estimated $119 million ($119 million XFX) to the Company's $119.7 million decline in net sales in the three months endedSeptember 30, 2019, there were no borrowings outstanding under this facility. See also Part II, Item 5. Other Information, “Extension2020, compared to the three months ended September 30, 2019. The XFX net sales decrease of the Maturity of the 2019 Senior Line of Credit,” regarding the Amended 2019 Senior Line of Credit Agreement.
Any loans outstanding under the 2019 Senior Line of CreditFacility shall bear interest at an annual rate of 8%, which is payable quarterly in arrears in cash. Products Corporation may, at its option, prepay any borrowings under the 2019 Senior Line of CreditFacility, in whole or in part (together with accrued and unpaid interest), at any time prior to maturity, without premium or penalty.  Products Corporation is required to repay any outstanding loans under the 2019 Senior Line of CreditFacility, together with accrued interest thereon, if for any reason Products Corporation or any of its subsidiaries has available unrestricted cash that Products Corporation determines, in its reasonable judgment, is not required to run their operations$122.5 million in the ordinary coursethird quarter of business, provided that such repayment would not result2020 was due to: a $51.9 million, or 23.9%, decrease in material adverse tax consequences.Revlon segment net sales; a $33.1 million, or 24.0%, decrease in Fragrances segment net sales; a $19.1 million, or 16.2%, decrease in Portfolio segment net sales; and a $18.4 million, or 14.9%, decrease in Elizabeth Arden segment net sales.
The 2019 Senior Line of Credit Agreement includes customary events of default, including a cross default provision making it an event of default under
Consolidated net sales in the 2019 Senior Line of Credit Agreement if there exists and continues an event default under Products Corporation’s existing bank term loan and revolver credit agreements, the 2018 Foreign Asset-Based Term Agreement or the indentures for Products Corporation’s 5.75% Senior Notes or 6.25% Senior Notes. If any such event of default occurs, MacAndrews & Forbes Group, LLC may declare all outstanding loans under the 2019 Senior Line of CreditFacility to be due and payable immediately. For the three and nine months ended September 30, 2019, there2020 were no borrowings outstanding$1,277.7 million, a $442.5 million decrease, or repayments under this facility.

March 2019 Amendment25.7%, compared to $1,720.2 million in the nine months ended September 30, 2019. Excluding the $14.1 million unfavorable FX impact, consolidated net sales decreased by $428.4 million, or 24.9%, during the nine months ended September 30, 2020. The ongoing and prolonged COVID-19 pandemic contributed an estimated $387 million ($392 million XFX) to the 2016 Revolving Credit Facility
On March 6, 2019, Products Corporation, Revlon and certain of their subsidiaries entered into Amendment No. 2 (“Amendment No. 2”)Company's $442.5 million decline in net sales in the nine months ended September 30, 2020, compared to the 2016 Revolving Credit Agreement (as amended by Amendment No. 2,prior year period. The XFX net sales decrease of $428.4 million in the “Amended 2016 Revolving Credit Agreement”)nine months ended September 30, 2020 was due to: a $227.4 million, or 31.8%, decrease in respectRevlon segment net sales; a $82.0 million, or 27.5%, decrease in Fragrances segment net sales; a $66.8 million, or 19.0%, decrease in Elizabeth Arden segment net sales; and a $52.2 million, or 14.7%, decrease in Portfolio segment net sales.

Consolidated loss from continuing operations, net of taxes, in the third quarter of 2020 was $44.5 million, compared to $44.4 million in the third quarter of 2019. The $0.1 million increase in consolidated loss from continuing operations, net of taxes, in the second quarter of 2020 was primarily due to:

•$85.0 million of lower gross profit, primarily due to the lower net sales in the third quarter of 2020, primarily as a result of the 2016 Revolving Credit Facility (aseffects of COVID-19, compared the third quarter of 2019;
•a $18.5 million increase in effect after Amendment No. 2,interest expense in the “Amended 2016 Revolving Credit Facility”). Pursuantthird quarter of 2020, compared to the termsthird quarter of Amendment No. 2,2019, primarily due to higher weighted average interest rates and higher weighted average borrowings driven primarily by the maturity date applicable2020 BrandCo Term Loan Facility;
•a $4.1 million increase in amortization of debt issuance costs in the third quarter of 2020, compared to the $41.5third quarter of 2019, primarily due to the additional debt issuance costs recorded and amortized in connection with the 2020 BrandCo Refinancing Transactions;
•a $4.0 million senior secured firstdecrease in last out Tranche Bthe benefit from income taxes in the third quarter of 2020 compared to the third quarter of 2019, primarily due to: (i) the mix and level of earnings; (ii) an increase in the U.S. tax on the Company's foreign earnings; and (iii) increased tax expense from return to provision adjustments, partially offset primarily by an increase in tax benefit from the net change in valuation allowances related to the recognition of previously unrecognized tax losses in Canada;
•$0.8 million of higher acquisition, integration and divestiture costs in the third quarter of 2020, compared to the third quarter of 2019, relating to the amortization of the Amended 2016 Revolving Credit Facility was extended from April 17,cash-based awards under Tier 1 and Tier 2 of the Revlon 2019 Transaction Incentive Program (the "2019 TIP"; see Note 11, "Stock Compensation Plan," to April 17, 2020. The Amended 2016 Revolving Credit Agreement provided that the “Liquidity Amount” (definedCompany's Unaudited Consolidated Financial Statements in this Form 10-Q for additional details on the 2019 TIP);
with the foregoing partially offset by:
•$54.7 million of lower SG&A expenses in the Amended 2016 Revolving Credit Agreement asthird quarter of 2020 compared to the sumthird quarter of each borrowing base less2019, primarily driven by cost reductions achieved through the sum of (x)Company's initiatives designed to mitigate the aggregate outstanding extensions of credit under the Amended 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such date) may exceed the aggregate commitments under the Amended 2016 Revolving Credit Facility by up to 5%. Amendment No. 2 limits the Liquidity Amount to no more than the aggregate commitments under the Amended 2016 Revolving Credit Facility. Under the Amended 2016 Revolving Credit Agreement, a “Liquidity Event Period” generally occurred if Products Corporation’s Liquidity Amount fell below the greater of $35 million and 10%adverse impact of the maximum availability underongoing and prolonged COVID-19 pandemic on the Amended 2016 Revolving Credit Facility. Amendment No. 2 changes these thresholds to $50 million and 15%, respectively, only for purposes of triggering certain notification obligations of Products Corporation, increased borrowing base reporting frequency andCompany's operations, as well as from the ability of the administrative agent to apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility. After entering into Amendment No. 2, in March 2019 Products Corporation’s availability under the Amended 2016 Revolving Credit Facility was $37.3 million, which was less than the greater of $35 million and 10% of the maximum availability under the Amended 2016 Revolving Credit Facility, which at such date equated to $41.3 million. Accordingly, effective beginning in March 2019 Products Corporation is required to maintain a FCCR of a minimum of 1.0 to 1.0 (which it currently satisfies), the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility, which the administrative agent began applying in March 2019, and Products Corporation is required to provide the administrative agent with weekly borrowing base certificates. Products Corporation will be required to: (i) maintain such 1.0 to 1.0 minimum FCCR until such time that availability under the Amended 2016 Revolving Credit Facility equals or exceeds the greater of $35 million and 10% of the maximum availability under such facility for at least 20 consecutive business days; and (ii) Products Corporation will continue to provide the administrative agent with weekly borrowing base certificates and the administrative agent may continue to apply amounts collected in controlled accounts as set forth above in each case until such time that availability under such facility is equal or exceeds the greater of $50 million and 15% of the maximum availability under such facility for at least 20 consecutive business days. Amendment No. 2 also adjusts, among other things, the “payment conditions” required to make unlimited restricted payments.

Revlon 2020 Restructuring Program;
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•a $31.2 million increase in gain on the early extinguishment of debt in the third quarter of 2020, compared to having had no gain in the third quarter of 2019, recorded upon the repurchase and cancellation of approximately $44.4 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes during the third quarter of 2020; and

•$17.4 millionof favorable variance in foreign currency, resulting from $9.8 million in foreign currency gains during the third quarter of 2020, compared to $7.6 million in foreign currency losses during the third quarter of 2019;

•a $4.3 million net decrease in other miscellaneous expenses, net, in the third quarter of 2020 compared to the third quarter of 2019, primarily due to the subsequent true-up in the third quarter of 2020 of financing fees previously expensed in 2020 in connection with the 2020 BrandCo Refinancing Transactions; and
•a $3.6 million decrease in restructuring charges, primarily due to the subsequent true-up in the third quarter of 2020 of restructuring charges previously accrued in 2020 under the Revlon 2020 Restructuring Program, compared to the expenditures incurred primarily under the 2018 Optimization Program in the third quarter of 2019; and
Consolidated loss from continuing operations, net of taxes, in the nine months ended September 30, 2020 was $385.2 million, compared to consolidated loss from continuing operations, net of taxes, of $185.5 million in the nine months ended September 30, 2019. The $199.7 million increase in consolidated loss from continuing operations, net of taxes, in the nine months ended September 30, 2020, compared to nine months ended September 30, 2019, was primarily due to:
•$292.5 millionof lower gross profit, primarily due to the COVID-19 related lower net sales in the nine months ended September 30, 2020;
•a $144.1 million increase in non-cash impairment charges recorded for the nine months ended September 30, 2020, primarily attributable to the effects of the ongoing and prolonged COVID-19 pandemic,compared to having had no impairment charges for the nine months ended September 30, 2019. This increase is attributable to non-cash impairment charges of $111.0 million recorded on the Company's goodwill and to $33.1 million of non-cash impairment charges recorded on certain of the Company's indefinite-lived intangible assets following the Company's interim impairment assessments during the first and second quarters of 2020;
•a $33.2 million increase in restructuring charges, primarily related to higher expenditures under the Revlon 2020 Restructuring Program in the nine months ended September 30, 2020, compared to the expenditures incurred primarily under the 2018 Optimization Program in the nine months ended September 30, 2019;
•a $32.3 million increase in interest expense in the nine months ended September 30, 2020, compared to the prior year period, higher weighted average borrowings and higher weighted average interest rates driven primarily by the 2020 BrandCo Term Loan Facility and the 2019 Term Loan Facility (the latter of which was fully repaid in May 2020 using proceeds from the 2020 BrandCo Term Loan Facility);
•a $7.4 million increase in amortization of debt issuance costs in the nine months ended September 30, 2020, compared to the prior year period, primarily due to the additional debt issuance costs recorded and amortized in connection with the 2020 BrandCo Refinancing Transactions;
•a $6.3 million net increase in other miscellaneous expenses, net, in the nine months ended September 30, 2020, compared to the prior year period, primarily due to financing fees expensed in connection with the 2020 BrandCo Refinancing Transactions; and
•$3.5 million of higher acquisition, integration and divestiture costs in the nine months ended September 30, 2020, compared to the prior year period, including $0.7 million in professional fees incurred in connection with the exploration of strategic transactions involving the Company and third parties pursuant to the Strategic Review and approximately $3.5 million relating to the amortization of the cash-based awards under Tier 1 and Tier 2 of the Revlon 2019 TIP (see Note 11, "Stock Compensation Plan," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q for additional details on the 2019 TIP);
with the foregoing partially offset by:
•$234.1 million of lower SG&A expenses in the nine months ended September 30, 2020, compared to the prior year period, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as from the Revlon 2020 Restructuring Program;
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•a $43.1 million increase in gain on the early extinguishment of debt in the nine months ended September 30, 2020, compared to having had no gain in the prior year period, primarily due to $31.2 million recorded during the third quarter of 2020 and $11.9 million recorded during the second quarter of 2020 upon the repurchase and subsequent cancellation of approximately $157.2 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes; and
•a $42.0 million increase in the benefit from income taxes in the nine months ended September 30, 2020, compared to the prior year period, primarily due to: (i) the increased loss from continuing operations before income taxes on which the tax benefit is recognized; (ii) the mix and level of earnings; and (iii) a reduction in the U.S. tax on the Company's foreign earnings, net of the impact of non-deductible impairment charges, partially offset by the net change in valuation allowances recorded related to the limitation on the deductibility of interest.

Recent Debt Transactions

5.75% Senior Notes Exchange Offer

See “Recent Developments” for important information regarding the Company’s debt-related transactions occurring after September 30, 2020. On September 29, 2020, Products Corporation commenced the Exchange Offer to exchange any and all of the then-outstanding 5.75% Senior Notes (the “Existing 5.75% Senior Notes”). As described in "Recent Developments," the Exchange Offer was amended on October 23, 2020 and on November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, no 5.75% Senior Notes remained outstanding as of the closing on November 13, 2020.

Amendments to the 2020 BrandCo Term Loan Facility
Prior to consummating the Exchange Offer, on September 28, 2020, Products Corporation and certain lenders under the 2020 BrandCo Term Loan Facility, representing more than a majority in aggregate principal amount of loans thereunder (the “Supporting BrandCo Lenders”), entered into a Transaction Support Agreement (the “BrandCo TSA”) under which the Supporting BrandCo Lenders agreed to take certain actions to facilitate the Exchange Offer and Consent Solicitation, including, among other things:
•Relinquishing certain rights of such Supporting BrandCo Lenders to “roll-up” loans held by such Supporting BrandCo Lenders under the 2016 Term Loan Facility into New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility (the “Roll-up Rights”);
•Tendering any Existing 5.75% Senior Notes held by such Supporting BrandCo Lenders into the Exchange Offer and Consent Solicitation;
•Consenting to amendments to the 2020 BrandCo Term Loan Facility to permit the exchange of Existing 5.75% Senior Notes for the New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility as contemplated by the Offering Memorandum and the payment of the BrandCo Support and Consent Consideration;
•Consenting to other amendments to the 2020 BrandCo Term Loan Facility and the Amended 2016 Revolving Credit Facility to permit the Exchange Offer and Consent Solicitation to be completed as contemplated by the Offering Memorandum; and
•Supporting and cooperating with Products Corporation to consummate the transactions contemplated by the BrandCo TSA and the Offering Memorandum, including the Exchange Offer and Consent Solicitation.
In connection with such amendments, Products Corporation agreed to provide the following consideration (collectively, the “BrandCo Support and Consent Consideration”) upon the successful consummation of the Exchange Offer:

•$12.5 million aggregate principal amount of New BrandCo Second-Lien Term Loans as a fee to the Supporting BrandCo Lenders under the BrandCo TSA in connection with such Supporting BrandCo Lenders’ relinquishment of their Roll-up Rights;
•$10.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans to one of the Supporting BrandCo Lenders in exchange for $18.7 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 held by such Supporting BrandCo Lender; and
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•to all lenders under the 2020 BrandCo Term Loan Facility (including the Supporting BrandCo Lenders), an amendment fee that was payable pro rata based on principal amount of loans consenting, consisting of, at Products Corporation's option, either (x) an aggregate of $2.5 million of cash or (y) $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans. Pursuant to the BrandCo Amendment, Products Corporation elected to pay this fee in-kind in the form of $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans.

On November 13, 2020, Products Corporation entered into that certain Amendment No. 1 (the “BrandCo Amendment”) to the 2020 BrandCo Credit Agreement in connection with the Exchange Offer in order to, among other things, provide for the incurrence of $75 million in aggregate principal amount of New BrandCo Second-Lien Term Loans. The New BrandCo Second Lien Term Loans are a separate tranche of “Term B-2 Loans” (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the BrandCo Credit Agreement. Except as to the use of proceeds, the terms of the New BrandCo Second-Lien Term Loans are substantially consistent with the other Term B-2 Loans. In connection with the BrandCo Amendment, Products Corporation paid certain fees to the lenders in-kind in the form of New BrandCo Second-Lien Term Loans in accordance with the BrandCo TSA.

MacAndrews & Forbes 2020 Restated Line of Credit Facility
In light of the upcoming maturity on July 9, 2021 of the 2018 Foreign Asset-Based Term Facility and the upcoming expiration on December 31, 2020 of the Amended 2019 Senior Line of Credit Facility, the Company sought to refinance or extend both the 2018 Foreign Asset-Based Term Facility and the Amended 2019 Senior Line of Credit Facility. Products Corporation sought to do so in order to reinforce its liquidity position to be better able to address the current business and economic environment and prepare for any further potential disruptions to its business and operations as may be brought on by the ongoing COVID-19 pandemic or other events.
As a result, and anticipating a future refinancing of the 2018 Foreign Asset-Based Term Facility (a “Future Refinanced European ABL Facility”), on September 28, 2020, Products Corporation and M&F entered into the Second Amended and Restated 2019 Senior Unsecured Line of Credit Facility (the “2020 Restated Line of Credit Facility”), which amended and restated the Amended 2019 Senior Line of Credit Facility and will provide Products Corporation with up to a $30 million tranche of a new facility of the 2018 Foreign Asset-Based Term Facility (the “New European ABL FILO Facility”) that would be secured on a “last-out” basis by the same collateral as the 2018 Foreign Asset-Based Term Facility or, if no Future Refinanced European ABL Facility is obtained, a stand-alone $30 million credit facility secured by the same collateral as the 2018 Foreign Asset-Based Term Facility when that facility is terminated, in each case, subject to a borrowing base. Upon the earlier of (x) the incurrence of a New European ABL FILO Facility and (y) December 31, 2020, the 2020 Restated Line of Credit Facility will terminate, such that M&F’s maximum committed amount under the 2020 Restated Line of Credit Facility will never exceed $30.0 million. As of September 30, 2020, there were no borrowings outstanding under the 2020 Restated Line of Credit Facility.
The New European ABL FILO Facility would mature on (x) the maturity date of any such Future Refinanced European ABL Facility or (y) if there is no Future Refinanced European ABL Facility, July 9, 2022. To the extent the Future Refinanced European ABL Facility exceeds $35.0 million in principal amount, the amount available under the New European ABL FILO Facility would decrease on a dollar-for-dollar basis, such that, if Products Corporation were able to obtain a Future Refinanced ABL Facility of $65.0 million from third parties, there would be no amounts available under the New European ABL FILO Facility. The interest rate for the New European ABL FILO Facility will be LIBOR + 10.00%. The covenants for the New European ABL FILO Facility would be substantially the same as those applicable to the 2018 European ABL Facility.

Consummation of 2020 BrandCo Refinancing Transactions

On May 7, 2020 (the “BrandCo 2020 Facilities Closing Date”), Products Corporation entered into a term credit agreement (the “2020 BrandCo Credit Agreement”) with Jefferies Finance LLC, as administrative agent and collateral agent, and certain financial institutions (the “2020 Facilities Lenders”) that are lenders or the affiliates of lenders under Products Corporation’s Term Loan Credit Agreement, dated as of September 7, 2016 and amended on April 30, 2020 and as amended on the BrandCo 2020 Facilities Closing Date, as further described below (as amended to date, the “2016 Term Loan Facility”). Pursuant to the 2020 BrandCo Credit Agreement, the 2020 Facilities Lenders provided Products Corporation with new and roll-up senior secured term loan facilities (the “2020 BrandCo Facilities” and, collectively, the "2020 BrandCo Term Loan Facility" and, together with the use of proceeds thereof and the Extension Amendment, the “2020 BrandCo Refinancing Transactions”).

Principal and Maturity: The 2020 BrandCo Facilities consist of: (i) a senior secured term loan facility in an aggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $815 million, plus the amount of certain fees and accrued interest that have been capitalized (the “2020 BrandCo Facility”); (ii) commitments in respect of a senior secured term
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loan facility in an aggregate principal amount of $950 million (the “Roll-up BrandCo Facility”); and (iii) a senior secured term loan facility in an aggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $3 million (the “Junior Roll-up BrandCo Facility”). Additionally, on May 28, 2020, Products Corporation borrowed from the 2020 Facilities Lenders an additional $65 million of term loans under the 2020 BrandCo Facility to repay in full the 2020 Incremental Facility under the 2016 Term Loan Facility, as a result of which the 2020 BrandCo Facility at June 30, 2020 had an aggregate principal amount outstanding of $910.6 million (including paid-in-kind closing fees of $29.1 million and paid-in-kind interest of $1.5 million that were capitalized). Additionally, during the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 had an aggregate principal amount outstanding of $846.0 million. The Company determined that the roll-up of such 2016 Term Loan Facility lenders into the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility represented a debt modification under U.S. GAAP, as the cash flow effect between the amount that Products Corporation owed to the participating lenders under the old debt instrument (i.e., the 2016 Term Loan Facility) and the amount that Products Corporation owed to such lenders after the consummation of the roll-up into the new debt instrument (i.e., the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were not considered to be substantially different within the meaning of ASC 470, Debt, under U.S. GAAP.

The proceeds of the 2020 BrandCo Facility were used: (i) to repay in full approximately $200 million of indebtedness outstanding under Products Corporation’s 2019 Term Loan Facility; (ii) to repay in full and terminate commitments under the 2020 Incremental Facility; and (iii) to pay fees and expenses in connection with the 2020 BrandCo Facilities and the 2020 BrandCo Refinancing Transactions. The Company will use the remaining net proceeds for general corporate purposes, including repurchasing, repaying or refinancing Products Corporation’s outstanding 5.75% Senior Notes. The proceeds of the Roll-up BrandCo Facility are available prior to the third anniversary of the BrandCo 2020 Facilities Closing Date to purchase at par an equivalent amount of any remaining term loans under the 2016 Term Loan Facility held by the lenders participating in the 2020 BrandCo Facility or their transferees. During the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 have an aggregate principal amount outstanding of $846.0 million, with a remaining capacity for the roll-up of loans under the 2016 Term Loan Facility of $107.0 million. See “Amendments to the 2020 BrandCo Term Loan Facility” regarding the Supporting BrandCo Lenders relinquishing certain Roll-up Rights and Products Corporation’s issuance of the BrandCo Support and Consent Consideration.

The 2020 BrandCo Facilities will mature on June 30, 2025, subject to a springing maturity 91 days prior to the August 1, 2024 maturity date of Products Corporation’s 6.25% Senior Notes if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remain outstanding.

The Company incurred approximately $119.3 million of new debt issuance costs in connection with closing the 2020 BrandCo Facility, which include paid-in kind amounts that are recorded as an adjustment to the carrying amount of the related liability and amortized to interest expense in accordance with the effective interest method over the term of the 2020 BrandCo Facilities.

Borrower, Guarantees and Security: Products Corporation is the borrower under the 2020 BrandCo Facilities and the 2020 BrandCo Facilities are guaranteed by certain of Products Corporation's indirect subsidiaries (the “BrandCos”) that hold certain intellectual property assets related to the Elizabeth Arden and American Crew brands, certain other Portfolio segment brands and certain owned Fragrance segment brands (the “Specified Brand Assets”). While the BrandCos do not guarantee the 2016 Term Loan Facility, all guarantors of the 2016 Term Loan Facility guarantee the 2020 BrandCo Facilities. All of the assets of the BrandCos (including all capital stock issued by the BrandCos) have been pledged to secure the 2020 BrandCo Facility on a first-priority basis, the Roll-up BrandCo Facility on a second-priority basis and the Junior Roll-up BrandCo Facility on a third-priority basis and while such assets do not secure the 2016 Term Loan Facility, the 2020 BrandCo Facilities are secured on a pari passu basis by the assets securing the 2016 Term Loan Facility.

Contribution and License Agreements: In connection with the pledge of the Specified Brand Assets, Products Corporation and certain of its subsidiaries contributed the Specified Brand Assets to the BrandCos. Products Corporation entered into license and royalty arrangements on arm’s length terms with the relevant BrandCos to provide for the continued use of the Specified Brand Assets by Products Corporation and its subsidiaries during the term of the 2020 BrandCo Facilities.
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Interest and Fees: Loans under the 2020 BrandCo Facility bear interest at a rate equal to LIBOR (with a LIBOR floor of 1.50%) plus (x) 10.50% per annum, payable not less than quarterly in arrears in cash and (y) 2.00% per annum payable not less than quarterly in-kind by adding such amount to the principal amount of outstanding loans under the 2020 BrandCo Facility. Loans under the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility bear interest at a rate equal to LIBOR (with a LIBOR floor of 0.75%) plus 3.50% per annum, payable not less than quarterly in arrears in cash.

Affirmative and Negative Covenants: The 2020 BrandCo Facilities contain certain affirmative and negative covenants that, among other things, limit Products Corporation’s and its restricted subsidiaries’ ability to: (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, unsecured or junior lien debt; (vii) enter into certain transactions with their affiliates; (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 2020 BrandCo Facilities also restrict distributions and other payments from the BrandCos based on certain minimum thresholds of net sales with respect to the Specified Brand Assets. The 2020 BrandCo Facilities also contain certain customary representations, warranties and events of default, including a cross default provision making it an event of default under the 2020 BrandCo Credit Agreement if there is an event of default under Products Corporation’s existing 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement or the indentures governing each of Products Corporation’s 5.75% Senior Notes due 2021 and its 6.25% Senior Notes due 2024 (the “Senior Notes Indentures”). The lenders under the 2020 BrandCo Credit Agreement may declare all outstanding loans under the 2020 BrandCo Facilities to be due and payable immediately upon an event of default. Under such circumstances, the lenders under the 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement, and the holders under the Senior Notes Indentures may also declare all outstanding amounts under such instruments to be due and payable immediately as a result of similar cross default or cross acceleration provisions, subject to certain exceptions and limitations described in the relevant instruments.

Prepayments: The 2020 BrandCo Facilities are subject to certain mandatory prepayments, including from the net proceeds from the issuance of certain additional debt and asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property, subject to certain exceptions. The 2020 BrandCo Facilities may be repaid at any time, subject to customary prepayment premiums.

2016 Term Loan Facility Extension Amendment: Term loan lenders under the 2016 Term Loan Facility were offered the opportunity to participate at par in the 2020 BrandCo Facilities based on their holdings of term loans under the 2016 Term Loan Facility. Lenders participating in the 2020 BrandCo Facilities, as well as other consenting lenders representing, in the aggregate, a majority of the loans and commitments under the 2016 Term Loan Facility, consented to an amendment to the 2016 Term Loan Facility (the “Extension Amendment”) that, among other things, made certain modifications to the covenants thereof and extended the maturity date of their term loans (“Extended Term Loans”) to June 30, 2025, subject to (i) the same September 7, 2023 springing maturity date of the non-extended term loans under the 2016 Term Loan Facility if, on such date, $75 million or more in aggregate principal amount of the non-extended term loans under the 2016 Term Loan Facility remains outstanding, and (ii) a springing maturity of 91 days prior to the August 1, 2024 maturity date of the 6.25% Senior Notes if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remains outstanding. The Extension Amendment became effective on the BrandCo 2020 Facilities Closing Date. As of September 30, 2020, approximately $30.7 million in aggregate principal amount of Extended Term Loans were outstanding after giving effect to the 2020 BrandCo Refinancing Transactions. The Extended Term Loans bear interest at a rate of LIBOR (with a LIBOR floor of 0.75%) plus 3.50% per annum, payable not less than quarterly in arrears in cash, consistent with the interest rate applicable to the non-extended term loans. Approximately $17.0 million of accrued interest outstanding on the 2016 Term Loan Facility was paid on the BrandCo 2020 Facilities Closing Date. The aggregate principal amount of non-extended term loans under the 2016 Term Loan Facility as of September 30, 2020 was approximately $855.6 million.

Repurchases of 5.75% Senior Notes due 2021

On May 7, 2020, Products Corporation used a portion of the proceeds from the 2020 BrandCo Facility to repurchase and subsequently cancel $50 million in aggregate principal face amount of its 5.75% Senior Notes. Products Corporation also paid approximately $0.7 million of accrued interest outstanding on the 5.75% Senior Notes on May 7, 2020. After the BrandCo 2020 Facilities Closing Date, Products Corporation repurchased and subsequently canceled in July 2020 a further $62.8 million in aggregate principal face amount of its 5.75% Senior Notes. Furthermore, during the three months ended September 30, 2020, Products Corporation repurchased and subsequently canceled an additional $44.4 million in aggregate principal face amount of its 5.75% Senior Notes. Accordingly, as of September 30, 2020, Products Corporation had repurchased and subsequently cancelled a total of approximately $157.2 million in aggregate principal face amount of its 5.75% Senior Notes, resulting in a
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gain on extinguishment of debt of approximately $31.2 million and $43.1 million for the three and nine months ended September 30, 2020, respectively, which were recorded within "Gain on early extinguishment of debt" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020. See “Recent Developments” with respect to the 5.75% Senior Notes Exchange Offer.

Prepayment of the 2019 Term Loan Facility due 2023

On the BrandCo 2020 Facilities Closing Date, Products Corporation used a portion of the proceeds from the 2020 BrandCo Facility to fully prepay the entire principal amount outstanding under its 2019 Term Loan Facility, totaling $200 million, plus approximately $1.3 million of accrued interest outstanding thereon, as well as approximately $33.5 million in prepayment premiums, $10.3 million in lenders' fees, $0.3 million in legal fees and approximately $2.0 million in other third party fees. As the lenders under the 2019 Term Loan Facility participated in the 2020 BrandCo Term Loan Facility, the Company determined that the full repayment of the 2019 Term Loan Facility represented a debt modification under U.S. GAAP as the cash flow effect between the old debt instrument (i.e., the 2019 Term Loan Facility) and the new debt instrument (i.e., the 2020 BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were not considered to be substantially different within the meaning of ASC 470, Debt, under U.S. GAAP. Accordingly, the $33.5 million of prepayment premiums, as well as the $10.3 million in other lenders' fees were capitalized as part of the aforementioned $119.3 million of total new debt issuance costs for the 2020 BrandCo Term Loan Facility, while the aforementioned $0.3 million of legal fees and $2.0 million in other third party fees were expensed as incurred in the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2020.

Amendment to the 2018 Foreign Asset-Based Term Facility

On May 4, 2020, the Company entered into an amendment to the 2018 Foreign Asset Based Term Facility, which had an original outstanding principal amount of €77 million. Such amendment provided for the following:

•increasing the interest rate on the loan from EURIBOR (with a floor 0.50%) plus a margin of 6.50% to EURIBOR (with a floor 0.50%) plus a margin of 7.00%;
•adding a springing maturity date of 91 days prior to the February 15, 2021 maturity of the 5.75% Senior Notes if any of Products Corporation's 5.75% Senior Notes remain outstanding on such date;
•requiring a mandatory prepayment of €5.0 million; and
•clarifying certain terms and waiving certain provisions in connection with the 2020 BrandCo Refinancing Transactions.

Approximately $0.4 million of amendment fees paid to the lenders under 2018 Foreign Asset-Based Term Facility were capitalized and are amortized to interest expense, together with any unamortized debt issuance costs outstanding prior to the amendment. As of September 30, 2020, there was the Euro equivalent of $56.8 million outstanding under the 2018 Foreign Asset-Based Term Facility, reflecting a repayment of €28.5 million made during the quarter ended June 30, 2020.

Incremental Revolving Credit Facility under the 2016 Term Loan Agreement

On April 30, 2020, Products Corporation entered into a Joinder Agreement (the “2020 Joinder Agreement”), with Revlon, certain of their subsidiaries and certain existing lenders (the “Incremental Lenders”) under Products Corporation’s 2016 Term Loan Agreement to provide for a $65 million incremental revolving credit facility (the “2020 Incremental Facility”). On the closing of the 2020 Incremental Facility, Products Corporation borrowed $63.5 million of revolving loans for working capital purposes and subsequently on May 11, 2020 Products Corporation also borrowed the additional $1.5 million of delayed funding revolving loans. Prior to its full repayment on May 28, 2020, amounts outstanding under the 2020 Incremental Facility bore interest at a rate of (x) LIBOR plus 16% or (y) an Alternate Base Rate plus 15%, at Products Corporation’s option. Except as to pricing, maturity and differences due to its revolving nature, the terms of the 2020 Incremental Facility were otherwise substantially consistent with the existing term loans under the 2016 Term Loan Facility. The 2020 Incremental Facility was repaid in full, and the commitments thereunder terminated, on May 28, 2020. Upon such repayment, approximately $2.9 million of upfront commitment fees that Products Corporation incurred in connection with consummating the 2020 Incremental Facility were entirely expensed within "Miscellaneous, net" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2020.

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Amendments to the 2016 Revolving Credit Agreement

See “Recent Developments” regarding the 5th Amendment to the Amended 2016 Revolving Credit Facility. On May 7, 2020, in connection with consummating the 2020 BrandCo Refinancing Transactions, Products Corporation entered into Amendment No. 4 to its Asset-Based Revolving Credit Agreement, dated as of September 7, 2016, as amended (the “2016 Revolving Credit Facility”). Amendment No. 4, among other things, made certain amendments and provided for certain waivers relating to the 2020 BrandCo Refinancing Transactions under the 2016 Revolving Credit Facility. In exchange for such amendments and waivers, the interest rate margin applicable to loans under Tranche A of the 2016 Revolving Credit Facility increased by 0.75%. In connection with the amendments to the 2018 Tranche B of the 2016 Revolving Credit Facility (which was fully repaid on its May 17, 2020 extended maturity date), Products Corporation incurred approximately $1.1 million in lender's fees that upon its full repayment were entirely expensed within “Miscellaneous, net” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss as of September 30, 2020. See “Recent Developments” and Note 19, “Subsequent Events,” regarding, among other things, Amendment No. 5 to the 2016 Revolving Credit Facility.

Previously, on April 17, 2020 (the “FILO Closing Date”), Products Corporation entered into Amendment No. 3 to the 2016 Revolving Credit Facility (“Amendment No. 3”), pursuant to which, the maturity date applicable to $36.3 million of loans under the $41.5 million senior secured first in, last out 2018 Tranche B under the 2016 Revolving Credit Facility (the “2018 FILO Tranche”) was extended from April 17, 2020 to May 17, 2020 (the “Extended Maturity Date”). Products Corporation repaid the remaining approximately $5.2 million of the 2018 FILO Tranche loans as of the FILO Closing Date. In addition, Amendment No. 3 increased the applicable interest margin for the 2018 FILO Tranche by 0.75%, subject to a LIBOR floor of 0.75%. Products Corporation fully repaid the 2018 FILO Tranche on the Extended Maturity Date.


Operating Segments


The Company operates in four reporting segments: Revlon; Elizabeth Arden; Portfolio; and Fragrances:
•Revlon - The Revlon segment is comprised of the Company's flagship Revlon brands. Revlon segment products are primarily marketed, distributed and sold in the mass retail channel, large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, professional hair and nail salons, one-stop shopping beauty retailers and specialty cosmetic stores in the U.S. and internationally under brands such as Revlon in color cosmetics; Revlon ColorSilk and Revlon Professional in hair color; and Revlon in beauty tools.
•Elizabeth Arden - The Elizabeth Arden segment is comprised of the Company's Elizabeth Arden branded products. The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics primarily to prestige retailers, department and specialty stores, perfumeries, boutiques, e-commerce sites, the mass retail channel, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and elizabetharden.com e-commerce business under brands such as Elizabeth Arden Ceramide, Prevage, Eight Hour, SUPERSTART, Visible Difference and Skin Illuminating in the Elizabeth Arden skin care brands; and Elizabeth Arden White Tea, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue andElizabeth Arden Green Tea in Elizabeth Arden fragrances.
•Portfolio - The Company’s Portfolio segment markets, distributes and sells a comprehensive line of premium, specialty and mass products primarily to the mass retail channel, hair and nail salons and professional salon distributors in the U.S. and internationally and large volume retailers, specialty and department stores under brands such as Almay and SinfulColors in color cosmetics; American Crew in men's grooming products (which are also sold direct-to-consumer on its americancrew.com website); CND in nail polishes, gel nail color and nail enhancements; Cutex in nail care products; Pure Ice in nail polishes; and Mitchum in anti-perspirant deodorants. The Portfolio 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.; and a body care line under the Natural Honey brand and hair color line under the Llongueras brand (licensed from a third party) that are bothis sold in the mass retail channel, large volume retailers and other retailers, primarily in Spain.
•Fragrances - The Fragrances segment includes the development, marketing and distribution of certain owned and licensed fragrances, as well as the distribution of prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers, specialty stores, e-commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as Juicy Couture (which are also sold direct-to-consumer on its juicycouturebeauty.com website), Britney Spears, Elizabeth Taylor, Curve, John Varvatos, Christina Aguilera, Giorgio Beverly Hills, Ed Hardy, Charlie, Lucky Brand, Paul Sebastian, Alfred Sung, Jennifer Aniston, Mariah Carey, Halston, Geoffrey Beene, La Perla, White Shoulders, AllSaints and Wildfox.


Results of Operations — Revlon, Inc.

Consolidated Net Sales:
Third quarter results:
Consolidated net sales in the third quarter of 2019 were $596.8 million, a $58.6 million, or 8.9%, decrease, compared to $655.4 million in the third quarter of 2018. Excluding the $12.1 million unfavorable FX impact, consolidated net sales decreased by $46.5 million, or 7.1%, during the third quarter of 2019. The XFX net sales decrease in the third quarter of 2019 was primarily due to: a $27.8 million, or 11.1%, decrease in Revlon segment net sales, a $17.2 million, or 12.4%, decrease in Portfolio segment net sales and a $5.6 million, or 3.9%, decrease in Fragrances segment net sales; partially offset by a $4.1 million, or 3.4%, increase in Elizabeth Arden segment net sales.


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commerce sites, the mass retail channel, travel retailers and other international retailers. The owned and licensed fragrances include brands such as: (i) Juicy Couture (which are also sold direct-to-consumer on its juicycouturebeauty.com website), John Varvatos and AllSaints in prestige fragrances; (ii) Britney Spears, Elizabeth Taylor, Christina Aguilera, Jennifer Aniston and Mariah Carey in celebrity fragrances; and (iii) Curve, Giorgio Beverly Hills, Ed Hardy, Charlie, Lucky Brand, ‹PS› (logo of former Paul Sebastian brand), Alfred Sung, Halston, Geoffrey Beene and White Diamonds in mass fragrances.
Year-to-date


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Results of Operations — Revlon, Inc.

Consolidated Net Sales:

Third quarter results:

Consolidated net sales in the first nine monthsthird quarter of 20192020 were $1,720.2$477.1 million, a $102.7$119.7 million decrease, or 5.6%20.1%, decrease compared to $1,822.9$596.8 million in the firstthird quarter of 2019. Excluding the $2.8 million favorable impact of foreign currency fluctuations (referred to herein as "FX," "XFX" or on an "XFX basis"), consolidated net sales decreased by $122.5 million, or 20.5%, during the third quarter of 2020. The ongoing and prolonged COVID-19 pandemic contributed an estimated $119 million ($119 million XFX) to the Company's $119.7 million decline in net sales in the three months endedSeptember 30, 2020, compared to the three months ended September 30, 2019. The XFX net sales decrease of $122.5 million in the third quarter of 2020 was due to: a $51.9 million, or 23.9%, decrease in Revlon segment net sales; a $33.1 million, or 24.0%, decrease in Fragrances segment net sales; a $19.1 million, or 16.2%, decrease in Portfolio segment net sales; and a $18.4 million, or 14.9%, decrease in Elizabeth Arden segment net sales.

Year-to-date results:

Consolidated net sales in the nine months of 2018.ended September 30, 2020 were $1,277.7 million, a $442.5 million decrease, or 25.7%, compared to $1,720.2 million in the nine months ended September 30, 2019. Excluding the $48.8$14.1 million unfavorable FX impact, consolidated net sales decreased by $53.7$428.4 million, or 2.9%24.9%, during the first nine months of 2019.ended September 30, 2020. The ongoing and prolonged COVID-19 pandemic contributed an estimated $387 million ($392 million XFX) to the Company's $442.5 million decline in net sales in the nine months ended September 30, 2020, compared to the prior year period. The XFX net sales decrease of $428.4 million in the first nine months of 2019ended September 30, 2020 was due primarily to: a $54.2$227.4 million, or 12.9%, decrease in Portfolio segment net sales, a $28.0 million, or 8.4%, decrease in Fragrances segment net sales and a $1.3 million, or 0.2%31.8%, decrease in Revlon segment net sales; partially offset by a $29.8$82.0 million, or 8.9%27.5%, increasedecrease in Fragrances segment net sales; a $66.8 million, or 19.0%, decrease in Elizabeth Arden segment net sales; and a $52.2 million, or 14.7%, decrease in Portfolio segment net sales.

See "Segment Results" below for further information on net sales by segment.


Segment Results:

The Company's management evaluates segment profit for 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. Segment profit also excludes the impact of certain items that are not directly attributable to the segments' underlying operating performance. The Company does not have any material inter-segment sales. For a reconciliation of segment profit to loss from continuing operations before income taxes, see Note 15,14, "Segment Data and Related Information," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q.
The following tables provide a comparative summary of the Company's segment results for the periods presented.
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 Net Sales Segment Profit
 Three Months Ended September 30, Change 
XFX Change (a)
 Three Months Ended September 30, Change 
XFX Change (a)
 2019 2018 $ % $ % 2019 2018 $ % $ %
Revlon$217.3
 $249.5
 $(32.2) (12.9)% $(27.8) (11.1)% $7.3
 $36.8
 $(29.5) (80.2)% $(29.0) (78.8)%
Elizabeth Arden123.2
 122.1
 1.1
 0.9 % 4.1
 3.4 % 12.5
 6.6
 5.9
 89.4 % 6.5
 98.5 %
Portfolio118.2
 138.4
 (20.2) (14.6)% (17.2) (12.4)% 14.4
 2.1
 12.3
 N.M.
 12.8
 N.M.
Fragrances138.1
 145.4
 (7.3) (5.0)% (5.6) (3.9)% 34.2
 26.9
 7.3
 27.1 % 7.7
 28.6 %
Total$596.8
 $655.4
 $(58.6) (8.9)% $(46.5) (7.1)% $68.4
 $72.4
 $(4.0) (5.5)% $(2.0) (2.8)%
 Net Sales Segment Profit
 Nine Months Ended September 30, Change 
XFX Change (a)
 Nine Months Ended September 30, Change 
XFX Change (a)
 2019 2018 $ % $ % 2019 2018 $ % $ %
Revlon$716.1
 $736.9
 $(20.8) (2.8)% $(1.3) (0.2)% $58.5
 $75.6
 $(17.1) (22.6)% $(14.4) (19.0)%
Elizabeth Arden352.0
 333.9
 18.1
 5.4 % 29.8
 8.9 % 17.1
 2.3
 14.8
 N.M.
 16.5
 N.M.
Portfolio354.1
 420.5
 (66.4) (15.8)% (54.2) (12.9)% 25.0
 (5.8) 30.8
 N.M.
 31.4
 N.M.
Fragrances298.0
 331.6
 (33.6) (10.1)% (28.0) (8.4)% 53.6
 41.2
 12.4
 30.1 % 13.1
 31.8 %
Total$1,720.2
 $1,822.9
 $(102.7) (5.6)% $(53.7) (2.9)% $154.2
 $113.3
 $40.9
 36.1 % $46.6
 41.1 %
(a) XFX excludes the impact of foreign currency fluctuations.
N.M. - Not meaningful
Revlon Segment
Third quarter results:
Revlon segment net sales in the third quarter of 2019 were $217.3 million, a $32.2 million, or 12.9%, decrease, compared to $249.5 million in the third quarter of 2018. Excluding the $4.4 million unfavorable FX impact, total Revlon segment net sales in the third quarter of 2019 decreased by $27.8 million, or 11.1%, compared to the third quarter of 2018. This decrease was primarily driven by lower net sales of Revlon color cosmetics in the mass retail channel, due to overall category declines, as well as lower net sales of Revlon ColorSilk hair color and Revlon-branded beauty tools, primarily in North America.

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The following tables provide a comparative summary of the Company's segment results for the periods presented.
Net SalesSegment Profit
Three Months Ended September 30,Change
XFX Change (a)
Three Months Ended September 30,Change
XFX Change (a)
20202019$%$%20202019$%$%
Revlon$166.0 $217.3 $(51.3)(23.6)%$(51.9)(23.9)%$13.5 $7.3 $6.2 84.9 %$5.9 80.8 %
Elizabeth Arden106.3 123.2 (16.9)(13.7)%(18.4)(14.9)%3.4 12.5 (9.1)(72.8)%(9.5)(76.0)%
Portfolio99.6 118.2 (18.6)(15.7)%(19.1)(16.2)%12.2 14.4 (2.2)(15.3)%(2.5)(17.4)%
Fragrances105.2 138.1 (32.9)(23.8)%(33.1)(24.0)%25.4 34.2 (8.8)(25.7)%(9.1)(26.6)%
Total$477.1 $596.8 $(119.7)(20.1)%$(122.5)(20.5)%$54.5 $68.4 $(13.9)(20.3)%$(15.2)(22.2)%

Net SalesSegment Profit
Nine Months Ended September 30,Change
XFX Change (a)
Nine Months Ended September 30,Change
XFX Change (a)
20202019$%$%20202019$%$%
Revlon$482.8 $716.1 $(233.3)(32.6)%$(227.4)(31.8)%$41.4 $58.5 $(17.1)(29.2)%$(16.8)(28.7)%
Elizabeth Arden282.4 352.0 (69.6)(19.8)%(66.8)(19.0)%18.4 17.1 1.3 7.6 %1.6 9.4 %
Portfolio298.1 354.1 (56.0)(15.8)%(52.2)(14.7)%33.9 25.0 8.9 35.6 %8.8 35.2 %
Fragrances214.4 298.0 (83.6)(28.1)%(82.0)(27.5)%34.6 53.6 (19.0)(35.4)%(19.1)(35.6)%
Total$1,277.7 $1,720.2 $(442.5)(25.7)%$(428.4)(24.9)%$128.3 $154.2 $(25.9)(16.8)%$(25.5)(16.5)%

(a) XFX excludes the impact of foreign currency fluctuations.


Revlon Segment

Third quarter results:

Revlon segment net sales in the third quarter of 2020 were $166.0 million, a $51.3 million, or 23.6%, decrease, compared to $217.3 million in the third quarter of 2019. Excluding the $0.6 million favorable FX impact, total Revlon segment net sales in the third quarter of 2020 decreased by $51.9 million, or 23.9%, compared to the third quarter of 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $50 million ($50 million XFX) to the Revlon segment's decrease in net sales in the third quarter of 2020, compared to the prior year quarter. The Revlon segment XFX decrease in net sales of $51.9 million in the third quarter of 2020 was driven primarily by lower net sales of Revlon color cosmetics, as well as lower net sales of Revlon-branded professional hair-care products in International regions and lower net sales of RevlonColorSilk hair color products in North America, due, primarily, to the continuing effects of COVID-19 on the mass retail channels and on salon activity, respectively. This decrease was partially offset by higher net sales of Revlon-branded beauty tools and hair color products in North America.

Revlon segment profit in the third quarter of 20192020 was $7.3$13.5 million, a $29.5$6.2 million, or 80.2%84.9%, decrease,increase, compared to $36.8$7.3 million in the third quarter of 2018.2019. Excluding the $0.6$0.3 million unfavorablefavorable FX impact, Revlon segment profit in the third quarter of 2019 decreased2020 increased by $29.0$5.9 million, or 78.8%80.8%, compared to the third quarter of 2018.2019. This decreaseincrease was driven primarily driven by the Revlon segment's lower brand support and other SG&A expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program, partially offset by the segment's lower net sales, primarily due to COVID-19 as described above, and lower gross profit margin.

Year-to-date results:

Revlon segment net sales in the first nine months of 2019ended September 30, 2020 were $716.1$482.8 million, a $20.8$233.3 million, or 2.8%32.6%, decrease, compared to $736.9$716.1 million in the first nine months of 2018.ended September 30, 2019. Excluding the $19.5$5.9 million unfavorable FX impact, total Revlon segment net sales in the first nine months of 2019ended September 30, 2020 decreased by $1.3$227.4 million, or 0.2%31.8%, compared to the first nine months of 2018. This decrease was primarily driven by lower net sales of Revlon color cosmetics, as well as lower net sales of Revlon-branded beauty toolsended September 30, 2019. The ongoing and Revlon ColorSilk hair color, primarily in North America, partially offset by increases in net sales of Revlon-branded hair care and professional products.
Revlon segment profit in the first nine months of 2019 was $58.5 million, a $17.1 million, or 22.6%, decrease, compared to $75.6 million in the first nine months of 2018. Excluding the $2.7 million unfavorable FX impact, Revlon segment profit in the first nine months of 2019 decreased by $14.4 million, or 19.0%, compared to the first nine months of 2018. This decrease was primarily driven by the Revlon segment's lower net sales described above and lower gross profit margin, partially offset by lower brand support expenses.
Elizabeth Arden Segment
Third quarter results:
Elizabeth Arden segment net sales in the third quarter of 2019 were $123.2 million, a $1.1 million, or 0.9%, increase, compared to $122.1 million in the third quarter of 2018. Excluding the $3.0 million unfavorable FX impact, Elizabeth Arden net sales in the third quarter of 2019 increased by $4.1 million, or 3.4%, compared to the third quarter of 2018. This increase was primarily driven by higher net sales of Elizabeth ArdenCeramide and Prevage skin care products, as well as higher net sales of certain Elizabeth Arden-branded fragrances, primarily internationally, partially offset by lower net sales of Elizabeth Arden-branded color cosmetics and certain other skin care products, primarily in North America.

Elizabeth Arden segment profit in the third quarter of 2019 was $12.5 million, a $5.9 million, or 89.4%, increase, compared to $6.6 million in third quarter of 2018. Excluding the $0.7 million unfavorable FX impact, Elizabeth Arden segment profit in the third quarter of 2019 increased by $6.5 million, or 98.5%, compared to the third quarter of 2018. This increase was primarily driven by the Elizabeth Arden segment's higher net sales described above, as well as improved gross profit margin.
Year-to-date results:
Elizabeth Arden segment net sales in the first nine months of 2019 were $352.0 million, an $18.1 million, or 5.4%, increase, compared to $333.9 million in the first nine months of 2018. Excluding the $11.7 million unfavorable FX impact, Elizabeth Arden segment net sales in the first nine months of 2019 increased by $29.8 million, or 8.9%, compared to the first nine months of 2018. This increase was primarily driven by higher net sales of Ceramide and Prevage skin care products and of certain Elizabeth Arden-branded fragrances, primarily internationally, partially offset by lower net sales of Elizabeth Arden-branded color cosmetics and certain other skin care products.

Elizabeth Arden segment profit in the first nine months of 2019 was $17.1 million, a $14.8 million increase, compared to $2.3 million in the first nine months of 2018. Excluding the $1.8 million unfavorable FX impact, Elizabeth Arden segment profit in the first nine months of 2019 increased by $16.5 million compared to the first nine months of 2018. This increase was primarily driven by the Elizabeth Arden segment's higher net sales described above.
Portfolio Segment
Third quarter results:
Portfolio segment net sales in the third quarter of 2019 were $118.2 million, a $20.2 million, or 14.6%, decrease, compared to $138.4 million in the third quarter of 2018. Excluding the $3.0 million unfavorable FX impact, total Portfolio segment net sales in the third quarter of 2019 decreased by $17.2 million, or 12.4%, compared to the third quarter of 2018. This decrease was driven primarily by the Portfolio segment's lower net sales of Almay color cosmetics, CND nail products, Pure Ice and SinfulColors color cosmetics, as well as lower net sales of local and regional brands, primarily in North America. These decreases were partially offset by higher net sales of Cutex nail care products internationally.

prolonged COVID-19 pandemic contributed
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an estimated $174 million ($176 million XFX) to the Revlon segment's decrease in net sales in the nine months endedSeptember 30, 2020, compared to the prior year period. The Revlon segment's XFX decrease in net sales of $227.4 million in the nine months endedSeptember 30, 2020 was driven primarily by lower net sales of Revlon color cosmetics, lower net sales of Revlon-branded professional hair-care products in International regions, as well as lower net sales of RevlonColorSilk hair color, due, primarily, to the continuing effects of COVID-19 on the mass retail channels and on salons activity, respectively, partially offset by increased net sales of Revlon-branded beauty tools and Revlon hair color products in North America.
Portfolio
Revlon segment profit in the third quarter of 2019nine months ended September 30, 2020 was $14.4$41.4 million, a $12.3$17.1 million, increaseor 29.2%, decrease, compared to $2.1$58.5 million in the third quarter of 2018.nine months ended September 30, 2019. Excluding the $0.5$0.3 million unfavorable FX impact, PortfolioRevlon segment profit in the third quarter of 2019 increased by $12.8 million, compared to the third quarter of 2018. This increase was primarily driven by the Portfolio segment's lower brand support expenses and distribution expenses, partially offset by the impact of the lower net sales, as described above.
Year-to-date results:
Portfolio segment net sales in the first nine months of 2019 were $354.1 million, a $66.4ended September 30, 2020 decreased by $16.8 million, or 15.8%, decrease, compared to $420.5 million in the first nine months of 2018. Excluding the $12.2 million unfavorable FX impact, total Portfolio segment net sales in the first nine months of 2019 decreased by $54.2 million, or 12.9%28.7%, compared to the first nine months of 2018.ended September 30, 2019. This decrease was driven primarily by the PortfolioRevlon segment's lower net sales, of CND nail products, Almay, Pure Ice and SinfulColors color cosmetics, as well as lower net sales of local and regional brands. These decreases were partially offset by higher net sales of Cutex nail care products, American Crew men's grooming products and Mitchum anti-perspirant deodorants.
Portfolio segment profit in the first nine months of 2019 was $25.0 million, a $30.8 million increase comparedprimarily due to a $5.8 million segment loss in the first nine months of 2018. Excluding the $0.6 million unfavorable FX impact, Portfolio segment profit in the first nine months of 2019 increased by $31.4 million compared to the first nine months of 2018. This increase was primarily driven by the Portfolio segment's lower brand support expenses and distribution expenses, partially offset by lower net sales,COVID-19 as described above, and lower gross profit margin.margin, partially offset primarily by the segment's lower brand support and other SG&A expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program.
Fragrances
Elizabeth Arden Segment

Third quarter results:
Fragrances
Elizabeth Arden segment net sales in the third quarter of 20192020 were $138.1$106.3 million, a $7.3$16.9 million, or 5%13.7%, decrease, compared to $145.4$123.2 million in the third quarter of 2018.2019. Excluding the $1.7$1.5 million unfavorablefavorable FX impact, total FragrancesElizabeth Arden segment net sales in the third quarter of 20192020 decreased by $5.6$18.4 million, or 3.9%14.9%, compared to the third quarter of 2018. This 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $24 million ($25 million XFX) to the Elizabeth Arden segment’s decrease in net sales in the third quarter of 2020, compared to the prior year quarter. The Elizabeth Arden segment XFX decrease in net sales of $18.4 million in the third quarter of 2020 was driven primarily by lower net sales of certain Elizabeth Arden-branded skin care products and color cosmetics in International regions, as well as lower net sales of Elizabeth Arden-branded fragrances, due, primarily, to the ongoing overall weakness in the masscontinuing effects of COVID-19 on foot traffic at department stores and other retail channel, including certain retail store closures,outlets, partially offset by higher net sales attributable to certain product launches in 2019of Ceramide skin care products in North America.
Fragrances
Elizabeth Arden segment profit in the third quarter of 20192020 was $34.2$3.4 million, a $7.3$9.1 million or 27.1%, increase,decrease, compared to $26.9$12.5 million in the third quarter of 2018.2019. Excluding the $0.4 million unfavorablefavorable FX impact, FragrancesElizabeth Arden segment profit in the third quarter of 2019 increased2020 decreased by $7.7$9.5 million, or 28.6%, compared to the third quarter of 2018.2019. This increasedecrease was driven primarily driven by the FragrancesElizabeth Arden segment's lower brand support expensesnet sales, primarily due to COVID-19 as described above, and distribution costs, as well as improvedlower gross profit margin, partially offset primarily by the segment's lower net sales.brand support and other SG&A expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program.

Year-to-date results:
Fragrances
Elizabeth Arden segment net sales in the first nine months of 2019ended September 30, 2020 were $298.0$282.4 million, a $33.6$69.6 million, or 10.1%19.8%, decrease, compared to $331.6$352.0 million in the first nine months of 2018.ended September 30, 2019. Excluding the $5.6$2.8 million unfavorable FX impact, total FragrancesElizabeth Arden segment net sales in the first nine months of 2019ended September 30, 2020 decreased by $28.0$66.8 million, or 8.4%19.0%, compared to the first nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $93 million ($95 million XFX) to the Elizabeth Arden segment’s decrease in net sales in the nine months ended September 30, 2020, compared to the prior year period. The Elizabeth Arden segment XFX decrease in net sales of 2018. This decrease$66.8 million in the nine months ended September 30, 2020 was driven primarily by lower net sales in the Fragrances segmentof certain Elizabeth Arden-branded skin care products, as well as color cosmetics, and lower net sales of Elizabeth Arden-branded fragrances, due, primarily, to the ongoing overall weakness in the masscontinuing effects of COVID-19 on foot traffic at department stores and other retail channel, including certain retail store closures in North America,outlets, partially offset by higher net sales attributable to new products launches in 2019, primarily internationally.of Ceramide skin care products.
Fragrances
Elizabeth Arden segment profit in the first nine months of 2019ended September 30, 2020 was $53.6$18.4 million, a $12.4$1.3 million, or 30.1%7.6%, increase, compared to $41.2$17.1 million in the first nine months of 2018.ended September 30, 2019. Excluding the $0.7$0.3 million unfavorable FX impact, Fragrances Elizabeth Arden segment profit in the first nine months of 2019ended September 30, 2020 increased by $13.1$1.6 million, or 31.8%9.4%, compared to the first nine months of 2018.ended September 30, 2019. This increase was driven primarily driven by the FragrancesElizabeth Arden segment's lower brand support expenses and distribution costs, partially offset by the impact of the segment's lower net sales.

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Geographic Results:

The following tables provide a comparative summarylower other SG&A and brand support expenses and slightly higher gross profit margin, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's North America and Internationaloperations, as well as the Revlon 2020 Restructuring Program, partially offset by the segment's lower net sales, for the periods presented:primarily due to COVID-19 as described above.

 Three Months Ended September 30,


Change 
XFX Change (a)
 2019 2018 $ % $ %
Revlon           
North America$100.0
 $123.1
 $(23.1) (18.8)% $(23.1) (18.8)%
International117.3
 126.4
 (9.1) (7.2)% (4.7) (3.7)%
Elizabeth Arden
       
  
North America$29.5

$40.3
 $(10.8) (26.8)% $(10.7) (26.6)%
International93.7

81.8
 11.9
 14.5 % 14.8
 18.1 %
Portfolio
       
  
North America$71.4

$88.1
 $(16.7) (19.0)% $(16.7) (19.0)%
International46.8

50.3
 (3.5) (7.0)% (0.5) (1.0)%
Fragrance
       
  
North America$98.6

$99.3
 $(0.7) (0.7)% $(0.6) (0.6)%
International39.5

46.1
 (6.6) (14.3)% (5.0) (10.8)%
        Total Net Sales$596.8
 $655.4
 $(58.6) (8.9)% $(46.5) (7.1)%
            
 Nine Months Ended September 30,


Change 
XFX Change (a)
 2019 2018 $ % $ %
Revlon           
North America$367.9
 $388.2
 $(20.3) (5.2)% $(19.5) (5.0)%
International348.2
 348.7
 (0.5) (0.1)% 18.2
 5.2 %
Elizabeth Arden           
North America$83.9
 $96.2
 $(12.3) (12.8)% $(11.5) (12.0)%
International268.1
 237.7
 30.4
 12.8 % 41.3
 17.4 %
Portfolio           
North America$214.5
 $264.8
 $(50.3) (19.0)% $(49.9) (18.8)%
International139.6
 155.7
 (16.1) (10.3)% (4.3) (2.8)%
Fragrances           
North America$198.4
 $216.9
 $(18.5) (8.5)% $(18.3) (8.4)%
International99.6
 114.7
 (15.1) (13.2)% (9.7) (8.5)%
        Total Net Sales$1,720.2
 $1,822.9
 $(102.7) (5.6)% $(53.7) (2.9)%
Portfolio Segment
(a) XFX excludes the impact of foreign currency fluctuations.

Revlon Segment


Third quarter results:

North America

In North America, RevlonPortfolio segment net sales in the third quarter of 2019 decreased by $23.12020 were $99.6 million, a $18.6 million, or 18.8%15.7%, to $100.0 million,decrease, compared to $123.1$118.2 million in the third quarter of 2018. This decrease was primarily due2019. Excluding the $0.5 million favorable FX impact, total Portfolio segment net sales in the third quarter of 2020 decreased by $19.1 million, or 16.2%, compared to the Revlon segment'sthird quarter of 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $19 million ($19 million XFX) to the Portfolio segment’s decrease in net sales in the third quarter of 2020, compared to the prior year quarter. The Portfolio segment XFX decrease in net sales of $19.1 million in the third quarter of 2020 was driven primarily by lower net sales of RevlonAlmay color cosmetics,CND nail products and American Crew men's grooming products, primarily in North America, as well as lower net sales of Revlon-branded beauty toolscertain local and Revlon ColorSilk hair color, withinregional brands, driven, primarily, by the U.S.continuing effect of COVID-19 on the mass retail channel.channel and on salons. This decrease was partially offset by higher net sales in North America ofCreme of Nature products and Mitchum anti-perspirant deodorants.



Portfolio segment profit in the third quarter of 2020 was $12.2 million, a $2.2 million decrease, compared to $14.4 million in the third quarter of 2019. Excluding the $0.3 million favorable FX impact, Portfolio segment profit in the three months ended September 30, 2020 decreased by $2.5 million, or 17.4%, compared to the three months ended September 30, 2019. This decrease was driven primarily by the Portfolio segment's lower net sales, primarily due to the ongoing and prolonged COVID-19 pandemic, as described above, and lower gross profit margin, partially offset by the segment's lower brand support and other SG&A expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program.
Year-to-date results:
Portfolio segment net sales in the nine months ended September 30, 2020 were $298.1 million, a $56.0 million, or 15.8%, decrease, compared to $354.1 million in the nine months ended September 30, 2019. Excluding the $3.8 million unfavorable FX impact, total Portfolio segment net sales in the nine months ended September 30, 2020 decreased by $52.2 million, or 14.7%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $56 million ($56 million XFX) to the Portfolio segment’s decrease in net sales in the nine months ended September 30, 2020, compared to the prior year period. The Portfolio segment XFX decrease in net sales of $52.2 million in the nine months ended September 30, 2020 was driven primarily by lower net sales of Almay color cosmetics, American Crew men's grooming products, CND nail products, primarily in North America, as well as certain local and regional skin care products brands, driven, primarily, by the continuing effects of COVID-19 on the mass retail channel and salons. This decrease was partially offset primarily by higher net sales of Creme of Nature products and of Cutex nail care products, primarily in North America.

Portfolio segment profit in the nine months ended September 30, 2020 was $33.9 million, a $8.9 million, or 35.6%, increase compared to $25.0 million in the nine months ended September 30, 2019. Excluding the $0.1 million favorable FX impact, Portfolio segment profit in the nine months ended September 30, 2020 increased by $8.8 million, or 35.2%, compared to the nine months ended September 30, 2019. This increase was driven primarily by the Portfolio segment's lower SG&A and brand support expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program, partially offset by the segment's lower net sales, primarily due to COVID-19,as described above, and slightly lower gross profit margin.

Fragrances Segment

Third quarter results:
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International

Internationally, RevlonFragrances segment net sales in the third quarter of 2019 decreased by $9.12020 were $105.2 million, a $32.9 million, or 7.2%23.8%, to $117.3 million,decrease, compared to $126.4$138.1 million in the third quarter of 2018.2019. Excluding the $4.4$0.2 million unfavorablefavorable FX impact, Revlontotal Fragrances segment International net sales in thethe third quarter of 20192020 decreased by $4.7$33.1 million, or 3.7%24.0%, compared to the third quarter of 2018. This 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $25 million ($25 million XFX) to the Fragrances segment’s decrease was driven by the Revlon segment's lower net sales of Revlon ColorSilk hair color and Revlon color cosmetics, within the Company's EMEA and Latin America regions.

Year-to-date results:

North America

In North America, Revlon segmentin net sales in the first nine monthsthird quarter of 2019 decreased by $20.3 million, or 5.2%, to $367.9 million, compared to $388.2 million in the first nine months of 2018. Excluding the $0.8 million unfavorable FX impact, Revlon segment net sales in North America in the first nine months of 2019 decreased by $19.5 million, or 5%,2020, compared to the first nine months of 2018. Thisprior year quarter. The Fragrances segment XFX decrease was primarily due to the Revlon segment's lowerin net sales of Revlon color cosmetics, as well as lower net sales of Revlon-branded beauty tools and Revlon ColorSilk hair color, partially offset by higher net sales of Revlon-branded hair care products within the U.S. mass retail channel.

International

Internationally, Revlon segment net sales in the first nine months of 2019 decreased by $0.5$33.1 million or 0.1%, to $348.2 million, compared to $348.7 million in the first nine months of 2018. Excluding the $18.7 million unfavorable FX impact, Revlon segment International net sales in the first nine months of 2019 increased by $18.2 million, or 5.2%, compared to the first nine months of 2018. This increase was driven primarily by the Revlon segment's higher net sales of Revlon color cosmetics, primarily within the Company's Pacific and Latin America regions, due mainly to improved service levels at the Oxford, N.C. facility, and higher net sales of Revlon-branded hair-care professional products, following new product launches in Europe.

Elizabeth Arden Segment

Third quarter results:

North America

In North America, Elizabeth Arden segment net sales in the third quarter of 20192020 was driven primarily by continuing impacts from COVID-19, especially in the prestige channel, resulting in decreased by $10.8foot traffic.

Fragrances segment profit in the third quarter of 2020 was $25.4 million, a $8.8 million, or 26.8%25.7%, to $29.5 million,decrease, compared to $40.3$34.2 million in the third quarter of 2018.2019. Excluding the $0.1$0.3 million unfavorablefavorable FX impact, Elizabeth ArdenFragrances segment net sales in North Americaprofit in the third quarter of 20192020 decreased by $10.7$9.1 million, or 26.6%, compared to the third quarter of 2018.2019. This decrease was driven primarily by the Fragrances segment's lower net sales, primarily due to the Elizabeth Arden segment's decrease in net sales driven by certain retail store closures,ongoing and prolonged COVID-19 pandemic, as described above, and lower gross profit margin, partially offset by the segment's higher net saleslower brand support and other SG&A expenses, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of Ceramide skin care products.the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program.

Year-to-date results:
International

Internationally, Elizabeth ArdenFragrances segment net sales in the third quarter of 2019 increased by $11.9nine months ended September 30, 2020 were $214.4 million, a $83.6 million, or 14.5%28.1%, to $93.7 million,decrease, compared to $81.8$298.0 million in the third quarter of 2018.nine months ended September 30, 2019. Excluding the $2.9$1.6 million unfavorable FX impact, Elizabeth Ardentotal Fragrances segment International net sales in the third quarter of 2019 increasednine months ended September 30, 2020 decreased by $14.8$82.0 million, or 18.1%27.5%, compared to the third quarternine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $65 million ($65 million XFX) to the Fragrances segment’sdecrease in net sales in the nine months ended September 30, 2020, compared to the prior year period. The Fragrances segment XFX decrease in net sales of 2018.$82.0 million in the nine months ended September 30, 2020 was driven primarily by continuing impacts from COVID-19, especially in the prestige channel, resulting in decreased foot traffic and temporary door closures.

Fragrances segment profit in the nine months ended September 30, 2020 was $34.6 million, a $19.0 million, or 35.4%, decrease, compared to $53.6 million in the nine months ended September 30, 2019. Excluding the $0.1 million favorable FX impact, Fragrances segment profit in the nine months ended September 30, 2020 decreased by $19.1 million, or 35.6%, compared to the nine months ended September 30, 2019. This increasedecrease was driven primarily by the Elizabeth ArdenFragrances segment's higherlower net sales, of Ceramideprimarily due to the ongoing and Prevage skin care products,prolonged COVID-19 pandemic, as described above, and of certain Elizabeth Arden-branded fragrance brands, withinslightly lower gross profit margin, partially offset primarily by lower other SG&A and brand support expenses, primarily driven by cost reductions achieved through the Company's Asia region, particularly in China,initiatives designed to mitigate the adverse impact of the ongoing and inprolonged COVID-19 pandemic on the Travel Retail business.


Company's operations, as well as the Revlon 2020 Restructuring Program.
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Geographic Results:
Year-to-dateThe following tables provide a comparative summary of the Company's North America and International net sales for the periods presented:
Three Months Ended September 30,


Change
XFX Change (a)
20202019$%$%
Revlon
North America$86.4 $100.0 $(13.6)(13.6)%$(13.7)(13.7)%
International79.6 117.3 (37.7)(32.1)%(38.2)(32.6)%
Elizabeth Arden
North America$30.5 $29.5 $1.0 3.4 %$1.1 3.7 %
International75.8 93.7 (17.9)(19.1)%(19.5)(20.8)%
Portfolio
North America$59.9 $71.4 $(11.5)(16.1)%$(11.3)(15.8)%
International39.7 46.8 (7.1)(15.2)%(7.8)(16.7)%
Fragrance
North America$79.2 $98.6 $(19.4)(19.7)%$(19.3)(19.6)%
International26.0 39.5 (13.5)(34.2)%(13.8)(34.9)%
        Total Net Sales$477.1 $596.8 $(119.7)(20.1)%$(122.5)(20.5)%
Nine Months Ended September 30,Change
XFX Change (a)
20202019$%$%
Revlon
North America$265.6 $367.9 $(102.3)(27.8)%$(102.0)(27.7)%
International217.2 348.2 (131.0)(37.6)%(125.4)(36.0)%
Elizabeth Arden
North America$66.9 $83.9 $(17.0)(20.3)%$(16.7)(19.9)%
International215.5 268.1 (52.6)(19.6)%(50.1)(18.7)%
Portfolio
North America$182.8 $214.5 $(31.7)(14.8)%$(31.4)(14.6)%
International115.3 139.6 (24.3)(17.4)%(20.8)(14.9)%
Fragrances
North America$151.1 $198.4 $(47.3)(23.8)%$(47.2)(23.8)%
International63.3 99.6 (36.3)(36.4)%(34.8)(34.9)%
        Total Net Sales$1,277.7 $1,720.2 $(442.5)(25.7)%$(428.4)(24.9)%

(a) XFX excludes the impact of foreign currency fluctuations.

Revlon Segment

Third quarter results:


North America


In North America, Elizabeth ArdenRevlon segment net sales in the first nine monthsthird quarter of 20192020 decreased by $12.3$13.6 million, or 12.8%13.6%, to $83.9$86.4 million, compared to $96.2$100.0 million in the first nine monthsthird quarter of 2018.2019. Excluding the $0.8$0.1 million unfavorablefavorable FX impact, Elizabeth ArdenRevlon segment net sales in North America in the first nine monthsthird quarter of 20192020 decreased by $11.5$13.7 million, or 12%13.7%, compared to the first nine monthsthird quarter of 2018. This 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $15 million ($15 million XFX) to the Revlon segment’s decrease was driven primarily by the Elizabeth Arden segment's lower net sales of certain other Elizabeth Arden-branded skin care and color cosmetics products resulting from certain retail store closures, partially offset primarily by higher net sales of the segment's Ceramide skin care brand.

International

Internationally, Elizabeth Arden segmentin net sales in the first nine months of 2019 increased by $30.4 million, or 12.8%, to $268.1 million, compared to $237.7 millionNorth America in the first nine monthsthird quarter of 2018. Excluding the $10.9 million unfavorable FX impact, Elizabeth Arden segment International net sales in the first nine months of 2019 increased by $41.3 million, or 17.4%,2020, compared to the first nine months of 2018. This increase was driven primarily by higher net sales of the Elizabeth Ardenprior year quarter. The Revlon segment's Ceramide and Prevage skin care products, primarily within the Company's Asia region, particularly$13.7 million XFX decrease in China, and in the Travel Retail business, as well as higher net sales of certain Elizabeth Arden fragrance brands. These increases were partially offset by lower net sales of Elizabeth Arden-branded color cosmetics products.

Portfolio Segment

Third quarter results:

North America

In North America, Portfolio segment net sales in the third quarter of 2019 decreased by $16.7 million, or 19%, to $71.4 million, compared to $88.1 million in the third quarter of 2018. This decrease2020 was primarily driven bydue to the PortfolioRevlon segment's lower net sales of Almay and Pure Ice color cosmetics, Mitchum anti-perspirant deodorants and CND nail products, mainly due to declines in the mass retail channel, as well as lower net sales of local and regional brands.

International

Internationally, Portfolio segment net sales in the third quarter of 2019 decreased by $3.5 million, or 7%, to $46.8 million, compared to $50.3 million in the third quarter of 2018. Excluding the $3.0 million unfavorable FX impact, Portfolio segment International net sales decreased by $0.5 million, or 1%, in the third quarter of 2019, compared to the third quarter of 2018. This decrease was primarily driven by the Portfolio segment's lower net sales of CND nail care products, primarily in the Company's EMEA region, as well as lower net sales of local and regional brands. These decreases were partially offset by the segment's higher net sales of Mitchum anti-perspirant deodorants and of Cutex nail care products, primarily in the EMEA region.
Year-to-date results:
North America

In North America, Portfolio segment net sales in the first nine months of 2019 decreased by $50.3 million, or 19%, to $214.5 million, as compared to $264.8 million in the first nine months of 2018. Excluding the $0.4 million unfavorable FX impact, Portfolio segment net sales in North America in the first nine months of 2019 decreased by $49.9 million, or 18.8%, compared to the first nine months of 2018. This decrease was driven primarily by the Portfolio segment's lower net sales of Almay Revloncolor cosmetics and of CND nailRevlonColorSilk hair color products, as well as lower net sales of Pure Ice and SinfulColors color cosmetics, local and regional brands and Mitchum anti-perspirant deodorants. These decreases were partially offset by higher net sales of American Crew men's grooming products.


due, primarily, to
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International

Internationally, Portfolio segment net sales in the first nine monthscontinuing effects of 2019 decreased by $16.1 million, or 10.3%, to $139.6 million, compared to $155.7 million inCOVID-19 on the first nine months of 2018. Excluding the $11.8 million unfavorable FX impact, Portfolio segment International net sales decreased by $4.3 million, or 2.8%, in the first nine months of 2019, compared to the first nine months of 2018. This decrease was driven primarily by the Portfolio segment's lower net sales of local and regional brands and of CND nail products, primarily in the Company's EMEA region,mass retail channel, partially offset by higher net sales of Mitchum anti-perspirant deodorants in the EMEA region,Revlon-branded beauty tools and higher net sales of Cutex nail care products primarily in Latin America.hair-care products.


Fragrances SegmentInternational


Third quarter results:

North America

In North America, FragrancesInternationally, Revlon segment net sales in the third quarter of 20192020 decreased by $0.7$37.7 million, or 0.7%32.1%, to $98.6$79.6 million, as compared to $99.3$117.3 million in the third quarter of 2018.2019. Excluding the $0.1$0.5 million unfavorablefavorable FX impact, FragrancesRevlon segment North AmericaInternational net sales decreased by $0.6 million, or 0.6%, in the third quarter of 2019,2020 decreased by $38.2 million, or 32.6%, compared to the third quarter of 2018,2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $35 million ($35 million XFX) to the Revlon segment’s decrease in International net sales in the third quarter of 2020, compared to the prior year quarter. The Revlon segment's $38.2 million XFX decrease in International net sales in the third quarter of 2020 was driven primarily driven by the Revlon segment's lower net sales inof Revlon color cosmetics, as well as lower net sales of Revlon-branded professional hair-care products due, primarily, to the continuing effects of COVID-19 on the mass retail channel and salons. This decrease was partially offset by higher net sales of Revlon ColorSilk hair color products, primarily within the Company's Latin America region, and growth in e-commerce net sales.

Year-to-date results:

North America

In North America, Revlon segment net sales in the nine months ended September 30, 2020 decreased by $102.3 million, or 27.8%, to $265.6 million, compared to $367.9 million in the nine months ended September 30, 2019. Excluding the $0.3 million unfavorable FX impact, Revlon segment net sales in North America in the nine months ended September 30, 2020 decreased by $102.0 million, or 27.7%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $67 million ($67 million XFX) to the Revlon segment’sdecrease in net sales in North America in the nine months ended September 30, 2020, compared to the prior year period. The Revlon segment's $102.0 million XFX decrease in North America net sales in the nine months ended September 30, 2020 was primarily due to the Revlon segment's lower net sales of Revlon color cosmetics, as well as certainRevlon ColorSilk hair color products, due, primarily, to the continuing effects of COVID-19 on the mass retail store closures in the prestige channel, partially offset by the effecthigher net sales of certain product launches.Revlon-branded beauty tools and hair care products.


International


Internationally, FragrancesRevlon segment net sales in the nine months ended September 30, 2020 decreased by $131.0 million, or 37.6%, to $217.2 million, compared to $348.2 million in the nine months ended September 30, 2019. Excluding the $5.6 million unfavorable FX impact, Revlon segment International net sales in the nine months ended September 30, 2020 decreased by $125.4 million, or 36.0%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $107 million ($109 million XFX) to the Revlon segment’s decrease in International net sales in the nine months ended September 30, 2020, compared to the prior year period. The Revlon segment's $125.4 million XFX decrease in International net sales in the nine months ended September 30, 2020 was driven primarily by the Revlon segment's lower net sales of Revlon color cosmetics, as well as lower net sales of Revlon-branded hair-care professional products and Revlon ColorSilk hair color products, within the Company's EMEA, Asia, Latin America and Pacific regions, due, primarily, to the continuing effects of COVID-19 on the mass retail channel and salons.

Elizabeth Arden Segment

Third quarter results:

North America

In North America, Elizabeth Arden segment net sales in the third quarter of 2019 decreased2020 increased by $6.6$1.0 million, or 14.3%3.4%, to $39.5$30.5 million, compared to $46.1$29.5 million in the third quarter of 2018.2019. Excluding the $1.6$0.1 million unfavorable FX impact, Fragrances segment International net sales decreased by $5.0 million, or 10.8%, in the third quarter of 2019, compared to the third quarter of 2018, primarily due to the Fragrances segment's lower net sales of certain licensed fragrance brands in the mass retail channel.
Year-to-date results:
North America

In North America, Fragrances segment net sales in the first nine months of 2019 decreased by $18.5 million, or 8.5%, to $198.4 million, as compared to $216.9 million in the first nine months of 2018. Excluding the $0.2 million unfavorable FX impact, Fragrances segmentElizabeth Arden net sales in North America in the first nine monthsthird quarter of 2019 decreased2020 increased by $18.3$1.1 million, or 8.4%3.7%, compared to the first nine monthsthird quarter of 2018. This decrease was primarily driven by2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $1 million ($1 million XFX) to the Fragrances segment's lowerElizabeth Arden segment’s variance in net sales due to weaknessin North America in the mass retail channel, as well as certain retail store closuresthird quarter of 2020, compared to the prior year quarter. The Elizabeth Arden segment's $1.1 million XFX increase in the prestige channel.

International

Internationally, Fragrances segmentNorth America net sales in the first nine monthsthird quarter of 2019 decreased2020 was driven primarily by $15.1 million, or 13.2%, to $99.6 million, compared to $114.7 million in the first nine months of 2018. Excluding the $5.4 million unfavorable FX impact, Fragrances segment International net sales decreased by $9.7 million, or 8.5%, in the first nine months of 2019, compared to the first nine months of 2018, primarily due to the FragrancesElizabeth Arden segment's lowerhigher net sales of certain licensed fragrance brands primarily in the mass retail channel,Ceramide skin care products, partially offset by new product launches in the Company's EMEA region.

Gross profit:
The table below shows the Company's gross profit and gross margin for the periods presented:lower net
75
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018
Change
Gross profit$327.8
 $350.4
 $(22.6) $969.5
 $1,015.7
 $(46.2)
Percentage of net sales54.9% 53.5% 1.4% 56.4% 55.7% 0.7%


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sales of certain other Elizabeth Arden-branded skin care and fragrances products, due, primarily, to the continuing effects of COVID-19 on foot traffic at department stores and other retail outlets.
Third
International

Internationally, Elizabeth Arden segment net sales in the third quarter results:

Gross profitof 2020 decreased by $22.6$17.9 million, or 19.1%, to $75.8 million, compared to $93.7 million in the third quarter of 2019, as2019. Excluding the $1.6 million favorable FX impact, Elizabeth Arden segment International net sales in the third quarter of 2020 decreased by $19.5 million, or 20.8%, compared to the third quarter of 2018. Unfavorable2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $23 million ($24 million XFX) to the Elizabeth Arden segment’sdecrease in the International net sales volumein the third quarter of 2020, compared to the prior year quarter. The Elizabeth Arden segment's $19.5 million XFX decrease in International net sales in the third quarter 2020 was driven primarily by lower net sales of Elizabeth Arden-branded skin care products and color cosmetics products, as well as certain Elizabeth Arden-branded fragrances, primarily within the Company's EMEA and, to a lesser extent, Asia and Pacific regions, due, primarily, to the continuing effects of COVID-19 on foot traffic at department stores and on travel retail outlets.

Year-to-date results:

North America

In North America, Elizabeth Arden segment net sales in the nine months ended September 30, 2020 decreased gross profitby $17.0 million, or 20.3%, to $66.9 million, compared to $83.9 million in the nine months ended September 30, 2019. Excluding the $0.3 million unfavorable FX impact, Elizabeth Arden segment net sales in North America in the nine months ended September 30, 2020 decreased by $16.7 million, or 19.9%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $16 million ($16 million XFX) to the Elizabeth Arden segment’s decrease in net sales in North America in the nine months ended September 30, 2020, compared to the prior year period. The Elizabeth Arden segment's $16.7 million XFX decrease in North America net sales in the nine months ended September 30, 2020 was driven primarily by the Elizabeth Arden segment's lower net sales of certain Elizabeth Arden-branded skin care products, as well as Elizabeth Arden-branded color cosmetics products and fragrances, due, primarily, to the continuing effects of COVID-19 on foot traffic at department stores and other retail outlets. This decrease was partially offset by higher net sales of Ceramide skin care products, as well as growth in e-commerce net sales.

International

Internationally, Elizabeth Arden segment net sales in the nine months ended September 30, 2020 decreased by $52.6 million, or 19.6%, to $215.5 million, compared to $268.1 million in the nine months ended September 30, 2019. Excluding the $2.5 million unfavorable FX impact, Elizabeth Arden segment International net sales in the nine months ended September 30, 2020 decreased by $50.1 million, or 18.7%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $76 million ($79 million XFX) to the Elizabeth Arden segment’s decrease in International net sales in the nine months ended September 30, 2020, compared to the prior year period. The Elizabeth Arden segment's $50.1 million XFX decrease in International net sales in the nine months ended September 30, 2020 was driven primarily by lower net sales of certain Elizabeth Arden-branded skin care products, as well as lower net sales of Elizabeth Arden-branded fragrances and color cosmetics, primarily within the Company's EMEA and, to a lesser extent, Asia, Pacific and Latin America regions, due, primarily, to the continuing effects of COVID-19 on foot traffic at department stores and on travel retail outlets. This decrease was partially offset by higher net sales of Ceramide skin care products within the Company's Asia region, as well as growth in e-commerce net sales.

Portfolio Segment

Third quarter results:

North America

In North America, Portfolio segment net sales in the third quarter of 20192020 decreased by approximately $21$11.5 million, or 16.1%, to $59.9 million, compared to the third quarter of 2018, with no impact on gross margin. Gross profit as a percentage of net sales (i.e., gross margin) in the third quarter of 2019 increased by 1.4% compared to the third quarter of 2018. The drivers of the gross margin in the third quarter of 2019, as compared to the third quarter of 2018, primarily included:

the impact of additional costs related to the service level disruptions at the Company's Oxford, N.C. manufacturing facility in the third quarter of 2018, which did not occur in the third quarter of 2019, resulting in increased gross margin by approximately 5 percentage points;
cost reductions and savings associated with the Company's cost optimization initiatives, which increased gross margin by approximately 3.2 percentage points; and
lower inventory obsolescence reserves, which increased gross margin by 1.2 percentage points;
with the foregoing offset primarily by:
•higher sales allowances and returns, which decreased gross margin by approximately 6 percentage points; and
•unfavorable FX impacts, which decreased gross margin by 2.1 percentage points.

Year-to-date results:

Gross profit decreased by $46.2 million in the first nine months of 2019, as compared to the first nine months of 2018. Unfavorable sales volume decreased gross profit in the first nine months of 2019 by approximately $26 million, compared to the first nine months of 2018, with no impact on gross margin. Gross profit as a percentage of net sales (i.e., gross margin) in the first nine months of 2019 increased by 0.7 percentage points, as compared to the first nine months of 2018. The drivers of the increase in gross margin in the first nine months of 2019, as compared to the first nine months of 2018, primarily included:

the impact of additional costs related to the service level disruptions at the Company's Oxford, N.C. manufacturing facility in the first nine months of 2018, which did not occur in the first nine months of 2019, resulting in increased gross margin of 4.3 percentage points; and
lower inventory obsolescence reserves, which increased gross margin by 0.4 percentage points;
with the foregoing partially offset primarily by:
•unfavorable FX impacts, which decreased gross margin by 3.1 percentage points; and
•the impact of tariffs, which decreased gross margin by approximately 1 percentage point.

SG&A expenses:
The table below shows the Company's SG&A expenses for the periods presented:
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
SG&A expenses$308.1
 $340.8
 $(32.7) $973.2
 $1,087.1
 $(113.9)

SG&A expenses decreased by $32.7$71.4 million in the third quarter of 2019,2019. Excluding the $0.2 million unfavorable FX impact, Portfolio segment North America net sales in the third quarter of 2020 decreased by $11.3 million, or 15.8%, compared to the third quarter of 2018, primarily driven by:
lower general and administrative expenses of approximately $24 million, driven by lower costs in the third quarter of 2019 primarily associated with the Company's cost optimization initiatives2019. The ongoing and lower incentive compensation;
favorable FX impact of approximately $5 million; and
lower distribution expenses of approximately $3prolonged COVID-19 pandemic contributed an estimated $14 million driven by the net sales decline.


($14
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million XFX) to the Portfolio segment’sdecrease in net sales in North America in the third quarter of 2020, compared to the prior year quarter. The Portfolio segment's $11.3 million XFX decrease in North America net sales in the third quarter of 2020 was driven primarily by the Portfolio segment's lower net sales of Almay color cosmetics, CND nail products, American Crew men's grooming products, driven, primarily, by the continuing effects of COVID-19 on the mass retail channel and on salons. This decrease was partially offset primarily by higher net sales of Creme of Nature products, as well as Mitchum anti-perspirant deodorants and Cutex nail products.

International

Internationally, Portfolio segment net sales in the third quarter of 2020 decreased by $7.1 million, or 15.2%, to $39.7 million, compared to $46.8 million in the third quarter of 2019. Excluding the $0.7 million favorable FX impact, Portfolio segment International net sales decreased by $7.8 million, or 16.7%, in the third quarter of 2020, compared to the third quarter of 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $5 million ($5 million XFX) to the Portfolio segment’s decrease in International net sales in the third quarter of 2020, compared to the prior year quarter. The Portfolio segment's $7.8 million XFX decrease in International net sales in the third quarter of 2020 was driven primarily by lower net sales of local and regional brands, CND nail products, American Crew men's grooming products and Almay color cosmetics, primarily in the Company's EMEA region, driven, primarily, by the continuing effects of COVID-19 on salons and the mass retail channel.
Year-to-date results:

North America

In North America, Portfolio segment net sales in the nine months ended September 30, 2020 decreased by $31.7 million, or 14.8%, to $182.8 million, as compared to $214.5 million in the nine months ended September 30, 2019. Excluding the $0.3 million unfavorable FX impact, Portfolio segment net sales in North America in the nine months ended September 30, 2020 decreased by $31.4 million, or 14.6%, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $39 million ($39 million XFX) to the Portfolio segment’s decrease in net sales in North America in the nine months ended September 30, 2020, compared to the prior year period. The Portfolio segment's $31.4 million XFX decrease in North America net sales in the nine months ended September 30, 2020 was driven primarily by the Portfolio segment's lower net sales of Almay color cosmetics, CND nail products and American Crew men's grooming products, due, primarily, to the continuing effects of COVID-19 on the mass retail channel and on salons. This decrease was partially offset primarily by higher net sales of Creme of Nature and certain other local and regional products brands, Cutex nail products and Mitchum anti-perspirant deodorants, as well as growth in e-commerce net sales.

International

Internationally, Portfolio segment net sales in the nine months ended September 30, 2020 decreased by $24.3 million, or 17.4%, to $115.3 million, compared to $139.6 million in the nine months ended September 30, 2019. Excluding the $3.5 million unfavorable FX impact, Portfolio segment International net sales decreased by $20.8 million, or 14.9%, in the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $17 million ($17 million XFX) to the Portfolio segment’s decrease in International net sales in the nine months ended September 30, 2020, compared to the prior year period. The Portfolio segment's $20.8 million XFX decrease in International net sales in the nine months ended September 30, 2020 was driven primarily by the Portfolio segment's lower net sales of certain local and regional skin care products brands, American Crew men's grooming products, CND nail products and Almay color cosmetics, primarily in the Company's EMEA region, due, primarily, to the continuing effect of COVID-19 on the mass retail channel and on salons.

Fragrances Segment

Third quarter results:

North America

In North America, Fragrances segment net sales in the third quarter of 2020 decreased by $19.4 million, or 19.7%, to $79.2 million, as compared to $98.6 million in the third quarter of 2019. Excluding the $0.1 million unfavorable FX impact, Fragrances segment net sales in North America decreased by $19.3 million, or 19.6%, in the third quarter of 2020, compared to the third quarter of 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $16 million ($16 million
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XFX) to the Fragrances segment’s decrease in net sales in North America in the third quarter of 2020, compared to the prior year quarter. The Fragrances segment's $19.3 million XFX decrease in North America net sales in the third quarter of 2020 was driven primarily by lower net sales due to the continuing impacts from COVID-19, especially in the prestige channel, resulting in decreased foot traffic.

International

Internationally, Fragrances segment net sales in the third quarter of 2020 decreased by $13.5 million, or 34.2%, to $26.0 million, compared to $39.5 million in the third quarter of 2019. Excluding the $0.3 million favorable FX impact, Fragrances segment International net sales decreased by $13.8 million, or 34.9%, in the third quarter of 2020, compared to the third quarter of 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $9 million ($9 million XFX) to the Fragrances segment’s decrease in International net sales in the third quarter of 2020, compared to the prior year quarter. The Fragrances segment's $13.8 million XFX decrease in International net sales during the third quarter of 2020 was due to lower net sales of certain licensed fragrances primarily in the Company's EMEA region and also, to a lesser extent, in the Company's Pacific, Latin America and Asia regions, due to the continuing impacts from COVID-19, resulting in decreased foot traffic.

Year-to-date results:

North America

In North America, Fragrances segment net sales in the nine months ended September 30, 2020 decreased by $47.3 million, or 23.8%, to $151.1 million, as compared to $198.4 million in the nine months ended September 30, 2019. Excluding the $0.1 million unfavorable FX impact, Fragrances segment net sales in North America decreased by $47.2 million, or 23.8%, in the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $40 million ($40 million XFX) to the Fragrances segment’s decrease in net sales in North America in the nine months ended September 30, 2020, compared to the prior year period. The Fragrances segment's $47.2 million XFX decrease in North America net sales in the nine months ended September 30, 2020 was driven primarily by the continuing impacts from COVID-19, especially in the prestige channel, resulting in decreased foot traffic and temporary door closures.

International

Internationally, Fragrances segment net sales in the nine months ended September 30, 2020 decreased by $36.3 million, or 36.4%, to $63.3 million, compared to $99.6 million in the nine months ended September 30, 2019. Excluding the $1.5 million unfavorable FX impact, Fragrances segment International net sales decreased by $34.8 million, or 34.9%, in the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. The ongoing and prolonged COVID-19 pandemic contributed an estimated $24 million ($25 million XFX) to the Fragrances segment’s decrease in International net sales in the nine months ended September 30, 2020, compared to the prior year period. The Fragrances segment's $34.8 million XFX decrease in International net sales in the nine months ended September 30, 2020 was driven primarily by lower net sales in the Company's EMEA region and also, to a lesser extent, in the Company's Asia, Latin America and Pacific regions, due to the continuing impacts from COVID-19, resulting in decreased foot traffic and temporary door closures.

Gross profit:
The table below shows the Company's gross profit and gross margin for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Gross profit$242.8 $327.8 $(85.0)$677.0 $969.5 $(292.5)
Percentage of net sales50.9 %54.9 %(4.0)%53.0 %56.4 %(3.4)%

Third quarter results:

Gross profit decreased by $85.0 million in the third quarter of 2020, as compared to the third quarter of 2019. Unfavorable sales volume, primarily driven by the effects of the ongoing and prolonged COVID-19 pandemic, decreased gross profit in the third quarter of 2020 by approximately $66 million, compared to the third quarter of 2019, with no impact on gross margin. Gross profit as a percentage of net sales (i.e., gross margin) in the third quarter of 2020 decreased by 4.0% compared to the
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third quarter of 2019. The decrease in gross margin in the third quarter of 2020, as compared to the third quarter of 2019, was impacted by the negative effect of product mix, mainly attributable to the effects of the ongoing and prolonged COVID-19 pandemic, higher manufacturing costs resulting, in part, from the ongoing and prolonged COVID-19 pandemic, as well as unfavorable impacts of tariffs, partially offset by the impact of cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of COVID-19 on the Company's operations, as well as the Revlon 2020 Restructuring Program.

Year-to-date results:

Gross profit decreased by $292.5 million in the nine months ended September 30, 2020, as compared to the third quarter of 2019. Unfavorable sales volume, primarily driven by the effects of the ongoing and prolonged COVID-19 pandemic, decreased gross profit in the nine months ended September 30, 2020 by approximately $249 million, compared to the nine months ended September 30, 2019, with no impact on gross margin. Gross profit as a percentage of net sales (i.e., gross margin) in the nine months ended September 30, 2020 decreased by 3.4 percentage points, as compared to the nine months ended September 30, 2019. The decrease in gross margin in the nine months ended September 30, 2020, as compared to the nine months ended September 30, 2019, was impacted by the negative effect of product mix, mainly attributable to the ongoing effects of the ongoing and prolonged COVID-19 pandemic, higher manufacturing costs resulting, in part, from the ongoing and prolonged COVID-19 pandemic, as well as unfavorable impacts of FX and tariffs, partially offset by the impact of cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of COVID-19 on the Company's operations, as well as the Revlon 2020 Restructuring Program.

SG&A expenses:
The table below shows the Company's SG&A expenses for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
SG&A expenses$253.4 $308.1 $(54.7)$739.1 $973.2 $(234.1)

Third quarter results:

SG&A expenses decreased by $113.9$54.7 million in the first nine monthsthird quarter of 2019,2020, compared to the first nine monthsthird quarter of 2018,2019, driven primarily driven by:
•a net decrease of approximately $48$36 million in brand support expenses, driven by plannedresulting from the Company's ongoing cost reduction initiatives in response to the ongoing and prolonged COVID-19 pandemic and decreased media spend to align with the lower activity in the first nine months of 2019,net sales, primarily in North America and in the EMEA regions, primarily within the PortfolioRevlon segment and, to a lesser extent, within the RevlonPortfolio, Elizabeth Arden and Fragrances segments;
•lower distribution expenses of approximately $8 million, driven primarily by the net sales decline;
•lower general and administrative expenses of approximately $41$7 million, primarily associateddriven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on the Company's operations, as well as the Revlon 2020 Restructuring Program; and
•unfavorable FX impact of approximately $2 million.

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Year-to-date results:

SG&A expenses decreased by $234.1 million in the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, driven primarily by:
•a net decrease of approximately $111 million in brand support expenses, resulting from the Company's ongoing cost reduction initiatives in response to the ongoing and prolonged COVID-19 pandemic and decreased media spend to align with the Company's cost optimization initiativeslower net sales primarily in North America and lower incentive compensation in the first nine monthsEMEA regions, primarily within the Revlon segment and, to a lesser extent, within the Elizabeth Arden, Portfolio and Fragrances segments, partially offset by an increase in brand support to support sales growth in Asia;
•lower general and administrative expenses of 2019approximately $82 million, primarily driven by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of the ongoing and higher costs inprolonged COVID-19 pandemic on the first nine monthsCompany's operations, as well as the Revlon 2020 Restructuring Program;
•lower distribution expenses of 2018 associated withapproximately $24 million, driven primarily by the departure of certain executives;net sales decline; and
•favorable FX impact of approximately $23$6 million.


Acquisition, integration and Integration Costs:divestiture costs:
The table below shows the Company's acquisition, integration and integrationdivestiture costs for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
     Integration Costs$— $0.1 $(0.1)$— $0.7 $(0.7)
     Divestiture Costs0.9 — 0.9 4.2 — 4.2 
Total acquisition, integration and divestiture costs$0.9 $0.1 $0.8 $4.2 $0.7 $3.5 
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
     Acquisition Costs$—
 $—
 $—
 $—
 $0.1
 $(0.1)
     Integration Costs0.1
 3.4
 (3.3) 0.7
 11.9
 (11.2)
Total acquisition and integration costs$0.1
 $3.4
 $(3.3) $0.7
 $12.0
 $(11.3)


Third quarter results:
The Company incurred $0.1 million and $3.4$0.9 million of acquisition and integrationdivestiture costs in the third quarter of 2020 relating to the amortization of the cash-based awards under Tier 1 and Tier 2 of the Revlon 2019 TIP (see Note 11, "Stock Compensation Plan," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q for additional details on the 2019 TIP).

Year-to-date results:

The Company incurred $4.2 million of divestiture costs in the nine months ended September 30, 2020 including $0.7 million in professional fees incurred in connection with the exploration of strategic transactions involving the Company and 2018, respectively,third parties pursuant to the Strategic Review and approximately $3.5 million relating to the amortization of the cash-based awards under Tier 1 and Tier 2 of the Revlon 2019 TIP (See Note 11, "Stock Compensation Plan," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q for additional details on the 2019 TIP).

The Company incurred $0.7 million of integration costs in the nine months ended September 30, 2019, related primarily related to the Company's integration of Elizabeth Arden's operations into the Company's business, including professional fees and employee-related costs.
The Company incurred $0.7 million and $12 million of acquisition and integration costs in the first nine months of 2019 and 2018, respectively, primarily related to the Company's integration of Elizabeth Arden's operations into the Company's business, including professional fees and employee-related costs.


Restructuring charges and other, net:
The table below shows the Company's restructuring charges and other, net for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Restructuring charges and other, net$(0.7)$2.9 $(3.6)$44.8 $11.6 $33.2 
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
Restructuring charges and other, net$2.9
 $3.9
 $(1.0) $11.6
 $13.9
 $(2.3)


Restructuring charges and other, net, decreased $1 million and $2.3$3.6 million during the three and ninemonths ended September 30, 2020, compared to the three months ended September 30, 2019, respectively,primarily due to the subsequent true-up in the third quarter of 2020 of
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restructuring charges previously accrued in 2020 under the Revlon 2020 Restructuring Program, compared to the prior periodsexpenditures incurred primarily under the 2018 Optimization Program in the third quarter of 2018, 2019.

Restructuring charges and other, net, increased $33.2 million during the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, primarily due to adjustments to previously accruedhigher charges in connection with the Company's restructuring programs. A discussionRevlon 2020 Restructuring Program, compared to the expenditures incurred primarily under the 2018 Optimization Program in the third quarter of 2019.

Further information on the Company's restructuring charges in relation to its restructuring initiatives follows.

Revlon 2020 Restructuring Program
Building upon its previously-announced 2018 Optimization Program, in March 2020 the Company announced that it is implementing a worldwide organizational restructuring (the “Revlon 2020 Restructuring Program”) designed to reduce the Company’s SG&A expenses, as well as cost of goods sold, improve the Company’s gross profit and Adjusted EBITDA and maximize productivity, cash flow and liquidity. The Revlon 2020 Restructuring Program includes rightsizing the organization and operating with more efficient workflows and processes. The leaner organizational structure is also expected to improve communication flow and cross-functional collaboration, leveraging the more efficient business processes.

As a result of the Revlon 2020 Restructuring Program, the Company expects to eliminate approximately 1,000 positions worldwide, including approximately 650 current employees and approximately 350 open positions of which approximately 785 were eliminated by September 30, 2020.

In March 2020, the Company began informing certain employees that were affected by the Revlon 2020 Restructuring Program. While certain aspects of the Revlon 2020 Restructuring Program may be subject to consultations with employees, works councils, unions and/or governmental authorities, the Company currently expects to substantially complete the employee-related actions by the end of 2020 and the other consolidation and outsourcing actions during 2021 and 2022.

In connection with implementing the Revlon 2020 Restructuring Program, the Company expects to recognize during 2020 approximately $60 million to $70 million of total pre-tax restructuring and related charges (the “2020 Restructuring Charges”), consisting primarily of employee-related costs, such as severance, retention and other contractual termination benefits. In addition, the Company expects restructuring charges in the range of $75 million to $85 million to be charged and paid during 2021 and 2022. The Company expects that substantially all of these restructuring charges will be paid in cash, with approximately $55 million to $65 million of the total charges expected to be paid in 2020, approximately $40 million to $45 million expected to be paid in 2021, with the balance expected to be paid in 2022. During the third quarter of 2020, the Company recorded $4.1 million of net restructuring and related charges under the 2020 Restructuring Program consisting of: (i) $5.1 million of lease and other restructuring-related charges that were recorded within SG&A; and (ii) $1.0 million true up of previously accrued severance and other personnel costs. Since commencing the Revlon 2020 Restructuring Program and through September 30, 2020, the Company recorded $61.2 million of restructuring and related charges under the 2020 Restructuring Program consisting of: (i) $45.6 million of severance and other personnel costs; and (ii) $15.6 million of lease and other restructuring-related charges that were recorded within SG&A. Of these charges, approximately $21.5 million were paid through September 30, 2020.

As a result of the Revlon 2020 Restructuring Program, the Company expects to deliver in the range of $200 million to $230 million of annualized cost reductions by the end of 2022, with approximately 50% of these annualized cost reductions to be realized from the headcount reductions occurring in 2020. During 2020, the Company expects to realize approximately $105 million to $115 million of in-year cost reductions, of which approximately $22 million and $87 million had been achieved during the three and nine months September 30, 2020, respectively.

2018 Optimization Program
During 2018, the Company announced a newits 2018 Optimization Program designed to streamline the Company’s operations, reporting structures and business processes, with the objective of maximizing productivity and improving profitability, cash flows and liquidity. During the third quarter of 2019,2020, the Company recorded $5.9restructuring charges related to severance and personnel benefits of $0.1 million of restructuring and related chargesunder the 2018 Optimization Program. During the nine months endedSeptember 30, 2020, the Company recorded, under the 2018 Optimization Program, consisting of: (i) $3.7$0.6 million due to the reversal of previously accrued severance, personnel benefits and other restructuring costs; and (ii) $2.2 million of other restructuring-related charges that were recorded within SG&A and cost of sales. During the first nine months of 2019, the Company recorded $28.1 million of restructuring and related charges under the 2018 Optimization Program consisting of: (i) $12.5 million of severance, personnel benefits and other restructuring costs; and (ii) $15.6costs, offset by $0.7 million of other restructuring-related charges that were recorded within SG&A and cost of sales. The Company expects to recognizerecognized approximately $30 million to $40$39.6 million of cumulative total pre-tax restructuring and related charges under the 2018 Optimization Program, consisting of employee-related costs, such as severance, pension and other termination costs, as well as other related charges and approximately $10 million of additional capital expenditures. The Company expects that approximately 85% of these restructuring and related charges will

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and related charges under the 2018 Optimization Program since its inception in November 2018, consisting of employee-related costs, such as severance, pension and other termination costs, as well as other related charges within SG&A and cost of sales and approximately $6.5 million of additional capital expenditures. As of September 30, 2020, restructuring and related charges to be paid in cash are approximately $32 million of the total charges, of which approximately $15.8$30.3 million were already paid through September 30, 2019. Substantially all of the remaining2020, with any residual balance is expected to be paid by the end of 2019, with any residual amount to be paid in 2020. The Company currently projects that the 2018 Optimization Program will result in between $90 million and $95 million of in-year cost reductions during 2019, of which approximately $65 million had been realized as of September 30, 2019, and annualized cost reductions in the range of approximately $125 million to $150 million by the end of 2019.  Approximately half of the annualized cost reductions are expected to be realized within cost of sales and the remainder in selling, general and administrative expenses.of 2020.

EA Integration Restructuring Program
The EA Integration Restructuring Program was substantially completed by December 31, 2018 and the Company expects to incur limited further charges under this program, primarily related to its exit from certain leased spaces. During the three and nine months ended September 30, 2019, the Company recorded $0.4$2.9 million and $11.6 million, respectively, of restructuring charges primarily related to restructuring and related actions under the EA Integration Restructuring2018 Optimization Program. As of September 30, 2019, the Company had recognized a total of $82.6 million of pre-tax restructuring and related charges consisting of: (i) $72.6 million of employee-related costs, including severance, retention and other contractual termination benefits; (ii) $5.1 million of lease termination costs; and (iii) $4.9 million of other related charges. The Company expects that cash payments will total $80 million to $85 million in connection with the EA Integration Restructuring Charges, of which $72 million were paid through September 30, 2019, with substantially all of the remaining balance expected to be paid by the end of 2020.

For further information on EA Integrationthe Revlon 2020 Restructuring Program, the 2018 Optimization Program and on the Company's other restructuring initiatives, see Note 2, "Restructuring Charges," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q.

Impairment Charges:
The table below shows the Company's impairment charges for the periods presented:

Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Impairment charges$— $— $— $144.1 $— $144.1 

During the threefirst and nine months ended 2018,second quarters of 2020, as a result of COVID-19’s impact on the Company’s operations, the Company determined that indicators of potential impairment existed requiring the Company to perform interim impairment analyses. These indicators included a deterioration in the general economic conditions, developments in equity and credit markets, deterioration in some of the economic channels in which the Company's operates (especially in the mass retail channel), the recent trading values of the Company's capital stock and the corresponding decline in the Company’s market capitalization and the revision of the Company's expected future cash flows as a result of COVID-19. Based on the first and second quarters of 2020 interim impairment analyses, the Company recorded $3.9$124.3 million and $13.9$19.8 million respectively, of total non-cash impairment charges primarily relatedfor the first and second quarter of 2020, respectively.

As of September 30, 2020, due to the EA Integration Restructuring Program.continued worldwide effects of the ongoing and prolonged COVID-19 pandemic, the Company re-assessed whether further indicators of impairment arose during the third quarter of 2020 that might result in additional goodwill impairment charges. Based upon such assessment, the Company determined that it was more likely than not that the fair value of each of its reporting units exceeded their respective carrying amounts as of September 30, 2020. Consequently, no impairment changes were recognized during the three months ended September 30, 2020.


For further information on these non-cash impairment charges, see Note 5, “Goodwill and Intangible Assets, Net,” to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q.

Interest expense:
The table below shows the Company's interest expense for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Interest expense$68.7 $50.2 $18.5 $178.0 $145.7 $32.3 
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
Interest expense$50.2
 $46.4
 $3.8
 $145.7
 $129.1
 $16.6

The $3.8$18.5 million increase in interest expense in thethe third quarter of 2019,2020, as compared to the third quarter of 2018,2019, was primarily due to higher weighted average interest rates and higher debt balancesweighted average borrowings driven primarily fromby the 20192020 BrandCo Term Loan Facility entered into in August 2019.Facility.

The $16.6$32.3 million increase in interest expense in during the nine months endedSeptember 30, 2019,2020, as compared to the nine months endedSeptember 30, 2018,2019, was primarily due to higher weighted average interest ratesborrowings and higher debt balances resulting from the 2019 Term Loan Facility entered into in August 2019, the 2018 Foreign Asset-Based Term Facility entered into during the third quarter of 2018, as well as higher borrowings under the Amended 2016 Revolving Credit Facility.
Please refer to "Financial Condition, Liquidity and Capital Resources - Long-Term Debt Instruments" in Item 2 of this Form 10-Q for further information.

Foreign currency losses (gains), net:
The table below shows the Company's foreign currency losses, net for the periods presented:weighted average
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 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
Foreign currency losses, net$7.6
 $1.1
 $6.5
 $9.0
 $10.7
 $(1.7)
The $7.6 million in foreign currency losses, net, during the third quarter of 2019, compared to $1.1 million in foreign currency losses, net, during the third quarter of 2018, was primarily driven by the net unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables and foreign currency denominated receivables.


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interest rates driven primarily by the 2020 BrandCo Term Loan Facility and the 2019 Term Loan Facility (the latter of which was fully repaid in May 2020 using proceeds from the 2020 BrandCo Term Loan Facility).

Gain on early extinguishment of debt:

Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
   Gain on early extinguishment of debt(31.2)$— $(31.2)$(43.1)$— $(43.1)

Gain on early extinguishment of debt for the three and nine months ended September 30, 2020 includes debt extinguishment gains of $31.2 million recorded during the third quarter of 2020 and $11.9 million recorded during the second quarter of 2020 upon the repurchase and subsequent cancellation of approximately $157.2 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes occurring in the third and second quarters of 2020.

For information on the terms and conditions of these debt instruments, see "Recent Developments," as well as Note 7, “Debt,” and Note 19, “Subsequent Events,” to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q and Note 9, "Debt," in the Audited Consolidated Financial Statements in the Company's 2019 Form 10-K. Also, please refer to "Financial Condition, Liquidity and Capital Resources - Long-Term Debt Instruments" in Item 2 of this Form 10-Q for further information.

Foreign currency losses, net:
The $9table below shows the Company's foreign currency losses, net for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Foreign currency (gains) losses, net$(9.8)$7.6 $(17.4)$9.1 $9.0 $0.1 

The $17.4 million increase in foreign currency gains, net, during the third quarter of 2020, compared to the third quarter of 2019, was primarily driven by the net favorable impact of foreign currency fluctuations on certain U.S. Dollar denominated intercompany payables and foreign currency denominated receivables compared to the prior year's quarter.

The $0.1 million increase in foreign currency losses, net, during the nine months ended September 30, 2019,2020, compared to $10.7 million in foreign currency losses, net, during the nine months ended September 30, 2018,2019, was primarily driven by the net favorableunfavorable impact of the revaluation offoreign currency fluctuations on certain U.S. Dollar denominated intercompany payables and foreign currency denominated receivables.receivables compared to the prior year's period.


Provision for (benefit from) income taxes:
The table below shows the Company's benefit fromprovision for (benefit from) income taxes for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20202019Change20202019Change
Provision for (benefit from) income taxes$1.9 $(2.1)$4.0 $(45.2)$(3.2)$(42.0)
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2019 2018 Change 2019 2018 Change
Benefit from income taxes$(2.1) $(38.7) $36.6
 $(3.2) $(43.1) $39.9

For the three and nine months ended September 30, 2019, theThe Company used the cut-off method to calculate the interim effective tax raterecorded a provision for all jurisdictions, because the annual rate method would not be reliable due to its sensitivity to minimal changes in forecasted annual pre-tax earnings. For the three and nine months ended September 30, 2018, the tax rate at the endincome taxes of the period was calculated using an estimate of the annual effective tax rate expected to be applicable$1.9 million for the full fiscal year.third quarter of 2020, compared to a benefit from income taxes of $2.1 million for the third quarter of 2019. The $4.0 million decrease in the benefit from income taxes for the third quarter of 2020, compared to the same quarter in 2019, was primarily due to: (i) the mix and level of earnings; (ii) an increase in the U.S. tax on the Company's foreign earnings; and (iii) increased tax expense from return to provision adjustments, partially offset primarily by an increase in tax benefit from the net change in valuation allowances related to the recognition of previously unrecognized tax losses in Canada.

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The Company recorded a benefit from income taxes of $2.1$45.2 million for the threenine months ended September 30, 2019 and a benefit from incomes taxes of $38.7 million for the three months ended September 30, 2018, respectively. The $36.6 million decrease in the Company's benefit from income taxes, of which $34.3 million was non-cash, was primarily due to: (i) the decreased loss from continuing operations before income taxes; (ii) the mix and level of earnings; (iii) the impact of the 2017 Tax Act mainly due2020, compared to an adjustment in the third quarter of 2018 related to a new U.S. Treasury regulation issued in September 2018.
The Company recorded a benefit from income taxes of $3.2 million for the nine months ended September 30, 2019 and a2019. The $42.0 million increase in the benefit from income taxes of $43.1 million for the nine months ended September 30, 2018. The $39.9 million decrease2020, compared to same period in the benefit from income taxes, of which $34.3 million was non-cash,2019, was primarily due to: (i) the decreasedincreased loss from continuing operations before income taxes;taxes on which the tax benefit is recognized; (ii) the mix and level of earnings; and (iii) a reduction in the U.S. tax on the Company's foreign earnings, net of the impact of non-deductible impairment charges, partially offset by the net change in valuation allowances recorded related to the limitation on the deductibility of interest.

The Company's effective tax rate for the three months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due the mix and level of earnings and the change in valuation allowance related to the limitation on the deductibility of interest. The Company's effective tax rate for the nine months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due to the impact of non-deductible impairment charges and the valuation allowance related to the limitation on the deductibility of interest, partially offset by the impact of the 2017 Tax Act mainly due to an adjustment"Coronavirus Aid, Relief and Economic Security Act" (the "CARES Act"), signed into law on March 27, 2020 by President Trump, which resulted in the third quartera partial release of 2018 related to a new U.S. Treasury regulation issued in September 2018. For a further discussion, see Note 13, "Income Taxes," to the Unaudited Consolidated Financial Statements in this Form 10-Q, as well as Note 15, "Income Taxes," to the Consolidated Financial Statements in the Company's 2018 Form 10-K and Item 1A. “Risk Factors-Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impactvaluation allowance on the Company's financial condition,2019 federal tax attributes associated with the limitation on the deductibility of interest.

The CARES Act, among other things, includes provisions providing for refundable payroll tax credits, the deferral of employer social security tax payments, acceleration of alternative minimum tax credit refunds and the increase of the net interest deduction limitation from 30% to 50%. The Company continues to examine the impact that the CARES Act may have on its results of operations, financial condition and/or cash flows” in the Company's 2018 Form 10-K.financial statement disclosures.

The Company's effective tax rate for the three months and nine months ended September 30, 2019 was lower than the federal statutory rate of 21%, primarily due to the valuation allowance related to the limitation on the deductibility of interest and the U.S. tax on the Company's foreign earnings.

The Company expects 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.
The
As of September 30, 2020, the Company concluded that, based on its evaluation of objectiveobjectively verifiable evidence, it does not require a valuation allowance on its federal deferred tax assets, other than those associated with the limitation on the deductibility of interest. The Company does have a valuation allowance on deferred tax assets associated with its activity in certain U.S. states and foreign jurisdictions. These conclusions regarding the establishment of valuation allowances on the Company's deferred tax assets as of the nine months ended September 30, 2019end of the third quarter of 2020 are consistent with the Company's conclusions on such matters as compared to prior quarters.The key assumptions used to determine positive and negative evidence included the Company’s cumulative taxable loss for the past three years, future reversals of existing taxable temporary differences, the Company's cost reduction initiatives and other efficiency efforts, as well as certain assumptions regarding COVID-19's expected impact on the Company.Potential negative evidence, including, among other things, any further worsening of the year ended December 31, 2018. However, ifeconomies in the jurisdictions in which the Company does not generate sufficient taxable incomeoperates and any future reduced profitability in such jurisdictions could result in additional valuation allowances which would reduce the Company's future periods, its deferred tax assets may not be realizable on a more-likely-than-not basis, whichassets. In such event, the Company's tax expense would resultlikely materially increase in the period the valuation allowance is recognized and adversely impact the Company's results of operations and statement of financial condition in such period. The Company havingwill continue to monitor the circumstances that would require it to establish an additional valuation allowance againston its deferred tax assets. The Company will continue to assess allAccordingly, depending on future evidence that may become available, evidence, both negative and positive, to determine whether such additionalthe Company's assessments regarding its valuation allowance is warranted.position may change.

For a further discussion,information, see Note 13,12, "Income Taxes," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q, as well as Note 15,14, "Income Taxes," to the Consolidated Financial Statements in the Company's 20182019 Form 10-K and Item 1A. “Risk Factors-Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impact on the Company's financial condition, results of operations and/or cash flows” in the Company's 20182019 Form 10-K.



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(all tabular amounts in millions, except share and per share amounts)





Results of Operations — Products Corporation


The condensed consolidated statementsProducts Corporation's Unaudited Consolidated Statements of income of Products CorporationOperations and Comprehensive Loss are essentially identical to the condensed consolidated statementsRevlon, Inc.'s Unaudited Consolidated Statements of income of Revlon, Inc.Operations and Comprehensive Loss, except for the following:


Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net loss - Revlon, Inc.$(44.5)$(44.7)$(385.2)$(183.5)
Selling, general and administrative expenses - public company costs2.0 1.8 5.9 5.1 
Provision for income taxes(0.4)(0.3)(1.0)(0.8)
Net loss - Products Corporation$(42.9)$(43.2)$(380.3)$(179.2)
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net loss - Revlon, Inc.$(44.7) $(11.1) $(183.5) $(223.9)
Selling, general and administrative expenses - public company's costs1.8
 1.7
 5.1
 5.0
Provision for income taxes(0.3) (0.5) (0.8) (1.1)
Net loss - Products Corporation$(43.2) $(9.9) $(179.2) $(220.0)


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




65
Table of Contents
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, 2019,2020, the Company had a liquidity position of $166.8$340.4 million, consisting of: (i) $60.7$268.3 million of unrestricted cash and cash equivalents;equivalents (with approximately $93.7 million held outside the U.S.); (ii) $81.2$52.6 million in available borrowing capacity under Products Corporation's Amended 2016 Revolving Credit Facility (which had $348.4$291.9 million drawn at such date); (iii) $30 million in available borrowing capacity under the 2019 Senior2020 Restated Line of Credit Facility, which had no borrowings at such date; and less (iv) $5.1approximately $10.5 million of outstanding checks. Under the Amended 2016 Revolving Credit Facility, as Products Corporation’s consolidated fixed charge coverage ratio ("FCCR") was greater than 1.0 to 1.0 as of September 30, 2019,2020, all of the $81.2approximately $52.6 million of availability under the Amended 2016 Revolving Credit Facility was available as of such date.

See “Part 1, Item 2. Combined Management’s Discussion“Recent Developments,” as well as Note 7, "Debt," and Analysis ofNote 19, “Subsequent Events,” to the Company's Unaudited Consolidated Financial ConditionStatements in this Form 10-Q and Results of Operations--Recent Debt Transactions”Note 9, "Debt," to the Company's Audited Consolidated Financial Statements in the Company’s 2019 Form 10-K for a discussiondetailed information on the terms and conditions of the Company’s credit facilitiesvarious debt instruments.

5.75% Senior Notes Exchange Offer

See “Recent Developments” for important information regarding the Company’s debt-related transactions occurring after September 30, 2020. On September 29, 2020, Products Corporation commenced the Exchange Offer to exchange any and amendments entered into during 2019.all of the then-outstanding 5.75% Senior Notes. As described in "Recent Developments," the Exchange Offer was amended on October 23, 2020 and on November 13, 2020, the Company announced that the Exchange Offer was successfully consummated and that Products Corporation had accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, no 5.75% Senior Notes remained outstanding as of the closing on November 13, 2020.


2019Amendments to the 2020 BrandCo Term Loan Facility
Principal
Prior to consummating the Exchange Offer, on September 28, 2020, Products Corporation and Maturity: certain lenders under the 2020 BrandCo Term Loan Facility, representing more than a majority in aggregate principal amount of loans thereunder (the “Supporting BrandCo Lenders”), entered into a Transaction Support Agreement (the “BrandCo TSA”) under which the Supporting BrandCo Lenders agreed to take certain actions to facilitate the Exchange Offer and Consent Solicitation, including, among other things:
•Relinquishing certain rights of such Supporting BrandCo Lenders to “roll-up” loans held by such Supporting BrandCo Lenders under the 2016 Term Loan Facility into New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility (the “Roll-up Rights”);
•Tendering any Existing 5.75% Senior Notes held by such Supporting BrandCo Lenders into the Exchange Offer and Consent Solicitation;
•Consenting to amendments to the 2020 BrandCo Term Loan Facility to permit the exchange of Existing 5.75% Senior Notes for the New BrandCo Second-Lien Term Loans under the 2020 BrandCo Term Loan Facility as contemplated by the Offering Memorandum and the payment of the BrandCo Support and Consent Consideration;
•Consenting to other amendments to the 2020 BrandCo Term Loan Facility and the Amended 2016 Revolving Credit Facility to permit the Exchange Offer and Consent Solicitation to be completed as contemplated by the Offering Memorandum; and
•Supporting and cooperating with Products Corporation to consummate the transactions contemplated by the BrandCo TSA and the Offering Memorandum, including the Exchange Offer and Consent Solicitation.
In connection with such amendments, Products Corporation agreed to provide the following consideration (collectively, the “BrandCo Support and Consent Consideration”) upon the successful consummation of the Exchange Offer:

•$12.5 million aggregate principal amount of New BrandCo Second-Lien Term Loans as a fee to the Supporting BrandCo Lenders under the BrandCo TSA in connection with such Supporting BrandCo Lenders’ relinquishment of their Roll-up Rights;
•$10.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans to one of the Supporting BrandCo Lenders in exchange for $18.7 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 held by such Supporting BrandCo Lender; and
•to all lenders under the 2020 BrandCo Term Loan Facility (including the Supporting BrandCo Lenders), an amendment fee that was payable pro rata based on principal amount of loans consenting, consisting of, at Products Corporation's option, either (x) an aggregate of $2.5 million of cash or (y) $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans. Pursuant to the BrandCo Amendment, Products Corporation elected to pay this fee in-kind in the form of $5.0 million aggregate principal amount of New BrandCo Second-Lien Term Loans.

On August 6, 2019,November 13, 2020, Products Corporation entered into that certain Amendment No. 1 (the “BrandCo Amendment”) to the 2020 BrandCo Credit Agreement in connection with the Exchange Offer in order to, among other things, provide for the incurrence of $75 million in aggregate principal amount of New BrandCo Second-Lien Term Loans. The New BrandCo Second Lien Term Loans are a separate tranche of “Term B-2 Loans” (ranking junior to the Term B-1 Loans and senior to the Term B-3 Loans with respect to liens on certain specified collateral) under the BrandCo Credit Agreement. Except as to the use of proceeds, the terms of the New BrandCo Second-Lien Term Loans are substantially consistent with the other Term B-2 Loans. In connection with the BrandCo Amendment, Products Corporation paid certain fees to the lenders in-kind in the form of New BrandCo Second-Lien Term Loans in accordance with the BrandCo TSA.


MacAndrews & Forbes 2020 Restated Line of Credit Facility
In light of the upcoming maturity on July 9, 2021 of the 2018 Foreign Asset-Based Term Facility and the upcoming expiration on December 31, 2020 of the Amended 2019 Senior Line of Credit Facility, the Company sought to refinance or extend both the 2018 Foreign Asset-Based Term Facility and the Amended 2019 Senior Line of Credit Facility. Products Corporation sought to do so in order to reinforce its liquidity position to be better able to address the current business and economic environment and prepare for any further potential disruptions to its business and operations as may be brought on by the ongoing COVID-19 pandemic or other events.
As a result, and anticipating a future refinancing of the 2018 Foreign Asset-Based Term Facility (a “Future Refinanced European ABL Facility”), on September 28, 2020, Products Corporation and M&F entered into the Second Amended and Restated 2019 Senior Unsecured Line of Credit Facility (the “2020 Restated Line of Credit Facility”), which amended and restated the Amended 2019 Senior Line of Credit Facility and will provide Products Corporation with up to a $30 million tranche of a new facility of the 2018 Foreign Asset-Based Term Facility (the “New European ABL FILO Facility”) that would be secured on a “last-out” basis by the same collateral as the 2018 Foreign Asset-Based Term Facility or, if no Future Refinanced European ABL Facility is obtained, a stand-alone $30 million credit facility secured by the same collateral as the 2018 Foreign Asset-Based Term Facility when that facility is terminated, in each case, subject to a borrowing base. Upon the earlier of (x) the incurrence of a New European ABL FILO Facility and (y) December 31, 2020, the 2020 Restated Line of
Credit Facility will terminate, such that M&F’s maximum committed amount under the 2020 Restated Line of Credit Facility will never exceed $30.0 million. As of September 30, 2020, there were no borrowings outstanding under the 2020 Restated Line of Credit Facility.
The New European ABL FILO Facility would mature on (x) the maturity date of any such Future Refinanced European ABL Facility or (y) if there is no Future Refinanced European ABL Facility, July 9, 2022. To the extent the Future Refinanced European ABL Facility exceeds $35.0 million in principal amount, the amount available under the New European ABL FILO Facility would decrease on a dollar-for-dollar basis, such that, if Products Corporation were able to obtain a Future Refinanced ABL Facility of $65.0 million from third parties, there would be no amounts available under the New European ABL FILO Facility. The interest rate for the New European ABL FILO Facility will be LIBOR + 10.00%. The covenants for the New European ABL FILO Facility would be substantially the same as those applicable to the 2018 European ABL Facility.

Consummation of 2020 BrandCo Refinancing Transactions

On May 7, 2020 (the “BrandCo 2020 Facilities Closing Date”), Products Corporation entered into a term credit agreement (the “2020 BrandCo Credit Agreement”) with Jefferies Finance LLC, as administrative agent and collateral agent, and certain financial institutions (the “2020 Facilities Lenders”) that are lenders or the affiliates of lenders under Products Corporation’s Term Loan Facility, which isCredit Agreement, dated as of September 7, 2016 and amended on April 30, 2020 and as amended on the BrandCo 2020 Facilities Closing Date, as further described below (as amended to date, the “2016 Term Loan Facility”). Pursuant to the 2020 BrandCo Credit Agreement, the 2020 Facilities Lenders provided Products Corporation with new and roll-up senior secured term loan facilities (the “2020 BrandCo Facilities” and, collectively, the "2020 BrandCo Term Loan Facility" and, together with the use of proceeds thereof and the Extension Amendment, the “2020 BrandCo Refinancing Transactions”).

Principal and Maturity: The 2020 BrandCo Facilities consist of: (i) a senior secured term loan facility among certain affiliated funds, investment vehicles or accounts managed or advised by Ares Management LLC, as lender, in an initialaggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $815 million, plus the amount of certain fees and accrued interest that have been capitalized (the “2020 BrandCo Facility”); (ii) commitments in respect of a senior secured term loan facility in an aggregate principal amount of $950 million (the “Roll-up BrandCo Facility”); and (iii) a senior secured term loan facility in an aggregate principal amount outstanding on the BrandCo 2020 Facilities Closing Date of $3 million (the “Junior Roll-up BrandCo Facility”). Additionally, on May 28, 2020, Products Corporation borrowed from the 2020 Facilities Lenders an additional $65 million of term loans under the 2020 BrandCo Facility to repay in full the 2020 Incremental Facility under the 2016 Term Loan Facility, as a result of which the 2020 BrandCo Facility at June 30, 2020 had an aggregate principal amount outstanding of $910.6 million (including paid-in-kind closing fees of $29.1 million and paid-in-kind interest of $1.5 million that were capitalized). Additionally, during the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 had an aggregate principal amount outstanding of $846.0 million. The Company determined that the roll-up of such 2016 Term Loan Facility lenders into the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility represented a debt modification under U.S. GAAP, as the cash flow effect between the amount that Products Corporation owed to the participating lenders under the old debt instrument (i.e., the 2016 Term Loan Facility) and the amount that Products Corporation owed to such lenders after the consummation of the roll-up into the new debt instrument (i.e., the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were not considered to be substantially different within the meaning of ASC 470, Debt, under U.S. GAAP.


The proceeds of the 2020 BrandCo Facility were used: (i) to repay in full approximately $200 million and Wilmington Trust, as administrative and collateral agent. Net proceeds from theof indebtedness outstanding under Products Corporation’s 2019 Term Loan Facility, whichFacility; (ii) to repay in full and terminate commitments under the 2020 Incremental Facility; and (iii) to pay fees and expenses in connection with the 2020 BrandCo Facilities and the 2020 BrandCo Refinancing Transactions. The Company will be useduse the remaining net proceeds for general corporate purposes, were approximately $188 million, after taking into account approximately $12 millionincluding repurchasing, repaying or refinancing Products Corporation’s outstanding 5.75% Senior Notes. The proceeds of related fees and expenses. The 2019 Term Loanthe Roll-up BrandCo Facility will mature onare available prior to the earliest of: (x) the fourththird anniversary of the BrandCo 2020 Facilities Closing Date; (y) the 180th day priorDate to the maturitypurchase at par an equivalent amount of Products Corporation’s existing 2016 Term Loan Facility, if any remaining term loans under the 2016 Term Loan Facility remainheld by the lenders participating in the 2020 BrandCo Facility or their transferees. During the three months ended June 30, 2020 and the three months ended September 30, 2020, certain lenders under the 2016 Term Loan Facility due June 2023, representing $846.0 million in aggregate principal outstanding, rolled-up to the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility due June 2025, as a result of which the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility at September 30, 2020 have not been replaced or refinanced by such date;an
aggregate principal amount outstanding of $846.0 million, with a remaining capacity for the roll-up of loans under the 2016 Term Loan Facility of $107.0 million. See “Amendments to the 2020 BrandCo Term Loan Facility” regarding the Supporting BrandCo Lenders relinquishing certain Roll-up Rights and (z)Products Corporation’s issuance of the BrandCo Support and Consent Consideration.

The 2020 BrandCo Facilities will mature on June 30, 2025, subject to a springing maturity 91 days prior to the August 1, 2024 maturity date of any springing maturityProducts Corporation’s 6.25% Senior Notes if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remain outstanding.

The Company incurred approximately $119.3 million of new debt issuance costs in connection with closing the 2020 BrandCo Facility, which include paid-in kind amounts that are recorded as an adjustment to the carrying amount of the related liability and amortized to interest expense in accordance with the effective interest method over the term of the 2020 BrandCo Facilities.

Borrower, Guarantees and Security: Products Corporation is the borrower under the 2020 BrandCo Facilities and the 2020 BrandCo Facilities are guaranteed by certain of Products Corporation's indirect subsidiaries (the “BrandCos”) that hold certain intellectual property assets related to the Elizabeth Arden and American Crew brands, certain other Portfolio segment brands and certain owned Fragrance segment brands (the “Specified Brand Assets”). While the BrandCos do not guarantee the 2016 Term Loan Facility, all guarantors of the 2016 Term Loan Facility (i.e.,guarantee the 91st day prior to the maturity2020 BrandCo Facilities. All of the 5.75% Senior Notes due February 15, 2021 if any 5.75% Senior Notes remain outstandingassets of the BrandCos (including all capital stock issued by such date).

Guarantees and Security: Products Corporation and its restricted subsidiaries under the 2019 Term LoanBrandCos) have been pledged to secure the 2020 BrandCo Facility (collectively, the “Restricted Group”) are subject to the covenants under the 2019 Term Loan Agreement. The 2019 Term Loan Facility is guaranteed by each existing and future direct or indirect wholly-owned domestic restricted subsidiary of Products Corporation (subject to various exceptions), as well as by Revlon, on a limited recoursefirst-priority basis, the Roll-up BrandCo Facility on a second-priority basis and Elizabeth Arden (U.K.) Ltd., Revlon Canada Inc.the Junior Roll-up BrandCo Facility on a third-priority basis and Elizabeth Arden (Canada) Limited. The obligations of Revlon, Products Corporation andwhile such assets do not secure the subsidiary guarantors under the 2019 Term Loan Facility are secured by pledges of the equity of Products Corporation and the equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to customary exceptions, including equity of first-tier foreign subsidiaries in excess of 66% of the voting equity interests of such entity) and by substantially all tangible and intangible personal and real property of Products Corporation and the subsidiary guarantors (subject to customary exclusions). The 2019 Term Loan Facility and the existing 2016 Term Loan Facility, share the same guarantors and collateral, except that the 2019 Term Loan Facility is also2020 BrandCo Facilities are secured byon a first-priority lien on certain intellectual property of the American Crew business (the “Additional Collateral”) and is guaranteedpari passu basis by the entities established to hold such Additional Collateral. Pursuant to a first lien pari passu intercreditor agreement, dated August 6, 2019, among Revlon, Products Corporation, the subsidiary guarantors, Wilmington Trust and Citibank, N.A. (acting as administrative agent and collateral agent for the 2016 Term Loan Facility), the liens on the shared collateral securing the 2019 Term Loan Facility rank pari passu in priority with the liens on the shared collateralassets securing the 2016 Term Loan Facility.


Contribution and License Agreement:Agreements: In connection with the pledge of such Additional Collateral,the Specified Brand Assets, Products Corporation and certain of its subsidiaries contributed the Specified Brand Assets to the BrandCos. Products Corporation entered into intercompany arrangements pursuant to which the Additional Collateral was contributed to a newly-formed subsidiary, Beautyge I, which then further contributed the Additional Collateral to its new wholly-owned subsidiary, Beautyge II, LLC. Products Corporation entered into a license and royalty arrangementarrangements on arm’s length terms with Beautyge II, LLCthe relevant BrandCos to provide for the Company’s continued use of the Additional CollateralSpecified Brand Assets by Products Corporation and its subsidiaries during the term of the 2019 Term Loan Facility.2020 BrandCo Facilities.


Interest and Fees: Interest accrues on Loans under the 2019 Term Loan2020 BrandCo Facility bear interest at a rate equal to LIBOR (with a LIBOR floor of 1.50%) plus (x) 10.50% per annum, payable not less than quarterly in arrears in cash and (y) 2.00% per annum payable not less than quarterly in-kind by adding such amount to the principal amount of one-month adjustedoutstanding loans under the 2020 BrandCo Facility. Loans under the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility bear interest at a rate equal to LIBOR (which has(with a LIBOR floor of 0%0.75%) plus a margin of 9.50%. Products Corporation is also obligated to pay customary fees and expenses3.50% per annum, payable not less than quarterly in connection with the 2019 Term Loan Facility.arrears in cash.


Affirmative and Negative Covenants:Covenants: The 2019 Term Loan Agreement contains2020 BrandCo Facilities contain certain affirmative and negative covenants that, among other things, limit the Restricted Group’sProducts Corporation’s and its restricted subsidiaries’ ability to: (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, unsecured or junior lien debt; (vii) enter into certain transactions with their affiliates; (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 2019 Term Loan Agreement2020 BrandCo Facilities also contains additional covenants: (i) restrictingrestrict distributions and other payments from the activities of the entities established to hold the Additional Collateral; (ii) limiting the incurrence of secured debt by the Restricted Group to an aggregate principal amount of $50 million (excluding the Amended 2016 Revolving Credit Facility and any refinancing of the 5.75% Senior Notes due 2021); (iii) restricting the transfer by the Restricted Group of material intellectual property to non-guarantor restricted subsidiaries or other affiliates; and (iv) limiting investments by Products Corporation and its subsidiary guarantors in any non-guarantor subsidiary to an outstanding amount of $50 million plus $10 million for ordinary course investments consistent with past practice. These negative covenants are subject to various exceptions, including an “available amount basket”BrandCos based on 50%certain minimum thresholds of Products Corporation’s cumulative consolidated net income from October 1, 2016, subject to Products Corporation’s compliance with a 5.0 to 1.0 ratio of Products Corporation’s net debt to Consolidated EBITDA (as defined in the 2019 Term Loan Agreement), except such compliance is not required when such baskets are used to make investments.

Financial Covenants: The 2019 Term Loan Agreement contains financial covenants. First, Products Corporation cannot permit at any time both (x) the aggregate principal amount of secured and structurally senior debt to exceed $2.5 billion and (y) the ratio of Products Corporation's net secured and structurally senior debt to Consolidated EBITDA to be greater than 5.0 to 1.0, subject to a one-time equity cure right. Second, Products Corporation’s Consolidated EBITDA cannot be less than $250 million for any test period ending on or after March 31, 2021.

Prepayments: The 2019 Term Loan Facility is subject to mandatory prepayments from: (i) the net proceeds from the issuance by Products Corporation or any of its restricted subsidiaries of certain additional debt; (ii) commencing with the excess cash flow calculationsales with respect to fiscal year ending December 31,the Specified Brand Assets. The 2020 50% of excess cash flow, with step-downs to 25% and 0% upon achievement of certain first lien leverage ratios and reduced by voluntary prepayments of the 2019 Term Loan Facility, the 2016 Term Loan Facility and revolving loans under the Amended 2016 Revolving Credit Facility (to the extent commitments thereunder are permanently reduced); and (iii) asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property that have not been reinvested to the extent in excess of certain minimum amounts (subject to an aggregate reinvestment cap of $50 million). Products Corporation may voluntarily prepay the 2019 Term Loan Facility at any time. All voluntary prepayments, certain mandatory prepayments and repayments upon acceleration after an event of default of the 2019 Term Loan Facility must be accompanied by a fee (the “Applicable Premium”) in an amount equal to: (i) prior to January 1, 2021, a make-whole amount with respect to interest payments through December 31, 2020 plus 10% of the aggregate principal amount prepaid, repaid or required to be repaid; (ii) on and after January 1, 2021, but prior to January 1, 2022, 10% of the aggregate principal amount prepaid, repaid or required to be repaid; (iii) on and after January 1, 2022, but prior to January 1, 2023, 7.5% of the aggregate principal amount prepaid, repaid or required to be repaid; or (iv) thereafter, 5% of the aggregate principal amount prepaid, repaid or required to be repaid. A 5% exit fee isBrandCo Facilities also payable upon the final scheduled maturity of the 2019 Term Loan Facility or if the loans thereunder are accelerated upon an event of default. The 2019 Term Loan Agreement also containscontain certain customary representations, warranties and events of default.

Events of Default: The 2019 Term Loan Agreement includes customary events of default, including a cross default provision making it an event of default under the 2019 Term Loan2020 BrandCo Credit Agreement if there is an event of default under Products Corporation’s existing 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement the Amended 2019 Senior Line of Credit Agreement or the indentures forgoverning each of Products Corporation’s 5.75% Senior Notes ordue 2021 and its 6.25% Senior Notes. In addition, theNotes due 2024 (the “Senior Notes Indentures”). The lenders under the 2019 Term Loan2020 BrandCo Credit Agreement may declare all outstanding loans under the 2019 Term Loan Agreement2020 BrandCo Facilities to be due and payable immediately upon an event of default. Under such circumstances, the lenders under the 2016 Credit Agreements, the Amended 2019 Senior Line of Credit Agreement and the 2018 Foreign Asset-Based Term Agreement, and the holders under the Senior Notes Indentures may also declare all outstanding loansamounts under such facilitiesinstruments to be due and payable immediately as a result of similar cross default provisions, and upon non-payment of any accelerated principal amount, the trustees or noteholders for the 5.75% Senior Notes and 6.25% Senior Notes may declare all outstanding notes to be due and payable immediately as a result of similar cross-accelerationcross acceleration provisions, subject to certain exceptions and limitations described in the relevant instruments.


FeesPrepayments: The 2020 BrandCo Facilities are subject to certain mandatory prepayments, including from the net proceeds from the issuance of certain additional debt and expenses incurred in connection with consummating the 2019asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property, subject to certain exceptions. The 2020 BrandCo Facilities may be repaid at any time, subject to customary prepayment premiums.

2016 Term Loan AgreementFacility Extension Amendment: Term loan lenders under the 2016 Term Loan Facility were offered the opportunity to participate at par in the 2020 BrandCo Facilities based on their holdings of approximately $12 million were capitalized and are being amortized to interest expense overterm loans under the term2016 Term Loan Facility. Lenders participating in the 2020 BrandCo Facilities, as well as other consenting lenders representing, in the aggregate, a majority of the 2019loans and commitments under the 2016 Term Loan Agreement usingFacility, consented to an amendment to the 2016 Term Loan Facility (the “Extension Amendment”) that, among other things, made certain modifications to the covenants thereof and extended the maturity date of their term loans (“Extended Term Loans”) to June 30, 2025, subject to (i) the same September 7, 2023 springing maturity date of the non-extended term loans under the 2016 Term Loan Facility if, on such date, $75 million or more in aggregate principal amount of the non-extended term loans under the 2016 Term Loan Facility remains outstanding, and (ii) a springing maturity of 91 days prior to the August 1, 2024 maturity date of the 6.25% Senior Notes if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remains outstanding. The Extension Amendment became effective on the BrandCo 2020 Facilities Closing Date. As of September 30, 2020, approximately $30.7 million in aggregate principal amount of Extended Term Loans were outstanding after giving effect to the 2020 BrandCo Refinancing Transactions. The Extended Term Loans bear interest method.at a rate of LIBOR (with a LIBOR floor of 0.75%) plus 3.50% per annum, payable not less than quarterly in arrears in cash, consistent with the interest rate applicable to the non-extended term loans. Approximately $17.0 million of accrued interest outstanding on the 2016 Term Loan Facility was paid on the BrandCo 2020 Facilities Closing Date. The aggregate principal amount outstandingof non-extended term loans under the 20192016 Term Loan Facility Agreement at as of September 30, 20192020 was $200approximately $855.6 million.


2019Repurchases of 5.75% Senior Line of Credit FacilityNotes due 2021


In June 2019,On May 7, 2020, Products Corporation entered intoused a 2019portion of the proceeds from the 2020 BrandCo Facility to repurchase and subsequently cancel $50 million in aggregate principal face amount of its 5.75% Senior Unsecured Line of Credit Agreement (the "2019 Senior Line of Credit Agreement") providingNotes. Products Corporation withalso paid approximately $0.7 million of accrued interest outstanding on the 5.75% Senior Notes on May 7, 2020. After the BrandCo 2020 Facilities Closing Date, Products Corporation repurchased and subsequently canceled in July 2020 a $30further $62.8 million senior unsecured linein aggregate principal face amount of credit (the "2019its 5.75% Senior Line of CreditFacility") from MacAndrews & Forbes Group, LLC, a subsidiary of Revlon’s majority stockholder. The 2019 Senior Line of CreditFacility allowsNotes. Furthermore, during the three months ended September 30, 2020, Products Corporation to request loans thereunderrepurchased and to use the proceedssubsequently canceled an additional $44.4 million in aggregate principal face amount of such loans for working capital and other general corporate purposes until the facility matures on December 31, 2019. Asits 5.75% Senior Notes. Accordingly, as of September 30, 2019, there were no borrowings outstanding under this facility. See also Part II, Item 5. Other Information, “Extension of the Maturity of the 2019 Senior Line of Credit,” regarding the Amended 2019 Senior Line of Credit Agreement.
Any loans outstanding under the 2019 Senior Line of CreditFacility shall bear interest at an annual rate of 8%, which is payable quarterly in arrears in cash.2020, Products Corporation may, at its option, prepay any borrowings under the 2019 Senior Linehad repurchased and subsequently cancelled a total of CreditFacility,approximately $157.2 million in whole or in part (together with accrued and unpaid interest), at any time prior to maturity, without premium or penalty.  Products Corporation is required to repay any outstanding loans under the 2019 Senior Line of CreditFacility, together with accrued interest thereon, if for any reason Products Corporation or anyaggregate principal face amount of its subsidiaries has available unrestricted cash that Products Corporation determines, in its reasonable judgment, is not required to run their operations in the ordinary course of business, provided that such repayment would not result in material adverse tax consequences.
The 2019 Senior Line of Credit Agreement includes customary events of default, including a cross default provision making it an event of default under the 2019 Senior Line of Credit Agreement if there exists and continues an event default under Products Corporation’s existing bank term loan and revolver credit agreements, the 2018 Foreign Asset-Based Term Agreement or the indentures for Products Corporation’s 5.75% Senior Notes, or 6.25% Senior Notes. If any such eventresulting in a gain on extinguishment of default occurs, MacAndrews & Forbes Group, LLC may declare all outstanding loans under the 2019 Senior Linedebt of CreditFacility to be dueapproximately $31.2 million and payable immediately. For$43.1 million for the three and nine months ended September 30, 2020, respectively, which were recorded within "Gain on early extinguishment of debt" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020.See “Recent Debt Transactions—Exchange Offer” in this Item 7. "Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information regarding Products Corporation's5.75% Senior Notes and the related Exchange Offer.

Prepayment of the 2019 thereTerm Loan Facility due 2023

On the BrandCo 2020 Facilities Closing Date, Products Corporation used a portion of the proceeds from the 2020 BrandCo Facility to fully prepay the entire principal amount outstanding under its 2019 Term Loan Facility, totaling $200 million, plus approximately $1.3 million of accrued interest outstanding thereon, as well as approximately $33.5 million in prepayment premiums, $10.3 million in lenders' fees, $0.3 million in legal fees and approximately $2.0 million in other third party fees. As the lenders under the 2019 Term Loan Facility participated in the 2020 BrandCo Term Loan Facility, the Company determined that the full repayment of the 2019 Term Loan Facility represented a debt modification under U.S. GAAP as the cash flow effect between the old debt instrument (i.e., the 2019 Term Loan Facility) and the new debt instrument (i.e., the 2020 BrandCo Facility) on a present value basis was less than 10% and, thus, the debt instruments were no borrowings or repaymentsnot considered to be substantially different within the meaning of ASC 470, Debt, under this facility.U.S. GAAP. Accordingly, the $33.5 million of prepayment premiums, as well as the $10.3 million in other lenders' fees were capitalized as part of the aforementioned $119.3 million of total new debt issuance costs for the 2020 BrandCo Term Loan Facility, while the aforementioned $0.3 million of legal fees and $2.0 million in other third party fees were expensed as incurred in the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2020.


Amendment No. 2 to the Amended 20162018 Foreign Asset-Based Term Facility

On May 4, 2020, the Company entered into an amendment to the 2018 Foreign Asset Based Term Facility, which had an original outstanding principal amount of €77 million. Such amendment provided for the following:

•increasing the interest rate on the loan from EURIBOR (with a floor 0.50%) plus a margin of 6.50% to EURIBOR (with a floor 0.50%) plus a margin of 7.00%;
•adding a springing maturity date of 91 days prior to the February 15, 2021 maturity of the 5.75% Senior Notes if any of Products Corporation's 5.75% Senior Notes remain outstanding on such date;
•requiring a mandatory prepayment of €5.0 million; and
•clarifying certain terms and waiving certain provisions in connection with the 2020 BrandCo Refinancing Transactions.

Approximately $0.4 million of amendment fees paid to the lenders under 2018 Foreign Asset-Based Term Facility were capitalized and are amortized to interest expense, together with any unamortized debt issuance costs outstanding prior to the amendment. As of September 30, 2020, there was the Euro equivalent of $56.8 million outstanding under the 2018 Foreign Asset-Based Term Facility, reflecting a repayment of €28.5 million made during the quarter ended June 30, 2020.

Incremental Revolving Credit Facility under the 2016 Term Loan Agreement


On March 6, 2019,April 30, 2020, Products Corporation entered into a Joinder Agreement (the “2020 Joinder Agreement”), with Revlon, and certain of their subsidiaries and certain existing lenders (the “Incremental Lenders”) under Products Corporation’s 2016 Term Loan Agreement to provide for a $65 million incremental revolving credit facility (the “2020 Incremental Facility”). On the closing of the 2020 Incremental Facility, Products Corporation borrowed $63.5 million of revolving loans for working capital purposes and subsequently on May 11, 2020 Products Corporation also borrowed the additional $1.5 million of delayed funding revolving loans. Prior to its full repayment on May 28, 2020, amounts outstanding under the 2020 Incremental Facility bore interest at a rate of (x) LIBOR plus 16% or (y) an Alternate Base Rate plus 15%, at Products Corporation’s option. Except as to pricing, maturity and differences due to its revolving nature, the terms of the 2020 Incremental Facility were otherwise substantially consistent with the existing term loans under the 2016 Term Loan Facility. The 2020 Incremental Facility was repaid in full, and the commitments thereunder terminated, on May 28, 2020. Upon such repayment, approximately $2.9 million of upfront commitment fees that Products Corporation incurred in connection with consummating the 2020 Incremental Facility were entirely expensed within "Miscellaneous, net" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2020.

On May 7, 2020, in connection with consummating the 2020 BrandCo Refinancing Transactions, Products Corporation entered into Amendment No. 24 to the Amended 2016its Asset-Based Revolving Credit Agreement, in respectdated as of September 7, 2016, as amended (the “2016 Revolving Credit Facility”). Amendment No. 4, among other things, made certain amendments and provided for certain waivers relating to the Amended2020 BrandCo Refinancing Transactions under the 2016 Revolving Credit Facility. PursuantIn exchange for such amendments and waivers, the interest rate margin applicable to loans under Tranche A of the 2016 Revolving Credit Facility increased by 0.75%. In connection with the amendments to the terms2018 Tranche B of the 2016 Revolving Credit Facility (which was fully repaid on its May 17, 2020 extended maturity date), Products Corporation incurred approximately $1.1 million in lender's fees that upon its full repayment were entirely expensed within “Miscellaneous, net” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss as of September 30, 2020. See “Recent Developments” and Note 19, “Subsequent Events,” regarding, among other things, Amendment No. 2,5 to the 2016 Revolving Credit Facility.

Previously, on April 17, 2020 (the “FILO Closing Date”), Products Corporation entered into Amendment No. 3 to the 2016 Revolving Credit Facility (“Amendment No. 3”), pursuant to which, the maturity date applicable to $36.3 million of loans under the $41.5 million senior secured first in, last out 2018 Tranche B ofunder the Amended 2016 Revolving Credit Facility (the “2018 FILO Tranche”) was extended from April 17, 20192020 to AprilMay 17, 2020. The Amended 2016 Revolving Credit Agreement provided that the “Liquidity Amount” (defined in the Amended 2016 Revolving Credit Agreement as the sum of each borrowing base less the sum of (x) the aggregate outstanding extensions of credit under the Amended 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such date) may exceed the aggregate commitments under the Amended 2016 Revolving Credit Facility by up to 5%2020 (the “Extended Maturity Date”). Amendment No. 2 limits the Liquidity Amount to no more than the aggregate commitments under the Amended 2016 Revolving Credit Facility. Under the Amended 2016 Revolving Credit Agreement, a “Liquidity Event Period” generally occurred if Products Corporation’s Liquidity Amount fell below the greater of $35 million and 10% of the maximum availability under the Amended 2016 Revolving Credit Facility. Amendment No. 2 changes these thresholds to $50 million and 15%, respectively, only for purposes of triggering certain notification obligations of Products Corporation increased borrowing base reporting frequency andrepaid the ability of the administrative agent to apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility. After entering into Amendment No. 2, in March 2019 Products Corporation’s availability under the Amended 2016 Revolving Credit Facility was $37.3remaining approximately $5.2 million which was less than the greater of $35 million and 10% of the maximum availability under the Amended 2016 Revolving Credit Facility, which at such date equated to $41.3 million. Accordingly, effective beginning in March 2019 Products Corporation is required to maintain a FCCR of a minimum of 1.0 to 1.0 (which it currently satisfies), the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the Amended 2016 Revolving Credit Facility, which the administrative agent began applying in March 2019, and Products Corporation is required to provide the administrative agent with weekly borrowing base certificates. Products Corporation will be required to: (i) maintain such 1.0 to 1.0 minimum FCCR until such time that availability under the Amended 2016 Revolving Credit Facility equals or exceeds the greater of $35 million and 10% of the maximum availability under such facility for at least 20 consecutive business days; and (ii) Products Corporation will continue to provide the administrative agent with weekly borrowing base certificates and the administrative agent may continue to apply amounts collected in controlled accounts as set forth above in each case until such time that availability under such facility is equal or exceeds the greater of $50 million and 15% of the maximum availability under such facility for at least 20 consecutive business days. Amendment No. 2 also adjusts, among other things, the “payment conditions” required to make unlimited restricted payments.

The Company’s foreign operations held $57.3 million out of its total $60.7 million in cash and cash equivalents as of September 30, 2019. 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. The Company believes that 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, the Amended 2019 Senior Line of Credit Facility and other permissible borrowings, along with the option to further settle historical intercompany loans and payables with certain foreign subsidiaries. The Company also expects to generate additional liquidity from cost reductions resulting from the implementation of the 2018 Optimization Program, which was initiated during the fourth quarter of 2018, and cost reductions generated from other cost control initiatives. See “Part 1, Item 2. Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations--Recent Debt Transactions--2019 Term Loan Facility,” “2019 Term Loan Facility” above in “Financial Condition, Liquidity and Capital Resources” and the Company’s 2018 Form 10-K, Item 1A. Risk Factors -“Restrictions and covenants in Products Corporation’s various debt instruments limit its ability to take certain actions and impose consequences in the event of failure to comply.” During the first nine months of 2019, as part of continuing to effectively manage its working capital needs, the Company continued to repatriate funds to the U.S. using tax-effective methods, such as through the settlement of historicalFILO Tranche loans and payables due from certain foreign subsidiaries.

In December 2017, the U.S. government enacted the Tax Act, which made broad and complex changes to the U.S. tax code, including a one-time transition tax on certain non-U.S. earnings, the current U.S. taxation of certain foreign earnings in 2018 and following years and limitations on tax deductions for interest expense in 2018 and following years. The Company was not subject to the one-time transition tax due to its deficit in foreign earnings as of the FILO Closing Date. In addition, Amendment No. 3 increased the applicable measurement dates. Additionally,interest margin for the Company determined that2018 FILO Tranche by 0.75%, subject to a LIBOR floor of 0.75%. Products Corporation fully repaid the limitation on interest deductibility did not impact the Company's 2018 federal cash taxes due to its net operating loss position. Further, as a result of the Company’s anticipated net operating loss carryover to 2019, the Company expects that the Tax Act will not have a material impactFILO Tranche on the Company's cash taxes or liquidity in 2019. As of December 31, 2018, the Company's accounting for the Tax Act was complete. For a further discussion, see Note 13, "Income Taxes," to the Unaudited Consolidated Financial Statements in this Form 10-Q, as well as Note 15, "Income Taxes," to the Consolidated Financial Statements in the Company's 2018 Form 10-K and Item 1A. “Risk Factors - Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impact on the Company's financial condition, results of operations and/or cash flows" in the Company's 2018 Form 10-K.Extended Maturity Date.



Changes in Cash Flows

As of September 30, 2019,2020, the Company had cash, cash equivalents and restricted cash of $60.9$273.7 million (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions), compared with $87.4$104.5 million at December 31, 2018.2019. The following table summarizes the Company’s cash flows from operating, investing and financing activities for the periods presented:
Nine Months Ended September 30,
20202019
Net cash used in operating activities$(256.9)$(166.8)
Net cash used in investing activities(7.4)(20.0)
Net cash provided by financing activities433.9 161.6 
Effect of exchange rate changes on cash and cash equivalents(0.4)(1.4)
   Net increase (decrease) in cash, cash equivalents and restricted cash169.2 (26.6)
Cash, cash equivalents and restricted cash at beginning of period104.5 87.5 
Cash, cash equivalents and restricted cash at end of period$273.7 $60.9 
 Nine Months Ended September 30,
 2019 2018
Net cash used in operating activities$(166.8) $(296.7)
Net cash used in investing activities(20.0) (41.6)
Net cash provided by financing activities161.6
 316.6
Effect of exchange rate changes on cash and cash equivalents(1.4) (3.2)
   Net decrease in cash, cash equivalents and restricted cash
(26.6) (24.9)
Cash, cash equivalents and restricted cash at beginning of period87.5
 87.4
Cash, cash equivalents and restricted cash at end of period$60.9
 $62.5


Operating Activities
Net cash used in operating activities was $166.8$256.9 million and $296.7$166.8 million for the nine months ended September 30, 20192020 and 2018,2019, respectively. The decreaseincrease in cash used in operating activities for the nine months ended September 30, 2019,2020, compared to the nine months ended September 30, 2018,2019, was primarily driven by favorable working capital changes comparedlower net sales, primarily due to the prior year period, as well as a lower net loss, also as a resultCOVID-19 impacts described above, partially offset by cost reductions achieved through the Company's initiatives designed to mitigate the adverse impact of COVID-19 on the charges incurred inCompany's operations, including the prior year period related to the effect of the Oxford, N.C. facility disruption.Revlon 2020 Restructuring Program.


Investing Activities
Net cash used in investing activities was $20 million and $41.6$7.4 million for the nine months ended September 30, 2019 and 2018, respectively, which2020, compared to $20.0 million of net cash used in investing activities for the nine months ended September 30, 2019. The decrease in cash used in investing activities was entirely comprised of capital expenditures. The variance inrelated to lower capital expenditures was affected, among other things, by approximately $11.2 million for Elizabeth Arden integration-related investments in the nine months ended September 30, 2020 compared to the prior year period.


Financing Activities
Net cash provided by financing activities was $161.6$433.9 million and $316.6$161.6 million for the nine months ended September 30, 2020 and 2019, respectively.
Net cash provided by financing activities for the nine months ended September 30, 2020 primarily included:
•$880.0 of borrowings under the 2020 BrandCo Term Loan Facility; and
•$19.5 million net borrowings under the Amended 2016 Revolving Credit Agreement;
with the foregoing partially offset by:
•$200.0 million used to fully repay the 2019 Term Loan Facility;
•$114.1 million used to repurchase approximately $157.2 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes;
•$108.3 million used to pay financing costs incurred in connection with the 2020 BrandCo Refinancing Transactions;
•$31.4 million used to partially repay the 2018 Foreign Asset-Based Term Loan;
•$19.5 million used to partially repay the Amended 2016 Revolving Credit Agreement;
•$9.2 million used to partially repay the 2016 Term Loan Facility; and
•$0.7 million of decreases in short-term borrowings and 2018, respectively.overdraft.
Net cash provided by financing activities for the nine months ended September 30, 2019 primarily included:
•$200 million of borrowings under the 2019 Term Loan Facility;
$13.459.9 million of borrowings under the Amended 2016 Revolving Credit Facility; and
with the foregoing partially offset by:
•$22.4 million of decreases in short-term borrowings and overdraft;
$13.59.0 million of repayments under the 2016 Term Loan Facility;
•$18.8 million of decreases in short-term borrowings and overdraft; and
•$13.41.4 million of payment of financing costs incurred in connection with consummating the 2019 Term Loan Facility in August 2019 and Amendment No. 2 to the Amended 2016 Revolving Credit Facility in March 2019.Facility.
Net cash provided by financing activities for the nine months ended September 30, 2018 primarily included:
$251.3 million of borrowings under the 2016 Revolving Credit Facility; and
$89.4 million of borrowings under the Asset-Based Term Facility;
with the foregoing partially offset by:
$13.5 million of repayments under the 2016 Term Loan Facility.


Long-Term Debt Instruments
See Note 8, "Long Term Debt," for
For detailed information regardingon the terms and conditions of Products Corporation’s various outstanding debt instruments, including, without limitation, the 2020 BrandCo Facilities, 2016 Term Loan Facility, Amended 2016 Revolving Credit Facility, 2019 Term Loan Facility (which was fully repaid as part of consummating the 2020 BrandCo Refinancing Transactions), 2018 Foreign Asset-Based Term Facility, Amended 2019 Senior2020 Restated Line of Credit Facility, 5.75% Senior Notes and 6.25% Senior Notes. For further detail regarding Products Corporation's long-term debt instruments,Notes, see the aforementioned discussion in this Form 10-Q under “Financial Condition, Liquidity and Capital Resources - Consummation of 2020 BrandCo Refinancing Transactions” and Note 10, "Long-Term Debt,9, "Debt," to the Consolidated Financial Statements in the Company's 2018Revlon's 2019 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 Revlon's 2019 Form 10-K. For information regarding certain risks related to the Company’s indebtedness, see Item 1A. “Risk Factors” in the Company's 20182019 Form 10-K.10-K, as updated by Part II, Item 1A. “Risk Factors” in the Company’s Form 10-Qs filed with the SEC during 2020.


Covenants
Products Corporation was in compliance with all applicable covenants under the 2020 BrandCo Credit Agreement, 2016 Credit Agreements, the 2019 Term Loan Agreement, the 2018 Foreign Asset-Based Term Agreement, and the 2019 Senior2020 Restated Line of Credit AgreementFacility, as well as with all applicable covenants under its Senior Notes Indentures, in each case as of September 30, 2019.2020. As of September 30, 2019,2020, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:
CommitmentBorrowing BaseAggregate principal amount outstanding at September 30, 2020Availability at September 30, 2020 (a)
Amended 2016 Revolving Credit Facility$400.0 $345.9 $291.9 $52.6 
2020 Restated Line of Credit Facility$30.0 N/A$— $30.0 
 Commitment Borrowing Base Aggregate principal amount outstanding at September 30, 2019 
Availability at September 30, 2019 (a)
Tranche A of the Amended 2016 Revolving Credit Facility$400.0
 $400.0
 $307.5
 $81.2
Tranche B of the Amended 2016 Revolving Credit Facility41.5
 40.9
 40.9
 —
Total Tranche A & B of the Amended 2016 Revolving Credit Facility(a)
$441.5
 $440.9
 $348.4
 $81.2
2019 Senior Line of Credit Facility$30.0
 N/A
 $—
 $30.0
(a)Availability atas of September 30, 20192020 is based upon the borrowing base then in effect under the Amended 2016 Revolving Credit Facility of $440.9$345.9 million, less $11.3$1.4 million of outstanding undrawn letters of credit and $348.4$291.9 million then drawn. As Products Corporation’s consolidated fixed charge coverage ratio was greater than 1.0 to 1.0 as of September 30, 2019,2020, all of the $81.2$52.6 million of availability under the Amended 2016 Revolving Credit Facility was available as of such date.

Products Corporation was in compliance with all applicable covenants under its Senior Notes Indentures as of September 30, 2019, with there being $500 million and $450 million in aggregate principal amount outstanding The 2018 Tranche B under the 5.75% Senior Notes and 6.25% Senior Notes, respectively, as of September 30, 2019.Amended 2016 Revolving Credit Facility was fully repaid in May 2020.


Sources and Uses

The Company’s principal sources of funds are expected to be operating revenues, cash on hand (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions) and funds that may be available from time to time for borrowing under the Amended 2016 Revolving Credit Facility, the Amended 2019 Senior2020 Restated Line of Credit Facility and other permissible borrowings. The 2016 Credit Agreements, the 2019 Term Loan Agreement, the Senior Notes Indentures and the 2018 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, subject to certain exceptions.

The Company’s principal uses of funds are expected to be the payment of operating expenses, including payments 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, such as the EA Integration Restructuring2018 Optimization Program and the 2018 OptimizationRevlon 2020 Restructuring Program; 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; 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 Item 1A. “Risk Factors” in the Company's 2019 Form 10-K, as updated by Part II, Item 1A. “Risk Factors” in the Company’s Form 10-Qs filed with the SEC during 2020.


The Company’s cash contributions to its pension and post-retirement benefit plans in the first nine months of 2019ended September 30, 2020 were $7.8$7.5 million.

The Company expects that cash contributions to its pension and post-retirement benefit plans will totalbe approximately $12$19 million in the aggregate for 2019.2020. The Company’s cash taxes paid in the first nine months of 2019ended September 30, 2020 were $6.9$12.6 million. The Company expects to pay net cash taxes totaling approximately $10 million to $15 million to $20 millionin the aggregate during 2019.2020. For a further discussion, see Note 13,10, "Pension and Post-Retirement Benefits," and Note 12, "Income Taxes," to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q, as well as Note 15, "Income Taxes," to the Consolidated Financial Statements in the Company's 2018 Form 10-K and Item 1A. “Risk Factors - Uncertainties in the interpretation and application of the U.S. income tax provisions could have a material impact on the Company's financial condition, results of operations and/or cash flows" in the Company's 2018 Form 10-K.

10-Q.
The Company’s purchases of permanent wall displays and capital expenditures in the first nine months of 2019ended September 30, 2020 were $28.4$16.5 million and $20$7.4 million, respectively. The Company expects that purchases of permanent wall displays will total approximately $50$35 million to $60$45 million in the aggregate during 20192020 and expects that capital expenditures will total approximately $30$10 million to $40$20 million in the aggregate during 2019.

2020.
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.

For certain of the Company’s other recent cost reduction initiatives, see “COVID-19 Impact on the Company’s Business” under the Overview section of this "Management Discussion and Analysis of Financial Condition and Results of Operations".
Continuing to execute the Company’s 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, 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 actions related to the 2018 Optimization Program.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, the Amended 2019 Senior2020 Restated Line of 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. (See “Financial Condition, Liquidity and Capital Resources - Consummation of 2020 BrandCo Refinancing Transactions” regarding the Company’s repurchase of certain 5.75% Senior Notes during the second and third quarters of 2020).


TheThe Company expects that operating revenues, cash on hand (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions) and funds that may be available from time-to-time for borrowing under the Amended 2016 Revolving Credit Facility, the Amended 2019 Senior2020 Restated Line of Credit Facility and otherother permissible borrowings will be sufficient to enable the Company to pay its operating expenses for 2019,2020, including payments in connection with the purchase 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, such as the EA Integration Restructuring2018 Optimization Program and the 2018 OptimizationRevlon 2020 Restructuring 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 cost reductions resulting from the implementation of the Revlon 2020 Restructuring Program and the
2018 Optimization Program.Program, and cost reductions generated from other cost control initiatives, including, without limitation, the Company’s interim measures to reduce costs in response to the COVID-19 pandemic (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), as well as funds provided by selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) 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, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of liquidity available under Products Corporation’s Amended 2016 Revolving Credit Facility and the 2018 Foreign Asset-Based Term Facility. For example, subject to certain exceptions, loans under the 2018 Foreign Asset-Based Term Facility must be prepaid to the extent that outstanding loans exceed the borrowing base, consisting of accounts receivable and inventory. For information regarding certain risks related to the Company’s indebtedness and cash flows, see Item 1A. “Risk Factors” in the Company's 2019 Form 10-K, as updated by Part II, Item 1A. “Risk Factors” in the Company’s Form 10-Qs filed with the SEC during 2020.


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 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, 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 any further consumption declines that the Company has experienced; inventory management 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 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 (such as the EA Integration Restructuring2018 Optimization Program and the 2018 OptimizationRevlon 2020 Restructuring Program), 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, discontinuingdiscontinuing 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 2019 Term Loan Agreement, the6.25% Senior Notes Indenturesindenture and/or the 2018 Foreign Asset-Based Term Agreement and in such event the Company could be required to take measures, including, among other things, reducing discretionary spending. (ForFor further discussion of certain risks associated with the Company's business and indebtedness, see Item 1A. "Risk Factors" in the Company’s 2018Company's 2019 Form 10-K.)

Derivative Financial Instruments
Foreign Currency Forward Exchange Contracts
Products Corporation enters into foreign currency forward exchange and option contracts ("FX Contracts") from time-to-time primarily for the purpose of hedging anticipated inventory purchases and certain intercompany payments denominated10-K, as updated by Part II, Item 1A. “Risk Factors” 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 FX Contracts inForm 10-Qs filed with the Company's hedging program matured in December 2018. The Company did not enter into any FX ContractsSEC during nine months ended September 30, 2019. The U.S. Dollar notional amounts of the FX Contracts outstanding at each of September 30, 2019 and December 31, 2018 were nil.2020.


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 the Old Acquisition Term Loan. The 2013 Interest Rate Swap expired in May 2018. Refer to Note 10, "Financial Instruments," in this Form 10-Q for more information on this interest rate swap transaction.
Credit Risk
Exposure to credit risk in the event of nonperformance by any of the counterparties to the Company's outstanding hedging instruments is limited to the gross fair value of the derivative instruments in asset positions, which totaled nil as of September 30, 2019 and December 31, 2018. The Company has from time to time in the past attempted 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. If applicable, the Company also periodically monitors any changes in the credit ratings of its counterparties. Given the credit standing of the counterparties that the Company has used from time to time to provide its derivative instruments, the Company believes the risk of loss arising from any non-performance by its counterparties under the derivative instruments that it has entered into from time to time would be remote.

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.

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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 the Company's 20182019 Form 10-K.

Effect of Recently Issued Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 1, "Description of Business and Summary of Significant Accounting Policies," to the Unaudited Consolidated Financial Statements in this Form 10-Q.




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(all tabular amounts in millions, except share and per share amounts)

Item 3. Quantitative and Qualitative Disclosures about Market Risk


Not applicable as a smaller reporting company.



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REVLON, INC. AND SUBSIDIARIES



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. In March 2020, the Company announced the Revlon 2020 Restructuring Program and in April 2020 the Company took several financial measures, such as implementing a reduced work week and furloughing a significant number of employees, designed to mitigate the adverse financial impacts of COVID-19 (the “COVID-19 Organizational Actions”). In response, the Company implemented mitigating actions to address the potential for any impact from these measures on the Company’s disclosure controls and procedures and its internal control over financial reporting, such as transferring responsibilities for the eliminated positions and furloughed employees and enhancing employee training and internal controls monitoring. 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 Form 10-Q. Based upon such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that as a result of the material weakness described in "Management's Annual Report on Internal Control Over Financial Reporting," under Item 9A. “Controls and Procedures” of the Company’s 2018 Form 10-K, the Company's disclosure controls and procedures were not effective as of the end of the period covered by this Form 10-Q.September 30, 2020.
Given the material weakness, the Company performed additional procedures to determine that the Company’s Unaudited Consolidated Financial Statements included in this Form 10-Q were prepared in accordance with U.S. GAAP and fairly present in all material respects the Company's financial condition, results of operations and cash flow for the periods presented. As a result, management, including the Company's Chief Executive Officer and Chief Financial Officer, concluded that the Company’s Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. GAAP and fairly present in all material respects the Company’s financial condition, results of operations and cash flow for the periods presented.
(b) Changes in Internal Control overOver Financial Reporting (“ICFR”("ICFR").As disclosed in Part II, Item 9A. “Controls and Procedures” in the Company’s 2018 Form 10-K, the Company identified a material weakness in internal control over financial reporting related to the following deficiencies:
(i)the Company did not perform an effective continuous risk assessment process that adequately identified and assessed risks affecting the Company's internal controls over financial reporting associated with the implementation of its new ERP system in the U.S.;
(ii)
the Company did not maintain a sufficient number of knowledgeable, trained personnel in the U.S. operations impacted by the ERP system implementation and in various other operations across the Company who understood and were held accountable for their assigned responsibilities for the design, implementation and operation of internal controls over financial reporting; and
(iii)as a result, the Company did not design, implement and consistently operate effective process-level controls to ensure that it appropriately (a) recorded and accounted for inventory, accounts receivable, net sales and cost of goods sold, (b) reconciled balance sheet accounts, (c) reviewed and approved the complete population of manual journal entries and (d) used complete and accurate information in performing manual controls.
The Company adopted a plan designed to improve its internal controls to remediate the aforementioned material weakness beginning Q1 2019 and through the date of filing this Form 10-Q has taken certain actions within each of the following areas: (i) implemented enhancements to company-wide risk assessment processes; (ii) enhanced the review and sign-off procedures for IT implementations; (iii) enhanced staff and continued to train staff responsible for internal control over financial reporting; (iv) enhanced the Company’s process and control documentation; (v) implemented new processes and controls relative to the execution and oversight of inventory, accounts receivable, net sales and cost of goods sold; (vi) enhanced and continued to reinforce policies around account reconciliations and manual journal entries; (vii) identified and clearly communicated individual employee responsibilities; and (viii) continued to implement new controls and new reporting tools to ensure the completeness and accuracy of information used in performing manual controls. These actions are ongoing and the Company is also continuing to evaluate additional controls and procedures that may be required to remediate the material weakness.

The Company believes that the actions being taken to improve the design and operating effectiveness of its internal controls
will effectively remediate the material weakness. However, the material weakness There have not been any changes in the Company’s internal control over financial reporting will not be considered remediated untilduring the internal controlsquarter ended September 30, 2020 that have materially affected, or are remediated operate for a sufficient period of time and management concludes, through testing, that these internal controls are operating effectively.


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For further information regarding the Company’s material weakness, see Part I, Item 1A. “Risk Factors - Difficulties in implementing the Company’s new ERP system have disrupted the Company's business operations and have caused a material weakness inreasonably likely to materially affect, the Company’s internal control over financial reporting. IfAs described in Item 4(a) above, the Company is unable to remediate the material weakness in its internal control over financial reporting, it may negatively impactRevlon 2020 Restructuring Program and the Company’s abilityCOVID-19 Organizational Actions did not materially affect, nor are they reasonably likely to prepare its future financial statements in conformity with U.S. GAAP. If the Company experiences ongoing disruptions with such implementation and/or is unable to remediate the material weakness in the future, such events could have a material adverse effect onmaterially affect, the Company's business, prospects, results of operations, financial condition and/or cash flows” in ICFR for the Company's 2018 Form 10-K and Part II, Item 9A. “Controls and Procedures” in the Company's 2018 Form 10-K.quarter ended September 30, 2020.







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Forward-Looking Statements
This Quarterly Report on Form 10-Q for the period ended September 30, 2019,2020, 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;
(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; 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, 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; 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 (such as the EA Integration Restructuring Program and the 2018 Optimization 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, 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, the Amended 2019 Senior Line of 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 product 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, including, without limitation: (A) 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 (2) recognizing $82.6 million of the EA Integration Restructuring Charges (all of which are expected to be cash payments), consisting of: (x) $72.6 million of employee-related costs, including severance, retention and other contractual termination benefits; (y) $5.1 million of lease termination costs; and (z) $4.9 million of other related charges; (B) the Company's 2018 Optimization Program designed to streamline the Company’s operations, reporting structures and business processes, with the objective of maximizing productivity and improving profitability, cash flows and liquidity, with the major initiatives underlying such program including: (1) optimizing its global supply chain and realizing manufacturing efficiencies and rationalizing its global warehouse network and office locations to drive greater efficiency, lower its cost base and enhance its speed-to-market capabilities for new innovations; (2) enhancing in-market execution and optimizing its commercial and organizational structures to create more efficient global and regional capabilities; and (3) reducing overhead costs and streamlining functions and workflows by leveraging technology and shared services and standardizing and simplifying its business processes, leading to greater agility and faster decision-making; (C) the Company’s expectations regarding the amount and timing of the charges and payments related to the 2018 Optimization Program, including that: (1) it will recognize approximately $30 million to $40 million of total 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; (2) it will incur approximately $10 million of additional capital expenditures; (3) of the restructuring charges, it recorded pre-tax restructuring charges of $28.1 million in the nine months ended September 30, 2019, related to the 2018 Optimization Program, with substantially all of the balance to be recognized in 2019; and (4) approximately 85% of the restructuring charges are to be paid in cash, with approximately $15.8 million paid through September 30, 2019, and substantially all of the remaining balance is expected to be paid by the end of 2019, with any residual amount to be paid in 2020; (D) the Company’s expectation that the actions to be implemented under the 2018 Optimization Program will be substantially completed by December 31, 2019; and (E) the Company's projections that the 2018 Optimization Program will result in between $90 million and $95 million of in-year cost reductions during 2019, of which approximately $65 million had been realized as of September 30, 2019, that the annualized cost reductions will be in the range of approximately $125 million to $150 million by the end of 2019 and that approximately half of the annualized cost reductions are expected to be realized within cost of sales and the remainder in selling, general and administrative expenses;
(vi)the Company’s expectation that operating revenues, cash on hand and funds that may be available from time to time for borrowing under Products Corporation's Amended 2016 Revolving Credit Facility, the Amended 2019 Senior Line of Credit Facility and other permissible borrowings will be sufficient to enable the Company to cover its operating expenses for 2019, 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, the Amended 2019 Senior Line of 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 its 2018 Optimization Program and cost reductions generated from other cost control initiatives 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 Products Corporation's Amended 2016 Revolving Credit Facility, the Amended 2019 Senior Line of 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 the implementation of the 2018 Optimization Program and from other cost reduction initiatives;
(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, such as the EA Integration Restructuring Program and the 2018 Optimization 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; 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, with respect to the Tax Act, the Company’s expectation that the Tax Act’s limitation on interest deductibility will not impact the Company’s 2019 federal cash taxes due to its net operating loss carryover position, and that the Tax Act will not have a material impact on its cash taxes or liquidity in 2019, as well as 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;
(xiv)the Company’s expectations regarding its implementation of the remediation plan to address the material weakness that it identified in its internal control over financial reporting, as described in Item 4. “Controls and Procedures” of this Form 10-Q; and
(xv)the Company’s plans to explore strategic transactions pursuant to the Strategic Review.

(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; 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, 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; 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 (such as the 2018 Optimization Program and the Revlon 2020 Restructuring Program), 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 which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions, funds available under the Amended 2016 Revolving Credit Facility, the 2020 Restated Line of 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, including, without limitation: (1) the Company’s plans to implement the Revlon 2020 Restructuring Program; including its expectation and belief that the Revlon 2020 Restructuring Program will reduce the Company’s selling, general and administrative expenses, as well as cost of goods sold, improve the
Company’s gross profit and Adjusted EBITDA and maximize productivity, cash flow and liquidity, as well as rightsizing the organization and operating with more efficient workflows and processes and that the leaner organizational structure will improve communication flow and cross-functional collaboration, leveraging the more efficient business processes; (2) the Company’s expectation that the Revlon 2020 Restructuring Program will result in the elimination of approximately 1,000 positions worldwide including approximately 650 current employees and approximately 350 open positions; (3) the Company’s expectation that it will substantially complete the employee-related actions by the end of 2020 and the other consolidation and outsourcing actions during 2021 and 2022; (4) the Company’s expectations regarding the amount and timing of the 2020 Restructuring Charges and payments related to the Revlon 2020 Restructuring Program, including that: (a) it will recognize during 2020 approximately $60 million to $70 million of total pre-tax restructuring and related charges and in addition restructuring charges in the range of $75 million to $85 million to be charged and paid during 2021 and 2022; and (b) substantially all of the 2020 Restructuring Charges will be paid in cash, with approximately $55 million to $65 million of the total charges expected to be paid in 2020, approximately $40 million to $45 million expected to be paid in 2021, with the balance expected to be paid in 2022; and (5) the Company’s expectations that as a result of the Revlon 2020 Restructuring Program, the Company will deliver in the range of $200 million to $230 million of annualized cost reductions by the end of 2022, with approximately 50% of these annualized cost reductions to be realized from the headcount reductions occurring in 2020, including the Company’s expectations that during 2020, the Company will realize approximately $105 million to $115 million of in-year cost reductions;
(vi)the Company's expectation that operating revenues, cash on hand (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions) and funds that may be available from time to time for borrowing under Products Corporation's Amended 2016 Revolving Credit Facility, the 2020 Restated Line of Credit Facility, and other permissible borrowings will be sufficient to enable the Company to cover its operating expenses for 2020, 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 (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions), availability under the Amended 2016 Revolving Credit Facility, the 2020 Restated Line of 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 its 2018 Optimization Program and its Revlon 2020 Restructuring Program and cost reductions generated from other cost control initiatives, including, without limitation, the Company's interim measures to reduce costs in response to the COVID-19 pandemic (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), as well as funds provided by selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) 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 (which as of September 30, 2020 included approximately $175.0 million of proceeds remaining from the 2020 BrandCo Refinancing Transactions) and funds available for borrowing under Products Corporation's Amended 2016 Revolving Credit Facility, the 2020 Restated Line of 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 the implementation of the 2018 Optimization Program and the Revlon 2020 Restructuring Program and from other cost reduction initiatives, including, without limitation, the Company’s interim measures to reduce costs in response to the COVID-19 pandemic (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), as well as funds provided by selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) 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, such as the 2018 Optimization Program and the Revlon 2020 Restructuring 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; 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 UMB lawsuit is without merit and its plans to vigorously to contest it and that the outcome of all other 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 the Company's 20182019 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 20192020 and 20182019 (which, among other places, can be found on the SEC's website at http://www.sec.gov, as well as on the Company's corporate website at www.revloninc.com). Except as expressly set forth in this Form 10-Q, the information available from time-to-time on such websites shall not be deemed incorporated by reference into this 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 the Company's 2018this Form 10-K10-Q 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: 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; 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 shortages of raw materials or otherwise; and/or supply disruptions at the Company’s manufacturing facilities; 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 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; 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 (such as the EA Integration Restructuring Program and the 2018 Optimization 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, 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; 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 volatility in the financial markets, 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) and political conditions (such as military actions and terrorist activities);
(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 the EA Integration Restructuring Program and/or the 2018 Optimization Program 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, the Amended 2019 Senior Line of Credit Facility, 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 2018 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; (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; and/or (3) difficulties or disruptions impacting the Company’s ability to ensure availability of its product where consumers shop, both in-store and increasingly online;
(v)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 in connection with the 2018 Optimization Program: (1) difficulties with, delays in or the Company’s inability to successfully complete the actions underlying the 2018 Optimization Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions, such as difficulties with, delays in or the Company’s inability to generate reductions in its cost base and/or overhead costs; (2) higher than anticipated restructuring charges and/or payments and/or changes in the expected timing of such charges and/or payments; (3) delays in completing the actions underlying the 2018 Optimization Program, which could reduce and/or defer the benefits expected to be realized from such activities, such as providing an additional source of liquidity; and/or (4) less than anticipated annualized cost reductions from the 2018 Optimization Program and/or changes in the timing of realizing such cost reductions, such as due to less than anticipated resources to fund such activities and/or more than expected costs to achieve the expected cost reductions;
(vi)lower than expected operating revenues, cash on hand and/or funds available under the Amended 2016 Revolving Credit Facility, the Amended 2019 Senior Line of Credit Facility and/or other permissible borrowings or generated from cost reductions related to the 2018 Optimization Program and/or other cost control initiatives; 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 Products Corporation's Amended 2016 Revolving Credit Facility, the Amended 2019 Senior Line of Credit Facility and/or other permissible borrowings; the unavailability of funds under the 2018 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 the 2018 Optimization Program and from other cost reduction initiatives;
(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 (such as the EA Integration Restructuring Program and the 2018 Optimization 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, 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, whether due to the enactment of the Tax Act or otherwise, 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;
(xiv)difficulties or delays that could affect the Company's ability to effectively implement the remediation plan, in whole or in part, to address the material weakness that it identified in its internal control over financial reporting, as described in Item 4. "Controls and Procedures" of this Form 10-Q; and/or
(xv)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.

(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 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, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America, 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 (such as the 2018 Optimization Program and the Revlon 2020 Restructuring 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, 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, such as the devastating fires in Australia and the earthquakes in Puerto Rico;
(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 the 2018 Optimization Program and/or the Revlon 2020 Restructuring Program 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, the 2020 Restated Line of 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 2018 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 COVID-19 expanding into more territories than currently anticipated, 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, such as in connection with the 2018 Optimization Program and/or the Revlon 2020 Restructuring Program, 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, the 2020 Restated Line of Credit Facility and/or other permissible borrowings or generated from cost reductions resulting from the implementation of the Revlon 2020 Restructuring Program and the 2018 Optimization Program and/or other cost control initiatives,including, without limitation, the Company’s interim measures to reduce costs in response to the COVID-19 pandemic (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), and/or from selling certain assets (such as the Natural Honey and Floid brands that were
sold in December 2019) 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 Products Corporation's Amended 2016 Revolving Credit Facility, the 2020 Restated Line of Credit Facility and/or other permissible borrowings; the unavailability of funds under the 2018 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 the Revlon 2020 Restructuring Program and the 2018 Optimization Program and from other cost reduction initiatives,including, without limitation, the Company’s interim measures to reduce costs in response to the COVID-19 pandemic (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain 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), and/or from selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) 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 (such as the 2018 Optimization Program and/or the Revlon 2020 Restructuring Program), 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, whether due to the enactment of the Tax Act or otherwise, 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.

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Website Availability of Reports, Corporate Governance Information and Other Financial Information
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 reports on Form 10-K, quarterly 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 the Company's Code of Conduct and Business Ethics, which includes the Company's Code of Ethics for Senior Financial Officers, and the Audit Committee Pre-Approval Policy. From 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.





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(all tabular amounts in millions, except share and per share amounts)

PART II - OTHER INFORMATION


Item 1. Legal Proceedings
On August 12, 2020, UMB Bank, National Association (“UMB”), purporting to act as successor agent under the Term Credit Agreement, dated as of September 7, 2016 (as amended as of May 7, 2020 and as otherwise amended, restated, supplemented or otherwise modified from time to time, the “2016 Credit Agreement”), filed a lawsuit, titled UMB Bank, National Association v. Revlon, Inc. et al., against Revlon, Inc., Products Corporation, several of Products Corporation’s subsidiaries, and several of Products Corporation’s contractual counterparties, including Citibank, Jefferies Finance LLC, Jefferies LLC, and Ares Corporate Opportunities Fund V, in the U.S. District Court for the Southern District of New York (the “Complaint”). The Complaint alleged various claims, stemming from alleged breaches of the 2016 Credit Agreement. The Company believes that this lawsuit was without merit. On November 6, 2020, having failed to serve the lawsuit on any defendant or make any effort to pursue the case, UMB Bank dismissed the case without prejudice to its right to refile it at a later date.
The Company is also 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.



Item 1A. Risk Factors


In addition to the other information in this report, when evaluating the Company’s business investors should consider carefully the following risk factors which have been updated since the Company’s 2019 Form 10-K. For definitions of certain capitalized terms used in this Form 10-Q referring to the Company's debt facilities, see Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources - Long-Term Debt Instruments" of this Form 10-Q and in the Company’s 2019 Form 10-K.

Revlon is a holding company with no business operations of its own and is dependent on its subsidiaries to pay certain expenses and dividends. In addition, shares of the capital stock of Products Corporation, Revlon's wholly-owned operating subsidiary, are pledged by Revlon to secure its obligations under the 2016 Credit Agreements and the 2020 BrandCo Credit Agreement.

Revlon is a holding company with no business operations of its own. Revlon's only material asset is all of the outstanding capital stock of Products Corporation, Revlon's wholly-owned operating subsidiary, through which Revlon conducts its business operations. As such, Revlon's net income has historically consisted predominantly of its equity in the net loss of Products Corporation, which for 2019 and 2018 was $151.2 million and $289.1 million, respectively (in each case excluding $7.9 million and $6.3 million, respectively, in expenses primarily related to Revlon being a public holding company). Revlon is dependent on the earnings and cash flow of, and dividends and distributions from, Products Corporation to pay Revlon’s expenses incidental to being a public holding company and to pay any cash dividend or distribution on its Class A Common Stock in each case that may be authorized by Revlon’s Board of Directors.

Products Corporation may not generate sufficient cash flow to pay dividends or distribute funds to Revlon because, for example, Products Corporation may not generate sufficient cash or net income; state laws may restrict or prohibit Products Corporation from issuing dividends or making distributions unless Products Corporation has sufficient surplus or net profits, which Products Corporation may not have; or because contractual restrictions, including negative covenants contained in Products Corporation’s various debt instruments, may prohibit or limit such dividends or distributions.

The terms of Products Corporation's 2016 Credit Agreements, the indenture governing Products Corporation's 6.25% Senior Notes due 2024 (the "6.25% Senior Notes Indenture" and the "6.25% Senior Notes," respectively) and the 2020 BrandCo Credit Agreement (as hereinafter defined) generally restrict Products Corporation from paying dividends or making distributions to Revlon, except in limited circumstances. For example, Products Corporation is permitted to pay dividends and make distributions to Revlon to enable Revlon to, among other things, maintain its existence and its ownership of Products Corporation, such as paying professional fees (e.g., legal, accounting and insurance fees), regulatory fees (e.g., SEC filing fees and NYSE listing fees), pay certain taxes and other expenses related to being a public holding company and, subject to certain limitations, to pay dividends, if any, on Revlon’s outstanding securities or make distributions in certain circumstances to
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finance Revlon’s purchase of shares of its Class A Common Stock issued in connection with the delivery of such shares to grantees under the Fourth Amended and Restated Revlon, Inc. Stock Plan, as amended. These limitations therefore restrict Revlon's ability to pay dividends on its Class A Common Stock.

All of the shares of Products Corporation’s capital stock held by Revlon are pledged to secure Revlon’s guarantee of Products Corporation's obligations under its 2016 Credit Agreements and the 2020 BrandCo Credit Agreement. A foreclosure upon the shares of Products Corporation's common stock would result in Revlon no longer holding its only material asset, would have a material adverse effect on the holders and price of Revlon’s Class A Common Stock and would be a change of control under Products Corporation’s other debt instruments. (See also Item 1A. Risk Factors - "Shares of Revlon Class A Common Stock and Products Corporation's capital stock are pledged to secure various of Revlon's and/or other of the Company's affiliates’ obligations and foreclosure upon these shares or dispositions of shares could result in the acceleration of debt under Products Corporation's 2016 Senior Credit Facilities, 2018 Foreign Asset-Based Term Facility, 2020 BrandCo Facilities, 2020 Restated Line of Credit Facility and/or its 6.25% Senior Notes and could have other consequences.")

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

Products Corporation has a substantial amount of outstanding indebtedness. As of September 30, 2020 the Company’s total indebtedness was $3,791.4 million (or $3,633.0 million net of discounts and debt issuance costs), including: (i) $1,761.3 million in aggregate principal amount of its 2020 BrandCo Term Loan Facility; (ii) $450 million in aggregate principal amount of its 6.25% Senior Notes; (iii) $342.8 million in aggregate principal amount of its 5.75% Senior Notes; (iv) $291.9 million of secured indebtedness under Tranche A of its Amended 2016 Revolving Credit Facility; (v) $886.3 million in aggregate principal amount of secured indebtedness under its 2016 Term Loan Facility; (vi) the Euro equivalent of $56.8 million in aggregate principal amount of secured indebtedness under its 2018 Foreign Asset-Based Term Facility; (vii) nil in aggregate principal amount of indebtedness under its 2020 Restated Line of Credit Facility; and (viii) $2.0 million in aggregate principal amount of other indebtedness. On November 13, 2020, Products Corporation successfully consummated the Exchange Offer and accepted $236 million in aggregate principal amount of 5.75% Senior Notes tendered in the Exchange Offer. Products Corporation issued $50 million aggregate principal amount of new ABL FILO Term Loans and $75 million aggregate principal amount of the New BrandCo Second-Lien Term Loans. Products Corporation used cash on hand to redeem, effective as of November 13, 2020, the remaining $106.8 million in aggregate principal amount of 5.75% Senior Notes pursuant to the terms of the 5.75% Senior Notes Indenture. Following the consummation of the Exchange Offer and the satisfaction and discharge of the remaining 5.75% Senior Notes, no 5.75% Senior Notes remained outstanding.

In addition, in May 2020 Products Corporation repaid in full the 2019 Term Loan Facility, incurred additional indebtedness under the 2020 BrandCo Term Loan Facility and exchanged a significant portion of indebtedness under the 2016 Term Loan Facility for indebtedness under the Roll-up BrandCo Facility and the Junior Roll-up BrandCo Facility in connection with the 2020 BrandCo Refinancing Transactions (see Note 7, "Debt" and Note 19, “Subsequent Events,” to the Company's Unaudited Consolidated Financial Statements in this Form 10-Q. See also, "Recent Debt Transactions" in Item 7. "Combined Management's Discussion and Analysis of Financial Condition and Results of Operations."). If the Company is unable to maintain or increase its profitability and cash flow and sustain such results in future periods, it could adversely affect the Company'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. (See also Item 1A. Risk Factors - "Restrictions and covenants in Products Corporation’s various debt instruments 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, 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;
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•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 and for other general corporate purposes;
•placing the Company 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 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; and
•making the Company more vulnerable in the event of adverse economic conditions 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 (as hereinafter defined), 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 subject to certain limitations, could be secured indebtedness. To the extent that more debt, whether secured or unsecured, is added to the Company's current debt levels, the risks described above would increase further. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Even after the consummation of the Exchange Offer, Products Corporation’s ability to pay the principal amount of its indebtedness depends on many factors.

The 2020 Restated Line of Credit Facility matures on December 31, 2020 (provided that upon the incurrence of a New European ABL FILO Facility under such facility, the New European ABL FILO Facility would mature on (x) the maturity date of any such Future Refinanced European ABL Facility or (y) if there is no Future Refinanced European ABL Facility, July 9, 2022); the 2018 Foreign Asset-Based Term Facility matures in July 2021; Tranche A under the Amended 2016 Revolving Credit Facility matures no later than September 2021; the 2016 Term Loan Facility matures no later than September 2023; Tranche B under the Amended 2016 Revolving Credit Agreement matures no later than December 2023; the 6.25% Senior Notes mature in August 2024; and the 2020 BrandCo Facilities and the Extended Term Loans mature no later than June 2025. The 2020 BrandCo Facilities have a springing maturity that accelerates to the 91st day prior to the maturity of the 6.25% Senior Notes if an aggregate principal amount of the 6.25% Senior Notes in excess of $100 million remains outstanding by such date. For a more complete description of the maturities of these debt instruments, including events that could accelerate their respective maturities, see "Recent Developments," as well as Note 7, “Debt,” and Note 19, “Subsequent Events,” to the Company's unaudited Consolidated Financial Statements in this Form 10-Q. See also, “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Products Corporation currently anticipates that, in order 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 event that Products 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 Company will be required to refinance 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 Company’s other affiliates and/or third parties. The Company may be unable 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 transactions may not be permitted under the terms of Products Corporation’s various debt instruments then in effect, including restrictions on the incurrence 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 satisfy its cash requirements if the actions do not result in sufficient cost reductions or generate a sufficient amount of additional capital, as the case may be.

None of the Company’s affiliates are required to make any capital contributions, loans or other payments to Products Corporation regarding its obligations on its indebtedness, other than the 2020 Restated Line of Credit Facility. 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 2018 Foreign Asset-Based Term Agreement, the 2020 BrandCo Credit 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 effect may not permit the Company to take such actions. (See also Item 1A. Risk Factors - "Restrictions and covenants in Products Corporation’s various debt instruments limit its ability to take certain actions and impose consequences in the event of failure to comply").

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The future state of the credit markets, including any volatility and/or tightening of the credit markets and reduction in credit availability, 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 Products Corporation’s various debt instruments limit its ability to take certain actions and impose consequences in the event of failure to comply.

The agreements that govern Products Corporation's indebtedness, including the 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement, the 2020 BrandCo Credit Agreement and Products Corporation's 6.25% Senior Notes Indenture, contain a number of significant restrictions and covenants that limit Products Corporation’s ability (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 Products Corporation’s operating flexibility by, among other things, restricting its 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 2018 Foreign Asset-Based Term Agreement, the 2020 BrandCo Credit Agreement, the 2020 Restated Line of Credit Facility 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 Senior Credit Facilities, the 2018 Foreign Asset-Based Term Facility, the 2020 BrandCo Credit Agreement, the 2020 Restated Line of Credit Facility 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. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, holders of the 6.25% Senior Notes may require Products Corporation to repurchase their notes in the event of a change of control under the applicable indenture and a change of control would be an event of default under the 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement and the 2020 BrandCo Credit 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 Senior Credit Facilities, the 2020 BrandCo Credit Agreement, the 2020 Restated Line of Credit Facility or the 2018 Asset-Based Term Facility or to repay, repurchase or redeem, in full or in part, the 6.25% Senior Notes.

Events beyond the Company’s control could impair the Company’s operating performance, which could affect Products Corporation’s ability to comply with the terms of Products Corporation’s debt instruments. Such events may include decreased consumer spending in response to the ongoing and prolonged COVID-19 pandemic or other weak economic conditions or weakness in the consumption of beauty products in one or more of the Company's segments; 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, 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.

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Under such circumstances, Products Corporation may be unable to comply with the requirements of one or more of its various debt instruments, including any financial covenants in the 2016 Credit Agreements. If Products Corporation is unable to satisfy such requirements at any future time, Products Corporation would need to seek an amendment or waiver of such requirements. The respective lenders under the 2016 Credit Agreements may not consent to any amendment or waiver requests that Products Corporation may make in the future, and, if they do consent, they may only do so on terms that are unfavorable to Products Corporation and/or Revlon.

If Products Corporation is unable to obtain any such waiver or amendment, Products Corporation's inability to meet the requirements of the 2016 Credit Agreements would constitute an event of default under such agreements, which, under certain circumstances, would permit the bank lenders to accelerate the repayment of the 2016 Senior Credit Facilities, and, under certain circumstances, would constitute an event of default under the 2020 BrandCo Credit Agreement, the 2018 Foreign Asset-Based Term Agreement, the 2020 Restated Line of Credit Agreement and the 6.25% Senior Notes Indenture. An event of default under the 6.25% Senior Notes Indenture would permit the 6.25% Senior Notes Trustee or the Requisite Note Holders to accelerate payment of the principal and accrued, but unpaid, interest on the 6.25% Senior Notes. An event of default under the 2020 Restated Line of Credit Agreement, under certain circumstances, would permit the lenders to accelerate the repayment of such facility.

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 its 2016 Senior Credit Facilities, the 2018 Foreign Asset-Based Term Facility, the 2020 BrandCo Credit Agreement, the 2020 Restated Line of Credit Facility and/or its 6.25% Senior Notes, it may be unable to refinance or restructure the payments on such debt. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Further, if the Company is unable to repay, refinance or restructure its indebtedness under the 2016 Senior Credit Facilities, the 2018 Foreign Asset-Based Term Facility and/or the 2020 BrandCo Credit 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 complying 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 Products Corporation's borrowing capacity under the Amended 2016 Revolving Credit Facility and the 2018 Foreign Asset-Based Term Facility may affect the Company's ability to finance its operations.

At September 30, 2020, Products Corporation had $291.9 million in aggregate borrowings outstanding under the Amended 2016 Revolving Credit Facility and the Euro equivalent of $56.8 million outstanding under the 2018 Foreign Asset-Based Term Facility as of September 30, 2020. While the Amended 2016 Revolving Credit Facility provides for up to $400.0 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 2018 Foreign Asset-Based Term Facility provides for a euro-denominated senior secured asset-based term loan facility in an original aggregate principal amount of €77 million, the full amount of which was funded on the closing of the facility in July 2018, the 2018 Foreign Asset-Based Term Agreement requires the maintenance of a borrowing base supporting the borrowing thereunder, based on the sum of: (i) 85% of eligible accounts receivable; and (ii) 90% of the net orderly liquidation value of eligible inventory, 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.

Under the Amended 2016 Revolving Credit Facility and the 2018 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 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 Borrowers must prepay loans under the Amended 2016 Revolving Credit Facility and the 2018 Foreign Asset-Based Term Facility to the extent that outstanding loans exceed its respective borrowing base under the 2018 Foreign Asset-Based Term Facility, in lieu of a mandatory prepayment, the Loan Parties may deposit cash in an amount not to exceed 10% of the borrowing base into a designated U.S. bank account with the Agent that is subject to a control agreement (such cash, the "Qualified Cash"). If any such over-advance has not been cured within 60 days, the Qualified Cash may be applied, at the Agent’s option, to prepay the loans under the 2018 Foreign Asset-Based Term Facility. To the extent certain levels of
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availability are obtained during a certain period of time, the Borrowers can withdraw the Qualified Cash from such bank account. In addition, the 2018 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.

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 2018 Foreign Asset-Based Term Facility), this could reduce the borrowing base under the Amended 2016 Revolving Credit Facility and/or the 2018 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 2018 Foreign Asset-Based Term Facility 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, 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 other covenants in the agreements that govern the 2016 Senior Credit Facilities. 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.

At September 30, 2020, the Company had a liquidity position of $340.4 million, consisting of: (i) $268.3 million of unrestricted cash and cash equivalents (with approximately $93.7 million held outside the U.S.); (ii) $52.6 million in available borrowing capacity under Products Corporation's Amended 2016 Revolving Credit Facility (which had $291.9 million drawn at such date); (iii) $30 million in available borrowing capacity under the 2020 Restated Line of Credit Facility, which had no borrowings at such date; and less (iv) approximately $10.5 million of outstanding checks. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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.

A substantial portion of the Products Corporation's indebtedness is subject to floating interest rates, which makes the Company more vulnerable in the event of adverse economic conditions, increases in prevailing interest rates or a downturn in the Company’s business. As of September 30, 2020, $2,966.4 million of Products Corporation’s total indebtedness, or approximately 79% 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. 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 2021. Certain of Products Corporation’s financing agreements, including its 2016 Term Loan Facility, the Amended 2016 Revolving Credit Facility and the 2020 BrandCo Facilities are made at variable rates that use LIBOR as a benchmark for establishing the applicable interest rate. While the 2016 Credit Agreements contain 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 2020 BrandCo Credit Agreement contains 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
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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.

Similar considerations as the ones described above with respect to LIBOR as benchmark for establishing interest rates apply to EURIBOR. Our 2018 Foreign Asset-Based Term Facility is denominated in Euros and the interest rate thereunder is tied to EURIBOR. To the extent that EURIBOR becomes unavailable, the agreement contains fallback provisions ultimately providing for a rate determined by the administrative agent as the all-in-cost of funds for borrowings denominated in Euros with maturities comparable to the interest period applicable to the loans under the 2018 Foreign Asset-Based Term Facility.

As of September 30, 2020, the entire $886.3 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 September 30, 2020, LIBOR and the alternate base rate for the 2016 Term Loan Facility were 0.75% and 3.25%, respectively. As of September 30, 2020, $291.9 million in aggregate principal amount outstanding under Tranche A 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 0.25%, 0.50% or 0.75%, depending on the average excess availability (based on the borrowing base as most recently reported by Products Corporation to the administrative agent from time-to-time); or (ii) the Eurocurrency rate plus an applicable margin equal to 1.25%, 1.5% or 1.75%, depending on the average excess availability (based on the borrowing base as most recently reported by Products Corporation to the administrative agent from time-to-time). Under the Amended 2016 Revolving Credit Facility, the applicable margin increases as average excess availability thereunder decreases. Under the 2018 Foreign Asset-Based Term Facility, which had the Euro equivalent of $56.8 million in aggregate principal amount outstanding as of September 30, 2020, interest accrues on borrowings at a rate per annum equal to the EURIBOR rate plus a 6.50% applicable margin. Interest accrues on the 2020 BrandCo Term Loan Facility 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 BrandCo Facility and the Junior Roll-up BrandCo Facility at a rate per annum of LIBOR (which has a floor of 0.75%) plus a margin of 3.5%. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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 Senior Credit Facilities, the 2018 Foreign Asset-Based Term Facility, the 2020 BrandCo Facilities and other short-term borrowings (which, in the aggregate, are Products Corporation’s only debt currently subject to floating interest rates) as of September 30, 2020, a 1% increase in LIBOR (or an equivalent successor rate) would increase the Company’s annual interest expense by $30.5 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 $15.0 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 Products Corporation may be unable to meet the requirements of the 2016 Credit Agreements, 2018 Foreign Asset-Based Term Loan Agreement, 2020 BrandCo Credit Agreement and/or 2020 Restated Line of Credit 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, the 2020 Restated Line of Credit Facility and other permissible borrowings will be sufficient to enable the Company to cover its operating expenses for 2020, including: cash requirements for the payment of expenses in connection with 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 (including, without limitation, the EA Integration Restructuring Program, the 2018 Optimization Program and the Revlon 2020 Restructuring 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; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade. See “Recent Debt Transactions” in Item 7. “Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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However, if the Company's anticipated level of revenue is not achieved because of, for example, decreased consumer spending in response to the ongoing and prolonged COVID-19 pandemic or other weak economic conditions or weakness in the consumption of beauty products in one or more of the Company's segments; 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 sales channels, such as due to the consumption declines in core beauty categories in the mass retail channel in North America; 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), acquisition and integration costs, costs related to litigation, advertising, promotional 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, 2018 Foreign Asset-Based Term Loan Agreement, 2020 BrandCo Credit Agreement and/or 2020 Restated Line of Credit Agreement (See also Item 1A. Risk Factors - "Restrictions and covenants in Products Corporation’s various debt instruments 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).

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 to comply with the requirements of the 2016 Credit Agreements, 2018 Foreign Asset-Based Term Loan Agreement, 2020 BrandCo Credit Agreement and/or 2020 Restated Line of Credit Agreement, the Company could be required to adopt one or more of the alternatives listed below:
•delaying the implementation of or revising certain aspects of the Company's business 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;
•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 the 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 to comply with the terms of the 2016 Credit Agreements, 2018 Foreign Asset-Based Term Loan Agreement and/or 2020 BrandCo Credit 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 Item 1A. Risk Factors - "Restrictions and covenants in Products Corporation’s various debt instruments 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).

Shares of Revlon Class A Common Stock and Products Corporation's capital stock are pledged to secure various of Revlon's and/or other of the Company's affiliates’ obligations and foreclosure upon these shares or dispositions of shares could result in the acceleration of debt under Products Corporation's 2016 Senior Credit Facilities, 2018 Foreign Asset-
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Based Term Facility, 2020 BrandCo Facilities, 2020 Restated Line of Credit Facility and/or its 6.25% Senior Notes and could have other consequences.

All of Products Corporation's shares of common stock are pledged to secure Revlon’s guarantee under the 2016 Senior Credit Facilities and the 2020 BrandCo Facilities. MacAndrews & Forbes has advised the Company that it has pledged shares of Revlon’s Class A Common Stock to secure certain obligations of MacAndrews & Forbes. Additional shares of Revlon and shares of common stock of intermediate holding companies between Revlon and MacAndrews & Forbes may from time-to-time be pledged to secure obligations of MacAndrews & Forbes. A default under any of these obligations that are secured by the pledged shares could cause a foreclosure with respect to such shares of Revlon's Class A Common Stock, Products Corporation's common stock or stock of intermediate holding companies between Revlon and MacAndrews & Forbes.

A foreclosure upon any such shares of common stock or dispositions of shares of Revlon’s Class A Common Stock, Products Corporation's common stock or stock of intermediate holding companies between Revlon and MacAndrews & Forbes that are beneficially owned by MacAndrews & Forbes could, in a sufficient amount, constitute a "change of control" under Products Corporation’s 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement, the 2020 BrandCo Credit Agreement and the 6.25% Senior Notes Indenture. A change of control constitutes an event of default under the 2016 Credit Agreements, the 2018 Foreign Asset-Based Term Agreement and the 2020 BrandCo Credit Agreement that would permit Products Corporation's and its subsidiaries' lenders to accelerate amounts outstanding under such facilities. In addition, holders of the 6.25% Senior Notes may require Products Corporation to repurchase their respective notes under those circumstances.

Products Corporation may not have sufficient funds at the time of any such change of control to repay in full or in part the borrowings under the 2016 Senior Credit Facilities, the 2018 Foreign Asset-Based Term Facility, the 2020 BrandCo Facilities and the 2020 Restated Line of Credit Facility (as a result of its cross-default provisions) and/or to repurchase or redeem some or all of the 6.25% Senior Notes. (See also Item 1A. Risk Factors - "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 Products Corporation may be unable to meet the requirements of the 2016 Credit Agreements, 2018 Foreign Asset-Based Term Loan Agreement, 2020 BrandCo Credit Agreement and/or 2020 Restated Line of Credit Agreement, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows."

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. After China began reporting on the spread of the COVID-19 coronavirus in early 2020, there have been over 45 million cases of the COVID-19 coronavirus globally and it has contributed to over 1.1 million deaths worldwide, according to data from the World Health Organization. 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 significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of retailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; 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.

The ongoing and prolonged COVID-19 pandemic has continued to adversely impact the Company’s business in Q3 2020, as social-distancing restrictions and related actions designed to curb the spread of the virus have remained in place or have been reinstated as the COVID-19 pandemic spikes across the globe. These restrictions could continue for the foreseeable future, as global economies face a “second-wave” of the pandemic as re-opening plans are implemented.

The ongoing and prolonged COVID-19 pandemic contributed an estimated $119 million ($119 million "XFX," as hereinafter defined), to the Company's $119.7 million decline in net sales for the three months ended September 30, 2020 three months ended September 30, 2020, compared to the prior year quarter, and an estimated $387 million ($392 million XFX) to the Company's $442.5 million decline in net sales for the nine months ended September 30, 2020, compared to the prior year period.

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REVLON, INC. AND SUBSIDIARIES

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 most of these measures still in place, including the Revlon 2020 Restructuring Program, the Company achieved cost reductions of approximately $78 million and $231 million during the three and nine months ended September 30, 2020, respectively, that have substantially offset the impact of the decline in the Company's net sales over such period. However, with the ongoing and prolonged COVID-19 pandemic, these mitigation actions may not prove to be effective in insulating the Company from any further damaging economic impacts from the pandemic.

The ongoing and prolonged COVID-19 pandemic has caused the Company and various of its key third party suppliers to temporarily close one or more of their manufacturing facilities. While these closures have not yet had a material adverse impact on the Company’s ability to operate and fulfill orders, if the COVID-19 restrictions continue for a period longer than the period for the re-opening of retailers, such restrictions could lead to a shortage of raw materials, components and finished products, which in turn could cause the Company to be unable to ship products to retailers and consumers and continue to adversely impact the Company’s net sales. The continuation of any of the foregoing events or other unforeseen consequences of the COVID-19 pandemic would continue to significantly adversely affect the Company’s business, results of operations, financial condition and cash flows.

In addition to the other information in this report, investors should consider carefully the risk factors discussed in Part I, Item 1A. "Risk Factors" in the Company's 20182019 Form 10-K.



Item 5. Other Information


Extension of the Maturity of the 2019 Senior Line of Credit

On November 7, 2019, Products Corporation and MacAndrews & Forbes Group, LLC, Revlon’s majority stockholder, enteredtendered approximately $15.5 million of 5.75% Senior Notes into the AmendedExchange Offer and, Restated 2019 Senior Unsecured Line of Credit Agreement (the “Amended 2019 Line of Credit Agreement”) to extendin exchange, received the maturityMixed Consideration as described herein, in accordance with the terms and conditions of the 2019 Senior Line of Credit Agreement entered into on June 27, 2019 by 1-year, expiring December 31, 2020. As of September 30, 2019 and as of the November 7, 2019 extension date, there were no borrowings outstanding under this facility. As of September 30, 2019, MacAndrews & Forbes Group, LLC and its affiliates beneficially owned 46,223,321 shares of Revlon’s Class A common stock, representing approximately 87.2% of Revlon’s outstanding shares of voting capital stock as of such date. The foregoing description of the Amended 2019 Line of Credit Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is incorporated by reference into this Form 10-Q as Exhibit 4.1.Exchange Offer.


Appointment of Mitra Hormozi, Esq. as a Revlon Director

Effective November 7, 2019, Revlon’s Board of Directors appointed Mitra Hormozi, Esq. to serve as a member of Revlon’s Board of Directors. Ms. Hormozi previously served as the Company’s Executive Vice President and General Counsel from April 2015 to July 2019, responsible for overseeing the Company’s worldwide legal affairs. Ms. Hormozi also acted as the Company’s Interim Chief Human Resources Officer from October 2018 to February 2019. Prior to joining the Company in April 2015, Ms. Hormozi was a litigation partner at two major law firms from 2011 to 2015 and previously served as Deputy Chief of Staff to then New York State Attorney General, Andrew Cuomo. Ms. Hormozi also served as an Assistant United States Attorney prosecuting high-profile complex racketeering cases in the Eastern District of New York. Since December 2018, Ms. Hormozi has served as a director of Athene Holding Ltd. (including one or more of its U.S. subsidiaries), which is a NYSE-listed company that offers and reinsures retirement savings products. With her background, Ms. Hormozi has extensive experience in both the public and private sectors of the legal field, as well as senior executive and business experience, governmental experience, public company board experience, combined with in-depth knowledge of the Company. Ms. Hormozi also currently sits on The New York State Commission on Legislative, Judicial, & Executive Compensation. Ms. Hormozi received a Bachelor of Arts in history from the University of Michigan and a Juris Doctor from the New York University School of Law.

In November 2019, the Company and Ms. Hormozi entered into a consulting agreement (the “Consulting Agreement”), pursuant to which Ms. Hormozi will assist in transitioning oversight of the Company’s worldwide legal affairs to her successor. In exchange for performing these advisory services, the Company will pay Ms. Hormozi a fee of $250,000 per year and she will continue to remain eligible to be paid her 2019 annual bonus award and vest in her outstanding LTIP awards, in each case on a pro-rated basis and subject to the Company’s achievement of its applicable performance objectives (supplemental to the Board’s compensation program for non-employee directors). The term of the Consulting Agreement expires on December 31, 2020, subject to earlier termination by either party on at least 30 days’ notice, among other standard termination rights. The foregoing description of the Consulting Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is incorporated by reference into this Form 10-Q as Exhibit 10.2.



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REVLON, INC. AND SUBSIDIARIES



Item 6. Exhibits
*
4.Instruments Defining the Rights of Security Holders, including Indentures.
4.1
4.210.Material Contracts.
10.1
4.3
Term Loan Guarantee and Collateral Agreement, dated as of August 6, 2019, made by each of the signatories thereto in favor of Wilmington Trust, as collateral agent, for the benefit of the Secured Parties under the Term Loan Agreement (incorporated by reference to Exhibit 4.3 to the Revlon Q2 2019 Form 10-Q). (inc
4.4
Holdings Term Loan Guarantee and Pledge Agreement, dated as of August 6, 2019, made by Revlon in favor of Wilmington Trust, as collateral agent, for the benefit of the Secured Parties under the Term Loan Agreement (incorporated by reference to Exhibit 4.4 to the Revlon Q2 2019 Form 10-Q).
4.5
First Lien Pari Passu Intercreditor Agreement, dated as of August 6, 2019, between Revlon, Products Corporation, certain subsidiaries of Products Corporation party thereto from time to time, Wilmington Trust, as administrative agent and collateral agent, and Citibank, N.A. (incorporated by reference to Exhibit 4.5 to the Revlon Q2 2019 Form 10-Q).
4.6
BrandCo Guarantee and Security Agreement, dated as of August 6, 2019, made by each of the signatories thereto in favor of Wilmington Trust, as administrative agent, for the benefit of the Secured Parties under the Term Loan Agreement (incorporated by reference to Exhibit 4.6 to the Revlon Q2 2019 Form 10-Q).
4.7
Intellectual Property License Agreement, dated as of August 6, 2019, made between Beautyge II, LLC, Products Corporation and other signatories thereto (incorporated by reference to Exhibit 4.7 to the Revlon Q2 2019 Form 10-Q).
10.1
Amendment dated as of September 5, 2019 to the Fourth Amended and Restated Revlon, Inc. Stock Plan (incorporatedorporated by reference to Exhibit 10.1 to the Revlon Q3 20192020 Form 10-Q).
10.2*31.1
*31.1
Certification of Debra Perelman, Chief Executive Officer, dated November 8, 2019,13, 2020, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
*31.2
**32.1
**32.2
*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.


101

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


Dated: November 8, 201913, 2020


Revlon, Inc.
(Registrant)
Revlon, Inc.
(Registrant)
By: /s/ Debra PerelmanBy: /s/ Victoria DolanBy: /s/ Pamela Bucher
Debra PerelmanVictoria DolanPamela Bucher
President, Chief Executive Officer &Chief Financial OfficerVice President,
DirectorChief Accounting Officer
& Controller

Revlon Consumer Products Corporation
(Registrant)
By: /s/ Debra PerelmanBy: /s/ Victoria DolanBy: /s/ Pamela Bucher
Debra PerelmanVictoria DolanPamela Bucher
President, Chief Executive Officer &Chief Financial OfficerVice President,
DirectorChief Accounting Officer
& Controller





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