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

FORM 10-K

(Mark One)

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


For the fiscal year ended December 31, 20152017

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 Number: 1-11178
REVLON, INC.
(Exact name of registrant as specified in its charter)
    
Delaware13-3662955
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
One New York Plaza, New York, New York10004
(Address of principal executive offices)(Zip Code)

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

Securities registered pursuant to Section 12(b) or 12(g) of the Act:
Title of each className of each exchange on which registered
Class A Common StockNew York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ¨ No x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x






Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large"large accelerated filer,” “accelerated filer”" "accelerated filer," "smaller reporting company," and “smaller reporting company”"emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨
 
Accelerated filer x
Non-accelerated filer ¨(Do not check if a smaller reporting company)
 
Smaller reporting company ¨
    (Do not check if a smaller reporting company)
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has 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 the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the registrant's Class A Common Stock held by non-affiliates (using the New York Stock Exchange closing price as of June 30, 2015,2017, the last business day of the registrant's most recently completed second fiscal quarter) was approximately $432,111,207.$225,291,062.

As of December 31, 2015, 52,463,4842017, 52,646,564 shares of Class A Common Stock were outstanding. At such date, 40,669,64044,573,187 shares of Class A Common Stock were beneficially owned by MacAndrews & Forbes Incorporated and certain of its affiliates.


DOCUMENTS INCORPORATED BY REFERENCE

Portions of Revlon, Inc.’s definitive Proxy Statement to be delivered to stockholders in connection with its Annual Stockholders' Meeting to be held on or about June 9, 20167, 2018 are incorporated by reference into Part III of this Form 10-K.






REVLON, INC. AND SUBSIDIARIES
Form 10-K
For the Year Ended December 31, 20152017
Table of Contents

PART I
Item 1.Business
21
Item 1A.Risk Factors
910
Item 1B.Unresolved Staff Comments
2225
Item 2.Properties
2225
Item 3.Legal Proceedings
2225
Item 4.Mine and Safety Disclosures
2226
   
PART II
Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
2227
Item 6.Selected Financial Data
2327
Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations
2630
Item 7A.Quantitative and Qualitative Disclosures About Market Risk
4450
Item 8.Financial Statements and Supplementary Data
4551
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
4551
Item 9A.Controls and Procedures
4552
Item 9B.Other Information
4652
   
PART III
Item 10.Directors, Executive Officers and Corporate Governance
4855
Item 11.Executive Compensation
4855
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
4855
Item 13.Certain Relationships and Related Transactions, and Director Independence
4855
Item 14.Principal Accountant Fees and Services
4855
   
PART IV
Item 15.Exhibits and Financial Statement Schedules
5057
 Index to Consolidated Financial Statements and Schedules
F-1
 Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements)
F-2
 Report of Independent Registered Public Accounting Firm (Internal Control Over Financial Reporting)
F-3
 Financial Statements
F-4
 Financial Statement Schedule: Schedule II - Valuation and Qualifying Accounts
F-63F-68
Item 16.Form 10-K Summary
F-68
 Signatures
F-65
 Certifications 
 Exhibits 





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PART I - FINANCIAL INFORMATION

Item 1. Business

Background
Revlon, Inc. (and("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 Inc. is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation wholly-owned by Ronald O. Perelman.
The Company was founded over 8086 years ago by Charles Revson, who revolutionized the cosmetics industry by introducing nail enamels matched to lipsticks in fashion colors. Today, the Company continues Revson's legacy by producing and marketing innovative products that address consumers' wants and needs for beauty and personal care products.
The Company currentlyis a leading global beauty company with an iconic portfolio of brands. The Company develops, manufactures, markets, distributes and sells worldwide an extensive array of beauty and personal care products, including 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 continues to build a combined organization that is entrepreneurial, agile and boldly creative, with a passion for beauty. The Company has strategic brand builders, developing a diverse portfolio of iconic brands that delight consumers around the world wherever and however they shop for beauty. The Company strives to be an ethical company that values inclusive leadership and is committed to sustainable and responsible growth. 

Financial Information about Operating Segments
The Company operates in threefour reporting segments: the consumer division (“Consumer”("Consumer"); Elizabeth Arden; the professional division (“Professional”("Professional"); and Other. The Elizabeth Arden segment consists entirely of the business acquired pursuant to Products Corporation's September 7, 2016 acquisition of Elizabeth Arden, Inc. ("Elizabeth Arden," the "Elizabeth Arden Acquisition" and the "Elizabeth Arden Acquisition Date," respectively). The Professional segment consists entirely of the business acquired pursuant to Products Corporation's October 9, 2013 acquisition of The Colomer Group Participations, S.L., a Spanish company now known as Beautyge Participations, S.L. ("Colomer," the "Colomer Acquisition" and the "Colomer Acquisition Date," respectively) The Other segment includes the business acquired pursuant to the Company's April 2015 acquisition of the CBBeauty Group and certain of its related entities (collectively "CBB" and, such transaction, the "CBB Acquisition").
The Company manufactures, markets and sells worldwide an extensive array of beauty and personal care products, including color cosmetics, hair color, hair care and hair treatments, as well as beauty tools, men's grooming products, anti-perspirant deodorants, fragrances, skincare and other beauty care products. The Company believes that its global brand name recognition, product quality, R&D, new product innovation and marketing experience have enabled it to create leading global consumer and professional brands.
The Company’s Consumer segment is comprised of products that are manufactured, marketed, distributed and sold in large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as Revlon, Almay, SinfulColorsand Pure Icein cosmetics; Revlon ColorSilkin women’s hair color; Revlonin beauty tools; Cutex in nail care products; and Mitchumin anti-perspirant deodorants. The Consumer segment also includes a skincareskin care line under the Natural Honey brand and hair color line under the Llonguerasbrand (licensed from a third party) that are sold in large volume retailers and other retailers, primarily in Spain, which were acquired as part of the Colomer Acquisition.Spain.
The Company'sElizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics to prestige retailers, the mass retail channel, specialty stores, perfumeries, department stores, boutiques, e-commerce, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and Elizabeth Arden.com e-commerce business under brands such as Skin Illuminating, SUPERSTART, Prevage, Eight Hour, Elizabeth Arden Ceramide and Visible Difference in the Elizabeth Arden skin care brands; Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Green Tea and UNTOLD in Elizabeth Arden fragrances; Juicy Couture, John Varvatos, All Saints, La Perla and Wildfox in designer fragrances; and Curve, Elizabeth Taylor, Britney Spears, Christina Aguilera, Shawn Mendes, Halston,Ed Hardy, Geoffrey Beene, Alfred Sung, Giorgio Beverly Hills, Lucky Brand, PS Fine Cologne for Men, White Shoulders and Jennifer Anistonin heritage fragrances.
The Company’s Professional segment manufactures, markets, distributes and sells professional products primarily to hair and nail salons and professional salon distributors in the U.S. and internationally under brands such as Revlon Professional in hair color, hair care and hair treatments; CND in nail polishes and nail enhancements, including CND Shellacand CND Vinyluxnail polishes; and American Crew in men’s grooming products. The Professional segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.
The Other segment includes the operating results related to the development, marketing and distribution of the CBB business and related purchase accounting for the CBB Acquisition. CBB develops, manufactures, markets and distributescertain licensed fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories.products. The results included within the Other segment are not material to the Company'sCompany’s consolidated results of operations.
The
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For certain information regarding the Company's Strategy for Value Creationsegments' performance, foreign and domestic operations and classes of similar products, refer to Note 19, "Segment Data and Related Information," to the Company’s Audited Consolidated Financial Statements in this Form 10-K.
The Company’s vision is to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful. We want to inspire our consumers to express themselves boldly and confidently.
The Company’s strategic goal is to optimize the market and financial performance of its portfolio of brands and assets. The business strategies employed by the Company to achieve this goal are:
1.
Manage financial drivers for value creation. Gross profit margin expansion, which includes optimizing price, allocating sales allowances to maximize our return on trade spending and reducing costs across our global supply chain. In addition, we are focused on eliminating non-value added general and administrative costs in order to fund reinvestment to facilitate growth.
2.
Grow profitability through intensive innovation and geographical expansion. Creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful, distinctive and ownable. We are also focused on

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pursuing organic growth opportunities within our existing brand portfolio and among our existing retailers, and pursuing opportunities to expand our geographical presence.
3.
Improve cash flow. Improving our cash flows through, among other things, continued effective management of our working capital and by focusing on appropriate return on capital spending.
4.
People. Attracting, developing and supporting employees who fit into our innovative culture and inspire the creative drive that represents the foundation of our vision and execution of our strategy.
Recent Transactions
2015 Efficiency Program
In September 2015, the Company initiated restructuring actions to drive certain organizational efficiencies across the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions are designed to reduce general and administrative expenses within the Consumer and Professional segments, and are expected to be completed by 2017. The Company recognized $9.5 million of restructuring and related charges during 2015 for the 2015 Efficiency Program and expects to recognize total restructuring and related charges of $10.1 million by the end of 2017. By implementing the 2015 Efficiency Program, the Company expects to achieve annualized cost reductions of approximately $10.0 million to $15.0 million by the end of 2018, of which approximately $3.0 million benefited the Company's 2015 results. For further discussion of the 2015 Efficiency Program, see Note 3, "Restructuring Charges - 2015 Efficiency Program" to the Consolidated Financial Statements in this Form 10-K.
Acquisition of CBBeauty Group
On April 21, 2015 (the "CBB Acquisition Date"), the Company completed the CBB Acquisition for total cash consideration of $48.6 million. CBB develops, manufactures, markets and distributes fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories. CBB is expected to provide the Company with a platform to develop the Company's presence in the fragrance category. On the CBB Acquisition Date, the Company used cash on hand to pay 70% of the total cash consideration, or $34.6 million. The remaining $14.0 million of the total cash consideration is payable in equal installments over 4 years from the CBB Acquisition Date, subject to the selling shareholders' compliance with certain service conditions. These remaining installments are being recorded as a component of SG&A expenses ratably over the 4-year installment period. The results of operations of the CBB business were included in the Company’s Consolidated Financial Statements commencing on the CBB Acquisition Date. See Note 2, "Business Combinations," to the Consolidated Financial Statements in this Form 10-K for further details on the CBB Acquisition.
Debt Transactions
In March 2015, Products Corporation prepaid $24.6 million of term loan indebtedness, representing 50% of its 2014 “excess cash flow" in accordance with the terms of its amended term loan agreement, which facility is comprised of: (i) the term loan due November 19, 2017, in the original aggregate principal amount of $675.0 million, which had $660.6 million in aggregate principal balance outstanding as of December 31, 2015 (the "2011 Term Loan"); and (ii) the term loan due October 8, 2019 in the original aggregate principal amount of $700 million, which had $672.5 million in aggregate principal balance outstanding as of December 31, 2015 (the "Acquisition Term Loan") (together, the "Amended Term Loan Agreement"). The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $12.1 million to $662.9 million (as all amortization payments under the 2011 Term Loan had been paid). The $12.5 million applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterly amortization payments under the Acquisition Term Loan on a ratable basis from $1.8 million prior to the prepayment to $1.7 million after giving effect to the prepayment and through its maturity on October 8, 2019. See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in this Form 10-K for further details.
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” for further discussion of the above debt transaction, including discussion of Products Corporation's "excess cash flow" payment to be made in 2016 in respect of 2015.
2014 Integration Program
The Company's integration initiatives in connection with the Colomer Acquisition have included actions to integrate Colomer's operations into the Company's business, as well as additional restructuring actions to reduce costs across the Company's businesses (all such actions, together the “Integration Program”). The Integration Program was designed to deliver cost reductions throughout the combined organization by generating synergies and operating efficiencies within the Company’s global supply chain,

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consolidating offices and back office support, as well as actions designed to reduce selling, general and administrative expenses. The Integration Program was substantially completed as of December 31, 2015.
While recognizing total restructuring charges, capital expenditures and related non-restructuring costs under the Integration Program of approximately $45.0 million in the aggregate through 2015, the Company achieved annualized cost reductions of approximately $35.0 million. For further discussion of the Colomer Acquisition and the Integration Program, see Note 2, "Business Combinations" and Note 3, "Restructuring Charges - Integration Program" to the Consolidated Financial Statements in this Form 10-K.
Products
Revlon, Inc. conducts business exclusively through Products Corporation. The Company manufactures and sells a variety of products worldwide. The following table sets forth the Company's principal brands that are included in its Consumer, ProfessionalElizabeth Arden and OtherProfessional segments by product category:
Segment COSMETICS HAIR MEN'S GROOMING BEAUTY TOOLS FRAGRANCEFRAGRANCES ANTI-PERSPIRANT DEODORANTS SKINCARESKIN CARE / BODYCAREBODY CARE
OwnedLicensed*
Consumer Revlon Revlon ColorSilk   Revlon Charlie Mitchum Gatineau
  Almay Llongueras*     Jean Naté   Natural Honey
  SinfulColors            
  Pure Ice            
Cutex
               
Professional CND Revlon Professional American Crew        
    Intercosmo d:fi        
    Orofluido          
    UniqOne          
    Creme of Nature          
               
OtherElizabeth ArdenElizabeth ArdenCurveElizabeth TaylorVisible Difference
         Burberry**Giorgio Beverly HillsBritney SpearsSUPERSTART
Elizabeth Arden White TeaChristina AguileraElizabeth Arden Pro
Elizabeth Arden 5th AvenueJennifer AnistonPrevage
Elizabeth Arden Green TeaPS Fine Cologne for MenEight Hour
Elizabeth Arden Red DoorGeoffrey BeeneElizabeth Arden Ceramide
Elizabeth Arden Always RedLucky BrandSkin Illuminating
Ed Hardy    
          Rihanna**Alfred Sung
Juicy Couture
John Varvatos
Halston
White Shoulders
Wildfox
Mariah Carey
Shawn Mendes
All Saints
La Perla
Tapout    
*Licensed from a third party
**Distributed brand

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The Company operates in four operating segments: Consumer; Elizabeth Arden; Professional; and Other, which also comprise the Company's reportable segments. For certain information regarding the Company's segments and domestic and foreign operations, refer to Note 19, "Segment Data and Related Information," to the Company’s Audited Consolidated Financial Statements in this Form 10-K. A further discussion of the Company's brands by segment appears below.
Consumer Segment:
The Company’s Consumer segment includes cosmetics, hair color and hair care, beauty tools, fragrances, anti-perspirant deodorants fragrances and skincareskin care products sold in approximately 130150 countries in large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally.
Cosmetics-The Company manufactures and markets a broad range of cosmetics, including face, lip, eye and nail products. Certain of the Company’s products incorporate patented, patent-pending or proprietary technology.technology into their production, formulation or design. See “New Product Development"Research and Research and Development.”Development" for more information.
Revlon: The Company sells a broad range of cosmetics under its flagship Revlon brand, which are designed to fulfill consumer wants and needs and are principally priced in the upper range for large volume retailers. The Revlon brand is comprised of face makeup, including foundation, powder, blush and concealers; lip makeup, including lipstick, lip gloss and lip liner; eye makeup, including mascaras, eyeliners, eye shadows and brow products; and nail color and nail care lines. Revlon products include innovative formulas and attractive colors that appeal to a wide range of consumers. The following are the key franchisesbrands within the Revlon brand:segment:
◦
Revlon ColorStay offers consumers a full range of products with long-wearing technology;
◦
Revlon PhotoReady products that are offered in face and eye makeup and are designed with innovative photochromatic pigments that bend and reflect light to give a flawless, airbrushed appearance in any light;
◦
Revlon Age Defying, which consists of face makeup for women in the over-35 age bracket, with ingredients to help reduce the appearance of fine lines and wrinkles;

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◦
Revlon Ultra HD, which is a liquid-based lip color offered globally;
◦
Revlon Super Lustrous, which is the Company'sCompany’s flagship wax-based lipcolor and is offered in a wide variety of shades of lipstick and lip gloss; and
◦
Revlon Mascara,which consists of a collection of five mascaras, each with a distinct lash benefit including lash definition, length, volume, magnified volume and length and a high impact all-in-one formula.
Almay: The Company’s Almay brand consists of hypo-allergenic, dermatologist-tested, fragrance-free cosmetics and skincareskin care products. The Almay brand is comprised of face makeup, including foundation, pressed powder, primer and concealer; eye makeup, including eye shadows, mascaras and eyeliners; lip makeup; and makeup removers. Key franchisesbrands within the Almay brand include Almay Smart Shade in face; Almay Intense i-ColorOne Coat in eye; and Almay Color + Care in lip. The Almay brand also has a significant makeup remover business under the core Almay brand name.
SinfulColors and Pure Ice: In addition to color cosmetics under TheSinfulColors, the Company’s SinfulColors and Pure Ice brands consist primarily of value-priced nail enamels, available in many bold, vivid and on-trend colors.
Cutex: The Company's Cutex brand consists of a full range of nail care products, including nail polish remover, nail enamels, nail tools and hand and nail care treatments.
Hair - The Company sells both hair color and hair care products throughout the world to large volume retailers and other retailers, primarily under the Company's Revlon ColorSilk franchise, as well as under the premium priced Llongueras brand (licensed from a third party) in Spain. Revlon ColorSilk products provide radiant, long-lasting color that leaves hair nourished, hydrated and ultra-conditioned.
Beauty tools - The Company sells Revlon beauty tools, which include nail, eye and manicure and pedicure grooming tools, eye lash curlers and a full line of makeup brushes under the Revlon brand name.
Fragrances - The Company sells a selection of moderately-priced fragrances in its Consumer segment, including perfumes, eau de toilettes, colognes and body sprays. The Company’s fragrance portfolio within its Consumer segment includes fragrances under globally-recognized brand names such as Charlie and Jean Naté.
Anti-perspirant deodorants - The Company sells Mitchum anti-perspirant deodorant products for men and women, with patented ingredients that provide consumers with up to 48 hours of protection.
SkincareSkin care - TheWithin its Consumer segment, the Company sells skincarecertain skin care products in the U.S. and in global marketsinternationally under various regional brands, including the Company’s Natural Honey and Gatineau brands.

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Elizabeth Arden Segment:
The Elizabeth Arden segment is comprised of an extensive portfolio, including the following:
Elizabeth Arden: Elizabeth Arden produces skin care, color cosmetics and fragrances under the Elizabeth Arden brand, including Visible Difference, Ceramide, SUPERSTART, Prevage, Eight Hour, Skin Illuminating, White Tea, Red Door and Green Tea.
Heritage, Designer, and Celebrity Fragrances: Elizabeth Arden’s heritage fragrances include a number of core brands, including Britney Spears, Christina Aguilera, Elizabeth Taylor, Curve, Giorgio Beverly Hills, Ed Hardy, Jennifer Aniston, Lucky Brand, PS Fine Cologne for Men, Halston, Geoffrey Beene, Alfred Sung, White Shoulders and Tapout. Designer fragrance brands include Juicy Couture, John Varvatos, All Saints, La Perla and Wildfox. Celebrity fragrances include Shawn Mendes and Mariah Carey.
Elizabeth Arden also distributes approximately 260 additional prestige fragrance brands owned by third parties. These products are typically sold to retailers in the U.S. and internationally, including prestige retailers and specialty stores and mass retailers, including mid-tier and chain drug retailers, e-commerce sites and other international and travel retailers.

Professional Segment: 
The Company’s Professional segment includes a comprehensive linelineup of products sold to hair and nail salons and professional salon distributors, including hair color, shampoos, conditioners, styling products, nail polishes and nail enhancements. The Professional segment also includes a multi-cultural line of products sold in both professional salons, large volume retailers and other retailers.
Professional brands -
RevlonProfessional: Professional: The Company’s Revlon Professionalbrand includes hair color, hair care and hair treatment products that are distributed exclusively to professional salons, salon professionals and salon distributors and are sold in more than 6085 countries.Revlon Professional is synonymous with innovation, fashion and technology to service the most creative salon professionals and their clients. Revlon Professionalsalon products include Revlonissimo NMT, Nutri Color Creme, Sensor Perm and Revlon Professional Equave.
American Crew and d:fi: TheCompany sells men'smen’s shampoos, conditioners, gels and other hair care and men's grooming products for use and sale by professional salons under the American Crewbrand name. American Crew is the “Official"Official Supplier to Men”Men" of quality grooming products that provide the ultimate usage experience and enhance a man'sman’s personal image. American Crew is the leading salon brand created specifically for men and is sold in more than 3070 countries. The Company also sells unisex hair products under the d:fibrand, which is a value-priced full line of cleansing, conditioning and styling products.
CND: The Company sells nail enhancement systems and nail color and treatment products and services for use by the professional nail salon industry under the CND brand name. CND is the global leader inCND-branded professional nail, hand and foot care products and CND-branded products are sold in more than 75 countries.85 countries and the Company recently introduced the CND brand into mass retail through CVS stores. CND nail products include:
◦
CND Shellac brand 14+ day nail color system, which delivers 14+ days of flawless wear, superior color and mirror shine with zero dry-time and no nail damage. The CND Shellac system is a true innovation in chip-free, extended-wear nail color; and
◦
CND Vinylux weekly polish,, a breakthrough nail polish that uses a patent-pending technology and lasts approximately a week. While ordinary polishes become brittle and deteriorate over time, CND Vinyluxdries with exposure to natural light to a flawless finish and strengthens its resistance to chips over time.
The Company also sells professional hair products under brand names such as Orofluido,UniqOne and Intercosmo.

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Multi-cultural hair - The Company sells multi-cultural hair-care products to professional salons, large volume retailers and other retailers, primarily in the U.S., under the Creme of Nature brand.
Other Segment:
Other Segment:
The Company’s Other segment primarily includes the distribution of certain prestige, designer and celebrity fragrances, cosmetics and skincare products, such as Burberry and Rihanna brandedskin care products.

Marketing
TheIn its Consumer segment, the Company markets its extensive product lines covering a broad range of price points within large volume retailers and e-commerce sites in the U.S. and within large volume retailers and other retailers internationally.

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The Company uses social media and other digital marketing, television, outdoor and print advertising and public relations and influencer marketing, as well as point-of-sale merchandising, including displays and samples, coupons and other trial incentives. The Company's marketing is designed to emphasize a uniform global image for its portfolio of core brands. The Company coordinates its marketing and advertising campaigns, such as itsthe Revlon brand's new Revlon Love Is OnLive Boldly campaign, with in-store promotional and other marketing activities. The Company develops, jointly with retailers, customized, tailored point-of-purchase and other focused marketing programs.
The Company also uses cooperative advertising programs, Company-paid or Company-subsidized demonstrators and coordinatedcoordinates in-store promotions and displays. Other marketing strategies, including trial-size products and couponing, are designed to introduce the Company's newest products to consumers and encourage trial and purchase in-store.
In the Elizabeth Arden segment, the Company’s approach is focused on generating strong retailer and consumer demand across its key brands. The Company emphasizes a competitive marketing mix for each brand and implements plans that are designed to ensure that each brand's positioning is carried through consistently across all consumer touch points. The Company is increasingly leveraging new media, such as social networking and mobile and digital applications, along with traditional consumer reach vehicles, such as television and magazine print advertising, to engage with its consumers through their personally-preferred technologies. The Elizabeth Arden segment’s marketing programs are also integrated with significant cooperative advertising programs that the Company plans and executes with its retailers, often linked with new product innovation and promotions.
In the Professional segment, the Company also markets products through educational seminars on such products' application methods and consumer benefits. In addition, the Company uses professional trade advertising, social media and other digital marketing, displays and samples to communicate to professionals and consumers the quality and performance characteristics of its products. Additionally,Also, in countries where the Professional segment has operations, the Company's direct sales force provides customers with point of sale communication and merchandising.
The Company believes that its presence in professional salons will provide benefits tothe marketing and sale of its consumer products businessin its other segments, as it will enableenables the Company to improve in many of its anticipation of consumer trends inother product categories, such as hair color, hair care, nail color, nail care and skin care, as these trends often appear first in salons.care. The Professional business also provides the Company with broader brand, geographic coverage and retail diversification beyond large volume retailers, among others. The Company also expects the Colomer Acquisition to continue to provide it with opportunities to achieve additional growth by leveraging the combined Company's enhanced innovation capability and know-how.
Additionally, the Company maintains separatemany brand-specific websites, such as www.revlon.com, www.elizabetharden.com, www.almay.com, www.revloncolorsilk.com, www.revlonprofessional.com, www.americancrew.com, www.cnd.com and www.mitchum.com, devoted to the Revlon, Elizabeth Arden,Almay, Revlon ColorSilk, Revlon Professional, American Crew, CND and Mitchum brands, respectively. Each of these websites feature product and promotional information for the brands and are updated regularly to stay current with the Company's new product launches and other marketing, advertising and promotional campaigns.

Research and Development
The Company believes that it is an industry leader in the development of innovative and technologically-advanced cosmetics and beauty products. The Company's marketing and research and development groups identify consumer needs and shifts in consumer preferences in order to develop new products, introduce line extensions and promotions and redesign or reformulate existing products to satisfy consumers'these needs and preferences. The Company's research and development group is comprised of departments specialized in the technologies critical to many of the Company's various product lines. The Company has aalso utilizes specialty laboratories and manufacturers in its supply chain for the development of certain new products, such as fragrances and skin care. The Company continues to refine its rigorous process for the continuousongoing development and evaluation of new product concepts, led by executives in marketing, sales, research and development, and including input from operations, law and finance. This process has created a comprehensive, long-term portfolio strategy that is intended to optimize the Company's ability to regularly bring to marketlaunch innovative new product offerings and to effectively manage the Company’s product portfolio.
The Company operates an extensive research and development facility in Edison, New Jersey for products within its Consumer segment.and Elizabeth Arden segments. The Company has research facilities for its products within the Professional segment in the U.S. (in California and Florida), Spain and Mexico. The scientists at these various facilities are responsible for performing all of the Company’s new product research and development worldwide and performing researchactivities for new products, ideas, concepts and packaging. The Company’s package development and engineering function is also part of the greater research and development organization and fosters a strong synergy of package and formula development, which is integral to a product’s success.The research and development group performs extensive safety and quality testing on the Company’s products, including toxicology, microbiology, efficacy and package testing. Additionally, quality control testing is performed at each of the Company’s manufacturing facilities.

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As of December 31, 2015,2017, the Company employed approximately 200 people in its research and development activities, including specialists in pharmacology, toxicology, chemistry, microbiology, engineering, biology, dermatology and quality control. In 2015, 20142017, 2016 and 2013,2015, the Company spent $31.2$35.7 million, $31.6$37 million and $26.9$31.2 million, respectively, on research and development activities.

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Manufacturing and Related Operations and Raw Materials
During 2015,2017, the Company’s products within the Consumer and Professional segments were produced at the Company’s facilities in the U.S. (North Carolina and Florida), South Africa, Spain, Italy and Mexico, and at third-party facilities around the world. Products within the Elizabeth Arden segment were also produced at the Company’s facilities, as well as third-party suppliers and contract manufacturers in the U.S. and Europe.
The Company continually reviews its manufacturing needs against its manufacturing capacities to identify opportunities to reduce costs and to operate more efficiently. The Company purchases raw materials and components throughout the world, and continuously pursues reductions in cost of goods through the global sourcing of raw materials and components from qualified vendors, utilizing its purchasing capacity to optimize cost reductions. The Company’s global sourcing strategy for materials and components from qualified vendors is also designed to ensure that the Company maintains a continuous supply of high quality raw materials and components. The Company believes that alternate sources of raw materials and components exist and does not anticipate any significant shortages of, or difficulty in obtaining, such materials. (See Item 1A. “Risk"Risk Factors - The Company depends on its Oxford, North Carolina facility for production of a substantial portion of its products within the Consumer segment. Disruptions at this facility and/or at other Company or third partythird-party facilities at which the Company's products are manufactured for both its Consumer, Elizabeth Arden and Professional segments, could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.”cash flows.")

Distribution
The Company's products are sold in approximately 130150 countries across six continents. The Company utilizes a dedicated sales force in those countries where the Company maintains operations, and also utilizes sales representatives and independent distributors to serve certain territories and retailers. (See Item 1A. “Risk"Risk Factors - The Company may be unable to maintaindepends on a limited number of customers for a large portion of its net sales, and the loss of one or increase its sales throughmore of these customers could reduce the Company's primary retailers, whichnet sales and have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows" and "Competition in the beauty industry could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations” and "Competition in the cosmetics, hair and beauty care products business could have a material adverse effect on the Company's business, financial condition and/or results of operations.cash flows.")
United States. Net sales in the U.S. accounted for approximately 55%49% of the Company's 20152017 net sales, which were made in multiple channels, including retail, Internet/e-commerce sites and specialty cosmetics stores. The Company also sells a broad range of beauty products to U.S. Government military exchanges and commissaries. The Company licenses its Revlon trademark to select manufacturers for complementary beauty-related products and accessories that the Company believes have the potential to extend the Company's brand names and image. The Elizabeth Arden and Red Door trademarks are also licensed to a third party in which the Company has a minority interest for the operation of the Elizabeth Arden Red Door Spa beauty salons and spas through which Elizabeth Arden products are sold and which also enables the Company to leverage the unique Red Door Spa heritage to generate both organic and innovation-driven growth. As of December 31, 2015, seven2017, 10 of thesesuch licenses were in effect relating to fifteen product categories.for 18 categories of beauty- and fashion-related products and services. Pursuant to thesesuch licenses, the Company retains strict control over product design and development, product and service quality, advertising and the use of its trademarks. These licensing arrangements offer opportunities for the Company to generate revenues and cash flow through royalties and renewal fees, some of which are prepaid from time to time.time-to-time.
In the Consumer segment, the Company’s retail merchandisers stock and maintain the Company's point-of-sale wall displays intended to ensure that high-selling SKUs are in stock and to ensure the optimal presentation of the Company's products in retail outlets.retailers. The Company’s products within its Professional segment are sold primarily through wholesale beauty supply distributors in the U.S. The Company's products within its Elizabeth Arden segment are sold through prestige retailers, the mass retail channel, perfumeries, boutiques, department and specialty stores, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. 
Outside of the United States. Net sales outside the U.S. accounted for approximately 45%51% of the Company's 20152017 net sales. The three countries outside the U.S. with the highest net sales were Spain, Canada, the U.K. and Australia, which together accounted for approximately 15%13% of the Company's 20152017 net sales. The Company distributes its products within its Consumer segment through large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries. The Company's products within the Elizabeth Arden segment are sold to perfumeries, boutiques, department and specialty stores, travel retailers, e-commerce sites and distributors. The Company’s products within its Professional segment are sold directly to hair and nail salons by the Company's direct sales force in countries where it has operations and through distributors in other countries outside the U.S.

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At December 31, 2015,2017, the Company actively sold its products through wholly-owned subsidiaries established in 2227 countries outside of the U.S. and through a large number of independent distributors and licensees elsewhere around the world.

Customers
The Company's principal customers for its Consumer segment include large volume retailers and chain drug stores, including such well-known retailers as Walmart, CVS and Target in the U.S., Shoppers DrugMart in Canada, A.S. Watson & Co. retail chains in Asia Pacific and Europe and Walgreens Boots Alliance in the U.S. and the U.K. Walmart and its affiliates worldwide accounted for approximately 18%16% of the Company's 20152017 consolidated net sales.
The Company's principal customers for its Elizabeth Arden segment include prestige retailers; specialty stores and department stores such as Macy’s, Dillard’s, Ulta, Belk, Sephora, Bloomingdales and Nordstrom; U.S. mass retailers, including large volume and mid-tier retailers and chain drug stores, such as Walmart, Target, Kohl’s, Walgreens, CVS, TJ Maxx and Marshalls; and international retailers, including prestige retailers, specialty stores, department stores, perfumeries and boutiques, such as Boots, Debenhams, Superdrug Stores, The Perfume Shop, Hudson’s Bay, Shoppers Drug Mart, Myer, Douglas and various travel retailers such as Nuance, Heinemann and World Duty Free.
The Company's principal customers for its Professional segment include Beauty Systems Group, Salon Centric and Ulta Salon, Cosmetics & Fragrance, as well as individual hair and nail salons and other distributors to professional salons.
As is customary in the industry, none of the Company’s customers is under an

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obligation to continue purchasing products from the Company in the future.
The Company expects that Walmart and a small number of other customers will, in the aggregate, continue to account for a large portion of the Company's net sales. (See Item 1A. “RiskRisk Factors -“The- "The Company depends on a limited number of customers for a large portion of its net sales, and the loss of one or more of these customers could reduce the Company’sCompany's net sales and have a material adverse effect on the Company’sCompany's business, prospects, results of operations, financial condition and/or results of operations.cash flows.")

Competition
The Company's cosmetics, fragrance, skin care, hair and beauty care products business categories are highly competitive. The Company competes primarily by:
developing quality products with innovative performance features, shades, finishes, components and packaging;
educating consumers, retail customers and salon professionals about the benefits of the Company’s products;
anticipating and responding to changing consumer, retail customer and salon professional demands in a timely manner, including the timing of new product introductions and line extensions;
offering attractively priced products relative to the product benefits provided;
maintaining favorable brand recognition;
generating competitive margins and inventory turns for its customers in both the Consumer and Professional segments by providing relevant products and executing effective pricing, incentive and promotional programs and marketing campaigns;campaigns, as well as social media and influencer marketing activities;
ensuring product availability through effective planning and replenishment collaboration with retailers and salons;the Company's customers;
providing strong and effective advertising, marketing, promotion, social media, influencer and merchandising support;
leveraging e-commerce, social media and mobile commerce initiatives and developing an effective omni-channel strategy to optimize the opportunity for consumers to interact with and purchase the Company's products;
maintaining an effective sales force and distributor network; and
obtaining and retaining sufficient retail display and floor space, optimal in-store positioning and effective presentation of its products at retail and in salons.on-shelf.
The Company competes in selected product categories against numerous multi-national manufacturers in both the Consumer and Professional segments, as well as with expanding private label and store-owned brands in the Consumer segment. In addition to products sold in large volume retailers, distributors, wholesalers, professional salons and demonstrator-assisted retailers, the Company's products also compete with products sold in prestige and department stores, television shopping, door-to-door, specialty stores, one-stop shopping beauty retailers, the Internet/e-commerce sites, perfumeries and other distribution outlets. The Company's competitors include, among others, L'Oréal S.A., The Procter & Gamble Company, Avon Products, Inc., & New Avon LLC, Coty Inc., Shiseido Co., Johnson & Johnson, Kao Corp., Henkel AG & Co., Mary Kay Inc., Hand & Nail Harmony, Inc., Oriflame Holding AG,

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Markwins International Corporation, Sephora (a division of LVMH Moët Henessy Louis Vuitton SE), Elizabeth Arden, Inc., Boots UK Limited, e.l.f. Beauty, Inc. and The Estée Lauder Companies Inc. (See Item 1A. “Risk Factors-Competition"Risk Factors - Competition in the cosmetics, hair and beauty care products businessindustry could have a material adverse effect on the Company’sCompany's business, prospects, results of operations, financial condition and/or results of operations.cash flows.")

Patents, Trademarks and Proprietary Technology
The Company considers trademark protection to be very important to its business. The Company’s trademarks are registered in the U.S. and in approximately 150 other countries. Significant trademarks include Revlon, Revlon ColorStay, Revlon PhotoReady, Revlon Super Lustrous, Revlon ColorBurst, Almay, Almay Smart Shade, SinfulColors, Pure Ice, Mitchum, Charlie, Jean Naté, Cutex, Revlon ColorSilk, Revlon Professional, Intercosmo, Orofluido, UniqOne, American Crew, Creme of Nature, CND, CND Shellac, CND Vinylux, Gatineau and Natural Honey. With the acquisition of Elizabeth Arden, the Company now also owns or has rights to use other significant trademarks for the manufacture, marketing, distribution and sale of numerous fragrance, cosmetic and skin care brands in our Elizabeth Arden segment, including owned marks such as Elizabeth Arden, Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Always Red, Elizabeth Arden Green Tea, Visible Difference, Prevage, Eight Hour, SuperStart, Untold,Giorgio Beverly Hills, Curve, Halston and White Diamonds, and licensed trademarks such as Christina Aguilera, Britney Spears, Shawn Mendes, Juicy Couture, Lucky Brand, John Varvatos, All Saints, La Perla, Alfred Sung, Elizabeth Taylor, Geoffrey Beene, Ed Hardy, Jennifer Aniston, Mariah Carey and Wildfox. The Company regularly renews its trademark registrations in the ordinary course of business.
The Company utilizes certain proprietary and/or patented technologies in the formulation, packaging and/or manufacture of a number of the Company’s products, including, among others, Revlon ColorStay cosmetics, Revlon PhotoReady makeup, Revlon Age Defying cosmetics, Almay Smart Shade makeup, Almay Intense i-Color eye makeup, Revlon ColorSilk hair color, the Prevage skin care line, Mitchum anti-perspirant deodorants, CND Shellac nail color systems and CND Vinylux nail polishes. The Company considers its proprietary technology and patent protection to be important to its business.
The Company files patents in the ordinary course of business on certain of the Company’s new technologies. Utility patents in the U.S. are enforceable for at least 20 years and international patents are enforceable for 20 years. The patents that the Company currently has in place expire at various times between 20162018 and 20332035 and the Company expects to continue to file patent applications on certain of its technologies in the ordinary course of business in the future.

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Government Regulation
The Company is subject to regulation by the Federal Trade Commission (the "FTC") and the Food and Drug Administration (the "FDA") in the U.S., as well as various other federal, state, local and foreign regulatory authorities, including those in the European Union (the "EU"), Canada and other countries in which the Company operates. The Company’s Oxford, North Carolina manufacturing facility is registered with the FDA as a drug manufacturing establishment, permitting the manufacture of cosmetics and other beauty-care products that contain over-the-counter drug ingredients, such as sunscreens, anti-perspirant deodorants and anti-dandruff hair-care products. Compliance with federal, state, local and foreign laws and regulations pertaining to the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had, and is not anticipated to have, a material effect on the Company's capital expenditures, earnings or competitive position. Regulations in the U.S., the EU, Canada and in other countries in which the Company operates that are designed to protect consumers or the environment have an increasing influence on the Company's product claims, ingredients and packaging. (See “Risk"Risk Factors - The Company’s products are subject to federal, state and international regulations that could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or results of operations.”cash flows.")
Industry Segments, Foreign and Domestic Operations
The Company operates in three operating segments: Consumer; Professional; and Other, which operating segments also comprise the Company's reportable segments. For certain information regarding the Company's segments and foreign and domestic operations, refer to Note 19, “Segment Data and Related Information,” to the Company’s Consolidated Financial Statements in this Form 10-K.
Employees
As of December 31, 2015,2017, the Company employed approximately 5,700 people. As7,800 people, of December 31, 2015,which approximately 25% of the Company's employees20% were covered by collective bargaining agreements. The Company's total employee population includes the impacts of integration initiatives in connection with the EA Integration Restructuring Program (as hereinafter described), including the impacts of insourcing efforts. The Company believes that its employee relations are satisfactory.

Available Information
The public may read and copy any materials that the Company files with the SEC,Securities and Exchange Commission ("SEC"), including, without limitation, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information in the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file with the SEC at http://www.sec.gov.

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The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports are also available free of charge on the Company's Internet website at http://www.revloninc.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.


Item 1A. Risk Factors

In addition to the other information in this report, investors should consider carefully the following risk factors when evaluating the Company’s business. For definitions of certain capitalized terms used in this Form 10-K 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-K.

Revlon Inc. 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, Inc.'sRevlon's wholly-owned operating subsidiary, are pledged by Revlon Inc. to secure its obligations under the Amended2016 Credit Agreements.
Revlon Inc. is a holding company with no business operations of its own. Revlon, Inc.’sRevlon's only material asset is all of the outstanding capital stock of Products Corporation, Revlon, Inc.’sRevlon's wholly-owned operating subsidiary, through which Revlon Inc. conducts its business operations. As such, Revlon, Inc.’sRevlon's net income has historically consisted predominantly of its equity in the net (loss) income of Products Corporation, which for 2017, 2016 and 2015 2014was $(178.7) million, $(15.7) million and 2013 was $62.1 million, $47.3respectively (in each case excluding $6.6 million, $9.4 million and $1.6 million, respectively (which excluded $9.0 million, $9.8 million and $8.1 million, respectively, in expenses primarily related to Revlon Inc. being a public holding company). Revlon Inc. is dependent on the earnings and cash flow of, and dividends and distributions from, Products Corporation to pay Revlon, Inc.’sRevlon’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, Inc.’sRevlon’s Board of Directors.
Products Corporation may not generate sufficient cash flow to pay dividends or distribute funds to Revlon Inc. 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.

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The terms of Products Corporation's Amended Term Loan Agreement,2016 Credit Agreements and the indentures governing Products Corporation's $175.0 million asset-based, multi-currency revolving credit facility6.25% Senior Notes due 2024 (the "Amended Revolving Credit Facility""6.25% Senior Notes Indenture" and the "6.25% Senior Notes," respectively) and 5.75% Senior Notes due 2021 (the "5.75% Senior Notes Indenture" and the "5.75% Senior Notes," respectively, and, together with the Amended Term Loan Agreement,6.25% Senior Notes Indenture, the "Amended Credit Agreements")"Senior Notes Indentures" and the indenture governing Products Corporation's 5¾% Senior"Senior Notes, (the "5¾% Senior Notes Indenture")" respectively) generally restrict Products Corporation from paying dividends or advancing or making distributions to Revlon, Inc., except in limited circumstances (including, without limitation, thatcircumstances. For example, Products Corporation is permitted to pay dividends and advances and make distributions to Revlon Inc. to enable Revlon Inc.,to, among other things, to pay expenses incidental to being a public holding company, including, among other things,maintain its existence and its ownership of Products Corporation, such as paying professional fees such as(e.g., legal, accounting and insurance fees,fees), regulatory fees such as(e.g., SEC filing fees and NYSE listing feesfees), 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, Inc.’sRevlon’s outstanding securities or make distributions in certain circumstances to finance theRevlon’s purchase by Revlon, Inc.of shares of its Class A Common Stock issued in connection with the delivery of such Class A Common Stockshares to grantees under the Fourth Amended and Restated Revlon, Inc. Stock Plan). This limitationPlan. These limitations therefore restricts Revlon, Inc.'srestrict Revlon's ability to pay dividends on its Class A Common Stock.
All of the shares of theProducts Corporation’s capital stock of Products Corporation held by Revlon Inc. are pledged to secure Revlon, Inc.’sRevlon’s guarantee of Products Corporation's obligations under its Amended2016 Credit Agreements. A foreclosure upon the shares of Products Corporation's common stock would result in Revlon Inc. no longer holding its only material asset, and would have a material adverse effect on the holders and price of Revlon, Inc.’sRevlon’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 Inc. Class A Common Stock and Products Corporation’s capital stock are pledged to secure various of Revlon, Inc.’sRevlon’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 Amended2016 Credit Agreements and Products Corporation's 5¾% Senior Notes IndentureIndentures and could have other consequences.”")

Products Corporation’s substantial indebtedness, including the additional Acquisition Term Loan thatindebtedness it used as a source of funds to consummatehas incurred in connection with the ColomerElizabeth Arden Acquisition, 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 December 31, 2015,2017 the Company’s total indebtedness was $1,848.5$2,897.4 million (or $1,845.0$2,836.3 million net of discounts)discounts and debt issuance costs), primarily includingincluding: (i) $673.7 million aggregate principal amount outstanding under the Acquisition Term Loan that was executed in 2013 in connection with facilitating the consummation of the Colomer Acquisition; (ii) $662.9 million aggregate principal amount outstanding under the 2011 Term Loan; and (iii) $500.0$450 million in aggregate principal face amount outstanding of its 6.25% Senior Notes; (ii) $500 million in aggregate principal amount of its 5.75% Senior Notes; (iii) $157 million of secured indebtedness under its 2016 Revolving Credit Facility; (iv) $1,777.5 million in aggregate principal

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amount of secured indebtedness under its 2016 Term Loan Facility; and (v) $12.9 million in aggregate principal amount of other indebtedness. In addition, as of such date Products Corporation's 5¾% Senior Notes.Corporation would have had the ability to incur an additional $193 million under its 2016 Revolving Credit Facility. If the Company is unable to maintain sustainedor increase its profitability and free 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 agreementsinstruments 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 operating revenuesprofitability 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 the execution ofexecuting the Company’s business strategyinitiatives (including activities related to continuing the integration of the Colomer business into the Company’sElizabeth Arden business), future working capital, capital expenditures, advertising, promotional and/or marketing expenses, new product development costs, purchases and reconfigurations of wall displays, acquisitions, acquisition integration costs, investments, restructuring programs and other general corporate requirements;purposes;
requiring the Company to dedicate a substantial portion of its cash flow from operations to payments on Products Corporation’s indebtedness, thereby reducing the availability of the Company’s cash flow necessary for the execution ofexecuting the Company’s business strategyinitiatives 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 Amended2016 Credit Agreements and the 5¾% Senior Notes Indenture,Indentures, limit Products Corporation’s ability to borrow additional money,funds, under certain circumstances Products

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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.

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

The 2011 Term Loan under5.75% Senior Notes mature in 2021, the Amended Term Loan Facility, with $662.9 million aggregate principal amount outstanding, matures in November 2017, and the Acquisition Term Loan under the Amended Term Loan Facility, with $673.7 million aggregate principal amount outstanding, matures in October 2019. The Amended2016 Revolving Credit Facility matures onno later than 2021, the earlier of August 14, 2018 and 90 days prior to the earliest maturity date of any term loans then outstanding under the Amended2016 Term Loan Facility but not earliermatures no later than June 16, 2016. The 5¾%2023 and the 6.25% Senior Notes mature in February 2021.2024. 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 its 5¾%any of the 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 atby their respective maturity dates, the Company maywill be required to refinance some or all of Products Corporation’s indebtedness, seek to sell assets or operations, seek to sell additional Revlon Inc. equity, seek to sell Revlon, Inc. debt securities of Revlon or Products Corporation debt securities 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 theProducts 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 or enable Products Corporation to comply with the financial covenants under the Amended Credit Agreements if the actions do not result in sufficient savingscost 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. 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 5¾%2016 Credit Agreements, the Senior Notes Indenture,Indentures, any of Products Corporation's other debt instruments (including the Amended Credit Agreements) and/or the debt instruments of Products Corporation’s subsidiaries

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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 agreementsinstruments limit its ability to take certain actions and impose consequences in the event of failure to comply").
The future state of the credit markets, including any volatility and/or tightening of the credit markets and reduction in credit availability, could adversely impact the Company’s ability to refinance or replace, in whole or in part, Products Corporation’s outstanding indebtedness at or prior toby their respective maturity dates, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Restrictions and covenants in Products Corporation’s various debt agreementsinstruments limit its ability to take certain actions and impose consequences in the event of failure to comply.
Agreements governing
The agreements that govern Products Corporation’s outstandingCorporation's indebtedness, including the Amended2016 Credit Agreements and the 5¾%its Senior Notes Indenture,Indentures, contain a number of significant restrictions and covenants that limit Products Corporation’s ability (subject in each case to limitedcertain 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.
In addition, the Amended Credit Agreements contain financial covenants limiting Products Corporation’s first-lien senior secured debt-to-EBITDA ratio (in the case of the Amended Term Loan Agreement) and, under certain circumstances, requiring Products Corporation to maintain a minimum consolidated fixed charge coverage ratio (in the case of the Amended Revolving Credit Agreement). These covenants affect Products Corporation’s operating flexibility by, among other things, restricting its

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ability to incur expenses and indebtedness that could otherwise be used to fund the costs of executing the Company’s business strategyinitiatives and to grow the Company’s business, as well as to fund general corporate purposes.
A breach ofCertain breaches under the Amended2016 Credit Agreements and/or the Senior Notes Indentures would permit Products Corporation’sthe Company’s lenders to accelerate amounts outstanding thereunder. The acceleration of amounts outstanding under the Amended2016 Senior Credit Agreements, whichFacilities and/or the Senior Notes Indentures would in turncertain circumstances constitute an event of default under the 5¾% Senior Notes Indenture, if the amount acceleratedother instruments permitting amounts outstanding under the Amended Credit Agreements exceeds $25.0 million and such default remains uncured for 10 days following notice from the trustee for the 5¾% Senior Notes Indenture (the "Notes Trustee") or from the holders of at least 30% of the outstanding principal amount of the 5¾% Senior Notes (the "Requisite Note Holders"). An event of default under the 5¾% Senior Notes Indenture would permit the Notes Trustee or the Requisite Note Holdersinstruments to accelerate payment of the principal and accrued, but unpaid, interest on the 5¾% Senior Notes.be accelerated. In addition, holders of Products Corporation’s outstanding 5¾%the Senior Notes may require Products Corporation to repurchase their respective notes in the event of a change of control under the 5¾% Senior Notes Indenture.applicable indenture and a change of control would be an event of default under the 2016 Credit Agreements. Products Corporation may not have sufficient funds at the time of any such breach of any such covenant or change of control to repay, in full or in part, the borrowingsamounts outstanding under the Amended2016 Senior Credit AgreementsFacilities or to repay, repurchase or redeem, in full or in part, its outstanding 5¾%the 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 weak economic conditions or weakness in the consumption of beauty care products; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third partythird-party suppliers; changes in consumer purchasing habits, including with respect to retailer preferences;preferences and/or sales channels; inventory management by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; 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 related to integrating the Elizabeth Arden business into the Company’s business, as well as those for pension expense under its benefit plans, acquisition-related integration costs, advertising, promotional and/or marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the Company's anticipated level of expenses.
Under such circumstances, Products Corporation may be unable to comply with the provisionsrequirements of one or more of its various debt instruments, including theany financial covenants in the Amended2016 Credit Agreements. If Products Corporation is unable to satisfy such covenants or other provisionsrequirements at any future time, Products Corporation would need to seek an amendment or waiver of such financial covenants or other provisions.requirements. The respective lenders under the Amended2016 Credit Agreements may not consent to any amendment or waiver requests that Products

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REVLON, INC. AND SUBSIDIARIES




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, Inc.Revlon.
In the event thatIf Products Corporation is unable to obtain any such waiver or amendment, Products Corporation's inability to meet the financial covenants or other provisionsrequirements of the Amended2016 Credit Agreements would constitute an event of default under its Amended Credit Agreements,such agreements, which, under certain circumstances, would permit the bank lenders to accelerate the Amended2016 Senior Credit AgreementsFacilities, and, under certain circumstances, would constitute an event of default under the 5¾% Senior Notes Indenture if the amount accelerated under the Amended Credit Agreements exceeds $25.0 million and such default remains uncured for 10 days following notice from the Notes Trustee or from the Requisite Note Holders.Indentures. An event of default under the 5¾% Senior Notes IndentureIndentures would permit the respective Notes Trustee or the Requisite Note Holders to accelerate payment of the principal and accrued, but unpaid, interest on the 5¾%respective Senior Notes.
Products Corporation’s assets and/or cash flowflows and/or that of Products Corporation’s subsidiaries may not be sufficient to fully repay borrowings under its outstandingvarious debt instruments, either upon maturity or if accelerated upon an event of default or change of control, and if Products Corporationthe Company is required to repay, repurchase and/or redeem, in whole or in part, amounts outstanding under its outstanding 5¾%2016 Senior Credit Facilities and/or its Senior Notes, or repay the Amended Credit Agreements upon a change of control, Products Corporationit may be unable to refinance or restructure the payments on such debt. Further, if Products Corporationthe Company is unable to repay, refinance or restructure its indebtedness under the Amended2016 Senior Credit Agreements,Facilities, the lenders could proceed against the collateral securing that indebtedness, subject to certain conditions and limitations as set forth in the third amended and restatedrelated intercreditor agreement. As described above, the consequences of complying with the foregoing restrictions, covenants and limitations under Products Corporation’sthe Company’s various debt agreements, including the Amended Credit Agreements and the 5¾% Senior Notes Indenture,instruments could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.





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Limits on Products Corporation's borrowing capacity under the Amended2016 Revolving Credit Facility may affect the Company's ability to finance its operations.
As of
At December 31, 2015,2017, Products Corporation had nil$157 million outstanding under the Amended2016 Revolving Credit Facilities (excluding $8.8 million of undrawn outstanding letters of credit).Facility. While the Amended2016 Revolving Credit Facility currently provides for up to $175.0$400 million of commitments, Products Corporation'sthe Company’s ability to borrow funds under such facility is limited by a borrowing base determined relative to the value, from time to time,time-to-time, of certain eligible trade receivables and eligible inventory in the U.S. and the U.K. and eligible real property and equipment in the U.S. In January 2014, certain of Products Corporation’s U.S.-domiciled subsidiaries acquired in the Colomer Acquisition (the “Colomer U.S. Subsidiaries”) became additional guarantors under Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility and the 5¾% Senior Notes Indenture. In January 2015 and May 2015, certain of Products Corporation’s newly-formed U.S.-domiciled subsidiaries in the Professional segment and certain of Products Corporation's newly-formed U.S.-domiciled subsidiaries formed in connection with the CBB Acquisition (collectively, the “New U.S. Subsidiaries”) became additional guarantors under such debt instruments. In connection with becoming guarantors, substantially all of the assets of such subsidiaries were pledged as collateral under Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility, thereby increasing the value of the assets supporting the borrowing base under the Amended Revolving Credit Facility.assets.
If the value of thesethe Company's eligible assets is not sufficient to support the full $175.0$400 million borrowing base, Products Corporation will not have fullcomplete access to the Amendedentire commitment available under the 2016 Revolving Credit Facility, but rather couldwould have access to a lesser amount as determined by the borrowing base. As Products Corporation continues to manage its working capital (including its inventory and accounts receivable, which are significant components of the eligible assets comprising the borrowing base), this could reduce the borrowing base under the Amended2016 Revolving Credit Facility. Further, if Products Corporation borrows funds under such facility, subsequent changes in the value or eligibility of the assets within the borrowing base could causerequire Products Corporation to be required to pay down the amounts outstanding under such facility so that there is no amount outstanding in excess of the then-existing borrowing base.
Products Corporation'sThe Company’s ability to borrow under the Amended2016 Revolving Credit Facility is also conditioned upon its compliance with other covenants in the Amended Revolvingagreements that govern the 2016 Senior Credit Agreement governing such facility, including a fixed charge coverage ratio that applies when the difference between (1) the borrowing base under such facility and (2) the amounts outstanding under such facility is less than $20.0 million.Facilities. Because of these limitations, Products Corporationthe Company may not always be able to meet its cash requirements with funds borrowed under the Amended2016 Revolving Credit Facility, which could have a material adverse effect on the Company'sCompany’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.
At December 31, 2015,2017, the aggregate principal amount outstanding under the Acquisition2016 Term Loan and the 2011 Term LoanFacility was $673.7$1,777.5 million, and $662.9 million, respectively, with the Company having a liquidity position of $473.6$280.1 million, consisting of $87.1 million of unrestricted cash and cash equivalents (net of any outstanding checks) of $307.4 million,, as well as $166.2$193 million in available borrowings under the AmendedProduct Corporation's $400 million 2016 Revolving Credit Facility, based upon the calculated borrowing base of $381.9 million, less $8.8$10.1 million of undrawn outstanding letters of credit, $21.8 million of outstanding checks and nil then drawn$157 million outstanding under the Amended2016 Revolving Credit Facility at such date.
The Amended Revolving Credit Facility is syndicated to a group of banks and financial institutions. Each bank is responsible to lend its portion of the $175.0 million commitment if and when Products Corporation seeks to draw under the Amended Revolving Credit Facility. The lenders may assign their commitments to other banks and financial institutions in certain cases without prior notice to Products Corporation. If a lender is unable to meet its lending commitment, then the other lenders under the Amended Revolving Credit Facility have the right, but not the obligation, to lend additional funds to make up for the defaulting lender’s commitment, if any. Products Corporation has never had any of its lenders under the Amended Revolving Credit Facility fail to fulfill their lending commitment. Based on information available to the Company, the Company has no reason to believe that any of the lenders under the Amended Revolving Credit Facility would be unable to fulfill their commitments to lend under the Amended Revolving Credit Facility as of December 31, 2015. However, it is possible that economic conditions and potential volatility in the financial markets, among other factors, could impact the liquidity and financial condition of certain banks and financial institutions. If one or more lenders under the Amended2016 Revolving Credit Facility wereare unable to fulfill their commitment to lend,advance funds to Products Corporation under such inabilityfacility, it would impact the Company'sCompany’s liquidity and, depending upon the amount involved and the Company'sCompany’s liquidity requirements, it could have an adverse effect on the Company'sCompany’s ability to fund its operations, which could have a material adverse effect on the Company'sCompany’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.

A substantial portion of Products Corporation's indebtedness is subject to floating interest rates.

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'sCompany’s business. The Company has hedged some of its exposure to floating interest rates under its 2016 Term Loan Facility through its existing $400 million floating-to-fixed 2013 Interest Rate Swap. As of December 31, 2015, $945.22017, including the effect of the 2013 Interest Rate Swap, $1,498.6 million of Products Corporation'sCorporation’s total indebtedness, (or $941.7 million net of discounts, and excluding indebtedness subject to the interest rate swap described below) or approximately 51% of Products Corporation's total indebtedness,53%, was subject to floating interest rates.
Under the Amended Term Loan Agreement, as of December 31, 2015 the $673.7 million in aggregate principal amount outstanding under the Acquisition Term Loan and the $662.9 million in aggregate principal amount outstanding under the 2011

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REVLON, INC. AND SUBSIDIARIES




As of December 31, 2017, the entire $1,777.5 million in aggregate principal amount outstanding under the 2016 Term Loan bearFacility 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. As of December 31, 2017, $157 million in aggregate principal amount outstanding under the 2016 Revolving Credit Facility bore interest, at Products Corporation's option,Corporation’s, at a rate per annum equal to either: (i) the Eurodollar Rate (as defined inalternate base rate plus an applicable margin equal to 0.25%, 0.50% or 0.75% depending on the Amended Term Loan Agreement) plus 2.5% and 3.0% per annum, respectively (provided that in no event shallaverage excess availability (based on the Eurodollar Rate (which is based upon LIBOR) be less than 0.75% and 1.0% per annum, respectively)borrowing base as most recently reported by Products Corporation to the administrative agent from time-to-time); or (ii) the Alternate Base Rate (as defined in the Amended Term Loan Agreement)Eurocurrency rate plus 1.5% and 2.0% per annum, respectively, which Alternate Base Rate is basedan applicable margin equal to 1.25%, 1.50% or 1.75% depending on the greater of Citibank, N.A.’s announcedaverage excess availability (based on the borrowing base rate and the U.S. federal funds rate plus 0.5% (provided that in no event shall the Alternative Base Rate be less than 1.75% and 2.0% per annum, respectively).
In November 2013,as most recently reported by Products Corporation entered into a forward-starting interest rate swap in a single derivative with a notional amount of $400.0 million in respect of indebtednessto the administrative agent from time-to-time). The applicable margin increases as average excess availability under the Acquisition Term Loan for a 3-year period beginning in May 2015 (the "2013 Interest Rate Swap"). Under the terms of the 2013 Interest Rate Swap, Products Corporation pays to the counterparty a quarterly fixed interest rate of 2.0709% on the $400.0 million notional amount, while receiving variable interest rate payments from the counterparty equal to the 3-month U.S. dollar LIBOR, with a LIBOR floor of 1.00% (which effectively fixes the interest rate on such notional amount at 5.0709% over the 3-year term of the 2013 Interest Rate Swap (May 2015 to May 2018)). While Products Corporation may enter into other interest hedging contracts, it may not be able to do so on a cost-effective basis, and any hedging transactions that Products Corporation enters into may not achieve their intended purpose. Accordingly, shifts in interest rates could have a material adverse effect on the Company’s business, financial condition and/or results of operations.
2016 Revolving Credit Facility decreases. At December 31, 2015, the Eurodollar Rate,2017, LIBOR and the Alternate Base Ratealternate base rate for the Acquisition2016 Term Loan Facility were 1.569% and the 2011 Term Loan were as follows:
  Eurodollar Rate LIBOR Alternate Base Rate
Acquisition Term Loan 1.00% 0.54% 3.50%
2011 Term Loan 0.75% 0.43% 3.50%
Pursuant to the 2013 Interest Rate Swap, the LIBOR portion of the interest rate on $400.0 million of outstanding indebtedness under the Acquisition Term Loan is effectively fixed at 5.0709% beginning in May 2015 through May 2018. Borrowings under the Amended Revolving Credit Facility (other than loans in foreign currencies) bear interest at a rate equal to, at Products Corporation's option, either (i) the Eurodollar Rate plus the applicable margin set forth in the grid below, or (ii) the Alternate Base Rate (as defined in the Amended Revolving Credit Agreement) plus the applicable margin set forth in the grid below:

Excess Availability Alternate Base Rate Loans Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
Greater than or equal to $92,000,000 0.50% 1.50%
Less than $92,000,000 but greater than or equal to $46,000,000 0.75% 1.75%
Less than $46,000,000 1.00% 2.00%
Local Loans (as defined in the Amended Revolving Credit Agreement) bear interest, if mutually acceptable to Products Corporation and the relevant foreign lenders, at the Local Rate, and otherwise (i) if in foreign currencies or in U.S. Dollars, at the Eurodollar Rate or the Eurocurrency Rate plus the applicable margin set forth in the grid above or (ii) if in U.S. Dollars, at the Alternate Base Rate plus the applicable margin set forth in the grid above.4.5%, respectively.
If any of LIBOR, Euribor, the baseprime rate or the U.S. federal funds rate or such equivalent local foreign currencyeffective rate increases, Products Corporation'sCorporation’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 Amended2016 Senior Credit Agreements,Facilities and other short-term borrowings (which, in the aggregate, are Products Corporation’s only debt currently subject to floating interest rates) as of December 31, 2015,2017, a 1% increase in LIBOR and Euribor would increase the Company’s annual interest expense by $9.6$15.7 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 flowrequirements 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, 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 available for borrowing under the 2016 Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2018, including cash requirements for the payment of expenses in connection with executing the Company's business initiatives (including integrating the Elizabeth Arden business into the Company's business) and its advertising, promotional, pricing and/or marketing plans, purchases of permanent wall displays, capital expenditure requirements, debt service payments and costs, tax payments, pension and post-retirement plan contributions, payments in connection with the Company's restructuring programs, severance not otherwise included in the Company's restructuring programs and debt and/or equity repurchases, if any.
However, if the Company's anticipated level of revenue is not achieved because of, for example, decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty products; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors and/or decreased performance by third-party suppliers; changes in consumer purchasing habits, including with respect to retailer preferences and/or sales channels; inventory management by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; 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 related to integrating the Elizabeth Arden business into the Company's business, as well as those for pension expense under its benefit plans, for 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. (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 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, 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;

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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 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).

The Company may not realize the anticipated synergies, net cost reductions and growth opportunities from the Elizabeth Arden Acquisition. 

The benefits that the Company expects to achieve as a result of the Elizabeth Arden Acquisition will depend, in part, on the ability of the combined company to realize the anticipated synergies, net cost reductions and growth opportunities. The Company’s success in realizing these anticipated synergies, net cost reductions and growth opportunities, and the timing of this realization, largely depends on the successful integration of Elizabeth Arden’s historical business and operations into the Company’s historical business and operations. Even if the Company is successful in effectively integrating Elizabeth Arden’s business and operations into the Company’s business, the Company may not realize the full benefits of the anticipated synergies, net cost reductions and growth opportunities that the Company currently expects, whether due to unanticipated expenses, unavailability of liquidity to fund such expenses, trade conditions or other unforeseen events. Even if such synergy and other benefits are fully realized, they may not be realized within the anticipated time frame. Moreover, the Company expects to incur substantial expenses in connection with integrating Elizabeth Arden’s business into the Company’s business, the amount of which is difficult to estimate accurately and may exceed the Company’s current estimates. Accordingly, the benefits expected from the Elizabeth Arden Acquisition may be offset by costs or delays incurred in integrating the businesses. The projected net cost reductions and synergies related to the Elizabeth Arden Acquisition are based on a number of assumptions relating to the Company’s historical business and Elizabeth Arden’s business, such as achieving certain sales volume increases. Those assumptions may be inaccurate, and, as a result, the Company’s projected net cost reductions and synergies may be inaccurate, and the Company's business, prospects, results of operations, financial condition and/or cash flows could be materially and adversely affected.

In connection with the Elizabeth Arden Acquisition, we have assumed potential liabilities relating to Elizabeth Arden’s business.

In connection with the Elizabeth Arden Acquisition, we have assumed potential liabilities relating to Elizabeth Arden’s business. To the extent we have not identified such liabilities or miscalculated their potential financial impact, these liabilities could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

The Company depends on its Oxford, North Carolina facility for production of a substantial portion of its products within the Consumer segment. Disruptions at this facility and/or at other Company or third partythird-party facilities at which the Company's products are manufactured for both its Consumer, Elizabeth Arden and Professional segments could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The Company produces a substantial portion of its products at its Oxford, North Carolina facility. Significant unscheduled downtime at this facility, or at other Company facilities and/or third partythird-party facilities at which the Company's products are

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manufactured, whether due to equipment breakdowns, power failures, natural disasters, weather conditions hampering delivery schedules, intermittent technology disruptions or other disruptions, including those caused by transitioning manufacturing across these facilities,

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REVLON, INC. AND SUBSIDIARIES




or any other cause could have a material adverse effect on the Company's ability to provide products to its customers, which could have a material adverse effect on the Company's sales, business, prospects, results of operations, financial condition and/or results of operations.cash flows. Additionally, if product sales exceed the Company's forecasts, internal or third partythird-party production capacities and/or the Company's ability to procure sufficient levels of finished goods, raw materials and/or components from third partythird-party suppliers, the Company could, from time to time,time-to-time, not have an adequate supply of products to meet customer demands, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.
Prior to the Elizabeth Arden Acquisition, Elizabeth Arden did not own or operate any manufacturing facilities and relied on third-party manufacturers and component suppliers to source and manufacture substantially all of its owned and licensed products and while certain consolidation has and will continue to occur, as planned, as a result of the Company's integration activities, we will continue to use third-party manufacturers for the Elizabeth Arden segment in the future. Over the past several years, Elizabeth Arden reduced the third-party manufacturers and component and materials suppliers that it uses. Elizabeth Arden also implemented a "turnkey" manufacturing process for substantially all of its products, as a result of which it relies on its third-party manufacturers for certain supply chain functions that it previously handled, such as component and raw materials planning, purchasing and warehousing. The Company's business, prospects, results of operations.operations, financial condition and/or cash flows could be materially adversely affected if Elizabeth Arden experiences any supply chain disruptions caused by this "turnkey" manufacturing process or other supply chain projects, or if its manufacturers or raw material suppliers were to experience problems with product quality, credit or liquidity issues, or disruptions or delays in the manufacturing process or delivery of finished products or the raw materials or components used to make such products.

The Company's newfinancial performance depends on its ability to anticipate and respond to consumer trends and changes in consumer preferences. New product introductions may not be as successful as the Company anticipates, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The Company has a rigorous process for the continuous development and evaluation of new product concepts, led by executives in marketing, sales, research and development, product development, operations, law and finance. However, consumer preference and spending patterns change rapidly and cannot be predicted with certainty. There can be no assurance that the Company will anticipate and respond to trends for beauty products effectively. Each new product launch, including those resulting from this newthe Company's recently updated product development process, carries risks, as well as the possibility of unexpected consequences, including:
 the acceptance of the Company's new product launches by, and sales of such new products to, the Company's customers may not be as high as the Company anticipates;
the Company's marketing, promotional, advertising and/or pricing strategies for its new products may be less effective than planned and may fail to effectively reach the targeted consumer base or engender the desired consumption of the Company's products by consumers;
the rate of purchases by the Company's consumers may not be as high as the Company anticipates;
the Company's wall displays to showcase its new products may fail to achieve their intended effects;
the Company may experience out-of-stocks and/or product returns exceeding its expectations as a result of the Company's new product launches or space reconfigurations or as a result of reductions in retail display space by the Company's customers;
the Company's net sales may also be impacted by inventory management by its customers or changes in pricing, marketing, advertising and/or promotional strategies by its customers;
the Company may incur costs exceeding its expectations as a result of the continued development and launch of new products, including, for example, unanticipated levels of research and development costs, advertising, promotional and/or marketing expenses, sales return expenses or other costs related to launching new products;
the Company may experience a decrease in sales of certain of the Company's existing products as a result of newly-launched products, the impact of which could be exacerbated by shelf space limitations and/or any shelf space loss. (See also Item 1A. Risk Factors -"Competition- "Competition in the cosmetics, hair and beauty care products business could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations"cash flows").
the Company's product pricing strategies for new product launches may not be accepted by its customers and/or its consumers, which may result in the Company's sales being less than it anticipates;
the Company may experience a decrease in sales of certain of the Company's products as a result of counterfeit products and/or products sold outside of their intended territories; and/or
any delays or difficulties impacting the Company's ability, or the ability of the Company's suppliers, to timely manufacture, distribute and ship products or raw materials, as the case may be, displays or display walls in connection with launching new

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REVLON, INC. AND SUBSIDIARIES




products, such as due to inclement weather conditions or other delays or difficulties such as those discussed under Item 1A. Risk Factors - "The Company depends on its Oxford, North Carolina facility for production of a substantial portion of the Company's products within the Consumer segment. Disruptions at this facility and/or at other Company or third partythird-party facilities at which the Company's products are manufactured for both its Consumer, Elizabeth Arden and Professional segments could affect the Company's business, prospects, results of operations, financial condition and/or results of operations,”cash flows," could have a material adverse effect on the Company's ability to ship and deliver products to meet its customers’ reset deadlines.
Each of the risks referred to above could delay or impede the Company's ability to achieve its sales objectives, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.




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REVLON, INC. AND SUBSIDIARIES




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 financial covenants under the Amended Credit Agreements, which could have a material adverse effect on the Company's business, financial condition and/or results of operations.
The Company currently expects that operating revenues, cash on hand, and funds available for borrowing under the Amended Revolving Credit Agreement and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2016, including cash requirements for the payment of expenses in connection with the execution of the Company's business strategy and its advertising, promotional, pricing and/or marketing plans, purchases of permanent wall displays, capital expenditure requirements, debt service payments and costs, tax payments, pension and post-retirement plan contributions, payments in connection with the Company's restructuring programs, severance not otherwise included in the Company's restructuring programs and debt and/or equity repurchases, if any.
However, if the Company's anticipated level of revenue is not achieved because of, for example, decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors and/or decreased performance by third party suppliers; changes in consumer purchasing habits, including with respect to retailer preferences; inventory management by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; less than anticipated results from the Company's existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company's expenses, including, without limitation, for pension expense under its benefit plans, for 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 certain financial covenants under the Amended Credit Agreements. (See also Item 1A. Risk Factors - "Restrictions and covenants in Products Corporation’s debt agreements 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 available for borrowing are insufficient to cover the Company's expenses and/or are insufficient to enable Products Corporation to comply with the financial covenants under the Amended Credit Agreements, 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 strategy;
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, Inc. equity or debt securities or Products Corporation's debt securities; and/or
reducing other discretionary spending.
There can be no assurance that the Company would be able to take any of these actions, because of a variety of commercial or market factors or constraints in Products Corporation's 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 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, financial condition and/or results of operations.
Such actions, if ever taken, may not enable the Company to satisfy its cash requirements or enable Products Corporation to comply with the financial covenants under its Amended Credit Agreements if the actions do not result in sufficient savings or

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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 debt agreements 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).
Economic conditions could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operationscash flows and/or on the financial condition of its customers and suppliers.

Economic conditions in the U.S. and/or other countries where the Company operates have in the past contributed, and may continue toin the future contribute, to high unemployment levels, lower consumer spending andand/or reduced credit availability. Such economic conditions have impacted, and could in the future impact, business and consumer confidence.confidence, especially in relation to discretionary purchases. These conditions could have an impact on customer and/or consumer purchases of the Company's products, which could result in a reduction of the Company's net sales, operating income and/or cash flows. Additionally, disruptions in the credit and other financial markets and economic conditions could, among other things, impair the financial condition of one or more of the Company's customers or suppliers, thereby increasing the risk of customer bad debts or non-performance by suppliers. These conditions could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

The U.K.’s ongoing withdrawal process from the European Union may have a negative effect on global economic conditions, financial markets and on the Company's business, prospects, results of operations.operations, financial condition and/or cash flows.

The Company is a multinational company with worldwide operations, including material business operations in Europe. In June 2016, a majority of voters in the U.K. elected to withdraw from the European Union in a national referendum. In March 2017, the U.K. government invoked Article 50 of the Treaty on the European Union and the U.K. is scheduled to leave the European Union in March 2019. The "Brexit" process has created significant ongoing uncertainty about the future relationship between the U.K. and the European Union and has given rise to calls for the governments of other European Union member states to consider withdrawal from the European Union. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings may be especially subject to increased market volatility. Lack of clarity about future U.K. laws and regulations as the U.K. determines which European Union laws to replace or replicate as the withdrawal process proceeds, including financial laws and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics, environmental, health and safety laws and regulations, immigration laws and employment laws, could decrease foreign direct investment in the U.K., increase costs, depress economic activity, restrict the Company’s access to capital and make regulatory compliance and the distribution, sourcing, manufacturing and sales and marketing of the Company’s products more difficult or costly. If the U.K. and the European Union are unable to negotiate acceptable withdrawal terms or if other European Union member states pursue withdrawal, barrier-free access between the U.K. and other European Union member states or among the European economic area overall could be diminished or eliminated. Similar adverse consequences could occur if regions such as Catalonia, where the Company's Spain businesses are headquartered, eventually succeed in withdrawing from their parent country. Approximately 5% of the Company's net sales are in the U.K. and approximately 14% of the Company's net sales are in the remainder of the European Union. Any of these factors could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

The Company depends on a limited number of customers for a large portion of its net sales, and the loss of one or more of these customers could reduce the Company's net sales and have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Walmart and its affiliates worldwide accounted for approximately 18%16%, 16%17% and 20%18% of the Company’s worldwide net sales for 2015, 20142017, 2016 and 2013,2015, respectively. The Company expects that, for future periods, Walmart and a small number of other customers in the Consumer, Elizabeth Arden and Professional segments will, in the aggregate, continue to account for a large portion of the Company's net sales. The Company may be affected by changes in the policies and demands of its customers relating to service levels, inventory de-stocking, pricing, marketing, advertising and/or promotional strategies or limitations on access to wall display space. As is customary in the consumer products industry, none of the Company's customers is under any obligation to continue purchasing products from the Company in the future.

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REVLON, INC. AND SUBSIDIARIES




The loss of Walmart and/or one or more of the Company's other customers that may account for a significant portion of the Company's net sales, or any significant decrease in sales to these customers, including as a result of consolidation among such customers, store closures in response to the growth in retail sales through e-commerce channels, inventory management by these customers, changes in pricing, marketing, advertising and/or promotional strategies by such customers or space reconfigurations by the Company's customers or any significant decrease in the Company's display space, could reduce the Company's net sales and/or operating income and therefore could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Declines in the financial markets may result in increased pension expense and increased cash contributions to the Company's pension plans.

Declines in the U.S. and global financial markets could result in significant declines in the Company's pension plan assets and result in increased pension expense and cash contributions to the Company's pension plans. Interest rate levels will affect the discount rate used to value the Company's year-end pension benefit obligations. One or more of these factors, individually or taken together, could impact future required cash contributions to the Company's pension plans and pension expense. Any one or more of these conditions could reduce the Company's available liquidity, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The Company may be unable to maintain or increase its sales through the Company's primary retailers, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

A decrease in consumer demand in the U.S. and/or internationally for beauty care products, inventory management by the Company's customers, changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers (such as the development and/or continued expansion of private label or their own store-owned brands), a reduction in display space by the Company's customers, 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 and/or a change in consumers’ purchasing habits, such as by buying more cosmetics and beauty care products from retailers where the Company does not currently principally compete (such as prestige and department stores),with respect to retailer preferences and/or sales channels, could result in decreased sales of the Company's products, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Competition in the cosmetics, hair and beauty care products businessindustry could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The cosmetics, hair and beauty care products businessindustry is highly competitive. The Company competes primarily by:
developing quality products with innovative performance features, shades, finishes, components and packaging;
educating consumers, retail customers and salon professionals about the benefits of the Company’s products;

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REVLON, INC. AND SUBSIDIARIES




anticipating and responding to changing consumer, retail customer and salon professional demands in a timely manner, including as to the timing of new product introductions and line extensions;
offering attractively priced products relative to the product benefits provided;
maintaining favorable brand recognition;
generating competitive margins and inventory turns for the Company’s customers by providing relevant products and executing effective pricing, incentive and promotional programs and marketing and advertising campaigns;campaigns, as well as social media and influencer marketing activities;
ensuring product availability through effective planning and replenishment collaboration with the Company's customers;
providing strong and effective advertising, promotion, marketing, social media, influencer and merchandising support;
leveraging e-commerce, social media and mobile commerce initiatives and developing an effective omni-channel strategy to optimize the opportunity for consumers to interact with and purchase the Company's products;
maintaining an effective sales force and distribution network; and
obtaining and retaining sufficient display space, optimal in-store positioning and effective presentation of the Company’s products on-shelf.
An increase in or change in the current level of competition that the Company faces could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

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REVLON, INC. AND SUBSIDIARIES




In addition to competing with expanding private label and store-owned brands in the Consumer segment, the Company competes against a number of multi-national manufacturers, some of which are larger and have substantially greater resources than the Company, and which may therefore have the ability to spend more aggressively than the Company on new business acquisitions, research and development activities and advertising, promotionspromotional, social media influencer and/or marketing activities and have more flexibility than the Company to respond to changing business and economic conditions. The Company's products in certain of its reporting segments also compete with similar products sold through retailers (including via e-commerce) other than those in which the Company principally competes including prestige and department stores.in those segments.
Additionally, the Company's major customers periodically assess the allocation of display space among competitors and in the course of doing so could elect to reduce the display space allocated to the Company's products, if, for example, the Company's marketing, promotional, advertising and/or pricing strategies for its new and/or existing products are less effective than planned, fail to effectively reach the targeted consumer base, fail to engender the desired consumption of the Company's products by consumers and/or fail to sustain productive levels of consumption dollar share; and/or the rate of purchases by the Company's consumers are not as high as the Company anticipates. Within the Company’s Consumer segment, among the factors used by the Company’s major customers in assessing the allocation of display space is a brand’s share of the color cosmetics category. The Company's color cosmetics brands have experienced, over time, year-over-year declines in their share of the color cosmetics category in the U.S. and it is possible that the Company may continue to experience further share declines. Further declines in the Company's share for one or more of its principal brands, including with respect to the Company’s Almay brand, could, among other things, contribute to a loss of display space and/or decreased revenues. Any significant loss of display space could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

Elizabeth Arden depends on various brand licenses and distribution arrangements for a significant portion of its sales, and the loss of one or more of these licenses or distribution arrangements could have a material adverse effect on the Company's business, prospects, results of operations.operations, financial condition and/or cash flows.

Elizabeth Arden’s rights to market and sell certain of its prestige fragrance brands are derived from licenses and other distribution arrangements from unaffiliated third parties and its business is dependent upon the continuation and renewal of such licenses and distribution arrangements on terms favorable to Elizabeth Arden. Each license is for a specific term and may have optional renewal terms. In addition, such licenses and distribution arrangements may be subject to Elizabeth Arden satisfying required minimum royalty payments, minimum advertising and promotional expenditures and satisfying minimum sales requirements. In addition, under certain circumstances, lower net sales may shorten the duration of the applicable license agreement. The loss of one or more of these licenses or other significant distribution arrangements, or a renewal of one or more of these arrangements on less than favorable terms, could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

The success of our Elizabeth Arden segment depends, in part, on the demand for heritage and designer fragrance products. A decrease in demand for such products, or the loss or infringement of any intellectual property rights, could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

The Company's Elizabeth Arden segment has license agreements to manufacture, market and distribute a number of heritage and designer fragrance products, including those of Juicy Couture, John Varvatos, Elizabeth Taylor, Britney Spears, Christina Aguilera, Shawn Mendes, All Saints, La Perla, Ed Hardy, Lucky Brand, Halston, Geoffrey Beene and Wildfox. In 2017, the Company's Elizabeth Arden segment derived approximately 42% of its net sales from heritage and designer fragrance brands. The demand for these products is, to some extent, dependent on the appeal to consumers of the particular designer or talent and the designer’s or talent’s reputation. Elizabeth Arden also cannot assure that the owners of the trademarks that it licenses can or will successfully maintain their intellectual property rights. If other parties infringe on the intellectual property rights that Elizabeth Arden licenses, the value of Elizabeth Arden's brands in the marketplace may be diluted. To the extent that the heritage or designer fragrance category or a particular designer or talent ceases to be appealing to consumers or a designer’s or talent’s reputation is adversely affected, sales of the related products and the value of the brands can decrease materially which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

The Company's foreign operations are subject to a variety of social, political and economic risks and have been, and are expected to continue to be, affected by foreign currency exchange fluctuations, foreign currency controls and/or government-mandated pricing controls, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operationscash flows and the value of its foreign assets.

As of December 31, 2015,2017, the Company had operations based in 2227 foreign countries and its products were sold in approximately 130150 countries. The Company is exposed to risks associated with social, political and economic conditions, including inflation, inherent in operating in foreign countries, including those in Asia (including Japan), Australia, Canada, Eastern Europe (including

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REVLON, INC. AND SUBSIDIARIES




(including Russia), Mexico, South Africa and South America (including Venezuela and Argentina), which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows. Such risks include hyperinflation, foreign currency devaluation, foreign currency controls, government-mandated pricing controls, currency remittance restrictions, changes in tax laws, changes in consumer purchasing habits (including as to retailer preferences), as well as, to a lesser extent, changes in U.S. laws and regulations relating to foreign trade and investment.
These risks and limitations could affect the ability of the Company's foreign subsidiaries to obtain sufficient capital to conduct their operations in the ordinary course of business. Limitations and the difficulties that certain of the Company's foreign subsidiaries may experience on the free flow of funds to and from these foreign subsidiaries could restrict the Company's ability to respond timely to challenging business conditions or changes in operations, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.
The Company's net sales outside of the U.S. for each of 2015, 20142017, 2016 and 20132015 represented approximately 45%51%, 47%45% and 44%45% of the Company's total consolidated net sales, respectively. During 2015, fluctuationsFluctuations in foreign currency exchange rates adverselypositively affected the Company's results of operations and the value of the Company's foreign net assets in 2017; however, they may continue to adversely affect the Company's results of operations and the value of the Company's foreign

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REVLON, INC. AND SUBSIDIARIES




net assets in 2015,future periods, which in turn could cause a material adverse effect on the Company's reported net sales and earnings and the comparability of period-to-period results of operations.
Products Corporation enters into foreign currency forward exchange contracts to hedge certain net cash flows denominated in foreign currencies. The foreign currency forward exchange contracts are entered into primarily for the purpose of hedging anticipated inventory purchases and certain intercompany payments denominated in foreign currencies and generally have maturities of less than one year. At December 31, 2015,2017, the notional amount of Products Corporation's foreign currency forward exchange contracts was $76.3$147.1 million. These foreign currency forward exchange contracts may not adequately protect the Company against the negative effects of foreign currency fluctuations, which could adversely affect the Company's overall liquidity.

Terrorist attacks, acts of war or military actions and/or other civil unrest may adversely affect the territories in which the Company operates and the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

On September 11, 2001, the U.S. was the target of terrorist attacks of unprecedented scope. These attacks contributed to major instability in the U.S. and other financial markets and reduced consumer confidence. These terrorist attacks, as well as subsequent terrorist attacks (such as those that have occurred in Berlin, Germany; Nice, France; Orlando, Florida; Istanbul, Turkey; Brussels, Belgium; Paris, France; Benghazi;Benghazi, Libya; Madrid, Spain; and London, England), attempted terrorist attacks, military responses to terrorist attacks, other military actions (such as the ongoing missile launch testing program of the Kim Jong-un regime in North Korea) and/or civil unrest such as that occurring in the Ukraine, Venezuela, Turkey, Syria, Iraq and surrounding areas, may adversely affect prevailing economic conditions, resulting in work stoppages, reduced consumer spending and/or reduced demand for the Company's products. These developments subject the Company's worldwide operations to increased risks and, depending on their magnitude, could reduce the Company's net sales and therefore could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The Company's products are subject to federal, state and international regulations that could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The Company is subject to regulation by the FTC and the FDA in the U.S., as well as various other federal, state, local and foreign regulatory authorities, including those in the EU, Canada and other countries in which the Company operates. The Company's Oxford, North Carolina manufacturing facility is registered with the FDA as a drug manufacturing establishment, permitting the manufacture of cosmetics and other beauty-care products that contain over-the-counter drug ingredients, such as sunscreens, anti-perspirant deodorants and anti-dandruff hair-care products. Regulations in the U.S., the EU, Canada and other countries in which the Company operates that are designed to protect consumers or the environment have an increasing influence on the Company's product claims, ingredients and packaging. To the extent federal, state, local and/or foreign regulatory changes occur in the future, they could require the Company to reformulate or discontinue certain of its products or revise its product packaging or labeling, any of which could result in, among other things, increased costs to the Company, delays in product launches, product returns or recalls and lower net sales, and therefore could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Any violation of the U.S. Foreign Corrupt Practices Act or other similar foreign anti-corruption laws could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

A significant portion of the Company’s revenue is derived from operations outside the U.S. and the Company has significant facilities outside the U.S., which exposes the Company to complex foreign and U.S. regulations inherent in conducting international

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REVLON, INC. AND SUBSIDIARIES




business transactions. The Company is subject to compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”("FCPA") and other similar foreign anti-corruption laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business and other types of improper payments. While the Company’s employees and agents are required to comply with these laws and the Company has developed policies and procedures to facilitate compliance with such laws, there is no assurance that the Company’s policies and procedures will prevent all violations of these laws, despite the Company’s long-standing commitment to conducting its business and achieving its objectives by maintaining the highest level of ethical standards and legal compliance. The SEC and the U.S. Department of Justice, and their foreign counterparts, have increased their enforcement activities with respect to the FCPA and similar foreign anti-corruption laws and any violation of these laws or allegations of such may result in severe criminal and civil sanctions, as well as other substantial costs and penalties, any of which could have a material adverse effect the Company’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.
The failure of
Disruptions to the Company's information technology systems and/or difficulties or delays in implementing new information technology systems could disrupt the Company's business operations which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The operation of the Company's business depends on the Company's information technology systems. The Company relies on its information technology systems to effectively manage, among other things, the Company's business data, communications, supply chain, inventory management, customer order entry and order fulfillment, processing transactions, summarizing and reporting results of operations, human resources benefits and payroll management, compliance with regulatory, legal and tax requirements and other processes and data necessary to manage the Company's business. The failure ofDisruptions to the Company's information

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REVLON, INC. AND SUBSIDIARIES




technology systems, including any failure ofdisruptions to the Company's current systems and/or as a result of transitioning to additional or replacement information technology systems, as the case may be, to perform as the Company anticipates could disrupt the Company's business and could result in, among other things, transaction errors, processing inefficiencies, loss of data and the loss of sales and customers, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows. In addition, the Company's information technology systems may be vulnerable to damage or interruption from circumstances beyond the Company's control, including, without limitation, fire, natural disasters, power outages, systems failure,disruptions, system conversions, security breaches, cyber-attacks, viruses and/or human error. In any such event, the Company could be required to make a significant investment to fix or replace its information technology systems, and the Company could experience interruptions in its ability to service its customers. Any such damage or interruption could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or resultscash flows.
In addition, as part of operations.
our normal business activities, the Company collects and stores certain confidential information, including personal information with respect to customers and employees, as well as information related to intellectual property, and the success of its e-commerce operations depends on the secure transmission of confidential and personal data over public networks, including the use of cashless payments. The Company’s information technology systems, or those of its third-party service providers, may be accessed by unauthorized users such as cyber criminals as a result of a failure, disruption, cyberattack or other security breach. As techniques used by cyber criminals change frequently, a failure, disruption, cyberattack or other security breach of the Company’s information technology systems or infrastructure, or those of its third-party service providers, may go undetected for an extended period and could result in the theft, transfer, unauthorized access to, disclosure, modification, misuse, loss or destruction of Company, employee, representative, customer, vendor and/or other third-party data, including sensitive or confidential data, personal information and/or intellectual property, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

Difficulties in implementing the Company’s new ERP system have disrupted the Company's business operations and ongoing disruptions with such implementation could have a material adverse effect on the Company's business, prospects, results of operations.operations, financial condition and/or cash flows.

The Company is in the process of implementing a new company-wide SAP enterprise resource planning (“ERP”("ERP") system. The Company's anticipated company-wide implementation of this SAP ERP system, may not result in improvements that outweigh its costs and may disrupt the Company's operations. This system implementationwhich subjects the Company to substantial costs, the majority of which are capital expenditures, and inherent risks associated with migrating from the Company's legacy systems. These costs and risks could include, but are not limited to:systems to a new IT platform, including, without limitation:
the inability to fill customer orders accurately or on a timely basis, or at all;
increased demands on management and staff time to the detriment of other corporate initiatives;
significant capital and operating expenditures;
the inability to process payments to vendors accurately or in a timely manner;
disruption of the Company's internal control structure; and/or
inability to fulfill
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REVLON, INC. AND SUBSIDIARIES




the Company's SEC or other governmental reporting requirements in a timely or accurate manner;
inability to fulfill federal, state and local taxreporting and filing requirements in a timely or accurate manner;manner.
increased demands on management and staff time to the detriment of other corporate initiatives; and
significant capital and operating expenditures.
IfDuring February 2018, the Company is unable to successfully plan, design or implement thislaunched the new SAP ERP system in whole the U.S., which caused its Oxford, N.C. manufacturing facility to experience service level disruptions that have impacted the Company’s ability to manufacture certain quantities of finished goods and fulfill shipments to several large retail customers in the U.S. The Company cannot provide assurances that it will remedy the ERP systems issues in time to fully recover these sales and/or that the ERP implementation will not continue to disrupt the Company's operations and its ability to fulfill customer orders. Also, these ERP-related disruptions have caused the Company to incur expedited shipping fees and other unanticipated expenses in part,connection with actions that the Company has implemented to remediate the decline in customer service levels, which could continue until the ERP systems issues are resolved. To the extent that these disruptions occur in larger magnitudes or experience unanticipated difficulties or delays in doing so,continue to persist over time, it could negatively impact the Company’s competitive position and its relationships with its customers and thus could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or results of operations.cash flows.

The illegal distribution and sale by third parties of counterfeit versions of the Company’s products or the unauthorized diversion by third parties of the Company’s products could have an adverse effect on the Company’s revenuesnet sales and a negative impact on the Company’s reputation and business.

Third parties may illegally distribute and sell counterfeit versions of the Company’s products. These counterfeit products may be inferior in terms of quality and other characteristics compared to the Company’s authentic products and/or the counterfeit products could pose safety risks that the Company’s authentic products would not otherwise present to consumers. Consumers could confuse counterfeit products with the Company’s authentic products, which could damage or diminish the image, reputation and/or value of the Company’s brands and cause consumers to refrain from purchasing the Company’s products in the future, which could adversely affect the Company’s revenuesnet sales and have a negative impact on the Company’s reputation.
A substantial portion of the products that the Company sells under its Professional segment are sold to professional salon distributors and/or wholesalers. Products sold to these customers are meant to be used exclusively by salons and individual salon professionals or are sold exclusively to the retail consumers of these salons. Despite the Company’s efforts to prevent diversion of such products from these customers, incidents have occurred and continue to occur whereby the Company’s products are sold to sales outlets other than the intended salons and salon professionals, such as to general merchandise retailers or unapproved outlets. In some instances, these diverted products may be old, damaged or otherwise adulterated, which could damage or diminish the image, reputation and/or value of the Company’s brands. In addition, such diversion may result in lower net sales of the Company’s products if consumers choose to purchase diverted products and/or choose to purchase products manufactured or sold by the Company’s competitors because of any perceived damage or diminishment to the image, reputation and/or value of the Company’s brands.

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REVLON, INC. AND SUBSIDIARIES




The Company believes that its trademarks, patents and other intellectual property rights are extremely important to the Company’s success and its competitive position. The Company devotes significant resources to registering and protecting its intellectual property rights and maintaining the positive image of its brands. The Company’s trademark and patent applications may fail to result in issued registrations or provide the scope of coverage sought. Unplanned increases in legal fees and other costs associated with enforcing and/or defending the Company’s trademarks, patents and/or other intellectual property rights could result in higher than expected operating expenses. The Company has been unable to eliminate, and may in the future be unable to eliminate, all counterfeiting activities, unauthorized product diversion and infringement of its trademarks, patents and/or other intellectual property, any of which could adversely affect the Company’s revenuesnet sales and have a negative impact on the Company’s reputation.

Elizabeth Arden's inability to acquire or license additional brands or secure additional distribution arrangements and arrangements could have an adverse effect on the Company's net sales and a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

The success of the Elizabeth Arden business depends in part upon the continued growth of its portfolio of owned, licensed and distributed brands, including expanding its geographic presence to take advantage of opportunities in developed and emerging regions. Efforts to increase sales of the Elizabeth Arden brand and Elizabeth Arden's prestige fragrance portfolio and expand its geographic market presence depend upon a number of factors, including its ability to:
develop Elizabeth Arden's brand portfolio through branding, innovation and execution;
identify and develop new and existing brands with the potential to become successful global brands;
innovate and develop new products that are appealing to consumers;
acquire or license additional brands or secure additional distribution arrangements and our ability to obtain the required financing for these agreements and arrangements;

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REVLON, INC. AND SUBSIDIARIES




expand Elizabeth Arden's geographic presence to take advantage of opportunities in developed and emerging regions;
continue to expand Elizabeth Arden's distribution channels within existing geographies to increase trade presence, brand recognition and sales;
expand Elizabeth Arden's trade presence through alternative distribution channels, such as through e-commerce channels;
expand margins through sales growth, the development of higher margin products and overhead and supply chain integration and efficiency initiatives;
effectively manage capital investments and working capital to improve the generation of cash flow; and
execute any acquisitions quickly and efficiently and integrate new businesses successfully.
There can be no assurance that the Company can successfully achieve any or all of the above objectives in the manner or time period that it expects. Further, achieving these objectives will require investments, which may result in material short-term costs without generating any current net sales and the Company may not ultimately achieve its net sales objectives associated with such efforts. The future expansion of the Elizabeth Arden segment through acquisitions, new product licenses, e-commerce initiatives or other new product distribution arrangements, if any, will depend upon the ability to identify suitable brands to acquire, license or distribute and to obtain the required financing for these acquisitions, licenses or distribution arrangements or to launch or support the brands associated with these agreements or arrangements. The Company may not be able to identify, negotiate, finance or consummate such acquisitions, licenses or arrangements on terms acceptable to the Company, or at all. In addition, the Company may decide to divest or discontinue certain brands or streamline operations under the Elizabeth Arden business and may incur costs and charges in doing so. The inability to acquire or license additional brands or secure additional distribution arrangements for the Elizabeth Arden segment (such as optimizing its e-commerce sales opportunities) and obtain the required financing for these agreements and arrangements could have an adverse effect on the Company’s net sales and a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.

The Company's success depends, in part, on the quality, efficacy and safety of its products.

The Company's success depends, in part, on the quality, efficacy and safety of its products. If the Company's products are found or alleged to be defective or unsafe, or if they fail to meet customer or consumer standards, the Company's relationships with its customers or consumers could suffer, the appeal of one or more of the Company's brands could be diminished and the Company could lose sales and/or become subject to liability claims, any of which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.

The Company’s success largely depends upon its ability to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce, as well as effectively implement succession planning for its senior management team, and, as such, the Company’s inability to do so could adversely affect the Company’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.
The continued execution of
Continuing to execute the Company's business strategyinitiatives largely depends on the Company’s ability to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce, as well as effectively implement succession planning for its senior management team. Unexpected levels of employee turnover or the Company’s failure to maintain an adequate succession plan to effectively transition current management leadership positions and/or the Company’s failure to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce could adversely affect the Company’s institutional knowledge base and/or competitive advantage. If the Company is unable to attract, hire and/or retain talented and highly qualified senior management, other key employees and/or a highly skilled and diverse workforce, or if the Company is unable to effectively provide for the succession of its senior management team, it could adversely affect the Company’s business, prospects, results of operations, financial condition and/or results of operations.cash flows.

Shares of Revlon Inc. Class A Common Stock and Products Corporation's capital stock are pledged to secure various of Revlon, Inc.'sRevlon'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 ProductsProduct Corporation's Amended2016 Senior Credit Agreements and Products Corporation's 5¾%Facilities and/or its Senior Notes Indenture and could have other consequences.

All of Products Corporation's shares of common stock are pledged to secure Revlon, Inc.’sRevlon’s guarantee under the Amended2016 Senior Credit Agreements.Facilities. MacAndrews & Forbes has advised the Company that it has pledged shares of Revlon, Inc.’sRevlon’s Class A Common Stock to secure certain obligations of MacAndrews & Forbes. Additional shares of Revlon Inc. and shares of common stock of intermediate holding companies between Revlon Inc. and MacAndrews & Forbes may from time to timetime-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

23
REVLON, INC. AND SUBSIDIARIES




with respect to such shares of Revlon, Inc.'sRevlon's Class A Common Stock, Products Corporation's common stock or stock of intermediate holding companies between Revlon Inc. and MacAndrews & Forbes.
A foreclosure upon any such shares of common stock or dispositions of shares of Revlon, Inc.’sRevlon’s Class A Common Stock, Products Corporation's common stock or stock of intermediate holding companies between Revlon Inc. and MacAndrews & Forbes that are beneficially owned by MacAndrews & Forbes could, in a sufficient amount, constitute a “change"change of control”control" under the AmendedProducts Corporation’s 2016 Credit Agreements and the 5¾% Senior Notes Indenture.Indentures. A change of control constitutes an event of default under the Amended2016 Credit Agreements that would permit Products Corporation's lenders to accelerate amounts outstanding under such facilities. In addition, holders of the 5¾% Senior Notes may require Products Corporation to repurchase their respective 5¾% Senior Notesnotes 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 Amended2016 Senior Credit Facilities and/or to repurchase or redeem some or all of the 5¾% Senior Notes. (See also Item 1A. Risk Factors - “The"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 financial covenants under the Amended2016 Credit Agreements which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows.")

Changes in tax laws or the examination of the Company's tax positions could increase (or decrease) the Company's tax obligations and effective tax rate, which could materially and adversely affect the Company's financial condition, results of operations.”operations and/or cash flows.

Tax laws in the various jurisdictions where the Company conducts business are dynamic and subject to change as new laws are passed and new interpretations of existing law are issued or applied (possibly with a retroactive effect). The Company is subject to taxes in the U.S. and numerous international jurisdictions. The Company records tax expense based on current tax payments and its estimates of future tax payments, which include reserves for estimates of probable settlements of international and domestic tax audits. At any one time, many tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a result, the Company expects that throughout the year there could be ongoing variability in its quarterly tax rates as taxable events occur and exposures are re-evaluated. Further, the Company's effective tax rate in a given financial statement period may be materially impacted by changes in tax laws, changes in the mix and level of earnings by taxing jurisdiction, changes to existing accounting rules or regulations or changes to the Company's ownership or capital structures. Fluctuations in the Company's tax obligations and effective tax rate could materially adversely affect its financial condition, results of operations and/or cash flows.

U.S. income tax reform efforts could have a material impact on the Company's financial condition, results of operations and/or cash flows.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act makes broad changes to the existing U.S. federal income tax code, including reducing the federal corporate income tax rate from 35% to 21%, imposing limitations on the Company's ability to deduct interest expense for tax purposes and reducing U.S. tax on qualified dividends received from non-U.S. subsidiaries, amongst many other complex provisions. The ultimate impact of such tax reforms may differ from the Company's current estimates due to changes in interpretations and assumptions made by the Company, as well as the issuance of any further regulations or guidance that may alter the operation of the U.S. federal income tax code. Various uncertainties also exist in terms of how U.S. states and any foreign countries within which the Company operates will react to these U.S. federal income tax reforms, which could have a material impact on the Company's financial condition, results of operations and/or cash flows.

MacAndrews & Forbes has the power to direct and control the Company's business.

MacAndrews & Forbes is wholly-owned by Ronald O. Perelman. Mr. Perelman, through MacAndrews & Forbes, beneficially owned approximately 78%85% of Revlon, Inc.'sRevlon's outstanding Class A Common Stock on December 31, 2015.2017. As a result, MacAndrews & Forbes is able to control the election of the entire Board of Directors of Revlon Inc. and of Products Corporation's Board of Directors (as it is a wholly owned subsidiary of Revlon, Inc.)Revlon) and controls the vote on all matters submitted to a vote of Revlon, Inc.’sRevlon’s and Products Corporation's stockholders, including the approval of mergers, consolidations, sales of some, substantially all or all of the Company's assets, issuances of capital stock and similar transactions.



2124
REVLON, INC. AND SUBSIDIARIES




Item 1B. Unresolved Staff Comments

None.


Item 2. Properties

The following table sets forth, as of December 31, 2015,2017, the Company's major manufacturing, research and development and warehouse/distribution facilities by the segment that each facility primarily operates in, all of which are owned by the Company, except where otherwise noted.
Location Segment Use Approximate Floor Space Sq. Ft.
Oxford, North Carolina Consumer 
Manufacturing, warehousing, distribution and office (a)
 1,012,000
Jacksonville, Florida Professional Manufacturing, warehousing, distribution and office 725,000
Salem, VirginiaElizabeth ArdenWarehousing and distribution (leased)482,000
Roanoke, VirginiaElizabeth ArdenWarehousing and distribution (leased)400,000
Tarragona, Spain Professional Manufacturing, warehousing, distribution and office 300,000
Mississauga, Canada Consumer Warehousing, distribution and office (leased) 195,000
Queretaro, Mexico Professional Manufacturing, warehousing, distribution and office 128,000
Canberra, Australia Consumer Warehousing and distribution 125,000
Edison, New Jersey Consumer Research and development and office (leased) 123,000
Rietfontein, South Africa Consumer Warehousing, distribution and office (leased) 120,000
Isando, South Africa Consumer Manufacturing, warehousing, distribution and office 94,000
Stone, United Kingdom Consumer Warehousing and distribution (leased) 92,000
Bologna, Italy Professional Manufacturing, warehousing, distribution and office 80,000
(a) 
Property subject to liens under the Amended2016 Credit Agreements.

In addition to the facilities described above, the Company owns and leases additional facilities in various areas throughout the world, including the lease of the Company's executive offices in New York, New York (approximately 91,000107,000 square feet) and in Cornella, Spain (approximately 107,00090,000 square feet). Management considers the Company's facilities to be well-maintained and satisfactory for the Company's operations, and believes that the Company's facilities and third partythird-party contractual supplier arrangements provide sufficient capacity for its current and expected production requirements.


Item 3. Legal Proceedings

The Company is involved in various routine legal proceedings incidental to the ordinary course of its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or its results of operations.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. (SeeSee Note 21, "Commitments and Contingencies" to the Consolidated Financial Statements in this Form 10-K, for further discussion.
As previously disclosed, following the announcement of the execution of the Elizabeth Arden Merger Agreement, several putative shareholder class action lawsuits and a derivative lawsuit were filed challenging the Merger. In addition to the complaints filed on behalf of plaintiffs Parker, Christiansen, Ross and Stein on July 25, 2016, a lawsuit (Hutson v. Elizabeth Arden, Inc., et al., Case No. CACE-16-013566) (referred to as the "Hutson complaint") was filed in the Seventeenth Judicial Circuit in and for Broward County, Florida (the "Court") against Elizabeth Arden, the members of the board of directors of Elizabeth Arden, Revlon, Products Corporation and Acquisition Sub. In general, the Hutson complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to Elizabeth Arden’s shareholders with respect to the Merger, by, among other things, approving the Merger pursuant to an unfair process and at an inadequate and unfair price; and (ii) Revlon, Products Corporation and Acquisition Sub aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors. The plaintiff seeks relief similar to that sought in the Parker case.


REVLON, INC. AND SUBSIDIARIES




By Order dated August 4, 2016, all five cases were consolidated by the Court into a Consolidated Amended Class Action. Thereafter, on August 11, 2016, a Consolidated Amended Class Action Complaint was filed, seeking to enjoin defendants from consummating the Merger and/or from soliciting shareholder votes. To the extent that the Merger was consummated, the Consolidated Amended Class Action Complaint seeks to rescind the Merger or recover rescissory or other compensatory damages, along with costs and fees. The grounds for relief set forth in the Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints, as previously disclosed. Class counsel advised that post-consummation of the Merger they were going to file a Second Consolidated Amended Class Action Complaint. The Second Consolidated Amended Class Action Complaint (which superseded the Consolidated Amended Class Action Complaint) was ultimately filed on or about January 26, 2017. Like the Consolidated Amended Class Action complaint, the grounds for relief set forth in the Second Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints.
The defendants' motions to dismiss the Second Consolidated Amended Class Action Complaint were filed on March 28, 2017. Plaintiffs' response was filed on June 6, 2017 and defendants' replies were filed on July 13, 2017. A hearing on the defendants' motion to dismiss was held on September 19, 2017 and on November 20, 2017, the defendants' motion was granted and the case was dismissed, with leave to amend under limited circumstances. On December 8, 2017, plaintiffs filed a Third Amended Complaint, seeking relief on the same grounds sought in the First and Second Amended Complaints, but alleged as direct, as opposed to derivative, claims. On January 12, 2018, the defendants once again moved to dismiss. The Company anticipates briefing, followed by a hearing that is expected to occur in the next few months. The Company believes the allegations contained in the Third Consolidated Amended Class Action Complaint are without merit and intends to continue to vigorously defend against them. Additional lawsuits arising out of or relating to the Merger Agreement or the Merger may be filed in the future.
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 4. Mine and Safety Disclosures

Not applicable.

PART II - OTHER INFORMATION
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Revlon, Inc.’s only class of capital stock outstanding at December 31, 2015 is its Class A Common Stock.
MacAndrews & Forbes, which is wholly-owned by Ronald O. Perelman, at December 31, 2015 beneficially owned 40,669,640 shares of Revlon, Inc.’s Class A Common Stock, with a par value of $0.01 per share (the “Class A Common Stock”) (36,108,030 shares of which were beneficially owned by MacAndrews & Forbes and 4,561,610 shares of which were beneficially owned by a family member of Mr. Perelman with respect to which shares MacAndrews & Forbes holds a voting proxy). As a result, at

2226
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


PART II - OTHER INFORMATION

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Revlon’s only class of capital stock outstanding at December 31, 2015,2017 is its Class A Common Stock. MacAndrews & Forbes, which is wholly-owned by Ronald O. Perelman, at December 31, 2017 beneficially owned 44,573,187 shares of Revlon’s Class A Common Stock, with a par value of $0.01 per share (the "Class A Common Stock"). As a result, at December 31, 2017, Mr. Perelman, indirectly through MacAndrews & Forbes, beneficially owned approximately 78%85% of the issued and outstanding shares of Revlon, Inc.'sRevlon's Class A Common Stock, which represented approximately 78%85% of the voting power of Revlon, Inc.’sRevlon’s capital stock. The remaining 11,793,8448,073,377 shares of Class A Common Stock that were issued and outstanding at December 31, 20152017 were owned by the public.
Revlon, Inc.'sRevlon's Class A Common Stock is listed and traded on the New York Stock Exchange (the "NYSE"). As ofAt December 31, 2015,2017, there were approximately 340285 holders of record of Class A Common Stock (which does not include the number of beneficial owners holding indirectly through a broker, bank or other nominee). No cash dividends were declared or paid during 20152017 and 20142016 by Revlon Inc. on its Class A Common Stock. The terms of the Amended2016 Credit Agreements and the 5¾% Senior Notes IndentureIndentures currently restrict Products Corporation’s ability to pay dividends or make distributions to Revlon, Inc., except in limited circumstances, which, in turn, limits Revlon, Inc.'sRevlon's ability to pay dividends to its shareholders.stockholders. See “Financial"Financial Condition, Liquidity and Capital Resources - Long Term Debt Instruments”Instruments" and Note 11, “Long-Term Debt”"Long-Term Debt," in the Company’s Consolidated Financial Statements.Statements in this Form 10-K.
The table below shows the high and low quarterly closing stock prices of Revlon, Inc.'sRevlon's Class A Common Stock on the NYSE consolidated tape for 20152017 and 2014.2016:
Year Ended December 31, 2015Year Ended December 31, 2017
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High$41.20
 $41.18
 $37.34
 $32.36
$35.40
 $27.55
 $27.50
 $24.20
Low32.32
 35.52
 28.97
 26.25
27.85
 18.60
 15.95
 20.65

Year Ended December 31, 2014Year Ended December 31, 2016
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High$27.58
 $31.52
 $34.99
 $35.55
$37.97
 $37.20
 $37.59
 $36.81
Low22.54
 25.40
 29.75
 31.04
24.50
 30.20
 30.73
 27.75

For information on securities authorized for issuance under the Company’s equity compensation plans, see “Item"Item 12 - Security Ownership of Certain Beneficial Owners and Related Stockholder Matters.”"


Item 6. Selected Financial Data

The Consolidated Statements of Operations Data for each of the years in the five-year5-year period ended December 31, 20152017 and the Consolidated Balance Sheet Data as of December 31, 2017, 2016, 2015, 2014 2013, 2012 and 20112013 are derived from the Company’s Consolidated Financial Statements, which have been audited by an independent registered public accounting firm. The results of operations related to the CBBElizabeth Arden Acquisition are included beginning on the Elizabeth Arden Acquisition Date of September 7, 2016. The results of operations related to the acquisition of the CBBeauty Group and certain of its related entities (collectively "CBB" and, such transaction, the "CBB Acquisition") are included beginning on the CBB acquisition date of April 21, 2015 (the "CBB Acquisition Date.Date"). The results of the operations related to the Colomer Acquisition are included beginning on the Colomer Acquisition Date of October 9, 2013. The results of the operations related to the Pure Ice and SinfulColors acquisitions are included beginning on their respective acquisition dates of July 2, 2012 and March 17, 2011. The Selected Consolidated Financial Data should be read in conjunction with the Company's Consolidated Financial Statements and the Notes to the Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations."Operations" in this Form 10-K.

2327
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


 Year Ended December 31,
 (in millions, except per share amounts) Year Ended December 31,
Statement of Operations Data: 
2015(a)
 
2014(b)
 
2013(c)
 
2012(d)
 
2011(e)
 
2017(a)
 
2016(b)
 
2015(c)
 
2014(d)
 
2013(e)
Net sales $1,914.3
 $1,941.0
 $1,494.7
 $1,396.4
 $1,347.5
 $2,693.7
 $2,334.0
 $1,914.3
 $1,941.0
 $1,494.7
Gross profit 1,246.5
 1,272.7
 949.6
 902.6
 866.3
 1,542.4
 1,416.9
 1,246.5
 1,272.7
 949.6
Selling, general and administrative expenses 1,002.5
 1,009.5
 731.7
 682.6
 660.2
 1,467.6
 1,161.0
 1,002.5
 1,009.5
 731.7
Acquisition and integration costs 8.0
 6.4
 25.4
 —
 —
 52.9
 43.2
 8.0
 6.4
 25.4
Restructuring charges and other, net 10.5
 21.3
 3.5
 20.5
 —
 33.4
 34.0
 10.5
 21.3
 3.5
Goodwill impairment charge 9.7
 —
 —
 —
 —
Operating income 215.8
 235.5
 189.0
 199.5
 206.1
Impairment charge 10.8
 23.4
 9.7
 —
 —
Operating (loss) income (22.3) 155.3
 215.8
 235.5
 189.0
Interest expense 83.3
 84.4
 73.8
 79.1
 84.9
 149.8
 105.2
 83.3
 84.4
 73.8
Interest expense - preferred stock dividend —
 —
 5.0
 6.5
 6.4
 —
 —
 —
 —
 5.0
Amortization of debt issuance costs 5.7
 5.5
 5.2
 5.3
 5.3
 9.1
 6.8
 5.7
 5.5
 5.2
Loss on early extinguishment of debt, net —
 2.0
 29.7
 —
 11.2
 —
 16.9
 —
 2.0
 29.7
Foreign currency losses, net 15.7
 25.0
 3.7
 2.8
 4.7
Foreign currency (gains) losses, net (18.5) 18.5
 15.7
 25.0
 3.7
Provision for income taxes 51.4
 77.8
 46.0
 43.7
 36.8
 21.8
 25.5
 51.4
 77.8
 46.0
Income from continuing operations, net of taxes 59.3
 39.6
 24.6
 61.2
 55.2
(Loss) income from discontinued operations, net of taxes (3.2) 1.3
 (30.4) (10.1) (1.8)
Net income (loss) 56.1
 40.9
 (5.8) 51.1
 53.4
(Loss) income from continuing operations, net of taxes (185.3) (17.0) 59.3
 39.6
 24.6
Income (loss) from discontinued operations, net of taxes 2.1
 (4.9) (3.2) 1.3
 (30.4)
Net (loss) income (183.2) (21.9) 56.1
 40.9
 (5.8)
                    
Basic income (loss) per common share:          
Basic (loss) income per common share:          
Continuing operations 1.13
 0.76
 0.47
 1.17
 1.06
 (3.52) (0.33) 1.13
 0.76
 0.47
Discontinued operations (0.06) 0.02
 (0.58) (0.19) (0.04) 0.04
 (0.09) (0.06) 0.02
 (0.58)
Net income (loss) $1.07
 $0.78
 $(0.11) $0.98
 $1.02
Basic net (loss) income per common share $(3.48) $(0.42) $1.07
 $0.78
 $(0.11)
                    
Diluted income (loss) per common share:          
Diluted (loss) income per common share:          
Continuing operations 1.13
 0.76
 0.47
 1.17
 1.06
 (3.52) (0.33) 1.13
 0.76
 0.47
Discontinued operations (0.06) 0.02
 (0.58) (0.19) (0.04) 0.04
 (0.09) (0.06) 0.02
 (0.58)
Net income (loss) $1.07
 $0.78
 $(0.11) $0.98
 $1.02
Diluted net (loss) income per common share $(3.48) $(0.42) $1.07
 $0.78
 $(0.11)
                    
Weighted average number of common shares outstanding (in millions)(f):
          
Weighted average number of common shares outstanding (in millions):          
Basic 52.4
 52.4
 52.4
 52.3
 52.2
 52.6
 52.5
 52.4
 52.4
 52.4
Diluted 52.6
 52.4
 52.4
 52.4
 52.3
 52.6
 52.5
 52.6
 52.4
 52.4

24
  Year Ended December 31,
Balance Sheet Data: 
2017(a)
 
2016
as adjusted(b)
 
2015
as adjusted(c)
 
2014
as adjusted(d)
 
2013
as adjusted(e)
Total current assets $1,143.2
 $1,123.7
 $808.9
 $715.4
 $734.0
Total non-current assets 1,913.7
 1,899.8
 1,158.4
 1,203.8
 1,253.1
Total assets $3,056.9
 $3,023.5
 $1,967.3
 $1,919.2
 $1,987.1
           
Total current liabilities(f)
 $932.3
 $708.7
 $515.0
 $464.9
 $552.7
Total other non-current liabilities 2,895.0
 2,929.6
 2,039.8
 2,098.4
 2,030.9
Total liabilities $3,827.3
 $3,638.3
 $2,554.8
 $2,563.3
 $2,583.6
           
Total indebtedness $2,836.3
 $2,692.0
 $1,825.0
 $1,845.6
 $1,905.8
Total stockholders' deficiency (770.4) (614.8) (587.5) (644.1) (596.5)
(a)
Comparability of results from continuing operations for 2017 are affected by: (1) $52.9 million of acquisition and integration costs incurred during 2017, primarily related to the Elizabeth Arden Acquisition; (2) $33.4 million in restructuring charges and other, net, primarily related

28
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)

  Year Ended December 31,
  (in millions, except per share amounts)
Balance Sheet Data: 
2015(a)
 
2014(b)
 
2013(c)
 
2012(d)
 
2011(e)
Total current assets $866.9
 $773.8
 $799.1
 $541.2
 $518.7
Total non-current assets 1,147.4
 1,170.3
 1,217.8
 695.4
 638.4
Total assets $2,014.3
 $1,944.1
 $2,016.9
 $1,236.6
 $1,157.1
           
Total current liabilities(g)
 $515.0
 $464.9
 $552.7
 $453.1
 $335.4
Redeemable preferred stock(h)
 —
 —
 —
 —
 48.4
Total other non-current liabilities 2,086.8
 2,123.3
 2,060.7
 1,432.8
 1,466.2
Total liabilities $2,601.8
 $2,588.2
 $2,613.4
 $1,885.9
 $1,850.0
           
Total indebtedness $1,845.0
 $1,870.5
 $1,935.6
 $1,220.7
 $1,227.7
Total stockholders' deficiency (587.5) (644.1) (596.5) (649.3) (692.9)

to the EA Integration Restructuring Program (See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K); and (3) a $10.8 million non-cash impairment charge related to goodwill for the Company's GCB reporting unit (see Note 8, "Goodwill and Intangible Assets, Net," to the Consolidated Financial Statements in this Form 10-K).
(b)
(a)Comparability of results from continuing operations for 2016 are affected by: (1) $43.2 million of acquisition and integration costs incurred during 2016, primarily related to the Elizabeth Arden Acquisition; (2) $34 million in restructuring charges and other, net, primarily related to the EA Integration Restructuring Program (See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K); (3) a $23.4 million non-cash impairment charge related to goodwill and acquired identifiable intangible assets for the Company's Other reporting unit (see Note 8, "Goodwill and Intangible Assets, Net," to the Consolidated Financial Statements in this Form 10-K); and (4) a $16.9 million aggregate loss on the early extinguishment of debt in connection withProducts Corporation entering into the 2016 Senior Credit Facilities and the corresponding complete refinancing and repayment of Products Corporation's Old Term Loan Facility.
(c)Comparability of results from continuing operations for 2015 are affected by: (1) a $20.7 million pension lump sum settlement charge related to a one-time lump sum payment option offered to certain former employees (See Note 14, "Savings Plan, Pension and Post-Retirement Benefits"Benefits," to the Consolidated Financial Statements in this Form 10-K); (2) a decrease in the provision for income taxes, primarily driven by a non-cash benefit related to the net reduction of the Company's deferred tax valuation allowance on its net deferred tax assets for certain foreign jurisdictions (See Note 16, "Income Taxes"Taxes," to the Consolidated Financial Statements in this Form 10-K); (3) $10.5 million in restructuring charges and other, net, primarily related to the 2015 Efficiency Program (See Note 3, “Restructuring Charges”"Restructuring Charges" to the Consolidated Financial Statements in this Form 10-K); (4) a $9.7 million non-cash goodwill impairment charge related to goodwill for the Company's Global Color Brands reporting unit (see Note 8, "Goodwill and Intangible Assets, Net"Net," to the Consolidated Financial Statements in this Form 10-K); and (5) $8.0$8 million of acquisition and integration costs incurred during 2015 primarily related to costs incurred in connection with the 2015 CBB Acquisition and the 2014 Integration Program.
(b)(d) 
Comparability of results from continuing operations for 2014 are affected by: (1) $21.3 million in restructuring charges and other, net, primarily related to the 2014 Integration Program (See Note 3, “Restructuring Charges”"Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K); (2) $6.4 million of acquisition and integration costs incurred during 2014 (see note (c)(d)(3) below) related to the Colomer Acquisition; and (3) a $6.0$6 million foreign currency loss recognized in the second quarter of 2014 as a result of the re-measurement of Revlon Venezuela’s monetary assets and liabilities (See Note 1, “Description"Description of Business and Summary of Significant Accounting Policies”Policies," to the Consolidated Financial Statements in this Form 10-K).
(c)(e) 
Comparability of results from continuing operations for 2013 are affected by: (1) a $29.7 million aggregate loss on the early extinguishment of debt, primarily in connection with Products Corporation’s issuance in February 2013 of $500.0$500 million aggregate principal amount of its 5¾% Senior Notes due February 15, 2021, of which Products Corporation used $491.2 million of the net proceeds (net of underwriters' fees) to repay and redeem all of the $330 million outstanding aggregate principal amount of its previous 9¾% Senior Secured Notes due November 2015 (the “9¾"9¾% Senior Secured Notes”Notes" and such transaction being the “2013"2013 Senior Notes Refinancing”Refinancing"); (2) a $26.4 million gain from insurance proceeds due to the settlement of the Company's claims for business interruption and property losses as a result of the June 2011 fire at the Company's facility in Venezuela; (3) $25.4 million of acquisition and integration costs incurred in 2013 (see note (b)(c)(2) above) related to the Colomer Acquisition; and (4) $21.4 million in restructuring and related charges, of which $20.0$20 million related to the Company's exit of its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment in 2013 and iswas reflected in loss from discontinued operations, net of taxes. (See Note 3, “Restructuring Charges”"Restructuring Charges," and Note 4, "Discontinued Operations"Operations," to the Consolidated Financial Statements in this Form 10-K).
(d)
Comparability of results from continuing operations for 2012 are affected by: (1) $24.1 million in restructuring and related charges recorded as a result of the September 2012 Program (See Note 3, "Restructuring Charges" of the Consolidated Financial Statements in this Form 10-K); (2) an increase in net income driven by a non-cash benefit of $15.8 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions in the U.S. at December 31, 2012; and (3) an $8.9 million loss contingency recognized related to previously outstanding litigation associated with the Company’s 2009 Exchange Offer.
(e)
Comparability of results from continuing operations for 2011 are affected by: (1) an increase in net income driven by a non-cash benefit of $16.9 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions outside the U.S. at December 31, 2011; and (2) an $11.2 million loss on the early extinguishment of debt in connection with the 2011 refinancing of Products Corporation’s 2010 term loan facility and 2010 revolving credit facility.
(f)
Represents the weighted average number of common shares outstanding for each respective period presented.
(g) 
Total current liabilities at December 31, 2013 included $58.4 million related to the Company's Non-Contributed Loan (as hereinafter defined)a loan that was outstanding to various third parties that was prepaid onin May 1, 2014 prior to its scheduled maturity on October 8, 2014.(the "Non-Contributed Loan").
(h)

Total current liabilities at December 31, 2012 included $48.4 million related to the carrying amount of the Revlon, Inc.'s Series A Preferred Stock, which matured and was fully redeemed on October 8, 2013.

2529
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented as follows:
Overview

Overview;
Operating Segments;
Results of Operations;
Financial Condition, Liquidity and Capital Resources;
Disclosures about Contractual Obligations and Commercial Commitments;
Off-Balance Sheet Transactions (there are none);
Discussion of Critical Accounting Policies;
Recently Adopted Accounting Pronouncements;
Recently Issued Accounting Standards or Updates Not Yet Effective; and
Inflation.

The Company (as defined below) is providing this overview in accordance with the SEC’s December 2003 interpretive guidance regarding MD&A.

Overview
Overview of the Business
Revlon, Inc. (and("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 Inc. is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation wholly-owned by Ronald O. Perelman.
The Company’s vision is to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful. We want to inspire our consumers to express themselves boldly and confidently. The Company operates in threefour segments: the consumer division (“Consumer”("Consumer"); Elizabeth Arden; the professional division (“Professional”("Professional"); and Other (as described below).Other. 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 fragrances, skincare and other beauty care products.
For additional information regarding our business, see "Part 1, Item 1 - Business" in this Form 10-K.

Overview of Net Sales and Earnings Results
Consolidated net sales in 2017 were $2,693.7 million, a $359.7 million increase, or 15.4%, as compared to $2,334 million in 2016. Excluding the $6.3 million favorable impact of foreign currency fluctuations (referred to herein as "FX", "XFX" or on an "XFX basis"), consolidated net sales increased by $353.4 million, or 15.1%, during 2017. The XFX increase in 2017 was primarily driven by a $509.1 million increase in net sales as a result of the Elizabeth Arden Acquisition completed in September 2016; partially offset by a $101.6 million, or 7.3%, decrease in Consumer segment net sales and a $49.3 million, or 10.3%, decrease in Professional segment net sales.
Consolidated loss from continuing operations, net of taxes, in 2017 was $185.3 million, compared to consolidated loss from continuing operations, net of taxes, of $17 million, in 2016. The $168.3 million increase in consolidated loss from continuing operations, net of taxes, in 2017 was primarily due to:
$306.6 million of higher SG&A expenses, primarily driven by the inclusion of the SG&A expenses within the Elizabeth Arden segment; and
a $44.6 million increase in interest expense incurred during 2017, primarily as a result of higher average debt outstanding and higher weighted average borrowing rates as a result of the debt transactions completed in the third quarter of 2016 in connection with the Elizabeth Arden Acquisition;
with the foregoing partially offset by:
$125.5 million of higher gross profit in 2017, primarily due to the inclusion of gross profit from the Elizabeth Arden segment, partially offset by lower gross profit within the Consumer and Professional segments;
$37 million of favorable variance in foreign currency gains, resulting from $18.5 million in foreign currency gains during 2017, as compared to $18.5 million of foreign currency losses during 2016;
a $16.9 million aggregate loss on the early extinguishment of debt as a result of the debt-related transactions completed in 2016; and
a $3.7 million decrease in the provision for income taxes in 2017, primarily due to the pretax loss from continuing operations in 2017, partially offset by the $47.9 million non-cash expense associated with the impact of the Tax Act.

Discontinued Operations Presentation
As a result of the Company's decision on December 30, 2013 to exit its direct manufacturing, warehousing and sales business operations in mainland China within its Consumer segment effective December 31, 2013, the Company is reporting the results of its former China operations within income (loss) from discontinued operations, net of taxes in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income. Unless otherwise stated, financial results discussed within "Overview" and "Results of Operations" refer only to continuing operations. See Note 4, "Discontinued Operations"Operations," to the Consolidated Financial Statements in this Form 10-K for further discussion.
Overview of Net Sales and Earnings Results
Consolidated net sales in 2015 were $1,914.3 million, a decrease of $26.7 million, or 1.4%, compared to $1,941.0 million in 2014. Excluding the $121.2 million unfavorable impact of foreign currency fluctuations, consolidated net sales increased $94.5 million, or 4.9%, in 2015 compared to 2014, primarily driven by an increase in Consumer segment net sales of $53.9 million, or 3.7%, and the inclusion of $28.4 million of net sales as a result of the CBB Acquisition.
Consolidated income from continuing operations, net of taxes, in 2015 was $59.3 million, compared to consolidated income from continuing operations, net of taxes, of $39.6 million in 2014. The $19.7 million increase in 2015 was primarily due to:
a $26.4 million decrease in the provision for income taxes in 2015, primarily due to the favorable impact as a result of the net reduction of the Company's deferred tax valuation allowance on the Company's net deferred tax assets for certain foreign jurisdictions;

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


$10.5 million in restructuring charges and other, net, in 2015, which primarily includes $9.5 million in restructuring charges recognized in 2015 related to the 2015 Efficiency Program, as compared to $21.3 million of restructuring charges and other, net recognized in 2014, primarily due to the Integration Program;
$9.3 million of favorable variance in foreign currency (gains) losses, net, as a result of $15.7 million in foreign currency losses, net, recognized during 2015, compared to $25.0 million in foreign currency losses, net, recognized during 2014; and
a $7.0 million reduction in SG&A expenses, primarily driven by the favorable impact of foreign currency fluctuations, which was partially offset by higher brand support within both the Consumer and Professional segments and increases in general and administrative expenses primarily due to $10.2 million of the 2015 pension lump sum settlement charge that was recorded as a component of SG&A expenses, as well as higher severance costs and incentive compensation;
with the foregoing partially offset by:
$26.2 million of lower gross profit in 2015 primarily due to a $26.7 million decrease in consolidated net sales, primarily due to the impact of foreign currency fluctuations and the unfavorable impact of a $10.5 million portion of the 2015 pension lump sum settlement charge in 2015 recorded within cost of sales; and
a $9.7 million non-cash impairment loss on goodwill for the Company's Global Color Brands reporting unit.
These items are discussed in more detail within "Results of Operations" and within "Financial Condition, Liquidity and Capital Resources" below.
Recent Events
2015 Efficiency Program
In September 2015, the Company initiated the 2015 Efficiency Program, consisting of restructuring actions to drive certain organizational efficiencies across the Company's Consumer and Professional segments. These actions are designed to reduce general and administrative expenses within the Consumer and Professional segments, and the Company expects that they will be completed by the end of 2017. The Company recognized $9.5 million of restructuring and related charges in 2015 for the 2015 Efficiency Program, of which $6.0 million related to the Consumer segment and $3.2 million related to the Professional segment, with the remaining charges included within unallocated corporate expenses, and expects to recognize total restructuring and related charges of $10.1 million by the end of 2017. By implementing the 2015 Efficiency Program, the Company expects to achieve annualized cost reductions of approximately $10.0 million to $15.0 million by the end of 2018, with approximately $3.0 million of cost reductions included in 2015 results.
In connection with the restructuring actions initiated in 2015 for the 2015 Efficiency Program, the Company expects to pay cash in an amount of approximately $10.3 million, including $0.2 million for capital expenditures (which capital expenditures are excluded from total restructuring and related charges expected to be recognized for the 2015 Efficiency Program), of which $2.8 million was paid in 2015, $5.8 million is expected to be paid in 2016, and the remaining balance is expected to be paid in 2017.
See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K for further details.
Acquisition of CBBeauty Group
On the CBB Acquisition Date, the Company completed the CBB Acquisition for total cash consideration of $48.6 million. CBB develops, manufactures, markets and distributes fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories. CBB is expected to provide the Company with a platform to develop the Company's presence in the fragrance category. On the CBB Acquisition Date, the Company used cash on hand to pay 70% of the total cash consideration, or $34.6 million. The remaining $14.0 million of the total cash consideration is payable in equal installments over four years from the CBB Acquisition Date, subject to the selling shareholders' compliance with certain service conditions. These remaining installments are being recorded as a component of SG&A expenses ratably over the four year installment period. The results of operations of the CBB business were included in the Company’s Consolidated Financial Statements commencing on the CBB Acquisition Date. See Note 2, "Business Combinations," to the Consolidated Financial Statements in this Form 10-K for further details on the CBB Acquisition.




27
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Pension Lump Sum Settlement Charge
In the fourth quarter of 2015, the Company offered certain former employees who had vested benefits in the Company’s U.S. qualified defined benefit pension plan (the Revlon Employees’ Retirement Plan) the option of receiving the present value of the participant’s pension benefit in a one-time cash lump sum payment. Based on the participants’ acceptance of that offer, $53.4 million was paid from the plan’s assets to settle $66.9 million of pension liabilities, resulting in a $13.5 million net reduction of the Company’s pension plan liabilities in 2015. In addition, the Company recorded a charge of $20.7 million as a result of the pension lump sum settlement accounting within costs of sales and SG&A expense in 2015. This charge was the result of accelerating a portion of the losses that were deferred in accumulated other comprehensive loss, which are required to be recognized in the period in which the pension plan liabilities were settled. See Note 14, "Savings Plan, Pension and Post-retirement Benefits," to the Consolidated Financial Statements in this Form 10-K for further details on this pension lump sum settlement.
Non-cash Impairment ChargeCharges
For purposes of the annual goodwill impairment test, the Company’sCompany's SinfulColors (acquired in 2011) and Pure Ice nail enamel brand, which was acquired(acquired in July 2012, is2012) brands are included within the Company’sCompany's Global Color Brands ("GCB") reporting unit. Despite improvementsThe shift in consumer behavior challenging the brick-and-mortar retail channel contributed to continued consumption and net sales declines, particularly in the net sales of Pure Ice nail enamel in 2015 and the realization of margin improvements through integrating the production of Pure Ice nail enamel within the Company's existing manufacturing processes, the Company continued to experience declines in the promotional activity for the Pure Ice brand at retailers.  As a result,category, which has disproportionately impacted GCB's financial results. Accordingly, in conjunction with the Company’sCompany's annual goodwill impairment test, the Company recorded a $9.7recognized $10.8 million in non-cash goodwill impairment chargecharges during the fourth quarter of 20152017 related to GCB. These non-cash impairment charges are primarily due to the Company’s expectations regarding the future performance of the Global Color BrandsGCB reporting unit in relation to itsthe carrying amount.amounts of GCB's goodwill. See Note 8, "Goodwill and Intangible Assets," to the Consolidated Financial Statements in this Form 10-K for further details on this non-cash goodwill impairment charge.
2015 Debt Related Transaction
In March 2015, Products Corporation prepaid $24.6 million of term loan indebtedness, representing 50% of its 2014 "excess cash flow" in accordance with the terms of its Amended Term Loan Agreement. The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $12.1 million to $662.9 million (as all amortization payments under the 2011 Term Loan had been paid). The $12.5 million applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterly amortization payments under the Acquisition Term Loan on a ratable basis from $1.8 million prior to the prepayment to $1.7 million after giving effect to the prepayment and through its maturity on October 8, 2019. See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in this Form 10-K for further details.

Operating Segments

The Company primarily operates in threefour reporting segments: the Consumer segment,consumer division ("Consumer"); Elizabeth Arden; the Professional segmentdivision ("Professional"); and the Other segment:Other:
The Consumer segment is comprised of the Company's consumer brands, which primarily include Revlon, Almay, SinfulColors and Pure Ice in color cosmetics; Revlon ColorSilk in women’s hair color; Revlon in beauty tools; and Mitchum in anti-perspirant deodorants. The Company’s principal customers for its consumer products include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Consumer segment also includesincludes: (i) a skincareskin care line andunder the Natural Honey brand; (ii) a hair color line under the Llongueras brand (licensed from a third party) sold to large volume retailers and other retailers, primarily in Spain.Spain, which were acquired as part of the Colomer Acquisition; and (iii) Cutex nail care products, which (combined with other Cutex businesses that the Company acquired in 1998) were acquired as part of the October 2015 and May 2016 acquisitions of the Cutex businesses and related assets in the U.S. (the "Cutex U.S. Acquisition") and in certain international territories (the "Cutex International Acquisition" and together with the Cutex U.S. Acquisition, the "Cutex Acquisitions"), respectively.
The Elizabeth Arden segment includes the operating results of the Elizabeth Arden business and related purchase accounting of the Elizabeth Arden Acquisition. Elizabeth Arden is a global prestige beauty products company with an iconic portfolio of prestige fragrance, skin care and cosmetic brands, which includes the Elizabeth Arden skin care brands, color cosmetics and fragrances; designer fragrances such as Juicy Couture, John Varvatos and Wildfox;and heritage fragrances such as Curve, Elizabeth Taylor, Britney Spears and Christina Aguilera.
The Professional segment is comprised primarily of the Company's professional brands, which include Revlon Professional in hair color, hair care and hair care;treatments; CND-branded products in nail polishes and nail enhancements; and American Crew in men’s grooming products, all of which are sold worldwide to professional salons. The Company’s principal customers for its professional products include hair and nail salons and distributors to professional salons in the U.S. and internationally. The Professional segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products sold to professional salons, large volume retailers and other retailers, primarily in the U.S.
The Other segment primarily includes the operating results related to the development, marketing and distribution of the CBB business and related purchase accounting for the CBB Acquisition. CBB develops, manufactures, markets and distributescertain licensed fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories.products. The results included within the Other segment are not material to the Company'sCompany’s consolidated results of operations.financial results.



2831
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)




Results of Operations
In the tables below, all amounts are in millions and numbers in parentheses ( ) denote unfavorable variances.
Consolidated Net Sales:
Year-to-date results:
Consolidated net sales in 20152017 were $1,914.3$2,693.7 million, a decrease of $26.7$359.7 million increase, or 1.4%15.4%, compared to $1,941.0$2,334 million in 2014.2016. Excluding the $121.2$6.3 million unfavorablefavorable FX impact, of foreign currency fluctuations, consolidated net sales increased $94.5by $353.4 million, or 4.9%15.1%, during 2015, primarily driven by an increase in Consumer segment net sales of $53.9 million, or 3.7%, and the inclusion of $28.4 million of net sales as a result of the CBB Acquisition.2017.
Consolidated net sales in 20142016 were $1,941.0$2,334 million, ana $419.7 million increase, of $446.3 million, or 29.9% as21.9%, compared to $1,494.7$1,914.3 million in 2013.2015. Excluding the $43.9 million unfavorable FX impact, of foreign currency fluctuations of $60.1 million, consolidated net sales increased $506.4on an XFX basis by $463.6 million, or 33.9%24.2%, during 2014, primarily driven by2016.
Changes in consumer shopping patterns for beauty products in which consumers have continued to increasingly engage with beauty brands through e-commerce and other social media channels have resulted in slower retail traffic in brick-and-mortar stores in the increasemass retail channel in net salesNorth America. This shift in consumer behavior has resulted in continuing declines in the brick-and-mortar retail channel, including store closures. To address the pace and impact of $460.9 million as a resultthis new commercial landscape, the Company has shifted some of its brand marketing spend toward facilitating increased penetration of e-commerce and social media channels and is focused on the following e-commerce initiatives: (i) developing and implementing effective content to enhance the Company's online retail position; (ii) improving the Company's consumer engagement across social media platforms; and (iii) transforming the Company's technology and data to support efficient management of the Colomer Acquisition in October 2013.Company's digital infrastructure.

See "Segment Results" below for further discussion.

Segment Results:
The Company's management evaluates segment profit, which is defined as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses, for each of the Company's reportable segments. Segment profit also excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the segments' underlying operating performance, which includes the impact of: (i) restructuring and related charges; (ii) acquisition and integration costs; (iii) goodwill impairment charges;deferred compensation costs; (iv) pension lump sum settlement charge;charges related to the program that Elizabeth Arden commenced prior to the Elizabeth Arden Acquisition to further align their organizational structure and distribution arrangements for the purpose of improving its go-to-trade capabilities and execution and to streamline their organization (the "Elizabeth Arden 2016 Business Transformation Program"); and (v) costs of sales resulting from a fair value adjustmentsadjustment to inventory acquired in acquisitions; (vi) deferred compensation related to the CBB Acquisition; (vii) insurance proceeds received in 2013 related to the 2011 fire that destroyed the Company's facility in Venezuela; (viii) insurance proceeds from the recovery of litigation settlements; and (ix) an accrual for estimated clean-up costs related to the Company's facility in Venezuela.Elizabeth Arden Acquisition. Unallocated corporate expenses primarily include general and administrative expenses related to the corporate organization. These expenses are recorded in unallocated corporate expenses as these items are centrally directed and controlled and are not included in internal measures of segment operating performance. During the second quarter of 2015, the Company removed pension-related costs for its U.S. qualified defined benefit pension plans from the measurement of its operating segment results. As a result, $8.2 million and $4.9 million of pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for 2014 and 2013, respectively. The Company does not have any material inter-segment sales. For a reconciliation of segment profit to income from continuing operations before income taxes, see Note 19, "Segment Data and Related Information"Information," to the Consolidated Financial Statements in this Form 10-K.
The following tables provide a comparative summary of the Company's segment results for each of 2015, 20142017, 2016 and 2013. In the tables below, certain prior year amounts have been reclassified to conform to the current period’s presentation. Consumer segment net sales and segment profit include the results of retail brands acquired in the Colomer Acquisition, which had previously been included in the Professional segment.2015.
Net Sales Segment Profit    Net Sales Segment Profit
Year Ended December 31, Change 
XFX Change (a)
 Year Ended December 31, Change 
XFX Change (a)
Year Ended December 31, Change 
XFX Change (a)
 Year Ended December 31, Change 
XFX Change (a)
2015 2014 $ % $ % 2015 2014 $ % $ %2017 2016 $ % $ % 2017 2016 $ % $ %
Consumer$1,414.8
 $1,438.3
 $(23.5) (1.6)% $53.9
 3.7% $360.2
 $339.4
 $20.8
 6.1 % $30.0
 8.8%$1,288.5
 $1,389.8
 $(101.3) (7.3)% $(101.6) (7.3)% $239.6
 $349.2
 $(109.6) (31.4)% $(108.7) (31.1)%
Elizabeth Arden(b)
952.5
 441.4
 511.1
 115.8 % 509.1
 115.3 % 114.2
 68.2
 46.0
 67.4 % 45.5
 66.7 %
Professional471.1
 502.7
 (31.6) (6.3)% 12.2
 2.4% 103.9
 104.8
 (0.9) (0.9)% 2.8
 2.7%432.2
 476.5
 (44.3) (9.3)% (49.3) (10.3)% 54.9
 99.4
 (44.5) (44.8)% (45.7) (46.0)%
Other28.4
—
—
 28.4
 N.M.
 28.4
 N.M.
 1.4
 —
 1.4
 N.M.
 1.4
 N.M.
20.5
 26.3
 (5.8) (22.1)% (4.8) (18.3)% (3.7) (2.7) (1.0) (37.0)% (1.1) (40.7)%
Total$1,914.3
 $1,941.0
 $(26.7) (1.4)% $94.5
 4.9% $465.5
 $444.2
 $21.3
 4.8 % $34.2
 7.7%$2,693.7
 $2,334.0
 $359.7
 15.4 % $353.4
 15.1 % $405.0
 $514.1
 $(109.1) (21.2)% $(110.0) (21.4)%
(a) XFX excludes the impact of foreign currency fluctuations.
(b) 2016 Net Sales and Segment Profit represent results for the partial period from the September 7, 2016 Elizabeth Arden Acquisition Date through December 31, 2016.

2932
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Net Sales Segment Profit    Net Sales Segment Profit
Year Ended December 31, Change 
XFX Change (a)
 Year Ended December 31, Change 
XFX Change (a)
Year Ended December 31, Change 
XFX Change (a)
 Year Ended December 31, Change 
XFX Change (a)
2014 2013 $ % $ % 2014 2013 $ % $ %2016 2015 $ % $ % 2016 2015 $ % $ %
Consumer$1,438.3
 $1,394.2
 $44.1
 3.2% $98.3
 7.1% $339.4
 $342.3
 $(2.9) (0.8)% $14.2
 3.3%$1,389.8
 $1,414.8
 $(25.0) (1.8)% $9.7
 0.7% $349.2
 $360.2
 $(11.0) (3.1)% $(8.3) (2.3)%
Elizabeth Arden(b)
441.4
 —
 441.4
 N.M.
 441.4
 N.M.
 68.2
 —
 68.2
 N.M.
 68.2
 N.M.
Professional502.7
 100.5
 $402.2
 N.M.
 408.1
 N.M.
 104.8
 5.1
 99.7
 N.M.
 $100.9
 N.M.
476.5
 471.1
 5.4
 1.1 % 11.1
 2.4% 99.4
 103.9
 (4.5) (4.3)% (3.5) (3.4)%
Other—
 —
 $—
 —% —
 —% —
 —
 —
 — % —
 —%26.3
 28.4
 (2.1) (7.4)% 1.4
 4.9% (2.7) 1.4
 (4.1) (292.9)% (4.3) (307.1)%
Total$1,941.0
 $1,494.7
 $446.3
 29.9% $506.4
 33.9% $444.2
 $347.4
 $96.8
 27.9 % $115.1
 33.1%$2,334.0
 $1,914.3
 $419.7
 21.9 % $463.6
 24.2% $514.1
 $465.5
 $48.6
 10.4 % $52.1
 11.2 %
(a) XFX excludes the impact of foreign currency fluctuations.

(b) 2016 Net Sales and Segment Profit represent results for the partial period from the September 7, 2016 Elizabeth Arden Acquisition Date through December 31, 2016.
Consumer Segment
Consumer segment net sales in 20152017 were $1,414.8$1,288.5 million, a decrease of $23.5$101.3 million, or 1.6%7.3%, decrease, compared to $1,438.3$1,389.8 million in 2014.2016. Excluding the $77.4$0.3 million unfavorablefavorable FX impact, of foreign currency fluctuations (referred to herein as on an "XFX basis"), total Consumer net sales increased $53.9in 2017 decreased by $101.6 million, or 3.7%7.3%, in 2015 compared to 2014,2016. This decrease was primarily driven by consumption declines as the Consumer segment continues to be impacted by shifts in consumer behavior resulting in continuing declines in core beauty categories in the mass retail channel in North America, which had a negative impact on net sales of Revlon color cosmetics, Almay color cosmetics and SinfulColors color cosmetics, as well as higher sales returns and incentives. These net sales decreases were partially offset by net sales growth internationally for Revlon color cosmetics.
Consumer segment profit in 2017 was $239.6 million, a $109.6 million, or 31.4%, decrease, compared to $349.2 million in 2016. Excluding the $0.9 million unfavorable FX impact, Consumer segment profit in 2017 decreased by $108.7 million, or 31.1%, compared to 2016. This decrease was primarily driven by lower gross profit, primarily as a result of the net sales declines in North America, partially offset by lower brand support expenses.
Consumer segment net sales in 2016 were $1,389.8 million, a $25 million, or 1.8%, decrease, compared to $1,414.8 million in 2015. Excluding the $34.7 million unfavorable FX impact, total Consumer net sales in 2016 increased by $9.7 million, or 0.7%, compared to 2015. This increase was primarily driven by higher net sales of Cutex nail care products from the Company’s global consolidation of the Cutex brand, which was completed with two separate acquisitions that closed for the U.S. in October 2015 and for the U.K., Australia and certain other International territories in May 2016, as well as higher net sales of Revlon color cosmetics,beauty tools and Mitchum anti-perspirant deodorant products, Revlon ColorSilk hair color and Cutex nail products, partially offset by lower net sales of Almay color cosmetics. Consumer segment netNet sales of Revlon color cosmetics were negatively impacted in connection with the Company's exit of its business operations in Venezuela in the second quarter of 2015 and change to a distributor model,essentially flat, as such change resulted in $1.0 million ofstrong sales growth internationally was offset by lower net sales in VenezuelaNorth America due to softening trade conditions in 2015, compared to $16.3 million of net sales in Venezuela in 2014. Excluding Venezuela, on an XFX basis, Consumer net sales would have increased by 4.4% in 2015, compared to 2014.core cosmetics categories.
Consumer segment profit in 20152016 was $349.2 million, a $11 million, or 3.1%, decrease as compared to $360.2 million an increase of $20.8 million, or 6.1%, compared to $339.4 million in 2014.2015. Excluding the $9.2$2.7 million unfavorable FX impact, of foreign currency fluctuations, Consumer segment profit increased $30.0 million, or 8.8%, in 2015 compared to 2014, primarily driven by higher gross profit as a result of the increases in net sales discussed above, partially offset by $8.7 million of higher brand support expenses for the Company's Consumer brands. In connection with the Company's exit of its business operations in Venezuela in the second quarter of 2015 and change to a distributor model, there was no profit in Venezuela in 2015, compared to $6.6 million of profit in Venezuela in 2014. Excluding Venezuela, on an XFX basis, Consumer segment profit would have increased by 11.1% in 2015, compared to 2014.
Consumer segment net sales in 2014 were $1,438.3 million, an increase of $44.1 million, or 3.2%, compared to $1,394.2 million in 2013. Excluding the $54.2 million unfavorable impact of foreign currency fluctuations, total Consumer net sales increased $98.3 million, or 7.1%, in 2014 compared to 2013, primarily driven by: (i) the inclusion of $52.8 million of increased net sales from Consumer brands acquired in the Colomer Acquisition; (ii) $15.1 million of favorable sales returns reserve adjustments in the U.S. during 2014, as a result of lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, partially offset by increased sales returns expense for 2014 sales returns; and (iii) higher net sales of Revlon color cosmetics, Revlon ColorSilk hair color and Mitchum anti-perspirant deodorant products. The increases in Consumer segment net sales in 2014 were partially offset by lower net sales of fragrances, as well as lower net sales of Almay, SinfulColors and Pure Ice color cosmetics.
Consumer segment profit in 2014 was $339.4 million, a decrease of $2.92016 decreased by $8.3 million, or 0.8%2.3%, compared to $342.3 million in 2013, primarily2015. This decrease was partially due to lower grossa 2015 gain of $3.5 million related to the sale of a non-core consumer brand. In addition, Consumer segment profit as a resultdecreased due to the unfavorable impact of $33.0 millionFX transaction within cost of higher advertising expense to support the Company's Consumer brands, and approximately $17.0 million of unfavorable foreign currency fluctuations,sales, partially offset by decreased brand support on lower performing brands.

Elizabeth Arden Segment

The Elizabeth Arden segment is comprised of the increaseoperations that the Company acquired in the Elizabeth Arden Acquisition, which closed on the September 7, 2016 Elizabeth Arden Acquisition Date. As such, the results for 2016 reflect only amounts for the partial period of September 7, 2016 through December 31, 2016. Therefore, an analysis of net sales includingand segment profit for the $15.1 million of favorableElizabeth Arden segment is not included in this Form 10-K, as the Company does not have full comparable prior period net sales returns reserve adjustments.or segment profit for the Elizabeth Arden segment.

Professional Segment

Professional segment net sales in 20152017 were $471.1$432.2 million, a decrease of $31.6$44.3 million, or 6.3%9.3%, decrease, as compared to $476.5 million in 2016. Excluding the $5 million favorable FX impact, total Professional segment net sales in 2017 decreased by $49.3 million, or 10.3%, compared to $502.7 million in 2014. Excluding the $43.8 million unfavorable impact of foreign currency fluctuations, total Professional net sales increased $12.2 million in 2015 compared to 2014,2016. This decrease was driven primarily as a result of higherby lower net sales of American Crew men's grooming products Revlon Professional hair products and Creme of NatureCND hairnail products, partially offset by lowerhigher net sales of CND Revlon Professionalnail products in the U.S. hair products.
Professional segment profit in 2015 was $103.9 million, a decrease of $0.9 million, or 0.9%, compared to $104.8 million in 2014. Excluding the $3.7 million unfavorable impact of foreign currency fluctuations, Professional segment profit increased $2.8 million in 2015 compared to 2014, primarily due to higher net sales, partially offset by $5.1 million of higher brand support

3033
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


expenses for the Company's Professional brands. In addition,
Professional segment profit in 2014 included2017 was $54.9 million, a $44.5 million, or 44.8%, decrease, as compared to $99.4 million in 2016. Excluding the $1.2 million favorable adjustment of $3.4 million related to the inventory obsolescence reserve, with no similar adjustment in 2015.
The Company'sFX impact, Professional segment is comprised of most of the operations acquiredprofit in 2017 decreased by the Company in the Colomer Acquisition in October 2013 (with the exception of the retail brands acquired in the Colomer Acquisition, which the Company has included within the Consumer segment, as noted above). As Colomer$45.7 million, or 46%, compared to 2016. This decrease was acquired in October 2013, there are no full year comparable prior years'primarily driven by lower net sales, or segment profit for the partially offset by lower brand support expenses and incentive compensation.

Professional segment to facilitate a comparison of 2014 and 2013 Professional segment results. Therefore, an analysis of net sales and segment profit for the Professional segment in 2014,2016 were $476.5 million, a $5.4 million, or 1.1%, increase, compared to 2013, is not included$471.1 million in this Form 10-K.2015. Excluding the $5.7 million unfavorable FX impact, total Professional net sales were $502.7in 2016 increased by $11.1 million for the full year of 2014 and $100.5 million from the October 2013 Colomer Acquisition Date through the end of 2013. Professionalcompared to 2015. This increase was driven primarily by higher net sales during each period consisted primarilyof American Crew men’s grooming products as a result of the Elvis Presley branded marketing campaign (which ended in December 2017) and Revlon Professional hair products. These increases were partially offset by lower net sales of CND products worldwide, including nail products.CND Shellac; Revlon Professional products, primarily in Europe; and American Crew products and other professional brands world-wide.

Professional segment profit in 2016 was $104.8$99.4 million, fora $4.5 million, or 4.3%, decrease, compared to $103.9 million in 2015, primarily driven by the full yearabsence in 2016 of 2014 and $5.1a $3 million fromgain related to the October 2013 Colomer Acquisition Date throughsale of a non-core professional brand that was completed in 2015. Excluding the end of 2013 and is comprised of the operating results of substantially all of the operations acquired$1 million unfavorable FX impact, Professional segment profit in the Colomer Acquisition.2016 decreased by $3.5 million, or 3.4%, compared to 2015.

Geographic Results:
In connection with changes that the organization made to its management reporting structure following the Colomer Acquisition, beginning in 2014, the Company combined its former Latin America and Canada; Asia Pacific; and Europe, Middle East and Africa operating regions into the International region for reporting purposes. The Company has modified its net sales discussion to conform to the manner by which the Company's management reviews the business, and, accordingly, prior year amounts have been restated to conform to this presentation.
The following tables provide a comparative summary of the Company's net sales by region for each of the years ended December 31, 2015, 20142017, 2016 and 2013:2015:
 Year Ended December 31,


Change 
XFX Change (a)
 2015 2014 $ % $ %
United States$1,043.7
 $1,021.9
 $21.8
 2.1 % $21.8
 2.1%
International870.6
 919.1
 (48.5) (5.3)% 72.7
 7.9%
    Total Net Sales$1,914.3
 $1,941.0
 $(26.7) (1.4)% $94.5
 4.9%
Year Ended December 31,


Change 
XFX Change (a)
Year Ended December 31,


Change 
XFX Change (a)
2014 2013 $ % $ %2017 2016 $ % $ %
United States$1,021.9
 $832.8
 $189.1
 22.7% $189.1
 22.7%
Consumer           
North America$750.8
 $882.4
 $(131.6) (14.9)% $(132.5) (15.0)%
International537.7
 507.4
 30.3
 6.0 % 30.9
 6.1 %
Elizabeth Arden(b)
           
North America$509.0
 $274.8
 $234.2
 85.2 % $233.6
 85.0 %
International443.5
 166.6
 276.9
 166.2 % 275.5
 165.4 %
Professional           
North America$173.5
 $223.9
 $(50.4) (22.5)% $(50.9) (22.7)%
International258.7
 252.6
 6.1
 2.4 % 1.6
 0.6 %
Other           
North America$—
 $—
 $—
 N.M.
(c) 
$—
 N.M.
International919.1
 661.9
 257.2
 38.9% 317.3
 47.9%20.5
 26.3
 (5.8) (22.1)% (4.8) (18.3)%
Total Net Sales$1,941.0
 $1,494.7
 $446.3
 29.9% $506.4
 33.9%$2,693.7
 $2,334.0
 $359.7
 15.4 % $353.4
 15.1 %
(a) XFX excludes the impact of foreign currency fluctuations.

United States
In(b) 2016 Net Sales represent results for the U.S., net sales in 2015 increased $21.8 million, or 2.1%, to $1,043.7 million, compared to $1,021.9 million in 2014, primarily due to higher Consumer segment net sales of Revlon color cosmetics, Mitchum anti-perspirant deodorant products and Revlon ColorSilk hair color, partially offset by lower net sales of Almay color cosmetics. Net sales inpartial period from the U.S. decreased in the Professional segment primarily due to lower net sales of CND nail products.September 7, 2016 Elizabeth Arden Acquisition Date through December 31, 2016.
In the U.S., net sales in 2014 increased $189.1 million, or 22.7%, to $1,021.9 million, as compared to $832.8 million in 2013, primarily due to the inclusion of $157.1 million of increased net sales as a result of the Colomer Acquisition. 2014 net sales in the U.S. were also impacted by $15.1 million of favorable sales returns reserve adjustments during 2014, as a result of lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, partially offset by increased sales returns expense for 2014 sales returns. In addition, 2014 had higher net sales of Revlon color cosmetics, Revlon ColorSilk(c) hair color and Mitchum anti-perspirant deodorant products, partially offset by lower net sales of Almay, SinfulColors and Pure Ice color cosmetics.N.M. - Not meaningful


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


 Year Ended December 31,


Change 
XFX Change (a)
 2016 2015 $ % $ %
Consumer           
North America$882.4
 $921.3
 $(38.9) (4.2)% $(36.9) (4.0)%
International507.4
 493.5
 13.9
 2.8 % 46.6
 9.4 %
Elizabeth Arden(b)
    
 
   
North America$274.8
 $—
 $274.8
 N.M.
 $274.8
 N.M.
International166.6
 —
 166.6
 N.M.
 166.6
 N.M.
Professional    —
 
   
North America$223.9
 $216.8
 $7.1
 3.3 % $7.9
 3.6 %
International252.6
 254.3
 (1.7) (0.7)% 3.2
 1.3 %
Other    
 
   
North America$—
 $—
 $—
 N.M.
(c) 
$—
 N.M.
International26.3
 28.4
 (2.1) (7.4)% 1.4
 4.9 %
        Total Net Sales$2,334.0
 $1,914.3
 $419.7
 21.9 % $463.6
 24.2 %
(a) XFX excludes the impact of foreign currency fluctuations.
(b) 2016 Net Sales represent results for the partial period from the September 7, 2016 Elizabeth Arden Acquisition Date through December 31, 2016.
(c) N.M. - Not meaningful

Consumer Segment

North America

In North America, Consumer segment net sales in 2017 decreased by $131.6 million, or 14.9%, to $750.8 million, compared to $882.4 million in 2016. Excluding the $0.9 million favorable FX impact, Consumer segment net sales in North America in 2017 decreased by $132.5 million, or 15%, as compared to 2016. This decrease was primarily due to declines in the U.S. mass retail channel driven by declines in consumption across several beauty categories. The net sales of Revlon color cosmetics, Almay color cosmetics and SinfulColors color cosmetics all declined in 2017 compared to 2016.
Consumer segment net sales in 2016 decreased by $38.9 million, or 4.2%, to $882.4 million, compared to $921.3 million in 2015. Excluding the $2 million unfavorable FX impact, Consumer segment net sales in North America in 2016 decreased by $36.9 million, or 4%, compared to 2015. This decrease was primarily driven by the results of softening trade conditions in core categories, which impacted Revlon color cosmetics and Almay color cosmetics, as well as increased competition impacting Revlon ColorSilk hair color. These decreases were partially offset by incremental net sales in connection with the Company completing the global consolidation of the Cutex nail care brand, as well as higher net sales of Revlon beauty tools.
International

Internationally, Consumer segment net sales in 2017 increased by $30.3 million, or 6%, to $537.7 million, compared to $507.4 million in 2016. Excluding the $0.6 million unfavorable FX impact, Consumer segment International net sales in 2015 decreased2017 increased by $48.5$30.9 million, or 5.3%6.1%, to $870.6 million, as compared to $919.1 million in 2014. Excluding the $121.2 million unfavorable impact of foreign currency fluctuations, International net sales increased2016. This increase was driven primarily by $72.7 million, or 7.9%, in 2015 compared to 2014, primarily due to higher net sales of Revlon color cosmetics in the Consumer segment. International net sales increased in the Professional segment primarily due to higher net sales of American Crew men's grooming products and Revlon Professional hair products.cosmetics. From a geographic perspective, the increase in internationalInternational net sales was throughout most of the Company’s International region. The Company's exit of its business operations in Venezuela in 2015 negatively impacted International net sales. Excluding Venezuela, on an XFX basis, International net sales would havemainly driven by increased by 9.0% in 2015, compared to 2014.
International net sales in 2014certain distributor territories, as well as throughout the Asia-Pacific region.
Consumer International segment net sales in 2016 increased $257.2by $13.9 million, or 38.9%2.8%, to $919.1$507.4 million, as compared to $661.9$493.5 million in 2013.2015. Excluding the $60.1$32.7 million unfavorable FX impact, of foreign currency fluctuations,Consumer International segment net sales in 2016 increased by $317.3$46.6 million, or 47.9%9.4%, compared to 2015. This increase was primarily due to the inclusion of $303.8 million of increased net sales as a result of the Colomer Acquisition. Additionally, 2014 net sales were impacteddriven by higher net sales of Revlon color cosmetics in Venezuela and Japan and Mitchum Revlon ColorSilkanti-perspirant deodorant products primarily in the U.K., partially offset by lower hair color, as well as incremental net sales of RevlonCutex color cosmeticsnail care products. The increase in certain distributor markets and fragrancesInternational net sales was mainly driven by higher net sales in the U.K. and Italy. Results in Venezuela for 2014 benefited from the increased availability of U.S. Dollars to import finished goods for sale, as compared to 2013.Mexico.

Gross profit:Elizabeth Arden Segment

 Year Ended December 31, Change
 2015 2014 2013
2015 vs. 2014
2014 vs. 2013
Gross profit$1,246.5
 $1,272.7
 $949.6
 $(26.2) $323.1
Percentage of net sales   
65.1% 65.6% 63.5% (0.5)% 2.1%
Gross profit decreased as a percentageThe Elizabeth Arden segment is comprised of the operations that the Company acquired in the Elizabeth Arden Acquisition, which closed on the September 7, 2016 Elizabeth Arden Acquisition Date. As such, the results for 2016 reflect only amounts for the partial period of September 7, 2016 through December 31, 2016. Therefore, an analysis of net sales by 0.5 percentage points, decreasing by $26.2 million in 2015, as compared to 2014. The drivers of the changes in grossand segment profit in 2015, as compared to 2014, primarily included:for
unfavorable foreign currency fluctuations, which reduced gross profit by $90.0 million and reduced gross profit as a percentage of net sales by 0.5 percentage points;
the unfavorable impact of a portion of the 2015 pension lump sum settlement charge recorded in the fourth quarter of 2015 within cost of sales in the amount of $10.5 million, which decreased gross profit by as a percentage of net sales by 0.6 percentage points.
the effects of the favorable sales returns accrual adjustments made in 2015 and 2014, due to lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, which 2014 adjustment was $4.1 million more favorable than the 2015 adjustment, and which had no impact on gross profit as a percentage of net sales;
with the foregoing partially offset by:
favorable volume, which increased gross profit by $67.8 million and increased gross profit as a percentage of net sales by 0.2 percentage points; and
lower manufacturing and freight costs as a result of supply chain cost reduction initiatives, which increased gross profit by $9.5 million and increased gross profit as a percentage of net sales by 0.5 percentage points.
Gross profit increased by $323.1 million, and as a percentage of net sales gross profit increased by 2.1 percentage points in 2014, as compared to 2013. The drivers of gross profit in 2014, as compared to 2013, primarily included:
the inclusion of gross profit from the Colomer Acquisition beginning in October 2013, which increased gross profit by $314.8 million and increased gross profit as a percentage of net sales by 1.3 percentage points;
favorable sales mix within the Consumer segment, which increased gross profit by $19.3 million and increased gross profit as a percentage of net sales by 1.0 percentage points;
favorable volume, which increased gross profit by $15.2 million, with no impact on gross profit as a percentage of net sales; and

3235
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


the Elizabeth Arden segment is not included in this Form 10-K, as the Company does not have full comparable prior period net sales or segment profit for the Elizabeth Arden segment.

Professional Segment

North America

In North America, Professional segment net sales in 2017 decreased by $50.4 million, or 22.5%, to $173.5 million, as compared to $223.9 million in 2016. Excluding the $0.5 million favorable FX impact, Professional segment net sales in North America in 2017 decreased by $50.9 million, or 22.7%, as compared to 2016. This decrease was primarily driven by declines in net sales of American Crew men's grooming products and CND nail products.

Professional segment net sales returns accrual adjustments,in North America in 2016 increased by $7.1 million, or 3.3%, to $223.9 million, compared to $216.8 million in 2015. Excluding the $0.8 million unfavorable FX impact, Professional segment net sales in North America in 2016 increased on an XFX basis by $7.9 million, or 3.6%, compared to 2015. This increase was primarily driven by increased net sales of related inventory write-off charges,American Crew men's grooming products as a result of the Elvis Presley branded marketing campaign, as well as Creme of Nature hair products, partially offset by lower net sales of CND nail products.

International

Internationally, Professional segment net sales in 2017 increased by $6.1 million, or 2.4%, to $258.7 million, compared to $252.6 million in 2016. Excluding the $4.5 million favorable FX impact, Professional segment International net sales increased by $1.6 million, or 0.6%, in 2017, as compared to 2016, primarily due to increases in net sales of Revlon Professional hair products, partially offset by lower expected discontinuednet sales of CND nail products. From a geographic perspective, the increase in International net sales was mainly driven by increased net sales in France, Russia and Italy.
Internationally, Professional segment net sales in 2016 decreased by $1.7 million, or 0.7%, to $252.6 million, compared to $254.3 million in 2015. Excluding the $4.9 million unfavorable FX impact, Professional segment International net sales increased by $3.2 million, or 1.3%, in 2016, compared to 2015. This increase was primarily due to higher net sales of Revlon Professional hair products, as well as an increase in net sales of American Crew men’s grooming products throughout most of the future related toInternational region. These increases were partially offset by lower net sales of CND nail products.

Gross profit:
The table below shows the Company's strategy to focus on fewer, bigger and better innovations, which increased gross profit for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Gross profit$1,542.4
 $1,416.9
 $1,246.5
 $125.5
 $170.4
Percentage of net sales57.3% 60.7% 65.1% (3.4)% (4.4)%

Gross profit increased by $12.1$125.5 million and increased grossin 2017, as compared to 2016. Gross profit decreased as a percentage of net sales in 2017 by 0.13.4 percentage points, as compared to 2016. The drivers of the decrease in gross margin in 2017, as compared to 2016, primarily included:
the inclusion of gross profit for the Elizabeth Arden segment, which decreased gross margin by 2.3 percentage points;
higher sales incentives, which decreased gross margin by 0.5 percentage points;
unfavorable product mix, which decreased gross margin by 0.4 percentage points; and
higher allowances for sales returns, which decreased gross margin by 0.2 percentage points;
with the foregoing partially offset by:
unfavorablefavorable foreign currency fluctuations, which reducedincreased gross margin by 0.3 percentage points.
Excluding the impacts of sales volumes in the Elizabeth Arden segment, unfavorable sales volumes decreased gross profit by $45.1$89 million and reducedin 2017, compared to 2016, with no impact on gross profit as a percentage of net sales by 0.4 percentage points.margin.

SG&A expenses:
 Year Ended December 31, Change
 2015 2014 2013
2015 vs. 2014
2014 vs. 2013
SG&A expenses$1,002.5

$1,009.5

$731.7
 $(7.0) $277.8

SG&A expenses decreased by $7.0 million in 2015 compared to 2014, primarily driven by:
$72.2 million of favorable impact due to foreign currency fluctuations in 2015;
with the foregoing partially offset by:
$16.2 million of higher brand support expenses for the Company's brands within the Consumer and Professional segments in 2015; and
$49.3 million of higher general and administrative expenses in 2015, primarily due to:
(i) $14.7 million of severance costs related to a 2015 initiative to upgrade the Company's people and talent; (ii) $10.2 million of charges related to the 2015 pension lump sum settlement recorded as a component of SG&A expenses; (iii) $9.8 million in expenses related to the 2015 operations of the CBB business acquired in April 2015; and (iv) higher incentive compensation expenses.
In 2014, as compared to 2013, SG&A expenses increased $277.8 million, primarily driven by:
the inclusion of SG&A expenses as a result of the Colomer Acquisition, beginning in October 2013, which contributed $226.2 million to the increase in SG&A expenses;
$33.0 million of higher advertising expenses to support the Company's brands within the Consumer segment;
a $26.4 million gain from insurance proceeds in 2013 due to the settlement of the Company's claim for the loss of inventory from the fire that destroyed the Company's facility in Venezuela, partially offset by an accrual in 2013 of $7.6 million for estimated clean-up costs related to the destroyed facility, which did not recur in 2014;
$18.3 million of higher general and administrative expenses, primarily due to increased severance related costs, higher incentive and stock-based compensation expense, and higher occupancy costs due to overlapping rents as a result of the Company's relocation of its New York City headquarters during 2014; and
$4.0 million of higher amortization of permanent wall displays;
with the foregoing partially offset by:
$24.8 million of favorable impacts due to foreign currency fluctuations.

Acquisition and Integration Costs:
 Year Ended December 31, Change
 2015 2014 2013 2015 vs. 2014
2014 vs. 2013
Acquisition and integration costs$8.0

$6.4
 $25.4
 $(1.6) $(19.0)
The acquisition and integration costs for 2015, 2014 and 2013 are summarized in the table presented below.

3336
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


 Year Ended December 31,
 2015
2014 2013
   Acquisition costs$5.9
 $0.5
 $12.9
   Integration costs2.1
 5.9
 12.5
Total acquisition and integration costs$8.0
 $6.4
 $25.4
Acquisition costsGross profit increased by $170.4 million in 2016, as compared to 2015. Gross margin decreased in 2016 by 4.4 percentage points as compared to 2015. The drivers of the decrease in gross margin in 2016, as compared to 2015, primarily included legal and consulting fees related to included:
the CBB Acquisition. Acquisitioninclusion of gross profit from the Elizabeth Arden segment, which decreased gross margin by 2.4 percentage points;
unfavorable foreign currency fluctuations, which decreased gross margin by 1.0 percentage point;
higher promotional allowances, which decreased gross margin by 0.6 percentage points;
additional inventory costs in 2014 and 2013 primarily included legal and consulting fees related to the Colomer Acquisition.
Integration costs consist of non-restructuring costs related to integrating Colomer's operations into the Company's business. Integration costs incurred during 2015 primarily included legal and professional fees. Integration costs incurred during 2014 primarily included employee-related costs related to management changes and audit-related fees related to the Colomer Acquisition. For 2013, integration costs primarily related to an impairment of in-progress capitalized software development costs, as well as employee-related costs due to management changes, in each case related to the Colomer Acquisition.

Restructuring charges and other, net:
 Year Ended December 31, Change
 2015 2014 2013 2015 vs. 2014
2014 vs. 2013
Restructuring charges and other, net$10.5
 $21.3
 $3.5
 $10.8
 $17.8
Restructuring charges and other, net, for 2015 primarily related to $9.5 million of costs incurred in connection with the 2015 Efficiency Program.
During 2014, the Company recorded charges totaling $20.1 million related to restructuring and related actions under the Integration Program, of which $18.9 million was recorded in restructuring charges and other, net, $0.6 million was recorded in cost of sales and $0.6 million was recorded in SG&A expenses.
See Note 3, "Restructuring Charges" to the Consolidated Financial Statements in this Form 10-K for further discussion.

Interest expense:
 Year Ended December 31, Change
 2015 2014 2013
2015 vs. 2014
2014 vs. 2013
Interest expense$83.3
 $84.4
 $73.8
 $1.1
 $10.6

The $1.1 million decrease in interest expense in 2015, compared to 2014, was primarily due to lower average debt outstanding, partially offset by higher weighted average borrowing rates. The lower average debt outstanding was the result of: (i) regularly scheduled quarterly amortization payments made towards the Acquisition Term Loan through December 31, 2015; (ii) the favorable benefit to 2015 as a result of the May 1, 2014 prepaymentrecognition of an increase in the fair value of inventory acquired in the Elizabeth Arden Acquisition, which decreased gross margin by 0.5 percentage points; and
unfavorable product mix, which decreased gross margin by 0.5 percentage points;
with the foregoing partially offset by:
the favorable impact in 2016 related to the portion of the remaining $58.42015 pension lump sum settlement charge recorded in the fourth quarter of 2015 within cost of sales, which did not recur in 2016, which increased gross margin by 0.3 percentage points.
Favorable volume increased gross profit by $26 million principal amount outstanding underin 2016, compared to 2015, with no impact on gross margin.

SG&A expenses:
The table below shows the Non-Contributed Loan;Company's selling, general and (iii) administrative ("SG&A") expenses for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
SG&A expenses$1,467.6
 $1,161.0
 $1,002.5
 $306.6
 $158.5
SG&A expenses increased by $306.6 million in 2017, compared to 2016, primarily driven by:
the $24.6inclusion of SG&A expenses in the Elizabeth Arden segment as a result of the Elizabeth Arden Acquisition, which contributed $303.7 million March 2015 excess cash flow prepayment, of which $12.1 million was applied to the principal amount outstanding under the 2011 Term Loan. The remaining $12.5 million of the excess cash flow prepayment that was applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterly amortization payments under the Acquisition Term Loan on a ratable basis from $1.8 million prior to such prepayment to $1.7 million after giving effect to such prepayment and through its maturity on October 8, 2019. The higher weighted average borrowing rates were primarily due to the impact of the 2013 Interest Rate Swap going into effect in May 2015.
The $10.6 million increase in interest expense in 2014, as compared to 2013, wasSG&A expenses; and
higher general and administrative expenses of $9.7 million, primarily due to higher average debtprofessional services fees related to the Company's digital transformation initiatives;
with the foregoing partially offset by:
a $4.4 million decrease in brand support expenses, primarily within the Consumer Segment, due to the decline in net sales; and
lower incentive compensation expense.
SG&A expenses increased by $158.5 million in 2016, compared to 2015, primarily driven by:
the inclusion of SG&A expenses in the Elizabeth Arden segment as a result of Products Corporation'sthe Elizabeth Arden Acquisition, Term Loan that was usedcommencing on and after the Elizabeth Arden Acquisition Date, which contributed $184.2 million to fund the Colomer Acquisition,increase in SG&A expenses; and
$6.5 million of higher general and administrative expenses in 2016, primarily driven by higher compensation due to changes in senior executive management, higher professional and legal fees and a total of $6.5 million in gains recognized in 2015 related to the sales of certain non-core assets, partially offset by $10.2 million of charges recognized in 2015 related to a pension lump sum settlement recorded as a component of SG&A expense and lower weighted average borrowing rates.non-restructuring severance;
with the foregoing partially offset by:
$19.8 million of favorable FX impacts; and
a $24.3 million decrease in brand support expenses for lower performing brands, primarily within the Consumer segment.




3437
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Foreign currency losses, net:Acquisition and Integration Costs:
The table below shows the Company's acquisition and integration costs for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2015 2014 2013 2015 vs. 2014
2014 vs. 2013
Foreign currency losses, net$15.7
 $25.0
 $3.7
 $(9.3) $21.3
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
     Acquisition Costs$3.6
 $21.5
 $5.9
 $(17.9) $15.6
     Integration Costs49.3
 21.7
 2.1
 27.6
 19.6
Total acquisition and integration costs$52.9
 $43.2
 $8.0
 $9.7
 $35.2

The decreaseCompany incurred $52.9 million of acquisition and integration costs in foreign currency losses,2017, consisting primarily of $49.2 million of integration costs related to the integration of Elizabeth Arden and $0.8 million of acquisition costs. The integration costs consisted of non-restructuring costs related primarily to the Company's integration of Elizabeth Arden's operations into the Company's business, including professional fees, lease termination costs and employee related costs. The acquisition costs primarily included legal fees directly attributable to the Elizabeth Arden Acquisition.
The Company incurred $43.2 million of acquisition and integration costs in 2016, consisting of $21.5 million of acquisition costs and $21.7 million of integration costs, primarily related to the Elizabeth Arden Acquisition. The acquisition costs primarily included legal and consulting fees related to the Elizabeth Arden Acquisition. Integration costs primarily included non-restructuring costs such as consulting fees related to the Company's integration of Elizabeth Arden's operations into the Company's business.

Restructuring charges and other, net:
The table below shows the Company's restructuring charges and other, net for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Restructuring charges and other, net$33.4
 $34.0
 $10.5
 $(0.6) $23.5

EA Integration Restructuring Program

On the Elizabeth Arden Acquisition Date, the Company completed the Elizabeth Arden Acquisition for a total cash purchase price of $9.3$1,034.3 million, pursuant to an agreement and plan of merger (the "Merger Agreement") by and among Revlon, Products Corporation, RR Transaction Corp. ("Acquisition Sub," then a wholly-owned subsidiary of Products Corporation) and Elizabeth Arden. On the Acquisition Date, Elizabeth Arden merged (the "Merger") with and into Acquisition Sub, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of Products Corporation.

To reduce the Company’s cost of goods sold and SG&A expenses following the Elizabeth Arden Acquisition, the Company identified integration initiatives including consolidating offices, eliminating certain duplicative activities and streamlining back-office support (the "EA Integration Restructuring Program"), which began in December 2016. The Company realized approximately $69 million of annualized cost reductions in executing the EA Integration Restructuring Program during 2017, which primarily benefited the Elizabeth Arden segment results and reduced the Company's corporate-level SG&A expenses.

During 2017, the Company recorded charges totaling $37.7 million related to restructuring and related actions under the EA Integration Restructuring Program. Of these charges: (a) $36.1 million were recorded in restructuring charges and included approximately $4.8 million of lease termination costs; (b) $0.9 million were recorded in cost of sales; and (c) $0.7 million were recorded in SG&A expenses.

During 2016, the Company recorded charges totaling $34.5 million related to the EA Integration Restructuring Program that were incurred in connection with integrating the Elizabeth Arden and Revlon organizations. Of the $34.5 million charge: (a) $31.7 million was recorded in restructuring charges and other, net; (b) $0.5 million was recorded in cost of goods sold; and (c) $2.3 million was recorded in SG&A expenses.

As of December 31, 2017, to further implement the EA Integration Restructuring Program and other restructuring costs, the Company anticipates recognizing approximately $90 million to $95 million of total pre-tax restructuring and related charges consisting of: (i) approximately $65 million to $70 million of employee-related costs, including severance, retention and other

38
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges.

For further discussion on the Elizabeth Arden Acquisition and the EA Integration Restructuring Program, see Note 2, "Business Combinations," and Note 3, "Restructuring Charges - EA Integration Restructuring Program," to the Consolidated Financial Statements in this Form 10-K.

2015 asEfficiency Program

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

In 2016, the Company recognized $1.3 million of restructuring charges and other, net, in connection with the 2015 Efficiency Program, compared to 2014, was$10.5 million of restructuring charges and other, net, in 2015.

See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K for further discussion of the Company's restructuring initiatives.

Interest expense:
The table below shows the Company's interest expense for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Interest expense$149.8
 $105.2
 $83.3
 $44.6
 $21.9
The $44.6 million increase in interest expense in 2017, compared to 2016, and the $21.9 million increase in interest expense in 2016, compared to 2015, were primarily driven by:
a $6.0 million foreign currency loss recognized in 2014due to higher average debt outstanding and higher weighted average borrowing rates as a result of the re-measurementdebt transactions completed in connection with the Elizabeth Arden Acquisition.

See Part II, Item 7. "Management's Discussion and Analysis of Revlon Venezuela's balance sheet,Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources – Long-Term Debt Instruments" for further discussion of the above debt transactions.

Loss on early extinguishment of debt:
The table below shows the Company's loss on early extinguishment of debt for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Loss on early extinguishment of debt$—
 $16.9
 $—
 $(16.9) $16.9

The Company recognized a $16.9 million aggregate loss on the early extinguishment of debt during in 2016, primarily due to approximately $6 million of fees and expenses that were expensed as comparedincurred in connection with entering into the 2016 Senior Credit Facilities, as well as the write-off of $10.9 million of unamortized debt discount and deferred financing fees previously capitalized in connection with the September 2016 repayment of the Old Term Loan Facility.

Please refer to a $1.9 million foreign"Financial Condition, Liquidity and Capital Resources – Long-Term Debt Instruments" for further discussion.

Foreign currency loss recognized in 2015;(gains) losses, net:
a $3.8 million gain in 2015, compared to a $0.5 million gain in 2014, related toThe table below shows the Company's foreign currency forward exchange contracts;(gains) losses, net for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Foreign currency (gains) losses, net$(18.5) $18.5
 $15.7
 $(37.0) $2.8

39
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


The $18.5 million in foreign currency gains, net, during 2017, compared to $18.5 million in foreign currency loss, net during 2016, was primarily driven by:
the favorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables and foreign currency denominated intercompany payables during 2015, asreceivables,
partly offset by:
a $4.1 million foreign currency loss in 2017, compared to 2014.a $2.1 million foreign currency gain in 2016, in each case related to the Company's foreign currency forward exchange contracts.
The $2.8 million increase in foreign currency losses net, of $21.3 million during 2014, asin 2016, compared to 2013,2015, was primarily driven by:
a $2.1 million foreign currency gain in 2016, compared to a $3.8 million foreign currency gain in 2015, in each case related to the Company’s foreign currency forward exchange contracts; and
the net unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables during 2014, as compared to 2013; and
a $6.0 million foreign currency loss related to the required re-measurement of Revlon Venezuela's balance sheet during the second quarter of 2014.denominated receivables.

Provision for income taxes:
The table below shows the Company's provision for income taxes for 2017, 2016 and 2015:
 Year Ended December 31, Change
 2015 2014 2013 2015 vs. 2014
2014 vs. 2013
Provision for income taxes$51.4
 $77.8
 $46.0
 $(26.4) $31.8
 Year Ended December 31, Change
 2017 2016 2015 2017 vs. 2016 2016 vs. 2015
Provision for income taxes$21.8
 $25.5
 $51.4
 $(3.7) $(25.9)

The Company's provision for income taxes decreased by $3.7 million in 2017, compared to 2016, primarily due to lower pre-tax income for 2017, compared to 2016, partially offset by the $47.9 million non-cash expense associated with the reduction in the Company's deferred tax assets as a result of the Tax Act.
The provision for income taxes decreased by $26.4$25.9 million in 2015,2016, compared to 2014,2015, primarily due to the favorable impact of certain discrete items, including: (i) the net reduction of valuation allowances in certain foreign jurisdictions; (ii) lower pre-tax income in certain jurisdictions for 2015,2016, compared to 2014; (iii) the impact of the favorable resolution of certain tax matters in 2015; and (iv) the impact of certain tax matters in 2014 that did not recur in 2015.
The provision for income taxes increased by $31.8 million in 2014, as compared to 2013, primarily due to: (i) the loss on early extinguishment of debt recognized in 2013; (ii) certain expenses related to the Colomer Acquisition; (iii) the favorable resolution of tax matters in a foreign jurisdiction; (iv) increased pre-tax income; and (v) establishing a valuation allowance against certain deferred tax assets in the Professional segment in 2014 (each of which in the case of (i), (ii) and (iii) favorably affected the provision for income taxes in 2013 and each of which did not recur in 2014),2015, partially offset by the favorable impactlack of certain discrete itemsbenefit in 2014, including2016 from goodwill and intangible assets impairment, as well as the favorable resolutionbenefit in 2015 from the reduction of the deferred tax mattersvaluation allowance that did not exist in certain jurisdictions and return-to-provision adjustments.2016.
The Company's effective tax rate for 20152017 was higherlower than the 35% federal statutory rate as a result of 35% due principally to: (i) foreignthe level and U.S. tax effects attributable to operations outsidemix of earnings between jurisdictions and the U.S.; (ii) state and local taxes; and (iii) foreign dividends and earnings taxable$47.9 million non-cash expense associated with the reduction in the U.S., partially offset byCompany's deferred tax assets as a result of the net reduction of valuation allowances in certain foreign jurisdictions.Tax Act.
The Company's effective tax rate for 20142016 was higher than the 35% federal statutory rate of 35% due principally to:as a result of: (i) state and local taxes, net of U.S federal income tax benefit;taxes; (ii) establishing a valuation allowance against certain deferred tax assets in the Professional segment; (iii) foreign dividends and earnings taxable in the U.S.; and (iv) foreign and U.S.(iii) the impairment related to the Company's Other segment for which there was no tax effects attributable to operations outside the U.S.benefit.
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.
In assessing the recoverability of its deferred tax assets, management regularly considers whether some portion or all of the deferred tax assets will not be realized based on the recognition threshold and measurement of a tax position. The ultimate realization of deferred tax assets is generally dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
On December 22, 2017, the U.S. government enacted the Tax Act, which makes broad and complex changes to the U.S. tax code, including a one-time transition tax on certain non-U.S. earnings and limitations on tax deductions for interest expense in 2018 and following years. The Company currently expects that it will not have a transition tax liability due to its deficit in foreign earnings and that the limitation on interest deductibility will not impact the Company's 2018 federal cash taxes due to its net operating loss carryover balance. As a result, the Company currently expects that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018.
The Tax Act affected the Company’s financial statements for the year ending December 31, 2017, including, but not limited to, by (1) reducing the U.S. federal corporate tax rate, and (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The Company currently expects to have no transition tax liability, due to its deficit in foreign earnings, and it recorded an estimated non-cash expense of $47.9 million in 2017 associated with the reduction in the Company's deferred tax assets, as a result of the reduction in the U.S. federal corporate tax rate.

3540
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


taxableSee Item 1A. Risk Factors - "U.S. income and tax planning strategiesreform efforts could have a material impact on the Company's financial condition, results of operations and/or cash flows" in making this assessment.Form 10-K. See also Note 16, “Income"Income Taxes,”" to the Consolidated Financial Statements in this Form 10-K for further discussion.
The SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cut and Jobs Act ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides that companies are required to complete their accounting under Accounting Standards Codification Topic 740, “Income Taxes” ("ASC 740") over a measurement period that should not extend beyond one year from the Tax Act enactment date. In accordance with SAB 118, companies must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete in their financial statements for the fiscal period ended December 31, 2017. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete at the time such financial statements are filed, but it is able to determine a reasonable estimate for the income tax effects of the Tax Act, it must record a provisional estimate of such effects in its financial statements for the period ended December 31, 2017. If a company cannot determine a provisional estimate to be included in its financial statements for the fiscal period ended December 31, 2017, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.


Financial Condition, Liquidity and Capital Resources
At December 31, 20152017, the Company had a liquidity position of $473.6$280.1 million,, consisting of $87.1 million of unrestricted cash and cash equivalents, (net of any outstanding checks) of $307.4 million, as well as $166.2$193 million in available borrowings under Products Corporation's $175.0$400 million Amended2016 Revolving Credit Facility, based upon the borrowing base of $381.9 million, less $8.8$10.1 million of outstanding undrawn outstanding letters of credit, $21.8 million of outstanding checks and no other borrowing$157 million of borrowings outstanding under the Amended2016 Revolving Credit Facility at such date. The Company believes that the cash generated by its operations, cash on hand, availability under the 2016 Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its liquidity needs for at least the next 12 months from the issuance date of this Form 10-K.
The Company’s foreign operations held $97.3$83.2 million out of theits total $307.4$87.1 million in cash and cash equivalents (net of any outstanding checks) as of December 31, 2015.2017. The cash held by the Company’s foreign operations is primarily used to fund such operations. The Company regularly assesses its cash needs and the available sources of cash to fund these needs. As part of this assessment, the Company determines the amount of foreign earnings, if any, that it intends to repatriate to help fund its domestic cash needs, including for the Company’s debt service obligations, and pays applicable U.S. income and foreign withholding taxes, if any, on such earnings to the extent repatriated, and otherwise records a tax liability for the estimated cost of repatriation in a future period. During 2017, the Company repatriated funds to the U.S. through the settlement of historical loans and payables due from certain foreign subsidiaries. The Company believes that the cash generated by its domestic operations, andcash on hand, availability under the Amended2016 Revolving Credit Facility and other permitted lines of credit, as well as the option to further settle intercompany loans and payables with certain foreign subsidiaries, should be sufficient to meet its domestic liquidity needs for at least the next 12 months. Therefore, the Company currently anticipates that restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company’s liquidity during such period. On December 22, 2017, the U.S. government enacted the Tax Act, which makes broad and complex changes to the U.S. tax code, including a one-time transition tax on certain non-U.S. earnings, and limitations on tax deductions for interest expense in 2018 and following years. The Company currently expects that it will not have a transition tax liability due to its deficit in foreign earnings and that the limitation on interest deductibility will not impact the Company's 2018 federal cash taxes due to its net operating loss carryover balance. As a result, the Company currently expects that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018. See Note 16, "Income Taxes," to the Consolidated Financial Statements and Item 1A. Risk Factors - "U.S. income tax reform efforts could have a material impact on the Company's financial condition, results of operations and/or cash flows" in this Form 10-K for a further discussion.

Changes in Cash Flows
At December 31, 2015,2017, the Company had cash, and cash equivalents and restricted cash of $326.9$87.4 million, compared with $275.3$186.8 million at December 31, 2014.2016. The following table summarizes the Company’s cash flows from operating, investing and financing activities in 2015, 20142017, 2016 and 2013:2015:
Year Ended December 31,Year Ended December 31,
2015 2014 20132017 2016 2015
Net cash provided by operating activities$155.3
 $174.0
 $123.3
Net cash (used in) provided by operating activities$(139.3) $120.1
 $158.1
Net cash used in investing activities(83.8) (52.1) (639.4)(108.3) (1,087.5) (83.8)
Net cash (used in) provided by financing activities(12.1) (75.1) 649.0
Net cash provided by (used in) financing activities136.9
 829.9
 (14.9)
Effect of exchange rate changes on cash and cash equivalents(7.8) (15.6) (5.1)11.3
 (2.6) (7.8)
Net (decrease) increase in cash, cash equivalents and restricted cash$(99.4) $(140.1) $51.6
Cash, cash equivalents and restricted cash at beginning of period186.8
 326.9
 275.3
Cash, cash equivalents and restricted cash at end of period$87.4
 $186.8
 $326.9

Operating Activities
Net cash used in operating activities was $139.3 million in 2017. Net cash provided by operating activities was $155.3 million, $174.0$120.1 million and $123.3$158.1 million for 2015, 20142016 and 2013,2015, respectively. The decreaseincrease in cash from operating activitiesused in 2015,2017, compared to the 2014,2016, was primarily driven by higher inventory and taxbalances; higher interest payments partially offset by less cash used in discontinued operations, as well as lower payments for restructuring and interest in 2015 compared to 2014. The cash provided by operating activities in 2014, compared to 2013, was favorably impacted by cash provided by the operations of the Professional segment as a result of increased debt incurred in September 2016 in connection with financing and consummating the ColomerElizabeth Arden Acquisition, partially offset byas well as higher interest payments and unfavorable changes in working capital, including higher tax paymentsborrowings under the 2016 Revolving Credit Facility; and higher payments for restructuring, actionsacquisition and integration costs in connection with the EA Integration Restructuring Program, partially offset by favorable changes in working capital.
The increase in cash used in 2016, as compared to 2015, was primarily related to bothdriven by the Integration Programpayment of acquisition and integration costs in 2016, higher interest payments in 2016 as a result of increased debt incurred in connection with financing and consummating the restructuring actions that included exiting the Company's direct manufacturing, warehousing and sales business operations in mainland China,Elizabeth Arden Acquisition, as well as implementing other immaterial restructuring actions outside the U.S. that are expectedtiming of certain accounts payable disbursements and accounts receivable collections at the end of 2015, compared to generate other operating efficiencies (the "December 2013 Program").
See Note 3, "Restructuring Charges" to the Consolidated Financial Statements in this Form 10-K for further discussion related to the Company's restructuring programs.
Net cash provided by operating activities related to discontinued operations, including restructuring payments, was approximately $0.1 million, $27 million and $10 million in 2015, 2014 and 2013, respectively.2016.
Investing Activities
Net cash used in investing activities was $83.8$108.3 million,, $52.1 $1,087.5 million and $639.4$83.8 million for 2017, 2016 and 2015, respectively, which included $108.3 million, $59.3 million and $48.3 million of cash used for capital expenditures, respectively. Capital expenditures for 20142017 included approximately $40 million for Elizabeth Arden integration-related investments.
Net cash used in investing activities in 2016 included $1,034.3 million in cash payments for the Elizabeth Arden Acquisition (partially offset by $41.1 million of cash acquired in the Elizabeth Arden Acquisition) and 2013, respectively.$29.1 million in cash payments for the May 2016 Cutex International Acquisition.
Net cash used in investing activities in 2015 included:
$48.3 million of cash used for capital expenditures; and
$41.7included $41.7 million in cash payments, net of cash acquired, primarily for the Company's April 2015 CBB Acquisition, partially offset by $6.2 million in cash proceeds from the sale of certain immaterial, non-core assets.
Net cash used in investing activities for 2014 included:
$55.5 million of cash used for capital expenditures, which were partially offset by $3.4 million in proceeds from the sale of property, plant and equipment, primarily related to other immaterial restructuring actions.Financing Activities
Net cash used in investingprovided by (used in) financing activities for 2013 included:
a cash payment of $664.5was $136.9 million, $829.9 million and $(14.9) million for the Colomer Acquisition, offset2017, 2016 and 2015, respectively.
Net cash provided by $36.9financing activities in 2017 primarily included:
$157 million of cash and cash equivalents acquired in such transaction, for a net cash use of $627.6 million; and
$28.6 million of cash used for capital expenditures;borrowings under the 2016 Revolving Credit Facility;
with the foregoing partially offset by:
$13.118 million of insurance proceeds received in July 2013 forrepayments under the Company's property claim related to the June 2011 fire at the Company's facility in Venezuela.2016 Term Loan Facility.
Financing Activities
Net cash (used in) provided by financing activities was in 2016 primarily included:
cash proceeds received in connection with originating the 2016 Term Loan Facility, in the aggregate principal amount of $1.8 billion, or $1.791 billion, net of discounts;
cash proceeds received in connection with issuance of the 6.25% Senior Notes, in the aggregate principal amount of $450 million; and
with the foregoing partially offset by:
$(12.1) million, $(75.1)658.6 million of cash used to repay all of the aggregate principal balance outstanding under Products Corporation’s 2011 Term Loan;
$651.4 million of cash used to repay all of the aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan;
(i) $45 million of fees incurred in connection with originating the 2016 Term Loan Facility; (ii) $5.7 million of fees incurred in connection with originating the 2016 Revolving Credit Facility; and $649.0(iii) $10.9 million of fees incurred in connection with issuing Products Corporation's 6.25% Senior Notes;
a $23.2 million required excess cash flow prepayment made under the Old Term Loan Facility, as discussed below; and
$2.7 million utilized for 2015, 2014 and 2013, respectively.the repurchase of shares from a former executive.
Net cash used in financing activities for 2015 primarily included:
a $24.6 million required excess cash flow prepayment made under the AmendedOld Term Loan Facility; and
$6.8 million of scheduled amortization payments on the Old Acquisition Term Loan;
with the foregoing partially offset by:
$23.023 million increase in short-term borrowings and overdraft.
Net cash used in financing activities for 2014 included:
the repayment in May 2014 of the $58.4 million aggregate principal amount outstanding of the Non-Contributed Loan;
$7.0 million of scheduled amortization payments on the Acquisition Term Loan;
$4.7 million decrease in short-term borrowings and overdraft; and
the payment of $1.8 million of financing costs primarily related to the February 2014 Term Loan Amendment (as hereinafter defined).
Net cash provided by financing activities for 2013 included:
Cash proceeds received in connection with the Acquisition Term Loan, in the aggregate principal amount of $700.0 million, or $698.3 million, net of discounts; and
Products Corporation's issuance of the $500.0 million aggregate principal amount of the 5¾% Senior Notes at par;
with the foregoing partially offset by:
the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of Products Corporation's previous 9¾% Senior Secured Notes in connection with the 2013 Senior Notes Refinancing;
the repayment of $113.0 million in principal on the 2011 Term Loan in connection with the consummation of the February 2013 Term Loan Amendments (as hereinafter defined); and
the payment of $48.8 million of financing costs comprised of: (i) $17.5 million of redemption and tender offer premiums, as well as fees and expenses related to the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of the 9¾% Senior Secured Notes in connection with the 2013 Senior Notes Refinancing; (ii) $10.2 million of underwriters' fees and other fees in connection with the issuance of the 5¾% Senior Notes in connection with the 2013 Senior Notes Refinancing; (iii) $1.2 million of fees incurred in connection with the February 2013 Term Loan Amendments; (iv) $3.5 million of fees incurred in connection with the August 2013 Term Loan Amendments (as hereinafter defined); (v) $15.9 million of fees incurred in connection with the Incremental Amendment (as hereinafter defined); and (vi) $0.5 million of fees incurred in connection with the 2013 Revolver Amendments (as hereinafter defined).overdrafts.
Refer to "Long-Term Debt Instruments - 2013 Debt Transactions" below for the definition and further discussion of the debt instruments and related financing activities discussed above.

Long-Term Debt Instruments
(a) Recent Debt Transactions
The Company completed several debt transactions during 2015, 20142016, as described below:
2016 Debt-Related Transactions
In connection with and 2013:
2015 Debt Related Transaction
Amendedsubstantially concurrently with the closing of the Elizabeth Arden Acquisition, Products Corporation entered into: (i) the 7-year $1.8 billion 2016 Term Loan Facility - Excess Cash Flow Payment
In March 2015,(the "2016 Term Loan Facility" and such agreement being the "2016 Term Loan Agreement"); and (ii) the 5-year $400 million 2016 Revolving Credit Facility (the "2016 Revolving Credit Facility" and such agreement being the "2016 Revolving Credit Agreement" and such facility, together with the 2016 Term Loan Facility, being the "2016 Senior Credit Facilities" and such agreements being the "2016 Credit Agreements"). Products Corporation prepaid $24.6also completed the issuance of $450 millionof indebtedness, representing 50% aggregate principal amount of its 2014 “excess cash flow,” in accordance with6.25% Senior Notes due 2024. The proceeds of Products Corporation's 6.25% Senior Notes offering and the terms of its Amended2016 Term Loan Facility. The prepaymentFacility, together with approximately $35 million of borrowings under the 2016 Revolving Credit Facility and approximately $126.7 million of cash on hand, were used: (A) to fund the Elizabeth Arden Acquisition, including: (i) repurchasing the entire $350 million aggregate principal amount outstanding of the then-existing Elizabeth Arden Senior Notes (the "Elizabeth Arden Senior Notes"); (ii) repaying the entire $142 million aggregate principal amount of borrowings outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility (which facility was applied onterminated upon such repayment); (iii) repaying the entire $25 million aggregate principal amount of borrowings outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility (which facility was terminated upon such repayment); and (iv) retiring the entire $55 million liquidation preference of all 50,000 shares of Elizabeth Arden's then-issued and outstanding preferred stock (which amount included a ratable basis between$5 million change of control premium); and (B) to completely refinance and repay all of the $651.4 million in aggregate principal amountsbalance outstanding under Products Corporation’s then-existing 2011 Term Loan (the "2011 Term Loan") and all of the $658.6 million in aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan (each of which facilities were terminated upon such repayment) (the "Old Acquisition Term Loan" and together with the 2011 Term Loan, the "Old Term Loan Agreement" and the Acquisition Term Loan. The amount of the prepayment applied to the 2011"Old Term Loan reducedFacility," respectively). The Company did not incur any material early termination penalties in connection with repaying the principal amount outstanding by $12.1 million to $662.9 million (as all amortization payments under the 2011Old Term Loan had been paid). The $12.5 million applied toFacility or the AcquisitionElizabeth Arden indebtedness and preferred stock.
2016 Term Loan reduced Products Corporation's future regularly scheduled quarterly amortization payments underFacility
Principal and Maturity: On the Elizabeth Arden Acquisition Term Loan on a ratable basis from $1.8 million prior to the prepayment to $1.7 million after giving effect to the prepayment and through its maturity on October 8, 2019.
2014 Debt Related Transactions
February 2014 Term Loan Amendment
In February 2014,Date, Products Corporation entered into an amendment (the “February 2014 Term Loan Amendment”) to its Amendedthe 2016 Term Loan Agreement, among Products Corporation, as borrower, a syndicate of lenders and Citicorp USA, Inc. (“CUSA”),for which Citibank, N.A. acts as administrative and collateral agent and collateral agent.
Pursuant towhich has an initial aggregate principal amount of $1.8 billion and matures on the February 2014 Term Loan Amendment,earlier of: (x) the interest rates applicable to Eurodollar Loans underseventh anniversary of the 2011 Term Loan bear interest atElizabeth Arden Acquisition Date (i.e., September 7, 2023); and (y) the Eurodollar Rate plus 2.5% per annum, with the Eurodollar Rate not to be less than 0.75% (compared to 3.0% and 1.0%, respectively,91st day prior to the February 2014maturity 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.  The loans under the 2016 Term Loan Amendment), while Alternate Base Rate Loans under the 2011Facility were borrowed at an original issue discount of 0.5% to their principal amount. The 2016 Term Loan bear interest atFacility may be increased by an amount equal to the Alternate Base Ratesum of (x) the greater of $450 million and 90% of Products Corporation’s pro forma consolidated EBITDA, plus 1.5%,(y) an unlimited amount to the extent that (1) the first lien leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt that is not junior or subordinated to the liens of the Senior Facilities to EBITDA) is less than or equal to 3.5 to 1.0 (for debt secured pari passu with the Alternate Base Rate not2016 Term Loan Facility) or (2) the secured leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt to beEBITDA) is less than 1.75% (comparedor equal to 2.0% in each case prior4.25 to 1.0 (for junior lien or unsecured debt), plus (z) up to an additional $400 million if the February 2014 Term Loan Amendment) (and as each such term is defined in the Amended Term Loan Agreement).
Products Corporation's Acquisition Term Loan and Amended2016 Revolving Credit Facility were not amended in connection withhas been repaid and terminated.

Guarantees and Security: Products Corporation and the February 2014restricted subsidiaries under the 2016 Term Loan Amendment.Facility, which include Products Corporation’s domestic subsidiaries, including Elizabeth Arden and its domestic subsidiaries (collectively, the "Restricted Group"), are subject to the covenants under the 2016 Term Loan Agreement.  The 2016 Term Loan Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon, on a limited recourse basis.  The obligations of Revlon, Products Corporation and the subsidiary guarantors under the 2016 Term Loan Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions).  The obligors and guarantors under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility are identical.  The liens securing the 2016 Term Loan Facility on the accounts, inventory, equipment, chattel paper, documents, instruments, deposit accounts, real estate and investment property and general intangibles (other than intellectual property) related thereto (the "Revolving Facility Collateral") rank second in priority to the liens thereon securing the 2016 Revolving Credit Facility.  The liens securing the 2016 Term Loan Facility on all other property, including capital stock, intellectual property and certain other intangible property (the "Term Loan Collateral"), rank first in priority to the liens thereon securing the 2016 Revolving Credit Facility, while the liens thereon securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility.
During 2014,
Interest and Fees: Interest accrues on term loans under the Company incurred approximately $1.1 million2016 Term Loan Facility at a rate per annum of Adjusted 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%, at Products Corporation’s option, and is payable quarterly, at a minimum.  Products Corporation is obligated to pay certain fees and expenses in connection with the February 20142016 Term Loan Amendment, which were expensed as incurred,Facility. 

Affirmative and wrote-off $0.8 million of unamortized debt discount and deferred financing costs as a result of the February 2014 Term Loan Amendment. These amounts, totaling $1.9 million, were recognized within loss on the early extinguishment of debt in the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the year ended December 31, 2014.
Repayment of Non-Contributed Loan
On May 1, 2014, Products Corporation used available cash on hand to optionally prepay in full the remaining $58.4 million principal amount then outstanding under the non-contributed loan portion of the Amended and Restated Senior SubordinatedNegative Covenants: The 2016 Term Loan Agreement (the "Non-Contributed Loan")contains certain affirmative and negative covenants that, remained owingamong other things, limit the Restricted Group’s 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 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 Products Corporationtheir subsidiaries or restrict liens; (xi) change their fiscal year; and (xii) modify the terms of certain debt. The negative covenants are subject to various third parties.  The Non-Contributed Loan would have otherwise maturedexceptions, including an "available amount basket" based on October 8, 2014. In connection with such prepayment, the Company wrote-off $0.1 million50% of deferred financing costs, which were recognized within loss on early extinguishment of debt in the Company's Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income for 2014.
2013 Debt Transactions
Term Loan and Revolving Credit Facility Amendments
(i) February 2013 Term Loan Amendments
In February 2013, Products Corporation consummated amendments (the "February 2013 Term Loan Amendments") to its third amended and restated term loan agreement dated as of May 19, 2011 (as amended, the "2011 Term Loan Agreement," or the “2011 Term Loan Facility” or the "2011 Term Loan") among Products Corporation, as borrower, a syndicate of lenders and CUSA, as administrative agent and collateral agent.
Pursuant to the February 2013 Term Loan Amendments, Products Corporation reduced the total aggregate principal amount outstanding under the 2011 Term Loan at such time from $788.0 million to $675.0 million, using a portion of the proceeds from Products Corporation’s issuancecumulative consolidated net income, plus a "starter" basket of its 5¾% Senior Notes (see “2013 Senior Notes Refinancing” below), together with cash on hand.  The February 2013 Term Loan Amendments also reduced the interest rates on the 2011 Term Loan such that (prior$200 million, subject to giving effect to the February 2014 Term Loan Amendment) Eurodollar Loans bore interest at the Eurodollar Rate plus 3.00% per annum, with the Eurodollar Rate not to be less than 1.00% (compared to 3.50% and 1.25%, respectively, prior to the February 2013 Term Loan Amendments), while Alternate Base Rate Loans bore interest at the Alternate Base Rate plus 2.00%, with the Alternate Base Rate not to be less than 2.00% (compared to 2.50% and 2.25%, respectively, prior to the February 2013 Term Loan Amendments) (and as each such term is defined in the 2011 Term Loan Agreement). 
Pursuant to the February 2013 Term Loan Amendments, Products Corporation, under certain circumstances, also has the right to request the 2011 Term Loan to be increased by up to the greater of: (i) $300 million; and (ii) an amount such that Products Corporation’s First Lien Secured Leverage Ratiocompliance with a 5.0 to 1.0 ratio of Products Corporation’s net debt to Consolidated EBITDA (as defined in the 20112016 Term Loan Agreement) does, except such compliance is not exceed 3.50:1.00 (comparedrequired when such baskets are used to $300 million prior tomake investments. While the February 2013 Term Loan Amendments). The lenders are not committed to provide any such increase. Any such increase would be in addition to the Acquisition Term Loan.
(ii) August 2013 Term Loan Amendments
In August 2013, in connection with the Colomer Acquisition, Products Corporation consummated further amendments (the "August 2013 Term Loan Amendments") to its 20112016 Term Loan Agreement (as amended by the August 2013 Term Loan Amendmentscontains certain customary representations, warranties and the Incremental Amendment, the "Amended Term Loan Agreement" or the "Amended Term Loan Facility"), which permitted, among other things: (i) Products Corporation's consummationevents of the Colomer Acquisition; and (ii) Products Corporation's incurring up to $700 million of term loans whichdefault, it used as a source of funds to consummate the Colomer Acquisition and to pay related fees and expenses.
(iii) Incremental Amendment
In August 2013, in connection with the Colomer Acquisition, Products Corporation entered into an incremental amendment (the "Incremental Amendment") resulting in the Amended Term Loan Agreement with Citibank, N.A., JPMorgan Chase Bank, N.A., Bank of America, N.A, Credit Suisse AG, Cayman Islands Branch, Wells Fargo Bank, N.A. and Deutsche Bank AG New York Branch (collectively, the "Initial Acquisition Lenders") and CUSA, as administrative agent and collateral agent, pursuant to which the Initial Acquisition Lenders committed to provide up to $700 million of term loans under the Amended Term Loan Agreement (the "Acquisition Term Loan"). The Acquisition Term Loan was issued on October 8, 2013 and Products Corporation used the net proceeds of $698.3 million as a source of funds to consummate the Colomer Acquisition and to pay related fees and expenses.
(iv) Amended Revolving Credit Facility
In August 2013, in connection with the Colomer Acquisition, Products Corporation consummated an amendment (the "August 2013 Revolver Amendment") to its third amended and restated revolving credit agreement dated June 16, 2011 (the "2011 Revolving Credit Agreement") which amended its then $140.0 million asset-backed, multi-currency revolving credit facility (the "2011 Revolving Credit Facility") to permit, among other things: (a) Products Corporation's consummation of the Colomer Acquisition; and (b) Products Corporation's incurring up to $700 million of the Acquisition Term Loan that Products Corporation used as a source of funds to consummate the Colomer Acquisition. Additionally, the August 2013 Revolver Amendment (1) reduced Products Corporation's interest rate spread over the LIBOR rate applicable to Eurodollar Loans under the facility from a range, based on availability, of 2.00% to 2.50%, to a range of 1.50% to 2.00%; (2) reduced the commitment fee on unused availability under the facility from 0.375% to 0.25%; and (3) extended the maturity of the facility, which was previously scheduled to mature in June 2016, to the earlier of (i) August 2018 or (ii) the date that is 90 days prior to the earliest maturity date ofdoes not contain any term loans then outstanding under Products Corporation's bank term loan agreements, but not earlier than June 2016.
Additionally, in December 2013, Products Corporation entered into an incremental amendment (the "December 2013 Revolver Amendment" and together with the August 2013 Revolver Amendment, the "2013 Revolver Amendments") to its 2011 Revolving Credit Agreement (as amended by the 2013 Revolver Amendments, the "Amended Revolving Credit Agreement" and the "Amended Revolving Credit Facility"). Under the terms of the December 2013 Revolver Amendment, the lenders' commitment to provide borrowings to Products Corporation and its subsidiary borrowers under the Amended Revolving Credit Facility was increased from $140.0 million to $175.0 million.financial maintenance covenants.


2013 Senior Notes Refinancing
In February 2013, Products Corporation issued $500.0 million aggregate principal amount of 5¾% Senior Notes due February 15, 2021 (the “5¾% Senior Notes”) to investors at par. Products Corporation used $491.2 million of the net proceeds (net of underwriters' fees) from the issuance of the 5¾% Senior Notes to repay and redeem all of the $330.0 million outstanding aggregate principal amount of its 9¾% Senior Secured Notes that were otherwise due November 2015 (the “9¾% Senior Secured Notes"), as well as to pay an aggregate of $28.0 million for the applicable redemption and tender offer premiums, accrued interest and related fees and expenses. Products Corporation used a portion of the remaining proceeds, together with existing cash, to pay approximately $113.0 million of principal on its 2011 Term Loan in conjunction with the February 2013 Term Loan Amendments. Products Corporation used the remaining balance available from the issuance of the 5¾% Senior Notes for general corporate purposes, including, without limitation, debt reduction transactions, such as repaying to Revlon, Inc. at maturity on October 8, 2013 the Contributed Loan (as hereinafter defined), which Revlon, Inc. used to pay the liquidation preference of Revlon, Inc.'s then outstanding Series A Preferred Stock, with a par value of $0.01 per share (the "Series A Preferred Stock") in connection with its mandatory redemption of such stock on such date.
Mandatory Redemption of Series A Preferred Stock
On October 8, 2013, Revlon, Inc. completed the mandatory redemption of its then outstanding 9,336,905 shares of Series A Preferred Stock for $48.6 million in accordance with its certificate of designation. Such redemption amount represented the $5.21 liquidation preference for each of the 9,336,905 shares of Series A Preferred Stock that Revlon, Inc. issued in the voluntary exchange offer consummated in October 2009 (the "2009 Exchange Offer").
(b)Prepayments: Summary of Terms and Covenants
Amended Credit Agreements
The following is a summary description of the Amended2016 Term Loan Facility which includes the 2011 Term Loan and the Acquisition Term Loan, and the Amended Revolving Credit Facility. Unless otherwise indicated, capitalized terms have the meanings given to them in the Amended Term Loan Agreement and/or the Amended Revolving Credit Agreement (the "Amended Credit Agreements"), as applicable. Investors should refer to the Amended Revolving Credit Agreement and/or the Amended Term Loan Agreement for complete terms and conditions, as these summary descriptions areis subject to a number of qualifications and exceptions.
Amended Term Loan Facility
As of December 31, 2015, term loans under the Amended Term Loan Facility bear interest at the following interest rates:
Eurodollar LoansAlternate Base Rate Loans
2011 Term LoansEurodollar Rate plus 2.50% per annum (with the Eurodollar Rate not to be less than 0.75%)Alternate Base Rate plus 1.50% (with the Alternate Base Rate not to be less than 1.75%)
Acquisition Term LoansEurodollar Rate plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%)Alternate Base Rate plus 2.00% (with the Alternate Base Rate not to be less than 2.00%)
The term loans under the Amended Term Loan Facility are required to be prepaid with:
mandatory prepayments from: (i) the net cash proceeds in excess of $10 million for each 12-month period ending on March 31 received during such period from sales of Term Loan First Lien Collateral by Products Corporation or any of its subsidiary guarantors with carryover of unused annual basket amounts up to a maximum of $25 million and with respect to certain specified dispositions up to an additional $25 million in the aggregate (subject to a reinvestment right for 365 days, or 545 days if the Company has within such 365-day period entered into a legally binding commitment to invest such funds);
(ii) the net proceeds from the issuance by Products Corporation or any of its restricted subsidiaries of certain additional debt; and
(iii) 50% of Products Corporation’s annual “excess(ii) commencing with the excess cash flow” (as defined under the Amended Term Loan Agreement), which payments commencedflow calculation with respect to Products Corporation'sfiscal year ending December 31, 2017, 50% of excess cash flow, forwith step-downs to 25% and 0% upon achievement of certain first lien leverage ratios and reduced by voluntary prepayments of loans under the 2014 fiscal year; such payments are required to be made within the first 100 days after the applicable year end.
Pursuant to the August 2013 Term Loan Amendments, the Amended2016 Term Loan Facility contains a financial covenant limitingand revolving loans under the 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. Products Corporation’s first lien senior secured leverage ratio (the ratio of Products Corporation’s senior secured debt that has a lien onCorporation may voluntarily prepay the collateral which secures the Amended2016 Term Loan Facility thatwithout premium or penalty.
2016 Revolving Credit Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Revolving Credit Agreement, for which Citibank, N.A. acts as administrative agent and collateral agent. The 2016 Revolving Credit Facility has an initial maximum availability of $400 million (with a $100 million sublimit for letters of credit and up to $70 million available for swing line loans), which availability is not junior or subordinatedsubject to the liens securingamount of the Amended Term Loan Facility (excluding debt outstanding under the Amendedborrowing base.  The 2016 Revolving Credit Facility) to EBITDA, as each such term is defined in the Amended Term Loan Facility), to no more than 4.25 to 1.0 for each period of four consecutive fiscal quarters ending during the period from June 30, 2011 to the maturity date of the Amended Term Loan Facility.
Products Corporation, under certain circumstances, also has the right to request the Amended Term Loan Facility tomay be increased by up to the greater of (i) $300(x) $50 million and (ii) an amount such that Products Corporation’s First Lien Secured Leverage Ratio (as defined(y) the excess of the borrowing base over the amounts of then-effective commitments.  The 2016 Revolving Credit Facility permits certain non-U.S. subsidiaries to borrow in the Amended Term Loan Agreement) does not exceed 3.50:1.00 (compared to $300 million prior to the February 2013 Term Loan Amendments).local currencies. The lenders are not committed to provide any such increase. Any such increase would be in addition to the Acquisition Term Loan that was issued in October 2013 and used as a source of funds to consummate the Colomer Acquisition and to pay related fees and expenses.
The 2011 Term Loan outstandingborrowing base calculation under the Amended Term Loan2016 Revolving Credit Facility matures on November 19, 2017. The Acquisition Term Loan under the Amended Term Loan Facility has the same terms as the 2011 Term Loan, except that: (i) it maturesis based on the sixth anniversarysum of: (i) 85% of eligible accounts receivable; (ii) the lesser of 85% of the closingnet orderly liquidation value and a percentage of the Acquisition Term Loan (or October 8, 2019)value specified in respect of different types of eligible inventory; (iii) qualified restricted cash (capped at $75 million); and (ii) it amortizes on March 31, June 30, September 30(iv) a temporary increase amount between August 15 and DecemberOctober 31 of each year, in an amount equalwhich are collectively subject to 0.25%certain availability reserves set by the administrative agent. The 2016 Revolving Credit Facility matures on the earlier of: (x) the fifth anniversary of the Elizabeth Arden Acquisition Date; 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 such Acquisition Term Loan.the then outstanding 5.75% Senior Notes by at least $200 million.
As of December 31, 2015, Products Corporation is required to prepay, on or before 100 days following the last day of its fiscal year (i.e., by April 9, 2016), $23.2 million of indebtedness
Guarantees and Security: The Restricted Group under the Amended2016 Revolving Credit Agreement (which is the same as the Restricted Group under the 2016 Term Loan Facility, representing 50% of its 2015 "excess cash flow" (as definedAgreement) is subject to the covenants under the Amended Term Loan Agreement). The prepayment will be applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Acquisition Term Loan. The amount of the prepayment to be applied to the 2011 Term Loan will be used to reduce the aggregate principal amount outstanding (as all amortization payments under the 2011 Term Loan have been paid), while the amount to be applied to the Acquisition Term Loan will be used to reduce Products Corporation's future annual amortization payments (which are payable in equal quarterly installments) on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019.
Amended2016 Revolving Credit Facility
Availability under the AmendedAgreement.  The 2016 Revolving Credit Facility varies basedis guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon on a borrowing base that is determined by the valuelimited recourse basis.  The obligations of eligible trade receivables and eligible inventory in the U.S.Revlon, Products Corporation and the U.K.subsidiary guarantors under the 2016 Revolving Credit Facility are secured by pledges of the equity of Products Corporation held by Revlon and eligiblethe equity of Products Corporation’s restricted subsidiaries held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% of the voting equity interests of such entity) and by substantially all tangible and intangible personal and real property of Products Corporation and equipment in the U.S. from timesubsidiary guarantors (subject to time.
In January 2014, the Colomer U.S. Subsidiaries became additionalcertain exclusions).  The obligors and guarantors under Products Corporation’s Amended Term Loan Facility and Amendedthe 2016 Revolving Credit Facility and the 5¾% Senior Notes Indenture. In January and May 2015, the New U.S. Subsidiaries became additional guarantors under such debt instruments. In connection with becoming guarantors, substantially all of the assets of such subsidiaries were pledged as collateral under Products Corporation’s Amended2016 Term Loan Facility and Amendedare identical.  The liens on the 2016 Revolving Facility Collateral securing the 2016 Revolving Credit Facility thereby increasingrank first in priority to the value ofliens thereon securing the assets supporting2016 Term Loan Facility, which rank second in priority on such collateral.  The liens on the Term Loan Collateral securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility, which rank first in priority on such collateral.

Interest and Fees: Under the 2016 Revolving Credit Facility, interest is payable quarterly and accrues on borrowings under such facility 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%, 1.50% 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), at Products Corporation’s option. The applicable margin decreases as average excess availability under the Amended Revolving Credit Facility.
If the value of the eligible assets is not sufficient to support the $175.0 million borrowing base under the Amended2016 Revolving Credit Facility increases.  Products Corporation will not have full accessis obligated to pay certain fees and expenses in connection with the Amended Revolving Credit Facility. Products Corporation’s ability to borrow under the Amended2016 Revolving Credit Facility, is also conditioned upon the satisfaction of certain conditions precedent and Products Corporation’s compliance with other covenants in the Amended Revolving Credit Agreement.
In each case subject to borrowing base availability, the Amended Revolving Credit Facility is available to:
(i) Products Corporation in revolving credit loans denominated in U.S. Dollars;
(ii) Products Corporation in swing line loans denominated in U.S. Dollars up to $30.0 million;
(iii) Products Corporation in standby and commercial letters of credit denominated in U.S. Dollars and other currencies up to $60.0 million; and
(iv) Products Corporation and certain of its international subsidiaries designated from time to time in revolving credit loans and bankers’ acceptances denominated in U.S. Dollars and other currencies.
As a result of the August 2013 Revolver Amendment, under the Amended Revolving Credit Facility, borrowings (other than loans in foreign currencies) bear interest, if made as Eurodollar Loans, at the Eurodollar Rate plus the applicable margin set forth in the grid below and, if made as Alternate Base Rate Loans, at the Alternate Base Rate plus the applicable margin set forth in the grid below.
Excess Availability Alternate Base Rate Loans Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
Greater than or equal to $92,000,000 0.50% 1.50%
Less than $92,000,000 but greater than or equal to $46,000,000 0.75% 1.75%
Less than $46,000,000 1.00% 2.00%
Local Loans (as defined in the Amended Revolving Credit Agreement) bear interest, if mutually acceptable to Products Corporation and the relevant foreign lenders, at the Local Rate, and otherwise (i) if in foreign currencies or in U.S. Dollars at the Eurodollar Rate or the Eurocurrency Rate plus the applicable margin set forth in the grid above or (ii) if in U.S. Dollars at the Alternate Base Rate plus the applicable margin set forth in the grid above.
Prior to the termination date of the Amended Revolving Credit Facility, revolving loans are required to be prepaid (without any permanent reduction in commitment) with:
(i) the net cash proceeds from sales of Revolving Credit First Lien Collateral by Products Corporation or any of Products Corporation’s subsidiary guarantors (other than dispositions in the ordinary course of business and certain other exceptions); and
(ii) the net proceeds from the issuance by Products Corporation or any of its subsidiaries of certain additional debt, to the extent there remains any such proceeds after satisfying Products Corporation’s repayment obligations under the Amended Term Loan Facility.
As a result of the August 2013 Revolver Amendment, Products Corporation pays to the lenders under the Amended Revolving Credit Facilityincluding a commitment fee of 0.25% offor any unused amounts. Loans under the average daily unused portion of the Amended2016 Revolving Credit Facility which fee is payable quarterly in arrears. Under the Amendedmay be prepaid without premium or penalty.

Affirmative and Negative Covenants: The 2016 Revolving Credit Facility,Agreement contains affirmative and negative covenants that are similar to those in the 2016 Term Loan Agreement, other than the "available amount basket" (as described above in the description of the 2016 Term Loan Facility); provided, however, under the 2016 Revolving Credit Agreement the Restricted Group will be able to incur unlimited additional junior secured debt and unsecured debt, make unlimited asset sales and dispositions, make unlimited investments and acquisitions, prepay junior debt and make unlimited restricted payments to the extent that certain "payment conditions" for asset-based credit facilities are satisfied.  The 2016 Revolving Credit Agreement contains certain customary representations, warranties and events of default.  If Products Corporation also pays:
(i) to foreign lenders a fronting feeCorporation’s "Liquidity Amount" (defined in the 2016 Revolving Credit Agreement as the Borrowing Base less the sum of 0.25% per annum on(x) the aggregate principal amount of specified Local Loans (which fee is retained by foreign lenders out of the portion of the Applicable Margin payable to such foreign lender);
(ii) to foreign lenders an administrative fee of 0.25% per annum on the aggregate principal amount of specified Local Loans;
(iii) to the multi-currency lenders a letteroutstanding extensions of credit commission equal to the product of (a) the Applicable Margin for revolving credit loans that are Eurodollar Rate loans (adjusted for the term that the letter of credit is outstanding) and (b) the aggregate undrawn face amount of letters of credit; and
(iv) to the issuing lender, a letter of credit fronting fee of 0.25% per annum of the aggregate undrawn face amount of letters of credit, which fee is a portion of the Applicable Margin.
As a result of the August 2013 Revolver Amendment, under certain circumstances, Products Corporation has the right to request that the Amended Revolving Credit Facility be increased by up to $100.0 million. The lenders are not committed to provide any such increase.
Under certain circumstances, if and when the difference between (i) the borrowing base under the Amended2016 Revolving Credit Facility, and (ii)(y) any availability reserve in effect on such date) falls below the amounts outstandinggreater of $35 million and 10% of the maximum availability under the Amended2016 Revolving Credit Facility is less than $20.0 million for a period of two consecutive days or more, and until such difference is equal to or greater than $20.0 million for a period of 30 consecutive business days,(a "Liquidity Event Period"), then the Amended Revolving Credit Facility requires Products CorporationRestricted Group will be required to maintain a consolidated fixed charge coverage ratio (the ratio of Products Corporation’s EBITDA minus Capital Expenditurescapital expenditures to Cash Interest Expensecash interest expense for such period) of a minimum of 1.0 to 1.0.
The Amended Revolving Credit Facility matures on1.0 until the earlier of August 14, 2018 andfirst date after 20 consecutive business days for which the date thatLiquidity Amount is 90 days priorequal to the earliest maturity date of any term loans then outstanding under the Amended Term Loan Facility, but not earlieror greater than June 16, 2016.
Covenants and Defaults Applicable to the Amended Term Loan Facility and the Amended Revolving Credit Facility
The Amended Credit Agreements contain various restrictive covenants prohibiting Products Corporation and its subsidiaries from:
(i) incurring additional indebtedness or guarantees, with certain exceptions;
(ii) making dividend and other payments or loans to Revlon, Inc. or other affiliates, with certain exceptions, including among others:
(a) exceptions permitting Products Corporation to pay dividends or make other payments to Revlon, Inc. to enable it to, among other things, pay expenses incidental to being a public holding company, including, among other things, professional fees such as legal, accounting and insurance fees, regulatory fees, such as SEC filing fees and NYSE listing fees, and other expenses related to being a public holding company;
(b) subject to certain circumstances, to finance the purchase by Revlon, Inc. of its Class A Common Stock in connection with the delivery of such Class A Common Stock to grantees under the Fourth Amended and Restated Revlon, Inc. Stock Plan and/or the payment of withholding taxes in connection with the vesting of restricted stock awards under such plan;
(c) subject to certain limitations, to pay dividends or make other payments to finance the purchase, redemption or other retirement for value by Revlon, Inc. of stock or other equity interests or equivalents in Revlon, Inc. held by any current or former director, employee or consultant in his or her capacity as such; and
(d) subject to certain limitations, to make other restricted payments to Products Corporation’s affiliates in an amount up to $10 million per year (plus $10 million for each calendar year commencing with 2011), other restricted payments in an aggregate amount not to exceed $35 million and certain other restricted payments, including without limitation those based upon certain financial tests;
(iii) creating liens or other encumbrances on Products Corporation’s or its subsidiaries’ assets or revenues, granting negative pledges or selling or transferring any of Products Corporation’s or its subsidiaries’ assets, all subject to certain limited exceptions;
(iv) with certain exceptions, engaging in merger or acquisition transactions;
(v) prepaying indebtedness and modifying the terms of certain indebtedness and specified material contractual obligations, subject to certain exceptions;
(vi) making investments, subject to certain exceptions; and
(vii) entering into transactions with Products Corporation’s affiliates involving aggregate payments or consideration in excess of $10 million other than upon terms that are not materially less favorable when taken as a whole to Products Corporation or its subsidiaries as terms that would be obtainable at the time for a comparable transaction or series of similar transactions in arm’s length dealings with an unrelated third person and where such payments or consideration exceed $20 million, unless such transaction has been approved by all of Products Corporation’s independent directors, subject to certain exceptions.
The events of default under each of the Amended Term Loan Agreement and the Amended Revolving Credit Agreement include customary events of default for such types of agreements. For a description of the events of defaults, see Note 11, "Long-Term Debt" to the Consolidated Financial Statements in this Form 10-K.threshold. If Products Corporation is in default under the senior secured leverage ratio under the Amended Term Loan Facility or the consolidated fixed charge coverage ratio under the Amended2016 Revolving Credit Agreement, Products Corporation may cure such default by Products Corporation and/or Revlon issuing certain equity securities to, orand Products Corporation receiving capital contributions from Revlon, Inc. and applyingwith such cash which isbeing deemed to increase EBITDA for the purpose of calculating the applicable ratio. Products Corporation may exercise this cure right no more than two times in any four-quarter period.period, and no more than five times in total during the term of the 2016 Revolving Credit Facility.

Prepayments:Products Corporation was in compliance with all applicable covenantsmust prepay borrowings under the Amended Term Loan Agreement and the Amended2016 Revolving Credit Facility asto the extent that outstanding loans and letters of December 31, 2015. At December 31, 2015,credit exceed availability.  During a Liquidity Event Period, the aggregate principaladministrative agent may apply amounts outstandingcollected in controlled accounts for the repayment of loans under the Acquisition2016 Revolving Credit Facility.  The above descriptions of the terms of the 2016 Term Loan Facility and the 2011 Term Loan were $673.7 million and $662.9 million, respectively, and availability under the $175.0 million Amended2016 Revolving Credit Facility based uponand the calculated borrowing base less $8.8 million of outstanding undrawn letters of creditrelated security and nil then drawn on the Amended Revolving Credit Facility, was $166.2 million. There were no borrowings under the Amended Revolving Credit Facility during 2015.collateral agreements are qualified in their entirety by reference to such agreements, which are attached as exhibits to this Form 10-K.
5¾%6.25% Senior Notes
In February 2013,On August 4, 2016, Revlon Escrow Corporation (the "Escrow Issuer"), which on such date was a wholly owned subsidiary of Products Corporation, completed its offering (the "2013the 6.25% Senior Notes Refinancing"),Offering, pursuant to an exemption from registration under the Securities Act of 1933 (as amended, the "Securities Act"), of $500.0$450 million aggregate principal amount of the 5¾%6.25% Senior Notes. The 5¾%6.25% Senior Notes are unsecured and were issued by the Escrow Issuer to the initial purchasers under the 5¾%6.25% Senior Notes Indenture, to investors at par.between the Escrow Issuer and U.S. Bank National Association, as trustee (the "6.25% Senior Notes Trustee"). The 5¾%6.25% Senior Notes mature on February 15, 2021.August 1, 2024. Interest on the 5¾%6.25% Senior Notes accrues at 5¾%6.25% per annum, paid every six months through maturity on each February 15th1 and August 15th.1. The 5¾%proceeds from the 6.25% Senior Notes were issued pursuantreleased from escrow on the September 7, 2016 Elizabeth Arden Acquisition Date (the "Escrow Release"). On the Elizabeth Arden Acquisition Date, the Escrow Issuer was merged with and into Products Corporation and in connection with the Escrow Release, Products Corporation and certain of its direct and indirect wholly-owned domestic subsidiaries, including Elizabeth Arden and certain of its subsidiaries (collectively, the "6.25% Senior Notes Guarantors"), and the 6.25% Senior Notes Trustee entered into a supplemental indenture (the "6.25% Senior Notes Supplemental Indenture") to the 5¾%6.25% Senior Notes Indenture, dated as of February 8, 2013 (the “Notes Closing Date”), by and amongpursuant to which Products Corporation Products Corporation’s domestic subsidiaries (the “Guarantors”), which also currently guarantee Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility, and U.S. Bank National Association, as trustee. The Guarantors issued guarantees (the “Guarantees”)assumed the obligations of Products Corporation’s obligationsthe Escrow Issuer under the 5¾%6.25% Senior Notes and the 5¾%6.25% Senior Notes Indenture and the 6.25% Senior Notes Guarantors jointly and severally, fully and unconditionally guaranteed the 6.25% Senior Notes on a joint and several, senior unsecured basis. The Colomer U.S. Subsidiaries became additional guarantors in January 2014 and the New U.S. Subsidiaries became additional guarantors in January and May 2015, in each case under Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility and the 5¾%basis (the "6.25% Senior Notes Indenture.Guarantees").  The 6.25% Senior Notes Guarantors are the same entities that are subsidiary guarantors under the 2016 Senior Credit Facilities.

In December 2013,2016, Products Corporation consummated an offer to exchange the original 5¾6.25% Senior Notes for $500$450 million of new 5¾%6.25% Senior Notes, which have substantially the same terms as the original 5¾%6.25% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the “5¾%"6.25% Senior Notes”Notes").
Products Corporation used a portion of the $491.2 million of net proceeds from the issuance of the 5¾% Senior Notes (net of underwriters' fees) to repay and redeem all of the $330.0 million outstanding aggregate principal amount of its 9¾% Senior Secured Notes, as well as to pay $8.6 million of accrued interest. Products Corporation incurred an aggregate of $19.4 million of fees for the applicable redemption and tender offer premiums, related fees and expenses in connection with redemption and repayment of the 9¾% Senior Secured Notes and other fees and expenses in connection with the issuance of the 5¾% Senior Notes. Products Corporation used a portion of the remaining proceeds from the issuance of the 5¾% Senior Notes, together with existing cash, to pay approximately $113.0 million of principal on its 2011 Term Loan in conjunction with the February 2013 Term Loan Amendments. Products Corporation used the remaining balance available from the issuance of the 5¾% Senior Notes for general corporate purposes, including, without limitation, debt reduction transactions, such as repaying to Revlon, Inc. at maturity on October 8, 2013 the Contributed Loan, which Revlon, Inc. used to pay the liquidation preference of Revlon, Inc.'s then outstanding Series A Preferred Stock in connection with its mandatory redemption on such date.
RankingRanking:
The 5¾%6.25% Senior Notes are Products Corporation’s senior, unsubordinated and unsecured obligations, and rank senior in right of payment to any future subordinated obligations of Products Corporation and rankranking: (i) pari passu in right of payment with all of Products Corporation’s existing and future senior debt of Products Corporation. Similarly, each Guarantee is the relevant Guarantor’s joint and several, unsubordinated and unsecured obligation and ranksindebtedness; (ii) senior in right of payment to anyall of Products Corporation’s and the 6.25% Senior Notes Guarantors’ future subordinated obligationsindebtedness; and (iii) effectively junior to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ existing and future senior secured indebtedness, including indebtedness under Products Corporation’s 2016 Senior Credit Facilities, to the extent of the value of the assets securing such Guarantorindebtedness. The 6.25% Senior Notes and ranksthe 6.25% Senior Notes Guarantees are: (i) structurally subordinated to all of the liabilities and preferred stock of any of the Company’s subsidiaries that do not guarantee the 6.25% Senior Notes; and (ii) pari passu in right of payment with all existing and future senior debtliabilities of such Guarantor.the 6.25% Senior Notes Guarantors other than expressly subordinated indebtedness. The Guarantees were issued on a joint and several basis.
The 5¾%6.25% Senior Notes and the 6.25% Senior Notes Guarantees rank effectively junior to Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility, which are secured, as well as indebtedness and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the “Non-Guarantor Subsidiaries”"6.25% Senior Notes Non-Guarantor Subsidiaries"), none of which guarantee the 5¾%6.25% Senior Notes.

Optional RedemptionRedemption:
On and after February 15, 2016, Prior to August 1, 2019, Products Corporation may redeem the 5¾%6.25% Senior Notes may be redeemed at Products Corporation'sits option, at any time as a whole or from time-to-time in part, upon Products Corporation’s payment of an applicable make-whole premium based on the comparable treasury rate plus 50 basis points. Prior to August 1, 2019, up to 40% of the aggregate principal amount of 6.25% Senior Notes may also be redeemed at Products Corporation’s option at any time as a whole or from time-to-time in part, at a redemption price equal to 106.250% of the principal amount thereof, plus accrued and unpaid interest to (but not including) the date of redemption with the proceeds of certain equity offerings and capital contributions (so long as at least 60% of the 6.25% Senior Notes thereafter remain outstanding). On and after August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole, or from time-to-time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to (but not including) the date of redemption, if redeemed during the 12-month period beginning on February 15thAugust 1 of the years indicated below:

Year Percentage
2016 104.313%
2017 102.875%
2018 101.438%
2019 and thereafter 100.000%
Period Optional Redemption Premium Percentage
2019 104.688%
2020 103.125%
2021 101.563%
2022 and thereafter 100.000%
Products Corporation
All redemptions (and notices thereof) may redeembe subject to various conditions precedent, and redemption dates specified in such notices may be extended so that such conditions precedent may be fulfilled (to the 5¾%extent redemption on such dates is otherwise permitted by the 6.25% Senior Notes at its option at any time or from time to time prior to February 15, 2016, as a whole or in part, at a redemption price per 5¾% Senior Note equal to the sum of: (1) the then outstanding principal amount thereof; plus (2) accrued and unpaid interest (if any) to the date of redemption; and plus (3) the applicable premium based on the applicable treasury rate plus 75 basis points.Indenture).
Prior to February 15, 2016, Products Corporation may, from time to time, redeem up to 35% of the aggregate principal amount of the 5¾% Senior Notes and any additional notes with, and to the extent Products Corporation actually receives, the net proceeds of one or more equity offerings from time to time, at 105.75%of the principal amount thereof, plus accrued interest to the date of redemption.
Change of ControlControl:
Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 5¾%6.25% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 5¾%6.25% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to (but not including) the date of repurchase.

Certain CovenantsCovenants:
The 5¾%6.25% Senior Notes Indenture limitsimposes certain limitations on Products Corporation’s and the 6.25% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to:
(i) incur or guarantee additional indebtedness (“Limitation on Debt”);
or issue preferred stock; (ii) pay dividends, make certain investments and make repayments on indebtedness that is subordinated in right of payment to the 5¾%6.25% Senior Notes and make other “restricted payments” (“Limitation on Restricted Payments”);
make certain investments;
"restricted payments;" (iii) create liens on their assets to secure debt;
(iv) enter into transactions with affiliates;
(v) merge, consolidate or amalgamate with another company (“Successor Company”);
company; (vi) transfer and sell assets (“Limitation on Asset Sales”);assets; and
(vii) permit restrictions on the payment of dividends by Products Corporation’s subsidiaries (“Limitation on Dividends from Subsidiaries”).Corporation's subsidiaries.

These covenants are subject to important qualifications and exceptions. The 5¾%6.25% Senior Notes Indenture also contains customary affirmative covenants and events of default.
In addition, if during any period of time the 5¾%6.25% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 5¾%6.25% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants regarding limitations on Limitationdebt, limitations on Debt, Limitationrestricted payments, limitation on Restricted Payments, Limitationguarantees by restricted subsidiaries, limitation on Asset Sales, Limitation on Dividends from Subsidiaries andtransactions with affiliates, certain provisions of the Successor Company covenant.successor company covenant, limitation on asset sales and limitation on dividends from restricted subsidiaries.
Amended Term Loan Facility - Excess Cash Flow Payment
In February 2016, Products Corporation prepaid $23.2 millionof indebtedness, representing 50% of its 2015 "excess cash flow" as defined under, and as required by, the Old Term Loan Agreement. The prepayment was applied on a ratable basis between the principal amounts outstanding at such time under the 2011 Term Loan and the Old Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount then outstanding by $11.5 million to $651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $11.7 million that was applied to the Old Acquisition Term Loan reduced Products Corporation's future annual amortization payments under such loan on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment. The 2011 Term Loan and Old Acquisition Term Loan were completely refinanced and terminated in connection with Products Corporation’s completing the 2016 Senior Credit Facilities and issuing the 6.25% Senior Notes.

Covenants
Products Corporation was in compliance with all applicable covenants under its 5¾% Senior Notes Indenturethe 2016 Credit Agreements as of December 31, 2015 and 2014.

Spanish Government Loan
In connection with2017. As of December 31, 2017, the Colomer Acquisition, the Company acquired the Colomer Group's euro-denominated loan payable to the Spanish government (the "Spanish Government Loan"), which loan had $0.6 million aggregate principal amountamounts outstanding under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility were $1,777.5 million and $157 million, respectively. Availability under the $400 million 2016 Revolving Credit Facility as of December 31, 2015 (based2017 was $193 million, based upon the calculated borrowing base of $381.9 million, less $10.1 million of outstanding undrawn letters of credit, $21.8 million of outstanding checks and $157 million then drawn on foreign exchange ratesthe 2016 Revolving Credit Facility.
Products Corporation was in effectcompliance with all applicable covenants under its Senior Notes Indentures as of such date).  The Spanish Government Loan does not bear interest and is payable in 10 equal installments on June 30th of each year beginning in 2016 through 2025.December 31, 2017.

Impact of Foreign Currency Translation – Venezuela
Revlon Venezuela's net sales are de minimis, representing approximately 1% of the Company’s consolidated net sales for each 2015, 2014 and 2013. At December 31, 2015 and December 31, 2014, Revlon Venezuela's assets represented approximately 1% of the Company’s total assets, respectively.
Venezuela - Highly-Inflationary Economy: Effective January 1, 2010, Venezuela was designated as a highly inflationary economy under U.S. GAAP. As a result, beginning January 1, 2010, the U.S. Dollar is the functional currency for the Company’s subsidiary in Venezuela (“Revlon Venezuela”). As Venezuela is designated as highly inflationary, foreign currency translation adjustments of Revlon Venezuela’s balance sheet have been reflected in the Company's earnings.
Venezuela - Currency Restrictions: Foreign currency restrictions enacted by the Venezuelan government since 2003 have become more restrictive and have impacted Revlon Venezuela’s ability to obtain U.S. Dollars in exchange for Venezuelan Bolivars ("Bolivars") at the official foreign exchange rates from the Venezuelan government and its foreign exchange commission, the Comisiónde Administracion de Divisas (“CADIVI”). In May 2010, the Venezuelan government took control over the previously freely-traded foreign currency exchange market and, in June 2010, replaced it with a new foreign currency exchange system, the Sistema de Transacciones en Moneda Extranjera (“SITME”). In the second quarter of 2011, the Company began using a SITME rate of 5.5 Bolivars per U.S. Dollar (the "SITME Rate") to translate Revlon Venezuela’s financial statements, as this was the rate at which the Company accessed U.S. Dollars in the SITME market during this period. Through December 31, 2012, the Company continued using the SITME Rate to translate Revlon Venezuela’s financial statements.
Venezuela - 2013 Foreign Currency Devaluation: In February 2013, the Venezuelan government announced the devaluation of Bolivars relative to the U.S. Dollar, changing the official exchange rate to 6.3 Bolivars per U.S. Dollar (the "Official Rate"). The Venezuelan government also announced that the SITME foreign currency market administered by Venezuela's central bank would be eliminated, and as a result, the Company began using the Official Rate to translate Revlon Venezuela’s financial statements beginning in 2013. To reflect the impact of the foreign currency devaluation, the Company recorded a one-time foreign currency loss of $0.6 million in earnings in the first quarter of 2013 as a result of the required re-measurement of Revlon Venezuela’s monetary assets and liabilities.
Venezuela - 2014 Foreign Currency Devaluation: In January 2014, the Venezuela government announced that the CADIVI would be replaced by the government-operated National Center of Foreign Commerce (the "CENCOEX"), and indicated that the Sistema Complementario de Administración de Divisas (“SICAD”) market would continue to be offered as an alternative foreign currency exchange. Additionally, a parallel foreign currency exchange system, SICAD II, started functioning in March 2014 and allowed companies to apply for the purchase of foreign currency and foreign currency denominated securities for any legal use or purpose. Throughout 2014, the Company exchanged Bolivars for U.S. Dollars to the extent permitted through the various foreign currency markets available based on its ability to participate in those markets. Prior to June 30, 2014, the Company utilized the Official Rate and following a consideration of the Company's specific facts and circumstances, which included its legal ability and intent to participate in the SICAD II exchange market to import finished goods into Venezuela, the Company determined that it was appropriate to utilize the SICAD II rate of 53 Bolivars per U.S. Dollar (the "SICAD II Rate") to translate Revlon Venezuela’s financial statements beginning on June 30, 2014. As a result, the Company recorded a foreign currency loss of $6.0 million in the second quarter of 2014 related to the required re-measurement of Revlon Venezuela’s monetary assets and liabilities. For 2014, the change to the SICAD II Rate of 53 Bolivars per U.S. Dollar, as compared to the Official Rate of 6.3 Bolivars per U.S. Dollar, had the impact of reducing the Company's consolidated net sales by $16.2 million and reducing the Company's consolidated operating income by $8.4 million.

Venezuela - 2015 Foreign Currency Devaluation: In February 2015, the Venezuela government introduced a new foreign currency exchange platform, the Marginal Currency System ("SIMADI"), which created a third new mechanism to exchange Bolivars for U.S. Dollars through private brokers. SIMADI replaced the SICAD II system and started operating on February 12, 2015. As a result, the Company considered its specific facts and circumstances in order to determine the appropriate rate of exchange to translate Revlon Venezuela’s financial statements. Through December 31, 2015, the Company has not participated in the SIMADI exchange market; however, given the elimination of the SICAD II system, the Company determined that it was appropriate to use the SIMADI rate of 193 Bolivars per U.S. Dollar (the "SIMADI Rate") to translate Revlon Venezuela’s balance sheet beginning on March 31, 2015.
As a result of the change from the SICAD II Rate to the SIMADI Rate on March 31, 2015, the Company was required to re-measure all of Revlon Venezuela’s monetary assets and liabilities at the SIMADI Rate. Using the SIMADI Rate, the Company recorded a foreign currency loss of $1.9 million in the first quarter of 2015 as a result of the required re-measurement of Revlon Venezuela’s balance sheet. During the second quarter of 2015, the Company exited its business operations in Venezuela and changed to a distributor model. Current or additional governmental restrictions, worsening import authorization controls, price and profit controls or labor unrest in Venezuela could impact the Company's ability to sell to the distributor in Venezuela.
Sources and Uses
The Company’s principal sources of funds are expected to be operating revenues, cash on hand and funds available for borrowing under the Amended2016 Revolving Credit Facility and other permitted lines of credit. The Amended2016 Credit Agreements and the 5¾% Senior Notes IndentureIndentures contain certain provisions that by their terms limit Products CorporationCorporation's and its subsidiaries’ ability to, among other things, incur additional debt.
The Company’s principal uses of funds are expected to be the payment of operating expenses, including expensespayments in connection with the continued execution ofCompany's synergy and integration programs related to the Company’s business strategy;Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company’s restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions), if any; severance not otherwise included in the Company’s restructuring programs; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories.territories and/or channels of trade. The Company’s cash contributions to its pension and post-retirement benefit plans in 20152017 were $18.1$8.5 million. The Company expects that cash contributions to its pension and post-retirement benefit plans towill be approximately $20$10 million in the aggregate for 2016.2018. The Company’s cash taxes paid in 20152017 were $25.4$0.4 million. The Company expects to pay cash taxes of approximately $55$10 million to $15 million in the aggregate during 2018. On December 22, 2017, the U.S. government enacted the Tax Act, which makes broad and complex changes to the U.S. tax code, including a one-time transition tax on certain non-U.S. earnings, and limitations on tax deductions for 2016. interest expense in 2018 and following years. The Company currently expects that it will not have a transition tax liability due to its deficit in foreign earnings and that the limitation on interest deductibility will not impact the Company's 2018 federal cash taxes due to its net operating loss carryover balance. As a result, the Company currently expects that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018. See Note 16, "Income Taxes," to the Consolidated Financial Statements and Item 1A. Risk Factors - "U.S. income tax reform efforts could have a material impact on the Company's financial condition, results of operations and/or cash flows" in this Form 10-K for a further discussion.
The Company’s purchases of permanent wall displays and capital expenditures in 20152017 were $47.4$65.5 million and $48.3$108.3 million, respectively. Capital expenditures for 2017 included approximately $40 million of spend for the EA Integration Restructuring Program. The Company expects that purchases of permanent wall displays will be approximately $55 million to $70 million during 2018 and expects that capital expenditures towill be approximately $50.0$90 million and $55.0to $110 million respectively, in the aggregate for 2016. See also Note 2, "Business Combinations," for discussion regarding the utilization of funds related to the Company's April 2015 CBB Acquisition.2018.
The Company has undertaken, and continues to assess, refine and implement, a number of programs to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables and accounts payable; and controls on general and administrative spending. In the ordinary course of business, the Company’s source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows.
Continuing to execute the Company’s business strategyinitiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including, without limitation, through licensing transactions), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining the Company’s approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Colomer Acquisition, and CBBthe Cutex Acquisitions and/or the Elizabeth Arden Acquisition. Any of these actions, the intended purpose of which would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities. Any such activities may be funded with cash on hand, funds available under the Amended2016 Revolving Credit Facility 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,time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, inblock 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.
The Company expects that operating revenues, cash on hand and funds available for borrowing under the Amended2016 Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to pay its operating expenses for 2016,2018, including expenses in connection with payments in connection with the execution ofCompany's synergy and integration programs related to the Company’s business strategy,Elizabeth Arden Acquisition, purchases of permanent wall displays, capital expenditure requirements,expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company’s restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any, severance not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, if any, costs related to litigation, and/or discontinuing non-core business lines and/or entering and/or exiting certain territories.territories and/or channels of trade.
There can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis.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. If the Company’s anticipated level of revenues is not achieved because of, among other things, decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Consumer, Professional and/or OtherCompany's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third partythird-party suppliers; changes in consumer purchasing habits, including with respect to retailer preferences and/or among professional salons;sales channels, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America, which continues to have a negative impact on net sales of Revlon color cosmetics, Almay color cosmetics, SinfulColors color cosmetics and Mitchum anti-perspirant deodorant products; inventory management by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; or less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, for synergy and integration programs related to the Elizabeth Arden Acquisition, capital expenditures, restructuring and severance costs, acquisition and integration costs, , costs related to litigation, advertising, promotional and marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses, 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 Amended2016 Credit Agreements and/or the Senior Notes Indentures and in such event the Company could be required to take measures, including, among other things, reducing discretionary spending. (See Item 1A. "Risk Factors - The Company's ability to service its debt and meet its cash requirements depends on many factors, including achieving anticipated levelsFactors" for further discussion 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 financial covenants under the Amended Credit Agreements, which could have a material adverse effect on the Company's business, financial condition and/or results of operations" and certain other risk factors discussing certain risks associated with the company'sCompany's business and indebtedness).indebtedness.)
During February 2018, the Company launched its new ERP system in the U.S., which caused its Oxford, N.C. manufacturing facility to experience service level disruptions that have impacted the Company’s ability to manufacture certain quantities of finished goods and fulfill shipments to several large retail customers in the U.S. In response, the Company has implemented a robust service recovery plan and is making significant progress in resolving these issues. These disruptions have reduced the Company’s accounts receivable on a temporary basis, which has impacted the Company’s borrowing base under the 2016 Revolving Credit Facility. The Company continues to believe that its current sources of liquidity are sufficient. In addition, the Company is negotiating for an expansion of available liquidity with its lenders. See Item 1A. "Risk Factors" regarding the Company’s implementation of its new ERP system and those related to the Company’s substantial indebtedness.


Derivative FinancialFinancial Instruments
Foreign Currency Forward Exchange Contracts
Products Corporation enters into FX Contractsforeign currency forward exchange and option contracts ("FX Contracts") from time to timetime-to-time to hedge certain net cash flows denominated in currencies other than the local currencies of the Company’s foreign and domestic operations. The FX Contracts are entered into primarily for the purpose of hedging anticipated inventory purchases and certain intercompany payments denominated in currencies other than the local currencies of the Company’s foreign and domestic operations and generally have maturities of less than one year. At December 31, 2015,2017, the FX Contracts outstanding had a notional amount of $76.3$147.1 million and a net assetliability fair value of $1.4 million.$1.3 million.
Interest Rate Swap Transaction
In November 2013, Products Corporation executed a forward-starting floating-to-fixed interest rate swap transaction with a 1.00% floor,(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 over a period of three years (the "2013Loan. The 2013 Interest Rate Swap")Swap initially had a floor of 1%, that in December 2016, was amended to 0.75%. In connection with entering into the 2016 Term Loan Facility, the 2013 Interest Swap was carried over to apply to a notional amount of $400 million in respect of indebtedness under such loan for the remaining balance of the term of such swap, which expires in May 2018. The Company initially designated the 2013 Interest Rate Swap as a cash flow hedge of the variability of the forecasted three-month LIBOR interest rate payments related to the $400 million notional amount under Products Corporation'sthe Old Acquisition Term Loan over the three-year term of the 2013 Interest Rate Swap. Commencing inSwap (and subsequently to the $400 million notional amount under the 2016 Term Loan Facility through May 2015,2018. Under the terms of the 2013 Interest Rate Swap, Products Corporation receives from the counterparty a floating interest rate based on the higher of three-month U.S. Dollar LIBOR or 1.00%,the floor percentage in effect, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which, with respect to the 2016 Term Loan Facility, effectively fixes the interest rate on such notional amount at 5.0709% over5.5709% through May 2018). At December 31, 2017 and December 31, 2016, the three-year termfair value of the 2013 Interest Rate Swap). ForSwap was a liability of $0.9 million and $4.7 million, respectively.
As a result of completely refinancing the year ended December 31, 2015Old Acquisition Term Loan with a portion of the proceeds from Products Corporation's consummation of the 2016 Senior Credit Facilities and the 6.25% Senior Notes in connection with consummating the Elizabeth Arden Acquisition, the critical terms of the 2013 Interest Rate Swap no longer matched the terms of the underlying debt under the 2016 Term Loan Facility. At the refinancing date, or the September 7, 2016 Elizabeth Arden Acquisition Date (the "De-designation Date"), the 2013 Interest Rate Swap was deemeddetermined to no longer be highly effective and therefore the changes in fair value related toCompany discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap, have been recordedchanges in Other Comprehensive (Loss) Income in the Consolidated Financial Statements. The fair value are accounted for as a component of other non-operating expenses. Accumulated deferred losses of $1.2 million, or $0.7 million net of tax, at December 31, 2017 that were previously recorded as a component of accumulated other comprehensive loss will be amortized into earnings through the expiration of the Company's 2013 Interest Rate Swap at December 31, 2015 and December 31, 2014 was a liability of $6.5 million and $3.5 million, respectively.in May 2018.
Credit Risk
Exposure to credit risk in the event of nonperformance by any of the counterparties to our outstanding hedging instruments is limited to the gross fair value of the derivative instruments in asset positions, which totaled $2.0$0.6 million and $0.2$2.3 million as of December 31, 20152017 and December 31, 2014,2016, respectively. The Company attempts to minimize exposure to credit risk by generally entering into derivative contracts with counterparties that have investment-grade credit ratings and are major financial institutions. The Company also periodically monitors any changes in the credit ratings of its counterparties. Given the current credit standing of the counterparties to the Company's derivative instruments, the Company believes the risk of loss arising from any non-performance by any of the counterparties under these derivative instruments is remote.

36
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)



Disclosures about Contractual Obligations and Commercial Commitments

The following table aggregates all contractual obligations and commercial commitments that affect the Company's financial condition and liquidity position as of December 31, 2015:2017:
 Payments Due by Period
(dollars in millions)		 Payments Due by Period
Contractual Obligations Total Less than 1 year 1-3 years 4-5 years After 5 years Total Less than 1 year 1-3 years 4-5 years After 5 years
Long-term debt, including current portion (a)
 $1,833.7
 $30.0
 $662.8
 $640.8
 $500.1
 $2,885.0
 $175.1
 $36.2
 $536.2
 $2,137.5
Interest on long-term debt (b)
 306.4
 82.8
 135.3
 73.9
 14.4
 812.1
 151.3
 297.6
 247.4
 115.8
Capital lease obligations 5.4
 3.1
 2.0
 0.3
 —
 2.9
 1.4
 1.3
 0.2
 —
Operating leases (c)
 127.1
 22.6
 32.1
 20.5
 51.9
 245.4
 48.0
 70.6
 48.2
 78.6
Purchase obligations (d)
 96.0
 89.5
 2.9
 1.8
 1.8
 329.6
 276.2
 32.6
 18.5
 2.3
Other long-term obligations (e)
 74.2
 55.7
 16.3
 1.2
 1.0
 85.6
 52.2
 23.9
 8.5
 1.0
Total contractual obligations $2,442.8
 $283.7
 $851.4
 $738.5
 $569.2
 $4,360.6
 $704.2
 $462.2
 $859.0
 $2,335.2
(a) 
Consists primarily ofof: (i) the $662.9$1,777.5 million in aggregate principal amount outstanding under the 20112016 Term Loan as of December 31, 2015;Facility; (ii) the $673.7$450 million in aggregate principal amount outstanding under the Acquisition Term Loan as of December 31, 2015;6.25% Senior Notes; and (iii) the $500.0$500 million in aggregate principal amount outstanding under the 5¾%5.75% Senior Notes, in each case as of December 31, 2015.2017.
(b) 
Consists of interest through the respective maturity dates on the outstanding debt discussed in (a) above; based on interest rates under such debt agreements as of December 31, 2015.2017.

41
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


(c) 
Included in the obligations for operating leases as of December 31, 20152017 is the lease for the Company's headquarters in New York City, which includes minimum lease payments in the aggregate of approximately $70 million over the 15-year term.term; a leased distribution and office facility in Roanoke, Virginia; and a leased warehouse and returns processing facility in Salem, Virginia.
(d) 
Consists of purchase commitments for finished goods, raw materials, components, minimum royalty guarantees and services pursuant to enforceable and legally binding obligations which include all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transactions.
(e) 
Consists primarily of media and advertising contracts, pension funding obligations (amount due within one year only, as subsequent pension funding obligation amounts cannot be reasonably estimated since the return on pension assets in future periods, as well as future pension assumptions, are not known), software licensing agreements and obligations related to third-party warehousing and distribution services. Such amounts exclude employment agreements, severance and other immaterial contractual commitments, which severance and other contractual commitments related to restructuring activities are discussed in Note 3, “Restructuring"Restructuring Charges,”" to the Consolidated Financial Statements in this Form 10-K.


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.


Discussion of Critical Accounting Policies
In the ordinary course of its business, the Company has made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of its financial statements in conformity with U.S. generally accepted accounting principles (“("U.S. GAAP”GAAP"). Actual results could differ significantly from those estimates and assumptions. It is also possible that other professionals, applying reasonable judgment to the same set of facts and circumstances, could develop a different conclusion. The Company believes that the following discussion addresses the Company's most critical accounting policies, which are those that are most important to the portrayal of the Company's financial condition and results of operations and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

37
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Allowance for Doubtful Accounts:
The allowance for doubtful accounts is determined based on historical experience and ongoing evaluations of the Company’s receivables and evaluations of the risks of payment. The allowance for doubtful accounts is recorded against trade receivable balances when they are deemed uncollectible. Recoveries of trade receivables previously reserved are recorded in the consolidated statements of incomeoperations and comprehensive (loss) income when received.
Sales Returns:
The Company allows customers, primarily within its Consumer segment,and Elizabeth Arden segments, to return their unsold products when they meet certain company-established criteria as outlined in the Company’s trade terms. The Company regularly reviews and revises, when deemed necessary, the Company’s estimates of sales returns based primarily upon historical product returns experience, planned product discontinuances and promotional sales, which would permit customers to return products based upon the Company’s trade terms. The Company records estimated sales returns as a reduction to sales and cost of sales, and an increase in accrued liabilities and inventories.
Returned products, which are recorded as inventories, are valued based upon the amount that the Company expects to realize upon their subsequent disposition. The physical condition and marketability of the returned products are the major factors the Company considers in estimating realizable value. Cost of sales includes the cost of refurbishment of returned products. Actual returns, as well as realized values on returned products, may differ significantly, either favorably or unfavorably, from the Company’s estimates if factors such as product discontinuances, customer inventory levels or competitive conditions differ from the Company’s estimates and expectations and, in the case of actual product returns, if economic conditions differ significantly from the Company’s estimates and expectations.
Trade Support Costs:
In order to support the retail trade, the Company has various performance-based arrangements with retailers to reimburse them for all or a portion of their promotional activities related to the Company's products. The Company regularly reviews and revises, when deemed necessary, estimates of costs to the Company for these promotions based on estimates of what has been

42
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


incurred by the retailers. Actual costs incurred by the Company may differ significantly if factors such as the level and success of the retailers' programs, as well as retailer participation levels, differ from the Company's estimates and expectations.
Inventories:
Inventories are stated at the lower of cost or marketnet realizable value. Cost is based on standard cost and production variances, which approximates actual cost on the first-in, first-out method. Cost components include direct materials, direct labor and direct overhead, as well as in-bound freight. The Company records adjustments to the value of inventory based upon its forecasted plans to sell its inventories, as well as planned discontinuances. The physical condition (e.g., age and quality) of the inventories is also considered in establishing its valuation. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from the amounts that the Company may ultimately realize upon the disposition of inventories if future economic conditions, customer inventory levels, product discontinuances, sales return levels or competitive conditions differ from the Company's estimates and expectations.
Pension Benefits:
The Company sponsors both funded and unfunded pension and other retirement plans in various forms covering employees who meet the applicable eligibility requirements. The Company uses several statistical and other factors in an attempt to estimate future events in calculating the liability and net periodic benefit income/cost related to these plans. These factors include assumptions about the discount rate, expected long-term return on plan assets and rate of future compensation increases as determined annually by the Company, within certain guidelines, which assumptions would be subject to revisions if significant events occur during the year. The Company uses December 31st as its measurement date for defined benefit pension plan obligations and plan assets.
As of December 31, 2015,The Company applies the Company adopted"full yield curve" approach, an alternative approach from the single weighted-average discount rate approach, to calculatingcalculate the service and interest components of net periodic benefit cost for pension and other post-retirement benefits, the “full yield curve” approach.benefits. Under this method, the discount rate assumption was built through the application of specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows for each of the Company's pension and other retirement plans. Prior to December 31, 2015, the Company estimated the service and interest cost components utilizing a single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. This change does not affect the measurement of the Company's total benefit obligations, as the change in service and interest costs is exactly offset in the actuarial loss (gain) recognized for each year. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. The change has been accounted for as a change in accounting estimate that is inseparable from a change in accounting principle, and accordingly, has been accounted for prospectively.

38
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


The Company utilized a 4.15% weighted average3.47% weighted-average discount rate in 20152017 for the Company's U.S. defined benefit pension plans, compared to a 3.89% weighted average3.92% weighted-average discount rate in 2014.2016. The Company utilized a 3.68% weighted average2.19% weighted-average discount rate for the Company’s international defined benefit pension plans in 2015,2017, compared to a 3.74% weighted average2.66% weighted-average discount rate selected in 2014.2016. The discount rates are used to measure the benefit obligations at the measurement date and the net periodic benefit income/cost for the subsequent calendar year and are reset annually using data available at the measurement date. The changes in the discount rates used for 20152017 were primarily due to observed increasesdecreases in long-term interest yields on high-quality corporate bonds from 2014.during 2017. At December 31, 2015,2017, the increasedecrease in the discount rates from December 31, 20142016 had the effect of decreasingincreasing the Company’s projected pension benefit obligation by approximately $15$24.1 million.
In selecting its expected long-term rate of return on its plan assets, the Company considers a number of factors, including, without limitation, recent and historical performance of plan assets, the plan portfolios' asset allocations over a variety of time periods compared with third-party studies, the performance of the capital markets in recent years and other factors, as well as advice from various third parties, such as the plans' advisors, investment managers and actuaries. While the Company considered both the recent performance and the historical performance of plan assets, the Company’s assumptions are based primarily on its estimates of long-term, prospective rates of return. The difference between actual and expected return on plan assets is reported as a component of accumulated other comprehensive income. Those(loss) income and the resulting gains or losses that are subject to amortizationamortized over future periods will be recognized as a component of the net periodic benefit cost in such future periods.cost. For the Company’s U.S. defined benefit pension plans, the expected long-term rate of return on the pension plan assets used was 7.50%6.5% for 20152017 and 7.75%7% for 2014.2016. The weighted averageweighted-average expected long-term rate of return used for the Company’s international plans was 6.00%4.81% for both 20152017 and 2014.6% for 2016. For 2015,2017, the Company'sactual return on pension plansplan assets realized a loss of $13.9was $53.5 million, as compared with expected return on plan assets of $40.3$28.6 million. The resulting $24.9 million difference, representing a net deferred loss of $54.2 million,gain, when combined with gains and losses from previous years, will be amortized over periods ranging from approximately 10 to 30 years. The actual return on plan assets for 2017 was belowabove expectations, primarily due to lowerhigher returns from investments in developed equity markets, bank loans and bond yields.

43
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


The table below reflects the Company’s estimates of the possible effects that changes in the discount rates and expected long-term rates of return would have had on its 20152017 net periodic benefit costs and its projected benefit obligation at December 31, 20152017 for the Company’s principal defined benefit pension plans, with all other assumptions remaining constant:
 Effect of Effect of Effect of Effect of
 25 basis points increase 25 basis points decrease 25 basis points increase 25 basis points decrease
 Net periodic benefit costs Projected pension benefit obligation Net periodic benefit costs Projected pension benefit obligation Net periodic benefit costs Projected pension benefit obligation Net periodic benefit costs Projected pension benefit obligation
Discount rate $(0.2) $(16.2) $(0.4) $16.8
 $1.1
 $(16.9) $0.8
 $17.7
Expected long-term rate of return (1.7) —
 1.1
 —
 (2.0) —
 0.4
 —
The rate of future compensation increases is another assumption used by the Company’s third partythird-party actuarial consultants for pension accounting. The rate of future compensation increases used for the Company’s projected pension benefit obligation in 20152017 and 2016 was 3.50%, as compared to 3.00% in 20143.5% for the U.S. defined benefit pension plans. Such increase was not applied to the Revlon Employees’ Retirement Plan and the Revlon Pension Equalization Plan, as the rate of future compensation increases is no longer relevant to such plans due to plan amendments whichthat effectively froze these plans as of December 31, 2009.
In addition, the Company's actuarial consultants also use other factors such as withdrawal and mortality rates. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants, among other things. Differences from these assumptions could significantly impact the actual amount of net periodic benefit cost and liability recorded by the Company.
To determine the fiscal 20162018 net periodic benefit income/cost, the Company is using the "full yield curve approach"curve" approach described above to separately calculate discount rates for each of the service and interest components. The following table represents the weighted average discount rates used in calculating each component of service and interest costs for the Company's U.S. and international defined benefit pension plans:
U.S.
Plans
 
International
Plans
U.S.
Plans
 
International
Plans
Interest cost on projected benefit obligation3.31% 3.18%3.07% 2.26%
Service cost4.80% 3.15%3.84% 0.69%
Interest cost on service cost4.32% 2.81%3.59% 0.39%

39
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


For 2016,2018, the Company is using long-term rates of return on pension plan assets of 7.00%6% and 6.00%4.95% for its U.S. and international defined benefit pension plans, respectively. The Company expects that the impact in 2016 of the change in calculating the service and interest components of net periodic benefit cost for pension and other post-retirement benefits following the adoption of the full yield curve approach as discussed above will result in net periodic benefit income of approximately $5.1 million for 2016. The Company expects that the impact of the changes in discount rates and the return on plan assets in 20162018 will result in net periodic benefit expensecost of $3.4$2.5 million for 2016,2018, compared to $1.9$4.1 million of net periodic benefit incomecost in 2015.2017, excluding the curtailment gain.
Goodwill and Acquired Intangible Assets:
In determining the fair values of net assets acquired, including trade names, customer relationships and other intangible assets, and resulting goodwill related to the Company's business acquisitions, the Company considers, among other factors, the analyses of historical financial performance and an estimate of the future performance of the acquired business. The fair values of the acquired intangible assets are primarily calculated using a discounted cash flow approach.
Determining fair value requires significant estimates and assumptions based on an evaluation ofevaluating a number of factors, such as marketplace participants, product life cycles, consumer awareness, brand history and future expansion expectations. There are significant judgments inherent in a discounted cash flow approach, including the selection ofin selecting appropriate discount rates, hypothetical royalty rates, contributory asset capital charges, estimating the amount and timing of estimated future cash flows and identification ofidentifying appropriate terminal growth rate assumptions. The discount rates used in discounted cash flow analyses are intended to reflect the risk inherent in the projected future cash flows generated by the respective acquired intangible assets.
Determining an acquired intangible asset's useful life requires management judgment and is based on an evaluation ofevaluating a number of factors, including the expected use of the asset, consumer awareness, trade name history and future expansion expectations, as well as any contractual provisions that could limit or extend an asset's useful life. The Company believes that an acquired trade name has an indefinite life if it has a history of strong revenue and cash flow performance, and the Company has the intent and ability to support the trade name with marketplace spending for the foreseeable future. If this indefinite-lived criteria is not met, acquired trade names are amortized over their expected useful lives, which generally range from five5 to 20 years.

44
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Goodwill totaled $469.7$692.5 million and $464.1$689.5 million as of December 31, 20152017 and 2014,2016, respectively. As of December 31, 2015, the2017, goodwill of $210.1$216.7 million, $240.7$234 million and $18.9$241.8 million related to the Consumer, ProfessionalElizabeth Arden and OtherProfessional segments, respectively. Indefinite-lived intangibles totaled $95.0$147.9 million and $101.3$243.3 million as of December 31, 20152017 and 2014,2016, respectively.
Goodwill and indefinite-lived intangible assets are not amortized, but rather are reviewed annually for impairment using September 30thOctober 1st carrying values, or when there is evidence that events or changes in circumstances indicate that the current carrying amounts may not be recovered. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to any such excess. Goodwill is tested for impairment at the reporting unit level. The Company establishes its reporting units based on its current reporting structure, product characteristics and management. Within the Consumer segment, the Company has identified two reporting units: (i) "Global Color Brands,"GCB, which includeincludes the SinfulColors and Pure Ice nail enamel brands; and (ii) "Revlon, Almay and Other," which includes the remainder of the Company's Consumer brands and does not include brands of the Company's Elizabeth Arden and Other reportable segment.segments. The Company's other reporting units are consistent with the reportable segments identified in Note 18, “Segment19, "Segment Data and Related Information.”" For purposes of testing goodwill for impairment, goodwill has been allocated to each reporting unit to the extent that goodwill relates to each reporting unit.
For 2015,2017, the Company utilized the two-step process, as prescribed by ASCAccounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other, to test the GCB reporting unit for impairment. The shift in orderconsumer behavior challenging the brick-and-mortar retail channel contributed to identify potential impairmentcontinued consumption and net sales declines for each of itsboth brands comprising the GCB reporting units.unit. In the first step of this test, the Company compared the fair value of each of the Company's reporting units,GCB, determined based upon discounted estimated future cash flows, to the respectiveits carrying amount, including goodwill. Where the fair value of such reporting unit exceeded the carrying amount, no further work was required and no impairment loss was recognized. The results of the step one test indicated that impairment indicators may have existed for the Company's Global Color BrandsGCB reporting unit as a result of the observed decline in sales of the Pure Ice nail enamel brand, primarily driven by the effects of declines in the promotional activity for the Pure Ice brand at retailers, and accordingly, the Company performed step two of the goodwill impairment test for this reporting unit.
In the second step, the Company measured the potential impairment of GCB reporting unit by comparing its implied fair value with the carrying amount of its goodwill at October 1, 2017. The implied fair value of the Global Color BrandsGCB reporting unit’s goodwill with the carrying amount of the goodwill at September 30, 2015. The implied fair value ofunit's goodwill was determined in the same manner as the amount of goodwill recognized in a business combination, where the estimated fair value of the GCB reporting unit was allocated to all the assets and liabilities of that reporting unit (including both recognized and unrecognized intangible assets) as if the reporting unitGCB had been acquired in a business combination and the estimated fair value of theGCB reporting unit was the purchase price paid. When the carrying amount of the reporting unit's goodwill is greater than the implied fair value of that reporting unit's goodwill, an impairment loss is recognized within operations. The Company determined the fair value of the Global Color BrandsGCB reporting unit using discounted estimated future cash flows. The weighted averageweighted-average cost of capital used in testing the Global Color BrandsGCB reporting unit for impairment was 13.0%12% with a perpetual growth rate of 2.0%2%. As a result of this annual impairment test, the Company recognized a $9.7an aggregate $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017. Following the recognition of this non-cash goodwill impairment charge, the GCB reporting unit had $14.8 million remaining goodwill as of December 31, 2017.
For 2017, in assessing whether goodwill was impaired in connection with its annual impairment test performed during the fourth quarter of 2017 using October 1st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and the financial performance of the (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts for 2017.
In conjunction with the 2017 annual impairment test, the Company reviewed finite-lived intangible assets for impairment whenever facts and circumstances indicated that their carrying values may not be fully recoverable. This test compares the current carrying values of the intangible assets to the undiscounted pre-tax cash flows expected to result from the use of the assets. Based upon the results of the annual goodwill impairment test for the GCB reporting unit during 2017, the Company performed an impairment review of the finite-lived intangible assets acquired as part of acquiring the SinfulColor and Pure Ice brands. For the year ended December 31, 2017, no impairment was recognized related to the carrying value of the GCB reporting unit's finite or indefinite-lived intangible assets.
For 2016, the Company utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then existing four reporting units: (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other. As a result of the annual impairment testing for 2016, the Company recognized a $16.7 million non-cash goodwill impairment charge related to the Other reporting unit in the fourth quarter of 2016.
Based upon the results of the annual goodwill impairment test for the Other reporting unit during 2016, the Company performed an impairment review of the finite-lived intangible assets acquired as part of the 2015 CBB Acquisition. As a result of this review, the Company recognized during the fourth quarter of 2016 within the Other reporting unit $4.2 million, $2.0 million and $0.5

4045
REVLON, INC.INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


million of non-cash impairment charges as a result of the Global Color Brandschange in the fair value of customer relationships, distribution rights and trade names, respectively, in the aggregate amount of $6.7 million.
For 2015, the Company utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then existing four reporting units: (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other. As a result of the 2015 annual impairment test, the Company recognized a $9.7 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2015. Following the recognition of the non-cash goodwill impairment charge, the Global Color Brands reporting unit has remaining goodwill in the amount of $25.6 million at December 31, 2015.
As of the date of the latest impairment test, the fair values of the (i) Revlon, Almay and Other; (ii) Professional; and (iii) Other reporting units exceeded their carrying values by approximately $2.5 billion, $310.7 million and $2.2 million, respectively. The Company did not record any impairment of identified intangible assets for the year ended December 31, 2015.
For 2014 and 2013, the Company performed a qualitative assessment to determine whether it would be necessary to perform the two-step goodwill impairment test and to assess the Company's indefinite lived intangible assets for indicators of impairment, and determined that it was more likely than not that the fair value of each of the Company's reporting units and indefinite-lived intangible assets exceeded their carrying amounts. The Company did not record any impairment of goodwill or identifiable intangible assets during the years ended December 31, 2014 or 2013.
See Note 2, “Business Combinations”"Business Combinations," and Note 8, “Goodwill"Goodwill and Intangible Assets, Net”Net," for further discussion of the Company's goodwill and intangible assets.
Income Taxes:
The Company records income taxes based on amounts payable with respect to the current year and includes the effect of deferred taxes. The effective tax rate reflects statutory tax rates, tax-planning opportunities that may be available in various jurisdictions in which the Company operates and the Company’s estimate of the ultimate outcome of various tax audits and issues. Determining the Company’s effective tax rate and evaluating tax positions requires significant judgment.
The Company recognizes deferred tax assets and liabilities for the future impact of differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which management expects that the Company will recover or settle those differences. The realization of the deferred tax assets is primarily dependent on forecasted future taxable income. The Company has establishedestablishes a valuation allowancesallowance for deferred tax assets when management has determineddetermines that it is more likely than not that the Company will not realize a tax benefit.benefit for the deferred tax assets. Any reduction in estimated forecasted future taxable income may require the Company to record valuation allowances against deferred tax assets on which a valuation allowance was not previously established. See “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations - Provision for income taxes,”" for further discussion.
The Company recognizes a tax position in its financial statements when management determines that it iswas more likely than not that the position will be sustained upon examination, based on the merits of such position. The Company recognizes liabilities for unrecognized tax positions in the U.S. and other tax jurisdictions based on an estimate of whether and the extent to which additional taxes will be due. If payment of these amounts is ultimately not required, the reversal of the liabilities would result in additional tax benefits recognized in the period in which the Company determines that the liabilities are no longer required. If the estimate of tax liabilities is ultimately less than the final assessment, this will result in a further charge to expense. The Company recognizes interest and penalties related to income tax matters in income tax expense.
The Company provides for U.S. federal income taxes and foreign withholding taxes on foreign subsidiaries' cumulative undistributed earnings when it is not the Company's intent to indefinitely reinvest such earnings overseas. No provision is made for U.S. income taxes where the Company's plan is to indefinitely reinvest such undistributed earnings from the Company's foreign operations in its overseas operations. If these future foreign earnings are repatriated to the U.S., or if the Company determines that such foreign earnings will be remitted to the U.S. in the foreseeable future, additional U.S. tax provisions may be required. Due to the complexities in the tax laws, including the implications of the Tax Act and the assumptions that would have to be made, it is not practicable to estimate the amounts of income tax provisions that may be required on account of these foreign undistributed earnings.
As previously noted, on December 22, 2017, with the enactment of the Tax Act, the U.S. government enacted comprehensive tax reform that makes broad and complex changes to the U.S. tax code affecting the Company’s fiscal year ended December 31, 2017, including, but not limited to:
1.reducing the U.S. federal corporate tax rate;
2.requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; and
3.imposing a new limitation on the deductibility of interest.

The impact of those changes to the Company's December 31, 2017 fiscal year is estimated to be a non-cash expense of $47.9 million.

The Tax Act also establishes other new tax laws that could affect the Company in future years, including, but not limited to:
1.a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
2.a new provision designed to tax global intangible low-taxed income ("GILTI");
3.increased limitations on the deductibility of certain executive compensation; and
4.changes to net operating loss carryforward periods and annual utilization.

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


For various reasons that are discussed in greater detail in Note 16, "Income Taxes," to the Consolidated Financial Statements in this Form 10-K, the Company has not completed its accounting for the income tax effects of certain elements of the Tax Act. The Company recorded provisional adjustments in cases where the Company was able to make reasonable estimates of the effects of elements of the Tax Act for which its analysis is not yet complete. The Company has not recorded any adjustments for elements of the Tax Act for which the Company was not yet able to make reasonable estimates of the impact of those elements, and has continued accounting for such elements in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act.

Recently Adopted Accounting Pronouncements
In April 2014,March 2016, the FASBFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,2016-09, "Improvements to Employee Share-Based Payment Accounting," which changessimplifies certain aspects of accounting for share-based payment transactions, including transactions in which an employee uses shares to satisfy the requirements for reporting discontinued operations under Accounting Standards Codification Topic 205. Under ASU No. 2014-08, a disposal of a component of an entityemployer’s minimum statutory income tax withholding obligations, forfeitures and income taxes when awards vest or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The standard states that a strategic shift could include a disposal of: (i) a major geographical area of operations; (ii) a major line of business; (iii) a major equity method investment; or (iv) other major parts of an entity. ASU No. 2014-08 no longer precludes presentation as a discontinued operation if: (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations; or (ii) there is significant continuing involvement with a component after its disposal. Additional disclosures about discontinued operations will also be required. The guidance is effective for annual periods beginning on or after December 15, 2014, and is to be applied prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.settled. The Company adopted ASU No. 2014-08 on a prospective basis2016-09 beginning on January 1, 2015, and such adoption did not have an impact on the Company's results of operations, financial condition or financial statement disclosures.

41
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Recently Issued Accounting Standards or Updates Not Yet Effective
In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," which requires deferred income tax assets and liabilities to be classified as noncurrent within a company's balance sheet. Currently, the Company is required to separate deferred income tax assets and liabilities into current and noncurrent amounts on its classified balance sheet, and this update will simplify the presentation by requiring a single, noncurrent amount. The guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU No. 2015-17 beginning on January 1, 20162017 and the adoption of thethis new guidance isdid not expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASU No. 2016-09 resulted in tax withholdings related to net share settlements of restricted stock units and awards in the amount of $3.2 million and $2.8 million for 2016 and 2015, respectively, previously reported in the Consolidated Statement of Cash Flows as a component of cash flows from operating activities, which were reclassified as a component of cash flows from financing activities.
In September 2015,August 2014, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments,2014-15, "Disclosure of Uncertainties about and Entity's Ability to Continue as a Going Concern," which eliminatesrequires an entity to evaluate whether conditions or events, in the current requirementaggregate, raise substantial doubt about the entity's ability to continue as a going concern for an acquirer in a business combinationone year from the date the financial statements are issued or are available to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance is effective for annual periods beginning after December 15, 2015.be issued. The Company adopted ASU No. 2015-16 beginning2014-15 on January 1, 20162017 and the adoption of the newthis guidance isdid not expected to have a material impact on the Company’s results of operations, financial condition and/orCompany's financial statement disclosures.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which simplifies the subsequent measurement of inventories by requiring inventory to be measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU No. 2015-11 beginning on January 1, 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides specific guidance on the presentation of changes in restricted cash and restricted cash equivalents on the statement of cash flows. Under the new standard, the changes in restricted cash and restricted cash equivalents are required to be disclosed in reconciling the opening and closing balances on the statement of cash flows. The Company adopted ASU No. 2016-18 during the fourth quarter of 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures, other than requiring the Company to reconcile its cash balances from its statements of financial position to its statements of cash flows and including restricted cash within the beginning and ending balances of cash within the Company's statement of cash flow.

Recently Issued Accounting Standards or Updates Not Yet Effective
In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which will permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. This new guidance can be applied retrospectively and provides entities with the option to reclassify the amounts. The new guidance is effective for annual and quarterly periods beginning after December 15, 2018, with early adoption permitted, and requires entities to make new disclosures regardless of whether they elect to reclassify tax effects. The Company is in the process of evaluating the impact that this new guidance is expected to have on its financial statements and/or financial statement disclosures.
In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which changes the way that employers present net periodic pension cost ("NPPC") and net periodic postretirement benefit cost ("NPPBC") within the income statement. The amendment requires an employer to present the service cost component of NPPC and NPPBC in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of NPPC and NPPBC would be presented separately from this line item and below any subtotal of operating income; companies will need to disclose the line items used to present these other components of NPPC and NPPBC, if not separately presented in the statement of operations. In addition, only the service cost

47
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


component would be eligible for capitalization in assets. This guidance is effective retrospectively for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU No. 2017-07 beginning as of January 1, 2018, and the Company expects that substantially all of the 2018 projected cost of approximately $9.0 million will be presented below operating income in the Company's 2018 Statement of Operations and Comprehensive (Loss) Income.
In January 2017, the FASB issued ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment," which simplifies the annual goodwill impairment analysis test by eliminating Step 2 of the current two-step impairment test. Under the new guidance, an entity would continue to perform the first step of the annual impairment test by comparing the carrying amount of a reporting unit with its fair value. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the goodwill impairment charge would be equal to the amount of such difference. This guidance is effective for annual periods beginning after December 15, 2016,2019, with early adoption permitted. The Company expects to adopt ASU No. 2015-112017-04 beginning onas of January 1, 2017. The Company2020 and is evaluatingin the process of assessing the impact that thethis new guidance willis expected to have on the Company’s results of operations, financial condition andand/or financial statement disclosures.
In April 2015,January 2017, the FASB issued ASU No. 2015-03, "Simplifying2017-01, "Clarifying the PresentationDefinition of Debt Issuance Costs,a Business," which requiresfurther clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU No. 2017-01 beginning as of January 1, 2018 and expects that this new guidance will not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Receipts and Cash Payments," which aims to standardize how certain transactions are classified within the Statement of Cash Flows, including, among other issues, debt issuanceprepayment and extinguishment costs to be presented in the financial statements asand contingent consideration payments made after a deduction from the corresponding debt liability, consistent with the presentation of debt discounts. Thebusiness combination. This guidance is effective for annual periods beginning after December 15, 2015,2017, with early adoption permitted, and is to be applied retrospectively.permitted. The Company adopted ASU No. 2015-032016-15 beginning onas of January 1, 2018 and expects that this new guidance will not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires lessees to recognize a right-of-use asset and a liability on the balance sheet for all leases, with the exception 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 adjustment such as for 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 will adopt ASU No. 2016-02 beginning as of January 1, 2019 and is in the process of assessing the impact that this new guidance is not expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers,Customers." which supersedes theThis new standard will replace most existing revenue recognition requirementsguidance in the ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification.U.S. GAAP when it becomes effective, as described below. The coreunderlying principle of ASU No. 2014-09this new standard is for companies tothat an entity should recognize revenue fromto depict the transfer of promised goods or services to customers in amountsan amount that reflectreflects the consideration to which the companyentity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also will result in enhanced disclosures about revenue, provide guidanceEntities may adopt this new standard either retrospectively for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. The guidance is effective for annual and interimall periods beginning after December 15, 2017, with early adoption prohibited. The Company expects to adopt ASU No. 2014-09 beginning January 1, 2018 and ispresented in the processfinancial statements (i.e., the full retrospective method) or as a cumulative-effect adjustment as of assessing the impact thatdate of adoption (i.e., the new guidance will have on the Company's results of operations,modified retrospective method), without applying to comparative years’ financial condition and financial statement disclosures.statements.
In August 2014,2015, the FASB issued ASU No. 2014-15, "Disclosure2015-14, "Revenue from Contracts with Customers: Deferral of Uncertainties about an Entity's Ability to Continue asthe Effective Date," which allows for a Going Concern," that will explicitly require management to assess an entity's ability to continue as a going concern and to provide related footnote disclosures if conditions give rise to substantial doubt. According todeferral of the adoption date for ASU No. 2014-15, substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. The likelihood threshold2014-09 until January 1, 2018 and permitted early adoption of "probable," similar to its current use in U.S. GAAP for loss contingencies, will be used to define substantial doubt. Disclosures will be required under ASU No. 2014-15 if conditions give rise to substantial doubt including whether and how management's plans will alleviate2014-09, but not before the substantial doubt. The guidance is effective for annual periods beginning after December 15, 2015, with early adoption prohibited. date of January 1, 2017.
The Company adopted ASU No. 2014-152014-09 beginning as of January 1, 20162018 using the modified retrospective method. While the Company is finalizing its assessment of all potential impacts of ASU No. 2014-09, given the nature of the Company's products and the terms and conditions applicable to sales to its customers, the timing and amount of revenue recognized based on the underlying principles of this new standard are consistent with the Company's revenue recognition policy under previous guidance. As a result, the Company does not currently expect that the adoption of the new guidance is not expected towill have a material impact on the Company’sits revenues, results of operations financial condition and/or financial position. The Company does, however, expect to expand its financial statement disclosures.disclosures in order to comply with the new standard. The Company has drafted its accounting policy with respect to the new standard based on a review of its business. The new policy reflects updates to internal controls and processes to enable the preparation of financial information upon its adoption of ASU No. 2014-09.

48
REVLON, INC AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)



Inflation
The Company's costs are affected by inflation and the effects of inflation that the Company may experience in future periods. Management believes, however, that such effects have not been material to the Company during the past three years in the U.S. and in foreign non-hyperinflationary countries. The Company operates in certain countries around the world, such as Argentina, and Venezuela, which havehas experienced hyperinflation. In hyperinflationary foreign countries, the Company attempts to mitigate

42
REVLON, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


the effects of inflation by increasing prices in line with inflation, where possible, and efficiently managing its costs and working capital levels.




4349
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity

The Company has exposure to changing interest rates, primarily under Products Corporation's Amended Term Loan Facility and its Amended Revolving2016 Senior Credit Facility.Facilities. The Company manages interest rate risk through a combination of fixed and floatingfixed-and-floating rate debt. TheFrom time-to-time, the Company from time to time makes use of derivative financial instruments to adjust its fixed and floatingfixed-and-floating rate ratio, such as with the 2013 Interest Rate Swap.Swap, which expires in May 2018. The Company does not hold or issue financial instruments for speculative or trading purposes.
The table below provides information about the Company's indebtedness as of December 31, 20152017 that is sensitive to changes in interest rates. The table presents cash flows with respect to principal on indebtedness and related weighted averageweighted-average interest rates by expected maturity dates. Weighted averageWeighted-average variable rates are based on implied forward rates in the U.S. Dollar LIBOR yield curve at December 31, 2015.2017. The information is presented in U.S. dollar equivalents, which is the Company's reporting currency:
Expected Maturity Date for the year ended December 31,  Expected Maturity Date for the Year Ended December 31,  
(dollars in millions, except for rate information)  (dollars in millions, except for rate information)  
 2016 2017 2018 2019 2020 Thereafter Total Fair Value December 31, 2015 2018 2019 2020 2021 2022 Thereafter Total Fair Value December 31, 2017
Debt                                
Short-term variable rate (various currencies) $8.6
           $8.6
 $8.6
Short-term variable rate (third party - various currencies) $10.6
           $10.6
 $10.6
Average interest rate (a)
 3.6%               4.1%              
Short-term fixed rate (third party - EUR) 2.7
           2.7
 2.7
 $1.8
           $1.8
 $1.8
Average interest rate 11.6%               11.8%              
Long-term fixed rate – third party (USD)           $500.0
 500.0
 485.0
Long-term fixed rate (third party - USD)       $500.0
   $450.0
 $950.0
 $649.8
Average interest rate           5.75%           5.75%   6.25%    
Long-term fixed rate – third party (EUR) 0.1
 $0.1
 $0.1
 $0.1
 $0.1
 0.1
 0.6
 0.6
Long-term fixed rate (third party - EUR) $0.1
 $0.1
 $0.1
 $0.1
 $0.1
 $—
 $0.5
 $0.5
Average interest rate —% —% —% —% —% —%     —% —% —% —% —% —%    
Long-term variable rate – third party (USD) (b)
 29.9
 $658.2
 6.8
 641.7
     1,336.6
 1,332.4
Long-term variable rate (third party - USD) (b)
 $175.0
 $18.0
 $18.0
 $18.0
 $18.0
 $1,687.5
 $1,934.5
 $1,481.2
Average interest rate (a)(c)
 3.8% 3.7% 4.6% 4.8%         3.5% 5.5% 5.6% 5.7% 5.7% 5.7%    
Total debt $41.3
 $658.3
 $6.9
 $641.8
 $0.1
 $500.1
 $1,848.5
 $1,829.3
 $187.5
 $18.1
 $18.1
 $518.1
 $18.1
 $2,137.5
 $2,897.4
 $2,143.9
(a) 
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at December 31, 2015.
2017.
(b) 
Includes total quarterly amortization payments required withinfor each year under the Acquisition2016 Term Loan as well asFacility and the required $23.2 million "excess cash flow" prepayment to be made on or before April 9, 2016borrowings under the Amended Term Loan Agreement. The 2017 amount includes the aggregate principal amount expected to be outstanding under the 2011 Term Loan which matures on November 19, 2017 and the 2019 amount includes the aggregate principal amount expected to be outstanding under the Acquisition Term Loan assuming a maturity date of October 9, 2019, in each case after giving effect to amortization payments and the excess cash flow prepayment.2016 Revolving Credit Facility.
(c) 
At December 31, 2015,2017, the Acquisitioninterest rate for the 2016 Term Loan bears interest atFacility was the Eurodollar Rate (as defined in the Amended2016 Term Loan Agreement) plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%). The 2011 Term Loan bears interest at the Eurodollar Rate plus 2.5%3.5% per annum (with the Eurodollar Rate not to be less than 0.75%). See Note 11, "Long-Term Debt," to the Consolidated Financial StatementsStatements. At December 31, 2017, the interest rate for the 2016 Revolving Credit Facility was 3.2% per annum, which is based on the Eurodollar Rate plus the applicable margin, as described in this Form 10-K. See "Financial Condition, Liquidity and Capital Resources - 2016 Revolving Credit Facility - Interest and Fees."
If any of LIBOR, Euribor, the base rate, the U.S. federal funds rate or such equivalent local foreign currency 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 Amended2016 Senior Credit AgreementsFacilities and other short-term borrowings (which, in the aggregate, are Products Corporation’s only debt currently subject to floating interest rates) as of December 31, 2015,2017, a 1% increase in both the LIBOR and Euribor rates would increase the Company’s annual interest expense by $9.6approximately $15.7 million.
In November 2013, Products Corporation executedAt December 31, 2017 and December 31, 2016, the fair value of the 2013 Interest Rate Swap which iswas a forward-starting, floating-to-fixed interest rate swap transaction withliability of $0.9 million and $4.7 million, respectively. See "Financial Condition, Liquidity and Capital Resources - Derivative Financial Instruments" for additional detail on the 2013 Interest Rate Swap.
As a 1.00% floor, based on a notional amountresult of $400 million in respect of indebtedness under Products Corporation'scompletely refinancing the Old Acquisition Term Loan over a periodin connection with the Elizabeth Arden Acquisition, the critical terms of three years. The Company designated the 2013 Interest Rate Swap as a cash flow hedgeno longer matched the terms of the variability ofunderlying debt under the forecasted three-month LIBOR interest rate payments related to the $400 million notional amount under Products Corporation's Acquisition2016 Term Loan over the three-year term of the 2013 Interest Rate Swap. Commencing in May 2015, Products Corporation receives from the counterparty a floating interest rate based on the higher ofFacility.

4450
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


three-month U.S. Dollar LIBORAt the De-designation Date, the 2013 Interest Rate Swap was determined to no longer be highly effective and the Company discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap, changes in fair value are accounted for as a component of other non-operating expenses. Accumulated deferred losses of $1.2 million, or 1.00%, while paying$0.7 million net of tax, at December 31, 2017 that were previously recorded as a fixed interest rate paymentcomponent of accumulated other comprehensive loss will be amortized to the counterparty equal to 2.0709% (which effectively fixes the interest rate on such notional amount at 5.0709%earnings over the three-yearremaining term of the 2013 Interest Rate Swap). The fair value of the Company's 2013 Interest Rate Swap at December 31, 2015 was a liability of $6.5 million.through its maturity.

Exchange Rate Sensitivity

The Company manufactures and sells its products in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. In addition, a portion of the Company's borrowings are denominated in foreign currencies, which are also subject to market risk associated with exchange rate movement. The Company, from time to timetime-to-time, hedges major foreign currency cash exposures through foreign exchange forward and option contracts. Products Corporation enters into these contracts with major financial institutions in an attempt to minimize counterparty risk. These contracts generally have a duration of less than 12 months and are primarily against the U.S. Dollar. In addition, Products Corporation enters into foreign currency swaps to hedge intercompany financing transactions. The Company does not hold or issue financial instruments for speculative or trading purposes.

The table below shows the notional, contract and fair values of the forward contracts as of December 31, 2017:
Forward Contracts (“FC”) 
Average Contractual Rate
$/FC
 Original U.S. Dollar Notional Amount 
Contract Value
December 31, 2015
 Asset (Liability) Fair Value December 31, 2015
Forward Contracts ("FC") 
Average Contractual Rate
$/FC
 U.S. Dollar Equivalent Notional Amount 
Contract Value
December 31, 2017
 
Asset (Liability) Fair Value
December 31, 2017
Sell British Pound/Buy USD 1.5253 $21.4
 $22.1
 $0.7
 1.3228
 30.5
 29.8
 (0.7)
Sell Canadian Dollars/Buy USD 0.7856
 27.3
 27.0
 (0.3)
Sell Australian Dollars/Buy USD 0.7221 13.6
 13.6
 —
 0.7724
 23.5
 23.3
 (0.2)
Buy Euro/Sell USD 1.1882
 17.7
 17.9
 0.2
Buy Mexican Peso/Sell USD 0.0594 13.1
 12.8
 (0.3) 0.0524
 12.2
 11.6
 (0.6)
Sell Canadian Dollars/Buy USD 0.7639 13.0
 13.7
 0.7
Sell South African Rand/Buy USD 0.0698 4.8
 5.2
 0.4
Sell USD/Buy Swiss Franc 1.0369
 9.6
 9.6
 —
Sell Japanese Yen/Buy USD 0.0083 4.3
 4.3
 —
 0.0091
 7.4
 7.5
 0.1
Buy Euro/Sell British Pound 0.8902
 6.2
 6.2
 —
Sell Danish Krone/Buy USD 0.1592
 4.0
 3.9
 (0.1)
Buy Australian Dollars/Sell NZ dollars 1.0887 3.5
 3.4
 (0.1) 1.0961
 3.2
 3.2
 —
Sell USD/Buy Hong Kong Dollars 7.7508 1.4
 1.4
 —
Sell New Zealand Dollars/Buy USD 0.6583 0.7
 0.7
 —
Sell USD/Buy South African Rand 0.0733
 2.0
 2.2
 0.2
Sell USD/Buy Australian Dollar 0.7708
 1.9
 2.0
 0.1
Sell USD/Buy British Pound 1.3417
 1.0
 1.0
 —
Sell Hong Kong Dollars/Buy USD 7.7499 0.5
 0.5
 —
 7.8108
 0.6
 0.6
 —
Total forward contracts $76.3
 $77.7
 $1.4
   $147.1
 $145.8
 $(1.3)


Item 8. Financial Statements and Supplementary Data

Reference is made to the Index on page F-1 of the Company’s Consolidated Financial Statements and the Notes thereto.


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None.



51
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


Item 9A. Controls and Procedures
(a) Disclosure Controls and Procedures.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 ChiefPrincipal Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the date of filing this Form 10-K, Paul Meister, the Company’s Executive Vice Chairman, was performing the functions of the Company’s Principal Executive Officer. The Company's management, with the participation of the Company's ChiefPrincipal 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 yearperiod covered by this Annual Report on Form 10-K. Based upon such evaluation, the Company’s ChiefPrincipal Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were effective.
(b) Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements in accordance with generally accepted accounting principles and includes those policies and procedures that:

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REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of its assets;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of its financial statements in accordance with generally accepted accounting principles, and that its receipts and expenditures are being made only in accordance with authorizations of its management and directors; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on its financial statements.
Internal control over financial reporting may not prevent or detect misstatements due to its inherent limitations. Management's projections of any evaluation of the effectiveness of internal control over financial reporting as to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 20152017 and in making this assessment used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control-Integrated Framework in accordance with the standards of the Public Company Accounting Oversight Board (United States) (2013).
Revlon, Inc.'sRevlon’s management determined that the Company's internal control over financial reporting was effective as of December 31, 2015.2017.
KPMG LLP, the Company's independent registered public accounting firm that audited the Company's consolidated financial statements included in this Annual Report on Form 10-K for the period ended December 31, 2015,2017, has issued a report on the Company's internal control over financial reporting. This report appears on page F-3.

(c) Changes in Internal Control Over Financial Reporting.Reporting. There have not been any changes in the Company’s internal control over financial reporting during the quarter ended December 31, 20152017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


Item 9B. Other Information

Lorenzo Delpani’s Departure as President and Chief Executive Officer. On February 25, 2016, Lorenzo Delpani informedBecause this Form 10-K is being filed within four business days from the Boarddate of the following reportable events, the Company has made the foregoing disclosure in this Form 10-K rather than in a Form 8-K under Item 5.02 (Departure of Directors that he was resigning his position as President and Chief Executive Officeror Certain Officers; Election of Revlon, Inc. and Products Corporation, effective March 1, 2016. Mr. Delpani will continue to serve as a Director and as a paid advisor for both companies. The Company and Mr. Delpani are continuing to discuss the termsDirectors; Appointment of Mr. Delpani's departure, including arrangements that will be made to ensure an effective transitionCertain Officers; Compensatory Arrangements of his roles and responsibilities.Certain Officers).

Election of Gianni Pieraccioni as Executive Vice President andEmployment Agreement for Debra Perelman, Chief Operating Officer. On February 25, 2016,March 14, 2018, Revlon and RCPC entered into an employment agreement with Debra Perelman (the “COO Employment Agreement”), following her election as the Company’s Board of Directors elected Gianni Pieraccioni as Executive Vice President and Chief Operating Officer that became effective on January 28, 2018. Such appointment was previously reported on a Form 8-K filed with the SEC on January 30, 2018. The term of Revlon, Inc.the COO Employment Agreement is at will.


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REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and Products Corporation, effective immediately. Prior to his election as Executive Vice President and Chief Operating Officer, Mr. Pieraccioni (56) served as the Company’s Executive Vice President and Global President - Revlon Consumer Division since February 2014. Prior to joining the Company, Mr. Pieraccioni served as Executive Vice President and Chief Commercial Officer for Alitalia and as GlobalGeneral Manager at Averna Group. During his long career, Mr. Pieraccioni held several general management, marketing and commercial positions of increasing scope and seniority within the CPG industry, including at U.S.-based companies such as per share amounts)


The Procter & Gamble Company, PepsiCo, Johnson & Johnson, and at European firms such as Sector Group and Binda Group. To reflect his new role and responsibilities, Products Corporation entered into an amendment to Mr. Pieraccioni’s employment agreement, which, among other things,COO Employment Agreement provides that Mr. PieraccioniMs. Perelman will serve as the Company's Executive Vice President andCompany’s Chief Operating Officer at an annual base salary of not less than $1,000,000,$1,125,000, with a target annual bonus opportunity of 100% of hisher base salary (the “COO Target Bonus”) under the Revlon Amended and Restated Executive Incentive Compensation Plan (the “Incentive Compensation Plan”), with the possibility of exceeding such amount based upon over-achievement of the Company’s performance objectives up to a maximum of 200% of her base salary.

Pursuant to the COO Employment Agreement, Ms. Perelman is eligible during her employment with the Company to participate in the Company’s annual long-term incentive programs (“LTIP”) under the Incentive Compensation Plan, with a $1,250,000 target annual award (the “COO LTIP Award”).

Ms. Perelman is also eligible to participate in other benefit and perquisites plans generally made available to the Company’s other senior executives at her level.

Upon termination of Ms. Perelman’s employment due to her death or disability or in the event the Company terminates Ms. Perelman's employment without "cause", Ms. Perelman will be eligible to receive: (i) her annual bonus with respect to the year prior to the year of termination (if not already paid as of the termination date) (the “COO Prior Year Bonus”); (ii) her annual bonus with respect to the year of termination, based on actual performance and pro-rated for the number of days actually worked during such year (the “COO Pro-Rated Bonus”); and (iii) payment in respect of any outstanding LTIP awards, based on actual performance and pro-rated for the number of days actually worked during the applicable performance period (the “COO Pro-Rated LTIP”).

Ms. Perelman is the daughter of Ronald O. Perelman, the Chairman of the Company's Board of Directors. The foregoing description is qualified by reference to the full text of the COO Employment Agreement, which will be filed as an exhibit to the Company’s Form 10-Q for the fiscal quarter ending March 31, 2018.

Election of Victoria Dolan as Chief Financial Officer. On March 1, 2018, the Company’s Board of Directors elected Victoria Dolan as its Chief Financial Officer (“CFO”), effective as of March 12, 2018. Ms. Dolan assumes such role from Chris Peterson, who will continue serving as the Company’s Chief Operating Officer, Operations, with oversight of the Company’s finance, supply chain and IT functions.

Ms. Dolan (58), most recently served as Chief Transformation Officer for The Colgate-Palmolive Company since October 2017. Prior to that role, Ms. Dolan served as Colgate-Palmolive’s Chief Transformation Officer and Corporate Controller from July 2016 to October 2017; Vice President, Corporate Controller and Principal Accounting Officer from February 2011 through July 2016; and Vice President, Finance and Strategic Planning, European and South Pacific Division, from November 2008 through January 2011. Prior to joining Colgate-Palmolive, Ms. Dolan held finance positions at Marriott International, Inc. from 2000 to 2008, The Coca-Cola Company from 1991 to 2000 and Arco Chemical Company from 1985 to 1991. Ms. Dolan received her B.A. in economics and M.B.A. in accounting and finance from the UCLA Anderson School of Management.

To reflect her roles and responsibilities, on March 12, 2018 the Company entered into an employment agreement with Ms. Dolan (the “CFO Employment Agreement”), which, among other things, provides that she will serve as the Company’s CFO at an annual base salary of not less than $600,000, with a target annual bonus under the Incentive Compensation Plan of 75% of her base salary, with the possibility of exceeding such amount based upon the Company’s and/or Mr. Pieraccioni’sher over-achievement of their respectivethe applicable performance objectives. Pursuant to the CFO Employment Agreement, Ms. Dolan’s annual bonus for 2018 will not be less than $450,000. During her employment with the Company, Ms. Dolan is eligible to participate in the Company’s annual LTIPs under the Incentive Compensation Plan. In connection with hisher election as EVP & COO, the Company’s CFO, Revlon’s Compensation Committee approved a supplemental$500,000 LTIP target award opportunity for Ms. Dolan under the Company’s 2018 LTIP, which is payable in March 2021 based on the extent to which the Company achieves certain performance metrics over 2018, 2019 and 2020.

In connection with the CFO Employment Agreement, Revlon’s Compensation Committee approved a grant to Mr. PieraccioniMs. Dolan of restricted shares of Revlon Inc. Class A common stockCommon Stock (the “CFO Restricted Stock Grant”), with a market valuethe number of approximately $1,000,000 based onshares being in an amount equal to $1,500,000 divided by the February 25, 2016 NYSE closing price of Revlon Inc.’s Class A common stock, which grantCommon Stock on March 15, 2018 (the “CFO Grant Date”). The CFO Restricted Stock Grant is scheduledeligible for vesting ratably on each of the first 3 anniversaries of the CFO Grant Date, provided that Ms. Dolan remains employed by the Company on each applicable vesting date, and is subject to vestearlier vesting upon the occurrence of a “change of control.” Ms. Dolan is also eligible to participate in equal installment over 4 years, beginning in March 2016. The Company also increased Mr. Pieraccioni’s housing allowance to $250,000 per annumother benefit and extended such allowance through February 2019. Mr. Pieraccioni's employment agreement was previously filed as Exhibit 10.11perquisites plans generally made available to the Company'sCompany’s other senior executives at her level.

While the term of the CFO Employment Agreement is indefinite, it may be terminated by the Company sooner pursuant to certain termination provisions in the CFO Employment Agreement. If the Company terminates Ms. Dolan’s employment for any reason other than for “cause,” she would be eligible to receive the greater of (a) the benefits provided under the Company’s Executive Severance Pay Plan; and (b) payment of base salary and continuation of medical benefits at the active employee rate for 12 months;

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REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)


prior year bonus (if not already paid); annual bonus for the year of termination, based on actual performance results and pro-rated for the number of days employed during that year (the “Pro-Rated Annual ReportBonus”); payment of the 2018 LTIP, based on Form 10-K that was filedthe Company’s actual performance results and pro-rated for the number of days employed during the performance period (the “Pro Rated LTIP”); and accelerated vesting of the next unvested tranche of the CFO Restricted Stock Grant, if any. The Executive Severance Pay Plan currently provides for base salary continuation for 12 months, plus an additional 2 weeks of base salary for each full year of service with the SEC on March 12, 2015Company, up to a total of 18 months.

Upon a change of control, the term of the CFO Employment Agreement would be extended for 24 months from the effective date of such change of control and described inif, within such period, Ms. Dolan terminated her employment for “COC good reason” or if the Company’s annual Proxy Statement filed withCompany terminated her employment other than for “cause,” she would receive: (i) 2 times the SEC on April 21, 2015. Mr. Pieraccionisum of (a) her base salary and (b) her average gross bonus earned over the previous 5 years; (ii) 24 months’ continuation of fringe benefits; and (iii) all of her unvested restricted shares would immediately vest.

Ms. Dolan does not have any family relationships with any of the Company'sCompany’s directors or executive officers and is not a party to any transactions listed in Item 404(a) of Regulation S-K.

Roberto Simon Supplemental Payment. As previously disclosed The foregoing description is qualified by reference to the Company in its Quarterly Report onfull text of the CFO Employment Agreement, which will be filed as an exhibit to the Company’s Form 10-Q that was filed withfor the SEC on November 4, 2015, Roberto Simon, the Company’s Executive Vice President and Chief Financial

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REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)

Officer, tendered his resignation from Revlon, Inc. and Products Corporation effective on or about February 26, 2016. In recognition of Mr. Simon’s effective management of the Company's financial, accounting and treasury functions through his departure date, including overseeing the close of the Company's 2015 fiscal year-end and the filing of its Annual Report on Form 10-K with the SEC on February 26, 2016, the Compensation Committee of the Company's Board of Directors approved a supplemental payment of $350,000 to Mr. Simon. Mr. Simon's separation agreement with Products Corporation, dated as of November 3, 2015, was previously described in and filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 4, 2015.quarter ending March 31, 2018.



Forward-Looking Statements
This Annual Report on Form 10-K for the yearperiod ended December 31, 20152017, as well as the Company's other public documents and statements, of the Company,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’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;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 care products in one or more of the Consumer, Professional and/or OtherCompany's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third partythird-party suppliers, changes in consumer purchasing habits, including with respect to retailer preferences and/or among professional salons;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; 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 pension expense under its benefit plans, acquisition and acquisition-related integration costs, capital expenditures, costs related to the Company’s synergy and integration programs in connection with the Elizabeth Arden Acquisition, restructuring and severance costs, costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
(iii)the Company's belief that the continued execution ofcontinuing to execute its business strategyinitiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands including(including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the CBBColomer Acquisition, and related non-restructuring costs,the Cutex Acquisitions and/or the Elizabeth Arden Acquisition, any of which, 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, which activities may be funded with cash on hand, funds available under the Amended2016 Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt;
(iv)certain beliefs and expectations regarding actions that the Company is pursuing to enhance and accelerate its e-commerce and social media penetration, such as the following: (a) the Company’s visionbelief that changes in consumer shopping patterns for beauty products in which consumers have continued to establish Revlon as the quintessentialincreasingly engage with beauty brands through e-commerce and most innovative beauty companyother social media channels have resulted in slower retail traffic in brick-and-mortar stores in the world by offering productsmass retail channel in North America, which has resulted in continuing declines in the brick-and-mortar retail channel, including store closures; (b) the Company’s expectation that, make consumers feel attractiveto address the pace and beautiful and to inspire its consumers to express themselves boldly and confidently; andimpact of this new commercial landscape, the Company's expectations regarding its strategic goal to optimize the market and financial performanceCompany’s shifting of its portfoliobrand marketing spend toward facilitating increased penetration of brandse-commerce and assets by: (a) managing financial drivers for value creation through gross profit margin expansion, which includes optimizing price, allocating sales allowancessocial media channels and its focus on (1) developing and implementing effective content to maximize our return on trade spending, reducing costsenhance its online retail position; (2) improving its consumer engagement across our global supply chainsocial media platforms; and eliminating non-value added general(3) transforming its technology and administrative costs in orderdata to fund reinvestment to facilitate growth; (b) growing profitability through intensive innovation and geographical expansion by creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful, distinctive and ownable; pursuing organic growth opportunities within our existing brand portfolio and among our existing retailers; and pursuing opportunities to expand our geographical presence; (c) improving our cash flows through, among other things, continued effectivesupport efficient management of our working capital and by focusing on appropriate return on capital spending; and (d) attracting, developing and supporting employees who fit into our innovative culture and inspire the creative drive that represents the foundation of our vision and execution of our strategy;its digital infrastructure;
(v)the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities;activities, including, without limitation,limitation: 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 expectation (a) that total restructuringSG&A expenses) and related charges under the December 2013 Program will be(2) recognizing approximately $18.9 million; (b) that cash payments will total approximately $17$90 million related to the December 2013 Program, of which $15.5 million was paid during 2014, $0.1 million was paid in 2015, and the remaining balance is expected to be paid in 2016; (c) the Company's expectation that the 2015 Efficiency Program will drive certain organizational efficiencies across the Company's Consumer and Professional segments and reduce general and administrative expenses within the Consumer and Professional segments; (d) that the Company will recognize a total of approximately $10.1$95 million of restructuring and related charges for the 2015 Efficiency Program by the end of 2017,EA Integration Restructuring Charges (all of which $9.5 million were recognized in 2015; (e) that cash payments related to the 2015 Efficiency Program will total approximately $10.3 million, including $0.2 million for capital expenditures (which capital expenditures are excluded from total restructuring and related charges expected to be recognized for the 2015 Efficiency Program), of which $2.8 million was paid in 2015, $5.8 million is expected to be paid in 2016, and the remaining balance expected to be paid in 2017; and (f) that approximately $3.0 million of cost reductions from the 2015 Efficiency Program benefited 2015 results and that annualized cost reductions thereafter are expected to be cash payments), consisting of: (i) approximately $10.0$65 million to $15.0$70 million by the end of 2018;employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges;
(vi)the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended2016 Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2016,2018, including the cash requirements referred to in item (viii) below, and the Company's beliefs that (a) the cash generated by its domestic operations, andcash on hand, availability under the Amended2016 Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its liquidity needs for at least the next 12 months from the issuance date of this Form 10-K, (b) the cash generated by its domestic operations, cash on hand, availability under the 2016 Revolving Credit Facility and other permitted lines of credit, as well as the option to further settle intercompany loans and payables with certain foreign subsidiaries, should be sufficient to meet its domestic liquidity needs for at least the next 12 months and (b)(c) 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 Amended2016 Revolving Credit Facility and other permitted lines of credit, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending;
(viii)the Company's expected principal uses of funds, including amounts required for the payment of operating expenses, including expenses incurred in connection with continuing to execute the Company’s business initiatives; payments in connection with the continued execution ofCompany’s synergy and integration programs related to the Company’s business strategy;Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); payments in connection with the Company's purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs,costs; cash tax payments,payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; business and/or brand acquisitions including(including, without limitation, through licensing transactions, if any;any); severance not otherwise included in the Company’s restructuring programs; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade (including, without limitation, that the Company may also, from time to time,time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, inblock 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 Company's market-risk sensitive instruments, as well as the Company’s expectations as to the counterparty’s performance, including that any risk of loss under its derivative instruments arising from any non-performance by any of the counterparties is remote;
(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 and accounts payable; the effects of service level disruptions to the Company’s manufacturing operations as a result of the launch of its new ERP system and actions that the Company is taking to implement a service recovery plan; and controls on general and administrative spending;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;year and, with respect to the Tax Act, the Company’s expectation that it will not have a transition tax liability due to its deficit in foreign earnings, that the Tax Act’s limitation on interest deductibility will not impact the Company’s 2018 federal cash taxes due to its net operating loss carryover balance, and that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018;
(xiii)the Company's expectationbelief that it will decide whether to exchange Bolivars for U.S. Dollars to the extent permitted through the CADIVI, CENCOEX and/or SIMADI markets based on its ability to participate in those markets and to the extent reasonable for its businessallegations contained in the future, the Company'sThird Consolidated Amended Class Action Complaint are without merit and its plans to continue to vigorously defend against them and its belief that current or additional governmental restrictions, worsening import authorization controls, price and profit controls or labor unrest in Venezuela could impact the Company's ability to sell to its distributor in Venezuela;
(xiv)the Company’s belief that while 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 its results of operations,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
(xv)(xiv)the Company's expectation that CBB will provide the Company with a platform to develop the Company's presence in the fragrance category and certain estimates used by management in estimating the fair value of the assets acquired in the CBBElizabeth Arden Acquisition and in valuing other assets and liabilities; and
(xv)the Company's expected benefits and other impacts from the Elizabeth Arden Acquisition.

Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language such as "estimates," "objectives," "visions," "projects," "forecasts," "focus," "drive towards," "plans," "targets," "strategies," "opportunities," "assumptions," "drivers," "believes," "intends," "outlooks," "initiatives," "expects," "scheduled to," "anticipates," "seeks," "may," "will" or "should" or the negative of those terms, or other variations of those terms or comparable language, or by discussions of strategies, targets, long-range plans, models or intentions. Forward-looking statements speak only as of the date they are made, and except for the Company's ongoing obligations under the U.S. federal securities laws, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investors are advised, however, to consult any additional disclosures the Company made or may make in its 2017 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 20162018 and 20152017 (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-K, the information available from time to timetime-to-time on such websites shall not be deemed incorporated by reference into this Annual Report on Form 10-K. 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" for further discussion of risks associated with the Company's business). In addition to factors that may be described in the Company's filings with the SEC, including this filing, the following factors, among others, could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company:

(i)unanticipated circumstances or results affecting the Company's financial performance and or sales growth, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Consumer, Professional and/or OtherCompany's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors, and/or decreased performance by third party suppliers;third-party suppliers 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 professional salons;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 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 restructuring or severance costs, acquisition costs and/or acquisition-related integration costs;costs and capital expenditures, including, without limitation, synergy and integration program costs and expenses related to the Elizabeth Arden Acquisition; higher than expected pension expense and/or cash contributions under its benefit plans, costs related to litigation, advertising, promotional and/or marketing expenses or lower than expected results from the Company’s advertising, promotional, pricing and/or marketing plans; higher than expected sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise or decreased sales of the Company’s existing or new products; actions by the Company’s customers, such as greater than expected inventory management and/or de-stocking, and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing, marketing, advertising and/or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including, among other things, business combinations, technological breakthroughs, implementation of new pricing strategies, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
(ii)in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as continued volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
(iii)unanticipated costs or difficulties or delays in completing projects associated with the continued execution ofcontinuing to execute the Company’s business strategyinitiatives or lower than expected revenues or the inability to create value through improving our financial performance as a result of such strategy,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(including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories)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 optimizing the Company's CBBColomer Acquisition, the Cutex Acquisitions and/or the Elizabeth Arden Acquisition (including difficulties or delays in and/or the Company’s inability to optimally integrate the Elizabeth Arden business which could result in less than expected synergies and/or cost reductions, more than expected costs to achieve the expected synergies and/or cost reductions or delays in achieving the expected synergies and/or cost reductions and/or less than expected benefits from the EA Integration Restructuring Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the EA Integration Restructuring Program), as well as the unavailability of cash generated by operations, cash on hand and/or funds under the Amended2016 Revolving Credit Facility or from other permitted additional sources of capital to fund such potential activities;
(iv)difficulties, delays in or less than expected results from the Company’s efforts to optimizeenhance and accelerate its e-commerce and social media penetration, such as: (a) greater than anticipated levels of consumers choosing to purchase their beauty products through e-commerce and other social media channels and/or greater than anticipated declines in the marketbrick-and-mortar retail channel, or either of those conditions occurring at a rate faster than anticipated; (b) the Company’s inability to address the pace and financial performanceimpact of this new commercial landscape, such as its inability to enhance its e-commerce and social media capabilities and/or increase its penetration of e-commerce and social media channels; (c) the Company’s inability to drive a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; (d) difficulties, delays and/or the Company's inability to (in whole or in part): (1) develop and implement effective content to enhance its online retail position; (2) improve its consumer engagement across social media platforms; and/or (3) transform its technology and data to support efficient management of its portfoliodigital infrastructure; and/or (e) the Company incurring greater than anticipated levels of brands and assets dueexpenses and/or debt to facilitate the foregoing objectives, which could result in, among other things, less than effective product development, less than expected acceptance of its new or existing products by consumers, salon professionalsanticipated revenues and/or customers in the Consumer, Professional and/or Other segments, less than expected acceptance of its advertising, promotional, pricing and/or marketing plans and/or brand communication by consumers, salon professionals and/or customers in the Consumer, Professional and/or Other segments, less than expected investment in advertising, promotional and/or marketing activities or greater than expected competitive investment, less than expected levels of advertising, promotional and/or marketing activities for its new product launches and/or less than expected levels of execution with its customers in the Consumer, Professional and/or Other segments or higher than expected costs and expenses, as well as due to: (i) difficulties, delays in or less than expected results from the Company’s efforts to manage financial drivers for value creation, such as due to higher than expected costs; (ii) difficulties, delays in or less than expected results from the Company’s efforts to grow profitability through intensive innovation and geographical expansion, such as less than effective product development and/or difficulties, delays in and/or the Company's inability to consummate transactions to expand its geographical presence; (iii) difficulties, delays in or less than expected results from the Company's efforts to improve its cash flow; and/or (iv) difficulties, delays in and/or the inability to attract or retain employees essential to the execution of its strategy;profitability;
(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 (a) difficulties, delays or the inability of the Company to successfully complete the EA Integration Restructuring Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions; (b) difficulties, delays or the inability of the Company to realize, in whole or in part, the anticipated benefits from the EA Integration Restructuring Program, such as difficulties with, delays in or the Company’s inability to generate certain reductions in its SG&A and/or eliminate certain positions; (c) delays in completing the EA Integration Restructuring Program, which could reduce the benefits realized from such activities; (d) higher than anticipated restructuring charges and/or payments in connection with completing the EA Integration Restructuring Program and/or changes in the expected timing of such charges and/or payments; and/or (e) greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the December 2013 Program, theEA Integration ProgramRestructuring Program; and/or the 2015 Efficiency Program and/or(g) the risk that any of such programsprogram may not satisfy the Company’s objectives;
(vi)lower than expected operating revenues, cash on hand and/or funds available under the Amended2016 Revolving Credit Facility and/or other permitted lines of credit or higher than anticipated operating expenses, such as referred to in clause (viii) below, and/or less than anticipated cash generated by the Company's domestic operations or unanticipated restrictions or taxes on repatriation of foreign earnings;
(vii)the unavailability of funds under Products Corporation's Amended2016 Revolving Credit Facility or other permitted lines of credit; or from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
(viii)higher than expected operating expenses, sales returns, working capital expenses, integration and/or synergy costs related to the Elizabeth Arden Acquisition, permanent wall display costs, capital expenditures, debt service payments, cash tax payments, cash pension plan contributions, other post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, restructuring costs, (including, without limitation, in connection with implementing the EA Integration Restructuring Program), severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, costs related to litigation and/or payments in connection with business and/or brand acquisitions including(including, without limitation, through licensing transactions, if any,any), and discontinuing non-core business lines and/or exiting and/or entering certain territories;territories and/or channels of trade;
(ix)interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments and/or difficulties, delays or the inability of the counterparty to perform such transactions;
(x)difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
(xi)lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
(xii)unexpected significant variances in the Company's tax provision, and effective tax rate;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;
(xiii)difficulties, delays in orunanticipated adverse effects on the Company's inability to exchange Bolivars for U.S. Dollars, whether due to the lackCompany’s business, prospects, results of a market developing for such exchange or otherwiseoperations, financial condition and/or unanticipated adverse impactscash flows as a result of unexpected developments with respect to the Company's results of operations such as due to higher than expected exchange rates; and difficulties or delays in the Company's ability to import certain products through Venezuela's monetary systems (including, without limitation, the CADIVI, CENCOEX and/or SIMADI markets);legal proceedings;
(xiv)unexpected effects on the Company’s business, financial condition and/or its results of operations as a result of legal proceedings;
(xv)difficulties or delays in realizing, or less than anticipated, benefits from the Colomer Acquisition, such as: (a) less than expected cost reductions; (b) more than expected costs to achieve the expected cost reductions; (c) delays in achieving the expected cost reductions, in whole or in part; (d) less than expected growth from the Colomer brands, such as due to difficulties, delays, unanticipated costs or the Company's inability to launch innovative new products within the Professional segment and/or difficulties or delays in and/or the Company's inability to expand its distribution into new retailers; and/or (e) less than expected synergistic benefits to the Company's Consumer segment from the Company having a presence in professional salons; and/or
(xvi)less than expected benefits arising from the Company's CBB Acquisition, such as difficulties in retaining CBB's licensed fragrance brands and/or securing new fragrance licensing opportunities and/or unexpected changes in the fair values of CBB'sthe assets acquired in the Elizabeth Arden Acquisition due to, among other things, unanticipated future performance of the acquired licenses.licenses and/or other brands; and/or
(xv)difficulties with, delays in and/or the Company’s inability to achieve, in whole or in part, or within the expected timeframe the expected benefits from the Elizabeth Arden Acquisition, such as (a) the Company’s or the Elizabeth Arden’s respective businesses experiencing disruptions due to management’s focus on executing the business integration activities and/or due to employee uncertainty during the integration transition period or other factors making it more difficult to maintain relationships with customers, suppliers, employees and other business partners; (b) the Company being unable to successfully implement, in whole or in part, its integration strategies, including the possibility that the expected synergies and cost reductions from the Elizabeth Arden Acquisition will not be realized or will not be realized within the expected time period.

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





Item 10. Directors, Executive Officers and Corporate Governance
A list of Revlon, Inc.'sRevlon's directors and executive officers and biographical information and other information about them may be found under the caption “Proposal"Proposal No. 1 - Election of Directors”Directors" and "Executive Officers," respectively, of Revlon, Inc.'sRevlon's Proxy Statement for the 20162018 Annual Stockholders' Meeting (the “2016"2018 Proxy Statement”Statement"), which sections are incorporated by reference herein.
The information set forth under the caption “Code"Code of Business Conduct and Senior Financial Officer Code of Ethics”Ethics" in the 20162018 Proxy Statement is also incorporated herein by reference.
The information set forth under the caption “Section"Section 16(a) Beneficial Ownership Reporting Compliance”Compliance" in the 20162018 Proxy Statement is also incorporated herein by reference.
The information set forth under the captions “Compensation"Compensation Discussion and Analysis,” “Executive" "Executive Compensation,” “Summary" "Summary Compensation Table,” “Grants" "Grants of Plan-Based Awards," “Outstanding"Outstanding Equity Awards at Fiscal Year-End,” “Option" "Option Exercises and Stock Vested,” “Pension" "Pension Benefits,” “Non-Qualified" "Non-Qualified Deferred Compensation”Compensation" and “Director Compensation”"Director Compensation" in the 20162018 Proxy Statement is also incorporated herein by reference.
Information regarding the Company's director nomination process, audit committee and audit committee financial expert matters may be found in the 20162018 Proxy Statement under the captions "Corporate Governance-Board of Directors and its Committees-Director Nominating Processes; Diversity" and "Corporate Governance-Board of Directors and its Committees-Audit Committee-Composition of the Audit Committee," respectively. That information is incorporated herein by reference.


Item 11. Executive Compensation
The information set forth under the captions “Compensation"Compensation Discussion and Analysis,” “Executive" "CEO Pay Ratio," "Executive Compensation,” “Summary" "Summary Compensation Table,” “Grants" "Grants of Plan-Based Awards,” “Outstanding" "Outstanding Equity Awards at Fiscal Year-End,” “Option" "Option Exercises and Stock Vested,” “Pension" "Pension Benefits,” “Non-Qualified" "Non-Qualified Deferred Compensation”Compensation" and “Director Compensation”"Director Compensation" in the 20162018 Proxy Statement is incorporated herein by reference. The information set forth under the caption “Corporate"Corporate Governance-Board of Directors and its Committees-Compensation Committee-Composition of the Compensation Committee”Committee" and “Compensation"Compensation Committee Report”Report" in the 20162018 Proxy Statement is also incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information set forth under the captions “Security"Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information”Information" in the 20162018 Proxy Statement is incorporated herein by reference.


Item 13. Certain Relationships and Related Transactions, and Director Independence
The information set forth under the captions “Certain"Certain Relationships and Related Transactions”Transactions" and "Corporate Governance-Board of Directors and its Committees-Controlled Company Exemption" and “Corporate"Corporate Governance-Board of Directors and its Committees-Audit Committee-Composition of the Audit Committee,”" respectively, in the 20162018 Proxy Statement is incorporated herein by reference.


Item 14. Principal AccountantAccounting Fees and Services
Information concerning principal accountant fees and services set forth under the caption “Audit Fees”"Audit Fees" in the 20162018 Proxy Statement is incorporated herein by reference.



Website Availability of Reports, Corporate Governance Information and Other Corporate GovernanceFinancial Information
The Company maintains a comprehensive corporate governance program, including Corporate Governance Guidelines for Revlon, Inc.’sRevlon’s Board of Directors, Revlon, Inc.’sRevlon’s Board Guidelines for Assessing Director Independence and charters for Revlon, Inc.’sRevlon’s Audit Committee and Compensation Committee. Revlon Inc. maintains a corporate investor relations website, www.revloninc.com, where stockholders and other interested persons may review, without charge, among other things, Revlon, Inc.'sRevlon's corporate governance materials and certain SEC filings (such as Revlon, Inc.'sRevlon'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

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REVLON, INC. AND SUBSIDIARIES




stock ownership of Revlon, Inc.’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. In addition, under the section of the website entitled, "Corporate Governance," Revlon Inc. posts printable copies of the latest versions of its Corporate Governance Guidelines, Board Guidelines for Assessing Director Independence and charters for Revlon, Inc.'sRevlon's Audit Committee and Compensation Committee, as well as Revlon, Inc.'sRevlon's Code of Conduct and Business Conduct,Ethics, which includes Revlon, Inc.'sRevlon'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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REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)




PART II - OTHER INFORMATION

Item 15. Exhibits and Financial Statement Schedules

Exhibits
(a)List of documents filed as part of this Report:
 (1) Consolidated Financial Statements and Reports of Independent Registered Public Accounting Firm included herein: See Index on page F-1.
 (2) Financial Statement Schedule: See Index on page F-1.
 All other schedules are omitted as they are inapplicable or the required information is furnished in the Company’s Consolidated Financial Statements or the Notes thereto.
 (3) List of Exhibits:
2.Plan of acquisition, reorganization, arrangement, liquidation or succession
2.1Share Sale and Purchase Agreement, dated as of August 3, 2013, by and among Revlon Consumer Products Corporation, (“Products Corporation”), Beauty Care Professional Products Participations, S.A., Romol Hair & Beauty Group, S.L., Norvo, S.L. and Staubinus España, S.L. (incorporated by reference to Exhibit 2.1 to Revlon, Inc.’sRevlon’s Current Report on Form 8-K filed with the SEC on August 5, 2013).
2.2Agreement and Plan of Merger, dated as of June 16, 2016, by and among Revlon, Products Corporation, RR Transaction Corp. and Elizabeth Arden (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Revlon filed with the SEC on June 17, 2016 (the "Revlon June 2016 Form 8-K")).
3.Certificate of Incorporation and By-laws.
3.1Restated Certificate of Incorporation of Revlon, Inc., dated February 25, 2014 (incorporated by reference to Exhibit 3.1 of Revlon Inc.'sRevlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 5, 2014).
3.2Second Amended and Restated By-Laws of Revlon, Inc., dated as of May 1, 2009November 3, 2016 (incorporated by reference to Exhibit 3.1 of Revlon, Inc.’s Currentto Revlon’s Quarterly Report on Form 8-K10-Q for the fiscal quarter ended September 30, 2016 filed with the SEC on April 29, 2009)November 4, 2016 (the "Revlon Q3 2016 Form 10-Q")).
4.Instruments Defining the Rights of Security Holders, Including Indentures.
4.1Third Amended and Restated Term Loan Agreement dated as of May 19, 2011 (the "2011 Term Loan Agreement"), among Products Corporation, as borrower, the lenders party thereto, Citigroup Global Markets Inc. ("CGMI"), J.P. Morgan Securities LLC ("JPM Securities"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse Securities (USA) LLC ("Credit Suisse") and Wells Fargo Securities, LLC ("WFS"), as the joint lead arrangers; CGMI, JPM Securities, Merrill Lynch, Credit Suisse, WFS and Natixis, New York Branch ("Natixis"), as joint bookrunners; JPMorgan Chase Bank, N.A. and Bank of America, N.A., as co-syndication agents; Credit Suisse, Wells Fargo Bank, N.A. and Natixis, as co-documentation agents; and Citicorp USA, Inc. ("CUSA"), as administrative agent and collateral agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on May 20, 2011 (the "Products Corporation May 20, 2011 Form 8-K")).
4.2Amendment No. 1 to Credit Agreement, dated as of February 21, 2013, to the Third Amended and Restated Term Loan Agreement, dated as of May 19, 2011, among Products Corporation, as borrower, CUSA, as Administrative Agent and Collateral Agent, and each lender thereunder (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on February 21, 2013).
4.3Amendment No. 2 to Term Loan Agreement, dated as of August 19, 2013, among Products Corporation, CUSA, as Administrative Agent and Collateral Agent (each as defined therein), and the Lenders (as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on August 19, 2013 (the "Products Corporation August 19, 2013 Form 8-K")).
4.4Incremental Amendment, dated as of August 19, 2013, to the Amended Term Loan Agreement, among Products Corporation, CUSA, as Administrative Agent and Collateral Agent (each as defined therein), and the Lenders (as defined therein) (incorporated by reference to Exhibit 4.2 to the Products Corporation August 19, 2013 Form 8-K).
4.5Third Amended and Restated Revolving Credit Agreement, dated as of June 16, 2011 (the "2011 Revolving Credit Agreement"), among Products Corporation and certain of its foreign subsidiaries, as borrowers, and CGMI and Wells Fargo Capital Finance, LLC ("WFCF"), as the joint lead arrangers; CGMI, WFCF, Merrill Lynch, JPM Securities and Credit Suisse, as joint bookrunners; and CUSA, as administrative agent and collateral agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on June 17, 2011 (the "Products Corporation June 17, 2011 Form 8-K")).

50
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

4.6Amendment No. 1 to Revolving Credit Agreement, dated as of August 14, 2013 ("Amendment No. 1"), among Products Corporation, the Local Borrowing Subsidiaries (as defined therein) from time to time party thereto, CUSA, as Administrative Agent and Collateral Agent (as defined therein), and the Lenders and Issuing Lenders (each as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on August 15, 2013).
4.7Incremental Amendment, dated as of December 24, 2013, to the 2011 Revolving Credit Agreement (as amended by Amendment No. 1), among Products Corporation, the Local Borrowing Subsidiaries (as defined therein) from time to time party thereto, CUSA, as Administrative Agent and Collateral Agent (as defined therein), and the Lenders and Issuing Lenders (each as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on December 24, 2013).
4.8Third Amended and Restated Pledge and Security Agreement dated as of March 11, 2010 among Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of Products Corporation filed with the SEC on March 16, 2010 (the “Products Corporation March 16, 2010 Form 8-K”)).
4.9Third Amended and Restated Intercreditor and Collateral Agency Agreement, dated as of March 11, 2010, among CUSA, as administrative agent for certain bank lenders, U.S. Bank National Association, as trustee for certain noteholders, CUSA, as collateral agent for the secured parties, Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation (incorporated by reference to Exhibit 4.4 to the Products Corporation March 16, 2010 Form 8-K).
4.10Amended and Restated Guaranty, dated as of March 11, 2010, by and among Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation, in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.5 to the Products Corporation March 16, 2010 Form 8-K).
4.11Form of Revolving Credit Note under the 2011 Revolving Credit Agreement (incorporated by reference to Exhibit 4.3 to the Products Corporation June 17, 2011 Form 8-K).
4.12Third Amended and Restated Copyright Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.8 to the Products Corporation March 16, 2010 Form 8-K).
4.13Third Amended and Restated Copyright Security Agreement, dated as of March 11, 2010, among Almay, Inc. and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.9 to the Products Corporation March 16, 2010 Form 8-K).
4.14Third Amended and Restated Patent Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.10 to the Products Corporation March 16, 2010 Form 8-K).
4.15Third Amended and Restated Trademark Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.11 to the Products Corporation March 16, 2010 Form 8-K).
4.16Third Amended and Restated Trademark Security Agreement, dated as of March 11, 2010, among Charles Revson Inc. and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.12 to the Products Corporation March 16, 2010 Form 8-K).
4.17
Form of Term Loan Note under the 2011 Term Loan Agreement (incorporated by reference to Exhibit 4.4 to the Products Corporation May 20, 2011 Form 8-K).

4.18Amended and Restated Term Loan Guaranty, dated as of March 11, 2010, by Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.14 to the Products Corporation March 16, 2010 Form 8-K).
4.19Reaffirmation Agreement, dated as of February 21, 2013, made by Revlon, Inc., Products Corporation and certain of its domestic subsidiaries and acknowledged by CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Products Corporation for the fiscal quarter ended March 31, 2013 filed with the SEC on April 25, 2013 (the “Products Corporation Q1 2013 Form 10-Q”)).

51
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

4.20Reaffirmation Agreement, dated as of August 19, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Term Loan (incorporated by reference to Exhibit 4.4 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2013 filed with the SEC on October 24, 2013 (the "Products Corporation Q3 2013 Form 10-Q")).
4.21Reaffirmation Agreement, dated as of August 14, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Revolving Credit Agreement (incorporated by reference to Exhibit 4.5 to the Products Corporation Q3 2013 Form 10-Q).
4.22Reaffirmation Agreement, dated as of December 24, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Revolving Credit Agreement (incorporated by reference to Exhibit 4.22 to Products Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 5, 2014 (the "Products Corporation 2013 Form 10-K")).
4.23Master Assignment and Acceptance, dated as of May 19, 2011 among certain lenders and Citibank, N.A. (incorporated by reference to Exhibit 4.3 to the Products Corporation May 20, 2011 Form 8-K).
4.24Indenture, dated as of February 8, 2013, among Products Corporation, certain subsidiaries of Products Corporation as guarantors thereto, and U.S. Bank National Association, as trustee, relating to Products Corporation's 5.75% Senior Notes due 2021 (the “5.75%"5.75% Senior Notes”Notes Indenture") (incorporated by reference to Exhibit 4.3 to Products Corporation's Quarterly Report on Form 10-Q for the Productsfiscal period ended March 30, 2013 filed with the SEC on April 25, 2013 (the "Products Corporation Q1 2013 Form 10-Q)10-Q")).
4.254.2Form of 5.75% Senior Notes (included in Exhibit 4.24)4.1) (incorporated by reference to Exhibit 4.4 to the Products Corporation Q1 2013 Form 10-Q).
4.264.3Registration Rights Agreement, dated as of February 8, 2013, among Products Corporation, certain subsidiaries of Products Corporation and CGMI,Citigroup Global Markets Inc. ("CGMI"), as representative of the several initial purchasers of the 5.75% Senior Notes (incorporated by reference to Exhibit 4.5 to the Products Corporation Q1 2013 Form 10-Q).
4.274.4Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of February 8, 2013, among Products Corporation, Revlon Inc. and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.6 to the Products Corporation Q1 2013 Form 10-Q).
4.284.5Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of January 21, 2014, among Products Corporation, Revlon Inc. and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.27 to the Products Corporation 2013 Form 10-K).
4.29Schedules and Exhibits to the 2011 Term Loan Agreement (Confidential information has been omitted from this exhibit and filed separately with the Securities and Exchange Commission. Revlon, Inc. has requested confidential treatment from the Securities and Exchange Commission with respect to this omitted information)(incorporated by reference to Exhibit 4.1 to Products Corporation's QuarterlyAnnual Report on Form 10-Q10-K for the fiscal quarteryear ended MarchDecember 31, 20142013 filed with the SEC on April 30,March 5, 2014 ("Products Corporation's Q1 2014(the "Products Corporation 2013 Form 10-Q"10-K")).
4.304.6Amendment No. 3Third Supplemental Indenture to the 2011 Term Loan Agreement, dated as of February 26, 2014 (incorporated by reference to Exhibit 4.1 to Products Corporation's Current Report on Form 8-K filed with the SEC on February 26, 2014 (the “Products Corporation February 26, 2014 Form 8-K”)).
4.31Reaffirmation Agreement, dated as of February 26, 2014, among Products Corporation, Revlon, Inc., certain of Products Corporation's domestic subsidiaries and CUSA, as administrative agent and collateral agent in connection with Amendment No. 3 to the 2011 Term Loan Agreement (incorporated by reference to Exhibit 4.2 to the Products Corporation February 26, 2014 Form 8-K).
4.32Schedule to Incremental Amendment, dated as of August 19, 2013, to the 2011 Term Loan Agreement, as amended on February 21, 2013 and August 19, 2013 (incorporated by reference to Exhibit 4.4 to Products Corporation's Q1 2014 Form 10-Q).
4.33Schedules and Exhibits to the 2011 Revolving Credit Agreement (Confidential information has been omitted from this exhibit and filed separately with the Securities and Exchange Commission. Revlon, Inc. has requested confidential treatment from the Securities and Exchange Commission with respect to this omitted information)(incorporated by reference to Exhibit 4.5 to Products Corporation's Q1 2014 Form 10-Q).

52
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

4.34Third Supplemental5.75% Senior Notes Indenture, dated as of January 14, 2015, among Realistic Roux Professional Products Inc., Products Corporation, the Guarantors defined in the 5.75% Senior Notes Indenture, and U.S Bank National Association (incorporated by reference to Exhibit 10.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2015, filed with the SEC on July 29, 2015 (the "Products Corporation Q2 2015 Form 10-Q")).
4.354.7Fourth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of May 8, 2015, among RML, LLC, Products Corporation, the Guarantors defined in the 5.75% Senior Notes Indenture, and U.S Bank National Association (incorporated by reference to Exhibit 10.2 to the Products Corporation Q2 2015 Form 10-Q).


REVLON, INC. AND SUBSIDIARIES




10.Material Contracts.
10.1Amended
4.8Escrow Agreement for the 6.25% Senior Notes, dated as of August 4, 2016, by and Restatedamong Revlon Escrow Corporation ("Escrow Corp."), U.S. Bank National Association, as trustee, and Citibank, N.A., as escrow agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Revlon filed with the SEC on August 5, 2016 (the "Revlon August 2016 Form 8-K")).
4.9Indenture for the 6.25% Senior Subordinated Notes, dated as of August 4, 2016 (the "6.25% Senior Notes Indenture"), by and between Escrow Corp. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Revlon August 2016 Form 8-K).
4.10Registration Rights Agreement, dated as of August 4, 2016, by and among Escrow Corp, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and CGMI as representatives of the initial purchasers (incorporated by reference to Exhibit 4.3 to the Revlon August 2016 Form 8-K).
4.11First Supplemental Indenture to the 6.25% Senior Notes Indenture, dated as of September 7, 2016, by and among Products Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Revlon filed with the SEC on September 9, 2016 (the "Revlon September 2016 Form 8-K")).
4.12
Joinder Agreement to the Registration Rights Agreement, dated as of September 7, 2016, by and among Products Corporation, the guarantors party thereto and Merrill Lynch and CGMI, as representatives of the initial purchasers (incorporated by reference to Exhibit 4.2 to the Revlon September 2016 Form 8-K).

4.13Term Loan Agreement, dated as of April 30, 2012,September 7, 2016, by and betweenamong Products Corporation, Revlon (solely for the purposes set forth therein), certain lenders party thereto and Citibank, N.A., as the borrower,administrative agent and MacAndrews & Forbes, as the initial lendercollateral agent (incorporated by reference to Exhibit 10.1 to Products Corporation’s Current Report onthe Revlon September 2016 Form 8-K filed with the SEC on May 1, 2012 (the "Products Corporation May 1, 2012 Form 8-K"))8-K).
10.24.14Administrative Letter Agreement in connection with the Amended and Restated Senior Subordinated Term LoanAsset-Based Revolving Credit Agreement, dated as of April 30, 2012,September 7, 2016, by and among Products Corporation, ascertain local borrowing subsidiaries from time to time party thereto, Revlon (solely for the borrower, MacAndrews & Forbes, as the initial lenderpurposes set forth therein), certain lenders and issuing lenders party thereto and Citibank, N.A., as the administrative agent, for the Non-Contributed Loancollateral agent, issuing lender and swingline lender (incorporated by reference to Exhibit 10.2 to the Products Corporation May 1, 2012Revlon September 2016 Form 8-K).
4.15Term Loan Guarantee and Collateral Agreement, dated as of September 7, 2016, made by each of the signatories thereto in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Term Loan Agreement (incorporated by reference to Exhibit 10.3 to the Revlon September 2016 Form 8-K).
4.16Holdings Term Loan Guarantee and Pledge Agreement, dated as of September 7, 2016, made by Revlon in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Term Loan Agreement (incorporated by reference to Exhibit 10.4 to the Revlon September 2016 Form 8-K).
4.17ABL Guarantee and Collateral Agreement, dated as of September 7, 2016, made by each of the signatories thereto in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Asset-Based Revolving Credit Agreement (incorporated by reference to Exhibit 10.5 to the Revlon September 2016 Form 8-K).
4.18Holdings ABL Guarantee and Pledge Agreement, dated as of September 7, 2016, made by Revlon in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Asset-Based Revolving Credit Agreement (incorporated by reference to Exhibit 10.6 to the Revlon September 2016 Form 8-K).
4.19ABL Intercreditor Agreement, dated as of September 7, 2016, among Citibank, N.A., as ABL Agent, Citibank, N.A., as Initial Term Loan Agent, Revlon, Products Corporation, each subsidiary listed therein or that becomes a party thereto and each Other Term Loan Agent from time to time party thereto (incorporated by reference to Exhibit 10.7 to the Revlon September 2016 Form 8-K).
4.20
Second Supplemental Indenture to the 6.25% Senior Notes Indenture, dated as of February 13, 2017, by and among Products Corporation, Cutex, Inc. (a subsidiary of Products Corporation), the other Subsidiary Guarantors (as defined in the 6.25% Senior Notes Indenture) and U.S. Bank National Association, as trustee under the 6.25% Senior Notes Indenture (incorporated by reference to Exhibit 4.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017 filed with the SEC on May 5, 2017 (the "Products Corporation Q1 2017 Form 10-Q")).

4.21
Fifth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of February 13, 2017, by and among Cutex, Inc., Products Corporation, the other Guarantors (as defined in the 5.75% Senior Notes Indenture) and U.S. Bank National Association, as trustee under the 5.75% Senior Notes Indenture (incorporated by reference to Exhibit 4.2 to the Products Corporation Q1 2017 Form 10-Q).

4.22
Sixth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of May 31, 2017, by and among Products Corporation and various of its subsidiaries, the other Guarantors (as defined in the Indenture ) and U.S. Bank National Association, as trustee under the Indenture (incorporated by reference to Exhibit 4.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2017, filed with the SEC on August 4, 2017).


58
REVLON, INC. AND SUBSIDIARIES




10.Material Contracts.
10.1Tax Sharing Agreement, dated as of June 24, 1992, among MacAndrews & Forbes, Revlon, Inc., Products Corporation and certain subsidiaries of Products Corporation, as amended and restated as of January 1, 2001 (incorporated by reference to Exhibit 10.2 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the SEC on February 25, 2002).
10.410.2Tax Sharing Agreement, dated as of March 26, 2004, by and among Revlon, Inc., Products Corporation and certain subsidiaries of Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004 filed with the SEC on May 17, 2004).
10.510.3Amended and Restated Employment Agreement, dated as of December 12, 2014,March 27, 2016, by and betweenamong Revlon, Products Corporation and Lorenzo DelpaniFabian T. Garcia (incorporated by reference to Exhibit 10.910.1 to Revlon's Current Report on Form 8-K filed with the SEC on March 28, 2016 (the "Revlon March 2016 Form 8-K")).
10.4Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.2 to the Revlon Inc.'sMarch 2016 Form 8-K).
10.5Employment Agreement, dated as of April 12, 2016, by and among Revlon, Products Corporation and Juan R. Figuereo (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on April 12, 2016).
10.6Consulting Agreement by and among Revlon, Products Corporation and E. Scott Beattie, dated as of November 3, 2016 (incorporated by reference to Exhibit 10.1 to the Revlon Q3 2016 Form 10-Q).
10.7Restricted Stock Unit Agreement between Revlon and E. Scott Beattie, dated November 3, 2016 (incorporated by reference to Exhibit 10.2 to the Revlon Q3 2016 Form 10-Q).
10.8Employment Agreement, dated as of October 9, 2014, by and among Revlon, Products Corporation and Gianni Pieraccioni (incorporated by reference to Exhibit 10.11 to Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on March 12, 2015 (the "Revlon Inc. 2014 Form 10-K")).
10.610.9Employment Agreement, dated as of October 9, 2014, between Products Corporation and Gianni Pieraccioni (incorporated by reference to Exhibit 10.11 to the Revlon, Inc. 2014 Form 10-K).
10.7*
First Amendment to Employment Agreement betweenby and among Revlon, Products Corporation and Gianni Pieraccioni, dated as of February 26, 2016.

10.8
Amended and Restated Employment Agreement, dated as of July 28, 2015, between Products Corporation and Roberto Simon2016 (incorporated by reference to Exhibit 10.310.7 to Revlon, Inc.’s QuarterlyRevlon’s Annual Report on Form 10-Q10-K for the fiscal quarteryear ended June 30,December 31, 2015 filed with the SEC on July 29, 2015)February 26, 2016).

10.910.10
Transition and Separation Agreement and Release dated as of November 3, 2015, betweenMarch 1, 2016 by and among Revlon, Products Corporation and Roberto SimonLorenzo Delpani (incorporated by reference to Exhibit 10.1 to Revlon, Inc.’s QuarterlyRevlon's Current Report on Form 10-Q for the fiscal quarter ended September 30, 20158-K filed with the SEC on NovemberMarch 4, 2015)2016).

10.1010.11
Amendment, dated April 21, 2016, to the Transition and Separation Agreement and Release by and among Revlon, Products Corporation and Lorenzo Delpani (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on April 22, 2016).
10.12Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan") (incorporated by reference to Annex A to Revlon, Inc.’sRevlon’s Definitive Information Statement on Schedule 14C filed with the SEC on July 3, 2014).

10.1110.13Form of Restricted Stock Agreement under the Stock Plan (incorporated by reference to Exhibit 10.3 to Revlon's Quarterly Report on Form 10-Q for the Revlon, Inc. Q3fiscal quarter ended September 30, 2014 Form 10-Q)filed with the SEC on October 29, 2014).
10.1210.14Revlon Amended and Restated Executive Incentive Compensation Plan, dated as of March 24, 2016 (incorporated by reference to Annex CD to Revlon, Inc.’sRevlon's Annual Proxy Statement on Schedule 14A filed with the SEC on April 21, 2015)29, 2016).
10.1310.15Amended and Restated Revlon Pension Equalization Plan, amended and restated as of December 14, 1998 (the “PEP”"PEP") (incorporated by reference to Exhibit 10.15 to Revlon, Inc.’sRevlon’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 filed with the SEC on March 3, 1999).
10.1410.16Amendment to the PEP, dated as of May 28, 2009 (incorporated by reference to Exhibit 10.13 to Revlon's Annual Report on Form 10-K for the Revlon, Inc.fiscal year ended December 31, 2009 Form 10-K)filed with the SEC on February 25, 2010).
10.1510.17Executive Supplemental Medical Expense Plan Summary, dated July 2000 (incorporated by reference to Exhibit 10.10 to Revlon, Inc.’sRevlon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the SEC on March 21, 2003).

53
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

10.1610.18Benefit Plans Assumption Agreement, dated as of July 1, 1992, by and among Revlon Holdings, Revlon Inc. and Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992 filed with the SEC on March 12, 1993).
10.17*10.19
Revlon Executive Severance Pay Plan (Restated, Effective September 1, 2017).
10.20
Preferred Stock Repurchase and Warrant Cancellation Agreement, dated June 16, 2016, by and among Revlon, Products Corporation, RR Transaction Corp., Elizabeth Arden, Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (incorporated by reference to Exhibit 10.210.1 to the Revlon Inc.’s QuarterlyJune 2016 Form 8-K).


59
REVLON, INC. AND SUBSIDIARIES




10.21
Employment Agreement, dated as of April 17, 2017, between Revlon, Products Corporation and Christopher Peterson (incorporated by reference to Revlon's Current Report on Form 10-Q for the fiscal quarter ended March 31, 20098-K filed with the SEC on April 30, 2009)17, 2017).

21.Subsidiaries.
*21.1
Subsidiaries of Revlon, Inc.
23.Consents of Experts and Counsel.
*23.1
Consent of KPMG LLP.
24.Powers of Attorney.
*24.1
Power of Attorney executed by Ronald O. Perelman.
*24.2
Power of Attorney executed by E. Scott Beattie.
*24.3
Power of Attorney executed by Alan S. Bernikow.
*24.324.4
Power of Attorney executed by Viet D. Dinh.
*24.4Power of Attorney executed by Meyer Feldberg.Kristin Dolan.
*24.5
Power of Attorney executed by David L. Kennedy.
.
*24.6Power of Attorney executed by Robert K. Kretzman.
*24.724.6
Power of Attorney executed by Ceci Kurzman.
*24.7
Power of Attorney executed by Paul Meister.
*24.8
Power of Attorney executed by Tamara Mellon.
*24.9
Power of Attorney executed by Debra G. Perelman.
*24.10
Power of Attorney executed by Paul Savas.
*24.11
Power of Attorney executed by Barry F. Schwartz.
*24.1124.12
Power of Attorney executed by Jonathan Schwartz.
*24.13
Power of Attorney executed by Cristiana Falcone Sorrell.
*31.1
Certification of Lorenzo Delpani, ChiefPaul Meister, Principal Executive Officer, dated February 26, 2016,March 15, 2018, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
*31.2
Certification of Roberto Simon, ChiefChristopher H. Peterson, Principal Financial Officer, dated February 26, 2016,March 15, 2018, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
32.1 (furnished herewith)
Certification of Lorenzo Delpani, ChiefPaul Meister, Principal Executive Officer, dated February 26, 2016,March 15, 2018, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 (furnished herewith)
Certification of Roberto Simon, ChiefChristopher H. Peterson, Principal Financial Officer, dated February 26, 2016,March 15, 2018, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *99.1
Revlon, Inc. Audit Committee Pre-Approval Policy.
 *101.INSXBRL Instance Document
 *101.SCHXBRL Taxonomy Extension Schema
 *101.CALXBRL Taxonomy Extension Calculation Linkbase
 *101.DEFXBRL Taxonomy Extension Definition Linkbase
 *101.LABXBRL Taxonomy Extension Label Linkbase
 *101.PREXBRL Taxonomy Extension Presentation Linkbase


*Filed herewith.


54
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


REVLON, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
  Page
Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements)

 
F-2
Report of Independent Registered Public Accounting Firm (Internal Control Over Financial Reporting)

 
F-3
Audited Financial Statements:  
Consolidated Balance Sheets as of December 31, 20152017 and 20142016

 
F-4
Consolidated Statements of Income (Loss)Operations and Comprehensive (Loss) Income (Loss) for each of the years in the three-year period ended December 31, 20152017 
F-5
Consolidated Statements of Stockholders' Deficiency for each of the years in the three-year period ended December 31, 2015

2017		 
F-6
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2015

2017		 
F-7
Notes to Consolidated Financial Statements

 
F-8
Financial Statement Schedule:  
Schedule II - Valuation and Qualifying Accounts 
F-64


F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TheTo the Board of Directors and Stockholders
Revlon, Inc.:

Opinion on the ConsolidatedFinancial Statements
We have audited the accompanying consolidated balance sheets of Revlon, Inc. and subsidiaries (the Company) as of December 31, 20152017 and 2014, and2016, the related consolidated statements of income (loss)operations and comprehensive (loss) income, (loss), stockholders’ deficiency, and cash flows for each of the years in the three‑year period ended December 31, 2015.2017, and the related notes and financial statement schedule II (collectively, the “consolidated financial statements”). In connection with our auditsopinion, the consolidated financial statements present fairly, in all material respects, the financial position of the consolidatedCompany as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.
financial statements, weWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial statement schedule II. reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 15, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includesmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 1991.



/s/ KPMG LLP

New York, New York
March 15, 2018




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Revlon, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Revlon, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly,Company maintained, in all material respects, theeffective internal control over financial position of Revlon, Inc. and subsidiariesreporting as of December 31, 2015 and 2014, and2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the resultsCommittee of their operations and their cash flows for eachSponsoring Organizations of the years in the three‑year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidatedfinancial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), Revlon, Inc. and its subsidiaries’ internal control over financial reportingthe consolidated balance sheets of the Company as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by2017 and 2016, the Committeerelated consolidated statements of Sponsoring Organizationsoperations and comprehensive (loss) income, stockholders’ deficiency, and cash flows for each of the Treadway Commission (COSO)years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule II (collectively, the “consolidated financial statements”), and our report dated February 26, 2016March 15, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control overthose consolidated financial reporting.statements.


/s/ KPMG LLP

New York, New York
February 26, 2016


F-2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBasis for Opinion
The Board of Directors and Stockholders
Revlon, Inc.:

We have audited Revlon, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Revlon, Inc. and subsidiaries’Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Revlon, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Revlon, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income (loss) and comprehensive income (loss), stockholders’ deficiency, and cash flows for each of the years in the three-year period ended December 31, 2015, and our report dated February 26, 2016 expressed an unqualified opinion on those consolidated financial statements.


/s/ KPMG LLP

New York, New York
February 26, 2016
March 15, 2018


F-3

Item 1.Audited Financial Statements


REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)
December 31, 2015 December 31, 2014December 31, 2017 December 31, 2016
     
(as adjusted)(a)
ASSETS      
Current assets:      
Cash and cash equivalents$326.9
 $275.3
$87.1
 $186.4
Trade receivables, less allowance for doubtful accounts of $10.5 and $9.3 as of December 31, 2015 and December 31, 2014, respectively244.9
 238.9
Trade receivables, less allowance for doubtful accounts of $13.5 and $11.1 as of December 31, 2017 and December 31, 2016, respectively444.8
 423.9
Inventories183.8
 156.6
497.9
 424.6
Deferred income taxes – current58.0
 58.4
Prepaid expenses and other53.3
 44.6
113.4
 88.8
Total current assets866.9
 773.8
1,143.2
 1,123.7
Property, plant and equipment, net of accumulated depreciation of $271.7 and $250.5 as of December 31, 2015 and December 31, 2014, respectively215.3
 212.0
Deferred income taxes – noncurrent40.3
 53.1
Property, plant and equipment, net of accumulated depreciation of $385.5 and $304.7 as of December 31, 2017 and December 31, 2016, respectively372.7
 320.5
Deferred income taxes138.0
 149.7
Goodwill469.7
 464.1
692.5
 689.5
Intangible assets, net of accumulated amortization of $61.1 and $39.3 as of December 31, 2015 and December 31, 2014, respectively318.0
 327.8
Intangible assets, net of accumulated amortization of $130.9 and $84.8 as of December 31, 2017 and December 31, 2016, respectively592.1
 636.6
Other assets104.1
 113.3
118.4
 103.5
Total assets$2,014.3
 $1,944.1
$3,056.9
 $3,023.5
      
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY      
Current liabilities:      
Short-term borrowings$11.3
 $6.6
$12.4
 $10.8
Current portion of long-term debt30.0
 31.5
170.2
 18.1
Accounts payable201.3
 153.5
336.9
 296.9
Accrued expenses and other272.4
 273.3
412.8
 382.9
Total current liabilities515.0
 464.9
932.3
 708.7
Long-term debt1,803.7
 1,832.4
2,653.7
 2,663.1
Long-term pension and other post-retirement plan liabilities185.3
 200.9
172.8
 184.1
Other long-term liabilities97.8
 90.0
68.5
 82.4
Stockholders’ deficiency:      
Class A Common Stock, par value $0.01 per share; 900,000,000 shares authorized; 54,088,174 and 53,925,029 shares issued as of December 31, 2015 and December 31, 2014, respectively0.5
 0.5
Class A Common Stock, par value $0.01 per share; 900,000,000 shares authorized; 54,556,100 and 53,956,073 shares issued as of December 31, 2017 and December 31, 2016, respectively0.5
 0.5
Additional paid-in capital1,026.3
 1,020.9
1,040.0
 1,033.2
Treasury stock, at cost: 859,921 and 777,181 shares of Class A Common Stock as of December 31, 2015 and December 31, 2014, respectively(13.3) (10.5)
Treasury stock, at cost: 1,114,528 and 1,024,908 shares of Class A Common Stock as of December 31, 2017 and December 31, 2016, respectively(21.7) (19.2)
Accumulated deficit(1,355.7) (1,411.8)(1,560.8) (1,377.6)
Accumulated other comprehensive loss(245.3) (243.2)(228.4) (251.7)
Total stockholders’ deficiency(587.5) (644.1)(770.4) (614.8)
Total liabilities and stockholders’ deficiency$2,014.3
 $1,944.1
$3,056.9
 $3,023.5


(a)Adjusted as a result of the adoption of certain accounting pronouncements as of December 31, 2017. See Note 1, "Description of Business and Summary
of Significant Accounting Policies - Recently Adopted Accounting Pronouncements," for details of these adjustments.


See Accompanying Notes to Audited Consolidated Financial Statements

F-4



REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (LOSS)
(dollars in millions, except share and per share amounts)
Year Ended December 31,Year Ended December 31,
2015 2014 20132017 2016 2015
          
Net sales$1,914.3
 $1,941.0
 $1,494.7
$2,693.7
 $2,334.0
 $1,914.3
Cost of sales667.8
 668.3
 545.1
1,151.3
 917.1
 667.8
Gross profit1,246.5
 1,272.7
 949.6
1,542.4
 1,416.9
 1,246.5
Selling, general and administrative expenses1,002.5
 1,009.5
 731.7
1,467.6
 1,161.0
 1,002.5
Acquisition and integration costs8.0
 6.4
 25.4
52.9
 43.2
 8.0
Restructuring charges and other, net10.5
 21.3
 3.5
33.4
 34.0
 10.5
Goodwill impairment charge9.7
 —
 —
Operating income215.8
 235.5
 189.0
Other expenses, net:     
Impairment charges10.8
 23.4
 9.7
Operating (loss) income(22.3) 155.3
 215.8
Other expenses:     
Interest expense83.3
 84.4
 73.8
149.8
 105.2
 83.3
Interest expense – preferred stock dividends—
 —
 5.0
Amortization of debt issuance costs5.7
 5.5
 5.2
9.1
 6.8
 5.7
Loss on early extinguishment of debt—
 2.0
 29.7
—
 16.9
 —
Foreign currency losses, net15.7
 25.0
 3.7
Foreign currency (gains) losses, net(18.5) 18.5
 15.7
Miscellaneous, net0.4
 1.2
 1.0
0.8
 (0.6) 0.4
Other expenses, net105.1
 118.1
 118.4
Income from continuing operations before income taxes110.7
 117.4
 70.6
Other expenses141.2
 146.8
 105.1
(Loss) income from continuing operations before income taxes(163.5) 8.5
 110.7
Provision for income taxes51.4
 77.8
 46.0
21.8
 25.5
 51.4
Income from continuing operations, net of taxes59.3
 39.6
 24.6
(Loss) income from discontinued operations, net of taxes(3.2) 1.3
 (30.4)
Net income (loss)$56.1
 $40.9
 $(5.8)
Other comprehensive income (loss):

 

 

(Loss) income from continuing operations, net of taxes(185.3) (17.0) 59.3
Income (loss) from discontinued operations, net of taxes2.1
 (4.9) (3.2)
Net (loss) income$(183.2) $(21.9) $56.1
Other comprehensive income:    

Foreign currency translation adjustments, net of tax (a)
(18.1) (24.6) (4.1)9.0
 (0.5) (18.1)
Amortization of pension related costs, net of tax (b)(c)
7.2
 4.5
 7.7
8.1
 7.6
 7.2
Pension re-measurement, net of tax (d)
(6.9) (69.6) 53.3
1.8
 (14.3) (6.9)
Pension settlement, net of tax (e)
17.3
 —
 —
—
 —
 17.3
Revaluation of derivative financial instruments, net of reclassifications into earnings (f)
(1.6) (3.7) 1.5
Other comprehensive (loss) income(2.1) (93.4) 58.4
Total comprehensive income (loss)$54.0
 $(52.5) $52.6
Pension curtailment, net of tax(f)
2.1
 —
 —
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax(g)
2.3
 —
 —
Revaluation of derivative financial instruments, net of reclassifications into earnings, net of tax(h)
—
 0.8
 (1.6)
Other comprehensive income, net23.3
 (6.4) (2.1)
Total comprehensive (loss) income$(159.9) $(28.3) $54.0
          
Basic earnings (loss) per common share:     
Basic (loss) earnings per common share:     
Continuing operations$1.13
 $0.76
 $0.47
$(3.52) $(0.33) $1.13
Discontinued operations(0.06) 0.02
 (0.58)0.04
 (0.09) (0.06)
Net income$1.07
 $0.78
 $(0.11)
Net (loss) income$(3.48) $(0.42) $1.07
          
Diluted earnings (loss) per common share:     
Diluted (loss) earnings per common share:     
Continuing operations$1.13
 $0.76
 $0.47
$(3.52) $(0.33) $1.13
Discontinued operations(0.06) 0.02
 (0.58)0.04
 (0.09) (0.06)
Net income$1.07
 $0.78
 $(0.11)
Net (loss) income$(3.48) $(0.42) $1.07
  

       
Weighted average number of common shares outstanding:  

       
Basic52,431,193
 52,359,897
 52,356,798
52,597,582
 52,504,196
 52,431,193
Diluted52,591,545
 52,423,939
 52,357,729
52,597,582
 52,504,196
 52,591,545
(a) 
Net of tax benefit(benefit) expense of $5.1$(0.4) million, $2.1$1.1 million and $3.3$(5.1) million for 2015, 20142017, 2016 and 2013,2015, respectively.
(b) 
Net of tax expense of $1.6 million for 2017, and $1.3 million $0.1 millionfor each of 2016 and $1.2 million for 2015, 2014 and 2013, respectively.2015.
(c) 
This other comprehensive income componentamount is included in the computation of net periodic benefit (income) costs. See Note 14, “Savings Plan, Pension"Pension and Post-Retirement Benefits,”" for additional information regarding net periodic benefit (income) costs.
(d) 
Net of tax (benefit) expensebenefit of $(3.3)$0.3 million,, $(42.0) $4.1 million and $33.5$3.3 million for 2017, 2016 and 2015, 2014 and 2013, respectively.
(e) 
Net of tax expense of $3.7 million.million for 2015.
(f) 
Net of tax (benefit) expense of $0.3 million for 2017.
(g)
Net of tax benefit of $1.4 million for 2017.
(h)
Net of tax expense (benefit) of $0.5 million and $(1.0) million $(2.3) millionfor 2016 and $1.0 million for 2015, 2014 and 2013, respectively.

See Accompanying Notes to Audited Consolidated Financial Statements

F-5



REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
(dollars in millions)

millions, except share and per share amounts)
Common Stock Additional Paid-In-Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ DeficiencyCommon Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Deficiency
                      
Balance, December 31, 2012$0.5
 1,015.1
 (9.8) (1,446.9) (208.2) (649.3)
Stock-based compensation amortization  0.2
       0.2
Net loss      (5.8) 

 (5.8)
Other comprehensive income, net (a)
      

 58.4
 58.4
Balance, December 31, 2013$0.5
 $1,015.3
 $(9.8) $(1,452.7) $(149.8) $(596.5)
Treasury stock acquired, at cost (b)
    (0.7)     (0.7)
Balance, January 1, 2015$0.5
 $1,020.9
 $(10.5) $(1,411.8) $(243.2) $(644.1)
Treasury stock acquired, at cost (a)
    (2.8)     (2.8)
Stock-based compensation amortization

 5.5
 

 

 

 5.5
  5.1
       5.1
Excess tax benefits from stock-based compensation  0.1
       0.1
  0.3
       0.3
Net income      40.9
   40.9
      56.1
   56.1
Other comprehensive loss, net (a)
        (93.4) (93.4)
Balance, December 31, 2014$0.5
 $1,020.9
 $(10.5) $(1,411.8) $(243.2) $(644.1)
Treasury stock acquired, at cost (b)
    (2.8)     (2.8)
Other comprehensive loss, net (b)
        (2.1) (2.1)
Balance, December 31, 2015$0.5
 $1,026.3
 $(13.3) $(1,355.7) $(245.3) $(587.5)
Treasury stock acquired, at cost (a)
    (3.2)     (3.2)
Repurchase of common stock (c)
    (2.7)     (2.7)
Stock-based compensation amortization  5.1
       5.1
  6.4
       6.4
Excess tax benefits from stock-based compensation  0.3
       0.3
  0.5
       0.5
Net income      56.1
   56.1
Other comprehensive loss, net (a)
        (2.1) (2.1)
Balance, December 31, 2015$0.5
 $1,026.3
 $(13.3) $(1,355.7) $(245.3) $(587.5)
Net loss      (21.9)   (21.9)
Other comprehensive loss, net (b)
        (6.4) (6.4)
Balance, December 31, 2016$0.5
 $1,033.2
 $(19.2) $(1,377.6) $(251.7) $(614.8)
Treasury stock acquired, at cost (a)
—
 —
 (2.5) —
 —
 (2.5)
Stock-based compensation amortization—
 6.8
 —
 —
 —
 6.8
Net loss—
 —
 —
 (183.2) —
 (183.2)
Other comprehensive income, net (b)
—
 —
 —
 —
 23.3
 23.3
Balance, December 31, 2017$0.5
 $1,040.0
 $(21.7) $(1,560.8) $(228.4) $(770.4)

(a)
See Note 17, “Accumulated Other Comprehensive Loss,” regarding the changes in the accumulated balances for each component of other comprehensive loss during each of 2015, 2014 and 2013.

(b)
Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (the “Stock Plan”"Stock Plan"), certain senior executives, in lieu of paying certain withholding taxes on the vesting of restricted stock, authorized the withholding ofCompany withheld an aggregate 82,740of 89,620, 92,092 and 22,32882,740 shares of Revlon Inc. Class A Common Stock during 20152017, 2016 and 2014,2015, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of such shares.restricted shares for certain senior executives. These withheld shares were recorded as treasury stock using the cost method, at a weighted averageweighted-average price per share of $27.67, $34.83 and $34.40, respectively, during 2017, 2016 and $33.54 during 2015, and 2014, respectively, based on the closing price of Revlon Inc. Class A Common Stock as reported on the NYSENew York Stock Exchange (the "NYSE") consolidated tape on each respective vesting date, for a total of $2.5 million, $3.2 million and $2.8 million in 2017, 2016 and 2015, and $0.7 million in 2014.respectively. See Note 15, "Stock Compensation Plan" to the Consolidated Financial Statements in Revlon, Inc.'s 2015 Form 10-KPlan," for details regarding restricted stock awards under the Stock Plan.

(b)See Note 17, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during 2017, 2016 and 2015.


(c)On April 21, 2016, in connection with his separation from the Company, the Company repurchased 72,895 shares of Revlon Class A Common Stock (representing vested shares of restricted stock) from Lorenzo Delpani, the Company's former President and Chief Executive Officer, at a price of $36.83 per share based upon the NYSE closing price of Revlon Class A Common Stock on April 20, 2016, for a total purchase price of $2.7 million.


See Accompanying Notes to Audited Consolidated Financial Statements

F-6



REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
 Year Ended December 31,
 2015 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net income (loss)$56.1
 $40.9
 $(5.8)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:     
   Depreciation and amortization103.2
 102.6
 76.7
   Foreign currency losses from re-measurement19.5
 25.5
 5.9
   Amortization of debt discount1.4
 1.4
 1.5
   Stock-based compensation amortization5.1
 5.5
 0.2
Goodwill impairment charge9.7
 —
 —
   Provision for deferred income taxes28.3
 64.3
 30.8
   Loss on early extinguishment of debt—
 2.0
 29.7
   Amortization of debt issuance costs5.7
 5.5
 5.2
   Insurance proceeds for property, plant and equipment—
 —
 (13.1)
 Gain on sale of certain assets(6.4) (2.1) (2.9)
   Pension and other post-retirement cost (income)19.0
 (5.3) (0.2)
   Change in assets and liabilities:  

 

      (Increase) decrease in trade receivables(18.5) (5.5) 40.1
      (Increase) decrease in inventories(30.6) 9.2
 10.2
      (Increase) decrease in prepaid expenses and other current assets(20.5) 15.2
 7.5
      Increase in accounts payable34.9
 0.2
 19.0
      Increase (decrease) in accrued expenses and other current liabilities7.3
 (22.2) (16.7)
      Pension and other post-retirement plan contributions(18.1) (19.0) (18.5)
      Purchases of permanent displays(47.4) (45.3) (44.5)
      Other, net6.6
 1.1
 (1.8)
Net cash provided by operating activities155.3
 174.0
 123.3
CASH FLOWS FROM INVESTING ACTIVITIES:     
Capital expenditures(48.3) (55.5) (28.6)
Business acquisitions, net of cash acquired(41.7) —
 (627.6)
Insurance proceeds for property, plant and equipment—
 —
 13.1
Proceeds from the sale of certain assets6.2
 3.4
 3.7
Net cash used in investing activities(83.8) (52.1) (639.4)
CASH FLOWS FROM FINANCING ACTIVITIES:     
Net increase (decrease) in short-term borrowings and overdraft23.0
 (4.7) (6.3)
Repayment under the Amended and Restated Senior Subordinated Term Loan—
 (58.4) —
Repayments under the Acquisition Term Loan(19.3) (7.0) —
Prepayments under the 2011 Term Loan(12.1) —
 —
Borrowings under the Acquisition Term Loan—
 —
 698.3
Proceeds from the issuance of the 5¾% Senior Notes—
 —
 500.0
Repayment of the 9¾% Senior Secured Notes—
 —
 (330.0)
Repayments under the 2011 Term Loan—
 —
 (113.0)
Redemption of Preferred Stock—
 —
 (48.6)
Payment of financing costs—
 (1.8) (48.8)
Other financing activities(3.7) (3.2) (2.6)
Net cash (used in) provided by financing activities(12.1) (75.1) 649.0
Effect of exchange rate changes on cash and cash equivalents(7.8) (15.6) (5.1)
   Net increase in cash and cash equivalents
51.6
 31.2
 127.8
   Cash and cash equivalents at beginning of period275.3
 244.1
 116.3
   Cash and cash equivalents at end of period$326.9
 $275.3
 $244.1
Supplemental schedule of cash flow information:     
   Cash paid during the period for:     
Interest$79.9
 $85.6
 $72.5
Income taxes, net of refunds25.4
 21.1
 12.7
Preferred stock dividends—
 —
 6.2
Supplemental schedule of non-cash investing and financing activities:     
   Treasury stock received to satisfy certain minimum tax withholding liabilities$2.8
 $0.7
 $0.0
 Year Ended December 31,
 2017 
2016
(as adjusted)(a)
 
2015
(as adjusted)(a)
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net (loss) income$(183.2) $(21.9) $56.1
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:     
   Depreciation and amortization155.8
 123.2
 103.2
   Foreign currency (gains) losses from re-measurement(22.5) 20.6
 19.5
   Amortization of debt discount1.2
 1.4
 1.4
   Stock-based compensation amortization6.8
 6.4
 5.1
Impairment charge10.8
 23.4
 9.7
   Provision for (benefit from) deferred income taxes22.6
 (6.2) 28.3
   Loss on early extinguishment of debt—
 16.9
 —
   Amortization of debt issuance costs9.1
 6.8
 5.7
 Loss (gain) on sale of certain assets1.6
 0.4
 (6.4)
   Pension and other post-retirement cost (income)1.5
 (0.6) 19.0
   Change in assets and liabilities, net of acquisitions:  

 

      Increase in trade receivables(9.9) (59.5) (18.5)
      (Increase) decrease in inventories(63.0) 74.5
 (30.6)
      Increase in prepaid expenses and other current assets(21.2) (8.2) (13.4)
      Increase (decrease) in accounts payable26.8
 (12.6) 34.9
      Increase in accrued expenses and other current liabilities12.3
 11.7
 10.1
      Pension and other post-retirement plan contributions(8.5) (8.3) (18.1)
      Purchases of permanent displays(65.5) (52.1) (47.4)
      Other, net(14.0) 4.2
 (0.5)
Net cash (used in) provided by operating activities(139.3) 120.1
 158.1
CASH FLOWS FROM INVESTING ACTIVITIES:     
Capital expenditures(108.3) (59.3) (48.3)
Business acquisition, net of acquired cash—
 (1,028.7) (41.7)
Proceeds from the sale of certain assets—
 0.5
 6.2
Net cash used in investing activities(108.3) (1,087.5) (83.8)
CASH FLOWS FROM FINANCING ACTIVITIES:     
Net increase (decrease) in short-term borrowings and overdraft3.3
 —
 23.0
Net borrowings under the 2016 Revolving Credit Facility157.0
 —
  
Repayments under the 2016 Term Loan Facility(18.0) (4.5)  
Prepayments under the Old Acquisition Term Loan—
 (15.1) (19.3)
Prepayments under the 2011 Term Loan—
 (11.5) (12.1)
Repayment of Old Acquisition Term Loan—
 (658.6) —
Repayment of 2011 Term Loan—
 (651.4) —
Borrowings under the 2016 Term Loan Facility—
 1,791.0
 —
Proceeds from the issuance of 6.25% Senior Notes—
 450.0
 —
Payment of financing costs(1.2) (61.6) —
Tax withholdings related to net share settlements of restricted stock units and awards(2.5) (3.2) (2.8)
Treasury stock purchased—
 (2.7) —
Other financing activities(1.7) (2.5) (3.7)
Net cash provided by (used in) financing activities136.9
 829.9
 (14.9)
Effect of exchange rate changes on cash and cash equivalents11.3
 (2.6) (7.8)
   Net (decrease) increase in cash, cash equivalents and restricted cash
(99.4) (140.1) 51.6
   Cash, cash equivalents and restricted cash at beginning of period186.8
 326.9
 275.3
   Cash, cash equivalents and restricted cash at end of period$87.4
 $186.8
 $326.9
Supplemental schedule of cash flow information:     
   Cash paid during the period for:     
Interest$149.1
 $91.7
 $79.9
Income taxes, net of refunds0.4
 21.9
 $25.4

(a)Adjusted as a result of the adoption of certain accounting pronouncements beginning on January 1, 2017. See Note 1, "Description of Business and Summary
of Significant Accounting Policies - Recently Adopted Accounting Pronouncements," for details of these adjustments.

See Accompanying Notes to Audited Consolidated Financial Statements

F-7
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Item 1. Financial Statements
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

The Company’s visionCompany is to establish Revlon as the quintessential and most innovativea leading global beauty company in the world by offering products that make consumers feel attractive and beautiful. We want to inspire our consumers to express themselves boldly and confidently.with an iconic portfolio of brands. The Company operates in three reporting segments: the consumer division (“Consumer”); the professional division (“Professional”); and Other (as described below). The Companydevelops, manufactures, markets, distributes and sells worldwide an extensive array of beauty and personal care products, including color cosmetics, hair color, hair care and hair treatments, fragrances, skin care, beauty tools, men'smen’s grooming products, anti-perspirant deodorants fragrances, skincare and other beauty care products.products across a variety of distribution channels. The Company is building a combined organization that is entrepreneurial, agile and boldly creative, with a passion for beauty. The Company has strategic brand builders developing a diverse portfolio of iconic brands that delight consumers around the world wherever and however they shop for beauty. The Company strives to be an ethical company that values inclusive leadership and is committed to sustainable and responsible growth.

The Company operates in four reporting segments: the consumer division ("Consumer"); Elizabeth Arden; the professional division ("Professional"); and Other. The Company’s principal customers for its products in the Consumer segment include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Company's principal customers for its products in the Elizabeth Arden segment include prestige retailers, the mass retail channel, perfumeries, boutiques, department and specialty stores, e-commerce sites and travel retailers and distributors, as well as direct sales to consumers via Elizabeth Arden branded retail stores and e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. The Company's principal customers for its products in the Professional segment include hair and nail salons and distributors to professional salons in the U.S. and internationally.
Effective in the second quarter of 2015, the Company has a third reporting The Other segment Other, whichprimarily includes the operating results related to the development, marketing and distribution of certain brands that our chief operating decision maker reviews on a stand-alone basis. The results included within the Other segment include the operating results and purchase accounting for the Company's April 2015 acquisition of the CBBeauty Group and certain of its related entities (collectively "CBB" and such transaction, the "CBB Acquisition"). CBB develops, manufactures, markets and distributeslicensed fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories. The results included within the Other segment are not material to the Company's consolidated results of operations. Refer to Note 2, "Business Combinations," for further details related to the CBB Acquisition.products.
Unless the context otherwise requires, all references to the Company mean Revlon Inc. and its subsidiaries. Revlon Inc., as a public holding company, has no business operations of its own and owns, as its only material asset, all of the outstanding capital stock of Products Corporation. As such, its net income/(loss) has historically consisted predominantly of the net income/(loss) of Products Corporation, and in 2017, 2016 and 2015 2014 and 2013 included $9.0$6.6 million, $9.8$9.4 million and $8.1$9.0 million, respectively, in expenses incidental to being a public holding company.
The accompanying 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 Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“("U.S. GAAP”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 Consolidated Financial Statements in the period they are determined to be necessary. Significant estimates made in the accompanying Consolidated Financial Statements include, but are not limited to, allowances for doubtful accounts, inventory valuation reserves, expected sales returns and allowances, trade support costs, 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, 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.
Discontinued Operations Presentation
As a result of the Company's decision on December 30, 2013 to exit its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment, the Company has reported the results of its former China operations within income (loss) income from discontinued operations, net of taxes in the Company's Consolidated Statements of Income (Loss)Operations and Comprehensive (Loss) Income (Loss) for all periods presented. See Note 4, "Discontinued Operations," for further discussion.

F-8
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Cash, Cash Equivalents and Restricted Cash Equivalents:
Cash equivalents are primarily investments in high-quality, short-term money market instruments with original maturities of three months or less and are carried at cost, which approximates fair value. Cash equivalents were $1.6$2.0 million and $6.3$2.5 million as of December 31, 20152017 and 2014,2016, respectively. Accounts payable includes $19.5include $21.8 million and $2.2$19.3 million of outstanding checks not yet presented for payment at December 31, 20152017 and 2014,2016, respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statements of financial position that sum to the total of the same such amounts shown in the statements of cash flows:
  December 31,
  2017 2016 2015
       
Cash and cash equivalents $87.1
 $186.4
 $326.9
Restricted cash(a)
 0.3
 0.4
 —
Total cash, cash equivalents and restricted cash $87.4
 $186.8
 $326.9

(a) Amounts included in restricted cash represent cash on deposit to support the Company's letters of credit and is included within other assets in the Company's consolidated balance sheets.

Trade Receivables:Receivables
Trade receivables represent payments due to the Company for previously recognized net sales, reduced by an allowance for doubtful accounts for balances which are estimated to be uncollectible at December 31, 2015 and 2014, respectively.period end. The Company grants credit terms in the normal course of business to its customers. Trade credit is extended based upon periodically updated evaluations of each customer's ability to perform its payment obligations. The Company does not normally require collateral or other security to support credit sales. The allowance for doubtful accounts is determined based on historical experience and ongoing evaluations of the Company's receivables and evaluationsassessments of the risks of payment. The allowance for doubtful accounts is recorded against trade receivable balances when they are deemed uncollectible. Recoveries of trade receivables previously reserved are recorded in the consolidated statements of income (loss)operations and comprehensive (loss) income (loss) when received. At December 31, 20152017 and 2014,2016, the Company's three largest customers accounted for an aggregate of approximately 27%31% and 31%27%, respectively, of the Company's outstanding trade receivables.

Inventories:Inventories
Inventories are stated at the lower of cost or marketnet realizable value. Cost is based on standard cost and production variances, which approximates actual cost on the first-in, first-out method. Cost components include direct materials, direct labor and direct overhead, as well as in-bound freight. The Company records adjustments to the value of its inventory based upon its forecasted plans to sell products included in inventory, as well as planned product discontinuances. The physical condition (e.g., age and quality) of the inventories is also considered in establishing its valuation. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from the amounts that the Company may ultimately realize upon the disposition of inventories if future economic conditions, customer inventory levels, product discontinuances, sales return levels or competitive conditions differ from the Company's estimates and expectations.

Property, Plant and Equipment and Other Assets:Assets
Property, plant and equipment is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of such assets as follows: land improvements, 20 to 30 years; buildings and improvements, 5 to 50 years; machinery and equipment, 3 to 15 years; counters and trade fixtures, 3 to 5 years; office furniture and fixtures, 3 to 15 years; and capitalized software, 2 to 10 years. Leasehold improvements and building improvements are amortized over their estimated useful lives or over the terms of the leases or remaining life of the original structure, respectively, whichever is shorter. Repairs and maintenance are charged to the statement of operations as incurred, and expenditures for additions and improvements are capitalized. Counters and trade fixtures are amortized over their estimated useful life of the in-store counter and display related assets. The estimated useful life may be subject to change based upon declines in net sales and/or changes in merchandising programs. See Note 7, “Property,"Property, Plant and Equipment"Equipment," for further discussion.
Included in other assets are permanent wall displays amounting to $65.6$84.8 million and $63.3$64.1 million as of December 31, 20152017 and 2014,2016, respectively, which are amortized generally over a period of 1 to 3 years. In the event of product discontinuances, from time to timetime-to-time, the Company may accelerate the amortization of related permanent wall displays based on the estimated remaining useful life of the asset. Amortization expense for permanent wall displays was $55.4 million, $47.8 million and $41.3 million $42.5 millionfor 2017, 2016 and $39.2 million for 2015, 2014respectively.

F-9
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and 2013, respectively. per share amounts)

The Company has also included, in other assets, netcapitalizes deferred financing costs related to the issuance of the Company’s debt instruments amounting to $21.3its revolving credit facilities, which costs were $5 million and $26.9$6 million as of December 31, 20152017 and 2014,2016, respectively, which are amortizedand amortizes such costs over the terms of the related debt instruments using the effective-interest method.
Long-lived assets, includingsuch as property, plant and equipment, and finite-lived intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the Company estimates the undiscounted future cash flows (excluding interest) resulting from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. In connection with integrating Colomer into the Company's business, the Company determined it would implement a company-wide, SAP enterprise resource planning system. As a result, the Company recognized a $5.9 million impairment charge related to in-progress capitalized software development costs during the year ended December 31, 2013 which was included as a component of acquisition and integration costs for 2013 in the Company's Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). There were no significant impairment charges to long-lived assets during the years ended December 31, 20152017, 2016 and 2014.2015.


F-9
REVLON, INC. AND SUBSIDIARIESGoodwill
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Goodwill:
Goodwill represents the excess purchase price for businesses acquired over the fair value of net assets acquired. Goodwill is not amortized, but rather is reviewed annually for impairment at the reporting unit level using September 30thOctober 1st carrying values, or when there is evidence that events or changes in circumstances indicate that the Company’s carrying amount may not be recovered.
For 2015,2017, in assessing whether goodwill was impaired in connection with its annual impairment test performed as of September 30th, the Company utilized the two-step process as prescribed by Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other. In the first step of this test, the Company compared the fair value of each of the Company's four reporting units, determined based upon discounted estimated future cash flows, to the carrying amount of such reporting unit, including goodwill. Where the fair value of such reporting unit exceeded the carrying amount, no further work was required and no impairment loss was recognized. Where the carrying amount of the reporting unit exceeded the fair value, the goodwill of the reporting unit was considered potentially impaired and the Company performed step two of the goodwill impairment test to measure the amount of the impairment loss. As a result of the annual impairment test, the Company recognized a $9.7 million non-cash goodwill impairment charge induring the fourth quarter of 2015.2017 using October 1
For 2014 and 2013,st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step goodwill impairment testprocess, as prescribed by Accounting Standard Codification ("ASC") 350, Intangibles - Goodwill and Other, to assess the Company's indefinite-lived intangible assets for indicators of impairment,impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and in each casethe financial performance of the (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it iswas more likely than not that the fair valuevalues of each of the Company'sthese reporting units and indefinite-lived intangible assets exceeded their carrying amounts for such2017.
However, for 2017, the Company determined that it would utilize the two-step process to test the Global Color Brands ("GCB") reporting years.unit for impairment. In the first step of this test, the Company compared the fair value of the GCB reporting unit, determined based upon its discounted estimated future cash flows, to its carrying amount, including goodwill. The results of the step one test indicated that impairment indicators existed for the GCB reporting unit due to continued net sales declines for both the SinfulColors and the Pure Ice brands and lower promotional activity for the Pure Ice brand.
In the second step, the Company measured the potential impairment of the GCB reporting unit by comparing the implied fair value with the carrying amount of its goodwill at October 1, 2017. The implied fair value of the GCB reporting unit's goodwill was determined in the same manner as the amount of goodwill recognized in a business combination, where the estimated fair value of the GCB reporting unit was allocated to all of the assets and liabilities of that reporting unit (including both recognized and unrecognized intangible assets) as if GCB had been acquired in a business combination and the estimated fair value of the GCB reporting unit was the purchase price paid. When the carrying amount of a reporting unit's goodwill is greater than the implied fair value of its goodwill, an impairment loss is recognized. The Company did not record anydetermined the fair value of the GCB reporting unit using discounted estimated future cash flows. The weighted-average cost of capital used in testing the reporting unit for impairment was 12% with a perpetual growth rate of goodwill during the years ended December 31, 2014 or 2013 as2%. As a result of itsthis annual impairment test.test, the Company recognized an aggregate $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017. Following the recognition of this non-cash goodwill impairment charge, the GCB reporting unit had $14.8 million in remaining goodwill as of December 31, 2017.
For 2016, the Company utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then-existing four reporting units, namely (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other (comprised of the CBB business). As a result of the annual impairment testing for 2016, the Company recognized a $16.7 million non-cash goodwill impairment charge related to the Other reporting unit in the fourth quarter of 2016.
For 2015, the Company utilized the two-step process in assessing whether goodwill was impaired for each of the Company's four reporting units. As a result of the 2015 annual impairment test, the Company recognized a $9.7 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2015.
See Note 2, “Business Combinations”"Business Combinations," and Note 8, “Goodwill"Goodwill and Intangible Assets, Net”Net," for further discussion of the Company's goodwill and annual impairment test.

Intangible Assets, net:net
Intangible Assets, net, include trade names and trademarks, customer relationships, patents and internally developed intellectual property ("IP") and acquired licenses. Indefinite-lived intangible assets, consisting of certain trade names, are not amortized, but rather are tested for impairment annually on September 30th,during the fourth quarter using October 1st carrying values, similar to

F-10
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

goodwill, and the Company recognizes an impairment if the carrying amount of its intangible assets exceeds its fair value. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. The Company writes off the gross carrying amount and accumulated amortization for intangible assets in the year in which the asset becomes fully amortized. Finite-lived intangible assets are considered for impairment upon the occurrence of certain “triggering events”"triggering events" and the Company recognizes an impairment if the carrying amount of the long-lived asset group intangible asset exceeds the Company's estimate of itsthe asset group's undiscounted future cash flows. ThereNo impairment was no impairmentrecognized related to the carrying value of any of the Company's finite or indefinite-lived intangible assets as a result of the annual impairment test for the years ended December 31, 2017 and 2015.
As a result of the 2016 annual impairment tests (described above), the Company also recognized a $6.7 million non-cash intangible assets impairment charge in 2015, 2014 or 2013.the fourth quarter of 2016 related to the Other reporting unit.
See Note 2, “Business Combinations”"Business Combinations," and Note 8, “Goodwill"Goodwill and Intangible Assets, Net”Net," for further discussion of the Company's intangible assets, including a summary of finite-lived and indefinite-lived intangible assets.

Revenue Recognition and Sales Returns:Returns
The Company's policy is to recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collection is probable. The Company records revenue from the sale of its products when risk of loss and title to the productproducts transfers to the customer. Net sales are comprised of gross revenues less expected product returns, trade discounts and customer allowances, which include costs associated with off-invoice mark-downs and other price reductions, as well as trade promotions and coupons. These incentive costs are recognized at the later of the date on which the Company recognizes the related revenue or the date on which the Company offers the incentive.
The Company allows customers to return their unsold products if and when they meet certain Company-established criteria as set forth in the Company's trade terms. The Company regularly reviews and revises, when deemed necessary, its estimates of sales returns based primarily upon the historical rate of actual product returns, planned product discontinuances, new product launches and estimates of customer inventory and promotional sales. The Company records sales returns as a reduction to sales and cost of sales, and an increase to accrued liabilities and inventories. Returned products, which are recorded as inventories, are valued based upon the amount that the Company expects to realize upon their subsequent disposition. The physical condition and marketability of the returned products are the major factors considered by the Company in estimating their realizable value.
Revenues derived from licensing arrangements, including any pre-payments, are recognized in the period in which they are earned, but not before the initial license term commences.

F-10
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


Cost of Sales:Sales
Cost of sales includes all of the costs to manufacture the Company's products. For products manufactured in the Company's own facilities, such costs include raw materials and supplies, direct labor and factory overhead. For products manufactured for the Company by third-party contractors, such cost represents the amounts invoiced by the contractors. Cost of sales also includes the cost of refurbishing products returned by customers that will be offered for resale and the cost of inventory write-downs associated with adjustments of held inventories to their net realizable value. These costs are reflected in the Company’s consolidated statements of income (loss)operations and comprehensive (loss) income (loss) when the product is sold and net sales revenues are recognized or, in the case of inventory write-downs, when circumstances indicate that the carrying value of inventories is in excess of their recoverable value. Additionally, cost of sales reflects the costs associated with any free products included as sales and promotional incentives. These incentive costs are recognized on the later of the date that the Company recognizes the related revenue or the date on which the Company offers the incentive.

Selling, General and Administrative Expenses:Expenses
Selling, general and administrative (“("SG&A”&A") expenses include expenses to advertise the Company's products, such as television advertising production costs and air-time costs, print advertising costs, digital marketing costs, promotional displays and consumer promotions. SG&A expenses also include the amortization of permanent wall displays and finite-lived intangible assets, depreciation of certain fixed assets, distribution costs (such as freight and handling), non-manufacturing overhead (principally personnel and related expenses), selling and trade educations fees, insurance and professional service fees.

Advertising:Advertising
Advertising within SG&A expenses includes television, print, digital marketing and other advertising production costs whichthat are expensed the first time the advertising takes place. The costs of promotional displays are expensed in the period in which they are shipped to customers. Advertising expenses were $375.1$550.0 million, $383.2$421.1 million and $278.5$368.7 million for 2015, 20142017, 2016 and 2013,2015, respectively, and were included in SG&A expenses in the Company's Consolidated Statementsconsolidated statements of Income (Loss)operations and Comprehensive Income (Loss).comprehensive (loss) income. The Company also has various arrangements with customers pursuant to its trade terms to reimburse them for a portion of their advertising costs, which provide advertising benefits to the Company. Additionally, from time to timetime-to-time, the Company

F-11
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

may pay fees to customers in order to expand or maintain shelf space for its products. The costs that the Company incurs for "cooperative" advertising programs, end cap placement, shelf placement costs, slotting fees and marketing development funds, if any, are expensed as incurred and are recorded as a reduction within net sales.

Distribution Costs:Costs
Costs associated with product distribution, such as freight and handling costs, are recorded within SG&A expenses when incurred. Distribution costs were $131.1 million, $98.4 million and $80.2 million $84.9 millionfor 2017, 2016 and $66.5 million for 2015, 2014 and 2013, respectively.

Income Taxes:Taxes
Income taxes are calculated using the asset and liability method. Under this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect of a change in income tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company records valuation allowances to reduce deferred tax assets when management determines that it iswas more likely than not that a tax benefit will not be realized.
The Company recognizes a tax position in its financial statements when management determines that it iswas more likely than not that the position will be sustained upon examination, based on the merits of such position. The Company recognizes liabilities for unrecognized tax positions in the U.S. and other tax jurisdictions based on an estimate of whether and the extent to which additional taxes will be due. If payment of these amounts is ultimately not required, the reversal of the liabilities would result in additional tax benefits recognized in the period in which the Company determines that the liabilities are no longer required. If the estimate of tax liabilities is ultimately less than the final assessment, this will result in a further charge to expense. The Company recognizes interest and penalties related to income tax matters in income tax expense.

See Note 16, "Income Taxes," to the Consolidated Financial Statements in this Form 10-K for discussion of the Tax Act (as hereinafter defined).
Research and Development:Development
Research and development expenditures are expensed as incurred and included within SG&A expenses. The amounts charged in 2015, 20142017, 2016 and 20132015 for research and development expenditures were $35.7 million, $37 million and $31.2 million, $31.6 million and $26.9 million, respectively.

F-11
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


Foreign Currency Translation:Translation
Assets and liabilities of foreign operations, whose functional currency is the local currency, are translated into U.S. Dollars at the rates of exchange in effect at the balance sheet date. Income and expense items are translated at the weighted averageweighted-average exchange rates prevailing during each period presented. Gains and losses resulting from foreign currency transactions are included in the results of operations. Gains and losses resulting from translation of financial statements of foreign subsidiaries and branches operating in non-hyperinflationary economies are recorded as a component of accumulated other comprehensive loss until either the sale or upon the complete or substantially complete liquidation by the Company of its investment in a foreign entity. To the extent that foreign subsidiaries and branches operate in hyperinflationary economies, non-monetary assets and liabilities are translated at historical rates and translation adjustments are included in the Company's results of operations.
Venezuela - Highly-Inflationary Economy: Effective January 1, 2010, Venezuela was designated as a highly inflationary economy under U.S. GAAP. As a result, beginning January 1, 2010, the U.S. Dollar is the functional currency for the Company’s subsidiary in Venezuela (“Revlon Venezuela”). As Venezuela is designated as highly inflationary, foreign currency translation adjustments of Revlon Venezuela’s balance sheet have been reflected in the Company's earnings.
Venezuela - Foreign Currency Restrictions: Foreign currency restrictions enacted by the Venezuelan government since 2003 have become more restrictive and have had an impact on Revlon Venezuela’s ability to obtain U.S. Dollars in exchange for Venezuelan Bolivars ("Bolivars") at the official foreign exchange rates from the Venezuelan government and its foreign exchange commission, the Comisiónde Administracion de Divisas (“CADIVI”). In May 2010, the Venezuelan government took control over the previously freely-traded foreign currency exchange market and, in June 2010, replaced it with a new foreign currency exchange system, the Sistema de Transacciones en Moneda Extranjera (“SITME”). In the second quarter of 2011, the Company began using a SITME rate of 5.5 Bolivars per U.S. Dollar (the "SITME Rate") to translate Revlon Venezuela’s financial statements, as this was the rate at which the Company accessed U.S. Dollars in the SITME market during this period. Through December 31, 2012, the Company continued using the SITME Rate to translate Revlon Venezuela’s financial statements.
Venezuela - 2013 Foreign Currency Devaluation: In February 2013, the Venezuelan government announced the devaluation of Bolivars relative to the U.S. Dollar, changing the official exchange rate to 6.3 Bolivars per U.S. Dollar (the "Official Rate"). The Venezuelan government also announced that the SITME currency market administered by the central bank would be eliminated, and as a result, the Company began using the Official Rate to translate Revlon Venezuela’s financial statements beginning in 2013. To reflect the impact of the foreign currency devaluation, the Company recorded a foreign currency loss of $0.6 million in earnings in the first quarter of 2013 as a result of the required re-measurement of Revlon Venezuela’s monetary assets and liabilities.
Venezuela - 2014 Foreign Currency Devaluation: In January 2014, the Venezuela government announced that the CADIVI would be replaced by the government-operated National Center of Foreign Commerce (the "CENCOEX"), and indicated that the Sistema Complementario de Administración de Divisas (“SICAD”) market would continue to be offered as an alternative foreign currency exchange. Additionally, a parallel foreign currency exchange system, SICAD II, started functioning in March 2014 and allowed companies to apply for the purchase of foreign currency and foreign currency denominated securities for any legal use or purpose. Throughout 2014, the Company exchanged Bolivars for U.S. Dollars to the extent permitted through the various foreign currency markets available based on its ability to participate in those markets. Prior to June 30, 2014, the Company utilized the Official Rate. Following a consideration of the Company's specific facts and circumstances, which included its legal ability and intent to participate in the SICAD II exchange market to import finished goods into Venezuela, the Company determined that it was appropriate to utilize the SICAD II rate of 53 Bolivars per U.S. Dollar (the "SICAD II Rate") to translate Revlon Venezuela’s financial statements beginning on June 30, 2014. As a result, the Company recorded a foreign currency loss of $6.0 million in the second quarter of 2014 related to the required re-measurement of Revlon Venezuela’s monetary assets and liabilities.

Venezuela - 2015 Foreign Currency Devaluation: In February 2015, the Venezuela government introduced a new foreign currency exchange platform, the Marginal Currency System ("SIMADI"), which created a third new mechanism to exchange Bolivars for U.S. Dollars through private brokers. SIMADI replaced the SICAD II system and started operating on February 12, 2015. As a result, the Company considered its specific facts and circumstances in order to determine the appropriate rate of exchange to translate Revlon Venezuela’s financial statements. Through December 31, 2015, the Company has not participated in the SIMADI exchange market; however, given the elimination of the SICAD II system, the Company determined that it was appropriate to use the SIMADI rate of 193 Bolivars per U.S. Dollar (the "SIMADI Rate") to translate Revlon Venezuela’s balance sheet beginning on March 31, 2015.
As a result of the change from the SICAD II Rate to the SIMADI Rate, on March 31, 2015 the Company was required to re-measure all of Revlon Venezuela’s monetary assets and liabilities at the SIMADI Rate. The Company recorded a foreign currency loss of $1.9 million in the first quarter of 2015 as a result of the required re-measurement of Revlon Venezuela’s balance sheet. During the second quarter of 2015, the Company exited its business operations in Venezuela and changed to a distributor model.

F-12
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Basic and Diluted Earnings per Common Share and Classes of Stock:Stock
Shares used in basic earnings per share are computed using the weighted averageweighted-average number of common shares outstanding during each period. Shares used in diluted earnings per share include the dilutive effect of unvested restricted shares under the stock plan using the treasury stock method. (See Note 20, "Basic and Diluted Earnings (Loss) Per Common Share").
Stock-Based Compensation:Compensation
The Company recognizes stock-based compensation costs for its restricted stock and restricted stock units, measured at the fair value of each award at the time of grant, as an expense over the period during which an employee is required to provide service. Upon the vesting of restricted stock, any resulting tax benefits are recognized in additional paid-in-capital. Any resulting tax deficiencies are recognized in the consolidated statements of income (loss)operations and comprehensive (loss) income (loss) as tax expense to the extent that the tax deficiency amount exceeds any existing additional paid-in-capital resulting from previously realized excess tax benefits from previous awards.awards vest or are settled. The Company reflects such excess tax benefits as cash flows from financing activities in the consolidated statements of cash flows.

Derivative Financial Instruments:Instruments
The Company is exposed to certain risks relating to its ongoing business operations. The Company uses derivative financial instruments, including: (i) foreign currency forward exchange contracts (“("FX Contracts”Contracts") intended for the purpose of managing foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates on the Company’s net

F-12
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

cash flows; and (ii) interest rate hedging transactions intended for the purpose of managing interest rate risk associated with Products Corporation’s variable rate indebtedness.
Foreign Currency Forward Exchange Contracts
Products Corporation enters into FX Contracts 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 does not apply hedge accounting to its FX Contracts. The Company records FX Contracts in its consolidated balance sheet at fair value and immediately recognizes changes in fair value in earnings. Fair value of the Company’s FX Contracts is determined by using observable market transactions of spot and forward rates. See Note 13, “Financial Instruments”"Financial Instruments," for further discussion of the Company's FX Contracts.
Interest Rate Swap
In November 2013, Products Corporation executedAs a result of the Company completing several debt transactions in connection with the September 7, 2016 acquisition of Elizabeth Arden, Inc. ("Elizabeth Arden," the "Elizabeth Arden Acquisition" and the "Elizabeth Arden Acquisition Date," respectively), the critical terms of the 2013 Interest Rate Swap (as hereinafter defined), which has been designated as a cash flow hedge no longer matched the terms of the variabilityunderlying debt and the 2013 Interest Rate Swap was determined to no longer be highly effective. Accordingly, the Company discontinued hedge accounting for the 2013 Interest Rate Swap during the third quarter of 2016. Following the de-designation of the forecasted three-month LIBOR interest rate payments related to its Acquisition Term Loan (as hereinafter defined). The Company records2013 Interest Rate Swap, changes in the fair value of cash flow hedgesthe 2013 Interest Rate Swap have been accounted for as a component of other non-operating expenses. Accumulated deferred losses on the 2013 Interest Rate Swap of $1.2 million, or $0.7 million net of tax, at December 31, 2017 that are designated as effective instrumentswere previously recorded as a component of accumulated other comprehensive loss. The Company immediately recognizes any ineffectiveness in such cash flow hedges in earnings. The Company recognizes gains and losses deferred in accumulated other comprehensive loss in current-periodwill be amortized into earnings when earnings are affected byover the variability of cash flowsremaining term of the hedged forecasted transaction.2013 Interest Rate Swap, which expires in May 2018.  See Note 13, “Financial Instruments”"Financial Instruments," for further discussion of the Company's 2013 Interest Rate Swap. Refer to Note 11, "Long-Term Debt," for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.
Recently Adopted Accounting Pronouncements
In AprilAugust 2014, the Financial Accounting Standards Board ("FASB") issued Accounting StandardsStandard Update ("ASU") No. 2014-08, "Reporting Discontinued Operations2014-15, "Disclosure of Uncertainties about and Disclosures of Disposals of Components of an Entity,Entity's Ability to Continue as a Going Concern," which changes the requirements for reporting discontinued operations under Accounting Standards Codification Topic 205. Under ASU No. 2014-08, a disposal of a component ofrequires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a group of components of an entity is requiredgoing concern for one year from the date the financial statements are issued or are available to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The standard states that a strategic shift could include a disposal of: (i) a major geographical area of operations; (ii) a major line of business; (iii) a major equity method investment; or (iv) other major parts of an entity. ASU No. 2014-08 no longer precludes presentation as a discontinued operation if: (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations; or (ii) there is significant continuing involvement with a component after its disposal. Additional disclosures about discontinued operations are also required. The guidance is effective for annual periods beginning on or after December 15, 2014, and is applied prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.issued. The Company adopted ASU No. 2014-08 on a prospective basis beginning2014-15 on January 1, 2015, and such adoption did not have an impact on the Company's results of operations, financial condition and/or financial statement disclosures.



F-13
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Recently Issued Accounting Pronouncements
In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," which requires deferred income tax assets and liabilities to be classified as noncurrent within a company's balance sheet. Currently, the Company is required to separate deferred income tax assets and liabilities into current and noncurrent amounts on its classified balance sheet, and this update will simplify the presentation by requiring a single, noncurrent amount. The guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU No. 2015-17 beginning on January 1, 20162017 and the adoption of the newthis guidance isdid not expected to have a material impact on the Company’s results of operations, financial condition andCompany's financial statement disclosures.
In September 2015,March 2016, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the2016-09, "Improvements to Employee Share-Based Payment Accounting, for Measurement Period Adjustments," which eliminates the current requirementsimplifies certain aspects of accounting for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the periodshare-based payment transactions, including transactions in which they determinean employee uses shares to satisfy the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The guidance is effective for annual periods beginning after December 15, 2015, with early adoption permitted.employer’s minimum statutory income tax withholding obligations, forfeitures and income taxes when awards vest or are settled. The Company adopted ASU No. 2015-162016-09 beginning on January 1, 20162017 and the adoption of the newthis guidance isdid not expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASU No. 2016-09 resulted in tax withholdings related to net share settlements of restricted stock units and awards in the amount of $3.2 million and $2.8 million for 2016 and 2015, respectively, previously reported in the Consolidated Statement of Cash Flows as a component of cash flows from operating activities, to be reclassified as a component of cash flows from financing activities.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which simplifies the subsequent measurement of inventories by requiring inventory to be measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU No. 2015-11 beginning on January 1, 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides specific guidance on the presentation of changes in restricted cash and restricted cash equivalents on the statement of cash flows. Under the new standard, the changes in restricted cash and restricted cash equivalents are required to be disclosed in reconciling the opening and closing balances on the statement of cash flows. The Company adopted ASU No. 2016-18 during the fourth quarter of 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures, other than requiring the Company to reconcile its cash balances from its statements of financial position to its statements of cash flows and including restricted cash within the beginning and ending balances of cash within the Company's statement of cash flow.

F-13
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Recently Issued Accounting Pronouncements
In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which will permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. This new guidance can be applied retrospectively and provides entities with the option to reclassify the amounts. The new guidance is effective for annual and quarterly periods beginning after December 15, 2018, with early adoption permitted, and requires entities to make new disclosures regardless of whether they elect to reclassify tax effects. The Company is in the process of evaluating the impact that this new guidance is expected to have on its financial statements and/or financial statement disclosures.
In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which changes the way that employers present net periodic pension cost ("NPPC") and net periodic postretirement benefit cost ("NPPBC") within the income statement. The amendment requires an employer to present the service cost component of NPPC and NPPBC in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of NPPC and NPPBC would be presented separately from this line item and below any subtotal of operating income; companies will need to disclose the line items used to present these other components of NPPC and NPPBC, if not separately presented in the statement of operations. In addition, only the service cost component would be eligible for capitalization in assets. This guidance is effective retrospectively for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU No. 2017-07 beginning as of January 1, 2018, and the Company expects that substantially all of the 2018 projected cost of approximately $9.0 million will be presented below operating income in the Company's 2018 Statement of Operations and Comprehensive (Loss) Income.
In January 2017, the FASB issued ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment," which simplifies the annual goodwill impairment analysis test by eliminating Step 2 of the current two-step impairment test. Under the new guidance, an entity would continue to perform the first step of the annual impairment test by comparing the carrying amount of a reporting unit with its fair value. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the goodwill impairment charge would be equal to the amount of such difference. This guidance is effective for annual periods beginning after December 15, 2016,2019, with early adoption permitted. The Company expects to adopt ASU No. 2015-112017-04 beginning onas of January 1, 2017. The Company2020 and is evaluatingin the process of assessing the impact that thethis new guidance willis expected to have on the Company’s results of operations, financial condition andand/or financial statement disclosures.
In April 2015,January 2017, the FASB issued ASU No. 2015-03, "Simplifying2017-01, "Clarifying the PresentationDefinition of Debt Issuance Costs,a Business," which requiresfurther clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt ASU No. 2017-01 beginning as of January 1, 2018 and expects that this new guidance will not have an impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Receipts and Cash Payments," which aims to standardize how certain transactions are classified within the Statement of Cash Flows, including, among other issues, debt issuanceprepayment and extinguishment costs to be presented in the financial statements asand contingent consideration payments made after a deduction from the corresponding debt liability, consistent with the presentation of debt discounts. Thebusiness combination. This guidance is effective for annual periods beginning after December 15, 2015,2017, with early adoption permitted,permitted. The Company will adopt ASU No. 2016-15 beginning as of January 1, 2018 and is to be applied retrospectively. The Company adopted ASU No. 2015-03 beginning on January 1, 2016 andin the adoptionprocess of assessing the impact that this new guidance is not expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires lessees to recognize a materialright-of-use asset and a liability on the balance sheet for all leases, with the exception 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 adjustment such as for 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 will adopt ASU No. 2016-02 beginning as of January 1, 2019 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers,Customers." which supersedes theThis new standard will replace most existing revenue recognition requirementsguidance in the ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification.U.S. GAAP when it becomes effective. The coreunderlying principle of ASU No. 2014-09this new standard is for companies tothat an entity should recognize revenue fromto depict the transfer of promised goods or services to customers in amountsan amount that reflectreflects the consideration tofor which the companyentity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also will result in enhanced disclosures about revenue, provide guidanceEntities may adopt this new standard either retrospectively for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. The guidance is effective for annual and interimall periods beginning after December 15, 2017, with early adoption prohibited. The Company expects to adopt ASU No. 2014-09 beginning January 1, 2018 and ispresented in the process of assessingfinancial statements (i.e., the impact that the new guidance will have on the Company's results of operations, financial condition and financial statement disclosures.
In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern," that will explicitly require management to assess an entity's ability to continue as a going concern and to provide related footnote disclosures if conditions give rise to substantial doubt. According to ASU No. 2014-15, substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. The likelihood threshold of "probable", similar to its current use in U.S. GAAP for loss contingencies, will be used to define substantial doubt. Disclosures will be required under ASU No. 2014-15 if conditions give rise to substantial doubt, including whether and how management's plans will alleviate the substantial doubt. The guidance is effective for annual periods beginning after December 15, 2015, with early adoption prohibited. The Company adopted ASU No. 2014-15 beginning January 1, 2016 and the adoption of the new guidance is not expected to have a material impact on the Company’s results of operations, financial condition and/full retrospective method) or financial statement disclosures.






F-14
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

as a cumulative-effect adjustment as of the date of adoption (i.e., the modified retrospective method), without applying to comparative years’ financial statements.
In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date," which allows for a deferral of the adoption date for ASU No. 2014-09 until January 1, 2018 and permits early adoption of ASU No. 2014-09, but not before the effective date of January 1, 2017.
The Company adopted ASU No. 2014-09 beginning as of January 1, 2018 using the modified retrospective method. While the Company is finalizing its assessment of all potential impacts of ASU No. 2014-09, given the nature of the Company's products and the terms and conditions applicable to sales to its customers, the timing and amount of revenue recognized based on the underlying principles of this new standard are consistent with the Company's revenue recognition policy under previous guidance. As a result, the Company does not currently expect that the adoption will have a material impact on its revenues, results of operations or financial position. The Company does, however, expect to expand its financial statement disclosures in order to comply with the new standard. The Company has drafted its accounting policy with respect to the new standard based on a review of its business. The new policy reflects updates to internal controls and processes to enable the preparation of financial information upon its adoption of ASU No. 2014-09.


2. BUSINESS COMBINATIONS
The CBBeauty GroupElizabeth Arden Acquisition
On April 21, 2015 (the "CBBthe Elizabeth Arden Acquisition Date"),Date, the Company completed the CBBElizabeth Arden Acquisition for a total cash considerationpurchase price of $48.6 million. CBB develops, manufactures, markets$1,034.3 million pursuant to an agreement and distributes fragrancesplan of merger (the "Merger Agreement") by and other beauty products under various celebrity, lifestyleamong Revlon, Products Corporation, RR Transaction Corp. ("Acquisition Sub," then a wholly-owned subsidiary of Products Corporation), and fashion brands licensed from third parties, principally throughElizabeth Arden. On the Elizabeth Arden Acquisition Date, Elizabeth Arden merged (the "Merger") with and into Acquisition Sub, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of Products Corporation.
In North America, Elizabeth Arden’s principal customers include prestige retailers, the mass retail channel, specialty stores, department stores and selective distribution in international territories. Onother retailers, distributors, e-commerce sites, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business. Elizabeth Arden products are also sold through the CBBElizabeth Arden Red Door Spa beauty salons and spas. Internationally, Elizabeth Arden’s portfolio of owned and licensed brands is sold to perfumeries, boutiques, department stores, travel retailers and distributors.
Products Corporation financed the Elizabeth Arden Acquisition Date,with the Company usedproceeds from (i) a 7-year $1.8 billion senior secured term loan facility (the "2016 Term Loan Facility" and such agreement being the "2016 Term Loan Agreement"); (ii) $35 million of borrowings under a 5-year $400 million senior secured asset-based revolving credit facility (the "2016 Revolving Credit Facility" and such agreement being the "2016 Revolving Credit Agreement" and such facility, together with the 2016 Term Loan Facility, being the "2016 Senior Credit Facilities" and such agreements being the "2016 Credit Agreements"); (iii) $450 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 (the "6.25% Senior Notes"); and (iv) approximately $126.7 million of cash on handhand. Refer to pay approximately 70% ofNote 11, "Long Term Debt" for further details related to financing the total cash consideration, or $34.6 million. The remaining $14.0 million of the total cash consideration is payable in equal annual installments over 4 years from the CBBElizabeth Arden Acquisition Date, subject to the selling shareholders' compliance with certain service conditions. These remaining installments are recorded as a component of SG&A expenses ratably over the 4-year installment period. CBB is expected to provide the Company with a platform to develop the Company's presence in the fragrance category. Theand related debt restructuring transactions.

Elizabeth Arden's results of operations of the CBB business are included in the Company’s Consolidated Financial Statements commencing on the CBBElizabeth Arden Acquisition Date. Pro forma results of operations have not been presented, as the impact of the CBB Acquisition on the Company’s consolidated financial results is not material.
The Company accounted for the CBB Acquisition as a business combination during the second quarter of 2015. The table below summarizes the allocation of the total consideration of $34.6 million paid on the CBB Acquisition Date, as well as adjustments for changes in working capital during the third quarter of 2015, with resulting goodwill, as follows:
 
Amounts recognized at April 21, 2015
(Provisional)(a)
 Measurement Period Adjustments 
Amounts recognized at April 21, 2015
(Adjusted)
Total Tangible Net Assets Acquired (b)
$3.9
 $(1.6) $2.3
Purchased Intangible Assets (c)
11.9
 0.2
 12.1
Goodwill18.8
 0.7
 19.5
        Total consideration transferred$34.6
 $(0.7) $33.9
(a) As previously reported in Revlon, Inc.'s second quarter 2015 Form 10-Q.

(b) Total net assets acquiredFor the twelve months ended December 31, 2017, the Company incurred $50 million of acquisition and integration costs in the CBB Acquisition are comprised primarilyits consolidated statement of inventory, trade receivablesoperations and accounts payable.

(c) Purchased intangible assets include customer networks valued at $7.0 million, distribution rights valued at $3.5 million and trade names valued at $1.6 million, with weighted average remaining useful lives of 14, 5 and 8 years, respectively.
In determining the estimated fair values of net assets acquired and resulting goodwillcomprehensive (loss) income related to the CBBElizabeth Arden Acquisition, the Company considered, among other factors, the analysiswhich consisted of CBB's historical financial performance$49.2 million of integration costs and an estimate$0.8 million of the future performanceacquisition costs. The integration costs consisted of the acquired business, as well as market participants' intended use of the acquired assets. Both the intangible assets acquired and goodwill are not deductible for income tax purposes.
Other Acquisitions Completed in 2015
The Company also completed the following acquisitions during 2015:
 
Purchase
Consideration
 Total Net Assets Acquired Purchased Intangible Assets Goodwill
American Crew and Revlon Professional Distribution Rights - Australia (1)
$4.4
 $1.4
 $2.9
 $—
Cutex U.S. (2)
8.1
 1.0
 5.2
 1.9
Total$12.5
 $2.4
 $8.1
 $1.9
(1)
In March 2015, the Company re-acquired rights to distribute its American Crew and Revlon Professional brands in Australia. The Company acquired customer relationships valued at $2.9 million, with weighted average remaining useful lives of 10 years.
(2)
In October 2015, the Company acquired the U.S. Cutex business and related assets from Cutex Brands, LLC (the "Cutex Acquisition"). The Company acquired inventory at fair value of approximately $1.0 million, trade names valued at $3.6 million and customer relationships valued at $1.6 million, with weighted average remaining useful lives of 10 years.
The results ofnon-restructuring costs related to integrating Elizabeth Arden's operations of these acquisitions are included ininto the Company's statement of income (loss) commencing on each respectivebusiness, including professional fees, lease termination costs and employee related costs. The acquisition date. The American Crew and Revlon Professional distribution rights acquisition iscosts primarily included within thlegal fees directly attributable to the Elizabeth Arden Acquisition.


F-15
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

e Company's Professional segment andPurchase Price of the Cutex U.S. acquisition is included within the Company's Consumer segment. The results of operations of these acquisitions did not have a material impact on the Company's results of operations for 2015. Elizabeth Arden Acquisition
The Colomer Acquisition
On October 9, 2013 (the "Colomer Acquisition Date"), Products Corporation completed its acquisitioncomponents of The Colomer Group Participations, S.L. ("Colomer" and the "Colomer Acquisition"), a Spanish company now known as Beautyge Participations, S.L., which primarily manufactures, markets and sells professional products to hair and nail salons and distributors to professional salons under brands such as Revlon Professional, CND, including CND Shellac, and American Crew, as well as retail and multi-cultural product lines, including under the Creme of Nature brand. The cash purchase price for the ColomerElizabeth Arden Acquisition was $664.5 million, which Products Corporation financed with proceeds from the Acquisition Term Loan under the Amended Term Loan Facility (both as hereinafter defined). The Colomer Acquisition provides the Company with broad brand, geographic and retailer diversification and substantially expands the Company's business, providing both distribution into new retailers and cost synergy opportunities.
The results of operations of the Colomer business have been included, in the Company’s Consolidated Financial Statements, commencing on the Colomer Acquisition Date.
For 2015, 2014 and 2013, respectively, the Company incurred acquisition and integration costs related to the Colomer Acquisition, summarizedwere as follows:
 Year Ended December 31,
 2015 2014 2013
   Acquisition costs$—
 $0.5
 $12.9
   Integration costs2.1
 5.9
 12.5
Total acquisition and integration costs$2.1
 $6.4
 $25.4
 
As of
September 7, 2016
Purchase price of Elizabeth Arden common stock (1)
$431.5
Repayment of Elizabeth Arden senior notes (2)
350.0
Repayment of Elizabeth Arden revolving credit facility, including accrued interest (3)
142.5
Repayment of Elizabeth Arden second lien credit facility, including accrued interest (3)
25.0
Repurchase of Elizabeth Arden preferred stock (4)
55.0
Payment of accrued interest and call premium on Elizabeth Arden Senior Notes (5)
27.4
Payment of Elizabeth Arden dividends payable at Elizabeth Arden Acquisition Date (6) 
2.9
Total Purchase Price$1,034.3
(1)All of Elizabeth Arden’s then issued and outstanding common stock was canceled and extinguished on the Elizabeth Arden Acquisition Date and converted into the right to receive $14 in cash per share, without interest, less any required withholding taxes, that was paid by Products Corporation upon the completion of the Elizabeth Arden Acquisition. The $431.5 million purchase price for Elizabeth Arden common stock included the settlement of all then outstanding Elizabeth Arden stock options and all then outstanding Elizabeth Arden restricted share units at the Elizabeth Arden Acquisition Date for a total cash payment of $11.1 million.
(2)The purchase price included the repurchase of the entire $350 million aggregate principal amount then outstanding of Elizabeth Arden’s 7.375% senior notes due 2021 (the "Elizabeth Arden Old Senior Notes").
(3)The purchase price included the repayment of the entire $142 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility and the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility, each of which facilities were terminated as of the Elizabeth Arden Acquisition Date.
(4)The purchase price included $55 million that was paid to retire the entire $55 million liquidation preference of all of the then issued and outstanding 50,000 shares of Elizabeth Arden preferred stock, par value $0.01 per share (the "Elizabeth Arden Preferred Stock"), which amount included a $5 million change of control premium.
(5)Interest on the Elizabeth Arden Old Senior Notes accrued at a rate of 7.375% per annum and was payable semi-annually on March 15 and September 15 of every year. The approximately $12.3 million of accrued and unpaid interest was calculated based on 176 days of accrued interest as of the Elizabeth Arden Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Old Senior Notes, upon a change in control, such notes were repurchased at a price equal to 103.69% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the date of such repurchase. The repurchase of the Elizabeth Arden Old Senior Notes was consummated on October 7, 2016.
(6)The purchase price included the payment of approximately $2.9 million in accrued dividends payable at the Elizabeth Arden Acquisition Date to the holders of the then outstanding Elizabeth Arden Preferred Stock.

There were no acquisition costs
F-16
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in 2015 related to the Colomer Acquisition. Acquisition costs in 2014millions, except share and 2013 primarily included legal fees related to the Colomer Acquisition.per share amounts)
Integration costs consist of non-restructuring costs related to integrating Colomer's operations into the Company's business. Integration costs incurred during 2015 primarily included legal and professional fees. Integration costs incurred during 2014 primarily included employee-related costs related to management changes and audit-related fees. For 2013, integration costs primarily related to an impairment of in-progress capitalized software development costs, as well as employee-related costs due to management changes.
Purchase Price Allocation
The Company accounted for the ColomerElizabeth Arden Acquisition as a business combination during the fourththird quarter of 2013.2016. The Company finalized the allocation of the Elizabeth Arden purchase price to the Elizabeth Arden assets acquired and liabilities assumed in the third quarter of 2017, which resulted in several adjustments to their previously-disclosed estimated fair value (the "Measurement Period Adjustments"). The table below summarizes the amounts recognized for assets acquired and liabilities assumed asallocation of the Colomertotal consideration of $1,034.3 million paid on the Elizabeth Arden Acquisition Date, both as wellpreviously reported and as adjustments madeadjusted by the measurement period adjustments.
 
Estimated Fair Value as Previously Reported(a)
 Measurement Period Adjustments Fair Value as Adjusted
Cash$41.1
 $—
 $41.1
Accounts Receivable132.6
 —
 132.6
Inventories323.3
 —
 323.3
Prepaid expenses and other current assets30.7
 —
 30.7
Property and equipment91.2
 —
 91.2
Deferred taxes, net (b)
68.7
 10.0
 78.7
Intangible assets (c)
336.8
 (15.4) 321.4
Goodwill221.7
 12.3
 234.0
Other assets16.6
 —
 16.6
     Total assets acquired$1,262.7
 $6.9
 $1,269.6
Accounts payable(116.0) —
 (116.0)
Accrued expenses (d)
(109.3) 1.7
 (107.6)
Other long-term liabilities(e)
(3.1) (8.6) (11.7)
     Total liabilities assumed$(228.4) $(6.9) $(235.3)
     Total consideration transferred$1,034.3
 $—
 $1,034.3
(a)As previously reported in 2014 after the Colomer Acquisition Date to the amounts initially recorded in 2013 (the "Measurement Period Adjustments"). Accordingly, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2013 to reflect these Measurement Period Adjustments. Revlon's 2016 Form 10-K.

(b)The Measurement Period Adjustments did not haveto deferred taxes, net, related to net increases in deferred tax assets as a material impact onresult of the Company's Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for 2014.
The Company recordedchanges to the total consideration of $664.5 million based on the respective estimated fair values and remaining useful lives of acquired trade name intangible assets and the net assets acquired on the Colomer Acquisition Date with resulting goodwill,recognition of non-qualified benefit plan obligations of Elizabeth Arden, as follows:

F-16
REVLON, INC. AND SUBSIDIARIESdiscussed further below.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

 
Amounts Previously Recognized as of October 9, 2013 (Provisional) (a)
 Measurement Period Adjustments Amounts Recognized as of Colomer Acquisition Date (Adjusted)
Cash and cash equivalents$36.9
 $—
 $36.9
Trade receivables83.9
 —
 83.9
Inventories75.1
 —
 75.1
Prepaid expenses and other31.3
 —
 31.3
Property, plant and equipment96.7
 —
 96.7
Intangible assets(b)
292.7
 5.4
 298.1
Goodwill(b)(c)
255.7
 (2.4) 253.3
Deferred tax asset - noncurrent53.1
 —
 53.1
Other assets(c)
1.9
 3.9
 5.8
         Total assets acquired927.3
 6.9
 934.2
Accounts payable48.0
 —
 48.0
Accrued expenses and other65.6
 —
 65.6
Long-term debt0.9
 —
 0.9
Long-term pension and other benefit plan liabilities4.5
 —
 4.5
Deferred tax liability(b)
123.3
 2.1
 125.4
Other long-term liabilities(c)
20.5
 4.8
 25.3
        Total liabilities assumed262.8
 6.9
 269.7
        Total consideration$664.5
 $—
 $664.5
(a)(c) As previously reported in Revlon, Inc.'s 2013 and 2014 Annual Reports on Form 10-K.
(b)The Measurement Period Adjustments to intangible assets deferred tax liability and goodwillrelated to a revised approach in the determination of the fair values for the acquired Elizabeth Arden trade names. During the first quarter of 2014 related to2017, the Company obtained further clarity into the product portfolio acquired through the Elizabeth Arden Acquisition, and, recognizing that each brand has its own distinct profile with its own defining attributes, as well as differing expected useful lives, determined that a change in assumptions used to calculate the fair value of an acquired customer relationship intangible asset, which increased the intangible asset by $5.4 million and extended the life of the asset from 10 to 20 years, increased deferred tax liabilities by $2.1 million and resulted in a net decrease to goodwill of $3.3 million.
(c)revised valuation approach was needed. The Company recorded a $3.9 million income tax adjustment tovalued the beginning tax balanceacquired trade names within other assetsthe Elizabeth Arden product portfolio, including Visible Difference, Elizabeth Arden Ceramide, Prevage, Eight Hour, Elizabeth Arden Red Door, Elizabeth Arden Green Tea and a $4.8 million adjustment to other long-term liabilities, resulting in a net increase to goodwill of $0.9 million.
In determiningElizabeth Arden 5th Avenue. The Company determined the fair values of net assetseach acquired trade name using a risk-adjusted discounted cash flow approach, specifically the relief-from-royalty method, which requires identifying the hypothetical cash flows generated by an assumed royalty rate that a third party would pay to license the trade names, and discounting them back to the Elizabeth Arden Acquisition Date. The royalty rate used in the Colomer Acquisition and resulting goodwill,valuation of each acquired trade name was based on a consideration of market rates for similar categories of assets.

The difference between the Company considered, among other factors, an analysis of Colomer's historical financial performance and an estimatepreliminary valuation of the future performanceElizabeth Arden trade name and the sum of the acquired business, as well as market participants' intended use of the acquired assets.
The intangible assets acquired in the Colomer Acquisition, based on the fair values of the identifiable intangible assets, were as follows:individual trade names within the Elizabeth Arden product portfolio resulted in an increase to goodwill of $15.4 million, which was recorded in the fiscal quarter ended March 31, 2017. As a result of this revised approach, the Company recognized amortization expense of approximately $1.8 million in its consolidated statement of operations and comprehensive (loss) income in 2017 related to the amortization of the acquired trade names from the Elizabeth Arden Acquisition Date through December 31, 2016.

 Fair Values at October 9, 2013 Weighted Average Useful Life (in years)
Trade names, indefinite-lived$108.6
 Indefinite
Trade names, finite-lived109.4
 5 - 20
Customer relationships62.4
 15 - 20
License agreement4.1
 10
Internally-developed IP13.6
 10
Total acquired intangible assets$298.1
  
(d)The Measurement Period Adjustments to accrued expenses related to changes in estimated payments for acquisition-related costs.

(e)The Measurement Period Adjustments to other long-term liabilities related to the recognition of the projected benefit obligation of a certain foreign non-qualified benefit plan of Elizabeth Arden.




F-17
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

Goodwill of $234 million represents the excess of the purchase price paid by Products Corporation for the Elizabeth Arden Acquisition over the fair value of the identifiable net assets acquired by Products Corporation in the Elizabeth Arden Acquisition. Factors contributing to the purchase price resulting in the recognition of goodwill include estimated annualized synergies and cost reductions, expanded category mix, channel diversification and a broader geographic footprint.

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

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

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

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

Unaudited Pro Forma Results

The following table presents the Company's pro forma consolidated net sales and income from continuing operations before income taxes for the years ended December 31, 2016 and 2015, respectively. The unaudited pro forma results include the historical consolidated statements of operations of the Company and Colomer,Elizabeth Arden, giving effect to the ColomerElizabeth Arden Acquisition and related financing transactions as if they had occurred on January 1, 2013.
The Company's pro forma consolidated net sales and income from continuing operations, before income taxes for 2013, are presented inat the following table:beginning of the earliest period presented.
 Unaudited Pro Forma Results
 Year Ended December 31, 2013
Net sales$1,908.9
Income from continuing operations, before income taxes125.2
The pro forma results, prepared in accordance with U.S. GAAP, include the following pro forma adjustments related to the Colomer Acquisition:
(i) as a result of an $11.1 million fair value adjustment to acquired inventory at the Colomer Acquisition Date, the Company recognized $8.5 million of the increase in cost of sales in its historical 2013 consolidated financial statements. The pro forma adjustments included an adjustment to reverse the $8.5 million recognized in 2013 cost of sales and recognize the full $11.1 million in 2012 cost of sales;
(ii) the pro forma increase in depreciation and amortization expense based on the $14.3 million of fair value adjustments to property, plant and equipment and acquired finite-lived intangible assets recorded in connection with the Colomer Acquisition in 2013;
(iii) the elimination of $9.0 million of goodwill impairment charges recognized by Colomer in 2013;
(iv) the elimination of $25.8 million of acquisition and integration costs recognized by the Company and Colomer in 2013;
(v) the elimination of $3.6 million of Colomer's debt facility fees recognized in 2013, as the debt facility was closed on the Colomer Acquisition Date; and
(vi) the $19.4 million pro forma increase in interest expense and amortization of debt issuance costs in 2013, resulting from the issuance of the Acquisition Term Loan used by Products Corporation to finance the Colomer Acquisition.
The unaudited pro forma results do not include: (1) any revenue or cost reductions that may be achieved through the business combination; or (2) the impact of non-recurring items directly related to the business combination.
The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Colomer Acquisition had been completed as of the date for which the pro forma financial information is presented. In addition, the unaudited pro forma results do not purport to project the future consolidated operating results of the combined company.
 Unaudited Pro Forma Results
  Year Ended December 31,
  2016 2015
Net sales $2,858.9
 $2,863.5
Loss from continuing operations, before income taxes (57.1) (74.6)


3. RESTRUCTURING CHARGES
2015 Efficiency Program
In September 2015, the Company initiated certain restructuring actions to drive certain organizational efficiencies across the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions, which occurred during 2015 and are planned to occur through 2017, are expected to reduce general and administrative expenses within the Consumer and Professional segments. Of the $9.5 million of restructuring and related charges recognized in 2015 for the 2015 Efficiency Program, $6.0 million related to the Consumer segment and $3.2 million related to the Professional segment, with the remaining charges included within unallocated corporate expenses. The Company expects to recognize total restructuring and related charges for the 2015 Efficiency Program of $10.1 million by the end of 2017, of which $6.1 million relates to the Consumer segment, $3.7 million relates to the Professional segment and the remaining charge relates to unallocated corporate expenses.
A summary of the restructuring and related charges incurred through December 31, 2015 in connection with the 2015 Efficiency Program is presented in the following table:

F-18
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

 Restructuring Charges and Other, Net
 Employee Severance and Other Personnel Benefits Other Total Restructuring Charges
Charges incurred through December 31, 2015$9.4
 $0.1
 $9.5
Total expected charges$9.5
 $0.6
 $10.1
The pro forma results, prepared in accordance with U.S. GAAP, include the following pro forma adjustments related to the Elizabeth Arden Acquisition:

(i) as a result of a $38 million increase in the fair value of acquired inventory at the Elizabeth Arden Acquisition Date, the Company expects that cash payments will total approximately $10.3recognized a $20.7 million increase in its cost of sales during 2016 in its consolidated financial statements. The pro forma adjustments include an adjustment to reverse the $20.7 million recognized in the year ended December 31, 2016 within cost of sales because it does not have a recurring impact;

(ii) the elimination of $68.0 million of acquisition and integration costs recognized by the Company and Elizabeth Arden in connection with consummating the Elizabeth Arden Acquisition during 2016;

(iii) a $1.4 million pro forma decrease in depreciation as a result of the fair value adjustments to property and equipment for the twelve months ended December 31, 2016;

(iv) a $5.6 million pro forma increase in amortization expense of acquired finite-lived intangible assets recorded in connection with the 2015 Efficiency Program, including $0.2 millionElizabeth Arden Acquisition for capital expenditures (which capital expenditures are excluded from total restructuringthe twelve months ended December 31, 2016; and

(v) a pro forma increase in interest expense and amortization of debt issuance costs related to financing the Elizabeth Arden Acquisition and related charges expecteddebt restructuring transactions as summarized in the following table. Refer to be recognizedNote 11, "Long Term Debt" for further details related to financing the 2015 Efficiency Program), of which $2.8 million was paid in 2015, $5.8 million is expected to be paid in 2016,Elizabeth Arden Acquisition and the remaining balance expected to be paid in 2017.related debt restructuring transactions.
Integration Program
Following Products Corporation's October 2013 Colomer Acquisition, the Company announced in January 2014 that it was implementing actions to integrate Colomer’s operations into the Company’s business, as well as additional restructuring actions identified to reduce costs across the Company’s businesses (all such actions, together, the “Integration Program”).
  Year Ended December 31,
($ in millions) 2016 2015
Interest Expense    
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes $121.9
 $106.4
Reversal of Elizabeth Arden’s historical interest expense (19.5) (26.2)
Company historical interest expense, as reflected in the historical consolidated financial statements (75.9) (50.9)
Total adjustment for pro forma interest expense $26.5
 $29.3
Debt issuance costs    
Pro forma amortization of debt issuance costs $8.1
 $8.1
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements (3.3) (4.4)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs (1.3) (1.5)
Total adjustment for pro forma amortization of debt issuance costs $3.5
 $2.2

The Company recognized total restructuring charges, capital expenditures andunaudited pro forma results do not include: (1) any incremental revenue generation, synergies or cost reductions that may be achieved as a result of the Elizabeth Arden Acquisition; or (2) the impact of non-operating or non-recurring items directly related non-restructuring costs underto the Integration ProgramElizabeth Arden Acquisition. In addition, the unaudited pro forma results do not purport to project the future consolidated operating results of approximately $45 million in the aggregate over the periods described below.combined company.

The Integration Program was designed to deliver cost reductions throughoutCutex International Acquisition
On May 31, 2016 (the "Cutex International Acquisition Date"), the combined organization by generating synergies and operating efficiencies within the Company’s global supply chain and consolidating offices and back office support, and other actions which were designed to reduce selling, general and administrative ("SG&A") expenses. The Company completed the Integration Program asacquisition of December 31, 2015.
The approximately $45 millionCutex International from Coty Inc. (the "Cutex International Acquisition") for total cash consideration of total non-restructuring costs, capital expenditures and restructuring charges under$29.1 million. Following the Integration Program referred to above consistedCompany's October 2015 acquisition of the following:
1.$2.1 million, $5.9 million and $12.5 million of non-restructuring integration costs recognized in 2015, 2014 and 2013, respectively. Such costs were reflected within acquisition and integration costs in the Company's Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and are related to combining Colomer’s operations into the Company’s business;
2.Total integration-related capital expenditures of $5.3 million, of which $0.9 million and $4.4 million were paid during 2015 and 2014, respectively; and
3.Total restructuring and related charges of $18.3 million, of which $(1.8) million and $20.1 million were recognized during 2015 and 2014, respectively. A summary of the restructuring and related charges for the Integration Program incurred through December 31, 2015 are as follows:
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits Other Total Restructuring Charges Inventory Write-offs and Other Manufacturing-Related Costs (a) Other Charges (b) Total Restructuring and Related Charges
Charges incurred through December 31, 2014$17.3
 $1.6
 $18.9
 $0.6
 $0.6
 $20.1
Charges incurred through December 31, 2015$(3.4) $0.6
 $(2.8) $0.7
 $0.3
 $(1.8)
Total charges$13.9
 $2.2
 $16.1
 $1.3
 $0.9
 $18.3
(a)
Inventory write-offs and other manufacturing-related costs are recorded within cost of sales within the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
(b)
Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
During 2015,Cutex business and related assets in the U.S. from Cutex Brands, LLC (the "Cutex U.S. Acquisition" and together with the Cutex International Acquisition, the "Cutex Acquisitions"), combined with other Cutex businesses that the Company recorded a $1.8 million benefit related to a changeacquired in estimate1998, the Cutex International Acquisition completed the Company's global consolidation of the Cutex brand. Cutex International's results of operations are included in connection with the Integration Program,Company’s Consolidated Financial Statements commencing on the Cutex International Acquisition Date. Pro forma results of which $3.1 millionoperations have not been presented, as the impact of the Cutex International Acquisition on the Company’s consolidated financial results is related to the Consumer segment, partially offset by additional charges of $1.3 million related to the Professional segment. During 2014, the Company recorded $20.1 million of charges related to the Integration Program, of which $10.2 million related to the Consumer segment and $9.9 million related to the Professional segment.not material.

F-19
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The Company expects that cash paymentsaccounted for the Cutex International Acquisition as a business combination in the second quarter of 2016. The table below summarizes the allocation of the total consideration paid:
 Amounts Recognized as of May 31, 2016
Inventory$0.8
Purchased Intangible Assets (a)
17.2
Goodwill11.1
        Total consideration transferred$29.1
(a) Purchased intangible assets include customer networks fair valued at $11.9 million and intellectual property fair valued at $0.8 million, which are amortized over useful lives of 15 and 10 years, respectively, and indefinite lived trade names fair valued at $4.5 million.
As part of the Cutex International Acquisition, the Company reacquired the Cutex trade name from Coty under an assignment of a license agreement, which had previously provided Coty with an exclusive right to manufacture, market and sell Cutex branded products for an initial term and perpetual automatic 20-year renewals. Based on the terms and conditions of the existing license agreement and other factors, the Cutex trade name was assigned an indefinite-life and, therefore, will not be amortized.
In determining the estimated fair values of net assets acquired and resulting goodwill related to the restructuringCutex International Acquisition, the Company considered, among other factors, the analysis of Cutex International's historical financial performance and related chargesan estimate of the future performance of the acquired business, as well as the intended use of the acquired assets. Factors contributing to the purchase price resulting in the recognition of goodwill include the anticipated benefits that the Company expects to achieve through the expansion of its nail product portfolio. Neither the intangible assets nor goodwill acquired in the Cutex International Acquisition are deductible for income tax purposes.


3. RESTRUCTURING CHARGES
EA Integration Restructuring Program
In December 2016, in connection with integrating the Elizabeth Arden and Revlon organizations, the Company began the process of implementing certain integration activities, including consolidating offices, eliminating certain duplicative activities and streamlining back-office support (the "EA Integration Restructuring Program"). The EA Integration Restructuring Program will totalis designed to reduce the Company’s cost of goods sold and selling, general and administrative ("SG&A") expenses. As a result of the EA Integration Restructuring Program, the Company expects to eliminate approximately $18425 positions worldwide.
In connection with implementing the EA Integration Restructuring Program, the Company expects to recognize approximately $90 million to $95 million of which $6.7total pre-tax restructuring charges (the "EA Integration Restructuring Charges"), consisting of: (i) approximately $65 million was paid during 2015to $70 million of employee-related costs, including severance, retention and $9.6other contractual termination benefits; (ii) approximately $15 million was paid during 2014. The remaining balance is expected to be paid in 2016.
December 2013 Program
In December 2013, the Company announced restructuring actions that included exiting its direct manufacturing, warehousingof lease termination costs; and sales business operations in mainland China, as well as implementing(iii) approximately $10 million of other immaterial restructuring actions outside the U.S. that are expected to generate operating efficiencies (the "December 2013 Program"). These restructuring actions resulted in the Company eliminating approximately 1,100 positions in 2014, primarily in China, which included eliminating in the first quarter of 2014 approximately 940 beauty advisors retained indirectly through a third-party agency. The charges incurred for the December 2013 Program relate entirely to the Consumer segment.related charges.
A summary of the restructuring and related charges incurred through 2015December 31, 2017 in connection with the December 2013EA Integration Restructuring Program areis presented in the following table:
 Restructuring Charges and Other, Net        
 Employee Severance and Other Personnel Benefits Other Total Restructuring Charges Allowances and Returns Inventory Write-offs Other Charges Total Restructuring and Related Charges
Charges incurred through December 31, 2014$8.6
 $0.3
 $8.9
 $6.5
 $3.1
 $0.4
 $18.9
Charges incurred through December 31, 2015$—
 $—
 $—
 $—
 $—
 $—
 $—
Total expected charges$8.6
 $0.3
 $8.9
 $6.5
 $3.1
 $0.4
 $18.9
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits 
Lease Termination and Other Costs(a)
 Total Restructuring Charges 
Inventory Adjustments(b)
 
Other Related Charges(c)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2016$31.5
 $0.2
 $31.7
 $0.5
 $2.3
 $34.5
Charges incurred during the year ended December 31, 201731.3
 4.8
 36.1
 0.9
 0.7
 37.7
Cumulative charges incurred through December 31, 2017$62.8
 $5.0
 $67.8
 $1.4
 $3.0
 $72.2
The Company expects net cash payments
(a) Includes primarily lease termination costs related to certain exited Elizabeth Arden office space.
(b) Inventory adjustments are recorded within cost of sales in the December 2013 Program to total approximately $17 million,Company’s consolidated statement of which nil was paid in 2015, $15.5 million was paid during 2014operations and $0.1 million was paid in 2013. The remaining balance is expected to be paid in 2016.comprehensive (loss) income.
(c)Other Immaterial Actions
In 2015, the Company recorded $3.9 million of restructuring and related charges for other immaterial restructuring actionsare recorded within bothSG&A in the ConsumerCompany’s consolidated statement of operations and Professional segments, primarily related to exit and disposal costs associated with the Company's Hong Kong subsidiary.
In 2014, the Company recorded net charges totaling $2.7 million of restructuring and related charges, for other immaterial restructuring actions within both the Consumer and Professional segments, due to $5.3 million of charges primarily related to employee-related costs, partially offset by a $2.6 million gain related to the sale of property, plant and equipment.comprehensive (loss) income.
















F-20
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


A summary of the restructuring charges incurred through December 31, 2017 in connection with the EA Integration Restructuring Program by reportable segment is presented in the following table:
  Charges incurred during the twelve months ended December 31, 2017 Cumulative charges incurred through December 31, 2017
Elizabeth Arden $16.1
 $22.6
Consumer 12.1
 16.3
Professional 4.2
 9.8
Unallocated Corporate Expenses 3.7
 19.1
     Total $36.1
 $67.8

The Company expects that cash payments will total $90 million to $95 million in connection with the EA Integration Restructuring Charges, of which $42.5 million was paid in 2017. The remaining balance is expected to be substantially paid by the end of 2020.


F-21
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Restructuring Reserve
The related liability balance and related activity for each of the Company's restructuring programs as summarized above, are presented in the following table:
      Utilized, Net        Utilized, Net  
Balance
Beginning of Year
 (Income) Expense, Net Foreign Currency Translation 

Cash
 

Non-cash
 
Balance
End of Year
Liability
Balance at January 1, 2017
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2017
2015           
2017           
EA Integration Restructuring Program:(a)
           
Employee severance and other personnel benefits$31.5
 $31.3
 $—
 $(37.0) $—
 $25.8
Other3.0
 6.4
 —
 (5.5) —
 3.9
2015 Efficiency Program:(b)
           
Employee severance and other personnel benefits4.5
 (3.2) —
 (1.0) —
 0.3
Other0.2
 —
 —
 —
 —
 0.2
December 2013 Program:(c)

 
 
 
 
  
Employee severance and other personnel benefits1.2
 —
 —
 (0.1) —
 1.1
Other immaterial actions: (d)

 
 
 
 
  
Employee severance and other personnel benefits1.4
 0.6
 —
 (0.9) —
 1.1
Other1.0
 1.1
 0.1
 (0.7) —
 1.5
Total restructuring reserve$42.8
 $36.2
 $0.1
 $(45.2) $—
 $33.9
           
Liability
Balance at January 1, 2016
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2016
2016           
EA Integration Restructuring Program:           
Employee severance and other personnel benefits$—
 $31.5
 $—
 $—
 $—
 $31.5
Other—
 3.0
       3.0
2015 Efficiency Program:                      
Employee severance and other personnel benefits$—
 $9.4
 $—
 $(2.8) $—
 $6.6
6.6
 0.6
 —
 (2.7) —
 4.5
Other—
 0.1
 —
 —
 —
 0.1
0.1
 0.7
 —
 (0.6) —
 0.2
Integration Program:           
2014 Integration Program:(e)
           
Employee severance and other personnel benefits9.6
 (3.4) (0.2) (5.2) —
 0.8
0.8
 —
 —
 (0.8) —
 —
Other0.1
 0.6
 —
 (0.6) —
 0.1
0.1
 —
 —
 (0.1) —
 —
December 2013 Program:
 
 
 
 
 
           
Employee severance and other personnel benefits1.2
 —
 —
 —
 —
 1.2
1.2
 —
 —
 —
 —
 1.2
Other—
 —
 —
 —
 —
 —
Other immaterial actions:

 
 
 
 
 
           
Employee severance and other personnel benefits3.1
 1.7
 (0.1) (2.4) —
 2.3
2.3
 2.1
 —
 (3.0) —
 1.4
Other—
 2.1
 —
 (1.4) —
 0.7
0.7
 1.5
 —
 (1.5) 0.3
 1.0
Total restructuring reserve$14.0
 $10.5
 $(0.3) $(12.4) $—
 $11.8
$11.8
 $39.4
 $—
 $(8.7) $0.3
 $42.8
           
2014           
Integration Program:           
Employee severance and other personnel benefits$—
 $17.3
 $(0.1) $(7.6) $—
 $9.6
Other—
 1.6
 —
 (1.2) (0.3) 0.1
December 2013 Program:           
Employee severance and other personnel benefits9.0
 (0.5) (0.2) (7.3) 0.2
 1.2
Other0.5
 (0.2) —
 (0.3) —
 —
Other immaterial actions:           
Employee severance and other personnel benefits (a)
2.7
 5.0
 (0.2) (4.5) 0.1
 3.1
Other (a)
1.5
 0.2
 —
 (1.7) —
 —
Total restructuring reserve$13.7
 $23.4
 $(0.5) $(22.6) $—
 $14.0
           
Gain on sale of property, plant and equipment for 2014 other immaterial actions  (2.6)        
Portion of restructuring benefits recorded within (loss) income from discontinued operations (b)
  0.5
        
Total restructuring charges and other, net, from continuing operations  $21.3
        

(a)Includes reserve of $4.2$1.6 million remaining at the end of 2013in charges related to inventory adjustments and other restructuring-related charges that were reflected within cost of sales and SG&A, respectively, in the Company's exit of its then-owned manufacturing facility in France and its then-leased manufacturing facility in Maryland; rightsizing its organizations in France and Italy; and realigning its operations in Latin America and Canada, or the "September 2012 Program."
(b) Refer to Note 4, "Discontinued Operations" for additional information regarding the Company's exit of itsdirect manufacturing, warehousing and sales business operations in mainland China.
As of Company’s December 31, 2015, $11.8 million2017 Consolidated Statement of the restructuring reserve balance was included within accrued expensesOperations and other in the Company's Consolidated Balance Sheet. At December 31, 2014, $13.7 million of the restructuring reserve balance was included within accrued expenses and other and $0.3 million was included within other long-term liabilities in the Company's Consolidated Balance Sheet.Comprehensive (Loss) Income.


F-21F-22
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


(b) In September 2015, the Company initiated restructuring actions to drive certain organizational efficiencies, including reducing general and administrative expenses, within the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions were completed by the end of 2017. During the third quarter of 2017, the Company performed a review of the 2015 Efficiency Program and determined that employees in certain positions that were initially identified to be eliminated would continue to be employed by the Company in varying positions in connection with integrating the Elizabeth Arden and Revlon organizations. As a result, the Company reversed approximately $3.2 million in previously accrued restructuring charges recognized in connection with the 2015 Efficiency Program. Total cash payments made for the 2015 Efficiency Program were $7.1 million. A summary of the restructuring and related charges incurred through December 31, 2017 in connection with the 2015 Efficiency Program by reportable segment is presented in the following table:
  2015 Efficiency Program cumulative charges incurred through December 31, 2017
Consumer $3.6
Professional 3.5
Unallocated Corporate Expenses 0.5
     Total $7.6

(c) In December 2013, the Company announced restructuring actions that primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment (the "December 2013 Program"). The December 2013 Program resulted in the elimination of approximately 1,100 positions in 2014, primarily in China.

(d) Consists primarily of $1.1 million in charges related to the program that Elizabeth Arden commenced prior to the Elizabeth Arden Acquisition to further align their organizational structure and distribution arrangements for the purpose of improving its go-to-trade capabilities and execution and to streamline their organization (the "Elizabeth Arden 2016 Business Transformation Program").

(e) Following Products Corporation's October 2013 acquisition of The Colomer Group Participations, S.L. ("Colomer" and the "Colomer Acquisition"), the Company implemented actions to integrate Colomer's operations into the Company's business, which reduced costs across the Company's businesses and generated synergies and operating efficiencies within the Company's global supply chain and consolidated offices and back office support (all such actions, together, the "2014 Integration Program"). The 2014 Integration Program was substantially completed as of December 31, 2015.

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


4. DISCONTINUED OPERATIONS
On December 30, 2013, the Company announced that it was implementing the December 2013 Program, which primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China (refer to Note 3, "Restructuring Charges - December 2013 Program").within the Consumer segment.
The results of the China discontinued operations are included within income (loss) income from discontinued operations, net of taxes, and relate entirely to the Consumer segment. The summary comparative financial results of discontinued operations arewere as follows:
 Year Ended December 31,
 2015 2014 2013
Net sales$—
 $2.6
 $13.8
(Loss) income from discontinued operations, before taxes(3.2) 1.5
 (30.8)
Provision for income taxes—
 0.2
 (0.4)
(Loss) income from discontinued operations, net of taxes(3.2) 1.3
 (30.4)
(a)
Net sales during 2014 include favorable adjustments to sales returns related to the Company's exit of its direct manufacturing, warehousing and sales business operations in mainland China.
(b)
Included in loss from discontinued operations, before taxes for 2013 are $20.0 million of restructuring and related charges related to the December 2013 Program. Refer to Note 3, "Restructuring Charges - December 2013 Program," for related disclosures.
Assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consist of the following:
 December 31, 2015 December 31, 2014
Cash and cash equivalents$2.0
 $2.4
Trade receivables, net0.2
 0.2
Total current assets2.2
 2.6
Total assets$2.2
 $2.6
 
 
Accounts payable$0.7
 $0.2
Accrued expenses and other3.6
 3.9
Total current liabilities4.3
 4.1
Total liabilities$4.3
 $4.1

5. INVENTORIES
 December 31,
 2015
2014
Raw materials and supplies$58.2
 $47.2
Work-in-process8.3
 9.0
Finished goods117.3
 100.4
 $183.8
 $156.6

 Year Ended December 31,
 2017 2016 2015
Net sales$—
 $—
 $—
Income (loss) from discontinued operations, before taxes2.4
 (4.9) (3.2)
Provision for income taxes0.3
 —
 —
Income (loss) from discontinued operations, net of taxes2.1
 (4.9) (3.2)




F-22
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


6. PREPAID EXPENSES AND OTHER
 December 31,
 2015 2014
Prepaid expenses$18.2
 $17.3
Other35.1
 27.3
 $53.3
 $44.6


7. PROPERTY, PLANT AND EQUIPMENT
 December 31,
 2015 2014
Land and improvements$10.7
 $11.7
Building and improvements84.7
 83.9
Machinery, equipment and capital leases213.0
 198.7
Office furniture, fixtures and capitalized software118.1
 104.2
Leasehold improvements29.0
 28.1
Construction-in-progress31.5
 35.9
Property, plant and equipment, gross487.0
 462.5
Accumulated depreciation and amortization(271.7) (250.5)
Property, plant and equipment, net$215.3
 $212.0
Depreciation and amortization expense for 2015, 2014 and 2013 was $37.0 million, $36.9 million and $25.2 million, respectively.


8. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill

The following table presents the changes in goodwill by segment during each of 2015 and 2014:
 Consumer Professional Other Total
Balance at January 1, 2014$217.9
 $254.4
 $—
 $472.3
Foreign currency translation adjustment—
 (8.2) —
 (8.2)
Balance at December 31, 2014$217.9
 $246.2
 $—
 $464.1
Goodwill acquired1.9
 —
 19.5
 21.4
Foreign currency translation adjustment—
 (5.5) (0.6) (6.1)
Goodwill impairment charge$(9.7) $—
 $—
 $(9.7)
Balance at December 31, 2015$210.1
 $240.7
 $18.9
 $469.7

The goodwill acquired during 2015 relates to: (i) $19.5 million of goodwill acquired in the CBB Acquisition, which was assigned to the Company's Other segment; and (ii) $1.9 million of goodwill acquired in the Cutex Acquisition. See Note 1, "Description of the Business and Summary of Significant Accounting Policies," for further discussion of the "Other" segment and Note 2, "Business Combinations," for further discussion of the CBB Acquisition.
For 2015, the Company utilized the two-step process as prescribed by ASC 350, Intangibles - Goodwill and Other, in order to identify potential impairment for each of its reporting units. In the first step of this test, the Company compared the fair value

F-23
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

of eachAssets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consisted of the following:
 December 31,
 2017 2016
Cash and cash equivalents$1.3
 $1.7
Trade receivables, net0.2
 0.2
Total current assets1.5
 1.9
Total assets$1.5
 $1.9
 
 
Accounts payable$0.5
 $0.5
Accrued expenses and other3.5
 3.3
Total current liabilities4.0
 3.8
Total liabilities$4.0
 $3.8


5. INVENTORIES
As of December 31, 2017 and 2016, the Company's inventory balances consisted of the following:
 December 31,
 2017 2016
Raw materials and supplies$123.4
 $72.9
Work-in-process22.0
 33.5
Finished goods352.5
 318.2
 $497.9
 $424.6


6. PREPAID EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's prepaid expenses and other balances were as follows:
 December 31,
 2017 2016
Prepaid expenses$43.3
 $34.6
Other70.1
 54.2
 $113.4
 $88.8



F-24
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

7. PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2017 and 2016, the Company's property, plant and equipment balances consisted of the following:
 December 31,
 2017 2016
Land and improvements$11.6
 $10.4
Building and improvements97.0
 88.6
Machinery, equipment and capital leases275.1
 243.3
Office furniture, fixtures and capitalized software168.3
 122.7
Counters and trade fixtures62.0
 60.8
Leasehold improvements51.4
 46.0
Construction-in-progress92.8
 53.4
Property, plant and equipment, gross758.2
 625.2
Accumulated depreciation and amortization(385.5) (304.7)
Property, plant and equipment, net$372.7
 $320.5
Depreciation and amortization expense on property, plant and equipment for 2017, 2016 and 2015 was $54.4 million, $45 million, and $37 million, respectively.


8. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill

The following table presents the changes in goodwill by segment during 2017 and 2016:
 Consumer Professional Elizabeth Arden  Other Total
Balance at January 1, 2016$210.1
 $240.7
 $—
 $18.9
 $469.7
Goodwill acquired (a)
17.4
 —
 221.7
 —
 239.1
Foreign currency translation adjustment—
 (0.4) —
 (2.2) (2.6)
Goodwill impairment charge—
 —
 —
 (16.7) (16.7)
Balance at December 31, 2016$227.5
 $240.3
 $221.7
 $—
 $689.5
Measurement Period Adjustments (b)
—
 —
 12.3
 —
 12.3
Foreign currency translation adjustment—
 1.5
 —
 —
 1.5
Goodwill impairment charge(10.8) —
 —
 —
 (10.8)
Balance at December 31, 2017$216.7
 $241.8
 $234.0
 $—
 $692.5
          
Cumulative goodwill impairment charges$(20.5) $—
 $—
 $(16.7) $(37.2)
(a) The goodwill acquired during 2016 relates to: (i) $221.7 million of goodwill acquired in the Elizabeth Arden Acquisition; and (ii) $17.4 million of goodwill acquired in the Cutex Acquisitions. See Note 2, "Business Combinations," for further discussion of the Elizabeth Arden Acquisition and Cutex Acquisitions.
(b) Refer to Note 2, "Business Combinations," for more information on the Measurement Period Adjustments related to the Elizabeth Arden Acquisition.
For 2017, in assessing whether goodwill was impaired in connection with its annual impairment test performed during the fourth quarter of 2017 using October 1st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process, as prescribed by ASC 350, Intangibles - Goodwill and Other, to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and the financial performance of the (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts for 2017.

F-25
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

However, for 2017, the Company determined that it would utilize the two-step process to test the GCB reporting unit for impairment. In the first step of this test, the Company compared the fair value of the GCB reporting unit, determined based upon discounted estimated future cash flows, to the respective carrying amount, including goodwill. Where the fair value of such reporting unit exceeded the carrying amount, no further work was required and no impairment loss was recognized. The results of the step one test concludedindicated that impairment indicators may have existed withinfor the Global Color BrandsGCB reporting unit as a result ofdue to continued net sales declines for both the observed decline in sales of theSinfulColors and Pure Ice nail enamel brand, primarily driven by the effects of declines in thebrands and lower promotional activity for the Pure Ice brand, at retailers and accordingly, the Company performed step two of the goodwill impairment test for thisthe GCB reporting unit.
In the second step, the Company measured the potential impairment of the GCB reporting unit by comparing the implied fair value of the Global Color Brands reporting unit’s goodwill with the carrying amount of theits goodwill at September 30, 2015.October 1, 2017. The implied fair value of the GCB reporting unit's goodwill was determined in the same manner as the amount of goodwill recognized in a business combination, where the estimated fair value of theGCB reporting unit was allocated to all the assets and liabilities of that reporting unit (including both recognized and unrecognized intangible assets) as if the reporting unitGCB had been acquired in a business combination and the estimated fair value of the GCB reporting unit was the purchase price paid. When the carrying amount of the reporting unit's goodwill is greater than the implied fair value of that reporting unit's goodwill, an impairment loss is recognized within operations.recognized. The Company determined the fair value of the Global Color BrandsGCB reporting unit using discounted estimated future cash flows. The weighted averageweighted-average cost of capital used in testing the Global Color BrandsGCB reporting unit for impairment was 13.0%12% with a perpetual growth rate of 2.0%2%. As a result of this annual impairment test, the Company recognized an aggregate $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017. Following the recognition of this non-cash goodwill impairment charge, the GCB reporting unit had $14.8 million remaining goodwill as of December 31, 2017.
For 2016 and 2015, the Company also utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then existing four reporting units (i.e., for 2016 (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other). As a result of the annual impairment testing for 2016 and 2015, the Company recognized a $16.7 million non-cash goodwill impairment charge related to the Other reporting unit in the fourth quarter of 2016 and a $9.7 million non-cash goodwill impairment charge related to the Global Color BrandsGCB reporting unit in the fourth quarter of 2015.









































F-24
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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:

 December 31, 2015
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and Licenses$145.0
 $(36.0) $109.0
 15
Customer relationships118.8
 (20.5) 98.3
 16
Patents and Internally-Developed IP16.8
 (4.0) 12.8
 10
Distribution rights3.5
 (0.6) 2.9
 5
Total finite-lived intangible assets$284.1
 $(61.1) $223.0
  
        
Indefinite-lived intangible assets:       
Trade Names$95.0
 $—
 $95.0
  
Total indefinite-lived intangible assets$95.0
 $—
 $95.0
  
        
Total intangible assets$379.1
 $(61.1) $318.0
  
        
 December 31, 2014
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and Licenses$140.5
 $(23.5) $117.0
 14
Customer relationships109.1
 (13.4) 95.7
 17
Patents and Internally-Developed IP16.2
 (2.4) 13.8
 10
Total finite-lived intangible assets$265.8
 $(39.3) $226.5
  
        
Indefinite-lived intangible assets:       
Trade Names$101.3
 $—
 $101.3
  
Total indefinite-lived intangible assets$101.3
 $—
 $101.3
  
        
Total intangible assets$367.1
 $(39.3) $327.8
  

Amortization expense for finite-lived intangible assets was $22.4 million, $21.3 million and $10.4 million for 2015, 2014 and 2013, respectively.














F-25
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


The following table reflects the estimated future amortization expense, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of December 31, 2015:
 Estimated Amortization Expense
2016$22.7
201722.3
201821.4
201918.9
202018.2
Thereafter119.5
Total$223.0



9. ACCRUED EXPENSES AND OTHER
 December 31,
 2015 2014
Sales returns and allowances$61.1
 $70.6
Compensation and related benefits75.6
 66.8
Advertising and promotional costs38.4
 44.9
Taxes20.8
 23.4
Interest12.4
 11.0
Restructuring reserve11.8
 13.7
Other52.3
 42.9
 $272.4
 $273.3
10. SHORT-TERM BORROWINGS
Products Corporation had outstanding short-term borrowings (excluding borrowings under the Amended Credit Agreements or 2011 Credit Agreements (as hereinafter defined), which are reflected in Note 11, "Long-Term Debt"), aggregating $11.3 million and $6.6 million at December 31, 2015 and 2014, respectively. The weighted average interest rate on these short-term borrowings outstanding at December 31, 2015 and 2014 was 4.9% and 6.2%, respectively.

11. LONG-TERM DEBT
 December 31, 2015 December 31, 2014
Amended Term Loan Facility: Acquisition Term Loan due 2019, net of discounts (see (a) below)$672.5
 $691.6
Amended Term Loan Facility: 2011 Term Loan due 2017, net of discounts (see (a) below)660.6
 671.6
Amended Revolving Credit Facility (see (a) below)—
 —
5¾% Senior Notes due 2021 (see (b) below)500.0
 500.0
Spanish Government Loan due 2025 (see (c) below)0.6
 0.7
 1,833.7
 1,863.9
Less current portion (*)   
(30.0) (31.5)
 $1,803.7
 $1,832.4

(*) At December 31, 2015 and 2014, the Company classified $30.0 million and $31.5 million, respectively, of long-term debt as a current liability, which was primarily comprised of $23.2 million and $24.6 million of required “excess cash flow” prepayments (as defined under the Amended

F-26
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Term Loan Agreement,Intangible Assets, Net

The following tables present details of the Company's total intangible assets as hereinafter defined). The excess cash flow prepaymentof December 31, 2017 and 2016:
 December 31, 2017
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$271.4
 $(72.8) $198.6
 13
Customer relationships250.6
 (46.8) 203.8
 13
Patents and internally-developed IP20.8
 (8.4) 12.4
 7
Distribution rights31.0
 (2.3) 28.7
 17
Other1.3
 (0.6) 0.7
 2
Total finite-lived intangible assets$575.1
 $(130.9) $444.2
  
        
Indefinite-lived intangible assets:       
Trade names$147.9
 $—
 $147.9
  
Total indefinite-lived intangible assets$147.9
 $—
 $147.9
  
        
Total intangible assets$723.0
 $(130.9) $592.1
  
        
 December 31, 2016
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$177.9
 $(47.9) $130.0
 13
Customer relationships247.6
 (30.1) 217.5
 14
Patents and internally-developed IP20.3
 (6.1) 14.2
 8
Distribution rights31.0
 (0.5) 30.5
 18
Other1.3
 (0.2) 1.1
 3
Total finite-lived intangible assets$478.1
 $(84.8) $393.3
  
        
Indefinite-lived intangible assets:       
Trade names$243.3
 $—
 $243.3
  
Total indefinite-lived intangible assets$243.3
 $—
 $243.3
  
        
Total intangible assets$721.4
 $(84.8) $636.6
  

Amortization expense for 2015 will be paid on or prior to April 9, 2016. The 2014 excess cash flow prepaymentfinite-lived intangible assets was paid on March 12, 2015. The current portion of long-term debt also includes the Company’s annual principal amortization payments (payable in equal quarterly installments and after giving effect to such prepayments) of $6.8$43.2 million, $27.5 million and $6.9$22.4 million due infor 2017, 2016, and 2015 respectively.

The Company completedreviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares the following debt transactions during 2015 and 2014.

2015 Debt Related Transaction
Amended Term Loan Facility - Excess Cash Flow Payment
In March 2015, Products Corporation prepaid $24.6 millionof indebtedness, representing 50% of its 2014 “excess cash flow” as defined under the Amended Term Loan Agreement, in accordance with the terms of its Amended Term Loan Facility. The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Acquisition Term Loan. The amountcurrent carrying values of the prepayment that was appliedintangible assets to the 2011 Term Loan reducedundiscounted pre-tax cash flows expected to result from the principal amount outstanding by $12.1 million to $662.9 million (as all amortization payments underuse of the 2011 Term Loan had been paid). The $12.5 million thatassets.
Based upon the results of the annual goodwill impairment testing for the Company's GCB reporting unit during 2017, the Company performed an impairment review of the acquired finite-lived intangible assets. No impairment was appliedrecognized related to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterly amortization payments undercarrying value of any of the Acquisition Term Loan on a ratable basis from $1.8 million prior to the prepayment to $1.7 million after giving effect to the prepayment and through its maturity on October 8, 2019.
2014 Debt Related Transactions
February 2014 Term Loan Amendment
In February 2014, Products Corporation entered into an amendment (the “February 2014 Term Loan Amendment”) to its amended term loan agreement among Products Corporation, as borrower, a syndicate of lenders and Citicorp USA, Inc. (“CUSA”), as administrative agent and collateral agent. The amended term loan agreement is comprised of: (i) the term loan due November 19, 2017, in the original aggregate principal amount of $675.0 million, which had $662.9 million in aggregate principal balance outstanding as of December 31, 2015 (the "2011 Term Loan"finite or the “2011 Term Loan Facility”); and (ii) the term loan due October 8, 2019, in the original aggregate principal amount of $700 million, which had $673.7 million in aggregate principal balance outstanding as of December 31, 2015 (the "Acquisition Term Loan") (together, the "Amended Term Loan Agreement" and the "Amended Term Loan Facility"). Pursuant to the February 2014 Term Loan Amendment, the interest rates applicable to Eurodollar Loans under the 2011 Term Loan bear interest at the Eurodollar Rate plus 2.5% per annum, with the Eurodollar Rate not to be less than 0.75% (compared to 3.0% and 1.0%, respectively, prior to the February 2014 Term Loan Amendment), while Alternate Base Rate Loans under the 2011 Term Loan bear interest at the Alternate Base Rate plus 1.5%, with the Alternate Base Rate not to be less than 1.75% (compared to 2.0% in each case prior to the February 2014 Term Loan Amendment) (and as each such term is defined in the Amended Term Loan Agreement).
Products Corporation's Acquisition Term Loan and Products Corporation's $175.0 million asset-based, multi-currency revolving credit facility (the "Amended Revolving Credit Facility") were not amended in connection with the February 2014 Term Loan Amendment.
During 2014, the Company incurred approximately $1.1 million of fees and expenses in connection with the February 2014 Term Loan Amendment, which were expensed as incurred, and wrote-off $0.8 million of unamortized debt discount and deferred financing costsindefinite-lived intangible assets as a result of the February 2014 Term Loan Amendment. These amounts, totaling $1.9 million, were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)annual impairment test for the year ended December 31, 2014.2017.
RepaymentBased upon the results of Non-Contributed Loan
On May 1, 2014, Products Corporation used available cash on hand to optionally prepay in full the remaining $58.4 million principal amount outstanding underannual goodwill impairment testing for the non-contributed loan portion of Product Corporation's amended and restated senior subordinated term loan agreement with MacAndrews & Forbes (the "Non-Contributed Loan") that remained owing from Products Corporation to various third parties. The Non-Contributed Loan would have otherwise matured on October 8, 2014. In connection with such prepayment,Company's Other reporting unit during 2016, the Company wrote-off $0.1 millionperformed an impairment review of deferred financing costs, which were recognized within loss on early extinguishmentthe finite-lived intangible assets acquired as part of debt in the Company's Consolidated Statements2015 acquisition of Income (Loss) and Comprehensive Income (Loss) for 2014.CBBeauty




F-27
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Group and certain of its related entities (collectively "CBB" and, such transaction, the "CBB Acquisition"). As a result of this review, the Company recognized during the fourth quarter of 2016 within the Other reporting unit $4.2 million, $2.0 million and $0.5 million of non-cash impairment charges as a result of the change in the fair value of customer relationships, distribution rights and trade names, respectively, in the aggregate amount of $6.7 million.
The Company did not recognize any impairment charges related to the carrying value of any of the Company's identifiable intangible assets in 2015.
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 December 31, 2017:
 Estimated Amortization Expense
2018$40.2
201937.3
202036.5
202135.3
202234.1
Thereafter260.8
Total$444.2


9. ACCRUED EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's accrued expenses and other current liabilities consisted of the following:
 December 31,
 2017 2016
Compensation and related benefits$59.6
 $75.8
Advertising and promotional costs84.0
 66.7
Sales returns and allowances61.7
 51.9
Taxes48.4
 39.2
Restructuring reserve33.3
 38.0
Interest23.8
 24.4
Other102.0
 86.9
 $412.8
 $382.9


10. SHORT-TERM BORROWINGS
Products Corporation had outstanding short-term borrowings (excluding borrowings under the 2016 Senior Credit Facilities for 2016, which are reflected in Note 11, "Long-Term Debt"), aggregating to $12.4 million and $10.8 million at December 31, 2017 and 2016, respectively. The weighted average interest rate on these short-term borrowings outstanding at both December 31, 2017 and 2016 was 5.0%.



F-28
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

11. LONG-TERM DEBT
As of December 31, 2017 and 2016, the Company's debt balances consisted of the following:
 December 31,
 2017 2016
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (see (a) below)$1,735.9
 $1,747.8
2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (b) below)152.1
 —
6.25% Senior Notes due 2024, net of debt issuance costs (see (c) below)440.3
 439.1
5.75% Senior Notes due 2021, net of debt issuance costs (see (d) below)495.1
 493.8
Spanish Government Loan due 20250.5
 0.5
 2,823.9
 2,681.2
Less current portion (*)   
(170.2) (18.1)
 $2,653.7
 $2,663.1

(*) At December 31, 2017, the Company classified $170.2 million as its current portion of long-term debt, comprised primarily of $152.1 million of net borrowings under the 2016 Revolving Credit Facility, net of debt issuance costs, and $18.1 million of amortization payments on the 2016 Term Loan Facility scheduled to be paid over the next four calendar quarters. At December 31, 2016, the Company classified $18.1 million as its current portion of long-term debt, comprised primarily of $18 million of amortization payments on the 2016 Term Loan Facility.

The Company completed the following debt transactions during 2016:

2016 Debt-Related Transactions
In connection with and substantially concurrently with closing the Elizabeth Arden Acquisition, Products Corporation entered into the 2016 Term Loan Facility and the 2016 Revolving Credit Facility. Additionally, as part of financing the Elizabeth Arden Acquisition, in August 2016 Products Corporation completed the issuance of $450 million aggregate principal amount of its 6.25% Senior Notes (the "6.25% Senior Notes Offering"), which funds were released from escrow (the "Escrow Release") on the Elizabeth Arden Acquisition Date. In connection with entering into the 2016 Senior Credit Facilities, Products Corporation maintained on the 2016 Term Loan Facility its existing floating-to-fixed 2013 Interest Rate Swap (as hereinafter defined) based on a notional amount of $400 million that previously applied to Products Corporation’s Old Acquisition Term Loan, which loan was refinanced in full in connection with Products Corporation's consummation of the 2016 Senior Credit Facilities and the 6.25% Senior Notes Offering. The proceeds of Products Corporation's 6.25% Senior Notes Offering and the 2016 Term Loan Facility, together with approximately $35 million of borrowings under the 2016 Revolving Credit Facility, and approximately $126.7 million of cash on hand, were used to: (A) fund the Elizabeth Arden Acquisition, including: (i) repurchasing the entire $350 million aggregate principal amount then-outstanding of the Elizabeth Arden Old Senior Notes; (ii) repaying the entire $142 million aggregate principal amount of borrowings outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility (which facility was terminated upon such repayment); (iii) repaying the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility (which facility was terminated upon such repayment); and (iv) retiring the entire $55 million liquidation preference of all 50,000 shares of Elizabeth Arden's then issued and outstanding preferred stock, which amount included a $5 million change of control premium; and (B) to completely refinance and repay all of the $651.4 million in aggregate principal balance then outstanding under Products Corporation’s then-existing 2011 Term Loan and all of the $658.6 million in aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan (each of which facilities were terminated upon such prepayment). The Company did not incur any material early termination penalties in connection with repaying such facilities and preferred stock. See below for a summary description of the agreements governing the 2016 Senior Credit Facilities and 6.25% Senior Notes.
Amended Term Loan Facility - Excess Cash Flow Payment
In February 2016, Products Corporation prepaid $23.2 millionof indebtedness, then outstanding under its Old Term Loan Facility, representing 50% of its 2015 "excess cash flow" as defined by, and required under, Old Term Loan Agreement. The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Old Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $11.5 million to $651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $11.7 million that was applied to the Old Acquisition Term Loan reduced Products Corporation's future annual amortization payments

F-29
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

under such loan on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019. The 2011 Term Loan and Old Acquisition Term Loan were completely refinanced and terminated in connection with financing the Elizabeth Arden Acquisition.

Long-Term Debt Agreements
(a) Amended Credit Agreements2016 Term Loan Facility
The following is a summary descriptionPrincipal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Term Loan Agreement, for which Citibank, N.A. acts as administrative and collateral agent and which has an initial aggregate principal amount of $1.8 billion and matures on the earlier of: (x) the seventh anniversary of the AmendedElizabeth Arden Acquisition Date and (y) the 91st day prior to the maturity of Products Corporation’s 5.75% Senior Notes due 2021 (the "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. The loans under the 2016 Term Loan Facility were borrowed at an original issue discount of 0.5% to their principal amount. The 2016 Term Loan Facility may be increased by an amount equal to the sum of (x) the greater of $450 million and 90% of Products Corporation’s pro forma consolidated EBITDA, plus (y) an unlimited amount to the extent that (1) the first lien leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt that is not junior or subordinated to the liens of the Senior Facilities to EBITDA) is less than or equal to 3.5 to 1.0 (for debt secured pari passu with the 2016 Term Loan Facility) or (2) the secured leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt to EBITDA) is less than or equal to 4.25 to 1.0 (for junior lien or unsecured debt), plus (z) up to an additional $400 million if the 2016 Revolving Credit Facility has been repaid and terminated.
Guarantees and Security: Products Corporation and the restricted subsidiaries under the 2016 Term Loan Facility, which includesinclude Products Corporation’s domestic subsidiaries, including Elizabeth Arden and its domestic subsidiaries (collectively, the 2011 Term Loan and the Acquisition Term Loan, and the Amended Revolving Credit Facility. Unless otherwise indicated, capitalized terms have the meanings given to them in the Amended Term Loan Agreement and/or the Amended Revolving Credit Agreement (the "Amended Credit Agreements""Restricted Group"), as applicable. Investors should refer to the Amended Revolving Credit Agreement and/or the Amended Term Loan Agreement for complete terms and conditions, as these summary descriptions are subject to a number of qualifications and exceptions.
Amended Revolving Credit Facility
Availabilitythe covenants under the Amended Revolving Credit2016 Term Loan Agreement.  The 2016 Term Loan Facility varies basedis guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon, on a borrowing base that is determined by the valuelimited recourse basis.  The obligations of eligible trade receivables and eligible inventory in the U.S.Revlon, Products Corporation and the U.K.subsidiary guarantors under the 2016 Term Loan Facility are secured by pledges of the equity of Products Corporation held by Revlon and eligiblethe equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% of the voting equity interests of such entity) and by substantially all tangible and intangible personal and real property and equipment in the U.S. from time to time.
In January 2014, certain of Products Corporation’s U.S.-domiciled subsidiaries acquired inCorporation and the Colomer Acquisition (the “Colomer U.S. Subsidiaries”) became additionalsubsidiary guarantors (subject to certain exclusions). The obligors and guarantors under Products Corporation’s Amendedthe 2016 Term Loan Facility and Amendedthe 2016 Revolving Credit Facility are identical. The liens securing the 2016 Term Loan Facility on the accounts, inventory, equipment, chattel paper, documents, instruments, deposit accounts, real estate and investment property and general intangibles (other than intellectual property) related thereto (the "Revolving Facility Collateral") rank second in priority to the 5¾% Senior Notes Indenture. In Januaryliens thereon securing the 2016 Revolving Credit Facility.  The liens securing the 2016 Term Loan Facility on all other property, including capital stock, intellectual property and May 2015, certain other intangible property (the "Term Loan Collateral"), rank first in priority to the liens thereon securing the 2016 Revolving Credit Facility, while the liens thereon securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility.
Interest and Fees: Interest accrues on term loans under the 2016 Term Loan Facility at a rate per annum of ProductAdjusted LIBOR (which has a floor of 0.75%) plus a margin of 3.50% or an alternate base rate plus a margin of 2.50%, at Products Corporation’s newly-formed U.S.-domiciled subsidiaries in the Professional segmentoption, and formedis payable quarterly, at a minimum. Products Corporation is obligated to pay certain fees and expenses in connection with the CBB Acquisition (collectively,2016 Term Loan Facility. 
Affirmative and Negative Covenants: The 2016 Term Loan Agreement contains certain affirmative and negative covenants that, among other things, limit the “New U.S. Subsidiaries”) becameRestricted Group’s ability to: (i) incur additional guarantors under such debt instruments. In connectiondebt; (ii) incur liens; (iii) sell, transfer or dispose of assets; (iv) make investments; (v) make dividends and distributions on, or repurchases of, equity; (vi) make prepayments of contractually subordinated or junior lien debt; (vii) enter into certain transactions with becoming guarantors, substantially alltheir 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 assetsterms of such subsidiaries were pledged as collateral undercertain debt. The negative covenants are subject to various exceptions, including an "available amount basket" based on 50% of Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility, thereby increasing the valuecumulative consolidated net income, plus a "starter" basket of the assets supporting the borrowing base under the Amended Revolving Credit Facility.
If the value of the eligible assets is not sufficient$200 million, subject to support the $175.0 million borrowing base under the Amended Revolving Credit Facility, Products Corporation will not have full access to the Amended Revolving Credit Facility. Products Corporation’s ability to borrow under the Amended Revolving Credit Facility is also conditioned upon the satisfaction of certain conditions precedent and Products Corporation’s compliance with other covenants in the Amended Revolving Credit Agreement.
In each case subjecta 5.0 to borrowing base availability, the Amended Revolving Credit Facility is available to:
(i)1.0 ratio of Products Corporation in revolving credit loans denominated in U.S. Dollars;
(ii) Products Corporation in swing line loans denominated in U.S. Dollars upCorporation’s net debt to $30.0 million;
(iii) Products Corporation in standby and commercial letters of credit denominated in U.S. Dollars and other currencies up to $60.0 million; and
(iv) Products Corporation and certain of its international subsidiaries designated from time to time in revolving credit loans and bankers’ acceptances denominated in U.S. Dollars and other currencies.
Under the Amended Revolving Credit Facility, borrowings (other than loans in foreign currencies) bear interest, if made as Eurodollar Loans, at the Eurodollar Rate plus the applicable margin set forth in the grid below and, if made as Alternate Base Rate Loans, at the Alternate Base Rate plus the applicable margin set forth in the grid below.
Excess Availability Alternate Base Rate Loans Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
Greater than or equal to $92,000,000 0.50% 1.50%
Less than $92,000,000 but greater than or equal to $46,000,000 0.75% 1.75%
Less than $46,000,000 1.00% 2.00%
Local LoansConsolidated EBITDA (as defined in the Amended Revolving Credit2016 Term Loan Agreement) bear interest, if mutually acceptable, except such compliance is not required when such baskets are used to Products Corporationmake investments. While the 2016 Term Loan Agreement contains certain customary representations, warranties and the relevant foreign lenders, at the Local Rate, and otherwiseevents of default, it does not contain any financial maintenance covenants.
Prepayments: The 2016 Term Loan Facility is subject to mandatory prepayments from: (i) if in foreign currencies or in U.S. Dollars at the Eurodollar Rate or the Eurocurrency Rate plus the applicable margin set forth in the grid above or (ii) if in U.S. Dollars at the Alternate Base Rate plus the applicable margin set forth in the grid above.
Prior to the termination date of the Amended Revolving Credit Facility, revolving loans are required to be prepaid (without any permanent reduction in commitment) with:
(i) the net cash proceeds from sales of Revolving Credit First Lien Collateral by Products Corporation or any of Products Corporation’s subsidiary guarantors (other than dispositions in the ordinary course of business and certain other exceptions); and

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

(ii) the net proceeds from the issuance by Products Corporation or any of its subsidiaries of certain additional debt, to the extent there remains any such proceeds after satisfying Products Corporation’s repayment obligations under the Amended Term Loan Facility.
Products Corporation pays to the lenders under the Amended Revolving Credit Facility a commitment fee of 0.25% of the average daily unused portion of the Amended Revolving Credit Facility, which fee is payable quarterly in arrears. Under the Amended Revolving Credit Facility, Products Corporation also pays:
(i) to foreign lenders a fronting fee of 0.25% per annum on the aggregate principal amount of specified Local Loans (which fee is retained by foreign lenders out of the portion of the Applicable Margin payable to such foreign lender);
(ii) to foreign lenders an administrative fee of 0.25% per annum on the aggregate principal amount of specified Local Loans;
(iii) to the multi-currency lenders a letter of credit commission equal to the product of (a) the Applicable Margin for revolving credit loans that are Eurodollar Rate loans (adjusted for the term that the letter of credit is outstanding) and (b) the aggregate undrawn face amount of letters of credit; and
(iv) to the issuing lender, a letter of credit fronting fee of 0.25% per annum of the aggregate undrawn face amount of letters of credit, which fee is a portion of the Applicable Margin.
Under certain circumstances, Products Corporation has the right to request that the Amended Revolving Credit Facility be increased by up to $100.0 million, provided that the lenders are not committed to provide any such increase.
Under certain circumstances, if and when the difference between (i) the borrowing base under the Amended Revolving Credit Facility and (ii) the amounts outstanding under the Amended Revolving Credit Facility is less than $20.0 million for a period of two consecutive days or more, and until such difference is equal to or greater than $20.0 million for a period of 30 consecutive business days, the Amended Revolving Credit Facility requires Products Corporation to maintain a consolidated fixed charge coverage ratio (the ratio of EBITDA minus Capital Expenditures to Cash Interest Expense for such period) of a minimum of 1.0 to 1.0.
The Amended Revolving Credit Facility matures on the earlier of August 14, 2018 and the date that is 90 days prior to the earliest maturity date of any term loans then outstanding under the Amended Term Loan Facility, but not earlier than June 16, 2016.
Amended Term Loan Facility
Term loans under the Amended Term Loan Facility bear interest at the following interest rates:
Eurodollar LoansAlternate Base Rate Loans
2011 Term LoansEurodollar Rate plus 2.50% per annum (with the Eurodollar Rate not to be less than 0.75%)Alternate Base Rate plus 1.50% (with the Alternate Base Rate not to be less than 1.75%)
Acquisition Term LoansEurodollar Rate plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%)Alternate Base Rate plus 2.00% (with the Alternate Base Rate not to be less than 2.00%)
The term loans under the Amended Term Loan Facility are required to be prepaid with:
(i) the net cash proceeds in excess of $10 million for each 12-month period ending on March 31 received during such period from sales of Term Loan First Lien Collateral by Products Corporation or any of its subsidiary guarantors, with carryover of unused annual basket amounts up to a maximum of $25 million and with respect to certain specified dispositions up to an additional $25 million in the aggregate (subject to a reinvestment right for 365 days, or 545 days if the Company has within such 365-day period entered into a legally binding commitment to invest such funds);
(ii) the net proceeds from the issuance by Products Corporation or any of itsrestricted subsidiaries of certain additional debt; and(ii) commencing with the excess cash flow
(iii) 50% of Products Corporation’s “excess cash flow” (as defined under the Amended Term Loan Agreement).
As of December 31, 2015, Products Corporation is required to prepay, on or before 100 days following the last day of its fiscal year (i.e., by April 9, 2016), $23.2 million of indebtedness under the Amended Term Loan Facility, representing 50% of its 2015 "excess cash flow" (as defined under the Amended Term Loan Agreement). The prepayment will be applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Acquisition Term Loan. The amount of the prepayment to be applied to the 2011 Term Loan will be used to reduce the aggregate principal amount outstanding (as all amortization payments under the 2011 Term Loan have been paid), while the amount to be applied to the Acquisition Term Loan will be used to

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

reduce Products Corporation's future annual amortization payments (which are payable in equal quarterly installments) on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019.
The Amended Term Loan Facility contains a financial covenant limiting Products Corporation’s first lien senior secured leverage ratio (the ratio of Products Corporation’s senior secured debt that has a lien on the collateral which secures the Amended Term Loan Facility that is not junior or subordinated to the liens securing the Amended Term Loan Facility (excluding debt outstanding under the Amended Revolving Credit Facility)) to EBITDA, as each such term is defined in the Amended Term Loan Facility, to no more than 4.25 to 1.0 for each period of four consecutive fiscal quarters ending through the maturity date of the Amended Term Loan Facility.
Products Corporation, under certain circumstances, also has the right to request the Amended Term Loan Facility to be increased by up to the greater of: (i) $300 million; and (ii) an amount such that Products Corporation’s First Lien Secured Leverage Ratio (as defined in the Amended Term Loan Agreement) does not exceed 3.50:1.00. The lenders are not committed to provide any such increase. Any such increase would be in addition to the Acquisition Term Loan.
The 2011 Term Loan outstanding under the Amended Term Loan Facility matures on November 19, 2017. The Acquisition Term Loan under the Amended Term Loan Facility has the same terms as the 2011 Term Loans, except that: (i) it matures on the sixth anniversary of the closing of the Acquisition Term Loan (or October 8, 2019); and (ii) it amortizes on March 31, June 30, September 30 and December 31 of each year (which commenced March 31, 2014), in an amount equal to 0.25% of the aggregate principal amount of the Acquisition Term Loan.
Provisions Applicable to the Amended Term Loan Facility and the Amended Revolving Credit Facility
The Amended Credit Agreements are supported by, among other things, guarantees from Revlon, Inc. and, subject to certain limited exceptions, Products Corporation’s domestic subsidiaries. Products Corporation’s obligations under the Amended Term Loan Agreement and the Amended Revolving Credit Agreement and the obligations under such guarantees are secured by, subject to certain limited exceptions, substantially all of Products Corporation’s assets and the assets of the guarantors, including:
(i) a mortgage on certain material owned real property, including Products Corporation’s facility in Oxford, North Carolina;
(ii) Products Corporation’s capital stock and the capital stock of the subsidiary guarantors and 66% of the voting capital stock and 100% of the non-voting capital stock of Products Corporation’s and the subsidiary guarantors’ first-tier, non-U.S. subsidiaries;
(iii) Products Corporation’s and the subsidiary guarantors’ intellectual property and other intangible property; and
(iv) Products Corporation’s and the subsidiary guarantors’ inventory, trade receivables, equipment, investment property and deposit accounts.
The liens on, among other things, inventory, trade receivables, deposit accounts, investment property (other than Products Corporation’s capital stock and the capital stock of Products Corporation’s subsidiaries), real property, equipment, fixtures and certain intangible property secure the Amended Revolving Credit Facility on a first priority basis and the Amended Term Loan Facility on a second priority basis. The liens on Products Corporation’s capital stock and the capital stock of Products Corporation’s subsidiaries and intellectual property and certain other intangible property secure the Amended Term Loan Facility on a first priority basis and the Amended Revolving Credit Facility on a second priority basis. Such arrangements are set forth in the Third Amended and Restated Intercreditor and Collateral Agency Agreement, dated as of March 11, 2010, by and among Products Corporation and CUSA, as administrative agent and as collateral agent for the benefit of the secured parties for the Amended Term Loan Facility and Amended Revolving Credit Facility (the “2010 Intercreditor Agreement”). The 2010 Intercreditor Agreement also provides that the liens referred to above may be shared from time to time, subject to certain limitations, with specified types of other obligations incurred or guaranteed by Products Corporation, such as foreign exchange and interest rate hedging obligations and foreign working capital lines.
The Amended Credit Agreements contain various restrictive covenants prohibiting Products Corporation and its subsidiaries from:
(i) incurring additional indebtedness or guarantees, with certain exceptions;
(ii) making dividend and other payments or loans to Revlon, Inc. or other affiliates, with certain exceptions, including among others:
(a) exceptions permitting Products Corporation to pay dividends or make other payments to Revlon, Inc. to enable it to, among other things, pay expenses incidental to being a public holding company, including, among other

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

things, professional fees such as legal, accountingcalculation with respect to fiscal year ending December 31, 2017, 50% of excess cash flow, with step-downs to 25% and insurance fees, regulatory fees, such as SEC filing0% upon achievement of certain first lien leverage ratios and reduced by voluntary prepayments of loans under the 2016 Term Loan Facility and revolving loans under the 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. Products Corporation may voluntarily prepay the 2016 Term Loan Facility without premium or penalty. No excess cash flow payments were due and payable with respect to 2017.
During 2016, the Company incurred approximately $45.2 million of fees and NYSE listingexpenses in connection with consummating the 2016 Term Loan Facility, of which $39.3 million were capitalized and are being amortized over the remaining term of the 2016 Term Loan Credit Facility using the effective interest method. The Company expensed the remaining $6 million of fees and other expenses and wrote-off $10.9 million of unamortized debt discount and deferred financing costs related to beingthe Old Term Loan Facility. These amounts, totaling $16.9 million, were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2016.
(b) 2016 Revolving Credit Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Revolving Credit Agreement, for which Citibank, N.A. acts as administrative agent and collateral agent. The 2016 Revolving Credit Facility has an initial maximum availability of $400 million (with a public holding company;
(b)$100 million sublimit for letters of credit and up to $70 million available for swing line loans), which availability is subject to the amount of the borrowing base.  The 2016 Revolving Credit Facility may be increased by the greater of (x) $50 million and (y) the excess of the borrowing base over the amounts of then-effective commitments.  The 2016 Revolving Credit Facility permits certain non-U.S. subsidiaries to borrow in local currencies. The borrowing base calculation under the 2016 Revolving Credit Facility is based on the sum of: (i) 85% of eligible accounts receivable; (ii) the lesser of 85% of the net orderly liquidation value and a percentage of the value specified in respect of different types of eligible inventory; (iii) qualified restricted cash (capped at $75 million); and (iv) a temporary increase amount between August 15 and October 31 of each year, which are collectively subject to certain circumstances,availability reserves set by the administrative agent. The 2016 Revolving Credit Facility matures on the earlier of: (x) the fifth anniversary of the Elizabeth Arden Acquisition Date; and (y) the 91st day prior to finance the purchasematurity 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.
Guarantees and Security: The Restricted Group under the 2016 Revolving Credit Agreement (which is the same as the Restricted Group under the 2016 Term Loan Agreement) is subject to the covenants under the 2016 Revolving Credit Agreement.  The 2016 Revolving Credit Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon Inc.on a limited recourse basis.  The obligations of its Class A Common StockRevlon, Products Corporation and the subsidiary guarantors under the 2016 Revolving Credit Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of Products Corporation’s restricted subsidiaries held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions).  The obligors and guarantors under the 2016 Revolving Credit Facility and the 2016 Term Loan Facility are identical.  The liens on the 2016 Revolving Facility Collateral securing the 2016 Revolving Credit Facility rank first in priority to the liens thereon securing the 2016 Term Loan Facility, which rank second in priority on such collateral.  The liens on the Term Loan Collateral securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility, which rank first in priority on such collateral.
Interest and Fees: Under the 2016 Revolving Credit Facility, interest is payable quarterly and accrues on borrowings under such facility 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%, 1.50% 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), at Products Corporation’s option. The applicable margin decreases as average excess availability under the 2016 Revolving Credit Facility increases.  Products Corporation is obligated to pay certain fees and expenses in connection with the delivery2016 Revolving Credit Facility, including a commitment fee of such Class A Common Stock to grantees0.25% for any unused amounts. Loans under the Fourth Amended2016 Revolving Credit Facility may be prepaid without premium or penalty.
Affirmative and Restated Revlon, Inc. Stock Plan and/orNegative Covenants: The 2016 Revolving Credit Agreement contains affirmative and negative covenants that are similar to those in the payment2016 Term Loan Agreement, other than the "available amount basket" (as described above in the description of withholding taxes in connection with the vesting of restricted stock awards2016 Term Loan Facility); provided, however, under such plan;
(c) subjectthe 2016 Revolving Credit Agreement the Restricted Group will be able to certain limitations, to pay dividends orincur unlimited additional junior secured debt and unsecured debt, make other payments to finance the purchase, redemption or other retirement for value by Revlon, Inc. of stock or other equity interests or equivalents in Revlon, Inc. held by any current or former director, employee or consultant in his or her capacity as such;unlimited asset sales and
(d) subject to certain limitations, to dispositions, make otherunlimited investments and acquisitions, prepay junior debt and make unlimited restricted payments to Products Corporation’s affiliates in an amount up to $10 million per year (plus $10 million for each calendar year commencing with 2011), other restricted payments in an aggregate amount not to exceed $35 million andthe extent that certain other restricted payments, including without limitation those based upon certain financial tests;
(iii) creating liens or other encumbrances on Products Corporation’s or its subsidiaries’ assets or revenues, granting negative pledges or selling or transferring any of Products Corporation’s or its subsidiaries’ assets, all subject to certain limited exceptions;
(iv) with certain exceptions, engaging in merger or acquisition transactions;
(v) prepaying indebtedness and modifying the terms of certain indebtedness and specified material contractual obligations, subject to certain exceptions;
(vi) making investments, subject to certain exceptions; and
(vii) entering into transactions with Products Corporation’s affiliates involving aggregate payments or consideration in excess of $10 million other than upon terms that are not materially less favorable when taken as a whole to Products Corporation or its subsidiaries as terms that would be obtainable at the time for a comparable transaction or series of similar transactions in arm’s length dealings with an unrelated third person and where such payments or consideration exceed $20 million, unless such transaction has been approved by all of Products Corporation’s independent directors, subject to certain exceptions.
The events of default under the Amended Credit Agreements include customary events of default for such types of agreements, including, among others:
(i) nonpayment of any principal, interest or other fees when due, subject in the case of interest and fees to a grace period;
(ii) non-compliance with the covenants in the Amended Term Loan Agreement, the Amended Revolving Credit Agreement or the ancillary security documents, subject in certain instances to grace periods;
(iii) the institution of any bankruptcy, insolvency or similar proceedings by or against Products Corporation, any of its subsidiaries or Revlon, Inc., subject in certain instances to grace periods;
(iv) default by Revlon, Inc. or any of its subsidiaries (A) in the payment of certain indebtedness when due (whether at maturity or by acceleration) in excess of $50.0 million in aggregate principal amount or (B) in the observance or performance of any other agreement or condition relating to such debt, provided that the amount of debt involved is in excess of $50.0 million in aggregate principal amount, or the occurrence of any other event, the effect of which default referred to in this subclause (iv) is to cause or permit the holders of such debt to cause the acceleration of payment of such debt;
(v) in the case of the Amended Term Loan Facility, a cross default under the Amended Revolving Credit Facility, and in the case of the Amended Revolving Credit Facility, a cross default under the Amended Term Loan Facility;
(vi) the failure by Products Corporation, certain of Products Corporation’s subsidiaries or Revlon, Inc. to pay certain material judgments;
(vii) a change of control such that: (A) Revlon, Inc. shall cease to be the beneficial and record owner of 100% of Products Corporation’s capital stock; (B) Ronald O. Perelman (or his estate, heirs, executors, administrator or other personal representative) and his or their controlled affiliates shall cease to “control” Products Corporation, and any other person or group of persons owns, directly or indirectly, more than 35% of Products Corporation’s total voting power; (C) any person or group of persons other than Ronald O. Perelman (or his estate, heirs, executors, administrator or other personal representative) and his or their controlled affiliates shall “control” Products Corporation; or (D) during any period of two consecutive years, the directors serving on Products Corporation’s Board of Directors at the beginning

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

"payment conditions" for asset-based credit facilities are satisfied.  The 2016 Revolving Credit Agreement contains certain customary representations, warranties and events of default. If Products Corporation’s "Liquidity Amount" (defined in the 2016 Revolving Credit Agreement as the Borrowing Base less the sum of (x) the aggregate outstanding extensions of credit under the 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such period (or other directors nominated by at least a majoritydate) falls below the greater of such continuing directors) shall cease to be a majority$35 million and 10% of the directors;
(viii) Revlon, Inc. shall have any meaningful assets or indebtedness or shall conduct any meaningful business other than its ownershipmaximum availability under the 2016 Revolving Credit Facility (a "Liquidity Event Period"), then the Restricted Group will be required to maintain a consolidated fixed charge coverage ratio (the ratio of Products Corporation andCorporation’s EBITDA minus capital expenditures to cash interest expense for such activities as are customaryperiod) of a minimum of 1.0 to 1.0 until the first date after 20 consecutive business days for a publicly traded holding company which the Liquidity Amount is not itself an operating company, in each case subjectequal to limited exceptions; and
(ix) the failure of certain affiliates which hold Products Corporation’s or its subsidiaries’ indebtedness to be party to a valid and enforceable agreement prohibitinggreater than such affiliate from demanding or retaining payments in respect of such indebtedness, subject to certain exceptions.
threshold. If Products Corporation is in default under the senior secured leverage ratio under the Amended Term Loan Facility or the consolidated fixed charge coverage ratio under the Amended2016 Revolving Credit Agreement, Products Corporation may cure such default by Products Corporation and/or Revlon issuing certain equity securities to, orand Products Corporation receiving capital contributions from Revlon, Inc. and applyingwith such cash which isbeing deemed to increase EBITDA for the purpose of calculating the applicable ratio. Products Corporation may exercise this cure right no more than two times in any four-quarter period.period, and no more than five times in total during the term of the 2016 Revolving Credit Facility.
Covenants
Prepayments:Products Corporation was in compliance with all applicable covenantsmust prepay borrowings under the Amended2016 Revolving Credit Facility to the extent that outstanding loans and letters of credit exceed availability.  During a Liquidity Event Period, the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the 2016 Revolving Credit Facility.   The above descriptions of the terms of the 2016 Term Loan Agreement and the Amended2016 Revolving Credit Facility and the related security and collateral agreements are qualified in their entirety by reference to such agreements, which are incorporated by reference as exhibits to this Form 10-K.
During 2016, the Company incurred approximately $5.7 million of fees and expenses in connection with consummating the 2016 Revolving Credit Facility, of which $5.6 million were capitalized as deferred financing costs and are being amortized over the remaining term of the 2016 Revolving Credit Facility using the effective interest method. The Company expensed the remaining $0.1 million of fees and expenses, which were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2016.
(c) 6.25% Senior Notes
On August 4, 2016, Revlon Escrow Corporation (the "Escrow Issuer"), which on such date was a wholly owned subsidiary of Products Corporation, completed the 6.25% Senior Notes offering, pursuant to an exemption from registration under the Securities Act of 1933 (as amended, the "Securities Act"), of $450 million aggregate principal amount of the 6.25% Senior Notes due 2024. The 6.25% Senior Notes are unsecured and were initially issued by the Escrow Issuer to the initial purchasers under an Indenture, dated as of August 4, 2016 (the "6.25% Senior Notes Indenture"), between the Escrow Issuer and U.S. Bank National Association, as trustee (the "6.25% Senior Notes Trustee"). The 6.25% Senior Notes mature on August 1, 2024. Interest on the 6.25% Senior Notes accrues at 6.25% per annum, paid every six months through maturity on each February 1 and August 1, beginning on February 1, 2017. The proceeds from the 6.25% Senior Notes were released from escrow on the September 7, 2016 The Elizabeth Arden Acquisition Date (the "Escrow Release"). On the Elizabeth Arden Acquisition Date, the Escrow Issuer was merged with and into Products Corporation and in connection with the Escrow Release, Products Corporation and certain of its direct and indirect wholly-owned domestic subsidiaries, including Elizabeth Arden and certain of its subsidiaries (collectively, the "6.25% Senior Notes Guarantors"), and the 6.25% Senior Notes Trustee entered into a supplemental indenture (the "6.25% Senior Notes Supplemental Indenture") to the 6.25% Senior Notes Indenture, pursuant to which Products Corporation assumed the obligations of the Escrow Issuer under the 6.25% Senior Notes and the 6.25% Senior Notes Indenture and the 6.25% Senior Notes Guarantors jointly and severally, fully and unconditionally guaranteed the 6.25% Senior Notes on a senior unsecured basis (the "6.25% Senior Notes Guarantees").  The 6.25% Senior Notes Guarantors are the same entities that are subsidiary guarantors under the 2016 Senior Credit Facilities.
In December 31, 20152016, Products Corporation consummated an offer to exchange the original 6.25% Senior Notes for $450 million of new 6.25% Senior Notes, which have substantially the same terms as the original 6.25% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the "6.25% Senior Notes").
Ranking: The 6.25% Senior Notes are Products Corporation’s senior, unsubordinated and 2014. At December 31, 2015,unsecured obligations, ranking: (i) pari passu in right of payment with all of Products Corporation’s existing and future senior unsecured indebtedness; (ii) senior in right of payment to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ future subordinated indebtedness; and (iii) effectively junior to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ existing and future senior secured indebtedness, including, indebtedness under Products Corporation’s 2016 Senior Credit Facilities, to the extent of the value of the assets securing such indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees are: (i) structurally subordinated to all of the liabilities and preferred stock of any of the Company’s subsidiaries that do not guarantee the 6.25% Senior Notes; and (ii) pari passu in right of payment with liabilities of the 6.25% Senior Notes Guarantors other than expressly subordinated indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees rank effectively junior to indebtedness

F-32
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the "6.25% Senior Notes Non-Guarantor Subsidiaries"), none of which guarantee the 6.25% Senior Notes.
Optional Redemption: Prior to August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole or from time to time in part, upon Products Corporation’s payment of an applicable make-whole premium based on the comparable treasury rate plus 50 basis points. Prior to August 1, 2019, up to 40% of the aggregate principal amountsamount of 6.25% Senior Notes that have been issued may also be redeemed at Products Corporation’s option at any time as a whole or from time-to-time in part, at a redemption price equal to 106.250% of the principal amount thereof, plus accrued and unpaid interest to (but not including) the date of redemption with the proceeds of certain equity offerings and capital contributions (so long as at least 60% of the 6.25% Senior Notes that have been issued thereafter remain outstanding). On and after August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole, or from time to time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to (but not including) the date of redemption, if redeemed during the 12-month period beginning on August 1 of the years indicated below:
Period Optimal Redemption Premium Percentage
2019 104.688%
2020 103.125%
2021 101.563%
2022 and thereafter 100.000%

All redemptions (and notices thereof) may be subject to various conditions precedent, and redemption dates specified in such notices may be extended so that such conditions precedent may be fulfilled (to the extent redemption on such dates is otherwise permitted by the 6.25% Senior Notes Indenture).
Change of Control: Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 6.25% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 6.25% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to (but not including) the date of repurchase.
Certain Covenants: The 6.25% Senior Notes Indenture imposes certain limitations on Products Corporation’s and the 6.25% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to: (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) pay dividends, make certain investments and make repayments on indebtedness that is subordinated in right of payment to the 6.25% Senior Notes and make other "restricted payments"; (iii) create liens on their assets to secure debt; (iv) enter into transactions with affiliates; (v) merge, consolidate or amalgamate with another company; (vi) transfer and sell assets; and (vii) permit restrictions on the payment of dividends by Products Corporation's subsidiaries.
These covenants are subject to important qualifications and exceptions. The 6.25% Senior Notes Indenture also contains customary affirmative covenants and events of default. In addition, if during any period of time the 6.25% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the Acquisition Term Loan6.25% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the 2011 Term Loan were $673.7 millioncovenants regarding limitations on debt, limitations on restricted payments, limitation on guarantees by restricted subsidiaries, limitation on transactions with affiliates, certain provisions of the successor company covenant, limitation on asset sales and $662.9 million, respectively, and availability underlimitation on dividends from restricted subsidiaries.
During 2016, in connection with consummating the $175.0 million Amended Revolving Credit Facility, based upon6.25% Senior Notes Offering, the calculated borrowing base less $8.8Company incurred approximately $11.3 million of outstanding undrawn lettersfees and expenses, all of creditwhich were capitalized and nil then drawn onare being amortized over the Amended Revolving Credit Facility, was $166.2 million.remaining term of the 6.25% Senior Notes using the effective interest method.

(b) 5¾%(d) 5.75% Senior Notes
On February 8, 2013, Products Corporation completed its offering (the "2013 Senior Notes Refinancing"), pursuant to an exemption from registration under the Securities Act, of 1933 (as amended, the "Securities Act"), of $500.0$500 million aggregate principal amount of the 5¾%5.75% Senior Notes. The 5¾%5.75% Senior Notes are unsecured and were issued to investors at par. The 5¾%5.75% Senior Notes mature on February 15, 2021. Interest on the 5¾%5.75% Senior Notes accrues at 5¾%5.75% per annum, paid every six months on February 15th and August 15th. (See "Registration Rights" below).
The 5¾%5.75% Senior Notes were issued pursuant to the 5¾%5.75% Senior Notes Indenture (the "5.75% Senior Notes Indenture" and together with the 6.25% Senior Notes Indenture, the "Senior Notes Indentures"), dated as of February 8, 2013 (the “Notes"5.75% Senior Notes Closing Date”Date"), by and among Products Corporation, Products Corporation’s domestic subsidiaries (the “Guarantors”"5.75% Senior Notes Guarantors"), which also currently guarantee Products Corporation’s Amended Term Loan Facility2016 Senior Credit Facilities and Amended Revolving Credit Facility,the 6.25% Senior Notes, and U.S. Bank National Association, as trustee.trustee (the "5.75% Senior Notes Trustee"). The 5.75% Senior Notes Guarantors

F-33
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

issued guarantees (the “Guarantees”"5.75% Senior Notes Guarantees") of Products Corporation’s obligations under the 5¾%5.75% Senior Notes and the 5¾%5.75% Senior Notes Indenture on a joint and several, senior unsecured basis. The Colomer U.S. Subsidiaries became additional guarantors in January 2014 and the New U.S. Subsidiaries became additional guarantors in January and May 2015, in each case under Products Corporation's Amended Term Loan Facility and Amended Revolving Credit Facility and the 5¾% Senior Notes Indenture.
In December 2013, Products Corporation consummated an offer to exchange the original 5¾%5.75% Senior Notes for $500 million of new 5¾%5.75% Senior Notes, which have substantially the same terms as the original 5¾%5.75% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the “5¾%"5.75% Senior Notes”Notes"). See "Registration Rights" below for further discussion.
Products Corporation used a portion of the $491.2 million of net proceeds from the issuance of the 5¾%5.75% Senior Notes (net of underwriters' fees) to repay and redeem all of the $330.0$330 million then outstanding aggregate principal amount of its 9¾%9.75% Senior Secured Notes, as well as to pay $8.6 million of accrued interest. Products Corporation incurred an aggregate of $19.4 million of fees for the applicable redemption and tender offer premiums, related fees and expenses in connection with redemption and repayment of the 9¾%9.75% Senior Secured Notes and other fees and expenses in connection with the issuance of the 5¾%5.75% Senior Notes. Products Corporation used a portion of the remaining proceeds from the issuance of the 5¾%5.75% Senior Notes, together with existing cash, to pay approximately $113.0$113 million of principal on its then outstanding 2011 Term Loan in conjunction with the February 2013 Term Loan Amendments. Products Corporation used the remaining balance available from the issuance of the 5¾%5.75% Senior Notes for general corporate purposes, including, without limitation, debt reduction transactions, such as repaying a loan to Revlon Inc. at its maturity on October 8, 2013, the Contributed Loan, which proceeds Revlon Inc. used to pay the liquidation preference of Revlon, Inc.'sRevlon's then outstanding Series A Preferred Stock, with a par value of $0.01 per share (the "Series A Preferred Stock") in connection with its mandatory redemption on such date.


F-32
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

RankingRanking:
The 5¾%5.75% Senior Notes are Products Corporation’s unsubordinated, unsecured obligations and rank senior in right of payment to any future subordinated obligations of Products Corporation and rank pari passu in right of payment with all existing and future senior debt of Products Corporation. Similarly, each 5.75% Senior Notes Guarantee is the relevant 5.75% Senior Notes Guarantor’s joint and several, unsubordinated and unsecured obligation, and ranksranking senior in right of payment to any future subordinated obligations of such 5.75% Senior Notes Guarantor and ranksranking pari passu in right of payment with all existing and future senior debt of such 5.75% Senior Notes Guarantor. The 5.75% Senior Notes Guarantees were issued on a joint and several basis.
The 5¾%5.75% Senior Notes and the 5.75% Senior Notes Guarantees rank effectively junior to Products Corporation’s Amended Term Loan Facility and Amended Revolving2016 Senior Credit Facility,Facilities, which are secured, as well as indebtedness and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the “Non-Guarantor Subsidiaries”"5.75% Senior Notes Non-Guarantor Subsidiaries" and together with the 6.25% Senior Notes Non-Guarantor Subsidiaries, the "Non-Guarantor Subsidiaries"), none of which guarantee the 5¾%5.75% Senior Notes.
Optional RedemptionRedemption:
The 5¾%5.75% Senior Notes may be redeemed at Products Corporation's option, at any time as a whole, or from time to timetime-to-time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to the date of redemption, if redeemed during the 12-month period beginning on February 15th of the years indicated below:
Year Percentage
2016 104.313%
Period Percentage
2017 102.875% 102.875%
2018 101.438% 101.438%
2019 and thereafter 100.000% 100.000%
Change of ControlControl:
Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 5¾%5.75% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 5¾%5.75% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to the date of repurchase.
Certain CovenantsCovenants:
The 5¾%5.75% Senior Notes Indenture limits Products Corporation’s and the 5.75% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to:
incur or guarantee additional indebtedness (“("Limitation on Debt”Debt");
pay dividends, make repayments on indebtedness that is subordinated in right of payment to the 5¾%5.75% Senior Notes and make other “restricted payments” (“"restricted payments" ("Limitation on Restricted Payments”Payments");
make certain investments;
create liens on their assets to secure debt;
enter into transactions with affiliates;
merge, consolidate or amalgamate with another company (“("Successor Company”Company");

F-34
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

transfer and sell assets (“("Limitation on Asset Sales”Sales"); and
permit restrictions on the payment of dividends by Products Corporation’s subsidiaries (“("Limitation on Dividends from Subsidiaries”Subsidiaries").
These covenants are subject to important qualifications and exceptions. The 5¾%5.75% Senior Notes Indenture also contains customary affirmative covenants and events of default.
In addition, if during any period of time the 5¾%5.75% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 5¾%5.75% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants on Limitation on Debt, Limitation on Restricted Payments, Limitation on Asset Sales, Limitation on Dividends from Subsidiaries and certain provisions of the Successor Company covenant.

Covenants


F-33
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Registration Rights
On the Notes Closing Date, Products Corporation, the Guarantors and the representatives of the initial purchasers of the 5¾% Senior Notes entered into a Registration Rights Agreement, pursuant to which Products Corporation and the Guarantors agreed with the representatives of the initial purchasers, for the benefit of the holders of the 5¾% Senior Notes, that Products Corporation would, at its cost, among other things: (i) file a registration statement with respect to the 5¾% Senior Notes within 150 days after the Notes Closing Date to be used in connection with the exchange of the 5¾% Senior Notes and related guarantees for publicly registered notes and related guarantees with substantially identical terms in all material respects (except for the transfer restrictions relating to the 5¾% Senior Notes and interest rate increases as described below); (ii) use its reasonable best efforts to cause the applicable registration statement to become effective under the Securities Act within 210 days after the Notes Closing Date; and (iii) use its reasonable best efforts to effect an exchange offer of the 5¾% Senior Notes and the related guarantees for registered notes and related guarantees within 270 days after the Notes Closing Date. In addition, under certain circumstances, Products Corporation was required to file a shelf registration statement to cover resalesin compliance with all applicable covenants under the 2016 Senior Credit Facilities as of December 31, 2017. At December 31, 2017, the 5¾% Senior Notes. If Products Corporation failed to satisfy such obligations, itaggregate principal amounts outstanding under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility were $1,777.5 million and $157 million, respectively. At December 31, 2017, availability under the $400 million 2016 Revolving Credit Facility was obligated to pay additional interest to each holder$193 million, based upon the calculated borrowing base of the 5¾% Senior Notes that were subject to transfer restrictions, with respect to the first 90-day period immediately following any such failure, at a rate$381.9 million, less $10.1 million of 0.25% per annumoutstanding undrawn letters of credit, $21.8 million in outstanding checks and $157 million then drawn on the principal amount of the 5¾% Senior Notes that were subject to transfer restrictions held by such holder. The amount of additional interest increased by an additional 0.25% per annum with respect to each subsequent 90-day period until all registration requirements were satisfied, up to a maximum amount of additional interest of 0.50% per annum on the principal amount of the 5¾% Senior Notes that were subject to transfer restrictions.
On December 24, 2013, Products Corporation, consummated an offer to exchange Products Corporation’s 5¾% Senior Notes for new notes, with substantially the same terms, but which were registered under the Securities Act. By having the registration statement declared effective by the SEC on November 22, 2013, Products Corporation cured the first registration default that occurred under the Registration Rights Agreement, because the Registration Statement had not been declared effective by September 6, 2013. By consummating the Exchange Offer on December 24, 2013, Products Corporation cured the second registration default under the Registration Rights Agreement, that occurred because Products Corporation had not consummated the Exchange Offer by November 5, 2013. The first registration default caused the interest on the 5¾% Senior Notes to increase from 5.75% per annum to 6.00% per annum from September 7, 2013 through December 5, 2013 and the second registration default caused the interest on the 5¾% Senior Notes to increase to 6.25% per annum from December 6, 2013 through December 23, 2013. With Products Corporation having consummated the Exchange Offer on December 24, 2013, interest on the 5¾% Senior Notes resumed accruing at the original rate of 5.75% per annum effective from such date. The Company recorded additional interest expense of $0.4 million during the year ended December 31, 2013 with respect to the registration defaults.
Covenants2016 Revolving Credit Facility.
Products Corporation was in compliance with all applicable covenants under its 5¾% Senior Notes IndentureIndentures as of December 31, 2015.
(c) Spanish Government Loan
In connection with the Colomer Acquisition, the Company acquired the Colomer Group's euro-denominated loan payable to the Spanish government (the "Spanish Government Loan"), which loan had $0.6 million aggregate principal amount outstanding as of December 31, 2015 (based on foreign exchange rates in effect as of such date).  The Spanish Government Loan does not bear interest and is payable in 10 equal installments on June 30th of each year beginning in 2016 through 2025. 2017.












F-34
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Long-Term Debt MaturitiesDerivative Financial Instruments
The aggregate amountsCompany is exposed to certain risks relating to its ongoing business operations. The Company uses derivative financial instruments, including: (i) foreign currency forward exchange contracts ("FX Contracts") intended for the purpose of contractual long-term debt maturities at December 31, 2015managing foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates on the years 2016 through 2020 and thereafter are as follows:
Years Ended December 31, Long-Term Debt Maturities 
2016 $30.0
(a) 
2017 658.3
(b) 
2018 6.9
(a) 
2019 641.8
(c) 
2020 0.1
 
Thereafter 500.1
(d) 
Total long-term debt 1,837.2
 
Discounts (3.5) 
Total long-term debt, net of discounts $1,833.7
 

(a)
Amount includes the quarterly amortization payments required under the Acquisition Term Loan. For 2016, this amount also includes the required $23.2 million “excess cash flow” prepayment to be made on or prior to April 9, 2016 under the Amended Term Loan Agreement (as defined under the Amended Term Loan Agreement).
(b)
Amount includes the aggregate principal amount expected to be outstanding under the 2011 Term Loan which matures on November 19, 2017, after giving effect to the excess cash flow prepayment discussed in note (a) above.
(c)
Amount is comprised of the aggregate principal amount expected to be outstanding under the Acquisition Term Loan assuming a maturity date of October 9, 2019, after giving effect to the amortization payments and excess cash flow prepayment referred to in note (a) above.
(d)
Amount is primarily comprised of the $500.0 million aggregate principal amount outstanding as of December 31, 2015 under the 5¾% Senior Notes, which mature on February 21, 2021.


12. FAIR VALUE MEASUREMENTS
Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to price 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;Company’s net

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.

F-35F-12
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Ascash flows; and (ii) interest rate hedging transactions intended for the purpose of December 31, 2015,managing interest rate risk associated with Products Corporation’s variable rate indebtedness.
Foreign Currency Forward Exchange Contracts
Products Corporation enters into FX Contracts primarily to hedge the fair valuesanticipated 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 does not apply hedge accounting to its FX Contracts. The Company records FX Contracts in its consolidated balance sheet at fair value and immediately recognizes changes in fair value in earnings. Fair value of the Company’s FX Contracts is determined by using observable market transactions of spot and forward rates. See Note 13, "Financial Instruments," for further discussion of the Company's FX Contracts.
Interest Rate Swap
As a result of the Company completing several debt transactions in connection with the September 7, 2016 acquisition of Elizabeth Arden, Inc. ("Elizabeth Arden," the "Elizabeth Arden Acquisition" and the "Elizabeth Arden Acquisition Date," respectively), the critical terms of the 2013 Interest Rate Swap (as hereinafter defined) no longer matched the terms of the underlying debt and the 2013 Interest Rate Swap was determined to no longer be highly effective. Accordingly, the Company discontinued hedge accounting for the 2013 Interest Rate Swap during the third quarter of 2016. Following the de-designation of the 2013 Interest Rate Swap, changes in the fair value of the 2013 Interest Rate Swap have been accounted for as a component of other non-operating expenses. Accumulated deferred losses on the 2013 Interest Rate Swap of $1.2 million, or $0.7 million net of tax, at December 31, 2017 that were previously recorded as a component of accumulated other comprehensive loss will be amortized into earnings over the remaining term of the 2013 Interest Rate Swap, which expires in May 2018.  See Note 13, "Financial Instruments," for further discussion of the Company's 2013 Interest Rate Swap. Refer to Note 11, "Long-Term Debt," for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.
Recently Adopted Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-15, "Disclosure of Uncertainties about and Entity's Ability to Continue as a Going Concern," which requires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial assetsstatements are issued or are available to be issued. The Company adopted ASU 2014-15 on January 1, 2017 and liabilities thatthe adoption of this guidance did not have a material impact on the Company's financial statement disclosures.
In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies certain aspects of accounting for share-based payment transactions, including transactions in which an employee uses shares to satisfy the employer’s minimum statutory income tax withholding obligations, forfeitures and income taxes when awards vest or are settled. The Company adopted ASU No. 2016-09 beginning on January 1, 2017 and the adoption of this guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASU No. 2016-09 resulted in tax withholdings related to net share settlements of restricted stock units and awards in the amount of $3.2 million and $2.8 million for 2016 and 2015, respectively, previously reported in the Consolidated Statement of Cash Flows as a component of cash flows from operating activities, to be reclassified as a component of cash flows from financing activities.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which simplifies the subsequent measurement of inventories by requiring inventory to be measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU No. 2015-11 beginning on January 1, 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides specific guidance on the presentation of changes in restricted cash and restricted cash equivalents on the statement of cash flows. Under the new standard, the changes in restricted cash and restricted cash equivalents are required to be measured at fair value are categorizeddisclosed in reconciling the table below:
 Total Level 1 Level 2 Level 3
Assets:       
Derivatives:       
FX Contracts(a)     
$2.0
 $—
 $2.0
 $—
Total assets at fair value$2.0
 $—
 $2.0
 $—
Liabilities:       
Derivatives:       
FX Contracts(a)    
$0.6
 $—
 $0.6
 $—
2013 Interest Rate Swap(b)
6.5
 —
 6.5
 —
Total liabilities at fair value$7.1
 $—
 $7.1
 $—
opening and closing balances on the statement of cash flows. The Company adopted ASU No. 2016-18 during the fourth quarter of 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures, other than requiring the Company to reconcile its cash balances from its statements of financial position to its statements of cash flows and including restricted cash within the beginning and ending balances of cash within the Company's statement of cash flow.

As of December 31, 2014, the fair values of the Company’s financial assets and liabilities that are required to be measured at fair value are categorized in the table below:
 Total Level 1 Level 2 Level 3
Assets:       
Derivatives:       
FX Contracts(a)     
$0.2
 $—
 $0.2
 $—
Total assets at fair value$0.2
 $—
 $0.2
 $—
Liabilities:       
Derivatives:       
2013 Interest Rate Swap(b)

$3.5
 $—
 $3.5
 $—
Total liabilities at fair value$3.5
 $—
 $3.5
 $—

(a)
The fair value of the Company’s foreign currency forward exchange contracts ("FX Contracts") was measured based on observable market transactions for similar transactions in actively quoted markets of spot and forward rates on the respective dates. See Note 13, “Financial Instruments.”
(b)
The fair value of the Company's 2013 Interest Rate Swap was measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve on the respective dates. See Note 13, “Financial Instruments.”

As of December 31, 2015, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $1,818.0
 $—
 $1,818.0
 $1,833.7

F-36F-13
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Recently Issued Accounting Pronouncements
In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which will permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. This new guidance can be applied retrospectively and provides entities with the option to reclassify the amounts. The new guidance is effective for annual and quarterly periods beginning after December 15, 2018, with early adoption permitted, and requires entities to make new disclosures regardless of whether they elect to reclassify tax effects. The Company is in the process of evaluating the impact that this new guidance is expected to have on its financial statements and/or financial statement disclosures.
In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which changes the way that employers present net periodic pension cost ("NPPC") and net periodic postretirement benefit cost ("NPPBC") within the income statement. The amendment requires an employer to present the service cost component of NPPC and NPPBC in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of NPPC and NPPBC would be presented separately from this line item and below any subtotal of operating income; companies will need to disclose the line items used to present these other components of NPPC and NPPBC, if not separately presented in the statement of operations. In addition, only the service cost component would be eligible for capitalization in assets. This guidance is effective retrospectively for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU No. 2017-07 beginning as of January 1, 2018, and the Company expects that substantially all of the 2018 projected cost of approximately $9.0 million will be presented below operating income in the Company's 2018 Statement of Operations and Comprehensive (Loss) Income.
In January 2017, the FASB issued ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment," which simplifies the annual goodwill impairment analysis test by eliminating Step 2 of the current two-step impairment test. Under the new guidance, an entity would continue to perform the first step of the annual impairment test by comparing the carrying amount of a reporting unit with its fair value. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the goodwill impairment charge would be equal to the amount of such difference. This guidance is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company expects to adopt ASU No. 2017-04 beginning as of January 1, 2020 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business," which further clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt ASU No. 2017-01 beginning as of January 1, 2018 and expects that this new guidance will not have an impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Receipts and Cash Payments," which aims to standardize how certain transactions are classified within the Statement of Cash Flows, including, among other issues, debt prepayment and extinguishment costs and contingent consideration payments made after a business combination. This guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt ASU No. 2016-15 beginning as of January 1, 2018 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires lessees to recognize a right-of-use asset and a liability on the balance sheet for all leases, with the exception 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 adjustment such as for 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 will adopt ASU No. 2016-02 beginning as of January 1, 2019 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This new standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The underlying principle of this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. Entities may adopt this new standard either retrospectively for all periods presented in the financial statements (i.e., the full retrospective method) or

F-14
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

as a cumulative-effect adjustment as of the date of adoption (i.e., the modified retrospective method), without applying to comparative years’ financial statements.
In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date," which allows for a deferral of the adoption date for ASU No. 2014-09 until January 1, 2018 and permits early adoption of ASU No. 2014-09, but not before the effective date of January 1, 2017.
The Company adopted ASU No. 2014-09 beginning as of January 1, 2018 using the modified retrospective method. While the Company is finalizing its assessment of all potential impacts of ASU No. 2014-09, given the nature of the Company's products and the terms and conditions applicable to sales to its customers, the timing and amount of revenue recognized based on the underlying principles of this new standard are consistent with the Company's revenue recognition policy under previous guidance. As a result, the Company does not currently expect that the adoption will have a material impact on its revenues, results of operations or financial position. The Company does, however, expect to expand its financial statement disclosures in order to comply with the new standard. The Company has drafted its accounting policy with respect to the new standard based on a review of its business. The new policy reflects updates to internal controls and processes to enable the preparation of financial information upon its adoption of ASU No. 2014-09.


2. BUSINESS COMBINATIONS
The Elizabeth Arden Acquisition
On the Elizabeth Arden Acquisition Date, the Company completed the Elizabeth Arden Acquisition for a total cash purchase price of $1,034.3 million pursuant to an agreement and plan of merger (the "Merger Agreement") by and among Revlon, Products Corporation, RR Transaction Corp. ("Acquisition Sub," then a wholly-owned subsidiary of Products Corporation), and Elizabeth Arden. On the Elizabeth Arden Acquisition Date, Elizabeth Arden merged (the "Merger") with and into Acquisition Sub, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of Products Corporation.
In North America, Elizabeth Arden’s principal customers include prestige retailers, the mass retail channel, specialty stores, department stores and other retailers, distributors, e-commerce sites, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. Internationally, Elizabeth Arden’s portfolio of owned and licensed brands is sold to perfumeries, boutiques, department stores, travel retailers and distributors.
Products Corporation financed the Elizabeth Arden Acquisition with the proceeds from (i) a 7-year $1.8 billion senior secured term loan facility (the "2016 Term Loan Facility" and such agreement being the "2016 Term Loan Agreement"); (ii) $35 million of borrowings under a 5-year $400 million senior secured asset-based revolving credit facility (the "2016 Revolving Credit Facility" and such agreement being the "2016 Revolving Credit Agreement" and such facility, together with the 2016 Term Loan Facility, being the "2016 Senior Credit Facilities" and such agreements being the "2016 Credit Agreements"); (iii) $450 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 (the "6.25% Senior Notes"); and (iv) approximately $126.7 million of cash on hand. Refer to Note 11, "Long Term Debt" for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.

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

For the twelve months ended December 31, 20142017, the Company incurred $50 million of acquisition and integration costs in its consolidated statement of operations and comprehensive (loss) income related to the Elizabeth Arden Acquisition, which consisted of $49.2 million of integration costs and $0.8 million of acquisition costs. The integration costs consisted of non-restructuring costs related to integrating Elizabeth Arden's operations into the Company's business, including professional fees, lease termination costs and employee related costs. The acquisition costs primarily included legal fees directly attributable to the Elizabeth Arden Acquisition.


F-15
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Purchase Price of the Elizabeth Arden Acquisition
The components of the purchase price for the Elizabeth Arden Acquisition were as follows:
 
As of
September 7, 2016
Purchase price of Elizabeth Arden common stock (1)
$431.5
Repayment of Elizabeth Arden senior notes (2)
350.0
Repayment of Elizabeth Arden revolving credit facility, including accrued interest (3)
142.5
Repayment of Elizabeth Arden second lien credit facility, including accrued interest (3)
25.0
Repurchase of Elizabeth Arden preferred stock (4)
55.0
Payment of accrued interest and call premium on Elizabeth Arden Senior Notes (5)
27.4
Payment of Elizabeth Arden dividends payable at Elizabeth Arden Acquisition Date (6) 
2.9
Total Purchase Price$1,034.3
(1)All of Elizabeth Arden’s then issued and outstanding common stock was canceled and extinguished on the Elizabeth Arden Acquisition Date and converted into the right to receive $14 in cash per share, without interest, less any required withholding taxes, that was paid by Products Corporation upon the completion of the Elizabeth Arden Acquisition. The $431.5 million purchase price for Elizabeth Arden common stock included the settlement of all then outstanding Elizabeth Arden stock options and all then outstanding Elizabeth Arden restricted share units at the Elizabeth Arden Acquisition Date for a total cash payment of $11.1 million.
(2)The purchase price included the repurchase of the entire $350 million aggregate principal amount then outstanding of Elizabeth Arden’s 7.375% senior notes due 2021 (the "Elizabeth Arden Old Senior Notes").
(3)The purchase price included the repayment of the entire $142 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility and the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility, each of which facilities were terminated as of the Elizabeth Arden Acquisition Date.
(4)The purchase price included $55 million that was paid to retire the entire $55 million liquidation preference of all of the then issued and outstanding 50,000 shares of Elizabeth Arden preferred stock, par value $0.01 per share (the "Elizabeth Arden Preferred Stock"), which amount included a $5 million change of control premium.
(5)Interest on the Elizabeth Arden Old Senior Notes accrued at a rate of 7.375% per annum and was payable semi-annually on March 15 and September 15 of every year. The approximately $12.3 million of accrued and unpaid interest was calculated based on 176 days of accrued interest as of the Elizabeth Arden Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Old Senior Notes, upon a change in control, such notes were repurchased at a price equal to 103.69% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the date of such repurchase. The repurchase of the Elizabeth Arden Old Senior Notes was consummated on October 7, 2016.
(6)The purchase price included the payment of approximately $2.9 million in accrued dividends payable at the Elizabeth Arden Acquisition Date to the holders of the then outstanding Elizabeth Arden Preferred Stock.


F-16
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

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

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

The difference between the preliminary valuation of the Elizabeth Arden trade name and the sum of the fair values of the individual trade names within the Elizabeth Arden product portfolio resulted in an increase to goodwill of $15.4 million, which was recorded in the fiscal quarter ended March 31, 2017. As a result of this revised approach, the Company recognized amortization expense of approximately $1.8 million in its consolidated statement of operations and comprehensive (loss) income in 2017 related to the amortization of the acquired trade names from the Elizabeth Arden Acquisition Date through December 31, 2016.

(d)The Measurement Period Adjustments to accrued expenses related to changes in estimated payments for acquisition-related costs.

(e)The Measurement Period Adjustments to other long-term liabilities related to the recognition of the projected benefit obligation of a certain foreign non-qualified benefit plan of Elizabeth Arden.


F-17
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

Goodwill of $234 million represents the excess of the purchase price paid by Products Corporation for the Elizabeth Arden Acquisition over the fair value of the identifiable net assets acquired by Products Corporation in the Elizabeth Arden Acquisition. Factors contributing to the purchase price resulting in the recognition of goodwill include estimated annualized synergies and cost reductions, expanded category mix, channel diversification and a broader geographic footprint.

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

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

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

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

Unaudited Pro Forma Results

The following table presents the Company's pro forma consolidated net sales and income from continuing operations before income taxes for the years ended December 31, 2016 and 2015, respectively. The unaudited pro forma results include the historical consolidated statements of operations of the Company and Elizabeth Arden, giving effect to the Elizabeth Arden Acquisition and related financing transactions as if they had occurred at the beginning of the earliest period presented.
 Unaudited Pro Forma Results
  Year Ended December 31,
  2016 2015
Net sales $2,858.9
 $2,863.5
Loss from continuing operations, before income taxes (57.1) (74.6)


F-18
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

(i) as a result of a $38 million increase in the fair value of acquired inventory at the Elizabeth Arden Acquisition Date, the Company recognized a $20.7 million increase in its cost of sales during 2016 in its consolidated financial statements. The pro forma adjustments include an adjustment to reverse the $20.7 million recognized in the year ended December 31, 2016 within cost of sales because it does not have a recurring impact;

(ii) the elimination of $68.0 million of acquisition and integration costs recognized by the Company and Elizabeth Arden in connection with consummating the Elizabeth Arden Acquisition during 2016;

(iii) a $1.4 million pro forma decrease in depreciation as a result of the fair value adjustments to property and equipment for the twelve months ended December 31, 2016;

(iv) a $5.6 million pro forma increase in amortization expense of acquired finite-lived intangible assets recorded in connection with the Elizabeth Arden Acquisition for the twelve months ended December 31, 2016; and

(v) a pro forma increase in interest expense and amortization of debt issuance costs related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions as summarized in the following table. Refer to Note 11, "Long Term Debt" for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.
  Year Ended December 31,
($ in millions) 2016 2015
Interest Expense    
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes $121.9
 $106.4
Reversal of Elizabeth Arden’s historical interest expense (19.5) (26.2)
Company historical interest expense, as reflected in the historical consolidated financial statements (75.9) (50.9)
Total adjustment for pro forma interest expense $26.5
 $29.3
Debt issuance costs    
Pro forma amortization of debt issuance costs $8.1
 $8.1
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements (3.3) (4.4)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs (1.3) (1.5)
Total adjustment for pro forma amortization of debt issuance costs $3.5
 $2.2

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

The Cutex International Acquisition
On May 31, 2016 (the "Cutex International Acquisition Date"), the Company completed the acquisition of Cutex International from Coty Inc. (the "Cutex International Acquisition") for total cash consideration of $29.1 million. Following the Company's October 2015 acquisition of the Cutex business and related assets in the U.S. from Cutex Brands, LLC (the "Cutex U.S. Acquisition" and together with the Cutex International Acquisition, the "Cutex Acquisitions"), combined with other Cutex businesses that the Company acquired in 1998, the Cutex International Acquisition completed the Company's global consolidation of the Cutex brand. Cutex International's results of operations are included in the Company’s Consolidated Financial Statements commencing on the Cutex International Acquisition Date. Pro forma results of operations have not been presented, as the impact of the Cutex International Acquisition on the Company’s consolidated financial results is not material.

F-19
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The Company accounted for the Cutex International Acquisition as a business combination in the second quarter of 2016. The table below summarizes the allocation of the total consideration paid:
 Amounts Recognized as of May 31, 2016
Inventory$0.8
Purchased Intangible Assets (a)
17.2
Goodwill11.1
        Total consideration transferred$29.1
(a) Purchased intangible assets include customer networks fair valued at $11.9 million and intellectual property fair valued at $0.8 million, which are amortized over useful lives of 15 and 10 years, respectively, and indefinite lived trade names fair valued at $4.5 million.
As part of the Cutex International Acquisition, the Company reacquired the Cutex trade name from Coty under an assignment of a license agreement, which had previously provided Coty with an exclusive right to manufacture, market and sell Cutex branded products for an initial term and perpetual automatic 20-year renewals. Based on the terms and conditions of the existing license agreement and other factors, the Cutex trade name was assigned an indefinite-life and, therefore, will not be amortized.
In determining the estimated fair values of net assets acquired and resulting goodwill related to the Cutex International Acquisition, the Company considered, among other factors, the analysis of Cutex International's historical financial performance and an estimate of the future performance of the acquired business, as well as the intended use of the acquired assets. Factors contributing to the purchase price resulting in the recognition of goodwill include the anticipated benefits that the Company expects to achieve through the expansion of its nail product portfolio. Neither the intangible assets nor goodwill acquired in the Cutex International Acquisition are deductible for income tax purposes.


3. RESTRUCTURING CHARGES
EA Integration Restructuring Program
In December 2016, in connection with integrating the Elizabeth Arden and Revlon organizations, the Company began the process of implementing certain integration activities, including consolidating offices, eliminating certain duplicative activities and streamlining back-office support (the "EA Integration Restructuring Program"). The EA Integration Restructuring Program is designed to reduce the Company’s cost of goods sold and selling, general and administrative ("SG&A") expenses. As a result of the EA Integration Restructuring Program, the Company expects to eliminate approximately 425 positions worldwide.
In connection with implementing the EA Integration Restructuring Program, the Company expects to recognize approximately $90 million to $95 million of total pre-tax restructuring charges (the "EA Integration Restructuring Charges"), consisting of: (i) approximately $65 million to $70 million of employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges.
A summary of the restructuring and related charges incurred through December 31, 2017 in connection with the EA Integration Restructuring Program is presented in the following table:
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits 
Lease Termination and Other Costs(a)
 Total Restructuring Charges 
Inventory Adjustments(b)
 
Other Related Charges(c)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2016$31.5
 $0.2
 $31.7
 $0.5
 $2.3
 $34.5
Charges incurred during the year ended December 31, 201731.3
 4.8
 36.1
 0.9
 0.7
 37.7
Cumulative charges incurred through December 31, 2017$62.8
 $5.0
 $67.8
 $1.4
 $3.0
 $72.2

(a) Includes primarily lease termination costs related to certain exited Elizabeth Arden office space.
(b) Inventory adjustments are recorded within cost of sales in the Company’s consolidated statement of operations and comprehensive (loss) income.
(c) Other related charges are recorded within SG&A in the Company’s consolidated statement of operations and comprehensive (loss) income.

F-20
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


A summary of the restructuring charges incurred through December 31, 2017 in connection with the EA Integration Restructuring Program by reportable segment is presented in the following table:
  Charges incurred during the twelve months ended December 31, 2017 Cumulative charges incurred through December 31, 2017
Elizabeth Arden $16.1
 $22.6
Consumer 12.1
 16.3
Professional 4.2
 9.8
Unallocated Corporate Expenses 3.7
 19.1
     Total $36.1
 $67.8

The Company expects that cash payments will total $90 million to $95 million in connection with the EA Integration Restructuring Charges, of which $42.5 million was paid in 2017. The remaining balance is expected to be substantially paid by the end of 2020.


F-21
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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, 2017
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2017
2017           
EA Integration Restructuring Program:(a)
           
Employee severance and other personnel benefits$31.5
 $31.3
 $—
 $(37.0) $—
 $25.8
Other3.0
 6.4
 —
 (5.5) —
 3.9
2015 Efficiency Program:(b)
           
Employee severance and other personnel benefits4.5
 (3.2) —
 (1.0) —
 0.3
Other0.2
 —
 —
 —
 —
 0.2
December 2013 Program:(c)

 
 
 
 
  
Employee severance and other personnel benefits1.2
 —
 —
 (0.1) —
 1.1
Other immaterial actions: (d)

 
 
 
 
  
Employee severance and other personnel benefits1.4
 0.6
 —
 (0.9) —
 1.1
Other1.0
 1.1
 0.1
 (0.7) —
 1.5
Total restructuring reserve$42.8
 $36.2
 $0.1
 $(45.2) $—
 $33.9
            
 
Liability
Balance at January 1, 2016
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2016
2016           
EA Integration Restructuring Program:           
Employee severance and other personnel benefits$—
 $31.5
 $—
 $—
 $—
 $31.5
Other—
 3.0
       3.0
2015 Efficiency Program:           
Employee severance and other personnel benefits6.6
 0.6
 —
 (2.7) —
 4.5
Other0.1
 0.7
 —
 (0.6) —
 0.2
2014 Integration Program:(e)
           
Employee severance and other personnel benefits0.8
 —
 —
 (0.8) —
 —
Other0.1
 —
 —
 (0.1) —
 —
December 2013 Program:           
Employee severance and other personnel benefits1.2
 —
 —
 —
 —
 1.2
Other immaterial actions:           
Employee severance and other personnel benefits2.3
 2.1
 —
 (3.0) —
 1.4
Other0.7
 1.5
 —
 (1.5) 0.3
 1.0
Total restructuring reserve$11.8
 $39.4
 $—
 $(8.7) $0.3
 $42.8

(a) Includes $1.6 million in charges related to inventory adjustments and other restructuring-related charges that were reflected within cost of sales and SG&A, respectively, in the Company’s December 31, 2017 Consolidated Statement of Operations and Comprehensive (Loss) Income.


F-22
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(b) In September 2015, the Company initiated restructuring actions to drive certain organizational efficiencies, including reducing general and administrative expenses, within the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions were completed by the end of 2017. During the third quarter of 2017, the Company performed a review of the 2015 Efficiency Program and determined that employees in certain positions that were initially identified to be eliminated would continue to be employed by the Company in varying positions in connection with integrating the Elizabeth Arden and Revlon organizations. As a result, the Company reversed approximately $3.2 million in previously accrued restructuring charges recognized in connection with the 2015 Efficiency Program. Total cash payments made for the 2015 Efficiency Program were $7.1 million. A summary of the restructuring and related charges incurred through December 31, 2017 in connection with the 2015 Efficiency Program by reportable segment is presented in the following table:
  2015 Efficiency Program cumulative charges incurred through December 31, 2017
Consumer $3.6
Professional 3.5
Unallocated Corporate Expenses 0.5
     Total $7.6

(c) In December 2013, the Company announced restructuring actions that primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment (the "December 2013 Program"). The December 2013 Program resulted in the elimination of approximately 1,100 positions in 2014, primarily in China.

(d) Consists primarily of $1.1 million in charges related to the program that Elizabeth Arden commenced prior to the Elizabeth Arden Acquisition to further align their organizational structure and distribution arrangements for the purpose of improving its go-to-trade capabilities and execution and to streamline their organization (the "Elizabeth Arden 2016 Business Transformation Program").

(e) Following Products Corporation's October 2013 acquisition of The Colomer Group Participations, S.L. ("Colomer" and the "Colomer Acquisition"), the Company implemented actions to integrate Colomer's operations into the Company's business, which reduced costs across the Company's businesses and generated synergies and operating efficiencies within the Company's global supply chain and consolidated offices and back office support (all such actions, together, the "2014 Integration Program"). The 2014 Integration Program was substantially completed as of December 31, 2015.

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


4. DISCONTINUED OPERATIONS
On December 30, 2013, the Company announced that it was implementing the December 2013 Program, which primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment.
The results of the China discontinued operations are included within income (loss) from discontinued operations, net of taxes, and relate entirely to the Consumer segment. The summary comparative financial results of discontinued operations were as follows:
 Year Ended December 31,
 2017 2016 2015
Net sales$—
 $—
 $—
Income (loss) from discontinued operations, before taxes2.4
 (4.9) (3.2)
Provision for income taxes0.3
 —
 —
Income (loss) from discontinued operations, net of taxes2.1
 (4.9) (3.2)


F-23
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consisted of the following:
 December 31,
 2017 2016
Cash and cash equivalents$1.3
 $1.7
Trade receivables, net0.2
 0.2
Total current assets1.5
 1.9
Total assets$1.5
 $1.9
 
 
Accounts payable$0.5
 $0.5
Accrued expenses and other3.5
 3.3
Total current liabilities4.0
 3.8
Total liabilities$4.0
 $3.8


5. INVENTORIES
As of December 31, 2017 and 2016, the Company's inventory balances consisted of the following:
 December 31,
 2017 2016
Raw materials and supplies$123.4
 $72.9
Work-in-process22.0
 33.5
Finished goods352.5
 318.2
 $497.9
 $424.6


6. PREPAID EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's prepaid expenses and other balances were as follows:
 December 31,
 2017 2016
Prepaid expenses$43.3
 $34.6
Other70.1
 54.2
 $113.4
 $88.8



F-24
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

7. PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2017 and 2016, the Company's property, plant and equipment balances consisted of the following:
 December 31,
 2017 2016
Land and improvements$11.6
 $10.4
Building and improvements97.0
 88.6
Machinery, equipment and capital leases275.1
 243.3
Office furniture, fixtures and capitalized software168.3
 122.7
Counters and trade fixtures62.0
 60.8
Leasehold improvements51.4
 46.0
Construction-in-progress92.8
 53.4
Property, plant and equipment, gross758.2
 625.2
Accumulated depreciation and amortization(385.5) (304.7)
Property, plant and equipment, net$372.7
 $320.5
Depreciation and amortization expense on property, plant and equipment for 2017, 2016 and 2015 was $54.4 million, $45 million, and $37 million, respectively.


8. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill

The following table presents the changes in goodwill by segment during 2017 and 2016:
 Consumer Professional Elizabeth Arden  Other Total
Balance at January 1, 2016$210.1
 $240.7
 $—
 $18.9
 $469.7
Goodwill acquired (a)
17.4
 —
 221.7
 —
 239.1
Foreign currency translation adjustment—
 (0.4) —
 (2.2) (2.6)
Goodwill impairment charge—
 —
 —
 (16.7) (16.7)
Balance at December 31, 2016$227.5
 $240.3
 $221.7
 $—
 $689.5
Measurement Period Adjustments (b)
—
 —
 12.3
 —
 12.3
Foreign currency translation adjustment—
 1.5
 —
 —
 1.5
Goodwill impairment charge(10.8) —
 —
 —
 (10.8)
Balance at December 31, 2017$216.7
 $241.8
 $234.0
 $—
 $692.5
          
Cumulative goodwill impairment charges$(20.5) $—
 $—
 $(16.7) $(37.2)
(a) The goodwill acquired during 2016 relates to: (i) $221.7 million of goodwill acquired in the Elizabeth Arden Acquisition; and (ii) $17.4 million of goodwill acquired in the Cutex Acquisitions. See Note 2, "Business Combinations," for further discussion of the Elizabeth Arden Acquisition and Cutex Acquisitions.
(b) Refer to Note 2, "Business Combinations," for more information on the Measurement Period Adjustments related to the Elizabeth Arden Acquisition.
For 2017, in assessing whether goodwill was impaired in connection with its annual impairment test performed during the fourth quarter of 2017 using October 1st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process, as prescribed by ASC 350, Intangibles - Goodwill and Other, to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and the financial performance of the (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts for 2017.

F-25
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

However, for 2017, the Company determined that it would utilize the two-step process to test the GCB reporting unit for impairment. In the first step of this test, the Company compared the fair value of the GCB reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. The results of the step one test indicated that impairment indicators existed for the GCB reporting unit due to continued net sales declines for both the SinfulColors and Pure Ice brands and lower promotional activity for the Pure Ice brand, and accordingly, the Company performed step two of the goodwill impairment test for the GCB reporting unit.
In the second step, the Company measured the potential impairment of the GCB reporting unit by comparing the implied fair value with the carrying amount of its goodwill at October 1, 2017. The implied fair value of the GCB reporting unit's goodwill was determined in the same manner as the amount of goodwill recognized in a business combination, where the estimated fair value of GCB reporting unit was allocated to all the assets and liabilities of that reporting unit (including both recognized and unrecognized intangible assets) as if the GCB had been acquired in a business combination and the estimated fair value of the GCB reporting unit was the purchase price paid. When the carrying amount of the reporting unit's goodwill is greater than the implied fair value of that reporting unit's goodwill, an impairment loss is recognized. The Company determined the fair value of the GCB reporting unit using discounted estimated future cash flows. The weighted-average cost of capital used in testing the GCB reporting unit for impairment was 12% with a perpetual growth rate of 2%. As a result of this annual impairment test, the Company recognized an aggregate $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017. Following the recognition of this non-cash goodwill impairment charge, the GCB reporting unit had $14.8 million remaining goodwill as of December 31, 2017.
For 2016 and 2015, the Company also utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then existing four reporting units (i.e., for 2016 (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other). As a result of the annual impairment testing for 2016 and 2015, the Company recognized a $16.7 million non-cash goodwill impairment charge related to the Other reporting unit in the fourth quarter of 2016 and a $9.7 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2015.


F-26
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 December 31, 2017 and 2016:
 December 31, 2017
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$271.4
 $(72.8) $198.6
 13
Customer relationships250.6
 (46.8) 203.8
 13
Patents and internally-developed IP20.8
 (8.4) 12.4
 7
Distribution rights31.0
 (2.3) 28.7
 17
Other1.3
 (0.6) 0.7
 2
Total finite-lived intangible assets$575.1
 $(130.9) $444.2
  
        
Indefinite-lived intangible assets:       
Trade names$147.9
 $—
 $147.9
  
Total indefinite-lived intangible assets$147.9
 $—
 $147.9
  
        
Total intangible assets$723.0
 $(130.9) $592.1
  
        
 December 31, 2016
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$177.9
 $(47.9) $130.0
 13
Customer relationships247.6
 (30.1) 217.5
 14
Patents and internally-developed IP20.3
 (6.1) 14.2
 8
Distribution rights31.0
 (0.5) 30.5
 18
Other1.3
 (0.2) 1.1
 3
Total finite-lived intangible assets$478.1
 $(84.8) $393.3
  
        
Indefinite-lived intangible assets:       
Trade names$243.3
 $—
 $243.3
  
Total indefinite-lived intangible assets$243.3
 $—
 $243.3
  
        
Total intangible assets$721.4
 $(84.8) $636.6
  

Amortization expense for finite-lived intangible assets was $43.2 million, $27.5 million and $22.4 million for 2017, 2016, and 2015 respectively.
The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares the current carrying values of the Company’s long-termintangible assets to the undiscounted pre-tax cash flows expected to result from the use of the assets.
Based upon the results of the annual goodwill impairment testing for the Company's GCB reporting unit during 2017, the Company performed an impairment review of the acquired finite-lived intangible assets. No impairment was recognized related to the carrying value of any of the finite or indefinite-lived intangible assets as a result of the annual impairment test for the year ended December 31, 2017.
Based upon the results of the annual goodwill impairment testing for the Company's Other reporting unit during 2016, the Company performed an impairment review of the finite-lived intangible assets acquired as part of the 2015 acquisition of CBBeauty

F-27
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Group and certain of its related entities (collectively "CBB" and, such transaction, the "CBB Acquisition"). As a result of this review, the Company recognized during the fourth quarter of 2016 within the Other reporting unit $4.2 million, $2.0 million and $0.5 million of non-cash impairment charges as a result of the change in the fair value of customer relationships, distribution rights and trade names, respectively, in the aggregate amount of $6.7 million.
The Company did not recognize any impairment charges related to the carrying value of any of the Company's identifiable intangible assets in 2015.
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 December 31, 2017:
 Estimated Amortization Expense
2018$40.2
201937.3
202036.5
202135.3
202234.1
Thereafter260.8
Total$444.2


9. ACCRUED EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's accrued expenses and other current liabilities consisted of the following:
 December 31,
 2017 2016
Compensation and related benefits$59.6
 $75.8
Advertising and promotional costs84.0
 66.7
Sales returns and allowances61.7
 51.9
Taxes48.4
 39.2
Restructuring reserve33.3
 38.0
Interest23.8
 24.4
Other102.0
 86.9
 $412.8
 $382.9


10. SHORT-TERM BORROWINGS
Products Corporation had outstanding short-term borrowings (excluding borrowings under the 2016 Senior Credit Facilities for 2016, which are reflected in Note 11, "Long-Term Debt"), aggregating to $12.4 million and $10.8 million at December 31, 2017 and 2016, respectively. The weighted average interest rate on these short-term borrowings outstanding at both December 31, 2017 and 2016 was 5.0%.



F-28
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

11. LONG-TERM DEBT
As of December 31, 2017 and 2016, the Company's debt includingbalances consisted of the following:
 December 31,
 2017 2016
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (see (a) below)$1,735.9
 $1,747.8
2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (b) below)152.1
 —
6.25% Senior Notes due 2024, net of debt issuance costs (see (c) below)440.3
 439.1
5.75% Senior Notes due 2021, net of debt issuance costs (see (d) below)495.1
 493.8
Spanish Government Loan due 20250.5
 0.5
 2,823.9
 2,681.2
Less current portion (*)   
(170.2) (18.1)
 $2,653.7
 $2,663.1

(*) At December 31, 2017, the Company classified $170.2 million as its current portion of long-term debt, are categorized incomprised primarily of $152.1 million of net borrowings under the table below:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $1,844.0
 $—
 $1,844.0
 $1,863.9
The fair value2016 Revolving Credit Facility, net of debt issuance costs, and $18.1 million of amortization payments on the Company's long-term debt, including2016 Term Loan Facility scheduled to be paid over the next four calendar quarters. At December 31, 2016, the Company classified $18.1 million as its current portion of long-term debt, iscomprised primarily of $18 million of amortization payments on the 2016 Term Loan Facility.

The Company completed the following debt transactions during 2016:

2016 Debt-Related Transactions
In connection with and substantially concurrently with closing the Elizabeth Arden Acquisition, Products Corporation entered into the 2016 Term Loan Facility and the 2016 Revolving Credit Facility. Additionally, as part of financing the Elizabeth Arden Acquisition, in August 2016 Products Corporation completed the issuance of $450 million aggregate principal amount of its 6.25% Senior Notes (the "6.25% Senior Notes Offering"), which funds were released from escrow (the "Escrow Release") on the Elizabeth Arden Acquisition Date. In connection with entering into the 2016 Senior Credit Facilities, Products Corporation maintained on the 2016 Term Loan Facility its existing floating-to-fixed 2013 Interest Rate Swap (as hereinafter defined) based on quoted market prices for similar issuesa notional amount of $400 million that previously applied to Products Corporation’s Old Acquisition Term Loan, which loan was refinanced in full in connection with Products Corporation's consummation of the 2016 Senior Credit Facilities and maturities.
the 6.25% Senior Notes Offering. The carrying amountsproceeds of Products Corporation's 6.25% Senior Notes Offering and the 2016 Term Loan Facility, together with approximately $35 million of borrowings under the 2016 Revolving Credit Facility, and approximately $126.7 million of cash on hand, were used to: (A) fund the Elizabeth Arden Acquisition, including: (i) repurchasing the entire $350 million aggregate principal amount then-outstanding of the Elizabeth Arden Old Senior Notes; (ii) repaying the entire $142 million aggregate principal amount of borrowings outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility (which facility was terminated upon such repayment); (iii) repaying the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility (which facility was terminated upon such repayment); and (iv) retiring the entire $55 million liquidation preference of all 50,000 shares of Elizabeth Arden's then issued and outstanding preferred stock, which amount included a $5 million change of control premium; and (B) to completely refinance and repay all of the $651.4 million in aggregate principal balance then outstanding under Products Corporation’s then-existing 2011 Term Loan and all of the $658.6 million in aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan (each of which facilities were terminated upon such prepayment). The Company did not incur any material early termination penalties in connection with repaying such facilities and preferred stock. See below for a summary description of the agreements governing the 2016 Senior Credit Facilities and 6.25% Senior Notes.
Amended Term Loan Facility - Excess Cash Flow Payment
In February 2016, Products Corporation prepaid $23.2 millionof indebtedness, then outstanding under its Old Term Loan Facility, representing 50% of its 2015 "excess cash equivalents, trade receivables, notes receivable, accounts payableflow" as defined by, and short-term borrowings approximate their respective fair values.required under, Old Term Loan Agreement. The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Old Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $11.5 million to $651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $11.7 million that was applied to the Old Acquisition Term Loan reduced Products Corporation's future annual amortization payments

13.
F-29
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL INSTRUMENTSSTATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

under such loan on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019. The 2011 Term Loan and Old Acquisition Term Loan were completely refinanced and terminated in connection with financing the Elizabeth Arden Acquisition.

Long-Term Debt Agreements
(a) 2016 Term Loan Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation maintains standbyentered into the 2016 Term Loan Agreement, for which Citibank, N.A. acts as administrative and trade letterscollateral agent and which has an initial aggregate principal amount of credit$1.8 billion and matures on the earlier of: (x) the seventh anniversary of the Elizabeth Arden Acquisition Date and (y) the 91st day prior to the maturity of Products Corporation’s 5.75% Senior Notes due 2021 (the "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. The loans under the 2016 Term Loan Facility were borrowed at an original issue discount of 0.5% to their principal amount. The 2016 Term Loan Facility may be increased by an amount equal to the sum of (x) the greater of $450 million and 90% of Products Corporation’s pro forma consolidated EBITDA, plus (y) an unlimited amount to the extent that (1) the first lien leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt that is not junior or subordinated to the liens of the Senior Facilities to EBITDA) is less than or equal to 3.5 to 1.0 (for debt secured pari passu with the 2016 Term Loan Facility) or (2) the secured leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt to EBITDA) is less than or equal to 4.25 to 1.0 (for junior lien or unsecured debt), plus (z) up to an additional $400 million if the 2016 Revolving Credit Facility has been repaid and terminated.
Guarantees and Security: Products Corporation and the restricted subsidiaries under the 2016 Term Loan Facility, which include Products Corporation’s domestic subsidiaries, including Elizabeth Arden and its domestic subsidiaries (collectively, the "Restricted Group"), are subject to the covenants under the 2016 Term Loan Agreement.  The 2016 Term Loan Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various corporate purposesexceptions), as well as by Revlon, on a limited recourse basis.  The obligations of Revlon, Products Corporation and the subsidiary guarantors under whichthe 2016 Term Loan Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions). The obligors and guarantors under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility are identical. The liens securing the 2016 Term Loan Facility on the accounts, inventory, equipment, chattel paper, documents, instruments, deposit accounts, real estate and investment property and general intangibles (other than intellectual property) related thereto (the "Revolving Facility Collateral") rank second in priority to the liens thereon securing the 2016 Revolving Credit Facility.  The liens securing the 2016 Term Loan Facility on all other property, including capital stock, intellectual property and certain other intangible property (the "Term Loan Collateral"), rank first in priority to the liens thereon securing the 2016 Revolving Credit Facility, while the liens thereon securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility.
Interest and Fees: Interest accrues on term loans under the 2016 Term Loan Facility at a rate per annum of Adjusted LIBOR (which has a floor of 0.75%) plus a margin of 3.50% or an alternate base rate plus a margin of 2.50%, at Products Corporation’s option, and is payable quarterly, at a minimum. Products Corporation is obligated to pay certain fees and expenses in connection with the 2016 Term Loan Facility. 
Affirmative and Negative Covenants: The 2016 Term Loan Agreement contains certain affirmative and negative covenants that, among other things, limit the Restricted Group’s 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 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 negative covenants are subject to various exceptions, including an "available amount basket" based on 50% of Products Corporation’s cumulative consolidated net income, plus a "starter" basket of $200 million, 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 2016 Term Loan Agreement), except such compliance is not required when such baskets are used to make investments. While the 2016 Term Loan Agreement contains certain customary representations, warranties and events of default, it does not contain any financial maintenance covenants.
Prepayments: The 2016 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

F-30
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

calculation with respect to fiscal year ending December 31, 2017, 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 loans under the 2016 Term Loan Facility and revolving loans under the 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. Products Corporation may voluntarily prepay the 2016 Term Loan Facility without premium or penalty. No excess cash flow payments were due and payable with respect to 2017.
During 2016, the Company incurred approximately $45.2 million of fees and expenses in connection with consummating the 2016 Term Loan Facility, of which $8.8$39.3 million were capitalized and $9.0are being amortized over the remaining term of the 2016 Term Loan Credit Facility using the effective interest method. The Company expensed the remaining $6 million (including of fees and expenses and wrote-off $10.9 million of unamortized debt discount and deferred financing costs related to the Old Term Loan Facility. These amounts, available under credit agreementstotaling $16.9 million, were recognized within loss on early extinguishment of debt in effect at that time) were maintained at the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 20152016.
(b) 2016 Revolving Credit Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Revolving Credit Agreement, for which Citibank, N.A. acts as administrative agent and December 31, 2014, respectively. Included in these amounts are approximately $7.5collateral agent. The 2016 Revolving Credit Facility has an initial maximum availability of $400 million and $7.7 (with a $100 million at December 31, 2015 and December 31, 2014, respectively, in standbysublimit for letters of credit that supportand up to $70 million available for swing line loans), which availability is subject to the amount of the borrowing base.  The 2016 Revolving Credit Facility may be increased by the greater of (x) $50 million and (y) the excess of the borrowing base over the amounts of then-effective commitments.  The 2016 Revolving Credit Facility permits certain non-U.S. subsidiaries to borrow in local currencies. The borrowing base calculation under the 2016 Revolving Credit Facility is based on the sum of: (i) 85% of eligible accounts receivable; (ii) the lesser of 85% of the net orderly liquidation value and a percentage of the value specified in respect of different types of eligible inventory; (iii) qualified restricted cash (capped at $75 million); and (iv) a temporary increase amount between August 15 and October 31 of each year, which are collectively subject to certain availability reserves set by the administrative agent. The 2016 Revolving Credit Facility matures on the earlier of: (x) the fifth anniversary of the Elizabeth Arden Acquisition Date; and (y) the 91st day prior to the maturity of Products Corporation’s self-insurance programs.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.
Guarantees and Security: The estimated liabilityRestricted Group under the 2016 Revolving Credit Agreement (which is the same as the Restricted Group under the 2016 Term Loan Agreement) is subject to the covenants under the 2016 Revolving Credit Agreement.  The 2016 Revolving Credit Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon on a limited recourse basis.  The obligations of Revlon, Products Corporation and the subsidiary guarantors under the 2016 Revolving Credit Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of Products Corporation’s restricted subsidiaries held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions).  The obligors and guarantors under the 2016 Revolving Credit Facility and the 2016 Term Loan Facility are identical.  The liens on the 2016 Revolving Facility Collateral securing the 2016 Revolving Credit Facility rank first in priority to the liens thereon securing the 2016 Term Loan Facility, which rank second in priority on such collateral.  The liens on the Term Loan Collateral securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility, which rank first in priority on such collateral.
Interest and Fees: Under the 2016 Revolving Credit Facility, interest is payable quarterly and accrues on borrowings under such programs is accruedfacility 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.Corporation to the administrative agent from time to time); or (ii) the Eurocurrency rate plus an applicable margin equal to 1.25%, 1.50% 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), at Products Corporation’s option. The applicable margin decreases as average excess availability under the 2016 Revolving Credit Facility increases.  Products Corporation is obligated to pay certain fees and expenses in connection with the 2016 Revolving Credit Facility, including a commitment fee of 0.25% for any unused amounts. Loans under the 2016 Revolving Credit Facility may be prepaid without premium or penalty.
Affirmative and Negative Covenants: The 2016 Revolving Credit Agreement contains affirmative and negative covenants that are similar to those in the 2016 Term Loan Agreement, other than the "available amount basket" (as described above in the description of the 2016 Term Loan Facility); provided, however, under the 2016 Revolving Credit Agreement the Restricted Group will be able to incur unlimited additional junior secured debt and unsecured debt, make unlimited asset sales and dispositions, make unlimited investments and acquisitions, prepay junior debt and make unlimited restricted payments to the extent that certain

F-31
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

"payment conditions" for asset-based credit facilities are satisfied.  The 2016 Revolving Credit Agreement contains certain customary representations, warranties and events of default. If Products Corporation’s "Liquidity Amount" (defined in the 2016 Revolving Credit Agreement as the Borrowing Base less the sum of (x) the aggregate outstanding extensions of credit under the 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such date) falls below the greater of $35 million and 10% of the maximum availability under the 2016 Revolving Credit Facility (a "Liquidity Event Period"), then the Restricted Group will be required to maintain a consolidated fixed charge coverage ratio (the ratio of Products Corporation’s EBITDA minus capital expenditures to cash interest expense for such period) of a minimum of 1.0 to 1.0 until the first date after 20 consecutive business days for which the Liquidity Amount is equal to or greater than such threshold. If Products Corporation is in default under the consolidated fixed charge coverage ratio under the 2016 Revolving Credit Agreement, Products Corporation may cure such default by Products Corporation and/or Revlon issuing certain equity securities and Products Corporation receiving capital contributions from Revlon, with such cash being deemed to increase EBITDA for the purpose of calculating the applicable ratio. Products Corporation may exercise this cure right no more than two times in any four-quarter period, and no more than five times in total during the term of the 2016 Revolving Credit Facility.
Prepayments: Products Corporation must prepay borrowings under the 2016 Revolving Credit Facility to the extent that outstanding loans and letters of credit exceed availability.  During a Liquidity Event Period, the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the 2016 Revolving Credit Facility.   The above descriptions of the terms of the 2016 Term Loan Agreement and the 2016 Revolving Credit Facility and the related security and collateral agreements are qualified in their entirety by reference to such agreements, which are incorporated by reference as exhibits to this Form 10-K.
During 2016, the Company incurred approximately $5.7 million of fees and expenses in connection with consummating the 2016 Revolving Credit Facility, of which $5.6 million were capitalized as deferred financing costs and are being amortized over the remaining term of the 2016 Revolving Credit Facility using the effective interest method. The Company expensed the remaining $0.1 million of fees and expenses, which were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2016.
(c) 6.25% Senior Notes
On August 4, 2016, Revlon Escrow Corporation (the "Escrow Issuer"), which on such date was a wholly owned subsidiary of Products Corporation, completed the 6.25% Senior Notes offering, pursuant to an exemption from registration under the Securities Act of 1933 (as amended, the "Securities Act"), of $450 million aggregate principal amount of the 6.25% Senior Notes due 2024. The 6.25% Senior Notes are unsecured and were initially issued by the Escrow Issuer to the initial purchasers under an Indenture, dated as of August 4, 2016 (the "6.25% Senior Notes Indenture"), between the Escrow Issuer and U.S. Bank National Association, as trustee (the "6.25% Senior Notes Trustee"). The 6.25% Senior Notes mature on August 1, 2024. Interest on the 6.25% Senior Notes accrues at 6.25% per annum, paid every six months through maturity on each February 1 and August 1, beginning on February 1, 2017. The proceeds from the 6.25% Senior Notes were released from escrow on the September 7, 2016 The Elizabeth Arden Acquisition Date (the "Escrow Release"). On the Elizabeth Arden Acquisition Date, the Escrow Issuer was merged with and into Products Corporation and in connection with the Escrow Release, Products Corporation and certain of its direct and indirect wholly-owned domestic subsidiaries, including Elizabeth Arden and certain of its subsidiaries (collectively, the "6.25% Senior Notes Guarantors"), and the 6.25% Senior Notes Trustee entered into a supplemental indenture (the "6.25% Senior Notes Supplemental Indenture") to the 6.25% Senior Notes Indenture, pursuant to which Products Corporation assumed the obligations of the Escrow Issuer under the 6.25% Senior Notes and the 6.25% Senior Notes Indenture and the 6.25% Senior Notes Guarantors jointly and severally, fully and unconditionally guaranteed the 6.25% Senior Notes on a senior unsecured basis (the "6.25% Senior Notes Guarantees").  The 6.25% Senior Notes Guarantors are the same entities that are subsidiary guarantors under the 2016 Senior Credit Facilities.
In December 2016, Products Corporation consummated an offer to exchange the original 6.25% Senior Notes for $450 million of new 6.25% Senior Notes, which have substantially the same terms as the original 6.25% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the "6.25% Senior Notes").
Ranking: The 6.25% Senior Notes are Products Corporation’s senior, unsubordinated and unsecured obligations, ranking: (i) pari passu in right of payment with all of Products Corporation’s existing and future senior unsecured indebtedness; (ii) senior in right of payment to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ future subordinated indebtedness; and (iii) effectively junior to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ existing and future senior secured indebtedness, including, indebtedness under Products Corporation’s 2016 Senior Credit Facilities, to the extent of the value of the assets securing such indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees are: (i) structurally subordinated to all of the liabilities and preferred stock of any of the Company’s subsidiaries that do not guarantee the 6.25% Senior Notes; and (ii) pari passu in right of payment with liabilities of the 6.25% Senior Notes Guarantors other than expressly subordinated indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees rank effectively junior to indebtedness

F-32
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the "6.25% Senior Notes Non-Guarantor Subsidiaries"), none of which guarantee the 6.25% Senior Notes.
Optional Redemption: Prior to August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole or from time to time in part, upon Products Corporation’s payment of an applicable make-whole premium based on the comparable treasury rate plus 50 basis points. Prior to August 1, 2019, up to 40% of the aggregate principal amount of 6.25% Senior Notes that have been issued may also be redeemed at Products Corporation’s option at any time as a whole or from time-to-time in part, at a redemption price equal to 106.250% of the principal amount thereof, plus accrued and unpaid interest to (but not including) the date of redemption with the proceeds of certain equity offerings and capital contributions (so long as at least 60% of the 6.25% Senior Notes that have been issued thereafter remain outstanding). On and after August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole, or from time to time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to (but not including) the date of redemption, if redeemed during the 12-month period beginning on August 1 of the years indicated below:
Period Optimal Redemption Premium Percentage
2019 104.688%
2020 103.125%
2021 101.563%
2022 and thereafter 100.000%

All redemptions (and notices thereof) may be subject to various conditions precedent, and redemption dates specified in such notices may be extended so that such conditions precedent may be fulfilled (to the extent redemption on such dates is otherwise permitted by the 6.25% Senior Notes Indenture).
Change of Control: Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 6.25% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 6.25% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to (but not including) the date of repurchase.
Certain Covenants: The 6.25% Senior Notes Indenture imposes certain limitations on Products Corporation’s and the 6.25% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to: (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) pay dividends, make certain investments and make repayments on indebtedness that is subordinated in right of payment to the 6.25% Senior Notes and make other "restricted payments"; (iii) create liens on their assets to secure debt; (iv) enter into transactions with affiliates; (v) merge, consolidate or amalgamate with another company; (vi) transfer and sell assets; and (vii) permit restrictions on the payment of dividends by Products Corporation's subsidiaries.
These covenants are subject to important qualifications and exceptions. The 6.25% Senior Notes Indenture also contains customary affirmative covenants and events of default. In addition, if during any period of time the 6.25% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 6.25% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants regarding limitations on debt, limitations on restricted payments, limitation on guarantees by restricted subsidiaries, limitation on transactions with affiliates, certain provisions of the successor company covenant, limitation on asset sales and limitation on dividends from restricted subsidiaries.
During 2016, in connection with consummating the 6.25% Senior Notes Offering, the Company incurred approximately $11.3 million of fees and expenses, all of which were capitalized and are being amortized over the remaining term of the 6.25% Senior Notes using the effective interest method.
(d) 5.75% Senior Notes
On February 8, 2013, Products Corporation completed its offering (the "2013 Senior Notes Refinancing"), pursuant to an exemption from registration under the Securities Act, of $500 million aggregate principal amount of the 5.75% Senior Notes. The 5.75% Senior Notes are unsecured and were issued to investors at par. The 5.75% Senior Notes mature on February 15, 2021. Interest on the 5.75% Senior Notes accrues at 5.75% per annum, paid every six months on February 15th and August 15th.
The 5.75% Senior Notes were issued pursuant to the 5.75% Senior Notes Indenture (the "5.75% Senior Notes Indenture" and together with the 6.25% Senior Notes Indenture, the "Senior Notes Indentures"), dated as of February 8, 2013 (the "5.75% Senior Notes Closing Date"), by and among Products Corporation, Products Corporation’s domestic subsidiaries (the "5.75% Senior Notes Guarantors"), which also currently guarantee Products Corporation’s 2016 Senior Credit Facilities and the 6.25% Senior Notes, and U.S. Bank National Association, as trustee (the "5.75% Senior Notes Trustee"). The 5.75% Senior Notes Guarantors

F-33
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

issued guarantees (the "5.75% Senior Notes Guarantees") of Products Corporation’s obligations under the 5.75% Senior Notes and the 5.75% Senior Notes Indenture on a joint and several, senior unsecured basis.
In December 2013, Products Corporation consummated an offer to exchange the original 5.75% Senior Notes for $500 million of new 5.75% Senior Notes, which have substantially the same terms as the original 5.75% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the "5.75% Senior Notes").
Products Corporation used a portion of the $491.2 million of net proceeds from the issuance of the 5.75% Senior Notes (net of underwriters' fees) to repay and redeem all of the $330 million then outstanding aggregate principal amount of its 9.75% Senior Secured Notes, as well as to pay $8.6 million of accrued interest. Products Corporation incurred an aggregate of $19.4 million of fees for the applicable redemption and tender offer premiums, related fees and expenses in connection with redemption and repayment of the 9.75% Senior Secured Notes and other fees and expenses in connection with the issuance of the 5.75% Senior Notes. Products Corporation used a portion of the remaining proceeds from the issuance of the 5.75% Senior Notes, together with existing cash, to pay approximately $113 million of principal on its then outstanding 2011 Term Loan in conjunction with the February 2013 Term Loan Amendments. Products Corporation used the remaining balance available from the issuance of the 5.75% Senior Notes for general corporate purposes, including, without limitation, debt reduction transactions, such as repaying a loan to Revlon at its maturity on October 8, 2013, which proceeds Revlon used to pay the liquidation preference of Revlon's then outstanding Series A Preferred Stock, in connection with its mandatory redemption on such date.
Ranking: The 5.75% Senior Notes are Products Corporation’s unsubordinated, unsecured obligations and rank senior in right of payment to any future subordinated obligations of Products Corporation and rank pari passu in right of payment with all existing and future senior debt of Products Corporation. Similarly, each 5.75% Senior Notes Guarantee is the relevant 5.75% Senior Notes Guarantor’s joint and several, unsubordinated and unsecured obligation, ranking senior in right of payment to any future subordinated obligations of such 5.75% Senior Notes Guarantor and ranking pari passu in right of payment with all existing and future senior debt of such 5.75% Senior Notes Guarantor. The 5.75% Senior Notes Guarantees were issued on a joint and several basis.
The 5.75% Senior Notes and the 5.75% Senior Notes Guarantees rank effectively junior to Products Corporation’s 2016 Senior Credit Facilities, which are secured, as well as indebtedness and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the "5.75% Senior Notes Non-Guarantor Subsidiaries" and together with the 6.25% Senior Notes Non-Guarantor Subsidiaries, the "Non-Guarantor Subsidiaries"), none of which guarantee the 5.75% Senior Notes.
Optional Redemption: The 5.75% Senior Notes may be redeemed at Products Corporation's option, at any time as a whole, or from time-to-time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to the date of redemption, if redeemed during the 12-month period beginning on February 15th of the years indicated below:
Period Percentage
2017 102.875%
2018 101.438%
2019 and thereafter 100.000%
Change of Control: Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 5.75% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 5.75% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to the date of repurchase.
Certain Covenants: The 5.75% Senior Notes Indenture limits Products Corporation’s and the 5.75% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to:
incur or guarantee additional indebtedness ("Limitation on Debt");
pay dividends, make repayments on indebtedness that is subordinated in right of payment to the 5.75% Senior Notes and make other "restricted payments" ("Limitation on Restricted Payments");
make certain investments;
create liens on their assets to secure debt;
enter into transactions with affiliates;
merge, consolidate or amalgamate with another company ("Successor Company");

F-34
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

transfer and sell assets ("Limitation on Asset Sales"); and
permit restrictions on the payment of dividends by Products Corporation’s subsidiaries ("Limitation on Dividends from Subsidiaries").
These covenants are subject to important qualifications and exceptions. The 5.75% Senior Notes Indenture also contains customary affirmative covenants and events of default.
In addition, if during any period of time the 5.75% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 5.75% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants on Limitation on Debt, Limitation on Restricted Payments, Limitation on Asset Sales, Limitation on Dividends from Subsidiaries and certain provisions of the Successor Company covenant.
Covenants
Products Corporation was in compliance with all applicable covenants under the 2016 Senior Credit Facilities as of December 31, 2017. At December 31, 2017, the aggregate principal amounts outstanding under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility were $1,777.5 million and $157 million, respectively. At December 31, 2017, availability under the $400 million 2016 Revolving Credit Facility was $193 million, based upon the calculated borrowing base of $381.9 million, less $10.1 million of outstanding undrawn letters of credit, $21.8 million in outstanding checks and $157 million then drawn on the 2016 Revolving Credit Facility.
Products Corporation was in compliance with all applicable covenants under its Senior Notes Indentures as of December 31, 2017.

Derivative Financial Instruments
The Company is exposed to certain risks relating to its ongoing business operations. The Company uses derivative financial instruments, including: (i) foreign currency forward exchange contracts ("FX Contracts") intended for the purpose of managing foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates on the Company’s net

F-12
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

cash flows; and (ii) interest rate hedging transactions intended for the purpose of managing interest rate risk associated with Products Corporation’s variable rate indebtedness.
Foreign Currency Forward Exchange Contracts
Products Corporation enters into FX Contracts 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 does not apply hedge accounting to its FX Contracts. The Company records FX Contracts in its consolidated balance sheet at fair value and immediately recognizes changes in fair value in earnings. Fair value of the Company’s FX Contracts is determined by using observable market transactions of spot and forward rates. See Note 13, "Financial Instruments," for further discussion of the Company's FX Contracts.
Interest Rate Swap
As a result of the Company completing several debt transactions in connection with the September 7, 2016 acquisition of Elizabeth Arden, Inc. ("Elizabeth Arden," the "Elizabeth Arden Acquisition" and the "Elizabeth Arden Acquisition Date," respectively), the critical terms of the 2013 Interest Rate Swap (as hereinafter defined) no longer matched the terms of the underlying debt and the 2013 Interest Rate Swap was determined to no longer be highly effective. Accordingly, the Company discontinued hedge accounting for the 2013 Interest Rate Swap during the third quarter of 2016. Following the de-designation of the 2013 Interest Rate Swap, changes in the fair value of the 2013 Interest Rate Swap have been accounted for as a component of other non-operating expenses. Accumulated deferred losses on the 2013 Interest Rate Swap of $1.2 million, or $0.7 million net of tax, at December 31, 2017 that were previously recorded as a component of accumulated other comprehensive loss will be amortized into earnings over the remaining term of the 2013 Interest Rate Swap, which expires in May 2018.  See Note 13, "Financial Instruments," for further discussion of the Company's 2013 Interest Rate Swap. Refer to Note 11, "Long-Term Debt," for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.
Recently Adopted Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-15, "Disclosure of Uncertainties about and Entity's Ability to Continue as a Going Concern," which requires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. The Company adopted ASU 2014-15 on January 1, 2017 and the adoption of this guidance did not have a material impact on the Company's financial statement disclosures.
In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies certain aspects of accounting for share-based payment transactions, including transactions in which an employee uses shares to satisfy the employer’s minimum statutory income tax withholding obligations, forfeitures and income taxes when awards vest or are settled. The Company adopted ASU No. 2016-09 beginning on January 1, 2017 and the adoption of this guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASU No. 2016-09 resulted in tax withholdings related to net share settlements of restricted stock units and awards in the amount of $3.2 million and $2.8 million for 2016 and 2015, respectively, previously reported in the Consolidated Statement of Cash Flows as a component of cash flows from operating activities, to be reclassified as a component of cash flows from financing activities.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which simplifies the subsequent measurement of inventories by requiring inventory to be measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU No. 2015-11 beginning on January 1, 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides specific guidance on the presentation of changes in restricted cash and restricted cash equivalents on the statement of cash flows. Under the new standard, the changes in restricted cash and restricted cash equivalents are required to be disclosed in reconciling the opening and closing balances on the statement of cash flows. The Company adopted ASU No. 2016-18 during the fourth quarter of 2017 and the adoption of this new guidance did not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures, other than requiring the Company to reconcile its cash balances from its statements of financial position to its statements of cash flows and including restricted cash within the beginning and ending balances of cash within the Company's statement of cash flow.

F-13
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Recently Issued Accounting Pronouncements
In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which will permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. This new guidance can be applied retrospectively and provides entities with the option to reclassify the amounts. The new guidance is effective for annual and quarterly periods beginning after December 15, 2018, with early adoption permitted, and requires entities to make new disclosures regardless of whether they elect to reclassify tax effects. The Company is in the process of evaluating the impact that this new guidance is expected to have on its financial statements and/or financial statement disclosures.
In March 2017, the FASB issued ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which changes the way that employers present net periodic pension cost ("NPPC") and net periodic postretirement benefit cost ("NPPBC") within the income statement. The amendment requires an employer to present the service cost component of NPPC and NPPBC in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of NPPC and NPPBC would be presented separately from this line item and below any subtotal of operating income; companies will need to disclose the line items used to present these other components of NPPC and NPPBC, if not separately presented in the statement of operations. In addition, only the service cost component would be eligible for capitalization in assets. This guidance is effective retrospectively for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU No. 2017-07 beginning as of January 1, 2018, and the Company expects that substantially all of the 2018 projected cost of approximately $9.0 million will be presented below operating income in the Company's 2018 Statement of Operations and Comprehensive (Loss) Income.
In January 2017, the FASB issued ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment," which simplifies the annual goodwill impairment analysis test by eliminating Step 2 of the current two-step impairment test. Under the new guidance, an entity would continue to perform the first step of the annual impairment test by comparing the carrying amount of a reporting unit with its fair value. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, the goodwill impairment charge would be equal to the amount of such difference. This guidance is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company expects to adopt ASU No. 2017-04 beginning as of January 1, 2020 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In January 2017, the FASB issued ASU No. 2017-01, "Clarifying the Definition of a Business," which further clarifies the definition of a business in an effort to assist entities in evaluating whether a set of transferred assets constitutes a business. Under this new guidance, if substantially all of the fair value of gross assets acquired is concentrated in a single asset or similar asset group, the set of transferred assets would not meet the definition of a business and no further evaluation is necessary. If this threshold is not met, the entity would then evaluate whether the set of transferred assets and activities meets the requirement that a business include, at a minimum, an input and a process that together have the ability to create an output. This guidance is effective for annual and quarterly periods beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt ASU No. 2017-01 beginning as of January 1, 2018 and expects that this new guidance will not have an impact on the Company’s results of operations, financial condition and/or financial statement disclosures.
In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Receipts and Cash Payments," which aims to standardize how certain transactions are classified within the Statement of Cash Flows, including, among other issues, debt prepayment and extinguishment costs and contingent consideration payments made after a business combination. This guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company will adopt ASU No. 2016-15 beginning as of January 1, 2018 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires lessees to recognize a right-of-use asset and a liability on the balance sheet for all leases, with the exception 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 adjustment such as for 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 will adopt ASU No. 2016-02 beginning as of January 1, 2019 and is in the process of assessing the impact that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This new standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The underlying principle of this new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. Entities may adopt this new standard either retrospectively for all periods presented in the financial statements (i.e., the full retrospective method) or

F-14
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

as a cumulative-effect adjustment as of the date of adoption (i.e., the modified retrospective method), without applying to comparative years’ financial statements.
In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date," which allows for a deferral of the adoption date for ASU No. 2014-09 until January 1, 2018 and permits early adoption of ASU No. 2014-09, but not before the effective date of January 1, 2017.
The Company adopted ASU No. 2014-09 beginning as of January 1, 2018 using the modified retrospective method. While the Company is finalizing its assessment of all potential impacts of ASU No. 2014-09, given the nature of the Company's products and the terms and conditions applicable to sales to its customers, the timing and amount of revenue recognized based on the underlying principles of this new standard are consistent with the Company's revenue recognition policy under previous guidance. As a result, the Company does not currently expect that the adoption will have a material impact on its revenues, results of operations or financial position. The Company does, however, expect to expand its financial statement disclosures in order to comply with the new standard. The Company has drafted its accounting policy with respect to the new standard based on a review of its business. The new policy reflects updates to internal controls and processes to enable the preparation of financial information upon its adoption of ASU No. 2014-09.


2. BUSINESS COMBINATIONS
The Elizabeth Arden Acquisition
On the Elizabeth Arden Acquisition Date, the Company completed the Elizabeth Arden Acquisition for a total cash purchase price of $1,034.3 million pursuant to an agreement and plan of merger (the "Merger Agreement") by and among Revlon, Products Corporation, RR Transaction Corp. ("Acquisition Sub," then a wholly-owned subsidiary of Products Corporation), and Elizabeth Arden. On the Elizabeth Arden Acquisition Date, Elizabeth Arden merged (the "Merger") with and into Acquisition Sub, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of Products Corporation.
In North America, Elizabeth Arden’s principal customers include prestige retailers, the mass retail channel, specialty stores, department stores and other retailers, distributors, e-commerce sites, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. Internationally, Elizabeth Arden’s portfolio of owned and licensed brands is sold to perfumeries, boutiques, department stores, travel retailers and distributors.
Products Corporation financed the Elizabeth Arden Acquisition with the proceeds from (i) a 7-year $1.8 billion senior secured term loan facility (the "2016 Term Loan Facility" and such agreement being the "2016 Term Loan Agreement"); (ii) $35 million of borrowings under a 5-year $400 million senior secured asset-based revolving credit facility (the "2016 Revolving Credit Facility" and such agreement being the "2016 Revolving Credit Agreement" and such facility, together with the 2016 Term Loan Facility, being the "2016 Senior Credit Facilities" and such agreements being the "2016 Credit Agreements"); (iii) $450 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 (the "6.25% Senior Notes"); and (iv) approximately $126.7 million of cash on hand. Refer to Note 11, "Long Term Debt" for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.

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

For the twelve months ended December 31, 2017, the Company incurred $50 million of acquisition and integration costs in its consolidated statement of operations and comprehensive (loss) income related to the Elizabeth Arden Acquisition, which consisted of $49.2 million of integration costs and $0.8 million of acquisition costs. The integration costs consisted of non-restructuring costs related to integrating Elizabeth Arden's operations into the Company's business, including professional fees, lease termination costs and employee related costs. The acquisition costs primarily included legal fees directly attributable to the Elizabeth Arden Acquisition.


F-15
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Purchase Price of the Elizabeth Arden Acquisition
The components of the purchase price for the Elizabeth Arden Acquisition were as follows:
 
As of
September 7, 2016
Purchase price of Elizabeth Arden common stock (1)
$431.5
Repayment of Elizabeth Arden senior notes (2)
350.0
Repayment of Elizabeth Arden revolving credit facility, including accrued interest (3)
142.5
Repayment of Elizabeth Arden second lien credit facility, including accrued interest (3)
25.0
Repurchase of Elizabeth Arden preferred stock (4)
55.0
Payment of accrued interest and call premium on Elizabeth Arden Senior Notes (5)
27.4
Payment of Elizabeth Arden dividends payable at Elizabeth Arden Acquisition Date (6) 
2.9
Total Purchase Price$1,034.3
(1)All of Elizabeth Arden’s then issued and outstanding common stock was canceled and extinguished on the Elizabeth Arden Acquisition Date and converted into the right to receive $14 in cash per share, without interest, less any required withholding taxes, that was paid by Products Corporation upon the completion of the Elizabeth Arden Acquisition. The $431.5 million purchase price for Elizabeth Arden common stock included the settlement of all then outstanding Elizabeth Arden stock options and all then outstanding Elizabeth Arden restricted share units at the Elizabeth Arden Acquisition Date for a total cash payment of $11.1 million.
(2)The purchase price included the repurchase of the entire $350 million aggregate principal amount then outstanding of Elizabeth Arden’s 7.375% senior notes due 2021 (the "Elizabeth Arden Old Senior Notes").
(3)The purchase price included the repayment of the entire $142 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility and the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility, each of which facilities were terminated as of the Elizabeth Arden Acquisition Date.
(4)The purchase price included $55 million that was paid to retire the entire $55 million liquidation preference of all of the then issued and outstanding 50,000 shares of Elizabeth Arden preferred stock, par value $0.01 per share (the "Elizabeth Arden Preferred Stock"), which amount included a $5 million change of control premium.
(5)Interest on the Elizabeth Arden Old Senior Notes accrued at a rate of 7.375% per annum and was payable semi-annually on March 15 and September 15 of every year. The approximately $12.3 million of accrued and unpaid interest was calculated based on 176 days of accrued interest as of the Elizabeth Arden Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Old Senior Notes, upon a change in control, such notes were repurchased at a price equal to 103.69% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the date of such repurchase. The repurchase of the Elizabeth Arden Old Senior Notes was consummated on October 7, 2016.
(6)The purchase price included the payment of approximately $2.9 million in accrued dividends payable at the Elizabeth Arden Acquisition Date to the holders of the then outstanding Elizabeth Arden Preferred Stock.


F-16
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

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

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

The difference between the preliminary valuation of the Elizabeth Arden trade name and the sum of the fair values of the individual trade names within the Elizabeth Arden product portfolio resulted in an increase to goodwill of $15.4 million, which was recorded in the fiscal quarter ended March 31, 2017. As a result of this revised approach, the Company recognized amortization expense of approximately $1.8 million in its consolidated statement of operations and comprehensive (loss) income in 2017 related to the amortization of the acquired trade names from the Elizabeth Arden Acquisition Date through December 31, 2016.

(d)The Measurement Period Adjustments to accrued expenses related to changes in estimated payments for acquisition-related costs.

(e)The Measurement Period Adjustments to other long-term liabilities related to the recognition of the projected benefit obligation of a certain foreign non-qualified benefit plan of Elizabeth Arden.


F-17
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

Goodwill of $234 million represents the excess of the purchase price paid by Products Corporation for the Elizabeth Arden Acquisition over the fair value of the identifiable net assets acquired by Products Corporation in the Elizabeth Arden Acquisition. Factors contributing to the purchase price resulting in the recognition of goodwill include estimated annualized synergies and cost reductions, expanded category mix, channel diversification and a broader geographic footprint.

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

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

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

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

Unaudited Pro Forma Results

The following table presents the Company's pro forma consolidated net sales and income from continuing operations before income taxes for the years ended December 31, 2016 and 2015, respectively. The unaudited pro forma results include the historical consolidated statements of operations of the Company and Elizabeth Arden, giving effect to the Elizabeth Arden Acquisition and related financing transactions as if they had occurred at the beginning of the earliest period presented.
 Unaudited Pro Forma Results
  Year Ended December 31,
  2016 2015
Net sales $2,858.9
 $2,863.5
Loss from continuing operations, before income taxes (57.1) (74.6)


F-18
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

(i) as a result of a $38 million increase in the fair value of acquired inventory at the Elizabeth Arden Acquisition Date, the Company recognized a $20.7 million increase in its cost of sales during 2016 in its consolidated financial statements. The pro forma adjustments include an adjustment to reverse the $20.7 million recognized in the year ended December 31, 2016 within cost of sales because it does not have a recurring impact;

(ii) the elimination of $68.0 million of acquisition and integration costs recognized by the Company and Elizabeth Arden in connection with consummating the Elizabeth Arden Acquisition during 2016;

(iii) a $1.4 million pro forma decrease in depreciation as a result of the fair value adjustments to property and equipment for the twelve months ended December 31, 2016;

(iv) a $5.6 million pro forma increase in amortization expense of acquired finite-lived intangible assets recorded in connection with the Elizabeth Arden Acquisition for the twelve months ended December 31, 2016; and

(v) a pro forma increase in interest expense and amortization of debt issuance costs related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions as summarized in the following table. Refer to Note 11, "Long Term Debt" for further details related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions.
  Year Ended December 31,
($ in millions) 2016 2015
Interest Expense    
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes $121.9
 $106.4
Reversal of Elizabeth Arden’s historical interest expense (19.5) (26.2)
Company historical interest expense, as reflected in the historical consolidated financial statements (75.9) (50.9)
Total adjustment for pro forma interest expense $26.5
 $29.3
Debt issuance costs    
Pro forma amortization of debt issuance costs $8.1
 $8.1
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements (3.3) (4.4)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs (1.3) (1.5)
Total adjustment for pro forma amortization of debt issuance costs $3.5
 $2.2

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

The Cutex International Acquisition
On May 31, 2016 (the "Cutex International Acquisition Date"), the Company completed the acquisition of Cutex International from Coty Inc. (the "Cutex International Acquisition") for total cash consideration of $29.1 million. Following the Company's October 2015 acquisition of the Cutex business and related assets in the U.S. from Cutex Brands, LLC (the "Cutex U.S. Acquisition" and together with the Cutex International Acquisition, the "Cutex Acquisitions"), combined with other Cutex businesses that the Company acquired in 1998, the Cutex International Acquisition completed the Company's global consolidation of the Cutex brand. Cutex International's results of operations are included in the Company’s Consolidated Financial Statements commencing on the Cutex International Acquisition Date. Pro forma results of operations have not been presented, as the impact of the Cutex International Acquisition on the Company’s consolidated financial results is not material.

F-19
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The Company accounted for the Cutex International Acquisition as a business combination in the second quarter of 2016. The table below summarizes the allocation of the total consideration paid:
 Amounts Recognized as of May 31, 2016
Inventory$0.8
Purchased Intangible Assets (a)
17.2
Goodwill11.1
        Total consideration transferred$29.1
(a) Purchased intangible assets include customer networks fair valued at $11.9 million and intellectual property fair valued at $0.8 million, which are amortized over useful lives of 15 and 10 years, respectively, and indefinite lived trade names fair valued at $4.5 million.
As part of the Cutex International Acquisition, the Company reacquired the Cutex trade name from Coty under an assignment of a license agreement, which had previously provided Coty with an exclusive right to manufacture, market and sell Cutex branded products for an initial term and perpetual automatic 20-year renewals. Based on the terms and conditions of the existing license agreement and other factors, the Cutex trade name was assigned an indefinite-life and, therefore, will not be amortized.
In determining the estimated fair values of net assets acquired and resulting goodwill related to the Cutex International Acquisition, the Company considered, among other factors, the analysis of Cutex International's historical financial performance and an estimate of the future performance of the acquired business, as well as the intended use of the acquired assets. Factors contributing to the purchase price resulting in the recognition of goodwill include the anticipated benefits that the Company expects to achieve through the expansion of its nail product portfolio. Neither the intangible assets nor goodwill acquired in the Cutex International Acquisition are deductible for income tax purposes.


3. RESTRUCTURING CHARGES
EA Integration Restructuring Program
In December 2016, in connection with integrating the Elizabeth Arden and Revlon organizations, the Company began the process of implementing certain integration activities, including consolidating offices, eliminating certain duplicative activities and streamlining back-office support (the "EA Integration Restructuring Program"). The EA Integration Restructuring Program is designed to reduce the Company’s cost of goods sold and selling, general and administrative ("SG&A") expenses. As a result of the EA Integration Restructuring Program, the Company expects to eliminate approximately 425 positions worldwide.
In connection with implementing the EA Integration Restructuring Program, the Company expects to recognize approximately $90 million to $95 million of total pre-tax restructuring charges (the "EA Integration Restructuring Charges"), consisting of: (i) approximately $65 million to $70 million of employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges.
A summary of the restructuring and related charges incurred through December 31, 2017 in connection with the EA Integration Restructuring Program is presented in the following table:
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits 
Lease Termination and Other Costs(a)
 Total Restructuring Charges 
Inventory Adjustments(b)
 
Other Related Charges(c)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2016$31.5
 $0.2
 $31.7
 $0.5
 $2.3
 $34.5
Charges incurred during the year ended December 31, 201731.3
 4.8
 36.1
 0.9
 0.7
 37.7
Cumulative charges incurred through December 31, 2017$62.8
 $5.0
 $67.8
 $1.4
 $3.0
 $72.2

(a) Includes primarily lease termination costs related to certain exited Elizabeth Arden office space.
(b) Inventory adjustments are recorded within cost of sales in the Company’s consolidated statement of operations and comprehensive (loss) income.
(c) Other related charges are recorded within SG&A in the Company’s consolidated statement of operations and comprehensive (loss) income.

F-20
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


A summary of the restructuring charges incurred through December 31, 2017 in connection with the EA Integration Restructuring Program by reportable segment is presented in the following table:
  Charges incurred during the twelve months ended December 31, 2017 Cumulative charges incurred through December 31, 2017
Elizabeth Arden $16.1
 $22.6
Consumer 12.1
 16.3
Professional 4.2
 9.8
Unallocated Corporate Expenses 3.7
 19.1
     Total $36.1
 $67.8

The Company expects that cash payments will total $90 million to $95 million in connection with the EA Integration Restructuring Charges, of which $42.5 million was paid in 2017. The remaining balance is expected to be substantially paid by the end of 2020.


F-21
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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, 2017
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2017
2017           
EA Integration Restructuring Program:(a)
           
Employee severance and other personnel benefits$31.5
 $31.3
 $—
 $(37.0) $—
 $25.8
Other3.0
 6.4
 —
 (5.5) —
 3.9
2015 Efficiency Program:(b)
           
Employee severance and other personnel benefits4.5
 (3.2) —
 (1.0) —
 0.3
Other0.2
 —
 —
 —
 —
 0.2
December 2013 Program:(c)

 
 
 
 
  
Employee severance and other personnel benefits1.2
 —
 —
 (0.1) —
 1.1
Other immaterial actions: (d)

 
 
 
 
  
Employee severance and other personnel benefits1.4
 0.6
 —
 (0.9) —
 1.1
Other1.0
 1.1
 0.1
 (0.7) —
 1.5
Total restructuring reserve$42.8
 $36.2
 $0.1
 $(45.2) $—
 $33.9
            
 
Liability
Balance at January 1, 2016
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at December 31, 2016
2016           
EA Integration Restructuring Program:           
Employee severance and other personnel benefits$—
 $31.5
 $—
 $—
 $—
 $31.5
Other—
 3.0
       3.0
2015 Efficiency Program:           
Employee severance and other personnel benefits6.6
 0.6
 —
 (2.7) —
 4.5
Other0.1
 0.7
 —
 (0.6) —
 0.2
2014 Integration Program:(e)
           
Employee severance and other personnel benefits0.8
 —
 —
 (0.8) —
 —
Other0.1
 —
 —
 (0.1) —
 —
December 2013 Program:           
Employee severance and other personnel benefits1.2
 —
 —
 —
 —
 1.2
Other immaterial actions:           
Employee severance and other personnel benefits2.3
 2.1
 —
 (3.0) —
 1.4
Other0.7
 1.5
 —
 (1.5) 0.3
 1.0
Total restructuring reserve$11.8
 $39.4
 $—
 $(8.7) $0.3
 $42.8

(a) Includes $1.6 million in charges related to inventory adjustments and other restructuring-related charges that were reflected within cost of sales and SG&A, respectively, in the Company’s December 31, 2017 Consolidated Statement of Operations and Comprehensive (Loss) Income.


F-22
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(b) In September 2015, the Company initiated restructuring actions to drive certain organizational efficiencies, including reducing general and administrative expenses, within the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions were completed by the end of 2017. During the third quarter of 2017, the Company performed a review of the 2015 Efficiency Program and determined that employees in certain positions that were initially identified to be eliminated would continue to be employed by the Company in varying positions in connection with integrating the Elizabeth Arden and Revlon organizations. As a result, the Company reversed approximately $3.2 million in previously accrued restructuring charges recognized in connection with the 2015 Efficiency Program. Total cash payments made for the 2015 Efficiency Program were $7.1 million. A summary of the restructuring and related charges incurred through December 31, 2017 in connection with the 2015 Efficiency Program by reportable segment is presented in the following table:
  2015 Efficiency Program cumulative charges incurred through December 31, 2017
Consumer $3.6
Professional 3.5
Unallocated Corporate Expenses 0.5
     Total $7.6

(c) In December 2013, the Company announced restructuring actions that primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment (the "December 2013 Program"). The December 2013 Program resulted in the elimination of approximately 1,100 positions in 2014, primarily in China.

(d) Consists primarily of $1.1 million in charges related to the program that Elizabeth Arden commenced prior to the Elizabeth Arden Acquisition to further align their organizational structure and distribution arrangements for the purpose of improving its go-to-trade capabilities and execution and to streamline their organization (the "Elizabeth Arden 2016 Business Transformation Program").

(e) Following Products Corporation's October 2013 acquisition of The Colomer Group Participations, S.L. ("Colomer" and the "Colomer Acquisition"), the Company implemented actions to integrate Colomer's operations into the Company's business, which reduced costs across the Company's businesses and generated synergies and operating efficiencies within the Company's global supply chain and consolidated offices and back office support (all such actions, together, the "2014 Integration Program"). The 2014 Integration Program was substantially completed as of December 31, 2015.

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


4. DISCONTINUED OPERATIONS
On December 30, 2013, the Company announced that it was implementing the December 2013 Program, which primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment.
The results of the China discontinued operations are included within income (loss) from discontinued operations, net of taxes, and relate entirely to the Consumer segment. The summary comparative financial results of discontinued operations were as follows:
 Year Ended December 31,
 2017 2016 2015
Net sales$—
 $—
 $—
Income (loss) from discontinued operations, before taxes2.4
 (4.9) (3.2)
Provision for income taxes0.3
 —
 —
Income (loss) from discontinued operations, net of taxes2.1
 (4.9) (3.2)


F-23
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consisted of the following:
 December 31,
 2017 2016
Cash and cash equivalents$1.3
 $1.7
Trade receivables, net0.2
 0.2
Total current assets1.5
 1.9
Total assets$1.5
 $1.9
 
 
Accounts payable$0.5
 $0.5
Accrued expenses and other3.5
 3.3
Total current liabilities4.0
 3.8
Total liabilities$4.0
 $3.8


5. INVENTORIES
As of December 31, 2017 and 2016, the Company's inventory balances consisted of the following:
 December 31,
 2017 2016
Raw materials and supplies$123.4
 $72.9
Work-in-process22.0
 33.5
Finished goods352.5
 318.2
 $497.9
 $424.6


6. PREPAID EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's prepaid expenses and other balances were as follows:
 December 31,
 2017 2016
Prepaid expenses$43.3
 $34.6
Other70.1
 54.2
 $113.4
 $88.8



F-24
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

7. PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2017 and 2016, the Company's property, plant and equipment balances consisted of the following:
 December 31,
 2017 2016
Land and improvements$11.6
 $10.4
Building and improvements97.0
 88.6
Machinery, equipment and capital leases275.1
 243.3
Office furniture, fixtures and capitalized software168.3
 122.7
Counters and trade fixtures62.0
 60.8
Leasehold improvements51.4
 46.0
Construction-in-progress92.8
 53.4
Property, plant and equipment, gross758.2
 625.2
Accumulated depreciation and amortization(385.5) (304.7)
Property, plant and equipment, net$372.7
 $320.5
Depreciation and amortization expense on property, plant and equipment for 2017, 2016 and 2015 was $54.4 million, $45 million, and $37 million, respectively.


8. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill

The following table presents the changes in goodwill by segment during 2017 and 2016:
 Consumer Professional Elizabeth Arden  Other Total
Balance at January 1, 2016$210.1
 $240.7
 $—
 $18.9
 $469.7
Goodwill acquired (a)
17.4
 —
 221.7
 —
 239.1
Foreign currency translation adjustment—
 (0.4) —
 (2.2) (2.6)
Goodwill impairment charge—
 —
 —
 (16.7) (16.7)
Balance at December 31, 2016$227.5
 $240.3
 $221.7
 $—
 $689.5
Measurement Period Adjustments (b)
—
 —
 12.3
 —
 12.3
Foreign currency translation adjustment—
 1.5
 —
 —
 1.5
Goodwill impairment charge(10.8) —
 —
 —
 (10.8)
Balance at December 31, 2017$216.7
 $241.8
 $234.0
 $—
 $692.5
          
Cumulative goodwill impairment charges$(20.5) $—
 $—
 $(16.7) $(37.2)
(a) The goodwill acquired during 2016 relates to: (i) $221.7 million of goodwill acquired in the Elizabeth Arden Acquisition; and (ii) $17.4 million of goodwill acquired in the Cutex Acquisitions. See Note 2, "Business Combinations," for further discussion of the Elizabeth Arden Acquisition and Cutex Acquisitions.
(b) Refer to Note 2, "Business Combinations," for more information on the Measurement Period Adjustments related to the Elizabeth Arden Acquisition.
For 2017, in assessing whether goodwill was impaired in connection with its annual impairment test performed during the fourth quarter of 2017 using October 1st, 2017 carrying values, the Company performed qualitative assessments to determine whether it would be necessary to perform the two-step process, as prescribed by ASC 350, Intangibles - Goodwill and Other, to assess the Company's indefinite-lived intangible assets for indicators of impairment. In performing the qualitative assessments, the Company considered the results of the step one test performed in 2016 and the financial performance of the (i) Revlon, Almay and Other; (ii) Elizabeth Arden; and (iii) Professional reporting units. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts for 2017.

F-25
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

However, for 2017, the Company determined that it would utilize the two-step process to test the GCB reporting unit for impairment. In the first step of this test, the Company compared the fair value of the GCB reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. The results of the step one test indicated that impairment indicators existed for the GCB reporting unit due to continued net sales declines for both the SinfulColors and Pure Ice brands and lower promotional activity for the Pure Ice brand, and accordingly, the Company performed step two of the goodwill impairment test for the GCB reporting unit.
In the second step, the Company measured the potential impairment of the GCB reporting unit by comparing the implied fair value with the carrying amount of its goodwill at October 1, 2017. The implied fair value of the GCB reporting unit's goodwill was determined in the same manner as the amount of goodwill recognized in a business combination, where the estimated fair value of GCB reporting unit was allocated to all the assets and liabilities of that reporting unit (including both recognized and unrecognized intangible assets) as if the GCB had been acquired in a business combination and the estimated fair value of the GCB reporting unit was the purchase price paid. When the carrying amount of the reporting unit's goodwill is greater than the implied fair value of that reporting unit's goodwill, an impairment loss is recognized. The Company determined the fair value of the GCB reporting unit using discounted estimated future cash flows. The weighted-average cost of capital used in testing the GCB reporting unit for impairment was 12% with a perpetual growth rate of 2%. As a result of this annual impairment test, the Company recognized an aggregate $10.8 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2017. Following the recognition of this non-cash goodwill impairment charge, the GCB reporting unit had $14.8 million remaining goodwill as of December 31, 2017.
For 2016 and 2015, the Company also utilized the two-step process in assessing whether goodwill was impaired for each of the Company's then existing four reporting units (i.e., for 2016 (i) Revlon, Almay and Other; (ii) GCB; (iii) Professional; and (iv) Other). As a result of the annual impairment testing for 2016 and 2015, the Company recognized a $16.7 million non-cash goodwill impairment charge related to the Other reporting unit in the fourth quarter of 2016 and a $9.7 million non-cash goodwill impairment charge related to the GCB reporting unit in the fourth quarter of 2015.


F-26
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 December 31, 2017 and 2016:
 December 31, 2017
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$271.4
 $(72.8) $198.6
 13
Customer relationships250.6
 (46.8) 203.8
 13
Patents and internally-developed IP20.8
 (8.4) 12.4
 7
Distribution rights31.0
 (2.3) 28.7
 17
Other1.3
 (0.6) 0.7
 2
Total finite-lived intangible assets$575.1
 $(130.9) $444.2
  
        
Indefinite-lived intangible assets:       
Trade names$147.9
 $—
 $147.9
  
Total indefinite-lived intangible assets$147.9
 $—
 $147.9
  
        
Total intangible assets$723.0
 $(130.9) $592.1
  
        
 December 31, 2016
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and licenses$177.9
 $(47.9) $130.0
 13
Customer relationships247.6
 (30.1) 217.5
 14
Patents and internally-developed IP20.3
 (6.1) 14.2
 8
Distribution rights31.0
 (0.5) 30.5
 18
Other1.3
 (0.2) 1.1
 3
Total finite-lived intangible assets$478.1
 $(84.8) $393.3
  
        
Indefinite-lived intangible assets:       
Trade names$243.3
 $—
 $243.3
  
Total indefinite-lived intangible assets$243.3
 $—
 $243.3
  
        
Total intangible assets$721.4
 $(84.8) $636.6
  

Amortization expense for finite-lived intangible assets was $43.2 million, $27.5 million and $22.4 million for 2017, 2016, and 2015 respectively.
The Company reviews finite-lived intangible assets for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares the current carrying values of the intangible assets to the undiscounted pre-tax cash flows expected to result from the use of the assets.
Based upon the results of the annual goodwill impairment testing for the Company's GCB reporting unit during 2017, the Company performed an impairment review of the acquired finite-lived intangible assets. No impairment was recognized related to the carrying value of any of the finite or indefinite-lived intangible assets as a result of the annual impairment test for the year ended December 31, 2017.
Based upon the results of the annual goodwill impairment testing for the Company's Other reporting unit during 2016, the Company performed an impairment review of the finite-lived intangible assets acquired as part of the 2015 acquisition of CBBeauty

F-27
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Group and certain of its related entities (collectively "CBB" and, such transaction, the "CBB Acquisition"). As a result of this review, the Company recognized during the fourth quarter of 2016 within the Other reporting unit $4.2 million, $2.0 million and $0.5 million of non-cash impairment charges as a result of the change in the fair value of customer relationships, distribution rights and trade names, respectively, in the aggregate amount of $6.7 million.
The Company did not recognize any impairment charges related to the carrying value of any of the Company's identifiable intangible assets in 2015.
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 December 31, 2017:
 Estimated Amortization Expense
2018$40.2
201937.3
202036.5
202135.3
202234.1
Thereafter260.8
Total$444.2


9. ACCRUED EXPENSES AND OTHER
As of December 31, 2017 and 2016, the Company's accrued expenses and other current liabilities consisted of the following:
 December 31,
 2017 2016
Compensation and related benefits$59.6
 $75.8
Advertising and promotional costs84.0
 66.7
Sales returns and allowances61.7
 51.9
Taxes48.4
 39.2
Restructuring reserve33.3
 38.0
Interest23.8
 24.4
Other102.0
 86.9
 $412.8
 $382.9


10. SHORT-TERM BORROWINGS
Products Corporation had outstanding short-term borrowings (excluding borrowings under the 2016 Senior Credit Facilities for 2016, which are reflected in Note 11, "Long-Term Debt"), aggregating to $12.4 million and $10.8 million at December 31, 2017 and 2016, respectively. The weighted average interest rate on these short-term borrowings outstanding at both December 31, 2017 and 2016 was 5.0%.



F-28
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

11. LONG-TERM DEBT
As of December 31, 2017 and 2016, the Company's debt balances consisted of the following:
 December 31,
 2017 2016
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (see (a) below)$1,735.9
 $1,747.8
2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (b) below)152.1
 —
6.25% Senior Notes due 2024, net of debt issuance costs (see (c) below)440.3
 439.1
5.75% Senior Notes due 2021, net of debt issuance costs (see (d) below)495.1
 493.8
Spanish Government Loan due 20250.5
 0.5
 2,823.9
 2,681.2
Less current portion (*)   
(170.2) (18.1)
 $2,653.7
 $2,663.1

(*) At December 31, 2017, the Company classified $170.2 million as its current portion of long-term debt, comprised primarily of $152.1 million of net borrowings under the 2016 Revolving Credit Facility, net of debt issuance costs, and $18.1 million of amortization payments on the 2016 Term Loan Facility scheduled to be paid over the next four calendar quarters. At December 31, 2016, the Company classified $18.1 million as its current portion of long-term debt, comprised primarily of $18 million of amortization payments on the 2016 Term Loan Facility.

The Company completed the following debt transactions during 2016:

2016 Debt-Related Transactions
In connection with and substantially concurrently with closing the Elizabeth Arden Acquisition, Products Corporation entered into the 2016 Term Loan Facility and the 2016 Revolving Credit Facility. Additionally, as part of financing the Elizabeth Arden Acquisition, in August 2016 Products Corporation completed the issuance of $450 million aggregate principal amount of its 6.25% Senior Notes (the "6.25% Senior Notes Offering"), which funds were released from escrow (the "Escrow Release") on the Elizabeth Arden Acquisition Date. In connection with entering into the 2016 Senior Credit Facilities, Products Corporation maintained on the 2016 Term Loan Facility its existing floating-to-fixed 2013 Interest Rate Swap (as hereinafter defined) based on a notional amount of $400 million that previously applied to Products Corporation’s Old Acquisition Term Loan, which loan was refinanced in full in connection with Products Corporation's consummation of the 2016 Senior Credit Facilities and the 6.25% Senior Notes Offering. The proceeds of Products Corporation's 6.25% Senior Notes Offering and the 2016 Term Loan Facility, together with approximately $35 million of borrowings under the 2016 Revolving Credit Facility, and approximately $126.7 million of cash on hand, were used to: (A) fund the Elizabeth Arden Acquisition, including: (i) repurchasing the entire $350 million aggregate principal amount then-outstanding of the Elizabeth Arden Old Senior Notes; (ii) repaying the entire $142 million aggregate principal amount of borrowings outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility (which facility was terminated upon such repayment); (iii) repaying the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility (which facility was terminated upon such repayment); and (iv) retiring the entire $55 million liquidation preference of all 50,000 shares of Elizabeth Arden's then issued and outstanding preferred stock, which amount included a $5 million change of control premium; and (B) to completely refinance and repay all of the $651.4 million in aggregate principal balance then outstanding under Products Corporation’s then-existing 2011 Term Loan and all of the $658.6 million in aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan (each of which facilities were terminated upon such prepayment). The Company did not incur any material early termination penalties in connection with repaying such facilities and preferred stock. See below for a summary description of the agreements governing the 2016 Senior Credit Facilities and 6.25% Senior Notes.
Amended Term Loan Facility - Excess Cash Flow Payment
In February 2016, Products Corporation prepaid $23.2 millionof indebtedness, then outstanding under its Old Term Loan Facility, representing 50% of its 2015 "excess cash flow" as defined by, and required under, Old Term Loan Agreement. The prepayment was applied on a ratable basis between the principal amounts outstanding under the 2011 Term Loan and the Old Acquisition Term Loan. The amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $11.5 million to $651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $11.7 million that was applied to the Old Acquisition Term Loan reduced Products Corporation's future annual amortization payments

F-29
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

under such loan on a ratable basis from $6.9 million prior to the prepayment to $6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019. The 2011 Term Loan and Old Acquisition Term Loan were completely refinanced and terminated in connection with financing the Elizabeth Arden Acquisition.

Long-Term Debt Agreements
(a) 2016 Term Loan Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Term Loan Agreement, for which Citibank, N.A. acts as administrative and collateral agent and which has an initial aggregate principal amount of $1.8 billion and matures on the earlier of: (x) the seventh anniversary of the Elizabeth Arden Acquisition Date and (y) the 91st day prior to the maturity of Products Corporation’s 5.75% Senior Notes due 2021 (the "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. The loans under the 2016 Term Loan Facility were borrowed at an original issue discount of 0.5% to their principal amount. The 2016 Term Loan Facility may be increased by an amount equal to the sum of (x) the greater of $450 million and 90% of Products Corporation’s pro forma consolidated EBITDA, plus (y) an unlimited amount to the extent that (1) the first lien leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt that is not junior or subordinated to the liens of the Senior Facilities to EBITDA) is less than or equal to 3.5 to 1.0 (for debt secured pari passu with the 2016 Term Loan Facility) or (2) the secured leverage ratio (defined as the ratio of Products Corporation’s net senior secured funded debt to EBITDA) is less than or equal to 4.25 to 1.0 (for junior lien or unsecured debt), plus (z) up to an additional $400 million if the 2016 Revolving Credit Facility has been repaid and terminated.
Guarantees and Security: Products Corporation and the restricted subsidiaries under the 2016 Term Loan Facility, which include Products Corporation’s domestic subsidiaries, including Elizabeth Arden and its domestic subsidiaries (collectively, the "Restricted Group"), are subject to the covenants under the 2016 Term Loan Agreement.  The 2016 Term Loan Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon, on a limited recourse basis.  The obligations of Revlon, Products Corporation and the subsidiary guarantors under the 2016 Term Loan Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of the Restricted Group held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions). The obligors and guarantors under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility are identical. The liens securing the 2016 Term Loan Facility on the accounts, inventory, equipment, chattel paper, documents, instruments, deposit accounts, real estate and investment property and general intangibles (other than intellectual property) related thereto (the "Revolving Facility Collateral") rank second in priority to the liens thereon securing the 2016 Revolving Credit Facility.  The liens securing the 2016 Term Loan Facility on all other property, including capital stock, intellectual property and certain other intangible property (the "Term Loan Collateral"), rank first in priority to the liens thereon securing the 2016 Revolving Credit Facility, while the liens thereon securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility.
Interest and Fees: Interest accrues on term loans under the 2016 Term Loan Facility at a rate per annum of Adjusted LIBOR (which has a floor of 0.75%) plus a margin of 3.50% or an alternate base rate plus a margin of 2.50%, at Products Corporation’s option, and is payable quarterly, at a minimum. Products Corporation is obligated to pay certain fees and expenses in connection with the 2016 Term Loan Facility. 
Affirmative and Negative Covenants: The 2016 Term Loan Agreement contains certain affirmative and negative covenants that, among other things, limit the Restricted Group’s 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 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 negative covenants are subject to various exceptions, including an "available amount basket" based on 50% of Products Corporation’s cumulative consolidated net income, plus a "starter" basket of $200 million, 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 2016 Term Loan Agreement), except such compliance is not required when such baskets are used to make investments. While the 2016 Term Loan Agreement contains certain customary representations, warranties and events of default, it does not contain any financial maintenance covenants.
Prepayments: The 2016 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

F-30
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

calculation with respect to fiscal year ending December 31, 2017, 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 loans under the 2016 Term Loan Facility and revolving loans under the 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. Products Corporation may voluntarily prepay the 2016 Term Loan Facility without premium or penalty. No excess cash flow payments were due and payable with respect to 2017.
During 2016, the Company incurred approximately $45.2 million of fees and expenses in connection with consummating the 2016 Term Loan Facility, of which $39.3 million were capitalized and are being amortized over the remaining term of the 2016 Term Loan Credit Facility using the effective interest method. The Company expensed the remaining $6 million of fees and expenses and wrote-off $10.9 million of unamortized debt discount and deferred financing costs related to the Old Term Loan Facility. These amounts, totaling $16.9 million, were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2016.
(b) 2016 Revolving Credit Facility
Principal and Maturity: On the Elizabeth Arden Acquisition Date, Products Corporation entered into the 2016 Revolving Credit Agreement, for which Citibank, N.A. acts as administrative agent and collateral agent. The 2016 Revolving Credit Facility has an initial maximum availability of $400 million (with a $100 million sublimit for letters of credit and up to $70 million available for swing line loans), which availability is subject to the amount of the borrowing base.  The 2016 Revolving Credit Facility may be increased by the greater of (x) $50 million and (y) the excess of the borrowing base over the amounts of then-effective commitments.  The 2016 Revolving Credit Facility permits certain non-U.S. subsidiaries to borrow in local currencies. The borrowing base calculation under the 2016 Revolving Credit Facility is based on the sum of: (i) 85% of eligible accounts receivable; (ii) the lesser of 85% of the net orderly liquidation value and a percentage of the value specified in respect of different types of eligible inventory; (iii) qualified restricted cash (capped at $75 million); and (iv) a temporary increase amount between August 15 and October 31 of each year, which are collectively subject to certain availability reserves set by the administrative agent. The 2016 Revolving Credit Facility matures on the earlier of: (x) the fifth anniversary of the Elizabeth Arden Acquisition Date; 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.
Guarantees and Security: The Restricted Group under the 2016 Revolving Credit Agreement (which is the same as the Restricted Group under the 2016 Term Loan Agreement) is subject to the covenants under the 2016 Revolving Credit Agreement.  The 2016 Revolving Credit Facility is guaranteed by each of Products Corporation's existing and future direct or indirect wholly-owned domestic restricted subsidiaries (subject to various exceptions), as well as by Revlon on a limited recourse basis.  The obligations of Revlon, Products Corporation and the subsidiary guarantors under the 2016 Revolving Credit Facility are secured by pledges of the equity of Products Corporation held by Revlon and the equity of Products Corporation’s restricted subsidiaries held by Products Corporation and each subsidiary guarantor (subject to certain exceptions, including equity of first-tier foreign subsidiaries in excess of 65% 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 certain exclusions).  The obligors and guarantors under the 2016 Revolving Credit Facility and the 2016 Term Loan Facility are identical.  The liens on the 2016 Revolving Facility Collateral securing the 2016 Revolving Credit Facility rank first in priority to the liens thereon securing the 2016 Term Loan Facility, which rank second in priority on such collateral.  The liens on the Term Loan Collateral securing the 2016 Revolving Credit Facility rank second in priority to the liens thereon securing the 2016 Term Loan Facility, which rank first in priority on such collateral.
Interest and Fees: Under the 2016 Revolving Credit Facility, interest is payable quarterly and accrues on borrowings under such facility 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%, 1.50% 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), at Products Corporation’s option. The applicable margin decreases as average excess availability under the 2016 Revolving Credit Facility increases.  Products Corporation is obligated to pay certain fees and expenses in connection with the 2016 Revolving Credit Facility, including a commitment fee of 0.25% for any unused amounts. Loans under the 2016 Revolving Credit Facility may be prepaid without premium or penalty.
Affirmative and Negative Covenants: The 2016 Revolving Credit Agreement contains affirmative and negative covenants that are similar to those in the 2016 Term Loan Agreement, other than the "available amount basket" (as described above in the description of the 2016 Term Loan Facility); provided, however, under the 2016 Revolving Credit Agreement the Restricted Group will be able to incur unlimited additional junior secured debt and unsecured debt, make unlimited asset sales and dispositions, make unlimited investments and acquisitions, prepay junior debt and make unlimited restricted payments to the extent that certain

F-31
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

"payment conditions" for asset-based credit facilities are satisfied.  The 2016 Revolving Credit Agreement contains certain customary representations, warranties and events of default. If Products Corporation’s "Liquidity Amount" (defined in the 2016 Revolving Credit Agreement as the Borrowing Base less the sum of (x) the aggregate outstanding extensions of credit under the 2016 Revolving Credit Facility, and (y) any availability reserve in effect on such date) falls below the greater of $35 million and 10% of the maximum availability under the 2016 Revolving Credit Facility (a "Liquidity Event Period"), then the Restricted Group will be required to maintain a consolidated fixed charge coverage ratio (the ratio of Products Corporation’s EBITDA minus capital expenditures to cash interest expense for such period) of a minimum of 1.0 to 1.0 until the first date after 20 consecutive business days for which the Liquidity Amount is equal to or greater than such threshold. If Products Corporation is in default under the consolidated fixed charge coverage ratio under the 2016 Revolving Credit Agreement, Products Corporation may cure such default by Products Corporation and/or Revlon issuing certain equity securities and Products Corporation receiving capital contributions from Revlon, with such cash being deemed to increase EBITDA for the purpose of calculating the applicable ratio. Products Corporation may exercise this cure right no more than two times in any four-quarter period, and no more than five times in total during the term of the 2016 Revolving Credit Facility.
Prepayments: Products Corporation must prepay borrowings under the 2016 Revolving Credit Facility to the extent that outstanding loans and letters of credit exceed availability.  During a Liquidity Event Period, the administrative agent may apply amounts collected in controlled accounts for the repayment of loans under the 2016 Revolving Credit Facility.   The above descriptions of the terms of the 2016 Term Loan Agreement and the 2016 Revolving Credit Facility and the related security and collateral agreements are qualified in their entirety by reference to such agreements, which are incorporated by reference as exhibits to this Form 10-K.
During 2016, the Company incurred approximately $5.7 million of fees and expenses in connection with consummating the 2016 Revolving Credit Facility, of which $5.6 million were capitalized as deferred financing costs and are being amortized over the remaining term of the 2016 Revolving Credit Facility using the effective interest method. The Company expensed the remaining $0.1 million of fees and expenses, which were recognized within loss on early extinguishment of debt in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2016.
(c) 6.25% Senior Notes
On August 4, 2016, Revlon Escrow Corporation (the "Escrow Issuer"), which on such date was a wholly owned subsidiary of Products Corporation, completed the 6.25% Senior Notes offering, pursuant to an exemption from registration under the Securities Act of 1933 (as amended, the "Securities Act"), of $450 million aggregate principal amount of the 6.25% Senior Notes due 2024. The 6.25% Senior Notes are unsecured and were initially issued by the Escrow Issuer to the initial purchasers under an Indenture, dated as of August 4, 2016 (the "6.25% Senior Notes Indenture"), between the Escrow Issuer and U.S. Bank National Association, as trustee (the "6.25% Senior Notes Trustee"). The 6.25% Senior Notes mature on August 1, 2024. Interest on the 6.25% Senior Notes accrues at 6.25% per annum, paid every six months through maturity on each February 1 and August 1, beginning on February 1, 2017. The proceeds from the 6.25% Senior Notes were released from escrow on the September 7, 2016 The Elizabeth Arden Acquisition Date (the "Escrow Release"). On the Elizabeth Arden Acquisition Date, the Escrow Issuer was merged with and into Products Corporation and in connection with the Escrow Release, Products Corporation and certain of its direct and indirect wholly-owned domestic subsidiaries, including Elizabeth Arden and certain of its subsidiaries (collectively, the "6.25% Senior Notes Guarantors"), and the 6.25% Senior Notes Trustee entered into a supplemental indenture (the "6.25% Senior Notes Supplemental Indenture") to the 6.25% Senior Notes Indenture, pursuant to which Products Corporation assumed the obligations of the Escrow Issuer under the 6.25% Senior Notes and the 6.25% Senior Notes Indenture and the 6.25% Senior Notes Guarantors jointly and severally, fully and unconditionally guaranteed the 6.25% Senior Notes on a senior unsecured basis (the "6.25% Senior Notes Guarantees").  The 6.25% Senior Notes Guarantors are the same entities that are subsidiary guarantors under the 2016 Senior Credit Facilities.
In December 2016, Products Corporation consummated an offer to exchange the original 6.25% Senior Notes for $450 million of new 6.25% Senior Notes, which have substantially the same terms as the original 6.25% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the "6.25% Senior Notes").
Ranking: The 6.25% Senior Notes are Products Corporation’s senior, unsubordinated and unsecured obligations, ranking: (i) pari passu in right of payment with all of Products Corporation’s existing and future senior unsecured indebtedness; (ii) senior in right of payment to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ future subordinated indebtedness; and (iii) effectively junior to all of Products Corporation’s and the 6.25% Senior Notes Guarantors’ existing and future senior secured indebtedness, including, indebtedness under Products Corporation’s 2016 Senior Credit Facilities, to the extent of the value of the assets securing such indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees are: (i) structurally subordinated to all of the liabilities and preferred stock of any of the Company’s subsidiaries that do not guarantee the 6.25% Senior Notes; and (ii) pari passu in right of payment with liabilities of the 6.25% Senior Notes Guarantors other than expressly subordinated indebtedness. The 6.25% Senior Notes and the 6.25% Senior Notes Guarantees rank effectively junior to indebtedness

F-32
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the "6.25% Senior Notes Non-Guarantor Subsidiaries"), none of which guarantee the 6.25% Senior Notes.
Optional Redemption: Prior to August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole or from time to time in part, upon Products Corporation’s payment of an applicable make-whole premium based on the comparable treasury rate plus 50 basis points. Prior to August 1, 2019, up to 40% of the aggregate principal amount of 6.25% Senior Notes that have been issued may also be redeemed at Products Corporation’s option at any time as a whole or from time-to-time in part, at a redemption price equal to 106.250% of the principal amount thereof, plus accrued and unpaid interest to (but not including) the date of redemption with the proceeds of certain equity offerings and capital contributions (so long as at least 60% of the 6.25% Senior Notes that have been issued thereafter remain outstanding). On and after August 1, 2019, Products Corporation may redeem the 6.25% Senior Notes at its option, at any time as a whole, or from time to time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to (but not including) the date of redemption, if redeemed during the 12-month period beginning on August 1 of the years indicated below:
Period Optimal Redemption Premium Percentage
2019 104.688%
2020 103.125%
2021 101.563%
2022 and thereafter 100.000%

All redemptions (and notices thereof) may be subject to various conditions precedent, and redemption dates specified in such notices may be extended so that such conditions precedent may be fulfilled (to the extent redemption on such dates is otherwise permitted by the 6.25% Senior Notes Indenture).
Change of Control: Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 6.25% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 6.25% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to (but not including) the date of repurchase.
Certain Covenants: The 6.25% Senior Notes Indenture imposes certain limitations on Products Corporation’s and the 6.25% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to: (i) incur or guarantee additional indebtedness or issue preferred stock; (ii) pay dividends, make certain investments and make repayments on indebtedness that is subordinated in right of payment to the 6.25% Senior Notes and make other "restricted payments"; (iii) create liens on their assets to secure debt; (iv) enter into transactions with affiliates; (v) merge, consolidate or amalgamate with another company; (vi) transfer and sell assets; and (vii) permit restrictions on the payment of dividends by Products Corporation's subsidiaries.
These covenants are subject to important qualifications and exceptions. The 6.25% Senior Notes Indenture also contains customary affirmative covenants and events of default. In addition, if during any period of time the 6.25% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 6.25% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants regarding limitations on debt, limitations on restricted payments, limitation on guarantees by restricted subsidiaries, limitation on transactions with affiliates, certain provisions of the successor company covenant, limitation on asset sales and limitation on dividends from restricted subsidiaries.
During 2016, in connection with consummating the 6.25% Senior Notes Offering, the Company incurred approximately $11.3 million of fees and expenses, all of which were capitalized and are being amortized over the remaining term of the 6.25% Senior Notes using the effective interest method.
(d) 5.75% Senior Notes
On February 8, 2013, Products Corporation completed its offering (the "2013 Senior Notes Refinancing"), pursuant to an exemption from registration under the Securities Act, of $500 million aggregate principal amount of the 5.75% Senior Notes. The 5.75% Senior Notes are unsecured and were issued to investors at par. The 5.75% Senior Notes mature on February 15, 2021. Interest on the 5.75% Senior Notes accrues at 5.75% per annum, paid every six months on February 15th and August 15th.
The 5.75% Senior Notes were issued pursuant to the 5.75% Senior Notes Indenture (the "5.75% Senior Notes Indenture" and together with the 6.25% Senior Notes Indenture, the "Senior Notes Indentures"), dated as of February 8, 2013 (the "5.75% Senior Notes Closing Date"), by and among Products Corporation, Products Corporation’s domestic subsidiaries (the "5.75% Senior Notes Guarantors"), which also currently guarantee Products Corporation’s 2016 Senior Credit Facilities and the 6.25% Senior Notes, and U.S. Bank National Association, as trustee (the "5.75% Senior Notes Trustee"). The 5.75% Senior Notes Guarantors

F-33
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

issued guarantees (the "5.75% Senior Notes Guarantees") of Products Corporation’s obligations under the 5.75% Senior Notes and the 5.75% Senior Notes Indenture on a joint and several, senior unsecured basis.
In December 2013, Products Corporation consummated an offer to exchange the original 5.75% Senior Notes for $500 million of new 5.75% Senior Notes, which have substantially the same terms as the original 5.75% Senior Notes, except that they are registered under the Securities Act (such registered new notes being the "5.75% Senior Notes").
Products Corporation used a portion of the $491.2 million of net proceeds from the issuance of the 5.75% Senior Notes (net of underwriters' fees) to repay and redeem all of the $330 million then outstanding aggregate principal amount of its 9.75% Senior Secured Notes, as well as to pay $8.6 million of accrued interest. Products Corporation incurred an aggregate of $19.4 million of fees for the applicable redemption and tender offer premiums, related fees and expenses in connection with redemption and repayment of the 9.75% Senior Secured Notes and other fees and expenses in connection with the issuance of the 5.75% Senior Notes. Products Corporation used a portion of the remaining proceeds from the issuance of the 5.75% Senior Notes, together with existing cash, to pay approximately $113 million of principal on its then outstanding 2011 Term Loan in conjunction with the February 2013 Term Loan Amendments. Products Corporation used the remaining balance available from the issuance of the 5.75% Senior Notes for general corporate purposes, including, without limitation, debt reduction transactions, such as repaying a loan to Revlon at its maturity on October 8, 2013, which proceeds Revlon used to pay the liquidation preference of Revlon's then outstanding Series A Preferred Stock, in connection with its mandatory redemption on such date.
Ranking: The 5.75% Senior Notes are Products Corporation’s unsubordinated, unsecured obligations and rank senior in right of payment to any future subordinated obligations of Products Corporation and rank pari passu in right of payment with all existing and future senior debt of Products Corporation. Similarly, each 5.75% Senior Notes Guarantee is the relevant 5.75% Senior Notes Guarantor’s joint and several, unsubordinated and unsecured obligation, ranking senior in right of payment to any future subordinated obligations of such 5.75% Senior Notes Guarantor and ranking pari passu in right of payment with all existing and future senior debt of such 5.75% Senior Notes Guarantor. The 5.75% Senior Notes Guarantees were issued on a joint and several basis.
The 5.75% Senior Notes and the 5.75% Senior Notes Guarantees rank effectively junior to Products Corporation’s 2016 Senior Credit Facilities, which are secured, as well as indebtedness and preferred stock of Products Corporation’s foreign and immaterial subsidiaries (the "5.75% Senior Notes Non-Guarantor Subsidiaries" and together with the 6.25% Senior Notes Non-Guarantor Subsidiaries, the "Non-Guarantor Subsidiaries"), none of which guarantee the 5.75% Senior Notes.
Optional Redemption: The 5.75% Senior Notes may be redeemed at Products Corporation's option, at any time as a whole, or from time-to-time in part, at the following redemption prices (expressed as percentages of principal amount), plus accrued interest to the date of redemption, if redeemed during the 12-month period beginning on February 15th of the years indicated below:
Period Percentage
2017 102.875%
2018 101.438%
2019 and thereafter 100.000%
Change of Control: Upon the occurrence of specified change of control events, Products Corporation is required to make an offer to purchase all of the 5.75% Senior Notes at a purchase price of 101% of the outstanding principal amount of the 5.75% Senior Notes as of the date of any such repurchase, plus accrued and unpaid interest to the date of repurchase.
Certain Covenants: The 5.75% Senior Notes Indenture limits Products Corporation’s and the 5.75% Senior Notes Guarantors’ ability, and the ability of certain other subsidiaries, to:
incur or guarantee additional indebtedness ("Limitation on Debt");
pay dividends, make repayments on indebtedness that is subordinated in right of payment to the 5.75% Senior Notes and make other "restricted payments" ("Limitation on Restricted Payments");
make certain investments;
create liens on their assets to secure debt;
enter into transactions with affiliates;
merge, consolidate or amalgamate with another company ("Successor Company");

F-34
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

transfer and sell assets ("Limitation on Asset Sales"); and
permit restrictions on the payment of dividends by Products Corporation’s subsidiaries ("Limitation on Dividends from Subsidiaries").
These covenants are subject to important qualifications and exceptions. The 5.75% Senior Notes Indenture also contains customary affirmative covenants and events of default.
In addition, if during any period of time the 5.75% Senior Notes receive investment grade ratings from both Standard & Poor’s and Moody’s Investors Services, Inc. and no default or event of default has occurred and is continuing under the 5.75% Senior Notes Indenture, Products Corporation and its subsidiaries will not be subject to the covenants on Limitation on Debt, Limitation on Restricted Payments, Limitation on Asset Sales, Limitation on Dividends from Subsidiaries and certain provisions of the Successor Company covenant.
Covenants
Products Corporation was in compliance with all applicable covenants under the 2016 Senior Credit Facilities as of December 31, 2017. At December 31, 2017, the aggregate principal amounts outstanding under the 2016 Term Loan Facility and the 2016 Revolving Credit Facility were $1,777.5 million and $157 million, respectively. At December 31, 2017, availability under the $400 million 2016 Revolving Credit Facility was $193 million, based upon the calculated borrowing base of $381.9 million, less $10.1 million of outstanding undrawn letters of credit, $21.8 million in outstanding checks and $157 million then drawn on the 2016 Revolving Credit Facility.
Products Corporation was in compliance with all applicable covenants under its Senior Notes Indentures as of December 31, 2017.

Long-Term Debt Maturities
The aggregate amounts of contractual long-term debt maturities at December 31, 2017 in the years 2018 through 2022 and thereafter are as follows:
Years Ended December 31, Long-Term Debt Maturities 
2018 $175.1
(a) 
2019 18.1
(b) 
2020 18.1
(b) 
2021 518.1
(c) 
2022 18.1
(b) 
Thereafter 2,137.5
 
Total long-term debt 2,885.0
 
Discounts and deferred finance charges (61.1) 
Total long-term debt, net of discounts and deferred finance charges $2,823.9
 

(a)
Amount consists primarily of $157 million in aggregate principal amount of borrowings under the 2016 Revolving Credit Facility and the quarterly amortization payments required under the 2016 Term Loan Facility.
(b)
Amount consists primarily of quarterly amortization payments described in (a) above.
(c)
Amount is primarily comprised of the $500 million in aggregate principal amount outstanding as of December 31, 2017 under the 5.75% Senior Notes, which mature on February 15, 2021, and the quarterly amortization payment described in (a) above.



F-35
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

12. FAIR VALUE MEASUREMENTS
Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to price 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 December 31, 2017, the fair values of the Company’s financial assets and liabilities that were required to be measured at fair value are categorized in the table below:
 Total Level 1 Level 2 Level 3
Assets:       
Derivatives:       
FX Contracts(a)     
$0.6
 $—
 $0.6
 $—
Total assets at fair value$0.6
 $—
 $0.6
 $—
Liabilities:       
Derivatives:       
FX Contracts(a)    
$1.9
 $—
 $1.9
 $—
2013 Interest Rate Swap(b)
0.9
 —
 0.9
 —
Total liabilities at fair value$2.8
 $—
 $2.8
 $—

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

(a)The fair value of the Company’s FX Contracts was measured based on observable market transactions for similar transactions in actively quoted markets of spot and forward rates on the respective dates. See Note 13, "Financial Instruments."
(b)The fair value of Products Corporation's 2013 Interest Rate Swap, which expires in May 2018 (as hereinafter defined) was measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve on the respective dates. See Note 13, "Financial Instruments."


F-36
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

As of December 31, 2017, 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:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $2,131.5
 $—
 $2,131.5
 $2,823.9

As of December 31, 2016, 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:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $2,770.9
 $—
 $2,770.9
 $2,681.2
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 cash and cash equivalents, trade receivables, notes receivable, accounts payable and short-term borrowings approximate their respective fair values.


13. FINANCIAL INSTRUMENTS
Products Corporation maintains standby and trade letters of credit for various corporate purposes under which Products Corporation is obligated, of which $10.1 million and $10.4 million (including amounts available under credit agreements in effect at that time) were maintained at December 31, 2017 and December 31, 2016, respectively. Included in these amounts are approximately $7.3 million in standby letters of credit that support Products Corporation’s self-insurance programs as of both December 31, 2017 and 2016. The estimated liability under such programs is accrued by Products Corporation.

Derivative Financial Instruments
The Company uses derivative financial instruments, primarily: (i) FX Contracts, intended for the purpose of managing foreign currency exchange risk by reducing the effects of fluctuations in foreign currency exchange rates on the Company’s net cash flows; and (ii) interest rate hedging transactions, such as the 2013 Interest Rate Swap, referred to below, intended for the purpose of managing interest rate risk associated with Products Corporation’s variable rate indebtedness. The Company does not hold or issue financial instruments for speculative or trading purposes.
Foreign Currency Forward Exchange Contracts
The FX Contracts are entered into primarily to hedge the anticipated net cash flows resulting from inventory purchases and intercompany payments denominated in currencies other than the local currencies of the Company’s foreign and domestic operations and generally have maturities of less than one year.
The U.S. Dollar notional amount of the FX Contracts outstanding at December 31, 20152017 and December 31, 20142016 was $76.3$147.1 million and $7.679.6 million, respectively.
Interest Rate Swap Transaction
In November 2013, Products Corporation executed a forward-starting floating-to-fixed interest rate swap transaction with a 1.00% floor,(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 Colomer Acquisition (the "Old Acquisition Term Loan over a period of three years (the "2013Loan"). The 2013 Interest Rate Swap")Swap initially had a floor of 1.00% that in December 2016 was amended to 0.75%. In connection with entering into the 2016 Term Loan Facility, the 2013 Interest Swap was carried over to apply to a notional amount of $400 million in respect of indebtedness under such loan for the remaining balance of the term of such swap, which expires in May 2018. The Company initially designated the 2013 Interest Rate Swap as a cash flow hedge of the variability of the forecasted three-month LIBOR interest rate payments initially related to the $400 million notional amount under the Old Acquisition Term Loan over the three-year term of the 2013 Interest Rate Swap. CommencingSwap (and subsequently to the $400 million notional

F-37
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

amount under the 2016 Term Loan Facility for the remaining balance of the term of such swap, which expires in May 2018). Under the terms of the 2013 Interest Rate Swap, commencing in May 2015, Products Corporation receives from the counterparty a floating interest rate based on the higher of the three-month USDU.S. Dollar LIBOR or 1.00%,the floor percentage in effect, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which, with respect to the 2016 Term Loan Facility, effectively fixes the interest rate on such notional amount at 5.0709%5.5709% through May 2018). At December 31, 2017, the fair value of the 2013 Interest Rate Swap was a liability of $0.9 million and the accumulated loss recorded in accumulated other comprehensive loss was $0.7 million, net of tax.
As a result of completely refinancing the Old Acquisition Term Loan with a portion of the proceeds from Product's Corporation's consummation of the 2016 Senior Credit Facilities and the 6.25% Senior Notes Offering in connection with consummating the Elizabeth Arden Acquisition, the critical terms of the 2013 Interest Rate Swap no longer matched the terms of the underlying debt under the 2016 Term Loan Facility. At the refinancing date, which was the same as the September 7, 2016 Elizabeth Arden Acquisition Date (the "De-designation Date"), the 2013 Interest Rate Swap was determined to no longer be highly effective and the Company discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap, changes in fair value have been accounted for as a component of other non-operating expenses. Accumulated deferred losses of $6.3 million, or $3.9 million net of tax, at the De-designation Date, that were previously recorded as a component of accumulated other comprehensive loss, will be fully amortized into earnings over the three-yearremaining term of the 2013 Interest Rate Swap). For 2015, the 2013 Interest Rate Swap, was deemed effective and therefore the changeswhich expires in fair valueMay 2018. At December 31, 2017, $1.2 million, or $0.7 million net of tax, remains as a component of accumulated other comprehensive loss related to the 2013 Interest Rate Swap, have been recorded in Other Comprehensive Loss. Asall of December 31, 2015,which will be amortized into earnings over the balance of deferred net losses on derivatives included in accumulated other comprehensive loss was $3.8 million after-tax. (Seenext 12 months. See "Quantitative Information – Derivative Financial Instruments" below).below.
The Company expects that $2.4 million of the after-tax deferred net losses related to the 2013 Interest Rate Swap will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. The amount ultimately realized in earnings may differ, as LIBOR is subject to change. Realized gains and losses are ultimately determined by actual rates at maturity of the derivative.
Credit Risk
Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of the derivative instruments in asset positions, which totaled $2.0$0.6 million and $0.2$2.3 million as of December 31, 20152017 and December 31,

F-37
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

2014, 2016, respectively. The Company attempts to minimize exposure to credit risk by generally entering into derivative contracts with counterparties that have investment-grade credit ratings and are major financial institutions. The Company also periodically monitors any changes in the credit ratings of its counterparties. Given the current credit standing of the Company's counterparties to its derivative instruments, the Company believes that the risk of loss under these derivative instruments arising from any non-performance by any of the counterparties is remote.

Quantitative Information – Derivative Financial Instruments
The effectsAs of December 31, 2017 and 2016, the fair values of the Company’sCompany's derivative financial instruments onin its Consolidated Financial StatementsBalance Sheets were as follows:
(a)Fair Values of Derivative Financial Instruments in the Consolidated Balance Sheets:
 Fair Values of Derivative Instruments
 Assets Liabilities
 Balance Sheet December 31,
2015		 December 31,
2014		 Balance Sheet December 31,
2015		 December 31,
2014
 Classification Fair Value Fair Value Classification Fair Value Fair Value
Derivatives designated as hedging instruments:        
2013 Interest Rate Swap(i)
Prepaid expenses and other $—
 $—
 Accrued expenses and other $4.0
 $2.1
 Other assets —
 —
 Other long-term liabilities 2.5
 1.4
Derivatives not designated as hedging instruments:        
FX Contracts(ii)   
Prepaid expenses and other $2.0
 $0.2
 Accrued Expenses $0.6
 $—
 Fair Values of Derivative Instruments
 Assets Liabilities
 Balance Sheet December 31,
2017		 December 31,
2016		 Balance Sheet December 31,
2017		 December 31,
2016
 Classification Fair Value Fair Value Classification Fair Value Fair Value
Derivatives not designated as hedging instruments:        
FX Contracts(a)   
Prepaid expenses and other $0.6
 $2.3
 Accrued Expenses $1.9
 $1.1
2013 Interest Rate Swap(b)
Prepaid expenses and other —
 —
 Accrued expenses and other 0.9
 3.7
 Other assets —
 —
 Other long-term liabilities —
 1.0

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

(b) The fair values of the 2013 Interest Rate Swap at December 31, 20152017 and December 31, 20142016 were measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve at December 31, 20152017 and December 31, 2014,2016, respectively.

(ii) The fair values of the FX Contracts at December 31, 2015 and December 31, 2014 were measured based on observable market transactions of spot and forward rates at December 31, 2015 and December 31, 2014, respectively.

(b) Effects of Derivative Financial Instruments on the Consolidated Statements of Income and Comprehensive Income (Loss) for each of 2015, 2014 and 2013:
 Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
Year Ended December 31,
2015
2014
2013
Derivatives designated as hedging instruments:     
2013 Interest Rate Swap, net of tax (a)
$(1.6) $(3.7) $1.5
(a)
Net of tax (benefit) expense of $(1.0) million, $(2.3) million and $1.0 million for each of 2015, 2014 and 2013, respectively.
 Income Statement ClassificationAmount of Gain (Loss) Recognized in Net Income
Year Ended December 31,
2015 2014 2013
Derivatives designated as hedging instruments:     
2013 Interest Rate SwapInterest Expense$(2.6) $—
 $—
Derivatives not designated as hedging instruments:     
FX ContractsForeign currency gain, net$3.8
 $0.5
 $2.2


F-38
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


The effects of the Company's derivative financial instruments on its Consolidated Statements of Operations and Comprehensive (Loss) Income were as follows for the periods presented:
 Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income
Year Ended December 31,
2017 2016 2015
Derivatives previously designated as hedging instruments:     
2013 Interest Rate Swap, net of tax (a)
$2.3
 $0.8
 $(1.6)

(a) Net of tax (benefit) expense of $(1.4) million, $0.5 million and $(1.0) million for 2017, 2016 and 2015, respectively.

Derivative Instruments Statement of Operations Classification Amount of Gain (Loss) Recognized in Net (Loss) Income
 Year Ended December 31,
 2017 2016 2015
Derivatives designated as hedging instruments:      
2013 Interest Rate Swap Interest Expense $(3.7) $(4.3) $(2.6)
Derivatives not designated as hedging instruments:      
FX Contracts Foreign currency gain (loss), net $(4.1) $2.1
 $3.8
2013 Interest Rate Swap Miscellaneous, net 0.1
 0.7
 —


14. SAVINGS PLAN, PENSION AND POST-RETIREMENT BENEFITS

Savings Plan:
The Company offers a qualified defined contribution plan for its U.S.-based employees, the Revlon Employees' Savings, Investment and Profit Sharing Plan (as amended, the "Savings Plan"), which allows eligible participants to contribute up to 25%, and highly compensated participants to contribute up to 6%8%, of eligible compensation through payroll deductions, subject to certain annual dollar limitations imposed by the Internal Revenue Service (the "IRS"). The Company matches employee contributions at fifty cents for each dollar contributed up to the first 6% of eligible compensation. The Company made cash matching contributions to the Savings Plan of $3 million, $2.6 million and $2.5 million during 2017, 2016 and 2015, respectively. In addition, the Company made cash contributions of $2.5 million and $2.4$0.8 million during each of 20142017 and 2013, respectively.2016, respectively, to the Elizabeth Arden defined contribution plan, which it acquired in the 2016 Elizabeth Arden Acquisition. Effective January 1, 2018, the Company merged the Elizabeth Arden defined contribution plan into the Company's Savings Plan. The Company also offers a non-qualified defined contribution plan (the “Excess"Excess Savings Plan”Plan") providing benefits for certain U.S. employees who are in excess of IRS limitations. These non-qualified defined contribution benefits are funded from the Company's general assets.
The Company’s qualified and non-qualified defined contribution savings plans for its U.S.-based employees contain a discretionary profit sharing component that enables the Company, should it elect to do so, to make discretionary profit sharing contributions. For 2017, the Company made discretionary profit sharing contributions to the Savings Plan and Excess Savings Plan of $5.1 million (of which $4.0 million was paid in 2017 and $1.1 million was paid in January 2018), or 3% of eligible compensation, which was credited on a quarterly basis. For 2016, the Company made discretionary profit sharing contributions to the Savings Plan and Excess Savings Plan of $5 million (of which $3.9 million was paid in 2016 and $1.1 million was paid in January 2017), or 3% of eligible compensation, which was credited on a quarterly basis. For 2015, the Company made discretionary profit sharing contributions to the Savings Plan and Excess Savings Plan of $4.8 million (of which $3.7 million was paid in 2015 and $1.1 million was paid in January 2016), or 3% of eligible compensation, which was credited on a quarterly basis. For 2014, the Company made discretionary profit sharing contributions to the Savings Plan and Excess Savings Plan of $4.0 million (of which $3.1 million was paid in 2014 and $0.9 million was paid in January 2015), or 3% of eligible compensation, which was credited on a quarterly basis. In 2013, the Company made discretionary profit sharing contributions to the Savings Plan and Excess Savings Plan of $4.1 million (of which $3.2 million was paid in 2013 and $0.9 million was paid in January 2014), or 3% of eligible compensation, which was credited on a quarterly basis.
Pension Benefits:
In 2009, Products Corporation’s U.S. qualified defined benefit pension plan (the Revlon Employees’ Retirement Plan, which covered a substantial portion of the Company's employees in the U.S.) and its non-qualified pension plan (the Revlon Pension Equalization Plan) were amended to cease future benefit accruals under such plans after December 31, 2009. No additional benefits have accrued since December 31, 2009, other than interest credits on participant account balances under the cash balance program of the Company’s U.S. pension plans. Also, service credits for vesting and early retirement eligibility will continue to accrue in accordance with the terms of the respective plans. In 2010, the Company amended its Canadian defined benefit pension plan (the Affiliated Revlon Companies Employment Plan) to reduce future benefit accruals under such plan after December 31, 2010.

F-39
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Additionally, while the Company closed its U.K. defined pension plan to new entrants in 2002, then-existing participants continue to accrue pension benefits.
Effective December 31, 2012, Products Corporation merged two of its U.S. qualified defined benefit pension plans; therefore, as of December 31, 2012, Products Corporation sponsors two U.S. qualified defined benefit pension plans. The Company also has non-qualified pension plans that provide benefits for certain U.S. and non-U.S. employees, and for U.S. employees in excess of IRS limitations in the U.S. and in certain limited cases contractual benefits for certain former officers of the Company. These non-qualified plans are funded from the Company's general assets.
In the fourth quarter of 2015, the Company offered certain former employees who had vested benefits in the Revlon Employees’ Retirement Plan the option of receiving the present value of the participant’s pension benefit in a one-time cash lump sum payment, an annuity form of benefit or the ability to maintain their deferred vested status in the pension plan. Based upon the participants' acceptance of that offer, $53.4 million was paid from the plan's assets in December 2015, with a corresponding decrease in the plan's benefit obligation. As a result of such program, the Company recorded a $20.7 million charge as a result of the pension lump sum settlement in the fourth quarter of 2015. ThisOf this charge, $10.3 million and $10.4 million was included in cost of sales and SG&A expenses.expenses, respectively.
Other Post-retirement Benefits:
The Company previously sponsored an unfunded retiree benefit plan, which provides death benefits payable to beneficiaries of a very limited number of former employees. Participation in this plan was limited to participants enrolled as of December 31, 1993. The Company also administers an unfunded medical insurance plan on behalf of Revlon Holdings, certain costs of which have been apportioned to Revlon Holdings under the transfer agreements among Revlon, Inc., Products Corporation and MacAndrews & Forbes. (See Note 22, “Related"Related Party Transactions - Transfer Agreements”Agreements").

F-40
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The following table provides an aggregate reconciliation of the projected benefit obligations, plan assets, funded status and amounts recognized in the Company’s Consolidated Financial Statements related to the Company's significant pension and other post-retirement benefit plans.

F-39
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

 Pension Plans Other Post-Retirement Benefit Plans
 December 31,
 2015 2014 2015 2014
Change in Benefit Obligation:       
Benefit obligation - beginning of year$(761.7) $(668.2) $(12.9) $(14.4)
Service cost(0.7) (0.8) —
 —
Interest cost(28.6) (30.1) (0.5) (0.5)
Actuarial gain (loss)44.4
 (108.0) (0.4) (0.2)
Lump sum settlement53.4
 —
 —
 —
Other pension settlements0.8
 —
 —
 —
Benefits paid38.3
 41.0
 0.8
 0.7
Foreign currency translation adjustments4.7
 4.4
 —
 —
Other—
 —
 —
 1.5
Benefit obligation - end of year$(649.4) $(761.7) $(13.0) $(12.9)
Change in Plan Assets:       
Fair value of plan assets - beginning of year$567.7
 $557.6
 $—
 $—
Actual return on plan assets(13.9) 37.6
 —
 —
Employer contributions17.3
 18.2
 0.8
 0.7
Lump sum settlement(53.4) —
 —
 —
Other pension settlements(0.8) —
 —
 —
Benefits paid(38.3) (41.0) (0.8) (0.7)
Foreign currency translation adjustments(4.7) (4.7) —
 —
Fair value of plan assets - end of year$473.9
 $567.7
 $—
 $—
Unfunded status of plans at December 31,$(175.5) $(194.0) $(13.0) $(12.9)

In respect of the Company's pension plans and other post-retirement benefit plans, amounts recognized in the Company’s Consolidated Balance Sheets at December 31, 2015 and 2014 consist of the following:plans:
 Pension Plans Other Post-Retirement Benefit Plans
 December 31,
 2015 2014 2015 2014
Other long-term assets$3.6
 $0.8
 $—
 $—
Accrued expenses and other$(6.0) $(6.1) $(0.8) $(0.7)
Pension and other post-retirement benefit liabilities(173.1) (188.7) (12.2) (12.2)
Total liability(175.5) (194.0) (13.0) (12.9)
        
Accumulated other comprehensive loss, gross258.0
 277.6
 2.8
 2.5
Income tax (benefit) expense(41.9) (43.7) (0.1) 0.1
Portion allocated to Revlon Holdings(0.9) (1.0) (0.2) (0.2)
Accumulated other comprehensive loss, net$215.2
 $232.9
 $2.5
 $2.4
 Pension Plans Other Post-Retirement Benefit Plans
 December 31,
 2017 2016 2017 2016
Change in Benefit Obligation:       
Benefit obligation - beginning of year$(640.5) $(649.4) $(13.4) $(13.0)
Service cost(3.0) (0.5) —
 —
Interest cost(19.6) (20.7) (0.4) (0.4)
Actuarial (loss) gain(22.3) (21.6) (1.1) (1.0)
Curtailment gain3.3
 —
 —
 —
Other pension settlements3.6
 —
 —
 —
Benefits paid43.2
 42.8
 0.9
 1.0
Other (a)
(18.4) —
 —
 —
Plan participant contributions(0.7) —
 —
 —
Foreign currency translation adjustments(7.0) 8.9
 —
 —
Benefit obligation - end of year$(661.4) $(640.5) $(14.0) $(13.4)
Change in Plan Assets:       
Fair value of plan assets - beginning of year$464.0
 $473.9
 $—
 $—
Actual return on plan assets53.5
 35.8
 —
 —
Employer contributions7.6
 7.3
 0.9
 1.0
Other pension settlements(3.6) —
 —
 —
Benefits paid(43.2) (42.8) (0.9) (1.0)
Other (a)
11.6
      
Plan participant contributions0.7
      
Foreign currency translation adjustments6.6
 (10.2) —
 —
Fair value of plan assets - end of year$497.2
 $464.0
 $—
 $—
Unfunded status of plans at December 31,$(164.2) $(176.5) $(14.0) $(13.4)
With respect to the above accrued expenses and other, the Company has recorded receivables from affiliates of $3.0 million and $3.1 million at December 31, 2015 and 2014, respectively, relating to pension plan liabilities retained by such affiliates.
(a)
Other includes the addition of a foreign non-qualified defined benefit plan assumed in connection with the Elizabeth Arden Acquisition.



F-40
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the Company's pension plans are as follows:
 December 31,
 2015 2014
Projected benefit obligation$649.4
 $761.7
Accumulated benefit obligation649.0
 761.0
Fair value of plan assets473.9
 567.7

Net Periodic Benefit Cost:
The components of net periodic benefit (income) costs for the Company’s pension and the other post-retirement benefit plans are as follows:
 

Pension Plans		 Other
Post-Retirement
Benefit Plans
 Year Ended December 31,
 2015 2014 2013 2015 2014 2013
Net periodic benefit (income) costs:   
Service cost$0.7
 $0.8
 $0.9
 $—
 $—
 $—
Interest cost28.6
 30.1
 27.6
 0.5
 0.5
 0.6
Expected return on plan assets(40.3) (41.3) (38.3) —
 —
 —
Amortization of actuarial loss8.4
 4.5
 8.6
 0.1
 0.1
 0.4
Lump sum settlement charge20.7
 —
 —
 —
 —
 —
Other pension settlements charge0.3
 —
 —
 —
 —
 —
 18.4
 (5.9) (1.2) 0.6
 0.6
 1.0
Portion allocated to Revlon Holdings(0.1) (0.1) (0.1) (0.1) —
 (0.1)
 $18.3
 $(6.0) $(1.3) $0.5
 $0.6
 $0.9
For 2015, the Company recognized net periodic benefit cost of $18.8 million, compared to net periodic benefit income of $(5.4) million in 2014, primarily due to the pension lump sum settlement charge recorded in the fourth quarter of 2015 and higher amortization of actuarial losses.
For 2014, the Company recognized net periodic benefit income of $(5.4) million, as compared to $(0.4) million in 2013, primarily due to an increase in the fair value of pension plan assets at December 31, 2014, as well as lower amortization of actuarial losses.
Net periodic benefit costs (income) are reflected in the Company's Consolidated Financial Statements as follows:
 Year Ended December 31,
 2015 2014
Net periodic benefit (income) costs:   
Cost of sales$6.1
 $(4.2)
Selling, general and administrative expense12.7
 (0.7)
Inventories—
 (0.5)
 $18.8
 $(5.4)
Amounts recognized in accumulated other comprehensive loss at December 31, 2015 in respect of the Company’s pension plans and other post-retirement plans, which have not yet been recognized as a component of net periodic benefit cost, are as follows:

F-41
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

With respect to the Company's pension plans and other post-retirement benefit plans, amounts recognized in the Company’s Consolidated Balance Sheets at December 31, 2017 and 2016 consisted of the following:
 Pension Benefits Post-Retirement Benefits Total
Net actuarial loss$258.0
 $2.8
 $260.8
Prior service cost—
 —
 —
Accumulated Other Comprehensive Loss, Gross258.0
 2.8
 260.8
Income tax (benefit) expense(41.9) (0.1) (42.0)
Portion allocated to Revlon Holdings(0.9) (0.2) (1.1)
Accumulated Other Comprehensive Loss, Net$215.2
 $2.5
 $217.7
 Pension Plans Other Post-Retirement Benefit Plans
 December 31,
 2017 2016 2017 2016
Other long-term assets$1.5
 $—
 $—
 $—
        
Accrued expenses and other(6.2) (6.1) (0.7) (0.8)
Pension and other post-retirement benefit liabilities(159.5) (170.4) (13.3) (12.6)
Total liability$(164.2) $(176.5) $(14.0) $(13.4)
        
Accumulated other comprehensive loss, gross$253.2
 $266.6
 $4.5
 $3.6
Income tax (benefit) expense(43.3) (44.3) (0.9) (0.4)
Portion allocated to Revlon Holdings(0.9) (0.9) (0.2) (0.2)
Accumulated other comprehensive loss, net$209.0
 $221.4
 $3.4
 $3.0
With respect to the above accrued expenses and other, the Company has recorded receivables from affiliates of $2.6 million and $2.7 million at December 31, 2017 and 2016, respectively, relating to pension plan liabilities retained by such affiliates.
As of December 31, 2017 and 2016, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company's pension plans are as follows:
 December 31,
 2017 2016
Projected benefit obligation$661.4
 $640.5
Accumulated benefit obligation661.1
 640.2
Fair value of plan assets497.2
 464.0

F-42
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Net Periodic Benefit Cost:
The components of net periodic benefit costs (income) for the Company's pension and the other post-retirement benefit plans are as follows:
 

Pension Plans		 Other
Post-Retirement
Benefit Plans
 Year Ended December 31,
 2017 2016 2015 2017 2016 2015
Net periodic benefit costs (income):   
Service cost$3.0
 $0.5
 $0.7
 $—
 $—
 $—
Interest cost19.6
 20.7
 28.6
 0.4
 0.4
 0.5
Expected return on plan assets(28.6) (31.0) (40.3) —
 —
 —
Amortization of actuarial loss9.5
 8.8
 8.4
 0.3
 0.2
 0.1
Lump sum settlement charge—
 —
 20.7
 —
 —
 —
Curtailment gain(a)
(2.6) —
 —
 —
 —
 —
Other pension settlements charge—
 —
 0.3
 —
 —
 —
Total net periodic benefit costs (income) prior to allocation$0.9
 $(1.0) $18.4
 $0.7
 $0.6
 $0.6
Portion allocated to Revlon Holdings(0.1) (0.1) (0.1) —
 (0.1) (0.1)
Total net periodic benefit costs (income)$0.8
 $(1.1) $18.3
 $0.7
 $0.5
 $0.5
(a)
As a result of the Elizabeth Arden Acquisition, the Company recognized $2.6 million in curtailment gains related to a foreign non-qualified defined benefit plan of Elizabeth Arden.
For 2017, the Company recognized net periodic benefit cost of $1.5 million, compared to net periodic benefit income of $0.6 million in 2016, primarily due to the lower return on plan assets and higher service costs during 2017, partially offset by a curtailment gain resulting from a certain foreign non-qualified benefit plan of Elizabeth Arden.
For 2016, the Company recognized net periodic benefit income of $0.6 million, compared to net periodic benefit cost of $18.8 million in 2015, primarily due to the pension lump sum settlement charge recorded in the fourth quarter of 2015, which was not repeated in 2016, as well as the Company's adoption of the alternative approach to calculating the service and interest components of net periodic benefit cost for pension and other post-retirement benefits (the "full yield curve" approach), which was adopted by the Company at December 31, 2015, discussed below.
Net periodic benefit costs (income) are reflected in the Company's Consolidated Financial Statements as follows:
 Year Ended December 31,
 2017 2016
Net periodic benefit (income) costs:   
Cost of sales$(1.0) $(2.5)
Selling, general and administrative expense2.5
 1.9
Total net periodic benefit costs (income)$1.5
 $(0.6)


F-43
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Amounts recognized in accumulated other comprehensive loss at December 31, 2017 with respect to the Company’s pension plans and other post-retirement plans, which have not yet been recognized as a component of net periodic benefit cost, were as follows:
 Pension Benefits Post-Retirement Benefits Total
Net actuarial loss$253.2
 $4.5
 $257.7
Accumulated Other Comprehensive Loss, Gross253.2
 4.5
 257.7
Income tax benefit(43.3) (0.9) (44.2)
Portion allocated to Revlon Holdings(0.9) (0.2) (1.1)
Accumulated Other Comprehensive Loss, Net$209.0
 $3.4
 $212.4
The total actuarial losses and prior service costs inwith respect ofto the Company’s pension plans and other post-retirement plans included in accumulated other comprehensive loss at December 31, 2015 and2017 expected to be recognized in net periodic benefit cost during the fiscal year endedending December 31, 2016,2018, is $8.5$9.0 million and $0.2$0.4 million, respectively.
Pension Plan Assumptions:
The following weighted average assumptions were used to determine the Company’s projected benefit obligation of the Company’s U.S. and International pension plans at the end of the respective years:
U.S. Plans International PlansU.S. Plans International Plans
2015 2014 2015 20142017 2016 2017 2016
Discount rate4.15% 3.89% 3.68% 3.74%3.47% 3.92% 2.19% 2.66%
Rate of future compensation increases3.50% 3.00% 2.22% 2.33%3.50% 3.50% 1.75% 2.20%
The following weighted average assumptions were used to determine the Company’s net periodic benefit (income) cost of the Company’s U.S. and International pension plans during the respective years:
U.S. Plans International PlansU.S. Plans International Plans
2015 2014 2013 2015 2014 20132017 2016 2015 2017 2016 2015
Discount rate3.89% 4.68% 3.78% 3.74% 4.48% 4.33%3.92% 4.15% 3.89% 2.24% 3.68% 3.74%
Expected long-term return on plan assets7.50% 7.75% 7.75% 6.00% 6.00% 6.00%6.50% 7.00% 7.50% 4.81% 6.00% 6.00%
Rate of future compensation increases3.00% 3.00% 3.00% 2.33% 3.40% 2.97%3.50% 3.50% 3.50% 2.01% 2.22% 2.33%
As ofEffective December 31, 2015, the Company adopted the “full"full yield curve”curve" method as an alternative approach to calculating the service and interest components of net periodic benefit cost for the Company's pension and other post-retirement benefits. Under the "full yield curve" method, the discount rate assumption was built through the application of specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows for each of the Company's pension and other post-retirement plans. Prior to December 31, 2015, the Company estimated the service and interest cost components utilizing a single weighted averageweighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. ThisThe change doesdid not affect the measurement of the Company's total projected benefit obligations, as the change in service and interest costs iswas exactly offset in the actuarial loss (gain) recognized for each year. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. The change to the "full yield curve" method was accounted for as a change in accounting estimate that iswas inseparable from a change in accounting principle, and accordingly, has beenwas accounted for prospectively.
In selecting its expected long-term rate of return on its pension plan assets, the Company considers a number of factors, including, without limitation, recent and historical performance of pension plan assets, the pension plan portfolios' asset allocations over a variety of time periods compared with third-party studies, the performance of the capital markets in recent years and other factors, as well as advice from various third parties, such as the pension plans' advisors, investment managers and actuaries. While the Company considered both the recent performance and the historical performance of pension plan assets, the Company’s assumptions are based primarily on its estimates of long-term, prospective rates of return. Using the aforementioned methodologies, the Company selected a 7.50%6.5% and 6.00% weighted average4.81% weighted-average long-term rate of return on plan assets assumption during 20152017 for the

F-44
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

U.S. and International pension plans, respectively. Differences between actual and expected asset returns are recognized in the net periodic benefit cost over the remaining service period of the active participating employees.

F-42
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The rate of future compensation increases is an assumption used by the actuarial consultants for pension accounting and is determined based on the Company’s current expectation for such increases.
Investment Policy:
The Investment Committee for the Company's U.S. pension plans (the “Investment Committee”"Investment Committee") has adopted (and revises from time to time)time-to-time) an investment policy for the Company's U.S. pension plans with the objective of realizing a long-term rate of return on pension plan assets that meets or exceeds, over time, the expected long-term rate of return on plan assets assumption, weighed against a reasonable risk level. In connection with this objective, the Investment Committee retains a professional investment advisor who recommends investment managers that invest plan assets in the following asset classes: common and preferred stock, mutual funds, fixed income securities, common and collective funds, hedge funds, group annuity contracts and cash and other investments. The Company’s internationalInternational plans follow a similar methodology in conjunction with local actuarial consultants and asset managers.
The investment policy adopted by the Investment Committee provides for investments in a broad range of publicly-traded securities, among other things. The investments are in domestic and international stocks, ranging from small to large capitalization stocks, debt securities ranging from domestic and international treasury issues, corporate debt securities, mortgages and asset-backed issues. Other investments may include cash and cash equivalents and hedge funds. The investment policy also allows for investments in private equity funds that are not covered in investments described above, provided that the Investment Committee approves any such investments prior to their selection. Also, global balanced strategies are utilized to provide for investments in a broad range of publicly-traded stocks and bonds in both domestic and international markets, as described above. In addition, the global balanced strategies can include commodities, provided that the Investment Committee approves any such investments prior to their selection.
The Investment Committee’s investment policy does not allow the use of derivatives for speculative purposes, but such policy does allow its investment managers to use derivatives for the purpose of reducing risk exposures or to replicate exposures of a particular asset class.
The Company’s U.S. and internationalInternational pension plans have target asset allocation ranges whichthat are intended to be flexible guidelines for allocating the plans’ assets among various classes of assets. These target ranges are reviewed periodically and considered for readjustment when an asset class weighting is outside of its target range (recognizing that these are flexible target ranges that may vary from time to time)time-to-time) with the objective of meeting or exceeding the expected long-term rate of return on plan assets assumption, weighed against a reasonable risk level. The target ranges per asset class arein effect for 2017 were as follows:
 Target Ranges
 U.S. Plans International Plans
Asset Class:   
Common and preferred stock0% - 10% —
Mutual funds20% - 30% —
Fixed income securities10% - 30%20% —
Common and collective funds25%30% - 55%50% 100%
Hedge funds0%5% - 15%—
Group annuity contract0% - 5% —
Cash and other investments0% - 10% —

Fair Value of Pension Plan Assets:
The following table presents information on the fair value of the Company's U.S. and internationalInternational pension plan assets at December 31, 20152017 and 2014:2016:
 U.S. Plans International Plans
 2015 2014 2015 2014
Fair value of plan assets$407.2
 $496.1
 $66.7
 $71.6
 U.S. Plans International Plans
 2017 2016 2017 2016
Fair value of plan assets$413.6
 $400.5
 $83.6
 $63.5



F-43F-45
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The Company determines the fair values of the Company’s U.S. and internationalInternational pension plan assets as follows:
Common and preferred stock: The fair values of investments included in the common and preferred stock asset class generally reflect the closing price reported on the major market where the individual securities are traded. The Company classifies common and preferred stock investments within Level 1 of the fair value hierarchy.

Mutual funds: The fair values of investments included in the mutual funds asset class are determined using net asset value (“NAV”("NAV") provided by the applicable fund administrators. The NAV is based on the closing price reported on the major market where the individual securities within the mutual fund are traded. The Company classifies mutual fund investments within Level 1 of the fair value hierarchy.

Fixed income securities: The fair values of investments included in the fixed income securities asset class are based on a compilation of primarily observable market information and/or broker quotes. The Company classifies fixed income securities investments primarily within Level 2 of the fair value hierarchy.

Common and collective funds: The fair values of investments included in the common and collective funds asset class are determined using NAV provided by the applicable fund administrators. The NAV is based on the value of the underlying assets owned by the common and collective fund, minus its liabilities, and then divided by the number of shares outstanding. The Company classifies common and collective fund investments within Level 2 of the fair value hierarchy.

Hedge funds: The hedge fund asset class includes investments in hedge funds that, in turn, primarily invest in a grouping of equities, fixed income instruments, currencies, derivatives and/or commodities. The fair values of investments included in the hedge funds class are determined using NAV provided by the applicable fund administrators. The NAV is based on securities listed or quoted on a national securities exchange or market, or traded in the over-the-counter market, and is valued at the closing quotation posted by that exchange or trading system. Securities not listed or quoted on a national securities exchange or market are valued primarily through observable market information or broker quotes. The hedge fund investments generally can be sold on a quarterly or monthly basis and may employ leverage. The Company classifies hedge fund investments within Level 2 of the fair value hierarchy.

Group annuity contract: The group annuity contract asset class primarily invests in equities, corporate bonds and government bonds. The fair values of securities listed or quoted on a national securities exchange or market, or traded in the over-the-counter market, are valued at the closing quotation posted by that exchange or trading system. Securities not listed or quoted on a national securities exchange or market are valued primarily through observable market information or broker quotes. The Company classifies group annuity contract investments within Level 2 of the fair value hierarchy.

Cash and cash equivalents: Cash and cash equivalents are measured at cost, which approximates fair value. The Company classifies cash and cash equivalents within Level 1 of the fair value hierarchy.


F-44F-46
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The fair values of the Company's U.S. and International pension plan assets at December 31, 20152017 by asset category were as follows:
Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) 
Significant Unobservable Inputs
 (Level 3)
Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) 
Significant Unobservable Inputs
 (Level 3)
Common and Preferred Stock:              
U.S. small/mid cap equity$14.6
 $14.6
 $—
 $—
$18.3
 $18.3
 $—
 $—
Mutual Funds(a):
              
Corporate bonds14.9
 14.9
 —
 —
17.7
 17.7
 —
 —
Government bonds12.9
 12.9
 —
 —
8.4
 8.4
 —
 —
U.S. large cap equity0.7
 0.7
 —
 —
0.1
 0.1
 —
 —
International equities3.0
 3.0
 —
 —
3.8
 3.8
 —
 —
Emerging markets international equity5.1
 5.1
 —
 —
7.4
 7.4
 —
 —
Other2.0
 2.0
 —
 —
4.5
 4.5
 —
 —
Fixed Income Securities:              
Corporate bonds41.7
 —
 41.7
 —
46.7
 —
 46.7
 —
Government bonds6.9
 —
 6.9
 —
15.4
 —
 15.4
 —
Common and Collective Funds(a):
              
Corporate bonds61.5
 —
 61.5
 —
51.5
 42.3
 9.2
 —
Government bonds56.8
 —
 56.8
 —
55.3
 44.1
 11.2
 —
U.S. large cap equity71.9
 —
 71.9
 —
78.6
 68.7
 9.9
 —
U.S. small/mid cap equity15.5
 —
 15.5
 —
16.1
 16.1
 —
 —
International equities77.8
 —
 77.8
 —
77.9
 42.8
 35.1
 —
Emerging markets international equity14.5
 —
 14.5
 —
18.9
 12.8
 6.1
 —
Cash and cash equivalents(0.8) 0.3
 (1.1) —
13.0
 13.0
 —
 —
Other5.5
 —
 5.5
 —
6.6
 1.8
 4.8
 —
Hedge Funds(a):
              
Corporate bonds3.8
 —
 3.8
 —
10.3
 —
 10.3
 —
Government bonds8.6
 —
 8.6
 —
0.7
 —
 0.7
 —
U.S. large cap equity3.8
 —
 3.8
 —
1.2
 —
 1.2
 —
Cash and cash equivalents4.6
 —
 4.6
 —
3.3
 3.3
 —
 —
Other32.1
 —
 32.1
 —
Other (b)
33.3
 —
 33.3
 —
Group Annuity Contract2.8
 —
 2.8
 —
—
 —
 —
 —
Cash and cash equivalents13.7
 13.7
 —
 —
8.2
 8.2
 —
 —
Fair value of plan assets at December 31, 2015$473.9
 $67.2
 $406.7
 $—
Fair value of plan assets at December 31, 2017$497.2
 $313.3
 $183.9
 $—
(a) 
The investments in mutual funds, common and collective funds and hedge funds are disclosed above within the respective underlying investments’ class (i.e., various equities, corporate bonds, government bonds and other investment classes), while the fair value hierarchy levels of the investments are based on the Company’s direct ownership unit of account.

(b)
Comprised of investments in equities, fixed income instruments, currencies, derivatives and/or commodities.





F-45F-47
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The fair values of the Company's U.S. and International pension plan assets at December 31, 20142016 by asset category were as follows:
Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) 
Significant Unobservable Inputs
 (Level 3)
Common and Preferred Stock:              
U.S. small/mid cap equity$20.5
 $20.5
 $—
 $—
$15.5
 $15.5
 $—
 $—
Mutual Funds(a):
              
Corporate bonds17.5
 17.5
 —
 —
14.3
 14.3
 —
 —
Government bonds13.6
 13.6
 —
 —
11.9
 11.9
 —
 —
U.S. large cap equity68.5
 68.5
 —
 —
0.1
 0.1
 —
 —
International equities7.3
 7.3
 —
 —
3.9
 3.9
 —
 —
Emerging markets international equity6.1
 6.1
 —
 —
6.3
 6.3
 —
 —
Other3.1
 3.1
 —
 —
3.0
 3.0
 —
 —
Fixed Income Securities:              
Corporate bonds55.0
 —
 55.0
 —
41.0
 —
 41.0
 —
Government bonds10.9
 —
 10.9
 —
13.9
 —
 13.9
 —
Common and Collective Funds(a):
              
Corporate bonds75.4
 —
 75.4
 —
56.0
 54.3
 1.7
 —
Government bonds60.0
 —
 60.0
 —
68.4
 57.0
 11.4
 —
U.S. large cap equity24.3
 —
 24.3
 —
68.8
 67.5
 1.3
 —
U.S. small/mid cap equity21.0
 —
 21.0
 —
20.0
 20.0
 —
 —
International equities89.9
 —
 89.9
 —
67.0
 34.9
 32.1
 —
Emerging markets international equity17.6
 —
 17.6
 —
15.3
 9.4
 5.9
 —
Cash and cash equivalents3.7
 —
 3.7
 —
4.8
 4.8
 —
 —
Other3.1
 —
 3.1
 —
(7.2) (10.3) 3.1
 —
Hedge Funds(a):
              
Corporate bonds6.8
 —
 6.8
 —
4.5
 —
 4.5
 —
Government bonds(8.8) —
 (8.8) —
6.5
 —
 6.5
 —
U.S. large cap equity9.1
 —
 9.1
 —
2.1
 —
 2.1
 —
International equities15.9
 —
 15.9
 —
Emerging markets international equity4.1
 —
 4.1
 —
Cash and cash equivalents26.8
 —
 26.8
 —
2.4
 —
 2.4
 —
Other4.2
 —
 4.2
 —
Other(b)
31.9
 —
 31.9
 —
Group Annuity Contract2.8
 —
 2.8
 —
3.0
 —
 3.0
 —
Cash and cash equivalents9.3
 9.3
 —
 —
10.6
 10.6
 —
 —
Fair value of plan assets at December 31, 2014$567.7
 $145.9
 $421.8
 $—
Fair value of plan assets at December 31, 2016$464.0
 $303.2
 $160.8
 $—
(a) 
The investments in mutual funds, common and collective funds and hedge funds are disclosed above within the respective underlying investments’ class (i.e., various equities, corporate bonds, government bonds and other investment classes), while the fair value hierarchy levels of the investments are based on the Company’s direct ownership unit of account.
(b)
Comprised of investments in equities, fixed income instruments, currencies, derivatives and/or commodities.




F-46F-48
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

There were no transfers into or out of Level 3 assets in the Company's U.S. and International pension plan's fair value hierarchy during 2015. The following table sets forth a summary of changes in the fair values of the Company's U.S. and International pension plans’ Level 3 assets for 2014:
 Total Fixed Income Securities Hedge Funds
Balance, January 1, 2014$1.9
 $1.9
 $—
Purchases, sales, and settlements, net(0.5) (0.5) —
Transfers out of Level 3(1.4) (1.4) —
Balance, December 31, 2014$—
 $—
 $—
The amount transferred out of Level 3 in the fair value hierarchy during 2014 relates to certain U.S. pension plan investments in South American government bonds. During 2014, observable market information became available for these plan assets and as a result, the assets have been categorized as Level 2 within the hierarchy. The U.S. pension plan did not realize any material gains2017 or losses related to these investments during 20142016.
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 2015, $17.32017, $7.6 million and $0.8$0.9 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During 2016,2018, the Company expects to contribute approximately $20$10 million in the aggregate to its pension and other post-retirement benefit plans.
Estimated Future Benefit Payments:
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid out of the Company’s pension and other post-retirement benefit plans:
Total Pension Benefits Total Other BenefitsTotal Pension Benefits Total Other Benefits
2016$41.7
 $1.0
201741.6
 1.0
201842.1
 1.0
$46.9
 $1.2
201942.4
 1.0
43.6
 1.2
202042.9
 1.0
45.3
 1.2
Years 2021 to 2025212.4
 4.9
202142.7
 1.2
202243.0
 1.2
Years 2023 to 2027202.6
 5.1



15. STOCK COMPENSATION PLAN
Revlon Inc. maintains the Fourth Amended and Restated Revlon, Inc. Stock Plan (the "Stock Plan"), which provides for awards of stock options, stock appreciation rights, restricted or unrestricted stock and restricted stock units to eligible employees and directors of Revlon Inc. and its affiliates, including Products Corporation. An aggregate of 6,565,000 shares arewere reserved for issuance as Awards under the Stock Plan, subject to the adjustment provisions of the Stock Plan. Aswhich there remained approximately 3.4 million shares available as of December 31, 2015, there were approximately 3.8 million shares remaining available under the Stock Plan2017 for grant as stock options, stock appreciation rights, restricted or unrestricted stock and/or restricted stock units. In July 2014, the Stock Plan was amended to renew the Stock Plan for a 7-year renewal term expiring on April 14, 2021.

Stock options:
Non-qualified stock options granted under the Stock Plan, if granted, are granted at prices that equal or exceed the fair market value of Class A Common Stock on the grant date and have a term of 7 years. Option grants generally vest over service periods that range from 1 year to 4 years.
At December 31, 2017, 2016 and 2015, there were no options exercisable under the Stock Plan and there was no stock option activity for 2017, 2016 and 2015.
Restricted stock awards and restricted stock units:
The Stock Plan allows for awards of restricted stock and restricted stock units to employees and directors of Revlon and its affiliates, including Products Corporation. The restricted stock awards granted under the Stock Plan vest over service periods that generally range from 2 years to 5 years. The Company granted 853,111 shares of restricted stock to certain executives in during 2017, which vest over a range of 2 years to 5 years, with the first tranche of such grants having vested in April 2017. The Company granted 125,540 shares of restricted stock to certain executives in 2016, which vest over a range of 3 years to 4 years, with the first tranche having vested in March 2016. The Company granted 220,635 shares of restricted stock to certain executives in 2015, which vest over a range of 4 years to 5 years, with the first tranche of such grants having vested in March 2016.
Pursuant to the Company’s employment agreement with Mr. Fabian Garcia, the Company’s President and Chief Executive Officer, on April 15, 2017 (the "Garcia Grant Date"), Revlon granted to Mr. Garcia 270,489 restricted shares of Revlon Class A Common Stock (the "Garcia Restricted Stock Grant"), being the number of shares equal to $10 million divided by the $36.97 NYSE closing price of Revlon Class A Common Stock on the April 15, 2016 commencement date of his employment (the "Garcia Effective Date"). One-fifth of the Garcia Restricted Stock Grant vested on the Garcia Grant Date (provided that the Company withheld 30,197 shares for the payment of withholding taxes due upon such vesting event pursuant to the terms of the Stock Plan).

F-47F-49
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

At December 31, 2015 and 2014, there were no options exercisable underPursuant to the terms of his separation agreement, dated January 29, 2018, the remaining four-fifths of the Garcia Restricted Stock Plan, and 800 exercisable at December 31, 2013.Grant will vest in full during March 2018. See Note 24, "Subsequent Events" for more information.
There was no stock option activity for 2015.Pursuant to the Company's employment agreement with Mr. Christopher Peterson, the Company's Chief Operating Officer, Operations & Principal Financial Officer, on April 17, 2017 (the "Peterson Grant Date"), Revlon granted Mr. Peterson 192,307 restricted shares of Revlon Class A summaryCommon Stock (the "Peterson Restricted Stock Grant"), being the number of stock option activity forshares equal to $5,000,000 divided by the $26.00 NYSE closing price of Revlon Class A Common Stock on the April 17, 2017 commencement date of his employment (the "Peterson Effective Date"). One-fifth of the Restricted Stock Grant will vest on each of 2014 and 2013 is presented below:
 Stock Options (000's) Weighted Average Exercise Price
Outstanding at January 1, 20138.1
 $29.91
Forfeited and expired(7.3) 30.17
Outstanding at January 1, 20140.8
 27.50
Forfeited and expired(0.8) 27.50
Outstanding at December 31, 2014—
 —

Restricted stock awards and restricted stock units:
The Stock Plan allows for awards of restricted stock and restricted stock units to employees and directors of Revlon, Inc. and its affiliates, including Products Corporation. The restricted stock awards granted under the Stock Plan vest over service periods that generally range from 3 years to 5 years. The Company granted 75,551 and 145,084 shares of restricted stock to certain executives in February 2015 and December 2015, respectively, which vest over a 5-year and 4-year period, respectively, with the first tranche vesting in March 2016. In 2014,5 anniversaries of the Company granted 693,378 shares of restricted stock to certain executives that vest over a 5-year period, which commenced in March 2015. In October 2013, the Company granted 120,000 shares of restricted common stock with a 3-year vesting period to an executive who ceased employmentPeterson Effective Date, so long as Mr. Peterson remains employed with the Company during 2014, with the final 40,000 shareson each applicable vesting in October 2016.date, subject to certain earlier payment or vesting provisions.
A summary of the restricted stock and restricted stock unit activity for each of 2015, 20142017, 2016 and 20132015 is presented in the following table:
Restricted Stock (000's) Weighted Average Grant Date Fair ValueRestricted Stock (000's) Weighted Average Grant Date Fair Value Per Share
Outstanding at January 1, 2013—
 $—
Granted120.0
 24.80
Outstanding at December 31, 2013120.0
 24.80
Granted693.4
 31.01
Vested(a)
(40.0) 24.80
Outstanding at December 31, 2014773.4
 30.37
Outstanding at January 1, 2015773.4
 $30.37
Granted220.6
 29.46
220.6
 29.46
Vested(a)
(171.7) 29.09
(171.7) 29.09
Forfeited(57.5) 30.44
(57.5) 30.44
Outstanding at December 31, 2015764.8
 30.39
764.8
 30.39
Granted125.5
 31.86
Vested(a)
(221.7) 29.51
Forfeited(257.6) 31.05
Outstanding at December 31, 2016(b)
411.0
 30.78
Granted853.1
 30.94
Vested(a)
(216.0) 32.63
Forfeited(253.1) 32.60
Outstanding at December 31, 2017795.0
 29.87

(a) 
Of the amounts vested during 2017, 2016 and 2015, 89,620, 92,092 and 2014, 82,740, and 22,328 shares, respectively, were withheld by the Company to satisfy certain grantees’ minimum withholding tax requirements, which withheld shares became Revlon Inc. treasury stock and are not sold on the open market. (See discussion under “Treasury Stock”"Treasury Stock" in Note 18, “Stockholders’ Deficiency”"Stockholders' Deficiency").

The Company recognizes non-cash compensation expense related to restricted stock awards and restricted stock units under the Stock Plan using the straight-line method over the remaining service period. The Company recorded compensation expense related to restricted stock awards under the Stock Plan of $6.8 million, $6.4 million and $5.1 million $5.5 millionduring 2017, 2016 and $0.2 million during 2015, 2014 and 2013, respectively. The total fair value of restricted stock and restricted stock units that vested during 20152017 and 20142016 was $5.0$7 million and $1.0$6.5 million, respectively. The deferred stock-based compensation related to restricted stock awards was $18.4$19.4 million at December 31, 20152017 and will be amortized ratably to compensation expense over thea weighted-average remaining vesting period of 3.43.25 years.




F-48F-50
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

16. INCOME TAXES
The Company's income before income taxes and the applicable provision for income taxes are as follows:
Year Ended December 31,Year Ended December 31,
2015 2014 20132017 2016 2015
Income (loss) from continuing operations before income taxes:     
(Loss) income from continuing operations before income taxes:     
United States$114.4
 $137.1
 $26.0
$(190.7) $4.2
 $114.4
Foreign(3.7) (19.7) 44.6
27.2
 4.3
 (3.7)
$110.7
 $117.4
 $70.6
$(163.5) $8.5
 $110.7
Provision for (benefit from) income taxes:     
Provision for income taxes:     
United States federal$37.7
 $54.6
 $24.8
$7.0
 $7.6
 $37.7
State and local16.9
 18.1
 13.8
9.0
 2.3
 16.9
Foreign(3.2) 5.1
 7.4
5.8
 15.6
 (3.2)
$51.4
 $77.8
 $46.0
$21.8
 $25.5
 $51.4
Current:          
United States federal$(2.7) $2.6
 $3.2
$(20.2) $9.0
 $(2.7)
State and local4.1
 3.7
 0.7
1.9
 2.5
 4.1
Foreign21.7
 7.2
 11.3
17.5
 20.2
 21.7
23.1
 13.5
 15.2
(0.8) 31.7
 23.1
Deferred:          
United States federal40.4
 52.0
 21.6
$27.2
 $(1.4) $40.4
State and local12.8
 14.4
 13.1
7.1
 (0.2) 12.8
Foreign(24.9) (2.1) (3.9)(11.7) (4.6) (24.9)
28.3
 64.3
 30.8
$22.6
 $(6.2) $28.3
Total provision for income taxes$51.4
 $77.8
 $46.0
$21.8
 $25.5
 $51.4
The actual tax on income before income taxes is reconciled to the applicable statutory federal income tax rate in the following table:
 Year Ended December 31,
 2015 2014 2013
Computed income tax expense$38.8
 $41.1
 $24.7
State and local taxes, net of U.S. federal income tax benefit11.1
 19.9
 8.9
Foreign and U.S. tax effects attributable to operations outside the U.S.13.6
 5.8
 (6.2)
Net establishment (release) of valuation allowance(15.5) 6.4
 —
Foreign dividends and earnings taxable in the U.S.3.2
 5.4
 11.0
Acquisition costs for which there is no tax benefit—
 —
 2.7
Other0.2
 (0.8) 4.9
Tax expense$51.4
 $77.8
 $46.0







F-49
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Deferred taxes are the result of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities at December 31, 2015 and 2014 were comprised of the following:
 December 31,
 2015 2014
Deferred tax assets:   
Inventories$7.3
 $7.6
Net operating loss carryforwards - U.S.47.2
 94.1
Net operating loss carryforwards - foreign51.4
 57.9
Employee benefits96.7
 100.7
State and local taxes—
 2.7
Sales related reserves25.8
 26.2
Foreign currency translation adjustment11.0
 3.9
Other52.7
 46.1
Total gross deferred tax assets292.1
 339.2
Less valuation allowance(47.1) (57.1)
Total deferred tax assets, net of valuation allowance245.0
 282.1
Deferred tax liabilities:   
Plant, equipment and other assets(29.9) (30.0)
Intangibles(82.4) (88.0)
Other(63.2) (55.3)
Total gross deferred tax liabilities(175.5) (173.3)
Net deferred tax assets$69.5
 $108.8
In assessing the recoverability of its deferred tax assets, management regularly considers whether some portion or all of the deferred tax assets will not be realized based on the recognition threshold and measurement of a tax position. The ultimate realization of deferred tax assets is generally dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
A valuation allowance has been provided for those deferred tax assets for which, in the opinion of the Company's management, it is more likely than not that the deferred tax assets will not be realized. At December 31, 2015, the deferred tax valuation allowance primarily represented amounts for foreign tax loss carryforwards and certain U.S. state and local tax loss carryforwards. The deferred tax valuation allowance decreased by $10.0 million and $4.6 million during 2015 and 2014, respectively. The decrease in the deferred tax valuation allowance during 2015 was primarily due to a reduction of the Company's valuation allowance on deferred tax assets of jurisdictions outside of the U.S., offset by additional valuation allowances on losses incurred in certain jurisdictions. The decrease in the deferred tax valuation allowance during 2014 was primarily due to foreign currency translation and the amalgamation of certain foreign subsidiaries, partially offset by the establishment of a valuation allowance against certain deferred tax assets in the Professional segment during 2014.
As of December 31, 2015, the Company has tax loss carryforwards of approximately $288.9 million, of which $219.4 million are foreign and $69.5 million are domestic (federal). The losses expire in future years as follows: 2016- $2.1 million; 2017- $8.2 million; 2018- $26.1 million; 2019 and beyond- $84.3 million; and unlimited- $168.2 million. The Company could receive the benefit of such tax loss carryforwards only to the extent it has taxable income during the carryforward periods in the applicable tax jurisdictions. As of December 31, 2015, there were no consolidated federal net operating losses available from the MacAndrews & Forbes Group (as hereinafter defined) from periods prior to the March 25, 2004 deconsolidation (as described below).
The Company remains subject to examination of its income tax returns in various jurisdictions including, without limitation: Australia, Canada and Spain for tax years ended December 31, 2011 through December 31, 2014; South Africa, the U.K. and the U.S. (federal) for tax years ended December 31, 2012 through December 31, 2014. The Company classifies interest and penalties as a component of the provision for income taxes. During 2015 and 2014, theThe Company recognized in the Consolidated Statements of Income (Loss)Operations and Comprehensive (Loss) Income (Loss) decreasesa benefit of $1.6 million and $1.0 million during 2017 and $0.92015, respectively, and an expense of $0.3 million respectively,during 2016 in accrued interest and penalties.

F-50
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

At December 31, 2015 and 2014, the Company had unrecognized tax benefits of $65.0 million and $62.0 million, respectively, including $10.3 million and $11.3 million, respectively, of accrued interest and penalties. The unrecognized tax benefits, to the extent reduced and unutilized in future periods, would generally affect the Company’s effective tax rate. A reconciliation of the beginning and ending amount of the unrecognized tax benefits is provided in the following table:
Balance at January 1, 2014$74.5
Increase based on tax positions taken in a prior year12.6
Decrease based on tax positions taken in a prior year(22.8)
Increase based on tax positions taken in the current year8.0
Decrease resulting from the lapse of statutes of limitations(10.3)
Balance at December 31, 201462.0
Increase based on tax positions taken in a prior year5.6
Decrease based on tax positions taken in a prior year(5.8)
Increase based on tax positions taken in the current year8.5
Decrease resulting from the lapse of statutes of limitations(5.3)
Balance at December 31, 2015$65.0
In addition, the Company believes that it is reasonably possible that its unrecognized tax benefits during 2016 will decrease by approximately $1.1 million as a result of changes in various tax positions, each of which is individually insignificant.
The Company has not provided for U.S. federal income taxes and foreign withholding taxes on $52.5$353.7 million of foreign subsidiaries' cumulative undistributed earnings as of December 31, 20152017 because such earnings are intended to be indefinitely reinvested overseas. If these futureforeign earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in a future period, additional tax provisions may be required. Due to the complexities in the tax laws, including the implications of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), which is discussed below, and the assumptions that would have to be made, it is not practicable to estimate the amounts of income tax provisions that may be required.required on account of these foreign undistributed earnings.

F-51
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The actual tax on income before income taxes is reconciled to the applicable statutory federal income tax rate in the following table:
 Year Ended December 31,
 2017 2016 2015
Computed income tax (benefit) expense$(57.2) $3.0
 $38.8
State and local taxes, net of U.S. federal income tax benefit6.1
 1.8
 11.1
Foreign and U.S. tax effects attributable to operations outside the U.S.(6.5) 3.1
 13.6
Net establishment (release) of valuation allowance(1.2) 2.0
 (15.5)
Foreign dividends and earnings taxable in the U.S.1.8
 1.7
 3.2
Impairment for which there is no tax benefit0.4
 8.9
 —
Tax effect of basis reclassification23.7
 —
 —
Impact of the Tax Act (a)
47.9
 —
 —
Other6.8
 5.0
 0.2
Total provision for income taxes$21.8
 $25.5
 $51.4
(a) Refer to the discussion that follows.

On December 22, 2017, with the enactment of the Tax Act, the U.S. government enacted comprehensive tax reform that makes broad and complex changes to the U.S. tax code affecting the Company’s fiscal year ended December 31, 2017, by, among other things:
reducing the U.S. federal corporate tax rate;
requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; and
imposing a new limitation on the deductibility of interest.

The impact of those changes to the Company's December 31, 2017 fiscal year is estimated to be a non-cash expense of $47.9 million.

The Tax Act also establishes other new tax laws that could affect the Company in future years, including, but not limited to:
a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
a new provision designed to tax global intangible low-taxed income ("GILTI");
increased limitations on the deductibility of certain executive compensation; and
changes to net operating loss carryforward periods and annual utilization.

The SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cut and Jobs Act ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides that companies are required to complete their accounting under ASC 740, “Income Taxes” ("ASC 740") over a measurement period that should not extend beyond one year from the Tax Act enactment date. In accordance with SAB 118, companies must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete in its financial statements for the fiscal period ended December 31, 2017. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete at the time such financial statements are filed, but it is able to determine a reasonable estimate for the income tax effects of the Tax Act, it must record a provisional estimate of such effects in its financial statements for the fiscal period ended December 31, 2017. If a company cannot determine a provisional estimate to be included in its financial statements for the fiscal period ended December 31, 2017, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

For various reasons that are discussed in greater detail below, the Company has not completed its accounting for the income tax effects of certain elements of the Tax Act. The Company recorded provisional adjustments in cases where the Company was able to make reasonable estimates of the effects of elements of the Tax Act for which its analysis is not yet complete. The Company has not recorded any adjustments for elements of the Tax Act for which the Company was not yet able to make reasonable estimates of the impact of those elements, and has continued accounting for such elements in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act.


F-52
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The Company's accounting for the following elements of the Tax Act is incomplete. However, the Company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments of $47.9 million, which reflect the Company's initial estimate of the following impacts of the Tax Act:

Reduction of U.S. federal corporate tax rate: As a result of enactment of the Tax Act, the Company reduced the carrying value of its federal deferred tax assets to reflect reduction from 35% to 21% in the federal tax rate applicable for future periods. This resulted in a one-time, non-cash charge of $47.9 million, with $30.3 million relating to deferred balances carried as of January 1, 2017 and the remaining $17.6 million related to the deferred activity in the year ended December 31, 2017.

Transition Tax: The Company has estimated that is has a net deficit in its non-U.S. earnings subject to the transition tax, so the Company does not have a liability for this tax. As such, no provision was recorded for the transition tax.

Limitation on the deductibility of interest: Starting in 2018, the Tax Act limits the Company's deduction for interest to:
interest income plus 30% of taxable income before interest, tax, depreciation and amortization for years through 2021; and
•interest income plus 30% of taxable income before interest and taxes for years 2022 and thereafter.

Any reduction in deductible interest in any year can be carried forward indefinitely and added to the potential interest deduction in subsequent years. While the Company's deduction for interest expense may be limited in future periods, the Company has estimated that this has no impact on its deferred assets and liability balances as of December 31, 2017. In assessing the Company's need for a valuation allowance as of December 31, 2017, the Company did account for the reduced interest deduction in future periods when the Company scheduled the utilization of deferred assets in future periods.

While the Company has been able to come to an estimate for the above items, amounts included in the tax expense and the associated balance sheet accounts (and related disclosures) are provisional and are subject to modification within the period provided for in SAB 118.

The Company's accounting for the following elements of the Tax Act is incomplete, and the Company was not able to make reasonable estimates of the effects. Therefore, no provisional adjustments were recorded for the following elements:

Accounting Principles Board ("APB") 23 Indefinite Reinvestment Assertion: The Company is in the process of assessing the impact of the Tax Act on its indefinite reinvestment assertion and any associated impact on its financial statements. This assessment includes, but is not limited to, assessing how the Tax Act will impact the consequence of indefinitely reinvesting the Company's foreign earnings and evaluating how the Company having no liability for the transition tax will impact the taxability of future repatriations. Therefore, no adjustments have been made in the Company's financial statements with respect to its indefinite reinvestment assertion.

GILTI: The Tax Act creates a new requirement that certain income earned by controlled foreign corporations ("CFC") must be included currently in the gross income of the CFC's U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of: (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder; over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company will not be subject to the GILTI provisions until 2018.

Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either: (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”); or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing the Company's global income to determine whether the Company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends not only on the Company's current structure and estimated future results of global operations, but also on the Company’s intent and ability to modify its structure and/or its business, the Company is not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, the Company has not made any adjustments related to the GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI, or to include the tax impact in the year it arises.


F-53
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Executive Compensation Limitation: The Tax Act expands the definition under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) of covered employee and provides that the status as a covered employee continues for all subsequent tax years, including years after the death of the individual, and, among other modifications, repeals the exception for performance-based compensation and commissions from the $1 million deduction limitation, subject to certain transitional "grandfathering" provisions. The Tax Act's transitional guidance allows certain payments made under written and binding agreements entered into prior to November 2, 2017 to be treated as if they were made under the provisions of Section 162(m) that were in effect prior to enactment of the Tax Act. The Company is in the process of gathering information on existing compensation arrangements for covered employees, as well as assessing the impact of transitional guidance on the realizability of existing deferred tax assets related to compensation arrangements of its covered employees. As a result, the Company has not made any adjustments related to impacts of the new executive compensation limitations in its financial statements.

Net Operating Loss Carryforward rules: The Company has $519.3 million of federal net operating loss carryforwards as of December 31, 2017. These carryforwards have a life of up to 20 years and can be used to reduce the Company's federal taxable income to zero, potentially eliminating any federal income tax liability for the periods in which they are used. If the Company was to incur a federal net operating loss in 2018 or a subsequent year, such losses would have an unlimited carryforward period, but they would only be available to offset 80% of the taxable income of the Company in any given year.

Deferred taxes are the result of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes. The Company's deferred tax assets and liabilities at December 31, 2017 and 2016 were comprised of the following:
 December 31,
 2017 2016
Deferred tax assets:   
Inventories$21.2
 $30.9
Net operating loss carryforwards - U.S.161.0
 140.4
Net operating loss carryforwards - foreign47.0
 50.5
Employee benefits54.5
 91.7
Sales-related reserves19.1
 23.9
Foreign currency translation adjustment10.3
 9.9
Other67.6
 89.4
Total gross deferred tax assets380.7
 436.7
Less valuation allowance(90.7) (81.4)
Total deferred tax assets, net of valuation allowance290.0
 355.3
Deferred tax liabilities:   
Plant, equipment and other assets(21.7) (26.0)
Intangibles(95.0) (132.4)
Other(36.0) (57.6)
Total gross deferred tax liabilities(152.7) (216.0)
Net deferred tax assets$137.3
 $139.3
In assessing the recoverability of its deferred tax assets, management regularly considers whether for some portion or all of the deferred tax assets it was more likely than not that a benefit will not be realized for these assets. The ultimate realization of deferred tax assets is generally dependent upon the generation of future taxable income during the periods in which those temporary differences may become deductible. In assessing the need for a valuation allowance, management evaluates the available pertinent positive and negative evidence, such as the Company's history of earnings, the scheduled reversal of deferred tax assets and liabilities, projected earnings, and income and available tax planning strategies.
A valuation allowance has been provided for those deferred tax assets for which, in the opinion of the Company's management, it was more likely than not that a benefit will not be realized. At December 31, 2017, the deferred tax valuation allowance primarily represented amounts for foreign jurisdictions where, as of the end of 2017, the Company had a three-year cumulative loss, and for certain U.S. jurisdictions where the Company had tax loss carryforwards and other tax attributes which may expire prior to being utilized. The deferred tax valuation allowance increased by $9.3 million and $34.3 million during 2017 and 2016, respectively.

F-54
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

The increase in the deferred tax valuation allowance during 2017 was primarily associated with state tax loss carryforwards for which the Company has determined it is more likely than not that it will not receive a benefit. The increase in the deferred tax valuation allowance during 2016 was primarily associated with deferred taxes added as a result of the Elizabeth Arden Acquisition, the majority of which were established through purchase accounting.
As of December 31, 2017, the Company has domestic (federal) and foreign net operating loss carryforwards of $727.9 million, of which $208.6 million are foreign and $519.3 million are domestic (federal). These losses expire in future years as follows: 2018- $0.1 million; 2019- $1.2 million; 2020- $1.0 million; 2021 and beyond- $533.4 million; and unlimited- $192.2 million. The Company also has state net operating loss carryforwards that expire between 2018 and 2036. The Company could receive the benefit of such tax loss carryforwards only to the extent it has taxable income during the carryforward periods in the applicable tax jurisdictions. As of December 31, 2017, there were no consolidated federal net operating losses available from the MacAndrews & Forbes Group (as hereinafter defined) from periods prior to the March 25, 2004 deconsolidation (as described below). The Company has acquired entities that had carryforward balances for tax losses, tax credits and other tax attributes at the time of the acquisition. U.S. federal and certain state and foreign jurisdictions impose limitations on the amount of these tax losses, tax credits and other carryforward balances that may be utilized after an acquisition. The Company has evaluated the impact of these limitations and has established a valuation allowance to reduce the deferred tax assets to the amount that the Company expects will be realized.
The Company remains subject to examination of its income tax returns in various jurisdictions, including, without limitation: Spain for the tax years ended December 31, 2007 and forward; the U.S. (federal) for the tax years ended June 30, 2010 and forward; Canada for the tax years ended December 31, 2010 and forward; Australia for the tax years ended December 31, 2013 and forward; Switzerland for the tax years ended June 30, 2014 and forward; and South Africa and the U.K. for the tax years ended December 31, 2014 and forward.
At December 31, 2017 and 2016, the Company had unrecognized tax benefits of $84.9 million and $93.3 million, respectively, including $9 million and $10.6 million, respectively, of accrued interest and penalties. Of the $84.9 million of unrecognized tax benefits as of December 31, 2017, $48.4 million would affect the Company's effective tax rate, if recognized, and the remaining $36.5 million would affect the Company's deferred tax accounts. A reconciliation of the beginning and ending amounts of the unrecognized tax benefits is provided in the following table:
 Tax Interest and Penalties Total
Balance at January 1, 2016$54.7
 $10.3
 $65.0
Increase based on tax positions taken in a prior year24.4
 1.5
 25.9
Decrease based on tax positions taken in a prior year(1.2) (0.1) (1.3)
Increase based on tax positions taken in the current year9.1
 0.2
 9.3
Decrease resulting from the lapse of statutes of limitations(4.3) (1.3) (5.6)
Balance at December 31, 201682.7
 10.6
 93.3
Increase based on tax positions taken in a prior year9.1
 1.5
 10.6
Decrease based on tax positions taken in a prior year (a)
(19.6) (1.5) (21.1)
Increase based on tax positions taken in the current year11.0
 0.2
 11.2
Decrease resulting from the lapse of statutes of limitations(7.3) (1.8) (9.1)
Balance at December 31, 2017$75.9
 $9.0
 $84.9
(a)
Includes a provisional amount for the expected impact of the Tax Act on the Company’s unrecognized tax benefits.
In addition, the Company believes that it is reasonably possible that its unrecognized tax benefits during 2018 will decrease by approximately $6.4 million due to the resolution of audits and the expiration of statutes of limitation.
As a result of the closing of the 2004 Revlon Exchange Transactions (as hereinafter defined in Note 22, “Related"Related Party Transactions - Tax Sharing Agreements”Agreements"), as of March 25, 2004, Revlon, Inc., Products Corporation and their U.S. subsidiaries were no longer included in the affiliated group of which MacAndrews & Forbes was the common parent (the “MacAndrews"MacAndrews & Forbes Group”Group") for federal income tax purposes. Revlon Holdings (as hereinafter defined in Note 22, “Related"Related Party Transactions - Transfer Agreements”Agreements"), Revlon, Inc., Products Corporation and certain of its subsidiaries, and MacAndrews & Forbes Incorporated entered into a tax sharing agreement (as subsequently amended and restated, the "MacAndrews & Forbes Tax Sharing Agreement"), for taxable periods beginning on or after January 1, 1992 through and including March 25, 2004, during which Revlon Inc. and Products Corporation or a subsidiary of Products Corporation was a member of the MacAndrews & Forbes Group. In these taxable periods, Revlon, Inc.'sRevlon's and Products Corporation's federal taxable income and loss were included in such group's consolidated tax return filed by MacAndrews & Forbes Incorporated. During such period, Revlon Inc. and Products Corporation were also included in certain state

F-55
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

and local tax returns of MacAndrews & Forbes Incorporated or its subsidiaries. Revlon Inc. and Products Corporation remain liable under the MacAndrews & Forbes Tax Sharing Agreement for all such taxable periods through and including March 25, 2004 for amounts determined to be due as a result of a redetermination arising from an audit or otherwise, equal to the taxes that Revlon Inc. or Products Corporation would otherwise have had to pay if it were to have filed separate federal, state or local income tax returns for such periods.
MacAndrews & Forbes’ current ownership does not require the Company to file a U.S. federal consolidated tax return with them. However, in certain U.S. states and in certain foreign jurisdictions the Company is required to file consolidated, combined, unitary or similar returns. The liability for these state and local liabilities is also governed by the MacAndrews & Forbes Tax Sharing Agreement. The Company accounts for its tax liabilities in these jurisdictions as if it were a separate filer, and the Company's tax accounts are presented as if it were a separate filer. During 2017, the Company's cash tax payments included $2.8 million of payments made to MacAndrews & Forbes in connection with these filings, and the Company's ending tax liability, which is a component of other current liabilities, included $0.9 million related to future payments to be made to MacAndrews & Forbes in connection with these filings.
Following the closing of the 2004 Revlon Exchange Transactions, Revlon Inc. became the parent of a new consolidated group for federal income tax purposes and Products Corporation's federal taxable income and loss are included in such group's consolidated tax returns. Accordingly, Revlon Inc. and Products Corporation entered into a tax sharing agreement (the "Revlon Tax Sharing Agreement") pursuant to which Products Corporation is required to pay to Revlon Inc. amounts equal to the taxes that Products Corporation would otherwise have had to pay if Products Corporation were to file separate federal, state or local income tax returns, limited to the amount, and payable only at such times, as Revlon Inc. will be required to make payments to the applicable taxing authorities.
There were no federal tax payments or payments in lieu of taxes from Revlon Inc. to Revlon Holdings pursuant to the MacAndrews & Forbes Tax Sharing Agreement in 20152017 or 20142016 with respect to periods covered by the MacAndrews & Forbes Tax Sharing Agreement, and the Company expects that there will not be any such payments in 2016.2018. During 2015,2017, there were no federal tax payments from Products Corporation to Revlon Inc. pursuant to the Revlon Tax Sharing Agreement with respect to 20152017 or 2014.2016. During 2014,2016, there was $0.3 million inwere no federal tax payments from Products Corporation to Revlon Inc. pursuant to the Revlon Tax Sharing Agreement with respect to 2014.2016 or 2015. The Company expects that there will be no federal tax payments from Products Corporation to Revlon Inc. pursuant to the Revlon Tax Sharing Agreement during 20162018 with respect to 2015.2017.

F-51
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Pursuant to the asset transfer agreement referred to in Note 22, “Related"Related Party Transactions - Transfer Agreements,”" Products Corporation assumed all tax liabilities of Revlon Holdings other than (i) certain income tax liabilities arising prior to January 1, 1992 to the extent such liabilities exceeded the reserves on Revlon Holdings' books as of January 1, 1992 or were not of the nature reserved for and (ii) other tax liabilities to the extent such liabilities are related to the business and assets retained by Revlon Holdings.



F-56
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

17. ACCUMULATED OTHER COMPREHENSIVE LOSS
The componentsA roll-forward of the Company's accumulated other comprehensive loss as of December 31, 2015, 2014 and 2013 areis as follows:
 Foreign Currency Translation Actuarial (Loss) Gain on Post-retirement Benefits Deferred Gain (Loss) - Hedging Other Accumulated Other Comprehensive Loss
Balance at January 1, 2013$23.3
 $(231.5) $—
 $—
 $(208.2)
Currency translation adjustment, net of tax of $3.3 million(4.1) —
 —
 —
 (4.1)
Amortization of pension related costs, net of tax of $(1.2) million(a)
—
 7.7
 —
 —
 7.7
Pension re-measurement, net of tax of $(33.5) million—
 53.3
 —
 —
 53.3
Revaluation of derivative financial instrument, net of tax of $(1.0) million(b)
—
 —
 1.5
 —
 1.5
Balance at December 31, 2013$19.2
 $(170.5) $1.5
 $—
 $(149.8)
Currency translation adjustment, net of tax of $2.1 million(24.6) —
 —
 —
 (24.6)
Amortization of pension related costs, net of tax of $(0.1) million(a)     
—
 4.5
 —
 —
 4.5
Pension re-measurement, net of tax of $42.0 million—
 (69.6) —
 —
 (69.6)
Revaluation of derivative financial instrument, net of tax of $2.3 million(b)
—
 —
 (3.7) —
 (3.7)
Other—
 0.3
 —
 (0.3) —
Balance at December 31, 2014$(5.4) $(235.3) $(2.2) $(0.3) $(243.2)
Currency translation adjustment, net of tax of $5.1 million$(18.1) 

 

 

 (18.1)
Amortization of pension related costs, net of tax of $(1.3) million(a)     


 $7.2
 

 

 7.2
Pension re-measurement, net of tax of $3.3 million

 $(6.9) 

 

 (6.9)
Settlement of certain pension liabilities, net of tax of $(3.7) million(b)


 $17.3
 $—
 

 17.3
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax benefit of $1.0 million(c)


 

 $(1.6) 

 (1.6)
Other comprehensive loss(18.1) 17.6
 (1.6) —
 (2.1)
Balance at December 31, 2015$(23.5) $(217.7) $(3.8) $(0.3) $(245.3)
 Foreign Currency Translation Actuarial (Loss) Gain on Post-retirement Benefits Deferred Gain (Loss) - Hedging Other Accumulated Other Comprehensive Loss
Balance at January 1, 2015$(5.4) $(235.6) $(2.2) $(0.3) $(243.2)
Currency translation adjustment, net of tax of $5.1 million(18.1) —
 —
 —
 (18.1)
Amortization of pension related costs, net of tax of $(1.3) million(a)     
—
 7.2
 —
 —
 7.2
Pension re-measurement, net of tax of $3.3 million—
 (6.9) —
 —
 (6.9)
Settlement of certain pension liabilities, net of tax of $(3.7) million(b)
—
 17.3
 —
 —
 17.3
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax of $1.0 million(c)
—
 —
 (1.6) —
 (1.6)
Other comprehensive (loss) income$(18.1) $17.6
 $(1.6) $—
 $(2.1)
Balance at December 31, 2015$(23.5) $(217.7) $(3.8) $(0.3) $(245.3)
Currency translation adjustment, net of tax of $(1.1) million(0.5) —
 —
 —
 (0.5)
Amortization of pension related costs, net of tax of $(1.3) million(a)     
—
 7.6
 —
 —
 7.6
Pension re-measurement, net of tax of $4.1 million—
 (14.3) —
 —
 (14.3)
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax of $(0.5) million(b)
—
 —
 0.8
 —
 0.8
Other comprehensive (loss) income$(0.5) $(6.7) $0.8
 $—
 $(6.4)
Balance at December 31, 2016$(24.0) $(224.4) $(3.0) $(0.3) $(251.7)
Currency translation adjustment, net of tax of $0.4 million9.0
 —
 —
 —
 9.0
Amortization of pension related costs, net of tax of $(1.6) million(a)
—
 8.1
 —
 —
 8.1
Pension re-measurement, net of tax of $0.3 million—
 1.8
 —
 —
 1.8
Amortization of deferred losses related to the de-designated 2013 Interest Rate Swap, net of tax of $1.4 million(c)
—
 —
 2.3
 —
 2.3
Curtailment gain, net of tax of $(0.3) million(d)
—
 2.1
 —
 —
 2.1
Other comprehensive income$9.0
 $12.0
 $2.3
 $—
 $23.3
Balance at December 31, 2017$(15.0) $(212.4) $(0.7) $(0.3) $(228.4)
(a) 
Amounts represent the change in Accumulated Other Comprehensive Lossaccumulated 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 14, “Savings Plan, Pension"Pension and Post-retirement Benefits,”" for further discussion of the Company’s pension and other post-retirement plans.
(b)
Represents the after-tax effective portion of the changes in fair value of the Company’s 2013 Interest Rate Swap, net of amounts reclassified into earnings during 2016 and 2015. See Note 13, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.

F-52F-57
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(b)
Amount primarily consists of the pension lump sum settlement charge, net of taxes, recorded during the fourth quarter of 2015. See Note 14, “Savings Plan, Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
(c) 
For the 2015, 2014 and 2013, the Company's 2013 Interest Rate Swap was deemed effective and therefore, the changes in fair value related to the 2013 Interest Rate Swap were recorded in other comprehensive income (loss). See Note 13,10, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.
(d)
As a result of the Elizabeth Arden Acquisition, the Company recognized $2.1 million in curtailment gains related to a foreign non-qualified defined benefit plan of Elizabeth Arden.
As shown above, other comprehensive lossincome includes changes in the fair value of the 2013 Interest Rate Swap which qualifies for hedge accounting. A rollforwardprior to the De-designation Date. Following is a roll-forward of the amounts reclassified out of accumulated other comprehensive loss into earnings as of December 31, 2015 are as follows:during 2017 and 2016:
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2014 (2.2)
Reclassifications into earnings (net of $1.0 million tax expense)(a)    
 1.6
Change in fair value (net of $2.0 million tax benefit) (3.2)
Ending accumulated losses at December 31, 2015 $(3.8)
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2015 $(3.8)
Reclassifications into earnings (net of $1.6 million tax expense)(a)
 2.7
Change in fair value (net of $1.1 million tax benefit) (1.9)
Ending accumulated losses at December 31, 2016 $(3.0)
Reclassifications into earnings (net of $1.4 million tax benefit)(a)
 2.3
Ending accumulated losses at December 31, 2017 $(0.7)
(a) 
Reclassified to interest expense.
There were no amounts reclassified into earnings during 2014 or 2013.


18. STOCKHOLDERS' DEFICIENCY
Information about the Company's common and treasury stock issued and/or outstanding is presented in the following table:
Common Stock  Class A Common Stock Treasury Stock
Class A Class B Treasury Stock
Balance, January 1, 201349,986,651
 3,125,000
 754,853
Conversion of Class B shares to Class A shares3,125,000
 (3,125,000) —
Restricted stock grants120,000
 —
 —
Balance, December 31, 201353,231,651
 —
 754,853
Restricted stock grants693,378
 —
 —
Withholding of restricted stock to satisfy taxes—
 —
 22,328
Balance, December 31, 201453,925,029
 —
 777,181
Balance, January 1, 201553,925,029
 777,181
Restricted stock grants220,635
 —
 —
220,635
 —
Restricted stock forfeitures(57,490) —
 —
(57,490) —
Withholding of restricted stock to satisfy taxes—
 —
 82,740
—
 82,740
Balance, December 31, 201554,088,174
 —
 859,921
54,088,174
 859,921
Restricted stock grants125,540
 —
Restricted stock forfeitures(257,641) —
Withholding of restricted stock to satisfy taxes—
 92,092
Treasury stock repurchased—
 72,895
Balance, December 31, 201653,956,073
 1,024,908
Restricted stock grants853,111
 —
Restricted stock forfeitures(253,084) —
Withholding of restricted stock to satisfy taxes—
 89,620
Balance, December 31, 201754,556,100
 1,114,528

Common Stock
As of December 31, 2015, Revlon, Inc.'s2017, Revlon's authorized common stock consisted of 900 million shares of Class A Common Stock, with a par value of $0.01 per share (the "Class A Common Stock"), and 200 million shares of Class B common stock, par value $0.01 per share ("Class B Common Stock" and together with the Class A Common Stock, the "Common Stock"). In October 2009, Revlon, Inc., amended its certificate of incorporation to: (1) clarify that the provision requiring that holders of its Class A Common Stock and holders of its Class B Common Stock receive the same consideration in certain business combinations shall only apply in connection with transactions involving third parties; and (2) increase the number of Revlon, Inc.’s authorized shares of preferred stock from 20 million to 50 million and, accordingly, to increase the number of Revlon, Inc.’s authorized shares of capital stock from 1,120 million to 1,150 million. The holders of Class A Common Stock and Class B Common Stock vote as a single class on all matters, except as otherwise required by law, with each share of Class A Common Stock entitling its holder to one vote and each share of the Class B Common Stock entitling its holder to ten votes. The holders of the Company's two classes of authorized

F-53
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Common Stock are entitled to share equally in the earnings of the Company from dividends, when and if declared by Revlon, Inc.’s Board of Directors. Each share of Class B Common Stock is convertible into one share of Class A Common Stock.
In October 2013, MacAndrews & Forbes exercised its right under Revlon, Inc.'s Restated Certificate of Incorporation to voluntarily convert all of the 3,125,000 shares of Revlon, Inc. Class B Common Stock (previously held in the name of REV Holdings LLC) on a one-for-one basis into 3,125,000 shares of Revlon, Inc. Class A Common Stock. The shares of Revlon, Inc.'s Class A Common Stock issued in such conversion were not registered under the Securities Act. As MacAndrews & Forbes is an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act, such shares were issued in reliance on exemptions from registration under Section 4(2) of the Securities Act and Rule 506 of Regulation D under the Securities Act. Appropriate restrictive legends were affixed to the certificate representing the shares of Class A Common Stock issued to REV Holdings LLC in such conversion. Revlon, Inc. did not receive any proceeds in connection with such conversion. As a result of such conversion, as of December 31, 2015 and 2014, there were no shares of Class B Common Stock outstanding.
As of December 31, 2015, after giving effect to the foregoing transactions,2017, MacAndrews & Forbes beneficially owned approximately 78%85% of Revlon, Inc.’sRevlon's Class A Common Stock, representing approximately 78%which at such date was Revlon's only class of Revlon, Inc.’s outstanding voting capital stock.stock outstanding.
Treasury Stock
Pursuant to the share withholding provisions of the Stock Plan, during 20152017 the Company withheld a total of 82,74089,620 shares of Revlon Inc.Class A Common Stock to satisfy its minimum statutory tax withholding requirements related to the vesting of shares

F-58
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

of restricted stock. These shares were recorded as treasury stock using the cost method, at a weighted average of $27.67 per share, based on the NYSE closing price per share on each applicable vesting date, for a total of $2.5 million. During 2016 the Company withheld a total of 92,092 shares of Revlon Class A Common Stock to satisfy its minimum statutory tax withholding requirements related to the vesting of shares of restricted stock. These shares were recorded as treasury stock using the cost method, at a weighted average of $34.40$34.83 per share, based on the NYSE closing price per share on each applicable vesting date, for a total of $2.8$3.2 million. During 2014,
In April 2016, in connection with his separation from the Company, withheld a total of 22,328Revlon repurchased 72,895 shares of Revlon Inc. Class A Common Stock to satisfy its minimum statutory tax withholding requirements related to the vesting of(representing vested shares of restricted stock, inwhich were included within treasury stock upon repurchase) from Lorenzo Delpani, the aggregate amountCompany's former President and Chief Executive Officer, at a price of $0.7$36.83 per share based upon the NYSE closing price of Revlon Class A Common Stock on April 20, 2016, for a total purchase price of $2.7 million.



19. SEGMENT DATA AND RELATED INFORMATION
Operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Company's “Chief"Principal Executive Officer”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 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 ChiefPrincipal Executive Officer. As of December 31, 2017, and since the Elizabeth Arden Acquisition Date, the Elizabeth Arden organization has continued to operate and be evaluated on a stand-alone basis.
At December 31, 2015,2017, the Company’s operations are organized into the following reportable segments:
Consumer - The Company’s Consumer segment is comprised of products that are marketed, distributed and sold in large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the Company's consumerU.S. and internationally under brands which primarily includesuch as Revlon, Almay, SinfulColors and Pure Ice in color cosmetics; Revlon ColorSilk in women’s hair color; Revlon in beauty tools; and Mitchum in anti-perspirant deodorants. The Company’s principal customers for its consumer products include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Consumer segment also includes a skincareskin care line under the Natural Honey brand and hair color line under the Llongueras brand (licensed from a third party) that are sold toin large volume retailers and other retailers, primarily in Spain, which were acquired as part ofwell as Cutex nail care products.
Elizabeth Arden - The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics to prestige retailers, the Colomer Acquisition.mass retail channel, specialty stores, perfumeries, department stores, boutiques, e-commerce, 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 Skin Illuminating, SUPERSTART, Prevage, Eight Hour, Elizabeth Arden Ceramide and Visible Difference in the Elizabeth Arden skin care brands; Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Green Tea and UNTOLD in Elizabeth Arden fragrances; Juicy Couture, John Varvatos, All Saints, La Perla and Wildfox in designer fragrances; and Curve, Elizabeth Taylor, Britney Spears, Christina Aguilera, ShawnMendes, Halston,Ed Hardy, Geoffrey Beene, Alfred Sung, Giorgio Beverly Hills, Lucky Brand, PS Fine Cologne for Men, White Shoulders and Jennifer Anistonin heritage fragrances.
Professional - The Company’s Professional segment is comprisedmarkets, distributes and sells professional products primarily of the brands which the Company acquiredto hair and nail salons and professional salon distributors in the Colomer Acquisition, which includeU.S. and internationally under brands such as Revlon Professional in hair color, hair care and hair care;treatments; CND-branded productsin nail polishes and nail enhancements;enhancements, including CND Shellac and CND Vinylux nail polishes; and American Crewin men’s grooming products, all of which are sold worldwide to professional salons. The Company’s principal customers for its professional products include hair and nail salons and distributors to professional salons in the U.S. and internationally.products. The Professional segment also includes a multi-cultural hair care line consisting of Creme of Naturehair care products, which are sold toin both professional salons and in large volume retailers and other retailers, and professional salons, primarily in the U.S.
Other - The Other segment primarily includes the operating results related to the development, marketing and distribution of the CBB business and related purchase accounting for the Company's April 2015 CBB Acquisition. CBB develops, manufactures, markets and distributescertain licensed fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through department stores and selective distribution in international territories.products. The results included within the Other segment are not material to the Company'sCompany’s consolidated results of operations.
The Company's management evaluates segment profit, which is defined as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses

F-54
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

on the early extinguishment of debt and miscellaneous expenses, for each of the Company's reportable segments. Segment profit also excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, which includes the impacts of: (i) restructuring and related charges; (ii) acquisition and integration costs; (iii) goodwill impairment charge;deferred compensation costs; (iv) pension lump sum settlement charges; (v) costs of sales resulting from a fair value adjustment to inventory

F-59
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

acquired in acquisitions; (vi) deferred compensationthe Elizabeth Arden Acquisition; and (v) charges related to the CBB Acquisition; (vii) insurance proceeds received in 2013 related to the 2011 fire that destroyed the Company's facility in Venezuela; (viii) insurance proceeds from the recovery of litigation settlements; and (ix) an accrual for estimated clean-up costs related to the Company's facility in Venezuela.Elizabeth Arden 2016 Business Transformation Program. Such items are shown below in the table reconciling segment profit to consolidated income from continuing operations before income taxes. Unallocated corporate expenses primarily include general and administrative expenses related to the corporate organization. These expenses are recorded in unallocated corporate expenses, as these items are centrally directed and controlled and are not included in internal measures of segment operating performance. During the second quarter of 2015, the Company removed pension-related costs for its U.S. qualified defined benefit pension plans from the measurement of its operating segment results. As a result, $8.2 million and $4.9 million in pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for 2014 and 2013, respectively. The Company does not have any material inter-segment sales.
The accounting policies for each of the reportable segments are the same as those described in Note 1, “Description"Description of Business and Summary of Significant Accounting Policies.”" The Company's assets and liabilities are managed centrally and are reported internally in the same manner as the 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 Consolidated Financial Statements.
The following table is a comparative summary of the Company’s net sales and segment profit by reportable segment for each of 2015, 2014, and 2013. In the table below, certain prior period amounts have been reclassified to conform to the presentation for 2015.







F-55F-60
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 by reportable segment for 2017, 2016 and 2015:
Twelve Months Ended December 31,Year Ended December 31,
2015 2014 20132017 2016 2015
Segment Net Sales:          
Consumer$1,414.8
 $1,438.3
 $1,394.2
$1,288.5
 $1,389.8
 $1,414.8
Elizabeth Arden952.5
 441.4
 —
Professional471.1
 502.7
 100.5
432.2
 476.5
 471.1
Other$28.4
 $—
 $—
20.5
 26.3
 28.4
Total$1,914.3
 $1,941.0
 $1,494.7
$2,693.7
 $2,334.0
 $1,914.3
          
Segment Profit:          
Consumer (a)
$360.2
 $339.4
 $342.3
Consumer$239.6
 $349.2
 $360.2
Elizabeth Arden114.2
 68.2
 —
Professional103.9
 104.8
 5.1
54.9
 99.4
 103.9
Other$1.4
 $—
 $—
(3.7) (2.7) 1.4
Total$465.5
 $444.2
 $347.4
$405.0
 $514.1
 $465.5
          
Reconciliation:          
Segment Profit$465.5
 $444.2
 $347.4
$405.0
 $514.1
 $465.5
Less:     

    
Unallocated corporate expenses (a)
88.0
 69.0
 63.7
Unallocated corporate expenses146.2
 98.8
 88.0
Depreciation and amortization103.2
 102.6
—
76.7
155.8
 123.2
 103.2
Non-cash stock compensation expense5.1
 5.5
 0.2
6.8
 6.4
 5.1
Non-Operating items:          
Restructuring and related charges11.6
 22.6
 4.5
34.5
 36.8
 11.6
Acquisition and integration costs8.0
 6.4
 25.4
52.9
 43.2
 8.0
Elizabeth Arden 2016 Business Transformation Program1.1
 2.6
 —
Elizabeth Arden inventory purchase accounting adjustment, cost of sales17.2
 20.7
 —
Inventory purchase accounting adjustment, cost of sales0.9
 2.6
 8.5
—
 0.2
 0.9
Pension Lump sum settlement20.7
 —
 —
Goodwill impairment charge9.7
 —
 —
Deferred Compensation related to CBB Acquisition2.5
 —
 —
Gain from insurance proceeds related to Venezuela fire—
 —
 (26.4)
Accrual for clean-up costs related to destroyed facility in Venezuela—
 —
 7.6
Shareholder litigation recoveries—
 —
 (1.8)
Operating Income215.8
 235.5
 189.0
Pension lump-sum settlement—
 —
 20.7
Impairment charge10.8
 23.4
 9.7
Deferred compensation2.0
 3.5
 2.5
Operating (loss) income(22.3) 155.3
 215.8
Less:          
Interest Expense83.3
 84.4
 73.8
149.8
 105.2
 83.3
Interest Expense - Preferred Stock—
 —
 5.0
Amortization of debt issuance costs5.7
 5.5
 5.2
9.1
 6.8
 5.7
Loss on early extinguishment of debt—
 2.0
 29.7
—
 16.9
 —
Foreign currency losses (gains), net15.7
 25.0
 3.7
Foreign currency (gains) losses, net(18.5) 18.5
 15.7
Miscellaneous, net0.4
 1.2
 1.0
0.8
 (0.6) 0.4
Income from continuing operations before income taxes$110.7
 $117.4
 $70.6
(Loss) income from continuing operations before income taxes$(163.5) $8.5
 $110.7




F-61
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(a)
During the second quarter of 2015, the Company removed pension-related costs for its U.S. qualified defined benefit pension plans from the measurement of its operating segment results. As a result, $8.2 million and $4.9 million of pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for 2014 and 2013, respectively.
As of December 31, 2015,2017, after giving effect to the Elizabeth Arden Acquisition, the Company had operations established in 2227 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. Walmart and its affiliates worldwide accounted for approximately 18%16%, 16%17% and 20%18% of the Company’s worldwide net sales in 2017, 2016 and 2015, respectively, and such sales are primarily included within the net sales of the Consumer segment.

F-56
 Year Ended December 31,
 2017 2016 2015
Geographic area:           
   Net sales:           
United States$1,315.1
 49% $1,290.2
 55% $1,058.7
 55%
International1,378.6
 51% 1,043.8
 45% 855.6
 45%
 $2,693.7
   $2,334.0
   $1,914.3
  

 December 31, 2017 December 31, 2016
Long-lived assets, net:      
United States$1,480.1
 83% $1,494.3
 85%
International295.6
 17% 255.4
 15%
 $1,775.7
  $1,749.7
  
 Year Ended December 31,
 2017 2016 2015
Classes of similar products:           
   Net sales:           
Color cosmetics$955.3
 35% $998.3
 43% $1,022.4
 53%
Fragrance731.3
 27% 408.4
 17% 80.8
 4%
Hair care517.3
 19% 544.3
 23% 522.1
 27%
Beauty care262.4
 10% 294.4
 13% 277.5
 15%
Skin care227.4
 8% 88.6
 4% 11.5
 1%
 $2,693.7
   $2,334.0
   $1,914.3
  


20. BASIC AND DILUTED EARNINGS PER COMMON SHARE
Shares used in basic (loss) earnings per share are computed using the weighted-average number of common shares outstanding during each period. Shares used in diluted (loss) earnings per share include the dilutive effect of unvested restricted stock under the Company’s Stock Plan using the treasury stock method. At December 31, 2017, 2016, and 2015 there were no outstanding stock options under the Company's Stock Plan.


F-62
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

of the Company’s worldwide net sales in 2015, 2014 and 2013, respectively, and such sales are primarily included within the net sales of the Consumer segment.
The Company expects that Walmart and a small number of other customers will, in the aggregate, continue to account for a large portion of the Company’s net sales. As is customary in the consumer products industry, none of the Company’s customers is under an obligation to continue purchasing products from the Company in the future.

InFollowing are the tables below, certain prior year amounts have been reclassified to conform to the current period’s presentation.components of basic and diluted (loss) earnings per common share for 2017, 2016 and 2015:
 Year Ended December 31,
 2015
2014 2013
Geographic area:           
   Net sales:           
      United States$1,043.7
 55% $1,021.9
 53% $832.8
 56%
  Outside of the United States870.6
 45% 919.1
 47% $661.9
 44%
 $1,914.3
   $1,941.0
   $1,494.7
  
 Year Ended December 31,
 2017 2016 2015
Numerator:     
(Loss) income from continuing operations, net of taxes$(185.3) $(17.0) $59.3
Income (loss) from discontinued operations, net of taxes2.1
 (4.9) (3.2)
Net (loss) income$(183.2) $(21.9) $56.1
Denominator:     
Weighted-average common shares outstanding – Basic52,597,582
 52,504,196
 52,431,193
Effect of dilutive restricted stock—
 —
 160,352
Weighted-average common shares outstanding – Diluted52,597,582
 52,504,196
 52,591,545
Basic (loss) earnings per common share:     
Continuing operations$(3.52) $(0.33) $1.13
Discontinued operations0.04
 (0.09) (0.06)
Net (loss) income per common share$(3.48) $(0.42) $1.07
Diluted (loss) earnings per common share:     
Continuing operations$(3.52) $(0.33) $1.13
Discontinued operations0.04
 (0.09) (0.06)
Net (loss) income per common share$(3.48) $(0.42) $1.07
      
Unvested restricted stock awards under the Stock Plan (a)
20,804
 109,481
 —

 December 31, 2015 December 31, 2014
Long-lived assets, net:      
United States$874.7
 79% $845.5
 76%
Outside of the United States232.4
 21% 271.7
 24%
 $1,107.1
  $1,117.2
  

 Year Ended December 31,
 2015
2014 2013
Classes of similar products:           
   Net sales:           
Color cosmetics$1,026.4
 54% $1,032.4
 53% $926.4
 62%
Hair care522.1
 27% 545.0
 28% 263.9
 18%
Beauty care and fragrance365.8
 19% 363.6
 19% 304.4
 20%
 $1,914.3
   $1,941.0
   $1,494.7
  

20. BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Shares used(a)     These are outstanding common stock equivalents that were not included in basic earnings (loss) per share are computed using the weighted average number of common shares outstanding during each period. Shares used in diluted earnings (loss) per share include the dilutive effect of unvested restricted stock and outstanding stock options under the Company’s Stock Plan using the treasury stock method. At December 31, 2015 and 2014, there were no outstanding stock options under the Company's Stock Plan. For 2013, all outstanding options to purchase shares of Class A Common Stock that could potentially dilute basic earnings (loss) per common share in the future were excluded from the calculation of diluted earnings (loss) per common share, as their effect would have been anti-dilutive, as in each case their exercise price was in excess of the average NYSE closing price of the Class A Common Stock for these periods.
No unvested restricted stock awards were excluded from the computation of diluted earnings (loss) per common share for the years ended December 31, 2015 and 2014. For 2013, 20,437 weighted average shares of unvested restricted stock were excluded from the computation of diluted earnings (loss) per common share because their effectinclusion would have been anti-dilutive.had an anti-dilutive effect.




F-57
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)


The components of basic and diluted earnings per common share for each 2015, 2014 and 2013 were as follows:
 Years Ended December 31,
 2015 2014 2013
Numerator:     
Income from continuing operations, net of taxes$59.3
 $39.6
 $24.6
(Loss) Income from discontinued operations, net of taxes(3.2) 1.3
 (30.4)
Net income$56.1
 $40.9
 $(5.8)
Denominator:     
Weighted average common shares outstanding – Basic52,431,193
 52,359,897
 52,356,798
Effect of dilutive restricted stock160,352
 64,042
 931
Weighted average common shares outstanding – Diluted52,591,545
 52,423,939
 52,357,729
Basic earnings (loss) per common share:     
Continuing operations$1.13
 $0.76
 $0.47
Discontinued operations(0.06) 0.02
 (0.58)
Net income (loss)$1.07
 $0.78
 $(0.11)
Diluted earnings (loss) per common share:     
Continuing operations$1.13
 $0.76
 $0.47
Discontinued operations(0.06) 0.02
 (0.58)
Net income$1.07
 $0.78
 $(0.11)
21. COMMITMENTS AND CONTINGENCIES
Products Corporation currently leases facilities for executive offices, warehousing, research and development and sales operations and leases various types of equipment under operating and capital lease agreements. Rental expense was $20.1 million, $18.5 million and $18.6 million $26.6 millionfor 2017, 2016 and $19.8 million for 2015, 2014 and 2013, respectively. Minimum rental commitments under all non-cancelable leases, including those pertaining to idled facilities, are presented in the following table:
Minimum Rental Commitments Total 2016 2017 2018 2019 2020 Thereafter Total 2018 2019 2020 2021 2022 Thereafter
Capital leases $5.4
 $3.1
 $1.4
 $0.6
 $0.3
 $—
 $—
 $2.9
 $1.4
 $0.9
 $0.4
 $0.1
 $0.1
 $—
Operating leases 127.1
 22.6
 17.7
 14.4
 12.8
 7.7
 51.9
 245.4
 48.0
 39.3
 31.3
 27.1
 21.1
 78.6
The Company is involved in various routine legal proceedings incidental to the ordinary course of its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or itscash flows.
As previously disclosed, following the announcement of the execution of the Elizabeth Arden Merger Agreement, several putative shareholder class action lawsuits and a derivative lawsuit were filed challenging the Merger. In addition to the complaints filed on behalf of plaintiffs Parker, Christiansen, Ross and Stein on July 25, 2016, a lawsuit (Hutson v. Elizabeth Arden, Inc., et al., Case No. CACE-16-013566) (referred to as the "Hutson complaint") was filed in the Seventeenth Judicial Circuit in and for Broward County, Florida (the "Court") against Elizabeth Arden, the members of the board of directors of Elizabeth Arden, Revlon, Products Corporation and Acquisition Sub. In general, the Hutson complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to Elizabeth Arden’s shareholders with respect to the Merger, by, among other things, approving the Merger pursuant to an unfair process and at an inadequate and unfair price; and (ii) Revlon, Products Corporation and Acquisition Sub aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors. The plaintiff seeks relief similar to that sought in the Parker case.
By Order dated August 4, 2016, all five cases were consolidated by the Court into a Consolidated Amended Class Action. Thereafter, on August 11, 2016, a Consolidated Amended Class Action Complaint was filed, seeking to enjoin defendants from

F-63
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

consummating the Merger and/or from soliciting shareholder votes. To the extent that the Merger was consummated, the Consolidated Amended Class Action Complaint seeks to rescind the Merger or recover rescissory or other compensatory damages, along with costs and fees. The grounds for relief set forth in the Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints, as previously disclosed. Class counsel advised that post-consummation of the Merger they were going to file a Second Consolidated Amended Class Action Complaint. The Second Consolidated Amended Class Action Complaint (which superseded the Consolidated Amended Class Action Complaint) was ultimately filed on or about January 26, 2017. Like the Consolidated Amended Class Action complaint, the grounds for relief set forth in the Second Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints.
The defendants' motions to dismiss the Second Consolidated Amended Class Action Complaint were filed on March 28, 2017. Plaintiffs' response was filed on June 6, 2017 and defendants' replies were filed on July 13, 2017. A hearing on the defendants' motion to dismiss was held on September 19, 2017 and on November 20, 2017, the defendants’ motion was granted and the case was dismissed, with leave to amend under limited circumstances. On December 8, 2017, plaintiffs filed a Third Amended Complaint, seeking relief on the same grounds sought in the First and Second Amended Complaints, but alleged as direct, as opposed to derivative, claims. On January 12, 2018, the defendants once again moved to dismiss. The Company anticipates briefing, followed by a hearing that is expected to occur in the next few months. The Company believes the allegations contained in the Third Consolidated Amended Class Action Complaint are without merit and intends to continue to vigorously defend against them. Additional lawsuits arising out of or relating to the Merger Agreement or the Merger may be filed in the future.
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.operations, financial condition and/or cash flows. However, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period.
As previously disclosed, in October 2009, the Company consummated its voluntary exchange offer in which, among other things, Revlon, Inc. issued 9,336,905 shares of its Series A Preferred Stock to stockholders (other than MacAndrews & Forbes) who elected to exchange shares in exchange for the same number of shares of Revlon, Inc. Class A Common Stock tendered in the Exchange Offer (the “Exchange Offer”). During 2009, several class action lawsuits were brought against the Company, Revlon, Inc.’s then directors and MacAndrews & Forbes (collectively, the “Defendants”) related to the 2009 Exchange Offer. Plaintiffs in each of these actions sought, among other things, an award of damages and the costs and disbursements of such actions, including a reasonable allowance for the fees and expenses of each such plaintiff’s attorneys and experts.
Although the Company continued to believe that it had meritorious defenses to the asserted claims in the actions, the Defendants and plaintiffs agreed to the terms of a settlement and in October 2012 executed the settlement agreements to resolve all claims in all of the actions (the “Settlement”).

F-58
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

In 2012, the Company recorded a charge of $8.9 million with respect to the Company’s then-estimated costs of resolving the actions, including the Company’s estimate at that time of additional payments to be made to the settling stockholders. The class action settlement was conditioned, and became effective in August 2013, upon final approval of the derivative action settlement and final dismissal of the actions pending outside of the Delaware Court of Chancery. In August 2013, a payment of $8.9 million, representing the Company's allocable portion of the settlement amount, was made to settle all amounts owed by the Company in connection with the settlement agreements.
Revlon, Inc. agreed with the staff of the SEC (or the “Commission”) on the terms of a proposed settlement of an investigation relating to certain disclosures made by Revlon, Inc. in its public filings in 2009 in connection with the 2009 Exchange Offer. In June 2013, the Commission approved such settlement and Revlon, Inc. entered into the settlement without admitting or denying the findings set forth therein and, pursuant to its terms, Revlon, Inc., among other things, paid a civil penalty of $850,000, which was previously accrued in the fourth quarter of 2012.
In September 2013, Revlon, Inc. received a final payment of approximately $1.8 million of insurance proceeds in connection with matters related to the 2009 Exchange Offer. These proceeds were recorded as a gain within SG&A expenses in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for 2013.


22. RELATED PARTY TRANSACTIONS
As of December 31, 2015,2017, MacAndrews & Forbes beneficially owned approximately 78%85% of Revlon, Inc.'sRevlon's Class A Common Stock representing approximately 78%85% of Revlon, Inc.’sRevlon’s outstanding shares of voting capital stock. As a result, MacAndrews & Forbes is able to elect Revlon, Inc.’sRevlon’s entire Board of Directors and control the vote on all matters submitted to a vote of Revlon, Inc.'sRevlon's stockholders. MacAndrews & Forbes is wholly-owned by Ronald O. Perelman, Chairman of Revlon, Inc.’sRevlon’s Board of Directors.
Transfer Agreements
In June 1992, Revlon Inc. and Products Corporation entered into an asset transfer agreement with Revlon Holdings LLC, a Delaware limited liability company and formerly a Delaware corporation known as Revlon Holdings Inc. ("Revlon Holdings"), and which is an affiliate and an indirect wholly-owned subsidiary of MacAndrews & Forbes, and certain of Revlon Holdings’ wholly-owned subsidiaries. Revlon Inc. and Products Corporation also entered into a real property asset transfer agreement with Revlon Holdings. Pursuant to such agreements, in June 1992, Revlon Holdings transferred certain assets to Products Corporation and Products Corporation assumed all of the liabilities of Revlon Holdings, other than certain specifically excluded assets and liabilities (the liabilities excluded are referred to as the "Excluded Liabilities"). Certain consumer products lines sold in demonstrator-assisted retailers considered not integral to the Company's business and that historically had not been profitable and certain other assets and liabilities were retained by Revlon Holdings. Revlon Holdings agreed to indemnify Revlon Inc. and Products Corporation against losses arising from the Excluded Liabilities, and Revlon Inc. and Products Corporation agreed to indemnify Revlon Holdings against losses arising from the liabilities assumed by Products Corporation. The amounts reimbursed by Revlon Holdings to Products Corporation for the Excluded Liabilities was $0.3 million, for 2015$0.5 million and $0.2$0.3 million for each2017, 2016 and 2015, respectively. A payable balance of 2014 and 2013. A $0.2 million and $0.1 million receivable balance fromnil to MacAndrews & Forbes was included within prepaidaccrued expenses and other in the Company’s Consolidated Balance Sheets for transactions subject to the Transfer Agreements at December 31, 20152017 and 2014,2016, respectively.
Reimbursement Agreements
Revlon, Inc., Products Corporation and MacAndrews & Forbes Inc. (a wholly-owned subsidiary of MacAndrews & Forbes) have entered into reimbursement agreements (the "Reimbursement Agreements") pursuant to which: (i) MacAndrews & Forbes Inc. 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 partythird-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 partythird-party providers, such as insurance, legal and accounting services, on behalf of

F-64
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

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

F-59
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

hand, and MacAndrews & Forbes, Inc., on the other, has agreed to indemnify the other party for losses arising out of the services provided by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.
The Reimbursement Agreements may be terminated by either party on 90 days' notice. The Company does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to the Company as could be obtained from unaffiliated third parties.
The Company participates in MacAndrews & Forbes' directors and officers liability insurance program (the “D"D&O Insurance Program”Program"), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which cover the Company, as well as MacAndrews & Forbes and its subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews & Forbes from time to timetime-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.
The net activity related to services provided and/or (purchased)purchased under the Reimbursement Agreements during each 2017, 2016 and 2015 was $(2.1)$3.8 million, $1.5 million and $2.1 million, respectively, which primarily included partial payments made by the Company to MacAndrews & Forbes during the first quarter of 2017, 2016 and 2015 for premiums related to the Company's allocable portion of the 5-year renewal of the D&O Insurance Program for the period from January 31, 2012 through January 31, 2017. The net activity related to services provided and/or (purchased) under the Reimbursement Agreements during 20142017 (which insurance coverage was $(3.8)renewed in January 2017 through January 2020). As of December 31, 2017 and December 31, 2016, a payable balance of $0.3 million which primarily included partial payments made by the Companyand $0.2 million, respectively, to MacAndrews & Forbes during 2014 for premiums related towas included in the Company's allocable portion of the 5-year renewal of the D&O Insurance Program for the period from January 31, 2012 through January 31, 2017. The net activity related to services provided and/or (purchased) under the Reimbursement Agreements during 2013 was $(4.4) million, which primarily included a $6.1 million partial payment made by the Company to MacAndrews & Forbes during 2013 for premiums related to the Company's allocable portion of the 5-year renewal of the D&O Insurance Program for the period from January 31, 2012 through January 31, 2017, partially offset by a $1.8 million payment from MacAndrews & Forbes for reimbursable costs incurred by the Company related to matters covered by the D&O Insurance Program. The receivable balances from MacAndrews & Forbes were $0.1 million at December 31, 2015 and nil December 31, 2014Consolidated Balance Sheet for transactions subject to the Reimbursement Agreements.
Tax Sharing Agreements
As a result of a debt-for-equity exchange transaction completed in March 2004 (the “2004"2004 Revlon Exchange Transactions”Transactions"), as of March 25, 2004, Revlon, Inc., Products Corporation and their U.S. subsidiaries were no longer included in the MacAndrews & Forbes Group for U.S. federal income tax purposes. See Note 16, “Income"Income Taxes,”" for further discussion on these agreements and related transactions in 2015, 20142017, 2016 and 2013.2015.
Registration Rights Agreement
Prior to the consummation of Revlon, Inc.'sRevlon's initial public equity offering in February 1996, Revlon Inc. and Revlon Worldwide Corporation (which subsequently merged into REV Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of MacAndrews & Forbes (“("REV Holdings”Holdings")), the then direct parent of Revlon Inc., entered into a registration rights agreement (the "Registration Rights Agreement"). In February 2003, MacAndrews & Forbes executed a joinder agreement to the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon, Inc.'sRevlon's Common Stock held by REV Holdings (the "Holders") had the right to require Revlon Inc. to register under the Securities Act all or part of the Class A Common Stock owned by such Holders, including, without limitation, the shares of Class A Common Stock purchased by MacAndrews & Forbes in connection with Revlon, Inc.'sRevlon's 2003 $50.0 million equity rights offering and the shares of Class A Common Stock which were issued to REV Holdings upon its conversion of all 3,125,000 shares of its Class B Common Stock in October 2013 (a "Demand Registration"). In connection with the closing of the 2004 Revlon Exchange Transactions and pursuant to the 2004 Investment Agreement, MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with Revlon, Inc.’sRevlon’s March 2006 $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, and Revlon, Inc.’sRevlon’s January 2007 $100 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes. Pursuant to the Registration Rights Agreement, in 2009 Revlon Inc. registered under the Securities Act all 9,336,905 shares of Class A Common Stock issued to MacAndrews & Forbes in the 2009 Exchange Offer, in which, among other things, Revlon Inc. issued to MacAndrews & Forbes shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the then-outstanding Senior Subordinated Term Loan that MacAndrews & Forbes contributed to Revlon, Inc.Revlon.

F-60F-65
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

Revlon Inc. may postpone giving effect to a Demand Registration for a period of up to 30 days if Revlon Inc. believes such registration might have a material adverse effect on any plan or proposal by Revlon Inc. with respect to any financing, acquisition, recapitalization, reorganization or other material transaction, or if Revlon Inc. is in possession of material non-public information that, if publicly disclosed, could result in a material disruption of a major corporate development or transaction then pending or in progress or could result in other material adverse consequences to Revlon, Inc.Revlon. In addition, the Holders have the right to participate in registrations by Revlon Inc. of its Class A Common Stock (a "Piggyback Registration"). The Holders will pay all out-of-pocket expenses incurred in connection with any Demand Registration. Revlon Inc. will pay any expenses incurred in connection with a Piggyback Registration, except for underwriting discounts, commissions and expenses attributable to the shares of Class A Common Stock sold by such Holders.
Other
As disclosedPursuant to the terms of Mr. Delpani’s Transition and Separation Agreement and Release with Revlon and Products Corporation, dated March 1, 2016 (as amended on April 21, 2016), in Note 21, “CommitmentsApril 2016, the Company (i) repurchased from Mr. Delpani 72,895 shares of Revlon Class A Common Stock (representing vested, formerly restricted shares that Revlon granted to Mr. Delpani) for an aggregate purchase price of $2.7 million, based on the $36.83 NYSE per share closing price of Revlon Class A Common Stock on April 20, 2016; and Contingencies,” during 2012,(ii) paid Mr. Delpani $1.6 million as consideration for canceling his 65,703 restricted shares of Revlon Inc. and MacAndrews & Forbes entered into settlement agreements in connectionClass A Common Stock that were otherwise scheduled to vest on March 15, 2017. Mr. Delpani ceased employment with the previously disclosed litigation actions relatedCompany on March 31, 2016 and ceased to the 2009 Exchange Offer. Such settlements became effectiveserve as Director in August 2013 and resulted in total cash payments of approximately $36.9 million to settle all actions and related claims by Revlon, Inc.’s stockholders, of which $23.5 million were paid from insurance proceeds. In August 2013, a payment of $8.9 million, representing the Company's allocable portion of the settlement amount, was made to settle all amounts owed by Revlon, Inc. in connection with the settlement agreements. The Company previously recorded the $8.9 million charge during 2012, which represented Revlon, Inc.’s allocable portion of the total settlement payments not expected to be covered by insurance. Additionally, in September 2013, Revlon, Inc. received a final payment of approximately $1.8 million of insurance proceeds in connection with matters related to the 2009 Exchange Offer. These proceeds were recorded as a gain within SG&A expenses in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for 2013.June 2016.
Certain of Products Corporation’s debt obligations, including the Amended2016 Credit Agreements and Products Corporation's 5¾% Senior Notes, have been, and may in the future be, supported by, among other things, guarantees from all of Products Corporation's domestic subsidiaries (subject to certain limited exceptions) and, for the Amended2016 Credit Agreements, guarantees from Revlon, Inc.Revlon. The obligations under such guarantees are secured by, among other things, all of the capital stock of Products Corporation and, its domestic subsidiaries (subject to certain limited exceptions) and 66% of the capital stock of Products Corporation's and its domestic subsidiaries' first-tier foreign subsidiaries. See Note 11, “Long"Long Term Debt,”" for a discussion of the terms of the Amended2016 Credit Agreements and 5¾% Senior Notes.
Effective January 28, 2018, the Board of Directors elected Debra G. Perelman as Chief Operating Officer of the Company, overseeing certain aspects of the Company's marketing, sales and research & development functions. See Part II, Item 9B, Other Information, in this Form 10-K for a description of Ms. Perelman’s employment terms. Ms. Perelman is the daughter of Ronald O. Perelman, the Chairman of the Company's Board of Directors. Ms. Perelman's former position as EVP Strategy, Digital Content and New Business Development of the Company, which began in December 2017, was carried out pursuant to a secondment arrangement between the Company and M&F, pursuant to which her compensation and benefits were paid directly by M&F and not by the Company, except that the Company was responsible for applicable business and travel expenses incurred by Ms. Perelman.
During 20152017 and 2014,2016, 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: (i) advertising inserts,included processing approximately $27.5 million and $40.9 million of coupon redemptions for the Company's retail customers for 2017 and 2016, respectively, for which the Company paid fees of approximately $0.2 million during 2015; (ii) processing approximately $32.9 million and $35.8 million of coupon redemptions for the Company's retail customers for 2015 and 2014, respectively, for which the Company paid fees of approximately $0.4 million and $0.4 million during 2015in 2017 and 2014, respectively;2016, respectively, and (iii) other similar advertising, coupon redemption and raw material supply services, for which the Company paid fees aggregating to $0.5 million and less than $0.1 million during 2015.in 2017 and 2016, respectively. 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 were at least as favorable as those available from unaffiliated parties.



F-61F-66
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

23. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the Company’s unaudited quarterly results of operations for each of 20152017 and 2014:2016:
 Year Ended December 31, 2015
 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net sales$438.5
 $482.4
 $471.5
 $521.9
Gross profit296.2
 321.1
 303.7
 325.5
(Loss) income from continuing operations, net of taxes(a)(b)
(0.8) 26.0
 7.9
 26.2
(Loss) income from discontinued operations, net of taxes(e)
(0.1) —
 (1.7) (1.4)
Net (loss) income(a)(b)
(0.9) 26.0
 6.2
 24.8
        
*Basic (loss) income per common share(a)(b)(e):
       
Continuing operations$(0.02) $0.50
 $0.15
 $0.50
Discontinued operations—
 —
 (0.03) $(0.03)
Net (loss) income$(0.02) $0.50
 $0.12
 $0.47
        
*Diluted (loss) income per common share(a)(b)(e):
       
Continuing operations(0.02) 0.49
 0.15
 0.50
Discontinued operations—
 —
 (0.03) (0.03)
Net (loss) income$(0.02) $0.49
 $0.12
 $0.47
 Year Ended December 31, 2017
 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net sales$594.9
 $645.7
 $666.5
 $786.6
Gross profit329.8
 377.5
 376.2
 458.9
Loss from continuing operations, net of taxes(a)
(37.7) (37.1) (32.8) (77.7)
Income from discontinued operations, net of taxes(c)
0.3
 0.6
 0.4
 0.8
Net loss(a)(c)
(37.4) (36.5) (32.4) (76.9)
        
*Basic (loss) income per common share(a)(c):
       
Continuing operations$(0.72) $(0.70) $(0.62) $(1.48)
Discontinued operations0.01
 —
 0.01
 0.02
Net (loss) income per common share$(0.71) $(0.70) $(0.61) $(1.46)
        
*Diluted (loss) income per common share(a)(c):
       
Continuing operations$(0.72) $(0.70) $(0.62) $(1.48)
Discontinued operations0.01
 —
 0.01
 0.02
Net (loss) income per common share$(0.71) $(0.70) $(0.61) $(1.46)

 Year Ended December 31, 2014
 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net sales$469.8
 $497.9
 $472.3
 $501.0
Gross profit306.3
 330.7
 307.7
 328.0
Income from continuing operations, net of taxes(c)(d)
8.7
 14.4
 14.2
 2.3
(Loss) income from discontinued operations, net of taxes(e)
(3.2) 3.7
 0.4
 0.4
Net income (d)(e)
5.5
 18.1
 14.6
 2.7
        
*Basic income per common share(c)(d)(e):
       
Continuing operations0.17
 0.27
 0.27
 0.04
Discontinued operations(0.06) 0.07
 0.01
 0.01
Net income$0.11
 $0.34
 $0.28
 $0.05
        
*Diluted income per common share(c)(d)(e):
       
Continuing operations0.17
 0.27
 0.27
 0.04
Discontinued operations(0.06) 0.07
 0.01
 0.01
Net income$0.11
 $0.34
 $0.28
 $0.05
 Year Ended December 31, 2016
 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Net sales$439.6
 $488.9
 $604.8
 $800.7
Gross profit285.7
 317.4
 361.4
 452.4
(Loss) Income from continuing operations, net of taxes(b)
10.6
 10.8
 (4.5) (33.9)
(Loss) from discontinued operations, net of taxes(c)
0.4
 (2.5) (0.2) (2.6)
Net (loss) income(b)(c)
11.0
 8.3
 (4.7) (36.5)
        
*Basic (loss) income per common share(b)(c):
       
Continuing operations$0.20
 $0.21
 $(0.09) $(0.65)
Discontinued operations0.01
 (0.05) —
 (0.05)
Net (loss) income per common share$0.21
 $0.16
 $(0.09) $(0.70)
        
*Diluted (loss) income per common share(b)(c):
       
Continuing operations$0.20
 $0.21
 $(0.09) $(0.65)
Discontinued operations0.01
 (0.05) —
 (0.05)
Net (loss) income per common share$0.21
 $0.16
 $(0.09) $(0.70)
(*) 
The sum of the quarterly earnings per share amounts doesmay not equal the annualfull year amount reported since per share amounts are computed independently for each quarter and for the full year based upon the respective weighted average common shares outstanding and other dilutive potential common shares for each respective period.
(a) 
IncomeLoss from continuing operations, net incomeloss and basic and diluted income per share for the first quarter of 2015 were unfavorably impacted by foreign currency losses, net of $15.9 million, primarily due to the unfavorable impacts of the revaluation of certain U.S. Dollar denominated intercompany payables, as well as a��$1.9 million foreign currency loss recognized in the first quarter of 2015 as a result of the re-measurement of Revlon Venezuela's balance sheet during the first quarter of 2015.

F-62
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(b)
Income from continuing operations, net income and basic and diluted income per share for the fourth quarter of 20152017 were impacted by: (i) a $20.7$59.6 million pension lump sum settlement charge related to the accounting for a one-time cash lump sum payment, which requires that a portion of pension losses within accumulated other comprehensive loss be realized in the period that related pension liabilities are settled (see Note 14, "Savings Plan, Pension and Post-retirement Benefits"); (ii) an increase in net income driven by the net reduction of the Company's deferred tax valuation allowance on its net deferred tax assets for certain foreign jurisdictions, which has been reflected in the provision for income taxes, for 2015primarily due to the impact of the Tax Act (See Note 16, "Income Taxes") for more information); (iii) a $9.7(ii) $22.1 million non-cash goodwill impairment chargeof restructuring charges, primarily related to the Global Color Brands reporting unit (see Note 8, "Goodwill and Intangible Assets"); and (iv) $9.5 million in restructuring charges related to the 2015 EfficiencyEA Integration Restructuring Program (see(See Note 3, "Restructuring Charges").
(c)
Income from continuing operations, net income for more information); and basic and diluted income per share for the first quarter of 2014 were unfavorably impacted by restructuring charges of $13.5 million related to the Integration Program, as well as $3.8(iii) $12.7 million of acquisition and integration costs primarily related to the ColomerElizabeth Arden Acquisition. (See Note 2, "Business Combinations," and Note 3, “Restructuring Charges”). Additionally, in the first quarter of 2014, the Company incurred a $1.9 million aggregate loss on early extinguishment of debt due to the February 2014 Term Loan Amendment. (See Note 11, “Long-Term Debt”).
(d)
Income from continuing operations, net income and basic and diluted income per share for the second and third quarter of 2014 were unfavorably impacted by foreign currency losses, net, of $7.2 million and $9.3 million, respectively, related to the required re-measurement of Revlon Venezuela's monetary assets and liabilities at June 30, 2014, and the results of unfavorable impacts of the revaluation of certain U.S. Dollar denominated intercompany payables during the third quarter of 2014. (See Note 1, "Description of Business and Summary of Significant Accounting Policies - Foreign Currency Translation" for further discussion on Venezuela foreign currency restrictions and related devaluation).
(e)
(Loss) income from discontinued operations includes the results of the Company's former China operations (See Note 4, "Discontinued Operations").






































F-63F-67
REVLON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)

(b)Income from continuing operations, net income and basic and diluted income per share for the fourth quarter of 2016 were unfavorably impacted by: (i) $31.7 million of restructuring charges related to the EA Integration Restructuring Charges (See Note 3, "Restructuring Charges"); and (ii) $16.7 million and $6.7 million of non-cash impairment charges on goodwill and intangible assets, respectively, within the Other reporting unit (see Note 8, "Goodwill and Intangible Assets, Net").
(c)
Income (loss) from discontinued operations includes the results of the Company's former China operations within the Consumer segment (See Note 4, "Discontinued Operations").


24. SUBSEQUENT EVENTS

Change in Leadership
On January 30, 2018, the Company filed a Current Report on Form 8-K with the SEC disclosing, among other things, the resignation of Fabian T. Garcia as the Company's President and Chief Executive Officer effective as of January 28, 2018. Mr. Garcia also resigned as a director of the Company. Mr. Garcia continued as an employee of the Company in an advisory role through the end of February 2018 to assist the Company with the transition of his duties and responsibilities. The Form 8-K also disclosed that the Company and Mr. Garcia entered into a separation agreement memorializing the terms of his transition and separation of employment (the "Garcia Separation Agreement"). The Garcia Separation Agreement provides that Mr. Garcia will receive certain separation pay and benefits that he is otherwise entitled to receive under his employment agreement dated March 27, 2016 in respect of a termination without cause, which agreement was previously disclosed in a Current Report on Form 8-K filed with the SEC on March 28, 2016.
With Mr. Garcia’s departure, the Board of Directors elected Paul M. Meister as the Company’s Executive Vice Chairman, effective January 28, 2018. In this position, Mr. Meister serves as the Company's principal executive officer until such time as Mr. Garcia’s full-time successor as President and Chief Executive Officer is appointed.

The Company has evaluated subsequent events through the filing of this Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements.


Item 16. Form 10-K Summary
None.


SCHEDULE II

REVLON, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2015, 20142017, 2016 and 20132015
(dollars in millions)

Balance at Beginning of Year Charged to Cost and Expenses Other Deductions Balance at End of YearBalance at Beginning of Year Charged to Cost and Expenses Other Deductions Balance at End of Year
Allowance for Doubtful Accounts:              
2017$11.1
 $3.0
 $(0.6) $13.5
201610.5
 2.2
 (1.6) 11.1
2015$9.3
 $2.8
 $(1.6) $10.5
9.3
 2.8
 (1.6) 10.5
20144.2
 8.4
 (3.3) 9.3
20133.5
 1.6
 (0.9) 4.2
              
Allowance for Volume and Early Payment Discounts:              
2017$23.0
 $100.4
 $(92.7) $30.7
201622.6
 80.1
 (79.7) 23.0
2015$23.4
 $51.6
 $(52.4) $22.6
23.4
 51.6
 (52.4) 22.6
201412.1
 84.7
 (73.4) 23.4
201314.6
 57.6
 (60.1) 12.1
              
Allowance for Sales Returns:              
2017$47.2
 $68.3
 $(55.7) $59.8
201639.3
 64.5
 (56.6) 47.2
2015$45.4
 $48.5
 $(54.6) $39.3
45.4
 48.5
 (54.6) 39.3
201453.1
 64.3
 (72.0) 45.4
201354.5
 77.8
 (79.2) 53.1


F-64



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

Dated: February 26, 2016March 15, 2018

Revlon, Inc.
(Registrant)
     
By: /s/ Lorenzo DelpaniPaul Meister By: /s/ Roberto SimonChristopher H. Peterson By: /s/ Siobhan AndersonWendel F. Kralovich
Lorenzo DelpaniPaul Meister Roberto SimonChristopher H. Peterson Siobhan AndersonWendel F. Kralovich
President,Executive Vice Chairman & Director Executive Vice President andChief Operating Officer, Operations Senior Vice President,
Chief Executive Officer and Chief& Principal Financial Officer Chief Accounting Officer
Director   Corporate& Controller Treasurer
and Investor Relations


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant on February 26, 2016March 15, 2018 and in the capacities indicated.
Signature Title
   
* Chairman of the Board and Director
(Ronald O. Perelman)  
* Vice Chairman of the Board and Director
(David L. Kennedy)E. Scott Beattie)  
* Director
(Alan S. Bernikow)  
* Director
(Viet D. Dinh)
*Director
(Meyer Feldberg)Kristin Dolan)  
* Director
(Robert K. Kretzman)  
* Director
(Ceci Kurzman)  
* Director
(Tamara Mellon)  
* Chief Operating Officer and Director
(Debra G. Perelman)
*Director
(Paul Savas)  
* Director
(Barry F. Schwartz)  
* Director
(Jonathan Schwartz)
*Director
(Cristiana Falcone Sorrell)  

* Mitra Hormozi, by signing her name hereto, does hereby sign this report on behalf of the directors of the registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and filed with the Securities and Exchange Commission.
By: /s/ Mitra Hormozi
Mitra Hormozi
Attorney-in-fact

F-65F-70