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

FORM 10-Q

(Mark One)

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


For the quarterly period ended SeptemberJune 30, 20152016

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: 33-59560
REVLON CONSUMER PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
    
Delaware13-3662953
(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

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 ¨ No x

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

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


The number of shares outstanding of the registrant's common stock was 5,260 as of SeptemberJune 30, 2015,2016, all of which were held by one affiliate, Revlon, Inc.








REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
INDEX
PART I - Financial Information

Item 1.Financial Statements
2
 Consolidated Balance Sheets as of SeptemberJune 30, 20152016 (Unaudited) and December 31, 20142015
2
 Unaudited Consolidated Statements of Income and Comprehensive Income (Loss) for the Three and NineSix Months Ended SeptemberJune 30, 20152016 and 20142015
3
 Unaudited Consolidated Statement of Stockholder's Deficiency for the NineSix Months Ended SeptemberJune 30, 20152016
4
 Unaudited Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20152016 and 20142015
5
 Notes to Unaudited Consolidated Financial Statements
6
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
3435
Item 3.Quantitative and Qualitative Disclosures About Market Risk
46
Item 4.Controls and Procedures
47
   
PART II - Other Information
Item 1.Legal Proceedings
49
Item 1A.Risk Factors
4950
Item 5.Other Information
5051
Item 6.Exhibits
5052
 Signatures
5153


1



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
September 30, 2015 December 31, 2014June 30, 2016 December 31, 2015
(Unaudited)  (Unaudited) 
(as adjusted)(a)
ASSETS      
Current assets:      
Cash and cash equivalents$181.2
 $275.3
$185.8
 $326.9
Trade receivables, less allowance for doubtful accounts of $10.1 and $9.3 as of September 30, 2015 and December 31, 2014, respectively260.4
 238.9
Trade receivables, less allowance for doubtful accounts of $10.7 and $10.5 as of June 30, 2016 and December 31, 2015, respectively268.4
 244.9
Inventories217.8
 156.6
209.6
 183.8
Deferred income taxes – current59.9
 58.4
Prepaid expenses and other61.3
 44.6
74.3
 53.3
Receivable from Revlon, Inc.114.8
 105.4
127.2
 117.4
Total current assets895.4
 879.2
865.3
 926.3
Property, plant and equipment, net of accumulated depreciation of $272.0 and $250.5 as of September 30, 2015 and December 31, 2014, respectively204.7
 212.0
Deferred income taxes – noncurrent31.5
 34.8
Property, plant and equipment, net of accumulated depreciation of $286.3 and $271.7 as of June 30, 2016 and December 31, 2015, respectively216.8
 215.3
Deferred income taxes41.7
 49.8
Goodwill478.2
 464.1
476.7
 469.7
Intangible assets, net of accumulated amortization of $55.5 and $39.3 as of September 30, 2015 and December 31, 2014, respectively320.9
 327.8
Intangible assets, net of accumulated amortization of $72.8 and $61.1 as of June 30, 2016 and December 31, 2015, respectively328.9
 318.0
Other assets106.8
 113.3
89.4
 84.1
Total assets$2,037.5
 $2,031.2
$2,018.8
 $2,063.2
      
LIABILITIES AND STOCKHOLDER'S DEFICIENCY      
Current liabilities:      
Short-term borrowings$10.0
 $6.6
$14.1
 $11.3
Current portion of long-term debt6.9
 31.5
6.8
 30.0
Accounts payable182.8
 153.5
187.6
 201.3
Accrued expenses and other246.6
 273.3
233.2
 272.4
Total current liabilities446.3
 464.9
441.7
 515.0
Long-term debt1,828.2
 1,832.4
1,783.6
 1,783.7
Long-term pension and other post-retirement plan liabilities180.7
 200.9
178.2
 185.3
Other long-term liabilities112.0
 90.0
72.8
 70.8
Stockholder's deficiency:      
RCPC Preferred Stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding as of September 30, 2015 and December 31, 201454.6
 54.6
Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding as of September 30, 2015 and December 31, 20140.0
 0.0
RCPC Preferred Stock, par value $1.00 per share; 1,000 shares authorized and 546 shares issued as of June 30, 2016 and December 31, 2015, respectively54.6
 54.6
Common Stock, par value $1.00 per share; 10,000 shares authorized and 5,260 shares issued as of June 30, 2016 and December 31, 2015 respectively—
 —
Additional paid-in-capital956.0
 952.1
960.9
 957.5
Accumulated deficit(1,284.7) (1,320.5)(1,236.1) (1,258.4)
Accumulated other comprehensive loss(255.6) (243.2)(236.9) (245.3)
Total stockholder's deficiency(529.7) (557.0)(457.5) (491.6)
Total liabilities and stockholder's deficiency$2,037.5
 $2,031.2
$2,018.8
 $2,063.2


(a) Adjusted as a result of the adoption of certain accounting pronouncements beginning on January 1, 2016. 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 Unaudited Consolidated Financial Statements

2



REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(dollars in millions)
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
              
Net sales$471.5
 $472.3
 $1,392.4
 $1,440.0
$488.9
 $482.4
 $928.5
 $920.9
Cost of sales167.8
 164.6
 471.4
 495.3
171.5
 161.3
 325.4
 303.6
Gross profit303.7
 307.7
 921.0
 944.7
317.4
 321.1
 603.1
 617.3
Selling, general and administrative expenses241.7
 249.3
 745.5
 754.6
256.8
 256.9
 502.6
 503.8
Acquisition and integration costs0.6
 0.9
 6.5
 5.4
5.5
 4.7
 6.0
 5.9
Restructuring charges and other, net4.0
 0.8
 0.9
 18.1
0.5
 (3.6) 1.8
 (3.1)
Operating income57.4
 56.7
 168.1
 166.6
54.6
 63.1
 92.7
 110.7
Other expenses, net:              
Interest expense21.5
 20.6
 62.0
 63.9
20.9
 20.5
 41.9
 40.5
Amortization of debt issuance costs1.4
 1.3
 4.2
 4.1
1.4
 1.4
 2.9
 2.8
Loss on early extinguishment of debt—
 —
 —
 2.0
Foreign currency (gains) losses, net(0.7) 9.3
 7.3
 17.9
Foreign currency loses (gains), net8.5
 (7.9) 5.1
 8.0
Miscellaneous, net0.3
 0.1
 0.5
 0.2
0.2
 0.2
 0.5
 0.2
Other expenses, net22.5
 31.3
 74.0
 88.1
31.0
 14.2
 50.4
 51.5
Income from continuing operations before income taxes34.9
 25.4
 94.1
 78.5
23.6
 48.9
 42.3
 59.2
Provision for income taxes25.5
 9.6
 56.5
 36.6
11.8
 21.4
 17.9
 31.0
Income from continuing operations, net of taxes9.4
 15.8
 37.6
 41.9
11.8
 27.5
 24.4
 28.2
(Loss) income from discontinued operations, net of taxes(1.7) 0.4
 (1.8) 0.9
Loss from discontinued operations, net of taxes(2.5) —
 (2.1) (0.1)
Net income$7.7
 $16.2
 $35.8
 $42.8
$9.3
 $27.5
 $22.3
 $28.1

Other comprehensive income (loss):
    

 

    

 

Currency translation adjustment, net of tax (a)
(2.5) (18.3) (15.1) (17.1)
Amortization of pension related costs, net of tax (b)(c)
1.9
 1.1
 5.4
 3.4
Revaluation of derivative financial instruments, net of reclassifications into earnings (d)
(0.7) 0.6
 (2.7) (2.3)
Other comprehensive (loss)(1.3) (16.6) (12.4) (16.0)
Total comprehensive income (loss)$6.4
 $(0.4) $23.4
 $26.8
Foreign currency translation adjustments, net of tax (a)
2.6
 0.8
 5.3
 (12.6)
Amortization of pension related costs, net of tax (b)(d)
2.0
 1.8
 3.8
 3.5
Revaluation of derivative financial instruments, net of reclassifications into earnings (c)
0.2
 (0.1) (0.7) (2.0)
Other comprehensive income (loss)4.8
 2.5
 8.4
 (11.1)
Total comprehensive income$14.1
 $30.0
 $30.7
 $17.0

(a) 
Net of tax benefitexpense (benefit) of $3.5$0.5 million and $0.2 million for the three months ended SeptemberJune 30, 20152016 and 2014,2015, respectively, and $6.3$0.6 million and $0.4$(2.8) million for the ninesix months ended SeptemberJune 30, 20152016 and 2014,2015, respectively.
(b) 
Net of tax benefitexpense of $0.3$0.4 million for each of the three months ended June 30, 2016 and 2015, respectively, and $0.7 million for each of the six months ended June 30, 2016 and 2015.
(c)
Net of tax expense (benefit) of $0.1 million and nil for the three months ended SeptemberJune 30, 20152016 and 2014,2015, respectively, and $1.0$(0.4) million and nil$(1.2) million for the ninesix months ended SeptemberJune 30, 20152016 and 2014,2015, respectively.
(c)(d) 
This other comprehensive income component is included in the computation of net periodic benefit (income) costs. See Note 11, “Pension and Post-Retirement Benefits,” for additional information regarding net periodic benefit (income) costs.
(d)
Net of tax benefit of $0.5 million and $0.4 million for the three months ended September 30, 2015 and 2014, respectively, and $1.7 million and $1.4 million for the nine months ended September 30, 2015 and 2014, respectively.


See Accompanying Notes to Unaudited Consolidated Financial Statements

3




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

Common Stock Additional Paid-In-Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's DeficiencyRCPC Preferred Stock Additional Paid-In-Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Deficiency
         
Balance, January 1, 2015$54.6
 $952.1
 $(1,320.5) $(243.2) $(557.0)
Balance, January 1, 2016$54.6
 $957.5
 $(1,258.4) $(245.3) $(491.6)
Stock-based compensation amortization  3.8
     3.8
  3.3
     3.3
Excess tax benefits from stock-based compensation  0.1
     0.1
  0.1
     0.1
Net income    35.8
   35.8
    22.3
   22.3
Other comprehensive loss, net (a)
      (12.4) (12.4)      8.4
 8.4
Balance, September 30, 2015$54.6
 $956.0
 $(1,284.7) $(255.6) $(529.7)
Balance, June 30, 2016$54.6
 $960.9
 $(1,236.1) $(236.9) $(457.5)


(a) 
See Note 13, “Accumulated Other Comprehensive Loss,” regarding the changes in the accumulated balances for each component of other comprehensive lossincome during the ninesix months ended SeptemberJune 30, 2015.2016.




See Accompanying Notes to Unaudited Consolidated Financial Statements

4



REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, dollars in millions)
Nine Months Ended September 30,Six Months Ended June 30,
2015 20142016 
2015
(as adjusted)(a)
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income$35.8
 $42.8
$22.3
 $28.1
Adjustments to reconcile net income to net cash (used in) provided by operating activities:   
Adjustments to reconcile net income to net cash used in by operating activities:   
Depreciation and amortization76.8
 76.4
52.2
 50.8
Foreign currency losses from re-measurement10.5
 18.0
4.2
 8.8
Amortization of debt discount1.1
 1.0
0.7
 0.7
Stock-based compensation amortization3.8
 3.7
3.3
 2.8
Provision for deferred income taxes37.1
 30.3
7.1
 19.5
Loss on early extinguishment of debt—
 2.0
Amortization of debt issuance costs4.2
 4.1
2.9
 2.8
Gain on sale of certain assets(6.5) (0.4)
Loss (gain) on sale of certain assets0.3
 (3.0)
Pension and other post-retirement income(1.6) (3.9)(0.3) (1.3)
Change in assets and liabilities:  

  

Increase in trade receivables(27.9) (16.4)(24.7) (18.7)
Increase in inventories(62.4) (17.9)(25.6) (36.1)
Increase in prepaid expenses and other current assets(29.7) (8.8)(31.0) (25.1)
Increase in accounts payable30.0
 10.3
(Decrease) increase in accounts payable(0.7) 29.6
Decrease in accrued expenses and other current liabilities(14.0) (44.6)(43.1) (25.5)
Pension and other post-retirement plan contributions(15.5) (16.4)(3.6) (5.2)
Purchases of permanent displays(32.5) (33.1)(17.5) (22.0)
Other, net(11.8) (0.4)(3.7) (3.7)
Net cash (used in) provided by operating activities(2.6) 46.7
(57.2) 2.5
CASH FLOWS FROM INVESTING ACTIVITIES:      
Capital expenditures(27.0) (30.3)(18.6) (17.2)
Business acquisitions, net of cash acquired(34.2) —
Business acquisitions(29.2) (34.2)
Proceeds from the sale of certain assets5.8
 0.9
0.4
 2.0
Net cash used in investing activities(55.4) (29.4)(47.4) (49.4)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Net increase in short-term borrowings and overdraft4.3
 (3.1)
Repayment under the Amended and Restated Senior Subordinated Term Loan—
 (58.4)
Net (decrease) increase in short-term borrowings and overdraft(8.4) 6.6
Repayments under the Acquisition Term Loan(17.6) (5.3)(15.1) (15.9)
Prepayments under the 2011 Term Loan(12.1) —
(11.5) (12.1)
Payment of financing costs—
 (1.8)
Other financing activities(3.0) (2.1)(1.6) (2.1)
Net cash used in financing activities(28.4) (70.7)(36.6) (23.5)
Effect of exchange rate changes on cash and cash equivalents(7.7) (12.3)0.1
 (5.9)
Net decrease in cash and cash equivalents
(94.1) (65.7)(141.1) (76.3)
Cash and cash equivalents at beginning of period275.3
 244.1
326.9
 275.3
Cash and cash equivalents at end of period$181.2
 $178.4
$185.8
 $199.0
Supplemental schedule of cash flow information:      
Cash paid during the period for:      
Interest$66.1
 $72.7
$41.2
 $37.9
Income taxes, net of refunds21.2
 16.8
12.9
 10.8

(a) Adjusted as a result of the adoption of certain accounting pronouncements beginning on January 1, 2016. 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 Unaudited Consolidated Financial Statements

5
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Item 1. Financial Statements

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revlon Consumer Products Corporation ("Products Corporation" and together with its subsidiaries, the "Company") is the direct wholly-owned operating subsidiary of Revlon, Inc., which is a direct andan indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company and Revlon, Inc., "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 wantThe Company wants to inspire ourits consumers to express themselves boldly and confidently. The Company operates in three segments,reporting segments: the consumer division (“Consumer”),; the professional division (“Professional”); and Other (as described below).Other. 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, beauty tools, men's grooming products, anti-perspirant deodorants, fragrances, skincare and other beauty care products. The Company’s principal customers for its products in the Consumer segment include large mass volume retailers, and chain drug and food stores, (collectively,chemist shops, hypermarkets, general merchandise stores, the “mass retail channel”)Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally, as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S.internationally. 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 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 distributes fragrances and other beauty products under a variety of 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'sCompany’s consolidated results of operations. Refer to Note 2, "Business Combinations," for further details related to the CBB Acquisition.
The accompanying Consolidated Financial Statements are unaudited. In management's opinion, all adjustments necessary for a fair presentation have been made. The Consolidated Financial Statements include the accounts of the Company after the elimination of all material intercompany balances and transactions.
The preparation of the Company's Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the 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. The Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2014,2015, filed with the U.S. Securities and Exchange CommissionSEC on February 26, 2016 (the "SEC") on March 12, 2015 (the "2014"2015 Form 10-K").
The Company's results of operations and financial position for interim periods are not necessarily indicative of those to be expected for a full year.
Certain prior year amounts in the Consolidated Financial Statements have been reclassified to conform to the current period's presentation.
Impact
Recently Adopted Accounting Pronouncements
In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Foreign Currency Translation - Venezuela Currency
In January 2014, the Venezuela government announced that the CADIVI would be replaced by the government-operated National Center of Foreign Commerce (the "CENCOEX"),Deferred Taxes," which requires deferred income tax assets and indicated that the Sistema Complementario de Administración de Divisas (“SICAD”) market would continueliabilities to be offeredclassified as an alternative foreign currency exchange. Additionally,noncurrent within 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,company's balance sheet. Under previous guidance, the Company exchanged Bolivars for U.S. Dollarswas required to separate deferred income tax assets and liabilities into current and noncurrent amounts. Netting deferred tax assets and deferred tax liabilities by tax jurisdiction is still required under ASU 2015-17. The Company adopted ASU No. 2015-17 beginning on January 1, 2016 and the Company's previously recorded deferred tax assets were adjusted to reflect the adoption of ASU No. 2015-17. The adoption of ASU No. 2015-17 resulted in no adjustment to the extent permitted throughCompany’s results of operations and stockholder's deficiency and had the various foreign currency markets available basedfollowing impact on its ability to participate in those markets. Prior to June 30, 2014, the Company utilized the official rate of 6.3 Bolivars per U.S. Dollar (the "Official Rate") and following a consideration of the Company's specific facts and circumstances, which included its legalpreviously reported Consolidated

6
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

abilityBalance Sheets for the fiscal year ended December 31, 2015 and intent to participate in the SICAD II exchange market to import finished goods into Venezuela,Consolidated Statements of Cash Flows for 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 onfiscal period ended 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.2015:
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. As of September 30, 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 of 193 Bolivars per U.S. Dollar. 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. As Venezuela was designated as a highly inflationary economy effective January 1, 2010, the Company reflected this foreign currency loss in earnings.
Consolidated Balance Sheets Total as reported at 12/31/2015 Adjustment Total as adjusted at 12/31/2015
     Deferred income taxes - current 58.0
 (58.0) —
     Deferred income taxes - noncurrent 38.5
 11.3
 49.8
     Other long-term liabilities 117.5
 (46.7) 70.8
       
Consolidated Statements of Cash Flows Total as reported at 6/30/2015 Adjustment Total as adjusted at 6/30/2015
     Increase in prepaid expense and other current assets (25.2) 0.1
 (25.1)
     Decrease in accrued expenses and other current liabilities (25.4) (0.1) (25.5)
Recently Adopted Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," which changes the requirements for reporting discontinued operations under Accounting Standards Codification Topic 205. Under ASU No. 2014-08, a disposal of a component of an entity 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. The Company adopted ASU No. 2014-08 on a prospective basis 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.
Recently Issued Accounting Pronouncements
In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments," which eliminates the current requirement for an acquirer in a business combination 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, with early adoption permitted. The Company expects to adoptadopted ASU No. 2015-16 beginning on January 1, 2016 and the adoption of the new guidance isdid not expected to have a material impact on the Company’s results of operations, financial condition and 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 guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt ASU No. 2015-11 beginning on January 1, 2017. The Company is evaluating the impact that the new guidance will have on the Company’s results of operations, financial condition and financial statement disclosures.
In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs," which requires debt issuance costs to be presented in the financial statements as a deduction from the corresponding debt liability, consistent with the presentation of debt discounts. The guidance is effective for annual periods beginning after December 15, 2015, with early adoption permitted, and is to be applied retrospectively. The Company expects to adoptadopted ASU No. 2015-03 beginning on January 1, 2016 and the Company's previously recorded other assets and long-term debt were adjusted to reflect the adoption of ASU No. 2015-03. The adoption of ASU No. 2015-03 resulted in no adjustment to the Company’s results of operations, cash flows and stockholder's deficiency and had the following impact on the previously reported Consolidated Balance Sheets for the fiscal year ended December 31, 2015:

Consolidated Balance Sheets Total as reported at 12/31/2015 Adjustment Total as adjusted at 12/31/2015
     Long-Term Debt 1,803.7
 (20.0) 1,783.7
     Other Assets 104.1
 (20.0) 84.1

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 isdid not expected to have a material impact on the Company’s results of operations, financial condition and financial statement disclosures.


Recently Issued Accounting Pronouncements
7In 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
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

shares to satisfy the employer’s minimum statutory income tax withholding obligation, forfeitures and income taxes when awards vest or are settled. The guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt ASU No. 2016-09 beginning on January 1, 2017 and is in the process of assessing the impact that the new guidance will have on the Company’s results of operations, financial condition and 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. The guidance is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt ASU No. 2016-02 beginning on January 1, 2019 and is in the process of assessing the impact that the new guidance will have on the Company’s results of operations, financial condition and financial statement disclosures.


2. BUSINESS COMBINATIONS
The CBBeauty GroupCutex International Acquisition
On April 21, 2015May 31, 2016 (the "Acquisition"Cutex International Acquisition Date"), the Company completed the CBB Acquisitionacquisition of certain international Cutex businesses ("Cutex International") from Coty Inc. (the "Cutex International Acquisition"), which primarily operate in Australia and the U.K., and related assets for a total cash consideration of $48.6$29.1 million. CBB is a U.K.-based company whose primary business consists of licensing and distributing fragrances under brands such as One Direction and Burberry. OnFollowing the Acquisition Date, the Company used cash on hand to pay approximately 70%Company's October 2015 acquisition of the total cash consideration, or $34.6 million. The remaining $14.0 millionCutex business and related assets in the U.S. from Cutex Brands, LLC, the Cutex International Acquisition completed the Company's global consolidation of the total cash consideration is payable over 4 years in equal annual installments, subject to the selling shareholders' compliance with certain service conditions. These remaining installments will be 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 developCutex brand and enhances and complements the Company's presence in the fragrance category. Theexisting brand portfolio of nail care products. Cutex International's results of operations of the CBB business 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 CBBCutex International Acquisition on the Company’s consolidated financial results is not material.
The Company accounted for the CBBCutex International Acquisition as a business combination duringin the second quarter of 2015. 2016. The table below summarizes the allocation of the total consideration of $29.1 million paid on the Cutex International Acquisition Date:
 Fair Value at May 31, 2016
Inventory$0.8
Purchased Intangible Assets (a)
19.7
Goodwill8.6
        Total consideration transferred$29.1

(a) Purchased intangible assets include customer networks fair valued at $14.0 million, intellectual property fair valued at $0.9 million, which are amortized over useful lives of 15 and 10 years, respectively, and indefinite lived trade names fair valued at $4.8 million.

The Company reacquired the Cutex trade name, 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 agreements and other factors, the Cutex trade name was assigned an indefinite-life and, therefore, will not be amortized.
The fair values of the net assets acquired in the CBBCutex International Acquisition were based on management’s preliminary estimate of the respective fair values. The estimated fair values of net assets and resulting goodwill are subject to the Company finalizing its analysis of the fair value of CBB’sCutex International's assets and liabilities as of the Cutex International Acquisition Date and may be adjusted upon completion of such analysis. In addition, information unknown at the time of the CBBCutex International Acquisition Date could result in adjustments to the respective fair values and resulting goodwill within the year following the CBB Acquisition.
Allocation of the total consideration of $34.6 million paid on theCutex International Acquisition Date, adjusted for changes in working capital during the third quarter of 2015, has been recorded based on the respective preliminarily estimated fair values of the net assets acquired on the Acquisition Date, with resulting goodwill, as follows:
 
Amounts recognized at April 21, 2015
(Provisional)(a)
 Measurement Period Adjustments 
Amounts recognized at April 21, 2015
(Adjusted)
Total 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$34.6
 $(0.7) $33.9
(a) As previously reported in the Company's second quarter 2015 Form 10-Q.

(b) Total net assets acquired in the CBB Acquisition are comprised primarily of inventory, trade receivables and accounts payable.

(c) Purchased intangible assets include customer networks preliminarily valued at $7.0 million, distribution rights preliminarily valued at $3.5 million and trade names preliminarily valued at $1.6 million, with weighted average remaining useful lives of 14, 5, and 8 years, respectively.Date.
In determining the preliminarily 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 CBB'sCutex International's historical financial performance and an estimate of the future performance of the acquired business, as well as market participants' intended use of the acquired assets. Factors contributing to the purchase price resulting in the recognition of goodwill include the anticipated benefits the

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


Company expects to achieve through the expansion of its nail product portfolio. Both the intangible assets acquired and goodwill are not deductible for income tax purposes.

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" or "Efficiency Program"). TheThese actions, which commenced during 2015 and are planned to occur during the remainder of 2015 and through 2016,2017, are expected to reduce departmentalgeneral and administrative expenses within the Consumer and Professional segments. The Company expects to recognize a total of approximately $4 million to $8 million of restructuring and related charges for the Efficiency Program through early 2016. Of the $3.7$1.2 million of restructuring and related charges recognized in the third quarterfirst six months of 20152016 for the 2015 Efficiency Program, $2.8$0.5 million related to the Consumer segment and $0.5$0.6 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 $11.7 million by the end of 2017, of which $6.9 million is expected to relate to the Consumer segment, $4.4 million is expected to relate to the Professional segment and the remaining charge relates to unallocated corporate expenses.
A summary of the restructuring and related charges incurred through June 30, 2016 in connection with the 2015 Efficiency Program is presented in the following table:
 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
Charges incurred in the six months ended June 30, 2016$0.6
 $0.6
 $1.2
Cumulative charges incurred through June 30, 2016$10.0
 $0.7
 $10.7
Total expected charges$10.0
 $1.7
 $11.7
Of the cumulative $10.7 million of restructuring and related charges recognized through the second quarter of 2016 related to the 2015 Efficiency Program, $6.5 million related to the Consumer segment, $3.8 million related to the Professional segment and the remaining charges related to unallocated corporate expenses.
The Company expects that cash payments will total approximately $12 million in connection with the 2015 Efficiency Program, 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 $1.6 million was paid in the six months ended June 30, 2016 and $2.8 million was paid in 2015. A total of $6.2 million is expected to be paid during the remainder of 2016, with the remaining balance expected to be paid in 2017.



8








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

A summaryRestructuring Reserve
The related liability balance and activity for each of the Company's restructuring and related charges incurred through September 30, 2015 in connection with the Efficiency Program isprograms are presented in the following table:
 Restructuring Charges and Other, Net    
 Employee Severance and Other Personnel Benefits Other Total Restructuring Charges Other Charges (a) Total Restructuring and Related Charges
Charges incurred in the nine months ended September 30, 2015$3.7
 $—
 $3.7
 $—
 $3.7
Total expected charges$8.0
 $—
 $8.0
 $—
 $8.0
(a)
Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Income and Comprehensive Income.
In connection with the restructuring actions initiated during the third quarter of 2015 for the Efficiency Program, the Company expects that cash payments will total approximately $3.7 million, of which $1.0 million was paid during the three months ended September 30, 2015. An additional $1.9 million is expected to be paid during the fourth quarter of 2015, with the remaining balance expected to be paid in 2016.
       Utilized, Net  
Balance
Beginning of Year
 (Income) Expense, Net Foreign Currency Translation 

Cash
 

Non-cash
 
Balance
End of Period
2015 Efficiency Program:           
Employee severance and other personnel benefits$6.6
 $0.6
 $—
 $(1.2) $—
 $6.0
Other0.1
 0.6
 —
 (0.4) (0.1) 0.2
Integration Program:(a)
           
Employee severance and other personnel benefits0.8
 —
 —
 (0.8) —
 —
Other0.1
 —
 —
 —
 —
 0.1
December 2013 Program:(b)

 
 
 
 
 
Employee severance and other personnel benefits1.2
 —
 —
 —
 —
 1.2
Other—
 —
 —
 —
 —
 —
Other immaterial actions: 

 
 
 
 
 
Employee severance and other personnel benefits2.3
 0.3
 —
 (1.0) —
 1.6
Other0.7
 0.3
 —
 (0.3) —
 0.7
Total restructuring reserve$11.8
 $1.8
 $—
 $(3.7) $(0.1) $9.8
Integration Program
(a) Following Products Corporation's October 2013 acquisition of The Colomer Group Participations, S.L. ("Colomer" and the "Colomer Acquisition"), the Company announced in January 2014 that it was implementingimplemented actions to integrate Colomer’sColomer's operations into the Company’sCompany's business as well as additional restructuring actions identified to reducewhich reduced costs across the Company’sCompany's businesses (all such actions, together, the “Integration Program”).
The Company expects to recognize total restructuring charges, capital expenditures and related non-restructuring costs under the Integration Program of approximately $50 million in the aggregate over the periods described below.
The Integration Program is designed to deliver cost reductions throughout the combined organization by generatinggenerated synergies and operating efficiencies within the Company’sCompany's global supply chain and consolidatingconsolidated offices and back office support and other(all such actions, designed to reduce selling, general and administrative ("SG&A"together, the "Integration Program") expenses. Certain actions that are part of the. The Integration Program are subject to consultations with employees, works councils or unions and governmental authorities. The Company expects towas substantially complete the Integration Program by the endcompleted as of December 31, 2015.
The approximately $50 million of total expected non-restructuring costs, capital expenditures and restructuring charges under the Integration Program referred to above consist of the following:
1.$1.5 million and $18.4 million of non-restructuring integration costs recognized during the nine months ended September 30, 2015, and through December 31, 2014, respectively. Such costs have been reflected within acquisition and integration costs in the Company's Consolidated Statements of Income and Comprehensive Income and are related to combining Colomer’s operations into the Company’s business;
2.Expected integration-related capital expenditures of approximately $6 million, of which $0.8 million and $4.4 million were paid during the nine months ended September 30, 2015 and through December 31, 2014, respectively, with the remaining balance expected to be paid during the remainder of 2015; and
3.Expected total restructuring and related charges of approximately $21 million, of which $(2.3) million and $20.1 million were recognized during the nine months ended September 30, 2015 and through December 31, 2014, respectively, with the remaining charges expected to be recognized during the remainder of 2015. A summary of the restructuring and related charges for the Integration Program incurred through September 30, 2015 and those expected to be incurred during the remainder of 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
 $20.1
Charges incurred in the nine months ended September 30, 2015$(3.2) $0.3
 $(2.9) $0.3
 $0.3
 $(2.3)
Cumulative charges incurred through September 30, 2015$14.1
 $1.9
 $16.0
 $0.9
 $0.9
 $17.8
Total expected charges$14.5
 $2.5
 $17.0
 $2.5
 $1.5
 $21.0

9
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

(b) (a)
Inventory write-offs and other manufacturing-related costs are recorded within cost of sales within the Company’s Consolidated Statements of Income and Comprehensive Income (Loss).
(b)
Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Income and Comprehensive Income (Loss).
During the nine months ended September 30, 2015, the Company recorded a benefit of $2.3 million in connection with the Integration Program, of which $3.7 million is related to the Consumer segment, partially offset by charges of $1.4 million related to the Professional segment. During the nine months ended September 30, 2014, the Company recorded charges related to the Integration Program of $17.1 million, of which $7.3 million related to the Consumer segment and $9.8 million related to the Professional segment.
The Company expects that cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately $20 million, of which $5.8 million was paid during the nine months ended September 30, 2015, and $9.6 million was paid during 2014. The remaining balance of $4.6 million is expected to be paid during the remainder of 2015.
December 2013 Program
In December 2013, the Company announced restructuring actions that primarily included exiting its direct manufacturing, warehousing and sales business operations in mainland China as well as implementing other immaterial restructuring actions outside the U.S., which are expected to generate other operating efficiencies (the "December 2013 Program"). These restructuring actionsThe December 2013 Program resulted in the Company eliminatingelimination of 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.
A summary of the restructuring and related charges incurred through September 30, 2015 in connection with the December 2013 Program is 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
Cumulative charges incurred through September 30, 2015$8.6
 $0.3
 $8.9
 $6.5
 $3.1
 $0.4
 $18.9
Total expected charges$8.6
 $0.3
 $8.9
 $6.5
 $3.1
 $0.4
 $18.9
The Company expects net cash payments related to the December 2013 Program to total approximately $17 million, of which $15.5 million was paid during 2014, and $0.1 million was paid in 2013. No charges were incurred during the nine months ended September 30, 2015 related to the December 2013 program. The remaining balance is expected to be paid in 2016.















10
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

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

Cash
 

Non-cash
 September 30,
2015
Efficiency Program:           
Employee severance and other personnel benefits$—
 $3.7
 $—
 $(1.0) $—
 $2.7
Integration Program:           
Employee severance and other personnel benefits9.6
 (3.2) (0.2) (4.8) —
 1.4
Other0.1
 0.3
 —
 (0.4) —
 —
December 2013 Program:
 
 
 
 
 
Employee severance and other personnel benefits1.2
 —
 —
 —
 —
 1.2
Other—
 —
 —
 —
 —
 —
Other immaterial actions: (a)

 
 
 
 
 
Employee severance and other personnel benefits3.1
 0.1
 —
 (2.2) —
 1.0
Other—
 —
 —
 —
 —
 —
Total restructuring reserve$14.0
 $0.9
 $(0.2) $(8.4) $—
 $6.3
China.

(a)At Other immaterial actions primarily include liabilities for employee-related costs within both the Consumer and Professional segments related to immaterial restructuring actions.
As of SeptemberJune 30, 20152016, $6.3$9.8 million of the restructuring reserve balance was included within accrued expenses and other in the Company's Consolidated Balance Sheet. At December 31, 2014, $13.72015, $11.8 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.


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 China (refer to Note 3, "Restructuring Charges - December 2013 Program").mainland China.

The results of the China discontinued operations are included within lossLoss from discontinued operations, net of taxes, and relate entirely to the Consumer segment. The summary comparative financial results of discontinued operations are as follows:
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
Net sales$—
 $—
 $—
 $2.6
$—
 $—
 $—
 $—
(Loss) income from discontinued operations, before taxes(1.7) 0.4
 (1.8) 1.1
Loss from discontinued operations, before taxes(2.5) —
 (2.1) (0.1)
Provision for income taxes—
 —
 —
 0.2
—
 —
 —
 —
(Loss) income from discontinued operations, net of taxes

(1.7) 0.4
 (1.8) 0.9
Loss from discontinued operations, net of taxes(2.5) —
 (2.1) (0.1)







11
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


Assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consist of the following:
September 30, 2015 December 31, 2014June 30, 2016 December 31, 2015
Cash and cash equivalents$2.0
 $2.4
$1.8
 $2.0
Trade receivables, net0.2
 0.2
0.2
 0.2
Total current assets2.2
 2.6
2.0
 2.2
Total assets$2.2
 $2.6
$2.0
 $2.2

 

 
Accounts payable$0.7
 $0.2
$0.6
 $0.7
Accrued expenses and other3.6
 3.9
3.5
 3.6
Total current liabilities4.3
 4.1
4.1
 4.3
Total liabilities$4.3
 $4.1
$4.1
 $4.3


5. INVENTORIES
September 30, 2015
December 31, 2014June 30, 2016
December 31, 2015
Raw materials and supplies$71.8
 $47.2
$61.9
 $58.2
Work-in-process12.4
 9.0
12.0
 8.3
Finished goods133.6
 100.4
135.7
 117.3
$217.8
 $156.6
$209.6
 $183.8


6. GOODWILL AND INTANGIBLE ASSETS, NET
Goodwill

The following table presents the changes in goodwill by segment during the ninesix months ended SeptemberJune 30, 2015:2016:
Consumer Professional Other TotalConsumer Professional Other Total
Balance at December 31, 2014$217.9
 $246.2
 $—
 $464.1
Balance at January 1, 2016$210.1
 $240.7
 $18.9
 $469.7
Goodwill acquired(a)—
 —
 19.5
 19.5
8.6
 —
 —
 8.6
Foreign currency translation adjustment—
 (5.6) 0.2
 (5.4)—
 0.2
 (1.8) (1.6)
Balance at September 30, 2015$217.9
 $240.6
 $19.7
 $478.2
Balance at June 30, 2016$218.7
 $240.9
 $17.1
 $476.7

The goodwill acquired during 2015 relates to(a) On May 31, 2016, the CBB Acquisition, which was assigned toCompany completed the Company's Other segment.Cutex International 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," to the Unaudited Consolidated Financial Statements in this Form 10-Q for further discussion ofdetails related to the CBBCutex International Acquisition.













12
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)



Intangible Assets, Net

The following tables present details of the Company's total intangible assets:

September 30, 2015June 30, 2016
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Finite-lived intangible assets:           
Trademarks and Licenses$141.5
 $(32.9) $108.6
 14$147.2
 $(42.3) $104.9
Customer relationships118.3
 (18.7) 99.6
 16132.5
 (24.4) 108.1
Patents and Internally-Developed IP16.4
 (3.5) 12.9
 917.9
 (5.2) 12.7
Distribution rights3.6
 (0.4) 3.2
 53.1
 (0.9) 2.2
Total finite-lived intangible assets$279.8
 $(55.5) $224.3
 $300.7
 $(72.8) $227.9
           
Indefinite-lived intangible assets:           
Trade Names$96.6
 $—
 $96.6
 $101.0
 $—
 $101.0
Total indefinite-lived intangible assets$96.6
 $—
 $96.6
 $101.0
 $—
 $101.0
           
Total intangible assets$376.4
 $(55.5) $320.9
 $401.7
 $(72.8) $328.9
           
December 31, 2014December 31, 2015
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Finite-lived intangible assets:           
Trademarks and Licenses$140.5
 $(23.5) $117.0
 14$145.0
 $(36.0) $109.0
Customer relationships109.1
 (13.4) 95.7
 17118.8
 (20.5) 98.3
Patents and Internally-Developed IP16.2
 (2.4) 13.8
 1016.8
 (4.0) 12.8
Distribution rights3.5
 (0.6) 2.9
Total finite-lived intangible assets$265.8
 $(39.3) $226.5
 $284.1
 $(61.1) $223.0
           
Indefinite-lived intangible assets:           
Trade Names$101.3
 $—
 $101.3
 $95.0
 $—
 $95.0
Total indefinite-lived intangible assets$101.3
 $—
 $101.3
 $95.0
 $—
 $95.0
           
Total intangible assets$367.1
 $(39.3) $327.8
 $379.1
 $(61.1) $318.0

Amortization expense for finite-lived intangible assets was $6.1 million and $5.3 million for the three months ended June 30, 2016 and 2015, respectively. Amortization expense for finite-lived intangible assets was $12.0 million and $10.4 million for the six months ended June 30, 2016 and 2015, respectively.












13
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


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 June 30, 2016:
 Estimated Amortization Expense
2016$11.5
201723.6
201822.7
201920.1
202019.5
Thereafter130.5
Total$227.9


7. ACCRUED EXPENSES AND OTHER
September 30, 2015 December 31, 2014June 30, 2016 December 31, 2015
Sales returns and allowances$55.2
 $70.6
$50.8
 $61.1
Compensation and related benefits67.9
 66.8
49.4
 75.6
Advertising and promotional costs39.0
 44.9
37.0
 38.4
Taxes22.9
 23.4
23.4
 20.8
Interest5.3
 11.0
12.3
 12.4
Restructuring reserve6.3
 13.7
9.8
 11.8
Other50.0
 42.9
50.5
 52.3
$246.6
 $273.3
$233.2
 $272.4

8. LONG-TERM DEBT
 September 30, 2015 December 31, 2014
Amended Term Loan Facility: Acquisition Term Loan due 2019, net of discounts (a)
$674.2
 $691.6
Amended Term Loan Facility: 2011 Term Loan due 2017, net of discounts (a)
660.3
 671.6
Amended Revolving Credit Facility (b)
—
 —
5¾% Senior Notes due 2021 (c)
500.0
 500.0
Spanish Government Loan due 2025 (d)
0.6
 0.7
 1,835.1
 1,863.9
Less current portion (*)   
(6.9) (31.5)
 $1,828.2
 $1,832.4
 June 30, 2016 December 31, 2015
Amended Term Loan Facility: Acquisition Term Loan due 2019, net of discounts and debt issuance costs (a)
$648.5
 $662.1
Amended Term Loan Facility: 2011 Term Loan due 2017, net of discounts and debt issuance costs (a)
648.2
 658.5
Amended Revolving Credit Facility (b)
—
 —
5¾% Senior Notes due 2021, net of debt issuance costs (c)
493.1
 492.5
Spanish Government Loan due 2025  (d)
0.6
 0.6
 1,790.4
 1,813.7
Less current portion (*)   
(6.8) (30.0)
 $1,783.6
 $1,783.7

(*) At December 31, 2014,2015, the Company classified $31.5$30.0 million as the current portion of long-term debt, as a current liability, which was primarily comprised of a $24.6$23.2 million required “excess cash flow” prepayment (as defined under the Amended Term Loan Agreement, as hereinafter defined), which that was paid on March 12, 2015February 29, 2016, and the Company’s regularly scheduled $1.7 million quarterly principal amortization payments (after giving effect to such prepayment) due in 2015.2016.
(a) See Note 17, "Subsequent Events," to the Unaudited Consolidated Financial Statements in this Form 10-Q for debt-related matters that occurred subsequent to the second quarter of 2016 and see Note 11, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20142015 Form 10-K for certain details regarding Products Corporation's Amended Term
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Loan Agreement, which facility is comprised ofof: (i) the $675.0 million term loan due November 19, 2017 in the original aggregate amount of $675.0 million (the "2011 Term Loan"); and (ii) the $700.0 million term loan due October 8, 2019 in the original aggregate amount of $700.0 million (the "Acquisition Term Loan") which, respectively, had $1,338.3$651.4 million and $658.6 million in aggregate principal balance outstanding at SeptemberJune 30, 20152016 (together, the "Amended Term Loan Agreement"). Additionally, see Note 11, "Long-Term Debt” to the Consolidated Financial Statements in the Company's 2014 Form 10-K for additional details regarding Products Corporation's Amended Term Loan Agreement.
(b) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20142015 Form 10-K for certain details regarding Products Corporation's existing $175.0 million asset-based, multi-currency revolving credit facility (the "Amended Revolving Credit Facility") which 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 Agreement, but not earlier than June 16, 2016.Agreement.
(c) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20142015 Form 10-K for certain details regarding Products Corporation's 5¾% Senior Notes that mature on February 15, 2021. The aggregate principal amount outstanding at June 30, 2016 was $500 million.
(d) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 20142015 Form 10-K for certain details regarding the euro-denominated loan payable to the Spanish government that matures on June 30, 2025.

20152016 Debt Related Transaction
Amended Term Loan Facility - Excess Cash Flow Payment
On March 12, 2015, in accordance with the terms of the Amended Term Loan Facility,February 29, 2016, Products Corporation prepaid $24.6$23.2 million of indebtedness, representing 50% of its 20142015 “excess cash flow” as defined under the Amended Term Loan Agreement.

14
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amountsAgreement, in millions)

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 amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $12.1$11.5 million to $662.9$651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $12.5$11.7 million that was applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterlyannual amortization payments under the Acquisition Term Loan on a ratable basis from $1.8$6.9 million prior to the prepayment to $1.7$6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019.
See Note 17, "Subsequent Events," to the Unaudited Consolidated Financial Statements in this Form 10-Q for debt-related transaction details that occurred subsequent to the second quarter of 2016.
Covenants
Products Corporation was in compliance with all applicable covenants under the Amended Term Loan Agreement and the Amended Revolving Credit Facility as of SeptemberJune 30, 2015.2016. At SeptemberJune 30, 2015,2016, the aggregate principal amounts outstanding under the Acquisition Term Loan and the 2011 Term Loan were $675.4$658.6 million and $662.9$651.4 million, respectively, and availability under the $175.0 million Amended Revolving Credit Facility, based upon the calculated borrowing base less $8.8$8.3 million of outstanding undrawn letters of credit and nil then drawn on the Amended Revolving Credit Facility, was $166.2$166.7 million.
Products Corporation was in compliance with all applicable covenants under its 5¾% Senior Notes Indenture as of SeptemberJune 30, 20152016 and December 31, 2014.2015.


9. 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.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

As of SeptemberJune 30, 20152016, 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 3Total Level 1 Level 2 Level 3
Assets:              
Derivatives:              
FX Contracts(a)
$2.8
 $—
 $2.8
 $—
$1.1
 $—
 $1.1
 $—
Total assets at fair value$2.8
 $—
 $2.8
 $—
$1.1
 $—
 $1.1
 $—
Liabilities:              
Derivatives:              
FX Contracts(a)
$0.6
 $—
 $0.6
 $—
$1.8
 $—
 $1.8
 $—
2013 Interest Rate Swap(b)
8.3
 —
 8.3
 —
7.6
 —
 7.6
 —
Total liabilities at fair value$8.9
 $—
 $8.9
 $—
$9.4
 $—
 $9.4
 $—





15
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

As of December 31, 2014,2015, 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 3Total Level 1 Level 2 Level 3
Assets:              
Derivatives:              
FX Contracts(a)
$0.2
 $—
 $0.2
 $—
$2.0
 $—
 $2.0
 $—
Total assets at fair value$0.2
 $—
 $0.2
 $—
$2.0
 $—
 $2.0
 $—
Liabilities:              
Derivatives:              
FX Contracts(a)
$0.6
 $—
 $0.6
 $—
2013 Interest Rate Swap(b)

$3.5
 $—
 $3.5
 $—
$6.5
 $—
 $6.5
 $—
Total liabilities at fair value$3.5
 $—
 $3.5
 $—
$7.1
 $—
 $7.1
 $—

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

As of SeptemberJune 30, 2016, 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$—
 $1,793.2
 $—
 $1,793.2
 $1,790.4
As of December 31, 2015, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $1,828.1
 $—
 $1,828.1
 $1,835.1
As of December 31, 2014, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $1,818.0
 $—
 $1,818.0
 $1,813.7
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $1,844.0
 $—
 $1,844.0
 $1,863.9

The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on the quoted market prices for the same issues.similar issues 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.


10. FINANCIAL INSTRUMENTS
Products Corporation maintains standby and trade letters of credit for various corporate purposes under which Products Corporation is obligated, of which $8.8$8.3 million and $9.08.8 million (including amounts available under credit agreements in effect at that time) were maintained at SeptemberJune 30, 20152016 and December 31, 20142015, respectively. Included in these amounts are approximately $7.5$7.2 million and $7.7$7.5 million at SeptemberJune 30, 20152016 and December 31, 20142015, respectively, in standby letters of credit that support Products Corporation’s self-insurance programs. The estimated liability under such programs is accrued by Products Corporation.



16
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Derivative Financial Instruments
The Company uses derivative financial instruments, primarilyprimarily: (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,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.
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 SeptemberJune 30, 20152016 and December 31, 20142015 was $83.074.2 million and $7.676.3 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, based on a notional amount of $400 million in respect of indebtedness under the Acquisition Term Loan over a period of three years (the "2013 Interest Rate Swap"). The Company designated the 2013 Interest Rate Swap as a cash flow hedge of the variability of the forecasted three-month LIBOR interest rate payments related to the $400 million notional amount under the Acquisition 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 of three-month USD LIBOR or 1.00%, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which effectively fixes the interest rate on such notional amount at 5.0709% over the three-year term of the 2013 Interest Rate Swap). For the ninesix months ended SeptemberJune 30, 2015,2016, the 2013 Interest Rate Swap was deemed effective and therefore the changes in fair value related to the 2013 Interest Rate Swap have been recorded in Other Comprehensive Loss. As of SeptemberJune 30, 20152016, the balance of deferred net losses on derivatives included in accumulated other comprehensive loss was $4.9$4.5 million after-tax. (See "Quantitative Information – Derivative Financial Instruments" below).
The Company expects that $2.3$2.6 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 $2.8$1.1 million and $0.2$2.0 million as of SeptemberJune 30, 20152016 and December 31, 2014,2015, 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.

17
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Quantitative Information – Derivative Financial Instruments
The effects of the Company’s derivative instruments on its Consolidated Financial Statements were as follows:
(a)Fair Values of Derivative Financial Instruments in the Consolidated Balance Sheets:
Fair Values of Derivative InstrumentsFair Values of Derivative Instruments
Assets LiabilitiesAssets Liabilities
Balance Sheet September 30,
2015		 December 31,
2014		 Balance Sheet September 30,
2015		 December 31,
2014		Balance Sheet June 30,
2016		 December 31,
2015		 Balance Sheet June 30,
2016		 December 31,
2015
Classification Fair Value Fair Value Classification Fair Value Fair ValueClassification Fair Value Fair Value Classification Fair Value Fair Value
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:      Derivatives designated as hedging instruments:      
2013 Interest Rate Swap(i)
Prepaid expenses and other $—
 $—
 Accrued expenses and other $4.2
 $2.1
Prepaid expenses and other $—
 $—
 Accrued expenses and other $4.2
 $4.0
Other assets —
 —
 Other long-term liabilities 4.1
 1.4
Other assets —
 —
 Other long-term liabilities 3.4
 2.5
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:      Derivatives not designated as hedging instruments:      
FX Contracts(ii)
Prepaid expenses and other $2.8
 $0.2
 Accrued Expenses $0.6
 $—
Prepaid expenses and other $1.1
 $2.0
 Accrued Expenses $1.8
 $0.6

(i) The fair values of the 2013 Interest Rate Swap at SeptemberJune 30, 20152016 and December 31, 20142015 were measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve at SeptemberJune 30, 20152016 and December 31, 20142015, respectively.

(ii) The fair values of the FX Contracts at SeptemberJune 30, 20152016 and December 31, 20142015 were measured based on observable market transactions of spot and forward rates at SeptemberJune 30, 20152016 and December 31, 20142015, respectively.

(b) Effects of Derivative Financial Instruments on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three and ninesix months ended SeptemberJune 30, 20152016 and 20142015:
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
Three Months Ended September 30,
Nine Months Ended September 30,Three Months Ended June 30,
Six Months Ended June 30,
2015
2014
2015
20142016
2015
2016
2015
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:       Derivatives designated as hedging instruments:       
2013 Interest Rate Swap, net of tax (a)
2013 Interest Rate Swap, net of tax (a)
$(0.7) $0.6
 $(2.7) $(2.3)
2013 Interest Rate Swap, net of tax (a)
$0.2
 $(0.1) $(0.7) $(2.0)
(a) 
Net of tax benefitexpense (benefit) of $0.5$0.1 million and tax expense of $0.4 millionnil for the three months ended SeptemberJune 30, 20152016 and 2014,2015, respectively, and$1.7 $(0.4) million and $1.4$(1.2) million for the ninesix months ended SeptemberJune 30, 2016 and 2015, and 2014, respectively.
Income Statement ClassificationAmount of Gain (Loss) Recognized in Net Income Income Statement Classification Amount of Gain (Loss) Recognized in Net Income
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014 2016 2015 2016 2015
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:       Derivatives designated as hedging instruments:        
2013 Interest Rate Swap2013 Interest Rate SwapInterest Expense$(1.0) $—
 $(1.5) $—
2013 Interest Rate SwapInterest Expense $(1.1) $(0.5) $(2.2) $(0.5)
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:       Derivatives not designated as hedging instruments:        
FX ContractsFX ContractsForeign currency gain (loss), net$2.3
 $1.5
 $3.2
 $0.2
FX ContractsForeign currency gain (loss), net $0.3
 $0.4
 $(0.5) $0.9









18
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

11. PENSION AND POST-RETIREMENT BENEFITS
The components of net periodic benefit (income) costs for the Company’s pension and the other post-retirement benefit plans for the thirdsecond quarter of 20152016 and 20142015 are as follows:


Pension Plans		 Other
Post-Retirement
Benefit Plans

Pension Plans		Other
Post-Retirement
Benefit Plans
Three Months Ended September 30,Three Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
Net periodic benefit (income) costs:  
Service cost$0.2
 $0.2
 $—
 $—
$0.2
 $0.2
 $—
 $—
Interest cost7.2
 7.5
 0.1
 0.2
5.1
 7.1
 0.1
 0.1
Expected return on plan assets(10.0) (10.3) —
 —
(7.8) (10.2) —
 —
Amortization of actuarial loss2.2
 1.1
 —
 —
2.3
 2.1
 0.1
 0.1
(0.4) (1.5) 0.1
 0.2
(0.2) (0.8) 0.2
 0.2
Portion allocated to Revlon Holdings—
 (0.1) —
 —
(0.1) (0.1) —
 —
$(0.4) $(1.6) $0.1
 $0.2
$(0.3) $(0.9) $0.2
 $0.2
The components of net periodic benefit (income) costs for the Company’sCompany's pension and the other post-retirement benefit plans for the ninefirst six months ended September 30,of 2016 and 2015 and 2014 are as follows:


Pension Plans		 Other
Post-Retirement
Benefit Plans

Pension Plans		Other
Post-Retirement
Benefit Plans
Nine Months Ended September 30,Six Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
Net periodic benefit (income) costs:  
Service cost$0.6
 $0.6
 $—
 $—
$0.3
 $0.4
 $—
 $—
Interest cost21.5
 22.6
 0.3
 0.5
10.3
 14.3
 0.2
 0.2
Expected return on plan assets(30.3) (31.0) —
 —
(15.6) (20.3) —
 —
Amortization of actuarial loss6.3
 3.3
 0.1
 0.1
4.4
 4.1
 0.1
 0.1
(1.9) (4.5) 0.4
 0.6
(0.6) (1.5) 0.3
 0.3
Portion allocated to Revlon Holdings(0.1) (0.1) —
 —
(0.1) (0.1) —
 —
$(2.0) $(4.6) $0.4
 $0.6
$(0.7) $(1.6) $0.3
 $0.3
In the three and ninesix months ended SeptemberJune 30, 2015,2016, the Company recognized net periodic benefit income of $0.3$0.1 million and $1.6$0.4 million, respectively, compared to $1.4net periodic benefit income of $0.7 million and $4.0$1.3 million in the three and ninesix months ended SeptemberJune 30, 2014, respectively,2015, primarily due to higher amortizationthe lower expected return on plan assets, partially offset by lower interest cost as a result of actuarial losses.

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.
Net periodic benefit costs (income) costs are reflected in the Company's Consolidated Financial Statements as follows:
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
Net periodic benefit (income) costs:              
Cost of sales$(1.0) $(1.2) $(3.0) $(3.0)$(0.5) $(1.0) $(1.3) $(2.0)
Selling, general and administrative expense0.7
 (0.2) 1.4
 (0.5)0.4
 0.3
 0.9
 0.7
Inventories—
 —
 —
 (0.5)
$(0.3) $(1.4) $(1.6) $(4.0)$(0.1) $(0.7) $(0.4) $(1.3)


19
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

The Company expects that it will have net periodic benefit income of approximately $2.0$1 million for its pension and other post-retirement benefit plans for all of 2015,2016, compared with net periodic benefit incomecost of $5.4$18.8 million in 2014.2015.
During the thirdsecond quarter of 2015, $10.12016, $1.4 million and $0.2$0.3 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During the first ninesix months of 2015, $14.92016, $3.1 million and $0.6$0.5 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. TheDuring 2016, the Company currently expects to contribute approximately $20$10 million in the aggregate to its pension and other post-retirement benefit plans in 2015.plans.
Relevant aspects of the qualified defined benefit pension plans, nonqualified pension plans and other post-retirement benefit plans sponsored by Products Corporation are disclosed in Note 14, "Savings Plan, Pension and Post-Retirement Benefits," to the Consolidated Financial Statements in the Company's 20142015 Form 10-K.


12. INCOME TAXES
The provision for income taxes represents federal, foreign, state and local income taxes. The effective tax rate differs from the applicable federal statutory rate due to the effect of state and local income taxes, tax rates and income in foreign jurisdictions, utilization of tax loss carryforwards, foreign earnings taxable in the U.S., non-deductible expenses and other items. The Company’s tax provision changes quarterly based on various factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, foreign, state and local income taxes, tax audit settlements and the interaction of various global tax strategies. In addition, changes in judgment from the evaluation of new information resulting in the recognition, derecognition and/or re-measurementremeasurement of a tax position taken in a prior period are recognized in the quarter in which any such change occurs.
For the thirdsecond quarter of 20152016 and 2014,2015, the Company recorded a provision for income taxes of $25.5$11.8 million and $9.6$21.4 million, respectively. The $15.9$9.6 million increasedecrease in the provision for income taxes was primarily attributabledue to higher pretaxlower pre-tax income in the third quarter of 2015, the unfavorable impact of certain discrete items, including return-to-provision adjustments and the impactphasing of the favorable resolutionrecognition of tax matters realized in the third quarter of 2014 that did not recur in the third quarter of 2015, and an increase in the valuation allowance related to certain assets in the U.S. as a result of a change in law.income taxes.
For the first ninesix months of 20152016 and 2014,2015, the Company recorded a provision for income taxes of $56.5$17.9 million and $36.6$31.0 million, respectively. The $19.9$13.1 million increasedecrease in the provision for income taxes was primarily attributabledue to the unfavorable impact of certain discrete items, including return-to-provision adjustmentslower pre-tax income and the impactphasing of the favorable resolutionrecognition of tax matters realized in the first nine months of 2014 that did not recur in the first nine months of 2015, an increase in the valuation allowance related to certain assets in the U.S. as a result of a change in law and higher pretax income in certain jurisdictions for the first nine months of 2015, as compared to the first nine months of 2014.taxes.
The Company's effective tax rate for the three months ended SeptemberJune 30, 20152016 was higher than the federal statutory rate of 35% due principally toas a result of foreign and U.S. tax effects attributable to operations outside of the U.S. and stateforeign dividends and local taxes.earnings taxable in the U.S.
The Company's effective tax rate for the ninesix months ended SeptemberJune 30, 20152016 was higher than the federal statutory rate of 35% due principally to foreign and U.S. tax effects attributable to operations outsideas a result of the U.S., state and local taxes andcertain foreign dividends and earnings taxable in the U.S.
The Company remains subject to examination of its income tax returns in various jurisdictions including, without limitation,limitation: Australia and South Africa, for tax years ended December 31, 2011 through December 31, 2013, Canada and Spain for tax years ended December 31, 2011 through December 31, 20142014; South Africa, the U.K. and the U.S. (federal) for tax years ended December 31, 2012 through December 31, 2014.2014; and Canada for tax years ended December 31, 2012 through December 31, 2015.

20
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


13. ACCUMULATED OTHER COMPREHENSIVE LOSS
The components of accumulated other comprehensive loss as of SeptemberJune 30, 20152016 are 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, 2015$(5.4) $(235.3) $(2.2) $(0.3) $(243.2)
Currency translation adjustment, net of tax benefit of $6.3 million$(15.1) 

 

 

 (15.1)
Amortization of pension related costs, net of tax benefit of $1.0 million(a)     


 $5.4
 

 

 5.4
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax benefit of $1.7 million(b)


 

 $(2.7) 

 (2.7)
Other comprehensive loss(15.1) 5.4
 (2.7) —
 (12.4)
Balance at September 30, 2015$(20.5) $(229.9) $(4.9) $(0.3) $(255.6)
 Foreign Currency Translation Actuarial (Loss) Gain on Post-retirement Benefits Deferred Gain (Loss) - Hedging Other Accumulated Other Comprehensive Loss
Balance at January 1, 2016$(23.5) $(217.7) $(3.8) $(0.3) $(245.3)
Currency translation adjustment, net of tax of $0.6 million5.3
 

 

 

 5.3
Amortization of pension related costs, net of tax of $0.7 million(a)     


 3.8
 

 

 3.8
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax benefit of $0.4 million(b)


 

 $(0.7) 

 (0.7)
Other comprehensive income (loss)5.3
 3.8
 (0.7) —
 8.4
Balance at June 30, 2016$(18.2) $(213.9) $(4.5) $(0.3) $(236.9)
(a) 
Amounts represent the change in accumulated other comprehensive loss as a result of the amortization of actuarial losses (gains) arising during each year related to the Company’s pension and other post-retirement plans. See Note 11, “Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
(b)  
For the ninesix months ended SeptemberJune 30, 2015,2016, the Company's 2013 Interest Rate Swap was deemed effective and therefore, the changes in fair value related to the 2013 Interest Rate Swap arewere recorded in other comprehensive loss.income (loss). See Note 10, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.

As shown above, comprehensive loss includes changes in the fair value of the 2013 Interest Rate Swap, which qualifyqualifies for hedge accounting. A rollforward of the amounts reclassified out of accumulated other comprehensive loss into earnings as of SeptemberJune 30, 20152016 are as follows:
  
2013
Interest Rate Swap
Beginning accumulated losses at June 30, 2015 (4.2)
Reclassifications into earnings (net of $0.4 million tax benefit)(a)    
 0.7
Change in fair value (net of $0.9 million tax benefit) (1.4)
Ending accumulated losses at September 30, 2015 $(4.9)
  
2013
Interest Rate Swap
Beginning accumulated losses at March 31, 2016 (4.7)
Reclassifications into earnings (net of $0.4 million tax expense)(a)    
 0.7
Change in fair value (net of $0.3 million tax benefit) (0.5)
Ending accumulated losses at June 30, 2016 $(4.5)
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2015 (3.8)
Reclassifications into earnings (net of $0.8 million tax expense)(a)    
 1.3
Change in fair value (net of $1.2 million tax benefit) (2.0)
Ending accumulated losses at June 30, 2016 $(4.5)
(a) 
Reclassified to interest expense.

  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2014 (2.2)
Reclassifications into earnings (net of $0.6 million tax benefit)(a)    
 0.9
Change in fair value (net of $2.3 million tax benefit) (3.6)
Ending accumulated losses at September 30, 2015 $(4.9)
(a)
Reclassified to interest expense.
There were no amounts reclassified into earnings during 2014.


21
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

A rollforward of the amounts reclassified out of accumulated other comprehensive loss into earnings as of June 30, 2015 are as follows:
  
2013
Interest Rate Swap
Beginning accumulated losses at March 31, 2015 (4.1)
Reclassifications into earnings (net of $0.2 million tax expense)(a)    
 0.3
Change in fair value (net of $0.2 million tax benefit) (0.4)
Ending accumulated losses at June 30, 2015 $(4.2)
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2014 (2.2)
Reclassifications into earnings (net of $0.2 million tax expense)(a)
 0.3
Change in fair value (net of $1.4 million tax benefit) (2.3)
Ending accumulated losses at June 30, 2015 $(4.2)
(a)
Reclassified to interest expense.

14. SEGMENT DATA AND RELATED INFORMATION
Operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Company's “Chief Executive Officer”) in deciding how to allocate resources and in assessing the Company's performance. As a result of the similarities in the procurement, manufacturing and distribution processes for all of 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 management.Chief Executive Officer.
At SeptemberJune 30, 2015,2016, the Company’s operations are organized into the following operatingreportable segments:
Consumer - 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 the mass retail channel, consisting of large mass volume retailers, and 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, as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S.internationally. The Consumer segment also includes a skincare line under the Natural Honey brand and a hair color line under the Llongueras brand sold in the mass retail channel,to large volume retailers and other retailers, primarily in Spain, which were acquired as part of the Colomer Acquisition. In October 2015 and in May 2016, the Company acquired the U.S. Cutex business and Cutex International business and related assets, respectively. The results of operations relating to the sales of Cutex nail care products are included within the Consumer segment.
Professional - The Professional segment is comprised primarily of the brands which the Company acquired in the Colomer Acquisition, which include Revlon Professional in hair color and hair care; CND-branded products in nail polishes and nail enhancements; and American Crew in men’s grooming products, all of which are sold worldwide in theto professional salon channel.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 line consisting of Creme of Nature hair care products sold in the mass retail channelto large volume retailers, other retailers and in professional salons, primarily in the U.S.
Other - The Other segment primarily includes the operating results of the CBB business and related purchase accounting for the Company's April 2015 CBB Acquisition. CBB develops, manufactures, markets and distributes fragrances and other beauty products under various celebrity, lifestyle and fashion brands licensed from third parties, principally through
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

department stores and selective distribution in international territories. 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 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) costs of sales resulting from a fair value adjustment indeferred compensation related to the second quarter of 2015 to inventory acquired inaccounting for the CBB Acquisition; and (iv) costs of sales resulting from a fair value adjustment in the firstsecond quarter of 20142016 and 2015 to inventory acquired in the Colomer Acquisition.Cutex International Acquisition and CBB Acquisition, respectively. 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, $2.1 million and $6.2 million in pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for the three and nine months ended September 30, 2014, 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 of Business and Summary of Significant Accounting Policies” in the Company's 20142015 Form 10-K. 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 operatingreportable segments is produced for the Company's managementChief Executive Officer or included in these Consolidated Financial Statements.









22















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



The following table is a comparative summary of the Company’s net sales and segment profit by operatingreportable segment for the three and ninesix months ended SeptemberJune 30, 20152016 and 2014. In the table below, certain prior period amounts have been reclassified to conform to the presentation for 2015.
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 20142016 2015 2016 2015
Segment Net Sales:              
Consumer$348.1
 $348.2
 $1,027.1
 $1,055.0
$359.5
 $354.7
 $679.5
 $679.0
Professional114.5
 124.1
 352.1
 385.0
123.3
 123.4
 238.4
 237.6
Other$8.9
 $—
 $13.2
 $—
$6.1
 $4.3
 10.6
 4.3
Total$471.5
 $472.3
 $1,392.4
 $1,440.0
$488.9
 $482.4
 $928.5
 $920.9
              
Segment Profit:              
Consumer (a)
$86.0
 $76.0
 $232.0
 $225.8
Consumer$81.0
 $83.8
 $139.4
 $146.0
Professional23.4
 25.2
 76.9
 88.5
24.1
 24.3
 49.7
 53.5
Other$(2.3) $—
 $(2.8) $—
$0.1
 $0.2
 (0.8) 0.2
Total$107.1
 $101.2
 $306.1
 $314.3
$105.2
 $108.3
 $188.3
 $199.7
              
Reconciliation:              
Segment Profit$107.1
 $101.2
 $306.1
 $314.3
$105.2
 $108.3
 $188.3
 $199.7
Less:

 

    

 

    
Unallocated corporate expenses (a)
18.0
 13.7
 48.5
 40.8
16.2
 15.8
 30.4
 30.5
Depreciation and amortization26.0
 25.6
 76.8
 76.4
26.3
 25.2
 52.2
 50.8
Non-cash stock compensation expense1.0
 3.2
 3.8
 3.7
1.1
 1.2
 3.3
 2.8
Non-Operating items:              
Restructuring and related charges4.2
 1.1
 1.9
 18.8
0.5
 (3.0) 1.8
 (2.3)
Acquisition and integration costs0.6
 0.9
 6.5
 5.4
5.5
 4.7
 6.0
 5.9
Deferred compensation related to CBB acquisition0.9
 0.7
 1.8
—
0.7
Inventory purchase accounting adjustment, cost of sales(0.1) —
 0.5
 2.6
0.1
 0.6
 0.1
 0.6
Operating Income57.4
 56.7
 168.1
 166.6
54.6
 63.1
 92.7
 110.7
Less:              
Interest Expense21.5
 20.6
 62.0
 63.9
20.9
 20.5
 41.9
 40.5
Amortization of debt issuance costs1.4
 1.3
 4.2
 4.1
1.4
 1.4
 2.9
 2.8
Loss on early extinguishment of debt—
 —
 —
 2.0
Foreign currency losses (gains), net(0.7) 9.3
 7.3
 17.9
8.5
 (7.9) 5.1
 8.0
Miscellaneous, net0.3
 0.1
 0.5
 0.2
0.2
 0.2
 0.5
 0.2
Income from continuing operations before income taxes$34.9
 $25.4
 $94.1
 $78.5
$23.6
 $48.9
 $42.3
 $59.2
(a)





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


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, $2.1 million and $6.2 million of pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for the three and nine months ended September 30, 2014, respectively.
As of SeptemberJune 30, 2015,2016, the Company had operations established in 2423 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.



23
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015
20142016 2015 2016
2015
Geographic area:                  
Net sales:                
United States$255.0
 54% $243.8
 52% $766.4
 55% $749.2
 52%$263.0
 54% $267.0
 55% $510.7
 55% $511.4
 56%
Outside of the United States216.5
 46% 228.5
 48% 626.0
 45% 690.8
 48%225.9
 46% 215.4
 45% 417.8
 45% 409.5
 44%
$471.5
 
 $472.3
 
 $1,392.4
 $1,440.0
 $488.9
 
 $482.4
 
 $928.5
 $920.9
 

September 30, 2015 December 31, 2014June 30, 2016 December 31, 2015
Long-lived assets, net:          
United States$880.2
 79% $845.5
 76%$853.0
 77% $854.7
 79%
Outside of the United States230.4
 21% 271.7
 24%258.8
 23% 232.4
 21%
$1,110.6
  $1,117.2
 $1,111.8
  $1,087.1
 

Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015
20142016 2015 2016
2015
Classes of similar products:                  
Net sales:                
Color cosmetics$243.6
 52% $242.6
 51% $749.1
 54% $763.5
 53%$263.4
 54% $266.0
 55% $487.7
 52% $505.5
 55%
Hair care131.0
 28% 132.8
 28% 387.9
 28% 405.5
 28%134.7
 27% 130.0
 27% 266.8
 29% 256.9
 28%
Beauty care and fragrance96.9
 21% 96.9
 21% 255.4
 18% 271.0
 19%90.8
 19% 86.4
 18% 174.0
 19% 158.5
 17%
$471.5
 
 $472.3
 
 $1,392.4
 $1,440.0
 $488.9
 
 $482.4
 
 $928.5
 $920.9
 


15. CONTINGENCIES
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, financial condition and/or its results of operations. 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.

16. RELATED PARTY TRANSACTIONS
Reimbursement Agreements
As previously disclosed in the Company's 20142015 Form 10-K, 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 whichwhich: (i) MacAndrews & Forbes Inc. is obligated to provide (directly or through its affiliates) certain professional and administrative services, including, without limitation, employees, to Revlon, Inc. and its subsidiaries, including, without limitation, Products Corporation,the Company, and to purchase services from third party providers, such as insurance, legal, accounting and air transportation services, on behalf of Revlon, Inc. and its subsidiaries, including Products Corporation,the Company, to the extent requested by Products Corporation,Corporation; and (ii) Products Corporation is obligated to provide certain professional and administrative services, including, without limitation, employees, to
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

MacAndrews & Forbes and to purchase services from third party providers, such as insurance, legal and accounting services, on behalf of MacAndrews & Forbes, to the extent requested by MacAndrews & Forbes,

24
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

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 purchased for or provided bythat MacAndrews & Forbes purchases for or provides to the Company and its subsidiaries and for the reasonable out-of-pocket expenses incurred bythat MacAndrews & Forbes incurs in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services purchasedthat Products Corporation purchases for or provided by Products Corporationprovides to MacAndrews & Forbes and for the reasonable out-of-pocket expenses incurred by Products Corporation in connection with the purchase or provision of such services. Each of the Company, on the one hand, and MacAndrews & Forbes, 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&O Insurance Program”), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which cover the Company, as well as MacAndrews & Forbes and its other subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews & Forbes from time to time for itstheir 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 under the Reimbursement Agreements during the ninesix months ended SeptemberJune 30, 2016 and 2015 and 2014 was $2.2$1.4 million and $3.8$2.3 million, respectively, which primarily includes partial payments made by the Company to MacAndrews & Forbes during the first quarter of 20152016 and 20142015 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. As of both SeptemberJune 30, 20152016 and December 31, 2014,2015, a receivable balance of nil and $0.1 million, respectively, from MacAndrews & Forbes waswere included in the Company's Consolidated Balance Sheets for transactions subject to the Reimbursement Agreements.

Other
During the six months ended June 30, 2016 and 2015, the Company engaged several companies in which MacAndrews & Forbes had a controlling interest to provide the Company with various ordinary course business services. These services included processing approximately $24.8 million and $16.1 million of coupon redemptions for the Company's retail customers for the six months ended June 30, 2016 and 2015, respectively, for which the Company paid fees of approximately $0.2 million and $0.2 million during the six months ended June 30, 2016 and 2015, respectively, and other similar advertising, coupon redemption and raw material supply services, for which the Company paid fees aggregating to less than $0.2 million during the six months ended June 30, 2016 and 2015, 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.

17. SUBSEQUENT EVENTS
On June 16, 2016, the Company and Revlon, Inc. entered into an agreement and plan of merger (the "Merger Agreement") by and among the Company, Revlon, Inc., RR Transaction Corp., a wholly-owned subsidiary of the Company (“Acquisition Sub”) and Elizabeth Arden, Inc. ("Elizabeth Arden") pursuant to which, among other things, Acquisition Sub will merge with and into Elizabeth Arden (the “Merger” or the “Pending Acquisition”), with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of the Company. The Company expects the Merger to close by the end of 2016, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions.
Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of iconic beauty brands that are highly complementary to the Company's existing brand portfolio and are sold worldwide. In North America, Elizabeth Arden’s principal customers include prestige retailers, the mass retail channel and distributors, as well as direct sales to consumers via its branded retail outlet stores and 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.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)



In connection with the execution of the Merger Agreement, on June 16, 2016, the Company entered into a debt financing commitment letter (the “Debt Commitment Letter”) with Citigroup Global Markets Inc., Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the “Lenders”). Pursuant to the Debt Commitment Letter, the Lenders have committed to arrange and provide the Company with: (i) a seven-year senior secured term loan facility in an aggregate principal amount of $1.8 billion (the "New Term Loan Facilities"); (ii) a five-year senior secured asset-based revolving credit facility in a principal amount of $400 million (the "New Revolving Credit Facility"); and (iii) to the extent that the proceeds of the Unsecured Notes (as defined below) are not available to consummate the transactions contemplated by the Merger Agreement, up to $400 million of senior unsecured bridge loans under a senior unsecured credit facility (the foregoing facilities collectively, the “Facilities”). The availability of the borrowings under the Facilities is subject to the satisfaction of certain customary conditions, including the consummation of the Merger.
Additionally, the Company engaged affiliates of the Lenders to act as initial purchasers and placement agents for a private placement of up to $400 million of senior unsecured notes (the “Unsecured Notes”). The proceeds of the applicable Facilities and Unsecured Notes (to the extent borrowed or issued on the closing date of the Merger (the "Closing Date") will be used to: (x) finance the Merger; (y) pay the fees, costs and expenses incurred in connection with, among other things, the Merger and the Facilities; and (z) fund the refinancing of substantially all of the Company’s existing long-term debt and credit facilities (such transactions in clauses (x) through (z) being the "Transactions"); provided that the Company's existing 5¾% Senior Notes due 2021 will remain outstanding.
On July 21, 2016, Revlon Escrow Corporation (the “Escrow Issuer”), a wholly owned subsidiary of the Company, priced an offering of $450.0 million aggregate principal amount of 6.25% Senior Notes due 2024 (the “Notes”), the proceeds of which Products Corporation expects will be used, together with $1.8 billion of borrowings under the New Term Loan Facility and $100.0 million of borrowings under the New Revolving Credit Facility, to finance the Transactions. The amount of borrowings under the New Revolving Credit Facility will be subject to changes in working capital requirements and other adjustments. The offering of the Notes is expected to close on August 4, 2016.
The aggregate principal amount of Notes that will be issued represents an increase from the $400.0 million aggregate principal amount of Notes that Products Corporation had originally offered. The amount of cash on hand that the Company had planned to use to finance the Pending Acquisition will be reduced by the amount of additional net proceeds of the Notes, and any remaining net proceeds will be used for general corporate purposes.
At the closing of the offering of the Notes, pursuant to an escrow agreement (the “Escrow Agreement”), the gross proceeds of the Notes, together with interest on the Notes, will be placed in an escrow account until the Closing Date of the Pending Acquisition. Under the Escrow Agreement, the Closing Date may be extended from time to time (subject to the Company or an affiliate funding additional interest through the extended Closing Date into the escrow account), but not later than six months after the initial issuance date of the Notes.
The net proceeds of the Notes will be released from escrow upon the satisfaction of various customary conditions precedent, including completion of the Pending Acquisition. Upon the escrow release: (1) the Escrow Issuer will be merged with and into Products Corporation, with Products Corporation as the surviving corporation, and Products Corporation will assume the Escrow Issuer's obligations under the Notes and the related indenture, (2) Products Corporation's current subsidiaries that guarantee its existing 5¾% Senior Notes will guarantee the Notes and the related indenture (along with the New Term Loan Facility and the New Revolving Credit Facility); and (3) Elizabeth Arden and certain of its subsidiaries will guarantee the Notes and the related indenture (along with the New Term Loan Facility, the New Revolving Credit Facility and the 5¾% Senior Notes).





17.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


18. GUARANTOR FINANCIAL INFORMATION
Products Corporation’s 5¾% Senior Notes are fully and unconditionally guaranteed on a senior basis by Products Corporation’s domestic subsidiaries (other than certain immaterial subsidiaries) that also guarantee Products Corporation’s obligations under its Amended Credit Agreements (the “Guarantor Subsidiaries”). In January 2014, Colomer’s U.S.-domiciled subsidiaries (the “Colomer U.S. Subsidiaries”) became additional guarantors under Products Corporation’s Amended Term Loan Facility and Amended Revolving Credit Facility and the indenture for the 5¾% Senior Notes. In January 2015, a newly-formed U.S.-domiciled entity in the Professional segment became an additional guarantor under such debt instruments. In May 2015, a newly-formed U.S.-domiciled entity formed in connection with the CBB Acquisition became an additional guarantor under such debt instruments.
The following Condensed Consolidating Financial Statements present the financial information as of SeptemberJune 30, 20152016 and December 31, 2014,2015, and for each of the three and nine month periodssix months ended SeptemberJune 30, 2016 and 2015 and 2014 forfor: (i) Products Corporation on a stand-alone basis; (ii) the Guarantor Subsidiaries on a stand-alone basis; (iii) the subsidiaries of Products Corporation that do not guarantee Products Corporation’s Amended Term Loan Facility, Amended Revolving Credit Facility and 5¾% Senior Notes (the “Non-Guarantor Subsidiaries”) on a stand-alone basis; and (iv) Products Corporation, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis. The Condensed Consolidating Financial Statements are presented on the equity method, under which the investments in subsidiaries are recorded at cost and adjusted for the applicable share of the subsidiary’s cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheets
As of June 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$61.9
 $71.4
 $52.5
 $—
 $185.8
Trade receivables, less allowances for doubtful accounts93.9
 45.3
 129.2
 —
 268.4
Inventories92.5
 38.0
 79.1
 —
 209.6
Prepaid expenses and other154.6
 6.8
 40.1
 —
 201.5
Intercompany receivables778.9
 451.2
 79.2
 (1,309.3) —
Investment in subsidiaries576.4
 (6.2) —
 (570.2) —
Property, plant and equipment, net127.4
 26.7
 62.7
 —
 216.8
Deferred income taxes7.2
 —
 34.5
 —
 41.7
Goodwill182.4
 30.0
 264.3
 —
 476.7
Intangible assets, net53.8
 152.8
 122.3
 —
 328.9
Other assets50.6
 13.4
 25.4
 —
 89.4
      Total assets$2,179.6
 $829.4
 $889.3
 $(1,879.5) $2,018.8
LIABILITIES AND STOCKHOLDER’S DEFICIENCY      
Short-term borrowings$—
 $—
 $14.1
 $—
 $14.1
Current portion of long-term debt6.7
 —
 0.1
 —
 6.8
Accounts payable74.2
 28.7
 84.7
 —
 187.6
Accrued expenses and other134.4
 16.5
 82.3
 —
 233.2
Intercompany payables427.6
 461.3
 420.4
 (1,309.3) —
Long-term debt1,783.1
 —
 0.5
 —
 1,783.6
Other long-term liabilities211.1
 5.9
 34.0
 —
 251.0
      Total liabilities2,637.1
 512.4
 636.1
 (1,309.3) 2,476.3
Stockholder’s deficiency(457.5) 317.0
 253.2
 (570.2) (457.5)
Total liabilities and stockholder’s deficiency$2,179.6
 $829.4
 $889.3
 $(1,879.5) $2,018.8





25
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


Condensed Consolidating Balance Sheets
As of September 30, 2015
 Products Corporation 
Guarantor Subsidiaries(a)
 Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$55.5
 $68.6
 $57.1
 $—
 $181.2
Trade receivables, less allowances for doubtful accounts85.7
 47.3
 127.4
 —
 260.4
Inventories101.5
 38.2
 78.1
 —
 217.8
Deferred income taxes - current48.9
 —
 11.0
 —
 59.9
Prepaid expenses and other138.6
 4.4
 33.1
 —
 176.1
Intercompany receivables675.5
 346.7
 94.6
 (1,116.8) —
Investment in subsidiaries553.7
 (54.2) —
 (499.5) —
Property, plant and equipment, net118.8
 27.3
 58.6
 —
 204.7
Deferred income taxes - noncurrent18.4
 —
 13.1
 —
 31.5
Goodwill190.1
 30.0
 258.1
 —
 478.2
Intangible assets, net52.6
 158.7
 109.6
 —
 320.9
Other assets76.0
 8.4
 22.4
 —
 106.8
      Total assets$2,115.3
 $675.4
 $863.1
 $(1,616.3) $2,037.5
LIABILITIES AND STOCKHOLDER’S DEFICIENCY      
Short-term borrowings$—
 $—
 $10.0
 $—
 $10.0
Current portion of long-term debt6.9
 —
 —
 —
 6.9
Accounts payable77.1

24.2

81.5

—

182.8
Accrued expenses and other137.3

20.2

89.1

—

246.6
Intercompany payables349.8

372.5

394.5

(1,116.8)
—
Long-term debt1,827.6

—

0.6

—

1,828.2
Other long-term liabilities246.3

0.9

45.5

—

292.7
      Total liabilities2,645.0

417.8

621.2

(1,116.8)
2,567.2
Stockholder’s deficiency(529.7)
257.6

241.9

(499.5)
(529.7)
Total liabilities and stockholder’s deficiency$2,115.3

$675.4

$863.1

$(1,616.3)
$2,037.5
(a) In January 2015, a newly-formed U.S.-domiciled entity in the Professional segment became an additional guarantor under Products Corporation’s Amended Term Loan Facility, Amended Revolving Credit Facility and the indenture for Products Corporation’s 5¾% Senior Notes. In connection with the CBB Acquisition, in May 2015 the Company’s newly-formed U.S.-domiciled subsidiary, RML, LLC, also became an additional guarantor under such debt instruments.
Condensed Consolidating Balance Sheets
As of December 31, 2015
(as adjusted)
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$141.5
 $93.0
 $92.4
 $—
 $326.9
Trade receivables, less allowances for doubtful accounts79.7
 44.5
 120.7
 —
 244.9
Inventories88.1
 34.5
 61.2
 —
 183.8
Prepaid expenses and other136.9
 3.3
 30.5
 —
 170.7
Intercompany receivables692.1
 366.5
 95.2
 (1,153.8) —
Investment in subsidiaries591.0
 16.3
 —
 (607.3) —
Property, plant and equipment, net124.8
 28.1
 62.4
 —
 215.3
Deferred income taxes5.8
 —
 44.0
 —
 49.8
Goodwill182.4
 30.0
 257.3
 —
 469.7
Intangible assets, net56.6
 156.7
 104.7
 —
 318.0
Other assets49.4
 9.6
 25.1
 —
 84.1
      Total assets$2,148.3
 $782.5
 $893.5
 $(1,761.1) $2,063.2
LIABILITIES AND STOCKHOLDER’S DEFICIENCY      
Short-term borrowings$—
 $—
 $11.3
 $—
 $11.3
Current portion of long-term debt29.9
 —
 0.1
 —
 30.0
Accounts payable85.3
 29.2
 86.8
 —
 201.3
Accrued expenses and other175.1
 18.9
 78.4
 —
 272.4
Intercompany payables360.4
 401.0
 392.4
 (1,153.8) —
Long-term debt1,783.2
 —
 0.5
 —
 1,783.7
Other long-term liabilities206.0
 0.8
 49.3
 —
 256.1
      Total liabilities2,639.9
 449.9
 618.8
 (1,153.8) 2,554.8
Stockholder's deficiency(491.6) 332.6
 274.7
 (607.3) (491.6)
Total liabilities and stockholder’s deficiency

2,148.3
 782.5
 893.5
 (1,761.1) 2,063.2

















26

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


Condensed Consolidating Balance Sheets
As of December 31, 2014
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$104.2
 $88.1
 $83.0
 $—
 $275.3
Trade receivables, less allowances for doubtful accounts87.8
 39.7
 111.4
 —
 238.9
Inventories75.5
 30.6
 50.5
 —
 156.6
Deferred income taxes - current46.2
 —
 12.2
 —
 58.4
Prepaid expenses and other119.0
 6.2
 24.8
 —
 150.0
Intercompany receivables992.5
 630.0
 129.6
 (1,752.1) —
Investment in subsidiaries562.8
 (161.4) —
 (401.4) —
Property, plant and equipment, net112.4
 28.0
 71.6
 —
 212.0
Deferred income taxes - noncurrent22.6
 —
 12.2
 —
 34.8
Goodwill185.8
 30.0
 248.3
 —
 464.1
Intangible assets, net53.2
 164.6
 110.0
 —
 327.8
Other assets83.2
 2.9
 27.2
 —
 113.3
      Total assets$2,445.2
 $858.7
 $880.8
 $(2,153.5) $2,031.2
LIABILITIES AND STOCKHOLDER’S DEFICIENCY      
Short-term borrowings$—
 —
 $6.6
 $—
 $6.6
Current portion of long-term debt31.5
 —
 —
 —
 31.5
Accounts payable68.3
 19.0
 66.2
 —
 153.5
Accrued expenses and other159.0
 24.5
 89.8
 —
 273.3
Intercompany payables672.9
 703.6
 375.6
 (1,752.1) —
Long-term debt1,831.7
 —
 0.7
 —
 1,832.4
Other long-term liabilities238.8
 4.4
 47.7
 —
 290.9
      Total liabilities3,002.2
 751.5
 586.6
 (1,752.1) 2,588.2
Stockholder’s deficiency(557.0) 107.2
 294.2
 (401.4) (557.0)
Total liabilities and stockholder’s deficiency$2,445.2
 $858.7
 $880.8
 $(2,153.5) $2,031.2
Condensed Consolidating Statements of Income and Comprehensive Income
For the Three Months Ended June 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$229.4
 $85.6
 $187.8
 $(13.9) $488.9
Cost of sales83.0
 31.8
 70.6
 (13.9) 171.5
Gross profit146.4
 53.8
 117.2
 —
 317.4
Selling, general and administrative expenses123.7
 37.2
 95.9
 —
 256.8
Acquisition and integration costs5.2
 —
 0.3
 —
 5.5
Restructuring charges and other, net(0.2) 0.1
 0.6
 —
 0.5
Operating income17.7
 16.5
 20.4
 —
 54.6
Other expenses (income):         
Intercompany interest, net(2.0) (0.2) 2.2
 —
 —
Interest expense20.7
 —
 0.2
 —
 20.9
Amortization of debt issuance costs1.4
 —
 —
 —
 1.4
Foreign currency losses (gains), net1.8
 (0.6) 7.3
 —
 8.5
Miscellaneous, net(12.5) (3.2) 15.9
 —
 0.2
Other expenses (income), net9.4
 (4.0) 25.6
 —
 31.0
Income (loss) from continuing operations before income taxes8.3
 20.5
 (5.2) —
 23.6
(Benefit from) provision for income taxes(3.8) 12.8
 2.8
 —
 11.8
Income (loss) from continuing operations12.1
 7.7
 (8.0) —
 11.8
Loss from discontinued operations, net of taxes—
 —
 (2.5) —
 (2.5)
Equity in loss of subsidiaries(2.8) (6.2) —
 9.0
 —
Net income (loss)$9.3
 $1.5
 $(10.5) $9.0
 $9.3
Other comprehensive income (loss)4.8
 (3.1) (5.4) 8.5
 4.8
Total comprehensive income (loss)$14.1
 $(1.6) $(15.9) $17.5
 $14.1





















27
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Three Months Ended September 30, 2015
 Products Corporation 
Guarantor Subsidiaries(a)
 Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$260.0
 $87.8
 $184.0
 $(60.3) $471.5
Cost of sales117.1
 34.5
 76.5
 (60.3) 167.8
Gross profit142.9
 53.3
 107.5
 —
 303.7
Selling, general and administrative expenses123.9
 31.5
 86.3
 —
 241.7
Acquisition and integration costs(0.2) —
 0.8
 —
 0.6
Restructuring charges and other, net1.6
 (0.7) 3.1
 —
 4.0
Operating income17.6
 22.5
 17.3
 —
 57.4
Other expenses, net:

 

 

 

 

Intercompany interest, net(2.1) —
 2.1
 —
 —
Interest expense21.2
 —
 0.3
 —
 21.5
Amortization of debt issuance costs1.4
 —
 —
 —
 1.4
Foreign currency losses (gains), net0.8
 (0.5) (1.0) —
 (0.7)
Miscellaneous, net(32.5) (4.3) 37.1
 —
 0.3
Other expenses, net(11.2) (4.8) 38.5
 —
 22.5
Income from continuing operations before income taxes28.8
 27.3
 (21.2) —
 34.9
Provision for income taxes9.7
 9.2
 6.6
 —
 25.5
Income (loss) income from continuing operations19.1
 18.1
 (27.8) —
 9.4
Loss from discontinued operations, net of taxes—
 —
 (1.7) —
 (1.7)
Equity in (loss) income of subsidiaries(11.4) (22.1) —
 33.5
 —
Net income (loss)$7.7
 $(4.0) $(29.5) $33.5
 $7.7
Other comprehensive (loss) income(1.3) (0.7) (4.3) 5.0
 (1.3)
Total comprehensive income (loss)$6.4
 $(4.7) $(33.8) $38.5
 $6.4
(a) In January 2015, a newly-formed U.S.-domiciled entity in the Professional segment became an additional guarantor under Products Corporation’s Amended Term Loan Facility, Amended Revolving Credit Facility and the indenture for Products Corporation’s 5¾% Senior Notes. In connection with the CBB Acquisition, in May 2015 the Company’s newly-formed U.S.-domiciled subsidiary, RML, LLC, also became an additional guarantor under such debt instruments.













28
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Three Months Ended September 30, 2014
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$233.5
 $91.2

$189.4

$(41.8)
$472.3
Cost of sales100.8
 37.0

68.6

(41.8)
164.6
Gross profit132.7
 54.2

120.8

—

307.7
Selling, general and administrative expenses119.7
 33.5

96.1

—

249.3
Acquisition and integration costs0.9
 —

—

—

0.9
Restructuring charges and other, net(0.1) 0.2
—0.7
——

0.8
Operating income12.2
 20.5

24.0

—

56.7
Other expenses, net:

 










Intercompany interest, net(2.2) —

2.2

—

—
Interest expense20.4
 —

0.2

—

20.6
Amortization of debt issuance costs1.3
 —

—

—

1.3
Loss on early extinguishment of debt, net—
 —

—

—

—
Foreign currency losses (gains), net1.9
 (0.4)
7.8

—

9.3
Miscellaneous, net(9.8) (3.1)
13.0

—

0.1
Other expenses, net11.6
 (3.5)
23.2

—

31.3
Income (loss) from continuing operations before income taxes0.6
 24.0

0.8

—

25.4
Provision for (benefit from) income taxes10.6
 —

(1.0)
—

9.6
(Loss) income from continuing operations(10.0) 24.0

1.8

—

15.8
Loss from discontinued operations, net of taxes—
 —

0.4

—

0.4
Equity in income (loss) of subsidiaries26.2
 5.8

—

(32.0)
—
Net income (loss)$16.2
 $29.8

$2.2

$(32.0)
$16.2
Other comprehensive (loss) income(16.6) 4.9

(10.7)
5.8

(16.6)
Total comprehensive (loss) income$(0.4) $34.7

$(8.5)
$(26.2)
$(0.4)
















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

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Nine Months Ended September 30, 2015
 Products Corporation 
Guarantor Subsidiaries(a)
 Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$771.8
 $254.1
 $518.8
 $(152.3) $1,392.4
Cost of sales332.7
 95.2
 195.8
 (152.3) 471.4
Gross profit439.1
 158.9
 323.0
 —
 921.0
Selling, general and administrative expenses369.7
 100.3
 275.5
 —
 745.5
Acquisition and integration costs5.7
 —
 0.8
 —
 6.5
Restructuring charges and other, net1.1
 —
 (0.2) —
 0.9
Operating income62.6
 58.6
 46.9
 —
 168.1
Other expenses, net:

 

 

 

 

Intercompany interest, net(6.2) (0.1) 6.3
 —
 —
Interest expense61.5
 —
 0.5
 —
 62.0
Amortization of debt issuance costs4.2
 —
 —
 —
 4.2
Foreign currency (gains) losses, net(0.4) (1.0) 8.7
 —
 7.3
Miscellaneous, net(38.7) (5.7) 44.9
 —
 0.5
Other expenses, net20.4
 (6.8) 60.4
 —
 74.0
Income from continuing operations before income taxes42.2
 65.4
 (13.5) —
 94.1
Provision for income taxes20.7
 27.3
 8.5
 —
 56.5
Income from continuing operations21.5
 38.1
 (22.0) —
 37.6
Loss from discontinued operations, net of taxes—
 —
 (1.8) —
 (1.8)
Equity in income (loss) of subsidiaries14.3
 (9.7) —
 (4.6) —
Net income (loss)$35.8
 $28.4
 $(23.8) $(4.6) $35.8
Other (loss) comprehensive income(12.4) (3.5) (17.6) 21.1
 (12.4)
Total comprehensive income (loss)$23.4
 $24.9
 $(41.4) $16.5
 $23.4
(a) In January 2015, a newly-formed U.S.-domiciled entity in the Professional segment became an additional guarantor under Products Corporation’s Amended Term Loan Facility, Amended Revolving Credit Facility and the indenture for Products Corporation’s 5¾% Senior Notes. In connection with the CBB Acquisition, in May 2015 the Company’s newly-formed U.S.-domiciled subsidiary, RML, LLC, also became an additional guarantor under such debt instruments.
















30
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Nine Months Ended September 30, 2014
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$729.0
 $272.7
 $577.5
 $(139.2) $1,440.0
Cost of sales321.5
 109.8
 203.2
 (139.2) 495.3
Gross profit407.5
 162.9
 374.3
 —
 944.7
Selling, general and administrative expenses354.1
 96.8
 303.7
 —
 754.6
Acquisition and integration costs5.4
 —
 —
 —
 5.4
Restructuring charges and other, net2.2
 3.3
 12.6
 —
 18.1
Operating income45.8
 62.8
 58.0
 —
 166.6
Other expenses, net:

 

 

 

 

Intercompany interest, net(6.4) (0.3) 6.7
 —
 —
Interest expense63.2
 0.1
 0.6
 —
 63.9
Amortization of debt issuance costs4.1
 —
 —
 —
 4.1
Loss on early extinguishment of debt, net2.0
 —
 —
 —
 2.0
Foreign currency (gains) losses, net(4.7) (0.2) 22.8
 —
 17.9
Miscellaneous, net(39.1) (4.0) 43.3
 —
 0.2
Other expenses, net19.1
 (4.4) 73.4
 —
 88.1
Income (loss) from continuing operations before income taxes26.7
 67.2
 (15.4) —
 78.5
Provision for (benefit from) income taxes64.1
 (27.9) 0.4
 —
 36.6
(Loss) income from continuing operations(37.4) 95.1
 (15.8) —
 41.9
Income from discontinued operations, net of taxes0.2
 —
 0.7
 —
 0.9
Equity in income (loss) of subsidiaries80.0
 (9.4) —
 (70.6) —
Net income (loss)$42.8
 $85.7
 $(15.1) $(70.6) $42.8
Other comprehensive (loss) income(16.0) 4.7
 (11.9) 7.2
 (16.0)
Total comprehensive income (loss)$26.8
 $90.4
 $(27.0) $(63.4) $26.8
Condensed Consolidating Statements of Income and Comprehensive Income
For the Three Months Ended June 30, 2015
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$268.4
 $85.3
 $178.6
 $(49.9) $482.4
Cost of sales114.4
 33.0
 63.8
 (49.9) 161.3
Gross profit154.0
 52.3
 114.8
 —
 321.1
Selling, general and administrative expenses119.3
 40.2
 97.4
 —
 256.9
Acquisition and integration costs4.7
 —
 —
 —
 4.7
Restructuring charges and other, net(0.7) 0.6
—
(3.5) —
 (3.6)
Operating income30.7
 11.5
 20.9
 —
 63.1
Other expenses (income):         
Intercompany interest, net(2.1) —
 2.1
 —
 —
Interest expense20.3
 —
 0.2
 —
 20.5
Amortization of debt issuance costs1.4
 —
 —
 —
 1.4
Foreign currency (gains), net(1.4) —
 (6.5) —
 (7.9)
Miscellaneous, net11.4
 (2.9) (8.3) —
 0.2
Other expenses (income), net29.6
 (2.9) (12.5) —
 14.2
Income from continuing operations before income taxes1.1
 14.4
 33.4
 —
 48.9
Provision for income taxes9.5
 9.5
 2.4
 —
 21.4
Loss (income) from continuing operations(8.4) 4.9
 31.0
 —
 27.5
Income from discontinued operations, net of taxes—
 —
 —
 —
 —
Equity in loss of subsidiaries35.9
 22.6
 —
 (58.5) —
Net income$27.5
 $27.5
 $31.0
 $(58.5) $27.5
Other comprehensive income (loss)2.5
 (1.8) 1.8
 —
 2.5
Total comprehensive income$30.0
 $25.7
 $32.8
 $(58.5) $30.0


















31


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


Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended September 30, 2015
 Products Corporation 
Guarantor Subsidiaries(a)
 Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash (used in) provided by operating activities(2.0) (18.3) 17.7
 —
 (2.6)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Capital expenditures(17.9) (3.5) (5.6) —
 (27.0)
Business acquisition, net of cash acquired—
 —
 (34.2) —
 (34.2)
Proceeds from the sale of certain assets3.5
 2.3
 —
 —
 5.8
   Net cash used in investing activities(14.4) (1.2) (39.8) —
 (55.4)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net increase in short-term borrowings and overdraft0.2
 —
 4.1
 —
 4.3
Repayments under the Acquisition Term Loan(17.6) —
 —
 —
 (17.6)
Prepayments under the 2011 Term Loan(12.1) —
 —
 —
 (12.1)
Other financing activities(2.8) —
 (0.2) —
 (3.0)
Net cash (used in) provided by financing activities(32.3) —
 3.9
 —
 (28.4)
Effect of exchange rate changes on cash and cash equivalents—
 —
 (7.7) —
 (7.7)
Net decrease in cash and cash equivalents(48.7) (19.5) (25.9) —
 (94.1)
Cash and cash equivalents at beginning of period104.2
 88.1
 83.0
 —
 275.3
Cash and cash equivalents at end of period$55.5
 $68.6
 $57.1
 $—
 $181.2
(a) In January 2015, a newly-formed U.S.-domiciled entity in the Professional segment became an additional guarantor under Products Corporation’s Amended Term Loan Facility, Amended Revolving Credit Facility and the indenture for Products Corporation’s 5¾% Senior Notes. In connection with the CBB Acquisition, in May 2015 the Company’s newly-formed U.S.-domiciled subsidiary, RML, LLC, also became an additional guarantor under such debt instruments.
Condensed Consolidating Statements of Income and Comprehensive Income
For the Six Months Ended June 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$428.1
 $168.6
 $346.0
 $(14.2) $928.5
Cost of sales145.2
 62.2
 132.2
 (14.2) 325.4
Gross profit282.9
 106.4
 213.8
 —
 603.1
Selling, general and administrative expenses247.7
 72.8
 182.1
 —
 502.6
Acquisition and integration costs5.6
 —
 0.4
 —
 6.0
Restructuring charges and other, net—
 0.7
 1.1
 —
 1.8
Operating income29.6
 32.9
 30.2
 —
 92.7
Other expenses (income):         
Intercompany interest, net(4.3) 0.1
 4.2
 —
 —
Interest expense41.6
 —
 0.3
 —
 41.9
Amortization of debt issuance costs2.9
 —
 —
 —
 2.9
Foreign currency losses (gains), net2.1
 (0.3) 3.3
 —
 5.1
Miscellaneous, net(34.7) 3.8
 31.4
 —
 0.5
Other expenses, net7.6
 3.6
 39.2
 —
 50.4
Income (loss) from continuing operations before income taxes22.0
 29.3
 (9.0) —
 42.3
(Benefit from) provision for income taxes(8.5) 26.2
 0.2
 —
 17.9
Income (loss) from continuing operations30.5
 3.1
 (9.2) —
 24.4
Loss from discontinued operations, net of taxes—
 —
 (2.1) —
 (2.1)
Equity in loss of subsidiaries(8.2) (12.1) —
 20.3
 —
Net income (loss)$22.3
 $(9.0) $(11.3) $20.3
 $22.3
Other comprehensive income (loss)8.4
 (7.5) (8.2) 15.7
 8.4
Total comprehensive income (loss)$30.7
 $(16.5) $(19.5) $36.0
 $30.7

















32



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


Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended September 30, 2014
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash (used in) provided by operating activities$2.2
 $55.7
 $(11.2) $—
 $46.7
CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Capital expenditures(23.2) (0.3) (6.8) —
 (30.3)
Proceeds from the sale of certain assets—
 —
 0.9
 —
 0.9
Net cash used in investing activities(23.2) (0.3) (5.9) —
 (29.4)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net increase in short-term borrowings and overdraft(3.7) (1.9) 2.5
 —
 (3.1)
Repayment under the Amended and Restated Senior Subordinated Term Loan(58.4) —
 —
 —
 (58.4)
Repayments under the Acquisition Term Loan(5.3) —
 —
 —
 (5.3)
Payment of financing costs(1.8) —
 —
 —
 (1.8)
Other financing activities(1.7) —
 (0.4) —
 (2.1)
Net cash (used in) provided by financing activities(70.9) (1.9) 2.1
 —
 (70.7)
Effect of exchange rate changes on cash and cash equivalents—
 —
 (12.3) —
 (12.3)
Net (decrease) increase in cash and cash equivalents(91.9) 53.5
 (27.3) —
 (65.7)
Cash and cash equivalents at beginning of period(a)
141.3
 14.5
 88.3
 —
 244.1
Cash and cash equivalents at end of period$49.4
 $68.0
 $61.0
 $—
 $178.4
(a) In January 2014, Colomer's U.S. subsidiaries became additional guarantors under Products Corporation's Amended Credit Agreements and 5¾% Senior Notes. Accordingly, for cash flow presentation purposes, the cash and cash equivalents at the beginning of the period associated with Colomer's U.S. subsidiaries have been reported under Guarantor Subsidiaries.
Condensed Consolidating Statements of Income and Comprehensive Income
For the Six Months Ended June 30, 2015
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$511.8
 $166.3
 $334.8
 $(92.0) $920.9
Cost of sales215.6
 60.7
 119.3
 (92.0) 303.6
Gross profit296.2
 105.6
 215.5
 —
 617.3
Selling, general and administrative expenses245.8
 68.8
 189.2
 —
 503.8
Acquisition and integration costs5.9
 —
 —
 —
 5.9
Restructuring charges and other, net(0.5) 0.7
 (3.3) —
 (3.1)
Operating income45.0
 36.1
 29.6
 —
 110.7
Other expenses (income):         
Intercompany interest, net(4.1) (0.1) 4.2
 —
 —
Interest expense40.3
 —
 0.2
 —
 40.5
Amortization of debt issuance costs2.8
 —
 —
 —
 2.8
Foreign currency (gains) losses, net(1.2) (0.5) 9.7
 —
 8.0
Miscellaneous, net(6.2) (1.4) 7.8
 —
 0.2
Other expenses (income), net31.6
 (2.0) 21.9
 —
 51.5
Income from continuing operations before income taxes13.4
 38.1
 7.7
 —
 59.2
Provision for income taxes11.0
 18.1
 1.9
 —
 31.0
Income from continuing operations2.4
 20.0
 5.8
 —
 28.2
Loss from discontinued operations, net of taxes—
 —
 (0.1) —
 (0.1)
Equity in loss of subsidiaries25.7
 12.4
 —
 (38.1) —
Net income$28.1
 $32.4
 $5.7
 $(38.1) $28.1
Other comprehensive loss(11.1) (2.8) (13.3) 16.1
 (11.1)
Total comprehensive income (loss)$17.0
 $29.6
 $(7.6) $(22.0) $17.0






















33REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


Condensed Consolidating Statements of Cash Flows
For the Six Months Ended June 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash used in operating activities$(27.2) $(20.4) $(9.6) $—
 $(57.2)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Capital expenditures(13.2) (1.2) (4.2) —
 (18.6)
Business acquisition—
 —
 (29.2) —
 (29.2)
Proceeds from the sale of certain assets—
 0.4
 —
 —
 0.4
   Net cash used in investing activities(13.2) (0.8) (33.4) —
 (47.4)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net (decrease) increase in short-term borrowings and overdraft(11.2) —
 2.8
 —
 (8.4)
Repayments under the Acquisition Term Loan(15.1) —
 —
 —
 (15.1)
Prepayments under the 2011 Term Loan(11.5) —
 —
 —
 (11.5)
Other financing activities(1.4) —
 (0.2) —
 (1.6)
Net cash (used in) provided by financing activities(39.2) —
 2.6
 —
 (36.6)
Effect of exchange rate changes on cash and cash equivalents—
 (0.4) 0.5
 —
 0.1
Net decrease in cash and cash equivalents(79.6) (21.6) (39.9) —
 (141.1)
Cash and cash equivalents at beginning of period$141.5
 $93.0
 $92.4
 $—
 $326.9
Cash and cash equivalents at end of period$61.9
 $71.4
 $52.5
 $—
 $185.8






















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


Condensed Consolidating Statements of Cash Flows
Six Months Ended June 30, 2015
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash (used in) provided by operating activities$(1.7) $(0.3) $4.5
 $—
 $2.5
CASH FLOWS FROM INVESTING ACTIVITIES:         
Capital expenditures(10.6) (2.5) (4.1) —
 (17.2)
Business acquisition, net of cash acquired—
 —
 (34.2) —
 (34.2)
Proceeds from the sale of certain assets0.4
 1.5
 0.1
 —
 2.0
   Net cash used in investing activities(10.2) (1.0) (38.2) —
 (49.4)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net increase in short-term borrowings and overdraft4.0
 —
 2.6
 —
 6.6
Repayments under the Acquisition Term Loan(15.9) —
 —
 —
 (15.9)
Prepayments under the 2011 Term Loan(12.1) —
 —
 —
 (12.1)
Other financing activities(1.9) —
 (0.2) —
 (2.1)
Net cash (used in) provided by financing activities(25.9) —
 2.4
 —
 (23.5)
Effect of exchange rate changes on cash and cash equivalents—
 —
 (5.9) —
 (5.9)
Net decrease in cash and cash equivalents(37.8) (1.3) (37.2) —
 (76.3)
Cash and cash equivalents at beginning of period$104.2
 $88.1
 $83.0
 $—
 $275.3
Cash and cash equivalents at end of period$66.4
 $86.8
 $45.8
 $—
 $199.0





















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


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

Overview
Overview of the Business
The Company (as defined below) is providing this overview in accordance with the SEC's December 2003 interpretive guidance regarding Management's Discussion and Analysis of Financial Condition and Results of Operations.    
Revlon Consumer Products Corporation ("Products Corporation" and together with its subsidiaries, the "Company") is the direct wholly-owned operating subsidiary of Revlon, Inc., which is a direct andan indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company and Revlon, Inc., "MacAndrews & Forbes"), a corporation wholly-owned by Ronald O. Perelman.
The Company operates in three segments,segments: the consumer division (“Consumer”),; the professional division (“Professional”); and Other (as described below). The Company manufactures, markets and sells worldwide an extensive array of beauty and personal care products worldwide, including color cosmetics, hair color, hair care and hair treatments, beauty tools, men's grooming products, anti-perspirant deodorants, fragrances, skincare and other beauty care products. Effective in the second quarter of 2015, the Company has a third reporting segment, Other, which includes the operating results 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 Acquisition. The results included within the Other segment are not material to the Company's consolidated results of operations.
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 Business Strategy
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’sOur strategic goal is to optimize the market and financial performance of itsour portfolio of brands and assets. The business strategies employedthat the Company employs include:
Building Our Strong Brands. The Company intends to continue building its strong brands by focusing on innovative, high-quality, consumer-preferred brand offerings, effective consumer brand communication, appropriate levels of targeted advertising and promotion and timely execution with our retail partners.
Driving Innovation.The global beauty industry is characterized by a high degree of differentiated innovation, which is one of the pillars of the Company's planned growth and a primary focus operationally. The Company's innovation strategy centers on creating fewer, bigger and better new product launches across our brands that are relevant, impactful and distinctive.
Continuing to Grow Our International Business in High Growth Regions.The Company currently sells its products in approximately 130 countries, and the pending acquisition of Elizabeth Arden will provide greater access to high-growth markets, such as the Asia Pacific region. The Company intends to continue driving growth by strategically entering new territories and expanding within existing territories by leveraging our distribution network and penetrating new and existing sales channels.
Sharing Best Practices and Leveraging Scale to Drive Margin Profile.The Company continues to generate consistent margins and plans to further drive margins by reducing costs across its supply chain, eliminating overhead redundancies and leveraging purchasing scale.
Further Developing Our Organizational Capability.The Company intends to continue developing its organizational capability through retaining, attracting and rewarding highly capable people and through performance management, development planning, succession planning and training. The Company looks to develop and support employees who fit into its innovative culture and inspire the creative drive that represents the foundation of our vision and execution of our strategy.
Growing Through Acquisitions of Businesses or Licenses.The Company seeks to opportunistically acquire brands to complement its core business. The Company believes that our acquisition strategy has been, and will continue to be, successful. The Company focuses on targets that will strengthen its existing capabilities or help the Company to achieve this goal are:expand into new product categories, channels or geographies. The Company continues to look opportunistically for additional fragrance licenses to build its fragrance business.
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 pursuing organic growth opportunities within our existing brand portfolio and existing channels, 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.

Overview of Net Sales and Earnings Results
Consolidated net sales in the thirdsecond quarter of 20152016 were $471.5$488.9 million, a decreasean increase of $0.8$6.5 million, or 0.2%1.3%, compared to $472.3$482.4 million in the thirdsecond quarter of 2014.2015. Excluding the $31.7$10.3 million unfavorable impact of foreign currency fluctuations, consolidated net sales increased $30.9by $16.8 million, or 6.5%3.5%, in the thirdsecond quarter of 2015.2016, compared to the second quarter of 2015. The increase in consolidated net sales in the thirdsecond quarter of 20152016 was primarily driven by ana $14.0 million, or 3.9%, increase in Consumer segment net sales of $20.7 million, or 5.9%, and an increase in Professional segment net sales of $1.3 million, or 1.0%, compared to the third quarter of 2014.

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


Consumer segment net sales, a $2.1 million, or 48.8%, increase in Other segment net sales (as a result of the April 2015 CBB Acquisition) and a slight increase in Professional segment net sales.
Consolidated net sales in the first ninesix months of 20152016 were $1,392.4$928.5 million, a decreasean increase of $47.6$7.6 million, or 3.3%0.8%, compared to $1,440.0$920.9 million in the first ninesix months of 2014.2015. Excluding the $93.0$24.9 million unfavorable impact of foreign currency fluctuations, consolidated net sales increased $45.4by $32.5 million, or 3.2%3.5%, in the first ninesix months of 20152016 compared to the first ninesix months of 2014.2015. The increase in consolidated net sales in the first ninesix months of 2015, compared to the first nine months of 20142016 was primarily driven by ana $22.1 million, or 3.3%, increase in Consumer segment net sales, of $30.3a $6.6 million, or 2.9%.
See "Segment Results" below for further discussion.153.5%, increase in Other segment net sales (as a result of the April 2015 CBB Acquisition) and a $3.8 million, or 1.6%, increase in Professional segment net sales.
Consolidated income from continuing operations, net of taxes, in the thirdsecond quarter of 20152016 was $9.4$11.8 million, compared to consolidated income from continuing operations, net of $15.8taxes, of $27.5 million in the thirdsecond quarter of 2014.2015. The $6.4$15.7 million decrease in the thirdsecond quarter of 20152016 was primarily due to:
$4.016.4 million of unfavorable variance in foreign currency losses (gains), net, as a result of $8.5 million in foreign currency losses recognized during the second quarter of 2016, as compared to $7.9 million in foreign currency gains, net, recognized during the second quarter of 2015;
a $4.1 million increase in restructuring charges and other, net, which increase is due to $0.5 million of charges incurred during the second quarter of 2016, as compared to net reductions in estimated restructuring costs of $3.6 million during the second quarter of 2015; and
$3.7 million of lower gross profit in the thirdsecond quarter of 20152016, primarily due to a $3.2$10.2 million increase in cost of sales; and
sales, partially offset by a $15.9$6.5 million increase in the provision for income taxes primarily due to higher pretax income in the third quarter of 2015, the relatively unfavorable impact of certain discrete items and an increase in the valuation allowance related to certain assets in the U.S. as a result of a change in law;net sales;
with the foregoing partially offset by:
$10.0a $9.6 million of favorable variancedecrease in foreign currency (gains) losses, net, as a result of $0.7 millionthe provision for income taxes recognized in foreign currency (gains), net, recognized during the thirdsecond quarter of 2015,2016, primarily due to net gains realized onlower pre-tax income and the Company's foreign exchange forward and option contracts, partially offset by $1.7 million of foreign currency losses, net, compared to $9.3 million in foreign currency losses, net, recognized during the third quarter of 2014, in each case due to the unfavorable impactphasing of the revaluationrecognition of certain U.S. Dollar denominated payables.income taxes.
Consolidated income from continuing operations, net of taxes, in the first ninesix months of 20152016 was $37.6$24.4 million, compared to $28.2 million of consolidated income from continuing operations, net of taxes, of $41.9 million in the first ninesix months of 2014.2015. The $4.3$3.8 million decrease in the first ninesix months of 20152016 was primarily due to:
$23.714.2 million of lower gross profit in the first ninesix months of 20152016, primarily due to a $47.6$21.8 million decreaseincrease in consolidated netcost of sales, partially offset by a $23.9$7.6 million decreaseincrease in cost ofnet sales; and
a $19.9$4.9 million increase in the provision for income taxesrestructuring charges and other, net, primarily due to $1.2 million of charges incurred under the relatively unfavorable impact2015 Efficiency Program during the first six months of certain discrete items, an increase2016, as compared to net reductions in estimated restructuring costs of $3.6 million during the valuation allowance related to certain assets in the U.S. as a resultsecond quarter of a change in law and higher pretax income;2015;
with the foregoing partially offset by:
a $17.2$12.8 million decrease in restructuring charges and other, net,the provision for income taxes recognized in the first ninesix months of 2015, which includes $3.7 million in restructuring charges related to the Efficiency Program, partially offset by a $3.6 million net reduction in estimated restructuring costs during the second quarter of 2015, as compared to $16.4 million of restructuring charges incurred under the Integration Program during the first nine months of 2014;
$10.6 million of favorable variance in foreign currency (gains) losses, net, as a result of $7.3 million in foreign currency losses, net, recognized during the first nine months of 2015,2016, primarily due to lower pre-tax income and the impactphasing of the revaluationrecognition of certain U.S. Dollar denominated payables, compared to $17.9 million in foreign currency losses, net, recognized during the first nine months of 2014, which was partially due to a $6.0 million foreign currency loss recognized as a result of the re-measurement of Revlon Venezuela's balance sheet as of June 30, 2014 and the unfavorable impact of the revaluation of certain U.S. Dollar denominated payables; and
a $9.1 million reduction in SG&A expenses primarily driven by the favorable impact of foreign currency, partially offset by higher brand support within both the Consumer and Professional segments and increases in general and administrative expenses due to higher severance costs and legal fees.income taxes.
These items are discussed in more detail within "Results of Operations" below.

Recent Events
2015 Efficiency ProgramElizabeth Arden Pending Transactions
On June 16, 2016, the Company and Revlon, Inc. entered into the Merger Agreement by and among the Company, Revlon, Inc., Acquisition Sub and Elizabeth Arden, pursuant to which, among other things, Acquisition Sub will merge with and into Elizabeth Arden, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of the Company. The Company expects the Merger to close by the end of 2016, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions.
Elizabeth Arden is a global prestige beauty products company with an extensive portfolio of iconic beauty brands that are highly complementary to the Company's existing brand portfolio and are sold worldwide. In North America, Elizabeth Arden’s principal customers include prestige retailers, the mass retail channel and distributors, as well as direct sales to consumers via its branded retail outlet stores and 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.
In September 2015,connection with the execution of the Merger Agreement, on June 16, 2016, the Company initiated certain restructuring actions to drive certain organizational efficiencies acrossentered into the Company's Consumer and Professional segments (the "2015 Efficiency Program" or "Efficiency Program"). These actions, which are planned to occur during the remainder of 2015 and through 2016, are expected to reduce departmental expenses within theDebt Commitment

35
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)


ConsumerLetter with the Lenders. Pursuant to the Debt Commitment Letter, the Lenders have committed to arrange and Professional segments. Theprovide the Company recognized $3.7with the Facilities, consisting of: (i) a senior secured term loan facility in an aggregate principal amount of $1.8 billion (the "New Term Loan Facilities"); (ii) a senior secured asset-based revolving credit facility in a principal amount of $400 million; and (iii) to the extent that the proceeds of the Unsecured Notes are not available to consummate the transactions contemplated by the Merger Agreement, up to $400 million of restructuringsenior unsecured bridge loans under a senior unsecured credit facility. The availability of the borrowings under the Facilities is subject to the satisfaction of certain customary conditions, including the consummation of the Merger.
Additionally, the Company engaged affiliates of the Lenders to act as initial purchasers and related chargesplacement agents for a private placement of up to $400 million of Unsecured Notes. The proceeds of the applicable Facilities and Unsecured Notes (to the extent borrowed or issued on the Closing Date of the Merger) will be used to: (x) finance the Merger; (y) pay the fees, costs and expenses incurred in connection with, among other things, the third quarterMerger and the Facilities; and (z) fund the refinancing of 2015 forsubstantially all of the Efficiency Program,Company’s existing long-term debt and credit facilities (such transactions in clauses (x) through (z) being the "Transactions"); provided that the Company's existing 5¾% Senior Notes due 2021 shall remain outstanding.
On July 21, 2016, the Escrow Issuer, a wholly owned subsidiary of the Company, priced an offering of $450.0 million aggregate principal amount of 6.25% Senior Notes due 2024 (the “Notes”), the proceeds of which $2.8Products Corporation expects will be used, together with $1.8 billion of borrowings under the New Term Loan Facility and $100.0 million relatedof borrowings under the New Revolving Credit Facility, to finance the Transactions. The amount of borrowings under the New Revolving Credit Facility will be subject to changes in working capital requirements and other adjustments. The offering of the Notes is expected to close on August 4, 2016.
The aggregate principal amount of Notes that will be issued represents an increase from the $400.0 million aggregate principal amount of Notes that Products Corporation had originally offered. The amount of cash on hand that the Company had planned to use to finance the Pending Acquisition will be reduced by the amount of additional net proceeds of the Notes, and any remaining net proceeds will be used for general corporate purposes.
At the closing of the offering of the Notes, pursuant to an escrow agreement (the “Escrow Agreement”), the gross proceeds of the Notes, together with interest on the Notes, will be placed in an escrow account until the Closing Date of the Pending Acquisition. Under the Escrow Agreement, the Closing Date may be extended from time to time (subject to the Consumer segmentCompany or an affiliate funding additional interest through the extended Closing Date into the escrow account), but not later than six months after the initial issuance date of the Notes.
The net proceeds of the Notes will be released from escrow upon the satisfaction of various customary conditions precedent, including completion of the Pending Acquisition. Upon the escrow release: (1) the Escrow Issuer will be merged with and $0.5 millioninto Products Corporation, with Products Corporation as the surviving corporation, and Products Corporation will assume the Escrow Issuer's obligations under the Notes and the related toindenture; (2) Products Corporation's current subsidiaries that guarantee its existing 5¾% Senior Notes will guarantee the Professional segment,Notes and the related indenture (along with the remaining charges included within unallocated corporate expenses. The Company expects to recognize a totalNew Term Loan Facility and the New Revolving Credit Facility); and (3) Elizabeth Arden and certain of approximately $4.0 million to $8.0 million of restructuringits subsidiaries will guarantee the Notes and the related charges for the Efficiency Program through early 2016. By implementing the Efficiency Program, the Company expects to achieve annualized cost reductions of approximately $6.0 million to $12.0 million by the end of 2018, with approximately $3.0 million of cost reductions expected to benefit 2015 results.
In connectionindenture (along with the restructuring actions initiated duringNew Term Loan Facility, the third quarter of 2015 for the Efficiency Program, the Company expects to pay cash of approximately $3.7 million, of which $1.0 million was paid in the third quarter of 2015, with an additional $1.9 million expected to be paid in the fourth quarter of 2015,New Revolving Credit Facility and the remaining balance expected to be paid in 2016.
See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-Q for further details.5¾% Senior Notes).
Acquisition of CBBeauty GroupCutex International
On April 21, 2015 (the "Acquisition Date"),the Cutex International Acquisition Date, the Company completed the CBBCutex International Acquisition from Coty Inc. for a total cash consideration of $48.6$29.1 million. CBB is a U.K.-based company whose primary business consists of licensingCutex International primarily operates in Australia and distributing fragrances under brands such as One Direction and Burberry. On the Acquisition Date,U.K. Following the Company used cash on hand to pay 70%Company's October 2015 acquisition of the total cash consideration, or $34.6 million. The remaining $14.0 millionCutex business and related assets in the U.S., the Cutex International Acquisition completes the Company's global consolidation of the total cash consideration is payable over 4 years in equal annual installments, subject to the selling shareholders' compliance with certain service conditions. These remaining installments will be 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 developCutex brand and enhances and complements the Company's presence in the fragrance category.existing brand portfolio of nail care products. The Cutex International results of operations of the CBB business 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 CBBCutex International Acquisition on the Company’s consolidated financial results is not material. See Note 2, "Business Combinations," to the Unaudited Consolidated Financial Statements in this Form 10-Q for further details.details related to the Cutex International Acquisition.
20152016 Debt Related Transaction
On March 12, 2015, in accordance withFebruary 29, 2016, the terms of the amended term loan agreement, which facility is comprised of (i) the $675.0 million term loan due November 19, 2017 (the "2011 Term Loan") and (ii) the $700.0 million term loan due October 8, 2019 (the "Acquisition Term Loan") (together, the "Amended Term Loan Agreement"), Products CorporationCompany prepaid $24.6$23.2 million of indebtedness, representing 50% of its 20142015 “excess cash flow” as defined under the Amended Term Loan Agreement.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 amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $12.1$11.5 million to $662.9$651.4 million (as all amortization payments under the 2011 Term Loan havehad been paid). The $12.5$11.7 million that was applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterlyannual amortization payments under the Acquisition Term Loan on a ratable basis from $1.8$6.9 million prior to the prepayment to $1.7$6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019. See Note 8, "Long-Term Debt," to the Unaudited Consolidated Financial
REVLON CONSUMER PRODUCTS CORPORATION 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)


Statements in this Form 10-Q for further details.details and "Elizabeth Arden Pending Transactions" above for information related to the financing transactions that are expected to be consummated in connection with the Pending Acquisition.

Operating Segments
The Company primarily operates in three segments,segments: the Consumer segment, the Professional segment and the Other segment:
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 the mass retail channel in the U.S. and internationally, consisting of large mass volume retailers, and 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., as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S.internationally. The Consumer segment also includes a skincare line under the Natural Honey brand and a hair color line under the Llongueras brand sold to large volume retailers and other retailers, primarily in Spain, which were acquired as part of the Colomer Acquisition. In October 2015 and in May 2016, the Company acquired Cutex businesses in the mass retail channel, primarilyU.S. and in Spain.certain international territories and related assets, respectively. The results of operations relating to the sales of Cutex nail care products are included within the Consumer segment.
The Professional segment is comprised primarily of the Company's professional brands, which include RevlonRevlon Professional in hair color and hair care; CND-branded products in nail polishes and nail enhancements; and American Crew in men’s grooming products, all of which are sold worldwide in theto professional salon channel.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 in the mass retail channelto professional salons, large volume retailers and in professional salons,other retailers, primarily in the U.S.

36
REVLON CONSUMER PRODUCTS CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


The Other segment primarily includes the operating results of the CBBeauty Group and certain of its related entities (collectively "CBB" and such transaction, the "CBB Acquisition"). CBB businessdevelops, manufactures, markets and related purchase accounting for the Company's April 2015 CBB Acquisition.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. The results included within the Other segment are not material to the Company'sCompany’s consolidated results of operations.


Results of Operations
In the tables below, all amounts are in millions and numbers in parentheses ( ) denote unfavorable variances.
Consolidated Net Sales:
ThirdSecond quarter results:
Consolidated net sales in the thirdsecond quarter of 20152016 were $471.5$488.9 million, a decreasean increase of $0.8$6.5 million, or 0.2%1.3%, as compared to $472.3$482.4 million in the thirdsecond quarter of 2014.2015. Excluding the $31.7$10.3 million unfavorable impact of foreign currency fluctuations, consolidated net sales increased $30.9by $16.8 million, or 6.5%3.5%, during the thirdsecond quarter of 2015.2016.
Year-to-date results:
Consolidated net sales in the first ninesix months of 20152016 were $1,392.4$928.5 million, a decrease of $47.6$7.6 million increase, or 3.3%0.8%, as compared to $1,440.0$920.9 million in the first ninesix months of 2014.2015. Excluding the $93.0$24.9 million unfavorable impact of foreign currency fluctuations, consolidated net sales increased $45.4by $32.5 million, or 3.2%3.5%, during the first ninesix months of 2015.2016.
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) costs of sales resulting from a fair value adjustment indeferred compensation related to the second quarter of 2015 to inventory acquired inaccounting for the CBB Acquisition; and (iv) costs of sales resulting from a fair
REVLON CONSUMER PRODUCTS CORPORATION 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)


value adjustmentadjustments in the firstsecond quarter of 20142016 and 2015 to inventory acquired in the Colomer Acquisition.Cutex International Acquisition and CBB Acquisition, respectively. 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, $2.1 million and $6.2 million of pension-related costs were reclassified from the measurement of Consumer segment profit and included as a component of unallocated corporate expenses for the three and nine months ended September 30, 2014, 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 14, "Segment Data and Related Information" to the Unaudited Consolidated Financial Statements in this Form 10-Q.

The following tables provide a comparative summary of the Company's segment results for the three months ended SeptemberJune 30, 20152016 and 2014:2015:

Net Sales Segment Profit (Loss)Net Sales Segment Profit    
Three Months Ended September 30, Change 
XFX Change (a)
 Three Months Ended September 30, Change 
XFX Change (a)
Three Months Ended June 30, Change 
XFX Change (a)
 Three Months Ended June 30, Change 
XFX Change (a)
2015 2014 $ % $ % 2015 2014 $ % $ %2016 2015 $ % $ % 2016 2015 $ % $ %
Consumer$348.1

$348.2
 $(0.1) — % $20.7

5.9% $86.0

$76.0
 $10.0
 13.2 % $13.4
 17.6 %$359.5
 $354.7
 $4.8
 1.4 % $14.0
 3.9% $81.0
 $83.8
 $(2.8) (3.3)% $(2.1) (2.5)%
Professional114.5

124.1
 (9.6) (7.7)% 1.3

1.0% 23.4

25.2
 (1.8) (7.1)% (0.2) (0.8)%123.3
 123.4
 (0.1) (0.1)% 0.7
 0.6% 24.1
 24.3
 (0.2) (0.8)% (0.1) (0.4)%
Other8.9

—
 8.9
 100.0 % 8.9

100.0% (2.3)
—
 (2.3) — % (2.3) 100.0 %6.1
—
4.3
 1.8
 41.9 % 2.1
 48.8% 0.1
 0.2
 (0.1) (50.0)% (0.1) (50.0)%
Total$471.5
 $472.3
 $(0.8) (0.2)% $30.9
 6.5% $107.1
 $101.2
 $5.9
 5.8 % $10.9
 10.8 %$488.9
 $482.4
 $6.5
 1.3 % $16.8
 3.5% $105.2
 $108.3
 $(3.1) (2.9)% $(2.3) (2.1)%
(a) XFX excludes the impact of foreign currency fluctuations.

The following tables provide a comparative summary of the Company's segment results for the ninesix months ended SeptemberJune 30, 20152016 and 2014:2015:

37
REVLON CONSUMER PRODUCTS CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


Net Sales Segment Profit (Loss)Net Sales Segment Profit    
Nine Months Ended September 30, Change 
XFX Change (a)
 Nine Months Ended September 30, Change 
XFX Change (a)
Six Months Ended June 30, Change 
XFX Change (a)
 Six Months Ended June 30, Change 
XFX Change (a)
2015 2014 $ % $ % 2015 2014 $ % $ %2016 2015 $ % $ % 2016 2015 $ % $ %
Consumer$1,027.1
 $1,055.0
 $(27.9) (2.6)% $30.3
 2.9% $232.0
 $225.8
 $6.2
 2.7 % $11.2
 5.0 %$679.5
 $679.0
 $0.5
 0.1% $22.1
 3.3% $139.4
 $146.0
 $(6.6) (4.5)% $(5.0) (3.4)%
Professional352.1
 385.0
 (32.9) (8.5)% 1.9
 0.5% 76.9
 88.5
 (11.6) (13.1)% (9.4) (10.6)%238.4
 237.6
 0.8
 0.3% 3.8
 1.6% 49.7
 53.5
 (3.8) (7.1)% (3.8) (7.1)%
Other13.2

—
 13.2
 100.0 % 13.2
 100.0% (2.8)
—
 (2.8) 100.0 % (2.8) 100.0 %10.6
—
4.3
 6.3
 146.5% 6.6
 153.5% (0.8) 0.2
 (1.0) (500.0)% (1.0) (500.0)%
Total$1,392.4
 $1,440.0
 $(47.6) (3.3)% $45.4
 3.2% $306.1
 $314.3
 $(8.2) (2.6)% $(1.0) (0.3)%$928.5
 $920.9
 $7.6
 0.8% $32.5
 3.5% $188.3
 $199.7
 $(11.4) (5.7)% $(9.8) (4.9)%
(a) XFX excludes the impact of foreign currency fluctuations.

Consumer Segment
ThirdSecond quarter results:
Consumer segment net sales in the thirdsecond quarter of 20152016 were $348.1$359.5 million, a $4.8 million increase, or 1.4%, compared to $348.2$354.7 million in the thirdsecond quarter of 2014.2015. Excluding the $20.8$9.2 million unfavorable impact of foreign currency fluctuations (referred to herein as on an "XFX basis"), total Consumer net sales increased $20.7by $14.0 million, or 5.9%3.9%, in the thirdsecond quarter of 2015,2016, compared to the thirdsecond quarter of 2014,2015. This increase was primarily driven by higher net sales of Revlon color cosmetics, Revlon ColorSilkSinfulColors hair color cosmetics, Mitchum anti-perspirant deodorant products and Cutex nail products, partially offset by lower net sales of Almay color cosmetics.
Consumer segment profit in the second quarter of 2016 was $81.0 million, a $2.8 million decrease, or 3.3%, compared to $83.8 million in the second quarter of 2015. Excluding the $0.7 million unfavorable impact of foreign currency fluctuations, Consumer segment profit decreased by $2.1 million, or 2.5%, in the second quarter of 2016, compared to the second quarter of 2015. This decrease was primarily driven by the unfavorable impact of product mix and the impact of foreign currency transaction within cost of sales.
REVLON CONSUMER PRODUCTS CORPORATION 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-to-date results:
Consumer segment net sales in the first six months of 2016 were $679.5 million, a $0.5 million increase, or 0.1%, compared to $679.0 million in the first six months of 2015. Excluding the $21.6 million unfavorable impact of foreign currency fluctuations, total Consumer net sales increased by $22.1 million, or 3.3%, in the first six months of 2016, compared to the first six months of 2015. This increase was primarily driven by higher net sales of Cutex nail products, SinfulColors color cosmetics and Mitchum anti-perspirant deodorant products, partially offset by lower net sales of Almay color cosmetics. Included in the third quarter 2015 net sales were $7.3 million of net favorable returns reserve adjustments, as compared to $8.8 million of favorable returns reserve adjustments in the third quarter of 2014, as a result of the Company’s continued assessment of its expected future returns based on its strategy to focus on fewer, bigger and better innovations.
Consumer segment profit in the third quarterfirst six months of 20152016 was $86.0$139.4 million, an increase of $10.0a $6.6 million decrease, or 13.2%4.5%, compared to $76.0$146.0 million in the third quarterfirst six months of 2014.2015. Excluding the $3.4$1.6 million unfavorable impact of foreign currency fluctuations, Consumer segment profit increased $13.4decreased by $5.0 million, or 3.4%, in the third quarterfirst six months of 2015,2016, compared to the third quarterfirst six months of 2014,2015. This decrease was primarily driven by higherlower gross profit as a result of the unfavorable impact of product mix and the increases inimpact of foreign currency transaction within cost of sales.

Professional Segment
Second quarter results:
Professional segment net sales as discussed above, partiallyin the second quarter of 2016 were $123.3 million, a $0.1 million decrease, or 0.1%, compared to $123.4 million in the second quarter of 2015. Excluding the $0.8 million favorable impact of foreign currency fluctuations, total Professional net sales increased by $0.7 million in the second quarter of 2016, compared to the second quarter of 2015. This increase was primarily due to higher net sales of Revlon Professional hair products and American Crew men’s grooming products throughout the international region, mostly offset by $2.8lower net sales of CND nail products due to the timing of product launches.
Professional segment profit in the second quarter of 2016 was $24.1 million, a $0.2 million decrease, or 0.8%, compared to $24.3 million in the second quarter of higher brand support expenses for2015. Excluding the Company's Consumer brands.$0.1 million unfavorable impact of foreign currency fluctuations, Professional segment profit decreased by $0.1 million in the second quarter of 2016, compared to the second quarter of 2015, essentially flat.
Year-to-date results:
ConsumerProfessional segment net sales in the first ninesix months of 20152016 were $1,027.1$238.4 million, a decrease of $27.9$0.8 million increase, or 2.6%0.3%, compared to $1,055.0$237.6 million in the first ninesix months of 2014.2015. Excluding the $58.2$3.0 million unfavorable impact of foreign currency fluctuations, total ConsumerProfessional net sales increased $30.3by $3.8 million or 2.9%, in the first ninesix months of 2015,2016, compared to the first ninesix months of 2014,2015. This increase was primarily driven byas a result of higher net sales of Revlon color cosmetics, Revlon ColorSilk Professional hair colorproducts and MitchumAmerican Crew anti-perspirant deodorantmen’s grooming products, partially offset by lower net sales of SinfulColors CNDcolor cosmetics nail products within the U.S. and Almay color cosmetics. 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, Consumer segment net sales were negatively impacted, as such change resulted in $0.9 million of net sales in Venezuela in the first nine months of 2015, compared to $14.1 million of net sales in Venezuela in the first nine months of 2014. Excluding Venezuela, on an XFX basis, Consumer net sales would have increased by 3.4% in the first nine months of 2015, compared to the first nine months of 2014.International region.
ConsumerProfessional segment profit in the first ninesix months of 20152016 was $232.0$49.7 million, an increase of $6.2a $3.8 million decrease, or 2.7%7.1%, compared to $225.8$53.5 million in the first ninesix months of 2014. Excluding2015. This decrease was primarily due to a $3.0 million gain related to the $5.0 million unfavorable impactsale of foreign currency fluctuations, Consumer segment profit increased $11.2 millioncertain non-core assets that was recognized in the first ninesix months of 2015 compared to the year ago period, primarily driven by increases in net sales and favorable sales mix, partially offset by 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 $0.1 million of profit in Venezuela in the first nine months of 2015, compared to $5.8 million of profit in Venezuela in the first nine months of 2014. Excluding Venezuela, on an XFX basis, Consumer segment profit would have increased by 5.4% in the first nine months of 2015, compared to the first nine months of 2014.2015.

Professional Segment
Third quarter results:


38




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


Professional segment net sales in the third quarter of 2015 were $114.5 million, a decrease of $9.6 million, or 7.7%, compared to $124.1 million in the third quarter of 2014. Excluding the $10.9 million unfavorable impact of foreign currency fluctuations, total Professional net sales increased $1.3 million, primarily as a result of higher net sales of Creme of Nature multi-cultural hair products, American Crew men's grooming products and Revlon Professional hair products, partially offset by lower net sales of CND nail products.
Professional segment profit in the third quarter of 2015 was $23.4 million, a decrease of $1.8 million, or 7.1%, compared to $25.2 million in the third quarter of 2014. Excluding the $1.6 million unfavorable impact of foreign currency fluctuations, Professional segment profit was essentially flat in the third quarter of 2015 compared to the third quarter of 2014.
Year-to-date results:
Professional segment net sales in the first nine months of 2015 were $352.1 million, a decrease of $32.9 million, or 8.5%, compared to $385.0 million in the first nine months of 2014. Excluding the $34.8 million unfavorable impact of foreign currency fluctuations, total Professional net sales increased $1.9 million, primarily as a result of higher net sales of American Crew men's grooming products and Revlon Professional hair products, mostly offset by lower net sales of CND nail products.
Professional segment profit in the first nine months of 2015 was $76.9 million, a decrease of $11.6 million, or 13.1%, compared to $88.5 million in the first nine months of 2014. Excluding the $2.2 million unfavorable impact of foreign currency fluctuations, Professional segment profit decreased $9.4 million in the first nine months of 2015 compared to the year ago period, primarily due to $13.0 million of higher brand support expenses for the Company's Professional brands.

Geographic Results:
The following tables provide a comparative summary of the Company's net sales by region for the three months ended SeptemberJune 30, 20152016 and 2014:2015:
Three Months Ended September 30,


Change 
XFX Change (a)
Three Months Ended June 30,


Change 
XFX Change (a)
2015 2014 $ % $ %2016 2015 $ % $ %
Consumer           
United States$218.3
 $221.1
 $(2.8) (1.3)% $(2.8) (1.3)%
International141.2
 133.6
 7.6
 5.7 % 16.8
 12.6 %
Professional           
United States$44.7
 $45.9
 $(1.2) (2.6)% $(1.2) (2.6)%
International78.6
 77.5
 1.1
 1.4 % 1.9
 2.5 %
Other           
United States$255.0

$243.8
 $11.2

4.6 % $11.2

4.6%$—
 $—
 $—
 N.M.
 $—
 N.M
International216.5

228.5
 (12.0)
(5.3)% 19.7

8.6%6.1
 4.3
 1.8
 41.9 % 2.1
 48.8 %
Total Net Sales$471.5

$472.3

$(0.8)
(0.2)% $30.9

6.5%$488.9
 $482.4
 $6.5
 1.3 % $16.8
 3.5 %
(a) XFX excludes the impact of foreign currency fluctuations.

The following tables provide a comparative summary of the Company's net sales by region for the ninesix months ended SeptemberJune 30, 20152016 and 2014:2015:
Nine Months Ended September 30,


Change 
XFX Change (a)
Six Months Ended June 30,


Change 
XFX Change (a)
2015 2014 $ % $ %2016 2015 $ % $ %
Consumer           
United States$418.8
 $422.7
 $(3.9) (0.9)% $(3.9) (0.9)%
International260.7
 256.3
 4.4
 1.7 % 26.0
 10.1 %
Professional           
United States$91.9
 $88.7
 $3.2
 3.6 % $3.2
 3.6 %
International146.5
 148.9
 (2.4) (1.6)% 0.6
 0.4 %
Other           
United States$766.4
 $749.2
 $17.2
 2.3 % $17.2
 2.3%$—
 $—
 $—
 N.M.
 $—
 N.M.
International626.0
 690.8
 (64.8) (9.4)% 28.2
 4.1%10.6
 4.3
 6.3
 146.5 % 6.6
 153.5 %
Total Net Sales$1,392.4
 $1,440.0
 $(47.6) (3.3)% $45.4
 3.2%$928.5
 $920.9
 $7.6
 0.8 % $32.5
 3.5 %
(a) XFX excludes the impact of foreign currency fluctuations.

Consumer Segment
Second quarter results:
United States
Third quarter results:
In the Consumer segment, U.S., net sales in the thirdsecond quarter of 2015 increased $11.22016 decreased by $2.8 million, or 4.6%1.3%, to $255.0$218.3 million, as compared to $243.8$221.1 million in the thirdsecond quarter of 2014,2015. This decrease was primarily due to higher Consumer segmentdriven by lower net sales in the U.S. of RevlonAlmay color cosmetics and Revlon ColorSilk hair color, partially offset by lowerhigher net sales of Almay Cutexcolor cosmetics. Net nail products and Revlon beauty tools.
International
In the Consumer segment, International net sales in the U.S. decreasedsecond quarter of 2016 increased by $7.6 million, or 5.7%, to $141.2 million, as compared to $133.6 million in the Professional segment primarily due to lowersecond quarter of 2015. Excluding the $9.2 million unfavorable impact of foreign currency fluctuations, International net sales increased by $16.8 million, or 12.6%, in the second quarter of CND nail products, partially offset2016, as compared to the second quarter of 2015. This increase was primarily driven by higher net sales of Creme of NatureRevlon hair products.color cosmetics, Revlon ColorSilk

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


hair color, and SinfulColors color cosmetics. From a geographic perspective, the increase in International net sales was mainly driven by higher net sales by certain distributors, as well as higher net sales in Japan, Argentina and the U.K.
Year-to-date results:
United States
In the Consumer segment, U.S., net sales in the first ninesix months of 2015 increased $17.22016 decreased by $3.9 million, or 2.3%0.9%, to $766.4$418.8 million, as compared to $749.2$422.7 million in the first ninesix months of 2014,2015. This decrease was primarily duedriven by lower net sales of Revlon color cosmetics and Almay color cosmetics, partially offset by higher net sales of Cutex nail products and SinfulColors color cosmetics.
International
In the Consumer segment, International net sales in the first six months of 2016 increased by $4.4 million, or 1.7%, to $260.7 million, as compared to $256.3 million in the first six months of 2015. Excluding the $21.6 million unfavorable impact of foreign currency fluctuations, International net sales increased by $26.0 million, or 10.1%, in the first six months of 2016, compared to the first six months of 2015. This increase was primarily driven by higher Consumer segment net sales of Revlon color cosmetics, Revlon ColorSilk hair color, partially offset by lowerMitchum anti-perspirant deodorant products and Cutex nail products. From a geographic perspective, the increase in International net sales of Almay color cosmeticswas mainly driven by higher net sales in Argentina, the U.K., certain distributors and Japan.

Professional Segment
Second quarter results:
United States
SinfulColors color cosmetics. NetIn the Professional segment, U.S. net sales in the U.S.second quarter of 2016 decreased by $1.2 million, or 2.6%, to $44.7 million, as compared to $45.9 million in the Professional segmentsecond quarter of 2015. This decrease was primarily due todriven by lower net sales of CND nail products.products due to the timing of product launches.
International
Third quarter results:
In the Professional segment, International net sales in the thirdsecond quarter of 2015 decreased $12.02016 increased by $1.1 million, or 5.3%1.4%, to $216.5$78.6 million, as compared to $228.5$77.5 million in the thirdsecond quarter of 2014.2015. Excluding the $31.7$0.8 million unfavorable impact of foreign currency fluctuations, International net sales increased $19.7by $1.9 million, or 8.6%2.5%, in the Consumer and Professional segments. International net sales increased insecond quarter of 2016, compared to the Consumer segment primarily due to higher net salessecond quarter of Revlon color cosmetics, Revlon ColorSilk hair color and Mitchum anti-perspirant deodorant products. International net sales increased in the Professional segment2015. This increase was primarily due to higher net sales of Revlon Professionalhair products and American Crew men'smen’s grooming products. From a geographic perspective,products throughout most of the increaseInternational region, partially offset by lower net sales for CND nail products, primarily in internationalRussia and Hong Kong.
Year-to-date results:
United States
In the Professional segment, U.S. net sales in the first six months of 2016 increased by $3.2 million, or 3.6%, to $91.9 million, as compared to $88.7 million in the first six months of 2015. This increase was primarily driven by certain distributor markets.new point-of-sale and merchandising initiatives for Creme of Nature multi-cultural hair products and the launch of the Elvis marketing campaign for American Crew men's grooming products, partially offset by lower net sales for CND nail products.
Year-to-date results:International
In the Professional segment, International net sales in the first ninesix months of 20152016 decreased $64.8by $2.4 million, or 9.4%1.6%, to $626.0$146.5 million, as compared to $690.8$148.9 million in the first ninesix months of 2014.2015. Excluding the $93.0$3.0 million unfavorable impact of foreign currency fluctuations, International net sales increased $28.2by $0.6 million, or 4.1%0.4%, in the first ninesix months of 20152016, compared to the year ago period,first six months of 2015. This increase was primarily due to higher net sales of Revlon Professional color cosmetics in the Consumer segment, primarily driven by higher net sales in certain distributor marketshair products and Australia. International net sales increased in the Professional segment primarily due to higher net sales of American Crew men's grooming products andthroughout the International region, partially offset by lower net sales of Revlon Professional CNDhair nail products, primarily in Spain and Australia. These increases were partially offset by $0.9 million ofRussia.
Other Segment
Second quarter results:
International
In the Other segment, net sales induring the Consumer segment in Venezuela in the first nine monthssecond quarter of 20152016 increased by $1.8 million, or 41.9%, to $6.1 million, as compared to $14.1$4.3 million of net sales in the Consumer segment in Venezuela during the first nine months of 2014, which decrease was driven by the Company's exit of its business operations in Venezuela in the second quarter of 2015. Excluding Venezuela, on an XFX basis, Internationalthe $0.3 million unfavorable impact of foreign currency
REVLON CONSUMER PRODUCTS CORPORATION 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)


fluctuations, Other segment net sales would have increased by 6.3%$2.1 million in the second quarter of 2016. This increase was primarily driven by there being no comparable results for the second quarter of 2015, as the CBB Acquisition closed on April 21, 2015.
Year-to-date results:
International
In the Other segment, net sales during the first six months of 2016 increased by $6.3 million, or 146.5%, to $10.6 million, as compared to $4.3 million in the first ninesix months of 2015. Excluding the $0.3 million unfavorable impact of foreign currency fluctuations, Other segment net sales increased by $6.6 million in the first six months of 2016. This increase was primarily driven by there being no comparable results for the full first six months of 2015 compared toas the first nine months of 2014.

CBB Acquisition closed on April 21, 2015.

Gross profit:
Three Months Ended September 30,   Nine Months Ended September 30, 
Three Months Ended June 30,   Six Months Ended June 30, 
2015 2014 Change 2015 2014
Change2016 2015 Change 2016 2015 Change
Gross profit$303.7
 $307.7
 $(4.0) $921.0
 $944.7
 $(23.7)$317.4
 $321.1
 $(3.7) $603.1
 $617.3
 $(14.2)
Percentage of net sales
64.4% 65.1% (0.7)% 66.1% 65.6% 0.5%64.9% 66.6% (1.6)% 65.0% 67.0% (2.1)%
Gross profit decreased $4.0 million, and as a percentage of net sales gross profit decreased by 0.71.6 percentage points, decreasing by $3.7 million in the thirdsecond quarter of 2015,2016, as compared to the thirdsecond quarter of 2014.2015. The drivers of the decreasesdecrease in gross profit in the thirdsecond quarter of 2015,2016, as compared to the thirdsecond quarter of 2014,2015, primarily included:
unfavorable foreign currency fluctuations, which reduceddecreased gross profit by $23.8$8.3 million and reduceddecreased gross profit as a percentage of net sales by 0.7 percentage points;
higher promotional allowances, which decreased gross profit by $7.5 million and decreased gross profit as a percentage of net sales by 0.6 percentage points; and
the effects of favorable returns accrual adjustmentsunfavorable product mix, which were made in the third quarter of 2014 due to lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, with no similar adjustments in the third quarter of 2015, and which had the net effect of reducingdecreased gross profit by $1.5$3.6 million and decreased gross profit as a percentage of net sales by 0.3 percentage points;
with the foregoing partially offset by:
favorable volume, which increased gross profit by $15.2$15.9 million, with no impact on gross profit as a percentage of net sales;sales.
lower returns,Gross profit decreased as a percentage of net sales by 2.1 percentage points, decreasing by $14.2 million in the first six months of 2016, as compared to the first six months of 2015. The drivers of the decrease in gross profit in the first six months of 2016, as compared to the first six months 2015, primarily included:
unfavorable foreign currency fluctuations, which increaseddecreased gross profit by $2.8$20.8 million and increaseddecreased gross profit as a percentage of net sales by 0.21.0 percentage points;
higher promotional allowances, which decreased gross profit by $14.5 million and decreased gross profit as a percentage of net sales by 0.7 percentage points; and
unfavorable product mix, which decreased gross profit by $8.1 million and decreased gross profit as a percentage of net sales by 0.4 percentage points;
with the foregoing partially offset by:
favorable volume, which increased gross profit by $29.1 million, with no impact on gross profit as a percentage of net sales.

SG&A expenses:
40
 Three Months Ended June 30,   Six Months Ended June 30, 
 2016 2015 Change 2016 2015 Change
SG&A expenses$256.8
 $256.9
 $0.1
 $502.6

$503.8

$1.2

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


lower manufacturing and freight costs, as a result of supply chain cost reduction initiatives, which increased gross profit by $2.8 million and increased gross profit as a percentage of net sales by 0.6 percentage points; and
favorable sales mix, which increased gross profit by $1.1 million and increased gross profit as a percentage of net sales by 0.2 percentage points.
Gross profit increased as a percentage of net sales by 0.5 percentage points, while decreasing $23.7SG&A expenses decreased $0.1 million in the first nine monthssecond quarter of 2015,2016, as compared to the first nine monthssecond quarter of 2014. The drivers2015, primarily driven by:
$4.6 million of the variances in gross profitfavorable impacts due to foreign currency fluctuations in the first nine months of 2015, as compared tosecond quarter 2016; and
a $2.3 million decrease in brand support expenses, primarily within the first nine months of 2014, primarily included:
favorable volume, which increased gross profit by $16.5 million and increased gross profit as a percentage of net sales by 0.2 percentage points;
lower returns, which increased gross profit by $12.1 million and increased gross profit as a percentage of net sales by 0.2 percentage points;
favorable sales mix, which increased gross profit by $15.0 million and increased gross profit as a percentage of net sales by 1.1 percentage points; and
lower manufacturing and freight costs, as a result of supply chain cost reduction initiatives, which increased gross profit by $9.4 million and increased gross profit as a percentage of net sales by 0.7 percentage points;Consumer segment;
with the foregoing partially offset by:
unfavorable foreign currency fluctuations, which reduced gross profit by $70.2a $5.0 million increase in general and reduced gross profit as a percentage of net sales by 0.6 percentage points; and
the effects of favorable returns accrual adjustments which were made in the third quarter of 2014,administrative expenses, primarily due to higher compensation due to changes in senior executive management and higher professional and legal fees, partially offset by lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, with no similar adjustments in the first nine months of 2015, and which had the net effect of reducing gross profit by $4.8 million and decreased gross profit as a percentage of net sales by 0.3 percentage points.


SG&A expenses:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014
Change
SG&A expenses$241.7
 $249.3
 $(7.6) $745.5

$754.6
 $(9.1)
severance.
SG&A expenses decreased $7.6by $1.2 million in the third quarterfirst six months of 20152016, as compared to the third quarterfirst six months of 2014,2015, primarily driven by:
$18.012.1 million of favorable impactimpacts due to foreign currency fluctuations;fluctuations in the first six months 2016; and
a $6.4 million decrease in brand support expenses, primarily within the Consumer segment;
with the foregoing partially offset by:
$6.514.5 million of higher general and administrative expenses in 2016, primarily due to higher severance costs,compensation due to changes in senior executive management, higher professional and legal fees and incentive compensation expense; and
$4.7a $3.0 million of higher brand support expenses for the Company's brands within the Consumer and Professional segments.
SG&A expenses decreased $9.1 milliongain recognized in the first ninesix months of 2015 on the sale of certain non-core assets, partially offset by lower severance.

Restructuring charges and other, net:
 Three Months Ended June 30,   Six Months Ended June 30, 
 2016 2015 Change 2016 2015 Change
Restructuring charges and other, net$0.5
 $(3.6) $(4.1) $1.8
 $(3.1) $(4.9)
Restructuring charges and other, net, for the second quarter of 2016 of $0.5 million primarily related to charges for employee-related costs incurred in connection with immaterial restructuring actions, as compared to $3.6 million of net reductions in estimated restructuring costs recognized during the second quarter of 2015.
Restructuring charges and other, net, for the first six months of 2016 of $1.8 million primarily related to charges for employee-related costs incurred in connection with the 2015 Efficiency Program, as compared to $3.1 million of net reductions in estimated restructuring costs recognized during the first six months of 2015.
The Company expects to achieve approximately $9 million in cost reductions during 2016 from the 2015 Efficiency Program and annualized cost reductions thereafter are expected to be approximately $10 million to $15 million.
See Note 3, "Restructuring Charges" to the Unaudited Consolidated Financial Statements in this Form 10-Q for further discussion.

Interest expense:
 Three Months Ended June 30,   Six Months Ended June 30, 
 2016 2015 Change 2016 2015
Change
Interest expense$20.9
 $20.5
 $(0.4) $41.9
 $40.5
 $(1.4)

The $0.4 million and $1.4 million increase in interest expense in the second quarter and first six months of 2016, compared to the second quarter and first ninesix months of 2014, primarily driven by:
$58.5 million of favorable impact due to foreign currency fluctuations in the first nine months of 2015;
with the foregoing partially offset by:
$35.8 million of higher brand support expenses for the Company's brands within the Consumer and Professional segments in the first nine months of 2015; and
$17.2 million of higher general and administrative expenses,2015, respectively, was primarily due to higher severance costs, legal feesweighted average borrowing rates, partially offset by lower average debt outstanding. The higher weighted average borrowing rates were driven by the impact of the 2013 Interest Rate Swap (as hereinafter defined). The lower average debt outstanding was the result of: (i) regularly scheduled quarterly amortization payments made towards the Acquisition Term Loan through June 30, 2016; and increased compensation expense related to(ii) the CBB Acquisition.excess cash flow prepayment of $23.2 million made in February 2016.


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



Acquisition and Integration Costs:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014 Change
Acquisition and integration costs$0.6

$0.9

$0.3
 $6.5

$5.4
 $(1.1)
The acquisition and integration costs for the three and nine months ended September 30, 2015 are summarized in the table presented below.
 Three Months Ended September 30, Nine Months Ended September 30,
 2015 2014 2015
2014
   Acquisition costs$0.3
 $0.1
 $5.0
 $0.5
   Integration costs0.3
 0.8
 1.5
 4.9
Total acquisition and integration costs$0.6
 $0.9
 $6.5
 $5.4
Acquisition costs in the third quarter and first nine months of 2015 and 2014 primarily included legal fees and consulting fees related to the CBB Acquisition and the Colomer Acquisition, respectively.
Integration costs consist of non-restructuring costs related to the Company's integration of Colomer's operations into the Company's business. Integration costs incurred during the third quarter of 2015 primarily included professional fees. Integration costs incurred during the first nine months of 2015 primarily included legal and professional fees. Integration costs incurred during both the third quarter of 2014 and during the first nine months of 2014 included employee-related costs related to management changes and audit-related fees.


Restructuring charges and other, net:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014 Change
Restructuring charges and other, net$4.0
 $0.8
 $(3.2) $0.9
 $18.1
 $17.2
Restructuring charges and other, net for the third quarter of 2015 primarily related to charges for employee related costs incurred in connection with the Efficiency Program.
For additional details on the Efficiency Program, please see "Overview - Recent Events - 2015 Efficiency Program."
During the third quarter of 2014, the Company recorded charges totaling $1.4 million related to restructuring and related actions under the Integration Program, of which $1.1 million was recorded in restructuring charges and other, net, $0.1 million was recorded in cost of sales and $0.2 million was recorded in SG&A expenses, in addition to charges for other immaterial actions within the Consumer segment of $0.2 million that was recorded within restructuring charges and other, net, related to employee-related costs, partially offset by a $0.3 million gain related to the sale of equipment.
Restructuring charges and other, net, for the first nine months of 2015 primarily related to charges for employee related costs incurred in connection with the Efficiency Program, partially offset by changes in estimated employee-related costs related to the Integration Program.
During the first nine months of 2014, the Company recorded charges totaling $17.1 million related to restructuring and related actions under the Integration Program, of which $16.4 million was recorded in restructuring charges and other, net, $0.2 million was recorded in cost of sales and $0.5 million was recorded in SG&A expenses, in addition to charges of $1.9 million that were recorded within restructuring charges and other, net, related to employee-related costs for other immaterial restructuring actions within the Consumer segment.
The Company continues to expect to achieve annualized cost reductions from the Integration Program of approximately $30.0 million to $35.0 million by the end of 2015.


42
REVLON CONSUMER PRODUCTS CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


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

Interest expense:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014
Change
Interest expense$21.5
 $20.6
 $(0.9) $62.0
 $63.9
 $1.9
The $0.9 million increase in interest expense in the third quarter of 2015, as compared to the third quarter of 2014, was primarily due to higher weighted average interest rates driven by the 2013 Interest Rate Swap related to a portion of the Acquisition Term Loan.
The $1.9 million decrease in interest expense in the first nine months of 2015, compared to the prior year period, was primarily due to lower average debt outstanding as a result of (i) regularly scheduled quarterly amortization payments made towards the Acquisition Term Loan through September 30, 2015; (ii) the favorable benefit to the first nine months of 2015 as a result of the May 1, 2014 prepayment of the remaining $58.4 million principal amount outstanding under the Non-Contributed Loan; and (iii) the $24.6 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.

Foreign currency (gains) losses, net:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014 Change
Foreign currency (gains) losses, net$(0.7) $9.3
 $(10.0) $7.3
 $17.9
 $(10.6)
 Three Months Ended June 30,   Six Months Ended June 30, 
 2016 2015 Change 2016 2015 Change
Foreign currency losses (gains), net$8.5
 $(7.9) $(16.4) $5.1
 $8.0
 $2.9
Foreign currency (gains),losses, net of $0.7$8.5 million during the thirdsecond quarter of 2015,2016, as compared to foreign currency gains, net, of $7.9 million during the second quarter of 2015, were primarily driven by the net unfavorable impact of the revaluation of certain U.S. Dollar denominated payables and foreign currency denominated receivables during the second quarter of 2016, as compared to the second quarter of 2015.
The decrease in foreign currency losses, net, of $9.3$2.9 million during the third quarterfirst six months of 2014, were2016, as compared to the first six months of 2015, was primarily driven primarily by the net favorable impact of the revaluation of certain U.S. Dollar denominated payables.
The decrease inintercompany payables and foreign currency losses, net, of $10.6 milliondenominated receivables during the first ninesix months of 2015,2016, as compared to the first ninesix months of 2014, was primarily driven by:
a $6.0 million foreign currency loss recognized in the first nine months of 2014 as a result of the re-measurement of Revlon Venezuela's balance sheet, as compared to a $1.9 million foreign currency loss recognized in the first nine months of 2015;
a $3.2 million gain for the first nine months of 2015, compared to a $0.1 million gain for the first nine months of 2014, related to the Company's foreign currency forward exchange contracts; and
the favorable impact of the revaluation of certain U.S. Dollar and foreign currency denominated intercompany payables during the first nine months of 2015, as compared to the first nine months of 2014.

2015.
Provision for income taxes:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2015 2014 Change 2015 2014 Change
Provision for income taxes$25.5
 $9.6
 $15.9
 $56.5
 $36.6
 $19.9
 Three Months Ended June 30,   Six Months Ended June 30, 
 2016 2015 Change 2016 2015 Change
Provision for income taxes$11.8
 $21.4
 $(9.6) $17.9
 $31.0
 $(13.1)

The provision for income taxes increased $15.9decreased by $9.6 million in the thirdsecond quarter of 2016, compared to the second quarter of 2015, compared to the third quarter of 2014, primarily due to higher pretaxlower pre-tax income in the third quarter of 2015, the unfavorable impact of certain discrete items, including return-to-provision adjustments and the impactphasing of the favorable resolutionrecognition of tax matters realized in the third quarter of 2014 that

43
REVLON CONSUMER PRODUCTS CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


did not recur in the third quarter of 2015, and an increase in the valuation allowance related to certain assets in the U.S. as a result of a change in law.income taxes.
The provision for income taxes increased $19.9decreased by $13.1 million in the first ninesix months of 2015,2016, compared to the first ninesix months of 2014,2015, primarily due to the unfavorable impact of certain discrete items, including return-to-provision adjustmentslower pre-tax income and the impactphasing of the favorable resolutionrecognition of tax matters realized in the first nine months of 2014 that did not recur in the first nine months of 2015, an increase in the valuation allowance related to certain assets in the U.S. as a result of a change in law and higher pretax income in certain jurisdictions for the first nine months of 2015, compared to the first nine months of 2014.taxes.
The Company's effective tax rate for the three months ended SeptemberJune 30, 20152016 was higher than the 35% federal statutory rate as a result of 35% due principally to foreign and U.S. tax effects attributable to operations outside the U.S. and state and local taxes.
The Company's effective tax rate for the nine months ended September 30, 2015 was higher than the federal statutory rate of 35% due principally to foreign and U.S. tax effects attributable to operations outside the U.S., state and local taxesforeign dividends and earnings taxable in the U.S.
The Company's effective tax rate for the six months ended June 30, 2016 was higher than the 35% federal statutory rate as a result of certain foreign dividends and earnings taxable in the U.S.
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.


Financial Condition, Liquidity and Capital Resources
At SeptemberJune 30, 20152016, the Company had a liquidity position of $345.0343.9 million, consisting of $177.2 million of cash and cash equivalents (net of any outstanding checks) of $178.8 million, as well as $166.2166.7 million in available borrowings under Products Corporation's $175.0 million asset-based, multi-currency revolving credit facility (the "AmendedAmended Revolving Credit Facility"),Facility, based upon the borrowing base less $8.8$8.3 million of undrawn outstanding letters of credit and nil then drawnno other borrowing outstanding under the Amended Revolving Credit Facility at such date.
The Company’s foreign operations held $59.2$57.2 million out of the total $178.8177.2 million in cash and cash equivalents (net of any outstanding checks) as of SeptemberJune 30, 2015.2016.  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.earnings to the extent repatriated, and otherwise records a tax liability for the estimated cost of repatriation in a future period. The Company believes that the cash generated by its domestic operations and availability under the Amended Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its domestic liquidity needs for at least the next twelve12 months. Therefore, the Company does not currently anticipateanticipates that restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company’s liquidity during such period. See "Subsequent Events"/"Recent Events."

Changes in Cash Flows
At SeptemberJune 30, 20152016, the Company had cash and cash equivalents of $181.2$185.8 million,, compared with $275.3326.9 million at December 31, 20142015. The following table summarizes the Company’s cash flows from operating, investing and financing activities for the ninesix months ended SeptemberJune 30, 20152016 and 2014:2015:
Nine Months Ended September 30,Six Months Ended June 30,
2015 20142016 2015
Net cash (used in) provided by operating activities$(2.6) $46.7
$(57.2) $2.5
Net cash used in investing activities(55.4) (29.4)(47.4) (49.4)
Net cash used in financing activities(28.4) (70.7)(36.6) (23.5)
Effect of exchange rate changes on cash and cash equivalents(7.7) (12.3)0.1
 (5.9)

Operating Activities
Net cash (used in) provided by operating activities was $(2.6)$(57.2) million and $46.7$2.5 million for the first ninesix months of 20152016 and 2014,2015, respectively. The increase in cash (used in)used in operating activities in the first ninesix months of 2015,2016, compared to the first ninesix months of 2014,2015, was primarily driven by higher inventory, as well as higher brand support and incentive compensation payments, partially offset by less cash used in discontinued operations, as well as lower payments for restructuring and interestthe shift in the first nine monthstiming of 2015.
Net cash provided by (used in) operating activities related to discontinued operations, including restructuring payments, was approximately $0.1 millioncertain customer collections and $(26.0) million foraccounts payable disbursements at the first nine monthsend of 2015 and 2014, respectively.2015.
Investing Activities
Net cash used in investing activities was $55.4$47.4 million and $29.4$49.4 million for the first ninesix months ended June 30, 2016 and 2015, respectively, which included $18.6 million and $17.2 million of 2015 and 2014,cash used for capital expenditures, respectively. Net cash used in investing activities during the first ninesix months of 20152016 included $29.2 million in cash payments for the May 2016 Cutex International Acquisition, as compared to $34.2 million in cash payments, net of cash acquired, primarily for the Company's April 2015 CBB Acquisition, partially offset by $5.8 million in cash proceeds from the sale of certain assets. Net cash used in investing activities during the first nine months of 2015 and 2014 included $27.0 million and $30.3 million of cash used for capital expenditures, respectively.Acquisition.
Financing Activities
Net cash used in financing activities was $28.4$36.6 million and $70.7$23.5 million for the ninesix months ended SeptemberJune 30, 2016 and 2015, and 2014, respectively.
Net cash used in financing activities for the first ninesix months of 20152016 primarily included:
a $23.2 million required excess cash flow prepayment made under the Amended Term Loan Facility, as discussed below;
$3.4 million of scheduled amortization payments on the Acquisition Term Loan; and
a $8.4 million decrease in short-term borrowings and overdraft.
Net cash used in financing activities for the first six months of 2015 included:
a $24.6 million required excess cash flow prepayment made under the Amended Term Loan Facility; and
$5.13.4 million of scheduled amortization payments on the Acquisition Term Loan;
with the foregoing partially offset by:
$4.36.6 million of short-term borrowings and overdraft.
Net cash used in financing activities for the first nine months of 2014 included:
the repayment of the $58.4 million aggregate principal amount outstanding of the Non-Contributed Loan;
$5.3 million of scheduled amortization payments on the Acquisition Term Loan;
$3.1 million of short-term borrowings and overdraft; and
the payment of $1.8 million of financing costs primarily related to the February 2014 Term Loan Amendment.
Cash Pooling Arrangement
As of December 31, 2014, certain of the Company's foreign subsidiaries utilized a cash pooling arrangement with a financial institution for cash management purposes. This cash pooling arrangement allowed the Company's participating subsidiaries to withdraw cash from the financial institution to the extent that aggregate cash deposits held by the Company's participating subsidiaries were available at the financial institution. To the extent any participating location on an individual basis was in an overdraft position, such overdrafts would be recorded within short-term borrowings in the Consolidated Balance Sheet and reflected as financing activities in the Consolidated Statement of Cash Flows, and the cash deposits held as collateral for such overdrafts would be classified as restricted cash within cash and cash equivalents. As of September 30, 2015, the Company no longer has a cash pool arrangement, and therefore, has no restricted cash recorded in cash and cash equivalents in the Consolidated Balance Sheet.

Long-Term Debt Instruments
For further detail regarding Products Corporation's long-term debt instruments, see Note 11, "Long-Term Debt," to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2014,2015, filed with the U.S. Securities and Exchange Commission (the "SEC") on March 12,February 26, 2015 (the "2014"2015 Form 10-K"), as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources" in the Company's 20142015 Form 10-K. See "Subsequent Events"/"Recent Events."


(a) 20152016 Debt Related Transaction
Amended Term Loan Facility - Excess Cash Flow Payment
On March 12, 2015, in accordance with the terms of the Amended Term Loan Facility,February 29, 2016, Products Corporation prepaid $24.6$23.2 million of indebtedness, representing 50% of its 20142015 “excess cash flow” as defined under the Amended Term Loan Agreement.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 amount of the prepayment that was applied to the 2011 Term Loan reduced the principal amount outstanding by $12.1$11.5 million to $662.9$651.4 million (as all amortization payments under the 2011 Term Loan had been paid). The $12.5$11.7 million that was applied to the Acquisition Term Loan reduced Products Corporation's future regularly scheduled quarterlyannual amortization payments under the Acquisition Term Loan on a ratable basis from $1.8$6.9 million prior to the prepayment to $1.7$6.8 million after giving effect to the prepayment and through its maturity on October 8, 2019.

(b) Covenants
Amended Credit Agreements
Products Corporation was in compliance with all applicable covenants under the Amended Term Loan Agreement and the Amended Revolving Credit Facility (the "Amended Credit Agreement") as of SeptemberJune 30, 2015 and December 31, 2014.2016. At SeptemberJune 30, 2015,2016, the aggregate principal amounts outstanding under the Acquisition Term Loan and the 2011 Term Loan were $675.4$658.6 million and $662.9$651.4 million, respectively, andrespectively. At June 30, 2016, availability under the $175.0 million Amended Revolving Credit Facility, based upon the calculated borrowing base less $8.8$8.3 million of outstanding undrawn letters of credit and nil then drawn on the Amended Revolving Credit Facility, was $166.2$166.7 million. There were no borrowings under the Amended Revolving Credit Facility during the first ninesix months of 20152016 and 2014.2015. See "Subsequent Events"/"Recent Events."
Products Corporation was in compliance with all applicable covenants under its 5¾% Senior Notes Indenture as of SeptemberJune 30, 20152016 and December 31, 2014.2015.

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 the first nine months of 2015 and 2014. At September 30, 2015 and December 31, 2014, Revlon Venezuela's assets represented approximately 1% of the Company’s total assets, respectively.
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 which 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 of 6.3 Bolivars per U.S. Dollar (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.
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. As of September 30, 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 of 193 Bolivars per U.S. Dollar. The Company recorded a $1.9 million foreign currency loss in the first quarter of 2015 as a result of the required re-measurement of Revlon Venezuela’s balance sheet. As Venezuela was designated as a highly inflationary economy effective January 1, 2010, the Company reflected this foreign currency loss in earnings. For both the three and nine months ended September 30, 2015, the change from the SICAD II Rate to the SIMADI Rate had the impact of reducing the Company's net sales by nil and $0.7 million, respectively, and increasing the Company's operating income by $0.1 million and $0.3 million, respectively.
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 Amended Revolving Credit Facility and other permitted lines of credit. The Amended Credit Agreements, and the 5¾% Senior Notes Indenture contain certain provisions that by their terms limit Products CorporationCorporation's and its subsidiaries’ ability to, among other things, incur additional debt. See "Subsequent Events"/"Recent Events."
The Company’s principal uses of funds are expected to be the payment of operating expenses, including expenses in connection with the continued execution of the Company’s business strategy; 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; costs related to the continuing integration of the Colomer Acquisition; 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 certain territories. See "Subsequent Events"/"Recent Events." The Company’s cash contributions to its pension and post-retirement benefit plans in the first ninesix months of 20152016 were $15.5$3.6 million. The Company expects cash contributions to its pension and post-retirement benefit plans to be approximately $20$10 million in the aggregate for 2015.2016. The Company’s cash taxes paid in the first ninesix months of 20152016 were $21.2$12.9 million. The Company expects to pay cash taxes of approximately $25$30 million in the aggregate for 2015.2016. The Company’s purchases of permanent wall displays and capital expenditures in the first ninesix months of 20152016 were $32.5$17.5 million and $27.0$18.6 million, respectively. The Company expects purchases of permanent wall displays and capital expenditures to be approximately $50$50.0 million and $55$55.0 million, respectively, in the aggregate for 2015.2016. See also Note 2, "Business Combinations," for discussion regarding the useutilization of funds related to the Company's April 2015 CBBMay 2016 Cutex International Acquisition.
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 strategy could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including, 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 Company's Colomer Acquisition, andthe CBB Acquisition. The Company plans to continue to integrateAcquisition and/or the operations of Colomer into the Company’s business and continues to expect to achieve approximately $30.0 million to $35.0 million of annualized cost reductions by the end of 2015 (approximately $17.0 million of which benefited the Company's 2014 results) at a cost of approximately $50 million in the aggregate over 2013 through 2015.Cutex International 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 Amended 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, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, in privately negotiated transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions. Any 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 Amended Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to pay its operating expenses for 2015,2016, including expenses in connection with the execution of the Company’s business strategy, purchases of permanent wall displays, capital expenditure requirements, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company’s restructuring programs, integration costs related to the Colomer Acquisition, 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 exiting certain territories. See "Subsequent Events"/"Recent Events."
There can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis. 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 Other 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;competitors and/or decreased performance by third party suppliers; changes in consumer purchasing habits, including with respect to shopping channels and/or among professional salons;retailers; 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; 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 restructuring costs, acquisition and integration costs, (including, without limitation, costs related to the continued integration of the Colomer Acquisition), 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 covenants under the Amended Credit Agreements and in such event the Company could be required to take measures, including, among other things, reducing discretionary spending. (See Item 1A. "Risk Factors" in the Company's 20142015 Form 10-K, as updated by Part II, Item 1A. "Risk Factors" in this Form 10-Q, for further discussion of certain risks associated with the Company's business and indebtedness.)

Derivative Financial Instruments
Foreign Currency Forward Exchange Contracts
Products Corporation enters into FX Contracts and option contracts from time 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 SeptemberJune 30, 2015,2016, the FX Contracts outstanding had a notional amount of $83.0$74.2 million and a net assetliability fair value of $2.2 million.$0.7 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, based on a notional amount of $400 million in respect of indebtedness under the Acquisition Term Loan over a period of three years (the "2013 Interest Rate Swap"). The Company 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's Acquisition 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 of three-month USDU.S. Dollar LIBOR or 1.00%, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which effectively fixes the interest rate on such notional amount at 5.0709% over the three-year term of the 2013 Interest Rate Swap). For the ninesix months ended SeptemberJune 30, 20152016, the 2013 Interest Rate Swap was deemed effective and therefore the changes in fair value related to the 2013 Interest Rate Swap have been recorded in Other Comprehensive (Loss) Income in the Company's Unaudited Consolidated Financial Statements. The fair value of the Company's 2013 Interest Rate Swap at SeptemberJune 30, 20152016 and December 31, 20142015 was a liability of $8.3$7.6 million and $3.5$6.5 million, respectively.
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 $2.8$1.1 million and $0.2$2.0 million as of SeptemberJune 30, 20152016 and December 31, 2014,2015, respectively. The Company attempts to minimize exposure to credit risk by generally entering into derivative contracts with counterparties that have investment-grade credit ratings and are major financial institutions. The Company also periodically monitors any changes in the credit ratings of its counterparties. Given the current credit standing of the counterparties to the Company's derivative instruments, the Company believes the risk of loss arising from any non-performance by any of the counterparties under these derivative instruments is remote.

Disclosures about Contractual Obligations and Commercial Commitments

As of SeptemberJune 30, 2015,2016, there were no material changes to the Company's total contractual cash obligations, as set forth in the contractual obligations and commercial commitments disclosure included in the Company's 20142015 Form 10-K. See "Subsequent Events"/"Recent Events."

44


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
For a discussion of the Company's critical accounting policies, see the Company's 20142015 Form 10-K.

Effect of RecentRecently Accounting Pronouncements

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

45
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
(all tabular amounts in millions)


Item 3. 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 Revolving Credit Facility. The Company manages interest rate risk through a combination of fixed and floating rate debt. The Company from time to time makes use of derivative financial instruments to adjust its fixed and floating rate ratio, such as with the 2013 Interest Rate Swap. The Company does not hold or issue financial instruments for trading purposes.
The qualitative and quantitative information presented in Item 7A of the Company's 20142015 Form 10-K ("Item 7A") describes significant aspects of the Company's financial instrument programsprogram that have material market risk as of December 31, 2014.2015. The following tables present this information as required by Item 7A as of SeptemberJune 30, 2015:2016. See "Subsequent Events"/"Recent Events."
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)  
 2015 2016 2017 2018 2019 Thereafter Total Fair Value September 30, 2015 2016 2017 2018 2019 2020 Thereafter Total Fair Value June 30, 2016
Debt                                
Short-term variable rate (various currencies) $8.5
           $8.5
 $8.5
 $12.1
           $12.1
 $12.1
Average interest rate (a)
 3.7%               2.8%              
Short-term fixed rate (third party - EUR) $1.5
           1.5
 $1.5
 2.0
           2.0
 2.0
Average interest rate 11.9%               11.8%              
Long-term fixed rate – third party (USD)           $500.0
 500.0
 $490.0
           $500.0
 500.0
 485.0
Average interest rate           5.75%               5.75%    
Long-term fixed rate – third party (EUR)   $0.1
 $0.1
 $0.1
 $0.1
 0.2
 0.6
 $0.6
   $0.1
 $0.1
 $0.1
 $0.1
 0.2
 0.6
 0.6
Average interest rate   0.0% 0.0% 0.0% 0.0% 0.0%       —% —% —% —% —%    
Long-term variable rate – third party (USD) (b)
 $1.7
 $6.9
 669.8
 6.9
 653.0
   1,338.3
 $1,337.5
 3.4
 $658.2
 6.8
 641.6
     1,310.0
 $1,307.6
Average interest rate (a)(c)
 4.0% 4.0% 3.4% 4.3% 4.6%       4.0% 3.3% 4.1% 4.4%        
Total debt $11.7
 $7.0
 $669.9
 $7.0
 $653.1
 $500.2
 $1,848.9
 $1,838.1
 $17.5
 $658.3
 $6.9
 $641.7
 $0.1
 $500.2
 $1,824.7
 $1,807.3
(a) 
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at SeptemberJune 30, 20152016.
(b) 
Includes total quarterly amortization payments required within each year under the Acquisition Term Loan.
(c) 
At SeptemberJune 30, 2015,2016, the Acquisition Term Loan bears interest at the Eurodollar Rate (as defined in the Amended 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% per annum (with the Eurodollar Rate not to be less than 0.75%).
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 Amended Credit Agreements and other short-term borrowings (which, in the aggregate, are Products Corporation’s only debt currently subject to floating interest rates) as of SeptemberJune 30, 2015,2016, a 1% increase in both the LIBOR and Euribor rates would increase the Company’s annual interest expense by $9.6$9.3 million.
In November 2013, Products Corporation executed the 2013 Interest Rate Swap, which is a forward-starting, floating-to-fixed interest rate swap transaction with a 1.00% floor, based on a notional amount of $400 million in respect of indebtedness under Products Corporation's Acquisition Term Loan over a period of three years. The Company 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's Acquisition 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 of the three-month USDU.S. Dollar LIBOR or 1.00%, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which effectively fixes the interest rate on such notional amountsamount at 5.0709% over the three-year term of the 2013 Interest Rate Swap). The fair value of the Company's 2013 Interest Rate Swap at SeptemberJune 30, 20152016 was a liability of $8.3$7.6 million.


46
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
(all tabular amounts in millions)


Exchange Rate Sensitivity
The Company manufactures and sells its products in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. In addition, a portion of the Company's borrowings are denominated in foreign currencies, which are also subject to market risk associated with exchange rate movement. The Company from time to time hedges major foreign currency cash exposures through foreign exchange forward and option contracts. Products Corporation enters into these contracts with major financial institutions in an attempt to minimize counterparty risk. These contracts generally have a duration of less than twelve12 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 trading purposes.
Forward Contracts (“FC”) 
Average Contractual Rate
$/FC
 Original US Dollar Notional Amount 
Contract Value
September 30, 2015
 Asset Fair Value September 30, 2015 
Average Contractual Rate
$/FC
 Original U.S. Dollar Notional Amount 
Contract Value
June 30, 2016
 Asset (Liability) Fair Value June 30, 2016
Sell Canadian Dollars/Buy USD 0.7586 16.3
 16.0
 (0.3)
Sell British Pound/Buy USD 1.5476 $19.8
 $20.3
 $0.5
 1.4239 15.4
 16.4
 1.0
Sell Australian Dollars/Buy USD 0.7368 15.6
 16.4
 0.8
 0.7278 13.4
 13.1
 (0.3)
Sell Canadian Dollars/Buy USD 0.7867 15.4
 16.1
 0.7
Buy Mexican Peso/Sell USD 0.0605 13.1
 12.7
 (0.4) 0.0552 12.3
 12.0
 (0.3)
Sell South African Rand/Buy USD 0.0775 7.0
 7.6
 0.6
 0.0631 6.5
 6.2
 (0.3)
Sell Japanese Yen/Buy USD 0.0083 5.0
 5.0
 —
 0.0091 6.1
 5.7
 (0.4)
Buy Australian Dollars/Sell NZ dollars 1.0862 4.1
 4.1
 —
 1.0799 3.6
 3.5
 (0.1)
Buy British Pound/Sell USD 1.5370 2.0
 2.0
 —
Sell New Zealand Dollars/Buy USD 0.6351 1.0
 1.0
 —
 0.6939 0.6
 0.6
 —
Total forward contracts $83.0
 $85.2
 $2.2
 $74.2
 $73.5
 $(0.7)

Item 4. 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 Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the fiscal period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were effective.
(b) Changes in Internal Control Over Financial Reporting.Reporting. During the third quarter of 2015, the Company implemented a new financial consolidation and reporting system. The Company expects that transitioning to this new system will provide the Company with efficiencies in the corporate consolidation process and enhanced reporting capabilities. In connection with implementing this new financial consolidation and reporting system, the Company updated its internal control over financial reporting to accommodate modifications to the Company's consolidation and reporting processes necessitated by the new system.

Other than as noted above, there were noThere have not been any changes in the Company’s internal control over financial reporting during the quarter ended SeptemberJune 30, 20152016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


Forward-Looking Statements
This Quarterly Report on Form 10-Q for the three and nine months ended SeptemberJune 30, 20152016, 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 and estimates (whether qualitative or quantitative) as to:
(i)the Company's future financial performance;
(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 the Consumer, Professional and/or Other segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third party suppliers, changes in consumer purchasing habits, including with respect to shopping channelsretailer preferences and/or among professional salons; 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, acquisition-related integration costs, (including, without limitation, costs related to the continued integration of the Colomer Acquisition), costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
(iii)the Company's belief that the continued execution of its business strategy could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands, (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Colomer Acquisition, and the CBB Acquisition and/or the Cutex International Acquisition (including the Company’s plans to continue to integrate the operations of Colomer into the Company’s businessCompany's belief that such acquisition enhances and its expectations that the Integration Program will deliver cost reductions throughout the combined organization by generating cost synergies and operating efficiencies withincomplements the Company's global supply chain and consolidating offices and back office support, and other actions which are designed to reduce selling, general and administrative expenses, and achieve approximately $30.0 million to $35.0 millionexisting brand portfolio of annualized cost reductions by the end of 2015, approximately $17.0 million of which benefited the Company's 2014 results, while recognizing approximately $50 million, in the aggregate over 2013 through 2015, of total restructuring charges, capital expenditures (including expected integration-related capital expenditures of approximately $6 million, $4.4 million of which was paid during 2014 and $0.8 million of which was paid during the nine months ended September 30, 2015, with the remaining balance expected to be paid in the remainder of 2015)nail care products) and related non-restructuring costs, 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 Amended Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt;
(iv)the Company’sCompany's vision to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful, and to inspire its consumers to express themselves boldly and confidently; andas well as the Company's expectations regarding its strategic goal is to optimize the market and financial performance of itsour portfolio of brands and assets by: (a) managing financial drivers for value creation through gross profit margin expansion, which includes optimizing price, allocating sales allowances to maximize our returnbuilding its strong brands by focusing on trade spending, reducing costs across our global supply chaininnovative, high-quality, consumer-preferred brand offerings, effective consumer brand communication, appropriate levels of targeted advertising and eliminating non-value added generalpromotion and administrative costs in order to fund reinvestment to facilitate growth;timely execution with the Company's retail partners; (b) growing profitability through intensivethe Company's innovation and geographical expansion bystrategy that centers on creating fewer, bigger and better innovationsnew product launches across ourthe Company's brands that are relevant, unique, impactful distinctive and ownable; pursuing organicdistinctive; (c) the Company's Pending Acquisition of Elizabeth Arden will provide greater access to high-growth markets, such as the Asia Pacific region; (d) driving growth opportunitiesby strategically entering new territories and expanding within our existing brand portfolioterritories by leveraging the Company's distribution network and penetrating new and existing sales channels; (e) generating consistent margins and pursuing opportunitiesplans to expand our geographical presence; (c) improving our cash flowsfurther drive margins by reducing costs across the supply chain, eliminating overhead redundancies and leveraging purchasing scale; (f) continuing to develop its organizational capability through among other things, continued effectiveretaining, attracting and rewarding highly capable people and through performance management, of our working capitaldevelopment planning, succession planning and by focusing on appropriate return on capital spending;training, and (d) attracting, developingthe Company's plans to develop and supportingsupport employees who fit into ourits innovative culture and inspire the creative drive that represents the foundation of ourthe Company' s vision and execution of our strategy; and (g) that the Company seeks to opportunistically acquire brands to complement its core business and that our acquisition strategy has been, and will continue to be, successful, as well as the Company's focus on targets that will strengthen its existing capabilities or help the Company to expand into new product categories, channels or geographies and that the Company continues to look opportunistically for additional fragrance licenses to build its fragrance business;
(v)the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities; including, without limitation, the Company’s expectation (a) that total restructuring and related charges related to the Integration Program will be approximately $21 million, of which $(2.3) million and $20.1 million of charges were recognized during the first nine months of 2015 and during 2014, respectively, with any remaining charges to be recognized in the remainder of 2015; (b) that cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately $20 million, of which $5.8 million was paid in the first nine months of 2015 and $9.6 million was paid during 2014, with the remaining balance of $4.6 million expected to be paid during the remainder of 2015; (c) that total restructuring and related charges under the December 2013 Program will be approximately $18.9 million; (d) that cash payments will total approximately $17 million related to the December 2013 Program, of which $15.5 million was paid during 2014, $0.1 million was paid in 2013, and the remaining balance is expected to be paid in 2016; (e) that the Company expects to substantially complete the Integration Program by the end of 2015; (f) the Company's expectation that the Efficiency Program will drive certain organizational efficiencies across the Company's Consumer and Professional segments and reduce departmentalgeneral and administrative expenses within the Consumer and Professional segments; (g)(b) that the Company will recognize a total of approximately $4 million to $8$11.7 million of restructuring and related charges for the 2015 Efficiency Program through early 2016,by the end of which $3.7 million were recognized during the third quarter of 2015; (h)2017; (c) that cash payments related to the restructuring and related charges recognized in the third quarter of 2015 in connection with the Efficiency Program will total approximately $3.7$12 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 $1.0$6.2 million was paid in the third quarter of 2015, with an additional $1.9 millionis expected to be paid induring the fourth quarterremainder of 2015 and2016, with the remaining balance expected to be paid in 2016;2017; and (i)(d) that approximately $3.0$9 million of cost reductions from the 2015 Efficiency Program are expected to benefit 20152016 results and that annualized cost reductions thereafter are expected to be approximately $6.0$10 million to $12.0$15 million by the end of 2018;
(vi)the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2015,2016, including the cash requirements referred to in item (viii) below, and the Company's beliefs that (a) the cash generated by its domestic operations and availability under the Amended Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its domestic liquidity needs for at least the next twelve12 months, and (b) restrictions or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
(vii)the Company’s expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended 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 in connection with the continued execution of the Company’s business strategy; 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; costs related to the continuing integration of the Colomer Acquisition; business and/or brand acquisitions (including 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 certain territories (including, without limitation, that the Company may also, from time to time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, in privately negotiated transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any 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; and controls on general and administrative spending; and the Company’s belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
(xi)the Company’s expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
(xii)the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year;
(xiii)the Company's expectation that it will decide whetherplan to exchange Bolivars for U.S. Dollars tovigorously defend against the extent permitted through the CADIVI, CENCOEX and/or SIMADI markets based on its ability to participate in those marketsParker, Christiansen, Ross, Hutson and to the extent reasonable for its business in the future, the Company's belief that current or additional governmental restrictions, worsening import authorization controls, priceStein complaints 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, financial condition and/or its results of operations, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period;
(xv)(xiv)the Company's plans in connection with continuing to integrate Colomer into the Company's business;
(xvi)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 CBBCutex International Acquisition; and
(xvii)(xv)the Company’s expectation that transitioningCompany's plans to its new financial consolidationconsummate the Pending Acquisition of Elizabeth Arden by the end of 2016, subject to receipt of regulatory approvals and reporting system will providesatisfaction of other customary closing conditions, and the Company with efficiencies inrelated financing transactions, as well as the corporate consolidation processterms and enhanced reporting capabilities.conditions of such transaction.

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 20142015 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 20152016 (which, among other places, can be found on the SEC's website at http://www.sec.gov. Except as expressly set forth in this Quarterly Report on Form 10-Q, the information available from time to time on such website shall not be deemed incorporated by reference into this Quarterly Report on Form 10-Q. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. (See also Item 1A. "Risk Factors" in the Company's 20142015 Form 10-K, as updated in Part II, Item 1A. "Risk Factors" in this Form 10-Q, for further discussion of risks associated with the Company's business.) In addition to factors that may be described in the Company's filings with the SEC, including this filing, the following factors, among others, could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company:

(i)unanticipated circumstances or results affecting the Company's financial performance, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in the Consumer, Professional and/or Other segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors and/or decreased performance by third party suppliers; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products, including new product launches; changes in consumer purchasing habits, including with respect to shopping channelsretailer preferences and/or among professional salons; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company’s existing or new products; higher than expected restructuring costs and/or acquisition-related integration costs, including, without limitation, costs related to the continued integration of the Colomer Acquisition;costs; 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 inventory management and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing, marketing, advertising and/or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including, among other things, business combinations, technological breakthroughs, implementation of new pricing strategies, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
(ii)in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as continued volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
(iii)unanticipated costs or difficulties or delays in completing projects associated with the continued execution of the Company’s business strategy or lower than expected revenues or the inability to create value through improving our financial performance as a result of such strategy, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing, supply chain or organizational size and structure, including optimizing the Company's Colomer Acquisition, andthe CBB Acquisition (including difficulties or delays in and/or the Company’s inability to continue to integrate the Colomer business which could result in less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions and/or less than expected benefits from the Integration Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the Integration Program),Cutex International Acquisition, as well as the unavailability of cash on hand and/or funds under the Amended 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 optimize the market and financial performance of its portfolio of brands and assets due to, among other things, less than effective product development, less than expected acceptance of its new or existing products by consumers, salon professionals and/or 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)to: (a) difficulties, delays in or less than expected results from the Company’s efforts to manage financial drivers for value creation,build its strong brands, such as due to higherless than effective product development, less than expected costs; (ii)acceptance of its new or existing products, and/or less than expected acceptance of its advertising, promotional, pricing and/or marketing plans and/or brand communication; (b) difficulties, delays in or less than expected results from the Company’s efforts to grow profitability through intensive innovationcreate fewer, bigger and geographical expansion,better new product launches across the Company's brands that are relevant, impactful and distinctive, such as due to less than effective product development and/or less than expected brand support; (c) less than anticipated benefits from the Pending Acquisition and/or difficulties, delays in and/or the Company'sCompany’s inability to consummate transactions to expand its geographical presence; (iii)such transaction; (d) difficulties, delays in or less than expected results from the Company'sCompany’s efforts to improvedrive growth by strategically entering new territories and expanding within existing territories by leveraging the Company's distribution network and penetrating new and existing sales channels, such as due to difficulties, delays in and/or the Company’s inability to consummate transactions to expand its cash flow; and/geographical presence; (e) difficulties, delays in or (iv)less than expected results from the Company’s efforts to further drive margins by reducing costs across the supply chain, eliminating overhead redundancies and leveraging purchasing scale, such as due to higher than expected costs; (f) difficulties, delays in and/or the inability to attract develop the Company’s organizational capability, such as difficulties in retaining and attracting highly capable people; and/or retain employees essential(g) difficulties, delays in and/or the inability to opportunistically acquire brands to complement the execution of its strategy;Company’s core business;
(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 greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the December 2013 Program, the Integration Program and/or the Effciency2015 Efficiency Program and/or 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 Amended 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 Amended 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, 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, costs related to the continuing integration of the Colomer Acquisition, restructuring costs, 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 through licensing transactions, if any,any), and discontinuing non-core business lines and/or exiting certain territories;
(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;
(xiii)difficulties, delays in or the Company's inability to exchange Bolivars for U.S. Dollars, whether due to the lack of a market developing for such exchange or otherwise and/or unanticipated adverse impacts 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);
(xiv)unexpected effects on the Company’s business, financial condition and/or its results of operations as a result of legal proceedings; and/or
(xv)(xiv)difficulties or delays in realizing, or less than anticipated, benefits from the Colomer Acquisition, such as less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions, such as due to difficulties or delays in and/or the Company’s inability to continue to implement the Integration Program, in whole or in part, and/or changes in the timing of completing its expected integration actions;
(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 Cutex International Acquisition due to, among other things, unanticipated future performance of the acquired licenses; and/orand
(xvii)(xv)less thanthe acquisition of Elizabeth Arden not being timely completed, if completed at all; risks associated with the financing of the Elizabeth Arden acquisition; prior to the completion of the Elizabeth Arden acquisition, the Company’s or the Elizabeth Arden’s respective businesses experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, business partners or governmental entities; and the Company being unable to successfully implement integration strategies or realize the anticipated benefits of the Elizabeth Arden acquisition, including the possibility that the expected benefits arisingsynergies and cost reductions from the Company's transition to its new financial consolidation and reporting system, such as, among other things, less than anticipated efficiencies inproposed acquisition will not be realized or will not be realized within the corporate consolidation process and/or less than anticipated enhancements to the Company’s reporting capabilities.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.

47
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES




Website Availability of Reports, Corporate Governance Information and Other Corporate GovernanceFinancial Information
Revlon, Inc., which owns 100% of Products Corporation's common stock, maintains a comprehensive corporate governance program, including Corporate Governance Guidelines for Revlon, Inc.’s Board of Directors, Revlon, Inc.’s Board Guidelines for Assessing Director Independence and charters for Revlon, Inc.’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.'s corporate governance materials and certain SEC filings (such as Revlon, Inc.'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, 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, charters for Revlon, Inc.'s Audit Committee and Compensation Committee, as well as Revlon, Inc.'s and the Company's Code of Conduct and Business Conduct,Ethics, which includes Revlon, Inc.'s and the Company's Code of Ethics for Senior Financial Officers, and the Audit Committee Pre-Approval Policy. From time to time, the Company may post on www.revloninc.com certain presentations that may include material information regarding its business, financial condition and/or results of operations. The business and financial materials and any other statement or disclosure on, or made available through, the websites referenced herein shall not be deemed incorporated by reference into this report.

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REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
(all tabular amounts in millions)


PART II - OTHER INFORMATION
Item 1. Legal Proceedings

The Company is involved in various routine legal proceedings incidental to the ordinary course of its business.

Following Revlon, Inc.’s and Products Corporation’s announcement of the execution of the Merger Agreement by and among Revlon, Inc., Products Corporation, Acquisition Sub and Elizabeth Arden, pursuant to which, among other things, Acquisition Sub will merge with and into Elizabeth Arden, five putative shareholder class action lawsuits and a derivative lawsuit have been filed challenging the Merger. On June 24, 2016, a putative shareholder class action lawsuit (Parker v. Elizabeth Arden, Inc. et al., Case No. CACE-16-011781) (referred to as the “Parker complaint”) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Elizabeth Arden, the members of Elizabeth Arden’s board of directors, Revlon, Inc. and Products Corporation. In general, the Parker complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to Elizabeth Arden’s shareholders by, among other things, approving the Merger pursuant to an allegedly unfair process and at an allegedly inadequate and unfair price; and (ii) Elizabeth Arden, Revlon, Inc. and Products Corporation aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the Merger, compensatory damages, rescissory damages in the event the Merger is consummated, and an award of attorneys’ fees and expenses.

On June 29, 2016, a putative shareholder class action and derivative lawsuit (Christiansen v. Rhône Capital L.L.C. et al., Case No. CACE-16-011746) (referred to as the “Christiansen complaint”) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Rhône Capital L.L.C. (“Rhône”), Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (collectively, “Nightingale”), the members of Elizabeth Arden’s board of directors, Revlon, Inc. and Products Corporation. In general, the Christiansen complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to the holders of Elizabeth Arden’s common stock and to Elizabeth Arden by, among other things, approving the Merger pursuant to a flawed process that placed the interests of the holders of Elizabeth Arden’s preferred stock ahead of the interests of Elizabeth Arden and the holders of Elizabeth Arden common stock; (ii) Rhône and Nightingale, an alleged controlling shareholder of Elizabeth Arden, breached its alleged fiduciary duties to the holders of Elizabeth Arden common stock and to Elizabeth Arden by forcing Elizabeth Arden to agree to the allegedly unfair terms of the Merger; and (iii) Revlon, Inc. and Products Corporation aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors to the holders of Elizabeth Arden common stock and to Elizabeth Arden. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the Merger, a declaration that the Merger Agreement was entered into in breach of the fiduciary duties owed to Elizabeth Arden and holders of Elizabeth Arden common stock by the members of Elizabeth Arden’s board of directors, Rhône, and Nightingale, and an award of attorneys’ fees and expenses.

On July 19, 2016, a putative class action lawsuit (Ross v. Elizabeth Arden, Inc., et al., Case No. CACE-16-013220) (referred to as the “Ross complaint”) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Elizabeth Arden, the members of Elizabeth Arden’s board of directors, Revlon, Inc. and Products Corporation. In general the Ross complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to Elizabeth Arden’s public shareholders by, among other things, approving the Merger pursuant to an allegedly inadequate and unfair sale process and at an allegedly inadequate and unfair price depriving Elizabeth Arden’s public shareholders of the true value of their investment and diverting consideration to themselves; and (ii) Revlon, Inc. and Products Corporation knowingly assisted, and aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the Merger, compensatory damages or rescissory damages in the event the Merger is consummated, and an award of attorneys’ fees and expenses.

On July 25, 2016, a putative class action lawsuit (Stein v. Rhône Capital L.L.C., et al., Case No. CACE-16-013580) (referred to as the “Stein complaint”) was filed in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida against Rhône, Nightingale, the members of Elizabeth Arden’s board of directors, Revlon, Inc. and Products Corporation. In general, the Stein complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to the holders of Elizabeth Arden common stock by, among other things, approving the Merger pursuant to an allegedly flawed process and placing the interests of the holders of Elizabeth Arden’s preferred stock over those of the holders of Elizabeth Arden common stock; (ii) Rhône and Nightingale, an alleged controlling shareholder of Elizabeth Arden, breached its alleged fiduciary duties to the holders of Elizabeth Arden common stock by compelling Elizabeth Arden and the members of Elizabeth Arden’s board of directors to approve the Merger and agree to allegedly unfavorable terms in the Merger Agreement; and (iii) Revlon, Inc. and Products Corporation aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board of directors, Rhône and Nightingale to the detriment of Elizabeth Arden’s public shareholders. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the Merger, a declaration that the Merger Agreement was entered into in breach of the fiduciary
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
(all tabular amounts in millions)

duties of the members of Elizabeth Arden’s board of directors, Rhône and Nightingale, rescission of the Merger Agreement to the extent already implemented, and an award of attorneys’ fees and expenses.

The Company believes the allegations contained in the Parker complaint, the Christiansen complaint, the Ross complaint, the Hutchinson complaint and the Stein complaint are without merit and intends to vigorously defend against them.

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, financial condition and/or its results of operations. However, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period.


Item 1A. Risk Factors
In addition to the other information in this report, investors should consider carefully the risk factors discussed in Part I, Item 1A. "Risk Factors" in the Company's 20142015 Form 10-K.10-K, as well as the following updates to such risk factors:
The results of the U.K.’s referendum on its withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and the Company's business.
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. The referendum was advisory, and the terms of any withdrawal are subject to a negotiation period that could last at least two years after the government of the U.K. formally initiates a withdrawal process. Nevertheless, the referendum has created significant 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 in the event of a withdrawal, 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. Approximately 5% of the Company's net sales are in the U.K. and approximately 20% 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'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.
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The Company may not realize the anticipated synergies, net cost reductions and growth opportunities from the Pending Acquisition. 

The benefits that the Company expects to achieve as a result of the Pending Acquisition of Elizabeth Arden will depend, in part, on the ability of the combined company to realize anticipated growth opportunities, net cost reductions and synergies. The Company’s success in realizing these growth opportunities, net cost reductions and synergies, and the timing of this realization, depends on the successful integration of the Company’s historical business and operations and the historical business and operations of Elizabeth Arden. Even if the Company is able to integrate the businesses and operations of Products Corporation and Elizabeth Arden successfully, this integration may not result in the realization of the full benefits of the growth opportunities, net cost reductions and synergies that the Company currently expects from this integration within the anticipated time frame or at all. For
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES




example, the Company may be unable to eliminate duplicative costs. Moreover, the Company may incur substantial expenses in connection with the integration of its business and Elizabeth Arden’s business. While the Company anticipates that certain expenses will be incurred, such expenses are difficult to estimate accurately and may exceed current estimates. Accordingly, the benefits from the Pending Acquisition may be offset by costs or delays incurred in integrating the businesses. The projected net cost reductions and synergies related to the Pending Acquisition are based on a number of assumptions relating to the Company’s business and Elizabeth Arden’s business. 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.

Item 5. Other Information
On November 3, 2015, Roberto Simon, the Executive Vice President and Chief Financial Officer for Revlon, Inc. ("Revlon") and Revlon Consumer Products Corporation, Revlon’s wholly owned operating subsidiary ("RCPC," and together with Revlon, the "Company"), tendered his resignation from the Company to accept a position as the chief financial officer of another NYSE-listed company. Mr. Simon agreed to have his resignation become effective on or about February 26, 2016 (the “Effective Date”) to manage an effective transition of the Company's financial, accounting and treasury functions, 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.     
As consideration for Mr. Simon’s agreement to postpone his departure, the Company and Mr. Simon entered into a separation agreement on November 3, 2015 under which Mr. Simon will, among other things, continue to remain eligible to receive the following incentive compensation awards: (i) paymentNone.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in or about March 2016 of his 2015 annual bonus (which is targeted at 75% of his annual base salary), subject to adjustment based upon the Company's level of attainment of its applicable performance factors; (ii) payment in or about March 2016 of $75,000, representing a pro rata portion of his 2016 annual bonus at target; (iii) payment in or about March 2016 of the final installment of his 2014 Transitional LTIP award in the amount of $333,333, subject to adjustment based upon the Company's level of attainment of its applicable performance factors; and (iv) vesting on March 15, 2016 of his 15,133 restricted shares of Revlon Class A common stock, with the remaining balance of his 60,532 restricted shares that would otherwise have vested in equal installments in March 2017, 2018, 2019 and 2020 being cancelled and forfeited in accordance with the terms and conditions of the Fourth Amended and Restated Revlon, Inc. Stock Plan. The Company also agreed to waive its right to clawback a one-time $150,000 housing allowance that was paid to Mr. Simon in August 2015. Mr. Simon will continue to be bound by the Company’s standard confidentiality, non-solicit and non-compete obligations.millions)


Item 6. Exhibits
2.1
Agreement and Plan of Merger, dated June 16, 2016, by and among Revlon, Inc., Revlon Consumer Products Corporation, RR Transaction Corp. and Elizabeth Arden, Inc. (incorporated by reference to Exhibit 2.1 to Revlon, Inc.'s Form 8-K filed with the SEC on June 17, 2016).

10.1
10.1 SeparationPreferred Stock Repurchase and Warrant Cancellation Agreement, dated as of November 3, 2015, betweenJune 16, 2016, by and among Revlon, Inc., Revlon Consumer Products Corporation, RR Transaction Corp., Elizabeth Arden, Inc., Nightingale Onshore Holdings L.P. and Roberto SimonNightingale Offshore Holdings L.P. (incorporated by reference to Exhibit 10.1 to Revlon, Inc.’s Quarterly Report on's Form 10-Q for the fiscal quarter ended September 30, 2015,8-K filed with the SEC on November 4, 2015)June 17, 2016).
10.2Support Agreement, dated June 16, 2016, by and among Revlon, Inc., Revlon Consumer Products Corporation, RR Transaction Corp., Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (incorporated by reference to Exhibit 10.2 to Revlon, Inc.'s Form 8-K filed with the SEC on June 17, 2016).
10.3
Support Agreement, dated June 16, 2016, by and among Revlon, Inc., Revlon Consumer Products Corporation, RR Transaction Corp. and E. Scott Beattie (incorporated by reference to Exhibit 10.3 to Revlon, Inc.'s Form 8-K filed with the SEC on June 17, 2016).

10.4Employment Agreement, dated as of April 12, 2016, between the Company and Juan R. Figuereo (incorporated by reference to Exhibit 10.1 to Revlon, Inc.'s Form 8-K filed with the SEC on April 12, 2016).
10.5Amendment, dated April 21, 2016, to the Transition and Separation Agreement and Release between the Company and Lorenzo Delpani (incorporated by reference to Exhibit 10.1 to Revlon, Inc.'s Form 8-K filed with the SEC on April 22, 2016).
*31.1Certification of Lorenzo Delpani,Fabian T. Garcia, Chief Executive Officer, dated November 4, 2015,July 29, 2016, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
*31.2Certification of Roberto Simon,Juan R. Figuereo, Chief Financial Officer, dated November 4, 2015,July 29, 2016, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
32.1 (furnished herewith)Certification of Lorenzo Delpani,Fabian T. Garcia, Chief Executive Officer, dated November 4, 2015,July 29, 2016, 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,Juan R. Figuereo, Chief Financial Officer, dated November 4, 2015,July 29, 2016, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *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.


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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: November 4, 2015July 29, 2016

Revlon Consumer Products Corporation
(Registrant)
     
By: /s/ Lorenzo DelpaniFabian T. Garcia By: /s/ Roberto SimonJuan R. Figuereo By: /s/ Siobhan Anderson
Lorenzo DelpaniFabian T. Garcia Roberto SimonJuan R. Figuereo Siobhan Anderson
President, Executive Vice President and Senior Vice President,
Chief Executive Officer and Chief Financial Officer Chief Accounting Officer,
Director   Corporate Controller, Treasurer
    and Investor Relations






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