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RCPC Revlon Consumer Products

Filed: 5 Nov 21, 7:16am


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________ to _______________
Commission File NumberRegistrant; State of Incorporation; Address and Telephone NumberIRS Employer Identification No.
1-11178Revlon, Inc.13-3662955
Delaware
One New York Plaza
New York, New York 10004
212-527-4000
33-59650Revlon Consumer Products Corporation13-3662953
Delaware
One New York Plaza
New York, New York 10004
212-527-4000
Securities registered pursuant to Section 12(b) or 12(g) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Revlon, Inc.Class A Common StockREVNew York Stock Exchange
Revlon Consumer Products CorporationNoneN/AN/A


Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Revlon, Inc.
Yes
No
Revlon Consumer Products Corporation
Yes
No

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ¨

1


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


Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).
Revlon, Inc.Yes
No
Revlon Consumer Products CorporationYes
No

Number of shares of common stock outstanding as of September 30, 2021:
Revlon, Inc. Class A Common Stock:53,659,772
Revlon Consumer Products Corporation Common Stock:5,260

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

Products Corporation meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q as, among other things, all of Products Corporation's equity securities are owned directly by Revlon, Inc., which is a reporting company under the Securities Exchange Act of 1934, as amended, and which filed with the SEC on November 5, 2021 all of the material required to be filed pursuant to Section 13, 14 or 15(d) thereof. Products Corporation is therefore filing this Form 10-Q with a reduced disclosure format applicable to Products Corporation.
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REVLON, INC. AND SUBSIDIARIES
INDEX


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Table of Contents

REVLON, INC. AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION


REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)
(Unaudited)
September 30, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$73.3 $97.1 
Trade receivables (net of allowance for doubtful accounts of $9.0 and $13.0, respectively)391.3 352.3 
Inventories, net461.5 462.6 
Prepaid expenses and other assets132.7 134.4 
Total current assets1,058.8 1,046.4 
Property, plant and equipment (net of accumulated depreciation of $559.9 and $528.9, respectively)305.9 352.0 
Deferred income taxes23.7 25.7 
Goodwill563.1 563.7 
Intangible assets (net of accumulated amortization and impairment of $318.8 and $296.8, respectively)401.5 430.8 
Other assets95.2 109.1 
Total assets$2,448.2 $2,527.7 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Short-term borrowings$0.6 $2.5 
Current portion of long-term debt163.8 217.5 
Accounts payable245.6 203.3 
Accrued expenses and other current liabilities400.5 420.9 
Total current liabilities810.5 844.2 
Long-term debt3,302.3 3,105.0 
Long-term pension and other post-retirement plan liabilities186.5 212.4 
Other long-term liabilities215.2 228.1 
Stockholders’ deficiency:
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 58,425,439 and 56,742,513 shares issued, respectively0.5 0.5 
Additional paid-in capital1,092.7 1,082.3 
Treasury stock, at cost: 1,992,225 and 1,774,200 shares of Class A Common Stock, respectively(37.6)(35.2)
Accumulated deficit(2,848.5)(2,631.7)
Accumulated other comprehensive loss(273.4)(277.9)
Total stockholders’ deficiency(2,066.3)(1,862.0)
Total liabilities and stockholders’ deficiency$2,448.2 $2,527.7 








See Accompanying Notes to Unaudited Consolidated Financial Statements
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Table of Contents
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in millions, except share and per share amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net sales$521.1 $477.1 $1,463.5 $1,277.7 
Cost of sales221.2 234.3 608.7 600.7 
      Gross profit299.9 242.8 854.8 677.0 
Selling, general and administrative expenses256.1 253.4 796.0 739.1 
Acquisition, integration and divestiture costs0.6 0.9 1.8 4.2 
Restructuring charges and other, net9.0 (0.7)22.8 44.8 
Impairment charges— — — 144.1 
Loss (gain) on divested assets0.1 (1.1)(1.7)(0.5)
      Operating income (loss)34.1 (9.7)35.9 (254.7)
Other expenses:
   Interest expense, net63.1 68.7 183.9 178.0 
   Amortization of debt issuance costs8.7 7.8 30.7 17.8 
   Gain on early extinguishment of debt— (31.2)— (43.1)
   Foreign currency losses (gains), net9.9 (9.8)11.5 9.1 
   Miscellaneous, net0.1 (2.6)2.8 13.9 
      Other expenses81.8 32.9 228.9 175.7 
Loss from operations before income taxes(47.7)(42.6)(193.0)(430.4)
Provision for (benefit from) income taxes5.4 1.9 23.8 (45.2)
Net loss$(53.1)$(44.5)$(216.8)$(385.2)
Other comprehensive income (loss):
   Foreign currency translation adjustments(0.6)2.2 (6.0)7.3 
   Amortization of pension related costs, net of tax(a)(b)
3.5 2.8 10.5 9.3 
Other comprehensive income, net2.9 5.0 4.5 16.6 
Total comprehensive loss$(50.2)$(39.5)$(212.3)$(368.6)
Basic and Diluted (loss) earnings per common share:$(0.98)$(0.83)$(4.02)$(7.22)
Weighted average number of common shares outstanding:
      Basic54,025,861 53,476,354 53,899,732 53,371,986 
      Diluted54,025,861 53,476,354 53,899,732 53,371,986 
    
(a) Net of tax expense of nil and $0.5 million for the three months ended September 30, 2021 and 2020, respectively, and net of tax benefit of nil and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively.
(b) This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).











See Accompanying Notes to Unaudited Consolidated Financial Statements
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Table of Contents
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
(dollars in millions, except share and per share amounts)
(Unaudited)
Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2021$0.5 $1,082.3 $(35.2)$(2,631.7)$(277.9)$(1,862.0)
Treasury stock acquired, at cost (a)
— — (2.4)— — (2.4)
Stock-based compensation amortization— 3.1 — — — 3.1 
Net loss   (96.0)— (96.0)
Other comprehensive (loss) income, net (b)
— — — — (1.4)(1.4)
Balance, March 31, 20210.5 1,085.4 (37.6)(2,727.7)(279.3)(1,958.7)
Treasury stock acquired, at cost (a)
— — — — — 0.0 
Stock-based compensation amortization— 3.4 — — — 3.4 
Net loss   (67.7) (67.7)
Other comprehensive (loss) income, net (b)
— — — — 3.0 3.0 
Balance, June 30, 20210.5 1,088.8 (37.6)(2,795.4)(276.3)(2,020.0)
Treasury stock acquired, at cost (a)
— — — — — — 
Stock-based compensation amortization 3.9   — 3.9 
Net loss   (53.1)— (53.1)
Other comprehensive (loss) income, net (b)
    2.9 2.9 
Balance at September 30, 2021$0.5 $1,092.7 $(37.6)$(2,848.5)$(273.4)$(2,066.3)
Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2020$0.5 $1,071.9 $(33.5)$(2,012.7)$(247.4)$(1,221.2)
Treasury stock acquired, at cost (a)
— — (0.4)— — (0.4)
Stock-based compensation amortization— 2.4 — — — 2.4 
Net loss— — — (213.9)— (213.9)
Other comprehensive (loss) income, net (b)
    (2.7)(2.7)
Balance, March 31, 20200.5 1,074.3 (33.9)(2,226.6)(250.1)(1,435.8)
Treasury stock acquired, at cost (a)
— — (1.3)— — (1.3)
Stock-based compensation amortization— 1.1 — — — 1.1 
Net loss— — — (126.8)— (126.8)
Other comprehensive (loss) income, net (b)
    14.3 14.3 
Balance, June 30, 2020$0.5 $1,075.4 $(35.2)$(2,353.4)$(235.8)$(1,548.5)
Treasury stock acquired, at cost (a)
— — — — — — 
Stock-based compensation amortization— 5.1 — — — 5.1 
Net loss— — — (44.5)— (44.5)
Other comprehensive (loss) income, net (b)
    5.0 5.0 
Balance, September 30, 2020$0.5 $1,080.5 $(35.2)$(2,397.9)$(230.8)$(1,582.9)
(a) Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan"), the Company withheld an aggregate of 763 and 756 shares of Revlon Class A Common Stock during the three months ended September 30, 2021 and 2020, respectively, and 163,259 and 127,725 shares of Revlon Class A Common Stock during the nine months ended September 30, 2021 and 2020, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares and restricted stock units ("RSUs") for certain senior executives and employees. These withheld shares were recorded as treasury stock using the cost method, at a weighted-average price per share of $12.84 and $8.50 during the three months ended September 30, 2021 and 2020, respectively, and $14.94 and $12.99 during the nine months ended September 30, 2021 and 2020, respectively, based on the closing price of Revlon Class A Common Stock as reported on the New York Stock Exchange (the "NYSE") consolidated tape on each respective vesting date, for a total of approximately $9,700 and $6,400 during the three months ended September 30, 2021 and 2020, respectively, and $2.4 million and $1.6 million during the nine months ended September 30, 2021 and 2020. See Note 11, "Stock Compensation Plan," for details regarding restricted stock awards and RSUs under the Stock Plan.
(b) See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the nine months ended September 30, 2021 and 2020, respectively.
See Accompanying Notes to Unaudited Consolidated Financial Statements
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Table of Contents
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(Unaudited)
Nine Months Ended September 30,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(216.8)$(385.2)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization96.8 108.3 
   Foreign currency losses from re-measurement11.5 9.1 
   Amortization of debt discount0.7 1.3 
   Stock-based compensation amortization10.4 8.6 
Impairment charges— 144.1 
Provision for (benefit from) deferred income taxes3.9 (54.4)
Gain on early extinguishment of debt— (43.1)
   Amortization of debt issuance costs30.7 17.8 
   Gain on divested assets(1.7)(0.5)
   Pension and other post-retirement cost3.6 4.2 
Paid-in-kind interest expense on the 2020 BrandCo Facilities14.1 6.2 
   Change in assets and liabilities:
(Increase) decrease in trade receivables(44.4)78.0 
Increase in inventories(8.1)(79.4)
Decrease (increase) in prepaid expenses and other current assets0.2 (1.7)
Increase (decrease) in accounts payable56.1 (27.8)
Decrease in accrued expenses and other current liabilities(25.2)(25.2)
Decrease in deferred revenue(2.0)— 
Pension and other post-retirement plan contributions(20.5)(7.5)
Purchases of permanent displays(15.0)(16.5)
Other, net19.0 6.8 
Net cash used in operating activities(86.7)(256.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(6.3)(7.4)
Proceeds from the sale of certain assets2.1 — 
Net cash used in investing activities(4.2)(7.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(12.5)(0.7)
Borrowings on term loans305.0 880.0 
Repayments on term loans (a)
(186.7)(354.7)
Net (repayments) borrowings under the revolving credit facilities(2.7)19.5 
Payment of financing costs(17.9)(108.3)
Tax withholdings related to net share settlements of restricted stock and RSUs(2.4)(1.6)
Other financing activities(0.3)(0.3)
Net cash provided by financing activities82.5 433.9 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2.4)(0.4)
   Net (decrease) increase in cash, cash equivalents and restricted cash
(10.8)169.2 
   Cash, cash equivalents and restricted cash at beginning of period (b)
102.5 104.5 
   Cash, cash equivalents and restricted cash at end of period (b)
$91.7 $273.7 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$186.4 $182.2 
Income taxes, net of refunds7.3 12.6 
Supplemental schedule of non-cash investing and financing activities:
Non-cash roll-up of participating lenders from the 2016 Term Loan Facility to the 2020 BrandCo Facilities$— $846.0 
Paid-in-kind debt issuance costs capitalized to the 2020 BrandCo Facilities— 29.1 
Paid-in-kind interest capitalized to the 2020 BrandCo Facilities14.1 — 
(a) Repayments on term loans for the nine months ended September 30, 2020 includes the repayment of the 2019 Term Loan Facility, repayment under the 2018 Foreign Asset-Based Term Loan and repayments under the 2016 Term Loan Facility of $200.0 million, $31.4 million and $9.2 million, respectively, as well as repurchases of the 5.75% Senior Notes of $114.1 million. During 2020, the Company used a portion of the proceeds from the 2020 BrandCo Facility to repurchase and subsequently cancel a portion of its 5.75% Senior Notes. See Note 8, "Debt" in the Company's 2020 Form 10-K for additional information.
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(b)These amounts include restricted cash of $18.4 million and $5.4 million as of September 30, 2021 and 2020, respectively. The balance as of September 30, 2021 represents: (i) cash on deposit in lieu of a mandatory prepayment and loan proceeds held in escrow until certain collateral perfection requirements are satisfied under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to support outstanding undrawn letters of credit. The balance as of September 30, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Consolidated Balance Sheets as of September 30, 2021 and September 30, 2020, respectively.

See Accompanying Notes to Unaudited Consolidated Financial Statements
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Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)
(Unaudited)
September 30, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$73.3 $97.1 
Trade receivables (net of allowance for doubtful accounts of $9.0 and $13.0, respectively)391.3 352.3 
Inventories, net461.5 462.6 
Prepaid expenses and other assets128.6 130.5 
Receivable from Revlon, Inc.176.8 170.0 
Total current assets1,231.5 1,212.5 
Property, plant and equipment (net of accumulated depreciation of $559.9 and $528.9, respectively)305.9 352.0 
Deferred income taxes32.4 34.1 
Goodwill563.1 563.7 
Intangible assets (net of accumulated amortization and impairment of $318.8 and $296.8, respectively)401.5 430.8 
Other assets95.2 109.1 
Total assets$2,629.6 $2,702.2 
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Short-term borrowings$0.6 $2.5 
Current portion of long-term debt163.8 217.5 
Accounts payable245.6 203.3 
Accrued expenses and other current liabilities403.7 423.2 
Total current liabilities813.7 846.5 
Long-term debt3,302.3 3,105.0 
Long-term pension and other post-retirement plan liabilities186.5 212.4 
Other long-term liabilities227.8 241.3 
Stockholder's deficiency:
Products Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding54.6 54.6 
Products Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding— — 
Additional paid-in capital1,017.3 1,006.9 
Accumulated deficit(2,699.2)(2,486.6)
Accumulated other comprehensive loss(273.4)(277.9)
Total stockholder's deficiency(1,900.7)(1,703.0)
Total liabilities and stockholder's deficiency$2,629.6 $2,702.2 












See Accompanying Notes to Unaudited Consolidated Financial Statements
7

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in millions)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
September 30,
2021202020212020
Net sales$521.1 $477.1 $1,463.5 $1,277.7 
Cost of sales221.2 234.3 608.7 600.7 
      Gross profit299.9 242.8 854.8 677.0 
Selling, general and administrative expenses254.5 251.4 791.7 733.2 
Acquisition, integration and divestiture costs0.6 0.9 1.8 4.2 
Restructuring charges and other, net9.0 (0.7)22.8 44.8 
Impairment charges— — — 144.1 
Loss (gain) on divested assets0.1 (1.1)(1.7)(0.5)
      Operating income (loss)35.7 (7.7)40.2 (248.8)
Other expenses:
   Interest expense, net63.1 68.7 183.9 178.0 
   Amortization of debt issuance costs8.7 7.8 30.7 17.8 
Gain on early extinguishment of debt— (31.2)— (43.1)
   Foreign currency losses (gains), net9.9 (9.8)11.5 9.1 
   Miscellaneous, net0.1 (2.6)2.8 13.9 
      Other expenses81.8 32.9 228.9 175.7 
Loss from operations before income taxes(46.1)(40.6)(188.7)(424.5)
Provision for (benefit from) from income taxes5.5 2.3 23.9 (44.2)
Net loss$(51.6)$(42.9)$(212.6)$(380.3)
Other comprehensive income (loss):
   Foreign currency translation adjustments(0.6)2.2 (6.0)7.3 
   Amortization of pension related costs, net of tax(a)(b)
3.5 2.8 10.5 9.3 
Other comprehensive income, net2.9 5.0 4.5 16.6 
Total comprehensive loss$(48.7)$(37.9)$(208.1)$(363.7)

(a)Net of tax expense of nil and $0.5 million for the three months ended September 30, 2021 and 2020, respectively, and net of tax benefit of nil and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively.
(b)This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).













See Accompanying Notes to Unaudited Consolidated Financial Statements
8

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY
(dollars in millions)
(Unaudited)
Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2021$54.6 $1,006.9 $(2,486.6)$(277.9)$(1,703.0)
Stock-based compensation amortization— 3.1 — — 3.1 
Net loss— — (94.9)— (94.9)
Other comprehensive (loss) income, net (a)
   (1.4)(1.4)
Balance, March 31, 202154.6 1,010.0 (2,581.5)(279.3)(1,796.2)
Stock-based compensation amortization— 3.4 — — 3.4 
Net loss— — (66.1)— (66.1)
Other comprehensive (loss) income, net (a)
— — — 3.0 3.0 
Balance, June 30, 202154.6 1,013.4 (2,647.6)(276.3)(1,855.9)
Stock-based compensation amortization 3.9   3.9 
Net loss  (51.6) (51.6)
Other comprehensive (loss) income, net (a)
   2.9 2.9 
Balance, September 30, 2021$54.6 $1,017.3 $(2,699.2)$(273.4)$(1,900.7)
Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2020$54.6 $996.5 $(1,893.1)$(247.4)$(1,089.4)
Stock-based compensation amortization— 2.4 — — 2.4 
Net loss— — (212.2)— (212.2)
Other comprehensive (loss) income, net (a)
   (2.7)(2.7)
Balance, March 31, 202054.6 998.9 (2,105.3)(250.1)(1,301.9)
Stock-based compensation amortization— 1.1 — — 1.1 
Net loss— — (125.2)— (125.2)
Other comprehensive (loss) income, net (a)
— — — 14.3 14.3 
Balance, June 30, 2020$54.6 $1,000.0 $(2,230.5)$(235.8)$(1,411.7)
Stock-based compensation amortization— 5.1 — — 5.1 
Net loss— — (42.9)— (42.9)
Other comprehensive (loss) income, net (a)
— — — 5.0 5.0 
Balance, September 30, 2020$54.6 $1,005.1 $(2,273.4)$(230.8)$(1,444.5)

(a)See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the nine months ended September 30, 2021 and 2020, respectively.







See Accompanying Notes to Unaudited Consolidated Financial Statements
9

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Unaudited
Nine Months Ended September 30,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(212.6)$(380.3)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization96.8 108.3 
   Foreign currency losses from re-measurement11.5 9.1 
   Amortization of debt discount0.7 1.3 
   Stock-based compensation amortization10.4 8.6 
Impairment charges— 144.1 
  Provision for (benefit from) deferred income taxes4.4 (53.1)
Gain on early extinguishment of debt— (43.1)
   Amortization of debt issuance costs30.7 17.8 
   Gain on divested assets(1.7)(0.5)
   Pension and other post-retirement cost3.6 4.2 
Paid-in-kind interest expense on the 2020 BrandCo Facilities14.1 6.2 
   Change in assets and liabilities:
(Increase) decrease in trade receivables(44.4)78.0 
Increase in inventories(8.1)(79.4)
Increase in prepaid expenses and other current assets(6.6)(9.3)
Increase (decrease) in accounts payable56.1 (27.8)
Decrease in accrued expenses and other current liabilities(25.1)(24.3)
Decrease in deferred revenue(2.0)— 
Pension and other post-retirement plan contributions(20.5)(7.5)
Purchases of permanent displays(15.0)(16.5)
Other, net21.0 7.3 
Net cash used in operating activities(86.7)(256.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(6.3)(7.4)
Proceeds from the sale of certain assets2.1 — 
Net cash used in investing activities(4.2)(7.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(12.5)(0.7)
Borrowings on term loans305.0 880.0 
Repayments on term loans (a)(186.7)(354.7)
Net (repayments) borrowings under the revolving credit facilities(2.7)19.5 
Payment of financing costs(17.9)(108.3)
Tax withholdings related to net share settlements of restricted stock and RSUs(2.4)(1.6)
Other financing activities(0.3)(0.3)
Net cash provided by financing activities82.5 433.9 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2.4)(0.4)
   Net (decrease) increase in cash, cash equivalents and restricted cash(10.8)169.2 
   Cash, cash equivalents and restricted cash at beginning of period (b)
102.5 104.5 
   Cash, cash equivalents and restricted cash at end of period (b)
$91.7 $273.7 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$186.4 $182.2 
Income taxes, net of refunds7.3 12.6 
Supplemental schedule of non-cash investing and financing activities:
Non-cash roll-up of participating lenders from the 2016 Term Loan Facility to the 2020 BrandCo Facilities$— 846.0 
Paid-in-kind debt issuance costs capitalized to the 2020 BrandCo Facilities— 29.1 
Paid-in-kind interest capitalized to the 2020 BrandCo Facilities14.1— 
(a) Repayments on term loans for the nine months ended September 30, 2020 includes the repayment of the 2019 Term Loan Facility, repayment under the 2018 Foreign Asset-Based Term Loan and repayments under the 2016 Term Loan Facility of $200.0 million, $31.4 million and $9.2 million, respectively, as well as repurchases of the 5.75% Senior Notes of $114.1 million. During 2020, the Company used a portion of the proceeds from the 2020 BrandCo
10

Facility to repurchase and subsequently cancel a portion of its 5.75% Senior Notes. See Note 8, "Debt" in the Company's 2020 Form 10-K for additional information.
(b) These amounts include restricted cash of $18.4 million and $5.4 million as of September 30, 2021 and 2020, respectively. The balance as of September 30, 2021 represents: (i) cash on deposit in lieu of a mandatory prepayment and loan proceeds held in escrow until certain collateral perfection requirements are satisfied under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to support outstanding undrawn letters of credit. The balance as of September 30, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Consolidated Balance Sheets as of September 30, 2021 and September 30, 2020, respectively.

See Accompanying Notes to Unaudited Consolidated Financial Statements
11

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


1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revlon, Inc. ("Revlon" and together with its subsidiaries, the "Company") conducts its business exclusively through its direct wholly-owned operating subsidiary, Revlon Consumer Products Corporation ("Products Corporation") and its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation beneficially owned by Ronald O. Perelman. Mr. Perelman is Chairman of Revlon's and Products Corporation's Board of Directors.
The Company is a leading global beauty company with an iconic portfolio of brands that develops, manufactures, markets, distributes and sells an extensive array of color cosmetics; hair color, hair care and hair treatments; fragrances; skin care; beauty tools; men’s grooming products; anti-perspirant deodorants; and other beauty care products across a variety of distribution channels.
The accompanying Consolidated Financial Statements are unaudited. In management's opinion, all adjustments necessary for a fair presentation of the Company's financial information have been made. The Unaudited Consolidated Financial Statements include the Company's accounts after the elimination of all material intercompany balances and transactions.
Certain prior year amounts have been reclassified to conform to the current year presentation.
The preparation of the Company's 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: expected sales returns; certain assumptions related to the valuation of acquired intangible and long-lived assets and the recoverability of goodwill, intangible and long-lived assets; income taxes, including deferred tax valuation allowances and reserves for estimated tax liabilities; and certain estimates and assumptions used in the calculation of the net periodic benefit (income) costs and the projected benefit obligations for the Company’s pension and other post-retirement plans, including the expected long-term return on pension plan assets and the discount rate used to value the Company’s pension benefit obligations. The Unaudited Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ("2020 Form 10-K").
The Company's results of operations and financial position for the interim periods are not indicative of those to be expected for the full year.
Liquidity and Ability to Continue as a Going Concern
The ongoing COVID-19 pandemic has continued to adversely impact the Company’s business in 2021. The COVID-19 pandemic’s adverse impact has resulted in significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of retailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse conditions have resulted in the general slowdown of the global economy, in turn contributing to declines in net sales within some of the Company’s reporting segments and regions. However, as COVID-19 restrictions are lifted, the Company is seeing a resumption in consumer spending and consumption. The Company continues to closely monitor the associated impacts and take appropriate actions in an effort to mitigate the COVID-19 pandemic’s negative effects on the Company’s operations and financial results.

Each reporting period, the Company assesses its ability to continue as a going concern for one year from the date the financial statements are issued. At September 30, 2021, the Company had a liquidity position of $121.9 million, consisting of: (i) $73.3 million of unrestricted cash and cash equivalents (with approximately $67.1 million held outside the U.S.); (ii) $53.2 million in available borrowing capacity under the Amendment No.8 to the Amended 2016 Revolving Credit Facility (which had $316.2 million drawn at such date); and less (iii) approximately $4.6 million of outstanding checks. The Company's evaluation includes its ability to meet its future contractual obligations and other conditions and events that may impact its liquidity.

The Company continues to focus on cost reduction and risk mitigation actions to address the ongoing impact from the COVID-19 pandemic as well as other risks in the business environment. It expects to generate additional liquidity through continued cost control initiatives as well as funds provided by selling certain assets or other strategic transactions in connection with the Company's ongoing Strategic Review. If sales continue to decline, the Company’s cost control initiatives may include
12

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

reductions in discretionary spend and reductions in investments in capital and permanent displays. Management believes that the debt transactions completed during the nine months ended September 30, 2021, along with existing cash and cash equivalents and cost control initiatives provides the Company with sufficient liquidity to meet its obligations and maintain business operations for the next twelve months.
However, there can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis, as, among other things, the Company’s liquidity can be impacted by a number of factors, including its level of sales, costs and expenditures, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of liquidity available under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility. For example, subject to certain exceptions, revolving loans under the Amended 2016 Revolving Credit Facility and term loans under the 2021 Foreign Asset-Based Term Facility must be prepaid to the extent that such outstanding loans exceed the applicable borrowing base, consisting of certain accounts receivable, inventory and real estate.
Recently Evaluated and/or Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standard Board ("FASB") issued Accounting Standard Update ("ASU") No. 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocations, calculating income taxes in interim periods and how a company accounts for future events. This ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Company adopted this guidance as of January 1, 2021. The adoption of this new guidance did not have any significant impacts on the Company’s results of operations, financial condition and/or financial statement disclosures.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The new guidance under ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is in the process of assessing the impact, if any, that ASU No. 2020-04 is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which was subsequently amended in November 2018 through ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses." ASU No. 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. Further, the new credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms. In November 2019, the FASB issued ASU No. 2019-10, which, among other things, deferred the application of the new guidance on credit losses for smaller reporting companies ("SRC") to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., a modified-retrospective approach). Under the above-mentioned deferral, the Company expects to adopt ASU No. 2016-03, and the related ASU No. 2018-19 amendments, beginning as of January 1, 2023 and is in the process of assessing the impact, if any, that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

2. RESTRUCTURING CHARGES

Revlon Global Growth Accelerator Program

On May 10, 2021, the Company announced that it was expanding the existing Revlon 2020 Restructuring Program through 2023. The Company renamed the revised program the Revlon Global Growth Accelerator (“RGGA”). RGGA includes a reinvestment strategy to strengthen our brands and drive long-term profitable margin and revenue growth through realized incremental productivity initiatives and enhanced capabilities.

13

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

The major initiatives underlying RGGA include:
Strategic Growth: Boost organic sales growth behind our strategic pillars – brands, markets, and channels – to deliver an approximate mid-single digit compound average annual growth rate through 2023;
Operating Efficiencies: Drive additional operational efficiencies and cost savings to fuel investments in revenue growth; and
Build Capabilities: Enhance capabilities and up-skill employees in order to evolve our culture to promote agility and deliver transformational change.

Since inception and through September 30, 2021, the Company recorded pre-tax restructuring and related charges of $96.8 million in connection with RGGA, consisting primarily of (i) $73.3 million of employee severance, other personnel benefits and other costs; and (ii) $23.5 million of lease and other restructuring-related charges that were recorded within Selling, general & administrative expenses ("SG&A") and Cost of sales.

A summary of the RGGA charges incurred since its inception in March 2020 and through September 30, 2021 is presented in the following table:
Restructuring Charges and Other, Net
Employee Severance and Other Personnel BenefitsOther CostsTotal Restructuring ChargesLeases (a)Other Related Charges (b)Total Restructuring and Related Charges
Charges incurred through December 31, 2020$48.6 $1.9 $50.5 $12.6 $5.7 $68.8 
Charges incurred during the nine months ended September 30, 20213.5 19.3 22.8 3.9 1.3 28.0 
Cumulative charges incurred through September 30, 2021$52.1 $21.2 $73.3 $16.5 $7.0 $96.8 
(a) Lease-related charges are recorded within SG&A in the Company’s Consolidated Statement of Operations and Comprehensive Loss.
(b) Other related charges are recorded within SG&A and cost of sales in the Company’s Consolidated Statement of Operations and Comprehensive Loss.

A summary of the RGGA restructuring charges incurred since its inception in March 2020 and through September 30, 2021 by reportable segment is presented in the following table:
Charges incurred in the nine months ended September 30, 2021Cumulative charges incurred through September 30, 2021
Revlon$6.5 $27.2 
Elizabeth Arden8.0 17.4 
Portfolio3.9 17.5 
Fragrances4.4 11.2 
Total$22.8 $73.3 
14

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

Restructuring Reserve
The liability balance and related activity for each of the Company's restructuring programs are presented in the following table:
Utilized, Net
Liability
Balance at January 1, 2021
Expense, Net

Cash
Liability Balance at September 30, 2021
RGGA:
Employee severance and other personnel benefits$12.6 $3.5 $(13.5)$2.6 
Other— 19.3 (19.3)— 
Total RGGA12.6 22.8 (32.8)2.6 
Other restructuring initiatives:
Employee severance and other personnel benefits1.2 — (0.3)0.9 
Total other restructuring initiatives1.2 — (0.3)0.9 
Total restructuring reserve$13.8 $22.8 $(33.1)$3.5 

All of the restructuring reserve balances were included within accrued expenses and other current liabilities in the Company's Consolidated Balance Sheets.

3. INVENTORIES

The Company's net inventory balances consisted of the following:
September 30,December 31,
20212020
Finished goods329.0 $356.7 
Raw materials and supplies116.3 97.1 
Work-in-process16.2 8.8 
$461.5 $462.6 

4. PROPERTY, PLANT AND EQUIPMENT
The Company's property, plant and equipment, net balances consisted of the following:
September 30,December 31,
20212020
Land and improvements$10.9 $11.4 
Building and improvements44.7 48.3 
Machinery and equipment86.8 98.7 
Office furniture, fixtures and capitalized software63.6 76.2 
Leasehold improvements18.7 21.3 
Construction-in-progress5.6 9.1 
Right-of-Use assets75.6 87.0 
Property, plant and equipment and Right-of-Use assets, net$305.9 $352.0 

Depreciation and amortization expense on property, plant and equipment and right-of-use assets for the three months ended September 30, 2021 and September 30, 2020 was $16.5 million and $18.3 million, respectively. Depreciation and amortization expense on property, plant and equipment and right-of-use assets for the nine months ended September 30, 2021 and September 30, 2020 was $50.7 million and $59.3 million, respectively. Accumulated depreciation and amortization was $559.9 million and $528.9 million as of September 30, 2021 and December 31, 2020, respectively.

15

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

5. GOODWILL AND INTANGIBLE ASSETS, NET

In accordance with ASC Topic 350, “Intangibles – Goodwill and Other,” the Company performs its annual impairment test during the fourth quarter of each year. The Company also reviews goodwill for impairment whenever events or changes in circumstances indicate that the carrying value of its goodwill may not be recoverable. After the close of each interim quarter, management assesses whether there exists any indicators of impairment requiring the Company to perform an interim goodwill impairment analysis.

As of September 30, 2021, the Company assessed that no indicators of impairment existed requiring the performance of a goodwill interim impairment analysis. No goodwill impairment charges were recorded during the three and nine months ended September 30, 2021.

The following table presents the changes in goodwill by segment for the nine months ended September 30, 2021:

RevlonPortfolioElizabeth ArdenFragrancesTotal
Balance at January 1, 2021$265.4 $87.9 $89.5 $120.9 $563.7 
Foreign currency translation adjustment(0.2)(0.2)(0.1)(0.1)(0.6)
Balance at September 30, 2021$265.2 $87.7 $89.4 $120.8 $563.1 
Cumulative goodwill impairment charges(a)
$(166.2)
(a) Amount refers to cumulative goodwill impairment charges related to impairments recognized in 2015, 2017, 2018 and 2020.

For the three and nine months ended September 30, 2020, the Company recorded goodwill impairment charges of nil and $111.0 million, respectively.

Intangible Assets, Net
Finite-Lived Intangibles
In accordance with ASC Topic 360, the Company makes judgments about the recoverability of its purchased finite-lived intangible assets whenever events or changes in circumstances indicate that an impairment to its finite-lived intangible assets may exist. The Company also considers several indicators of impairment, including, among other factors, the following: (i) whether there exists any significant adverse change in the extent or manner in which a long-lived asset and/or asset group is being used; (ii) whether there exists any projection or forecast demonstrating losses associated with the use of a long-lived asset and/or asset group; and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset and/or asset group will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. The carrying amount of a finite-lived intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the finite-lived intangible asset and/or asset group and the impairment loss is measured as the amount by which the carrying amount of the finite-lived intangible asset exceeds its fair value.
As of September 30, 2021, the Company assessed that no indicators of impairment existed requiring the performance of a finite-lived intangibles interim impairment analysis.
As a result, no impairment charges were recognized related to the carrying value of any of the Company's finite-lived intangible assets for the three and nine months ended September 30, 2021 and 2020, respectively.
Indefinite-Lived Intangibles
As of September 30, 2021, the Company assessed that no indicators of impairment existed requiring the performance of an indefinite-lived intangibles interim impairment analysis. No intangibles impairment charges were recorded during the three and nine months ended September 30, 2021.
For the three and nine months ended September 30, 2020, the Company recorded indefinite-lived intangible assets impairment charges of nil and $33.1 million, respectively.

16

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

The following tables present details of the Company's total intangible assets as of September 30, 2021 and December 31, 2020:
September 30, 2021
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$271.1 $(139.2)$— $131.9 12
Customer relationships247.4 (119.5)— 127.9 10
Patents and internally-developed intellectual property23.7 (16.9)— 6.8 4
Distribution rights31.0 (8.8)— 22.2 13
Other1.3 (1.3)— — 0
Total finite-lived intangible assets$574.5 $(285.7)$— $288.8 
Indefinite-lived intangible assets:
Trade names$145.8 N/A$(33.1)$112.7 
Total indefinite-lived intangible assets$145.8 N/A$(33.1)$112.7 
Total intangible assets$720.3 $(285.7)$(33.1)$401.5 
December 31, 2020
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$272.8 $(128.6)$— $144.2 12
Customer relationships249.9 (110.7)— 139.2 11
Patents and internally-developed intellectual property23.6 (15.6)— 8.0 5
Distribution rights31.0 (7.5)— 23.5 14
Other1.3 (1.3)— — 0
Total finite-lived intangible assets$578.6 $(263.7)$— $314.9 
Indefinite-lived intangible assets:
Trade names$149.0 N/A$(33.1)$115.9 
Total indefinite-lived intangible assets$149.0 N/A$(33.1)$115.9 
Total intangible assets$727.6 $(263.7)$(33.1)$430.8 

Amortization expense for finite-lived intangible assets was $9.1 million and $8.3 million for the three months ended September 30, 2021 and 2020, respectively, and $26.1 million and $25.0 million for the nine months ended September 30, 2021 and 2020, respectively.


17

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

The following table reflects the estimated future amortization expense for each period presented, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of September 30, 2021:        
Estimated Amortization Expense
2021$8.3 
202232.6 
202330.8 
202427.5 
202526.3 
Thereafter163.3 
Total$288.8 

6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The Company's accrued expenses and other current liabilities consisted of the following:
September 30,December 31,
20212020
Advertising, marketing and promotional costs$99.0 $96.3 
Sales returns and allowances74.9 95.5 
Taxes (a)
54.2 41.8 
Compensation and related benefits44.4 50.1 
Interest24.0 29.6 
Freight and distribution costs17.6 9.5 
Professional services and insurance14.7 18.6 
Short-term lease liability14.3 16.6 
Restructuring reserve3.5 13.8 
Software2.2 3.1 
Other51.7 46.0 
Total$400.5 $420.9 
(a) Accrued Taxes for Products Corporation as of September 30, 2021 and December 31, 2020 were $57.3 million and $44.8 million,

18

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

7. DEBT

The table below details the Company's debt balances, net of discounts and debt issuance costs.
September 30,December 31,
20212020
Amended 2016 Revolving Credit Facility (Tranche A) due 2024
$134.5 $136.7 
SISO Term Loan Facility due 2024125.8 — 
2021 Foreign Asset-Based Term Facility due 202470.7 — 
2020 ABL FILO Term Loans due 202350.0 50.0 
2020 Troubled-debt-restructuring: future interest46.2 57.8 
2020 BrandCo Term Loan Facility due 20251,742.9 1,719.8 
2016 Term Loan Facility: 2016 Term Loan due 2023 and 2025869.2 874.8 
2018 Foreign Asset-Based Term Facility due 2021— 57.7 
6.25% Senior Notes due 2024426.5 425.4 
Spanish Government Loan due 20250.3 0.3 
Debt$3,466.1 $3,322.5 
Less current portion(163.8)(217.5)
Long-term debt$3,302.3 $3,105.0 
Short-term borrowings (*)
$0.6 $2.5 
(*)The weighted average interest rate on these short-term borrowings outstanding at September 30, 2021 and December 31, 2020 was 11.4% and 11.7%, respectively.

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

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

Amendment No. 8 included an extinguishment, as defined by ASC 470, Debt, with the prior lenders under the Company's Tranche A Revolving Credit facility and the substitution of such lenders under the revolving credit facility with a new lender, MidCap, with which the Company had no prior loans outstanding. In connection with this transaction:
19

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


Fees of $0.8 million paid to the old lenders that were extinguished under the Tranche A Revolving Credit facility were expensed within SG&A on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021;
Deferred financing costs associated with the extinguished, old lenders prior to the effective date of Amendment No. 8, amounting to approximately $4.7 million, were expensed within "Amortization of debt issuance costs” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021; and
Fees of approximately $2.1 million paid to the new lender and third parties were recorded as deferred financing costs and are amortized in accordance with the straight-line method over the revised term of Tranche A through May 7, 2024.

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

Extinguishment accounting was applied to one existing prior lender, which is no longer involved with the SISO facility after Amendment No. 8. In connection with such extinguishment, deferred financing costs of approximately $1.4 million were expensed within "Amortization of debt issuance costs” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021; and
Modification accounting was applied to those exiting lenders for which the cash flow effect between the amount owed to them before and after the consummation of Amendment No. 8, on a present value basis, was less than 10% and, thus, the debt instruments were not considered to be substantially different. In connection with such modification, fees of approximately $0.9 million paid to the lenders were recorded as deferred financing costs and are amortized within "Amortization of debt issuance costs” (together with previously exiting deferred financing costs associated with these lenders of approximately $4.0 million), in accordance with the new effective interest rate computed over the revised term of the SISO facility. Additionally, approximately $0.4 million of fees paid to third parties were expensed within SG&A on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021.


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

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

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

20

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

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

Principal and Maturity: The 2021 Foreign Asset-Based Term Facility provides for a U.S. dollar-denominated senior secured asset-based term loan facility in an aggregate principal amount of $75 million, the full amount of which was funded on the closing of the facility. On the 2021 ABTL Closing Date, approximately $7.5 million of the proceeds of the 2021 Foreign Asset-Based Term Facility were deposited in an escrow account by the ABTL Agent pending completion of certain post-closing perfection actions with respect to certain foreign real property of the guarantors constituting collateral securing the 2021 Foreign Asset-Based Term Facility. The 2021 Foreign Asset-Based Term Facility has an uncommitted incremental facility pursuant to which it may be increased from time to time by up to the amount of the borrowing base in effect at the time such incremental facility is incurred, subject to certain conditions and the agreement of the lenders providing such increase. The proceeds of the loans under the 2021 Foreign Asset-Based Term Facility were used: (i) to repay in full the obligations under the Asset-Based Term Loan Credit Agreement, dated as of July 9, 2018, as amended, among the ABTL Borrower, the other subsidiaries of Products Corporation party thereto, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (the “ABTL Refinancing”); (ii) to pay fees and expenses in connection with the 2021 Foreign Asset-Based Term Facility and the ABTL Refinancing; and (iii) for working capital and other general corporate purposes. The 2021 Foreign Asset-Based Term Facility matures on March 2, 2024, subject to a springing maturity date of August 1, 2023 if, on such date, any principal amount of loans under the 2016 Term Loan Agreement due September 7, 2023 remain outstanding.

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

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

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

Affirmative and Negative Covenants: The 2021 Foreign Asset-Based Term Agreement contains certain affirmative and negative covenants that, among other things, limit the ABTL Loan Parties’ ability to, subject to various exceptions and
21

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

qualifications: (i) incur additional debt; (ii) incur liens; (iii) sell, transfer or dispose of assets; (iv) make investments; (v) make dividends and distributions on, or repurchases of, equity; (vi) make prepayments of contractually subordinated or junior lien debt; (vii) enter into certain transactions with their affiliates, including amending certain material intercompany agreements or trade terms; (viii) enter into sale-leaseback transactions; (ix) change their lines of business; (x) restrict dividends from their subsidiaries or restrict liens; (xi) change their fiscal year; and (xii) modify the terms of certain debt. The ABTL Parent Guarantors are subject to certain customary holding company covenants. The ability of the Loan Parties to make certain intercompany asset sales, investments, restricted payments and prepayments of intercompany debt is contingent on certain "cash movement conditions" or "payment conditions" being met, which among other things, require a certain level of liquidity for the applicable Loan Party to effect such type of transactions. The 2021 Foreign Asset-Based Term Agreement also contains a financial covenant requiring the ABTL Loan Parties to maintain a minimum average balance of cash and cash equivalents of $3.5 million, tested monthly, based on the last 10 business days of each month, subject to certain cure rights. The 2021 Foreign Asset-Based Term Agreement also contains certain customary representations, warranties and events of default.

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

As a result of the ABTL Refinancing and the closing of the 2021 Foreign Asset-Based Term Facility without the participation of MacAndrews & Forbes as a lender, MacAndrews & Forbes’ commitment in respect of the New European ABL FILO Facility under the 2020 Restated Line of Credit Facility terminated on the ABTL Closing Date in accordance with its terms.

The proceeds from the 2021 Foreign Asset-Based Term Facility were used to extinguish the entire amount outstanding under the 2018 Foreign Asset-Based Term Facility as of the closing date, which was due on July 9, 2021. In connection with such extinguishment, approximately nil and $1.0 million of pre-existing unamortized deferred financing costs were expensed within "Amortization of Debt Issuance Costs" on the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three and nine month periods ended September 30, 2021. In accordance with the terms of the 2021 Foreign Asset-Based Term Agreement, approximately $13.8 million of the proceeds from the transaction are held in escrow and are recorded within "Prepaid expenses and other assets" on the Company's Unaudited Consolidated Balance Sheet as of September 30, 2021.

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

2020 Troubled Debt Restructuring

As a result of the 5.75% Senior Notes Exchange Offer, and following the applicability of the Troubled Debt Restructuring guidance in ASC 470, Debt, the Company recorded $57.8 million of future interest payments. During the three and nine months ended September 30, 2021, the Company recorded $3.7 million and $11.6 million, respectively, of amortization of such future interest as an offset within "Interest expense, net" on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss.


22

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

Covenants
Products Corporation was in compliance with all applicable covenants under the 2020 BrandCo Credit Agreement, 2016 Credit Agreements, the 2021 Foreign Asset-Based Term Facility, as well as with all applicable covenants under its 6.25% Senior Notes Indenture, in each case as of September 30, 2021. At September 30, 2021, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:
            
CommitmentBorrowing BaseAggregate principal amount outstanding at September 30, 2021
Availability at September 30, 2021 (a)
Tranche A Revolving Credit Facility$270.0 $189.4 $136.2 $53.2 
SISO Term Loan Facility130.0 130.0 130.0 — 
2020 ABL FILO Term Loans50.0 40.6 $50.0 $— 
(a) Availability as of September 30, 2021 is based upon the Tranche A Revolving borrowing base then in effect under Amendment No.8 to the Amended 2016 Revolving Credit Facility of $189.4 million (which includes a $9.4 million reserve for the shortfall of the borrowing base that supports the 2020 ABL FILO Term Loans compared to the corresponding aggregate principal amount outstanding of $50 million), less $136.2 million then drawn.

The Company’s foreign subsidiaries held $67.1 million out of the Company's total $73.3 million in cash and cash equivalents as of September 30, 2021. While the cash held by the Company’s foreign subsidiaries is primarily used to fund their operations, the Company regularly assesses its global cash needs and the available sources of cash to fund these needs, which regularly includes repatriating foreign-held cash to settle historical intercompany loans and other intercompany payables.

8. FAIR VALUE MEASUREMENTS

Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing the fair value measurement of assets and liabilities are as follows:
Level 1: Fair valuing the asset or liability using observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2: Fair valuing the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3: Fair valuing the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.
As of both September 30, 2021 and December 31, 2020, the Company did not have any financial assets and liabilities that were required to be measured at fair value.

As of September 30, 2021, the fair value and carrying value of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
September 30, 2021
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$— $2,531.2 $— $2,531.2 $3,466.1 

23

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

As of December 31, 2020, the fair value and carrying value of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
December 31, 2020
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$— $2,168.9 $— $2,168.9 $3,322.5 
(a) The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on quoted market prices for similar issuances and maturities.
The carrying amounts of the Company's cash and cash equivalents, trade receivables, notes receivable, accounts payable and short-term borrowings approximate their respective fair values.

9. FINANCIAL INSTRUMENTS

Letters of Credit

Products Corporation maintains standby and trade letters of credit for various corporate purposes under which Products Corporation is obligated, of which $9.1 million and $7.8 million (including amounts available under credit agreements in effect at that time) were maintained as of September 30, 2021 and December 31, 2020, respectively. Included in these amounts are approximately $6.6 million and $5.3 million in standby letters of credit that primarily support Products Corporation’s workers compensation, general liability and automobile insurance programs, in each case as outstanding as of September 30, 2021 and December 31, 2020, respectively. At September 30, 2021 and December 31, 2020, respectively, all of the outstanding letters of credit were collateralized with a deposit of cash at the issuing financial institution. The estimated liability under such programs is accrued by Products Corporation.


10. PENSION AND POST-RETIREMENT BENEFITS

Net Periodic Benefit Cost
The components of net periodic benefit costs for the Company's pension and the other post-retirement benefit plans for the three months ended September 30, 2021 and 2020, respectively, were as follows:
Pension PlansOther
Post-Retirement Benefit Plans
Three Months Ended September 30,
2021202020212020
Net periodic benefit costs:
Service cost$0.4 $0.5 $— $— 
Interest cost2.3 3.8 — 0.1 
Expected return on plan assets(4.9)(5.7)$— — 
Amortization of actuarial loss3.3 2.7 0.2 0.1 
Total net periodic benefit costs prior to allocation$1.1 $1.3 $0.2 $0.2 
Portion allocated to Revlon Holdings— — — — 
Total net periodic benefit costs$1.1 $1.3 $0.2 $0.2 

In the three months ended September 30, 2021, the Company recognized net periodic benefit cost of $1.3 million, compared to net periodic benefit cost of $1.5 million in the three months ended September 30, 2020.

24

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

The components of net periodic benefit costs for the Company's pension and the other post-retirement benefit plans for the nine months ended September 30, 2021 and 2020, respectively, were as follows:
Pension PlansOther
Post-Retirement Benefit Plans
Nine Months Ended September 30,
2021202020212020
Net periodic benefit costs:
Service cost$1.1 $1.3 $— $— 
Interest cost6.9 11.20.1 0.3
Expected return on plan assets(14.8)(17.1)— — 
Amortization of actuarial loss9.9 8.30.5 0.3
Total net periodic benefit costs prior to allocation$3.1 $3.7 $0.6 $0.6 
Portion allocated to Revlon Holdings(0.1)(0.1)— — 
Total net periodic benefit costs$3.0 $3.6 $0.6 $0.6 

In the nine months ended September 30, 2021, the Company recognized net periodic benefit cost of $3.6 million, compared to net periodic benefit cost of $4.2 million in the nine months ended September 30, 2020.

Net periodic benefit costs are reflected in the Company's Consolidated Financial Statements as follows for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net periodic benefit costs:
Selling, general and administrative expense$0.4 $0.5 $1.1 $1.3 
Miscellaneous, net0.9 1.0 2.5 2.9 
Total net periodic benefit costs$1.3 $1.5 $3.6 $4.2 
The Company expects that it will have net periodic benefit cost of approximately $5 million for its pension and other post-retirement benefit plans for all of 2021, compared with net periodic benefit cost of $4.0 million in 2020.

Contributions:
The Company’s intent is to fund at least the minimum contributions required to meet applicable federal employee benefit laws and local laws, or to directly pay benefit payments where appropriate. During the three months ended September 30, 2021, $3.1 million and $0.2 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During the nine months ended September 30, 2021, $19.9 million and $0.6 million were contributed to the Company's pension plans and other post-retirement benefit plans, respectively. During 2021, the Company expects to contribute approximately $21 million to $24 million in the aggregate to its pension and other post-retirement benefit plans once given effect to the provision of the American Rescue Plan signed into law by President Biden on March 11, 2021. The American Rescue Plan includes pension funding relief for both single employer and multiemployer plans. The single employer provisions provide for higher interest rates and a longer shortfall amortization period to be used for funding valuation and benefit restriction purposes. By default, the interest rate changes will take effect for the 2020 plan year (for both minimum contribution and benefit restriction purposes) and the change in the shortfall amortization period will take effect for the 2022 plan year. However, plan sponsors can elect to defer the interest rate changes to as late as 2022 or accelerate the change in shortfall amortization period to as early as 2019. As a result, each plan sponsor will need to assess the optimal effective date(s) for the relief and make any appropriate elections.

As a result of the CARES Act passed by the U.S. Congress in March 2020 to address the economic environment resulting from COVID-19, and in accordance with the Limited Relief for Pension Funding and Retirement Plan Distributions provision of such act, the Company deferred to 2021 approximately $11.8 million of contributions that were otherwise scheduled to be paid to its 2 qualified pension plans at different earlier dates during 2020. The deferral was in effect only for 2020 and under the CARES relief provisions the Company was required to pay the contributions by no later than January 4, 2021, including interest at the plans’ 2020 effective interest rate from the original due date to the actual payment date. The Company paid the contributions by the due date.
25

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


11. STOCK COMPENSATION PLAN
Revlon's amended Stock Plan provides for awards of stock options, stock appreciation rights, restricted or unrestricted stock and restricted stock units ("RSUs") to eligible employees and directors of Revlon and its affiliates, including Products Corporation. On June 3, 2021 Revlon’s stockholders approved an amendment to the Stock Plan to reserve an additional 2,000,000 shares and extend the term until August 2030. As a result, an aggregate of 8,565,000 shares were reserved for issuance as Awards under the Stock Plan, of which there remained approximately 2.7 million shares available for grant as of September 30, 2021.

2019 Transaction Incentive Program

As of September 30, 2021, a total of 121,891 time-based RSUs under Tier 1 of the Revlon 2019 Transaction Incentive Program (the "2019 TIP") had been granted and are outstanding under the Stock Plan.

The 2019 TIP also provided for the following cash-based awards payable to certain employees, subject to continued employment through the respective vesting dates: (i) Tier 1 - $6.8 million payable in 2 equal installments as of December 31, 2020 and December 31, 2021; and (ii) Tier 2 - $2.5 million payable in 1 installment as of December 31, 2020. Such RSUs and cash-based awards are eligible for vesting following a termination without cause or due to death or disability or if not assumed upon a change in control (the “Special Vesting Rules”). Since inception and through September 30, 2021, the Company granted $1.4 million cash-based awards, net of forfeitures, under Tier 1, which are being amortized over the period from the grant dates to December 31, 2021. The total amount amortized for this Tier 1 cash-based awards since the program's inception and through September 30, 2021 is approximately $4.5 million, of which $0.4 million and $1.5 million were recorded during the three and nine months ended September 30, 2021, respectively. The amortization of such awards is recorded within "Acquisition, integration and divestiture costs" in the Company's Consolidated Statements of Operations and Comprehensive Loss.

Long-Term Incentive Program
During the first quarter of 2021, the Company granted approximately 1.5 million time-based RSU awards under the Stock Plan (the "2021 LTIP RSUs") to certain employees. During the second quarter of 2021, the Company granted approximately 35,000 time-based RSU awards under the 2021 LTIP RSUs. During the third quarter of 2021 there were approximately 15,000 grants of time-based RSUs. The 2021 LTIP RSUs are 100% time-based and vests as follows: 50% in March 2022; 25% in March 2023; 25% in March 2024.
During the first quarter of 2020, the Company granted approximately 1.3 million time-based and performance-based RSU awards under the Stock Plan (the "2020 LTIP RSUs") to certain employees. During the second and third quarter of 2020, there were no grants of 2020 LTIP RSUs.
During the second quarter of 2021, the Company granted approximately 78,000 TIP awards with both a cash component and RSU component, all pursuant to the Stock Plan. These TIP awards are 100% time-based and vests as follows: 50% in June 2022; 50% in June 2023. The awards are subject to continued employment through the respective vesting dates.

Time-Based LTIP and TIP RSUs
The Company recognized $3.4 million and $9.0 million of net compensation expense related to the time-based LTIP and TIP RSUs for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, the Company had $15.0 million of total deferred compensation expense related to non-vested, time-based LTIP and TIP RSUs. The cost is recognized over the vesting period of the awards, as described above.

Performance-based LTIP RSUs
The Company recognized $0.5 million and $1.0 million of net compensation expense related to the performance-based LTIP RSUs for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, the Company had $11.3 million of total deferred compensation expense related to non-vested, performance-based LTIP RSUs. The cost is recognized over the service period of the awards, as described above.

26

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

Acceleration of Vesting
Under the aforementioned provisions for acceleration of vesting, as of September 30, 2021 and since the time these provisions became effective in September 2019, 57,763 LTIP RSUs and 47,743 2019 TIP Tier 1 RSUs were vested on an accelerated basis due to involuntary terminations, resulting in accelerated amortization of approximately $2.0 million. In addition, for the nine months ended September 30, 2021 and under the same accelerated vesting provisions, the Company also recorded approximately $1.8 million of accelerated amortization in connection with the cash portion of the 2019 TIP Tier 1 and Tier 2 awards that were vested on an accelerated basis due to involuntary terminations. Approximately nil and $0.2 million in accelerated amortization were recorded in connection with the cash portion of the 2019 TIP Tier 1 awards during the three and nine months ended September 30, 2021, respectively. See the roll-forward table in the following sections of this Note 11 for activity related to the nine months ended September 30, 2021.

27

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

During the nine months ended September 30, 2021, the activity related to time-based and performance-based RSUs previously granted to eligible employees and the grant date fair value per share related to these RSUs were as follows under the LTIP and 2019 TIP programs, respectively:
Time-Based LTIPPerformance-Based LTIP
RSUs (000's)Weighted-Average Grant Date Fair Value per RSURSUs (000's)Weighted-Average Grant Date Fair Value per RSU
Outstanding as of December 31, 2020
2019 TIP RSUs (a)
58.8 $15.95 n/a$— 
LTIP RSUs:
2020496.5 14.96 462.9 14.96 
2019169.3 22.55 255.3 22.55 
201866.4 19.40 215.9 19.42 
Total LTIP RSUs732.2 934.1 
Total LTIP and TIP RSUs Outstanding as of December 31, 2020791.0 934.1 
Granted
2019 TIP RSUs Granted80.1 13.11 n/a— 
LTIP RSUs:
20211,559.0 10.77 — — 
2020— — — — 
2019— — — — 
2018— — — — 
Total LTIP RSUs Granted1,559.0 — 
Vested
2019 TIP RSUs Vested (b)
(8.9)15.30 — — 
LTIP RSUs:
2020 (b)
(182.7)14.96 — — 
2019 (b)
(91.4)22.53 — — 
2018)(b)
(65.9)19.42 (38.5)19.44 
Total LTIP RSUs Vested(340.0)(38.5)
Forfeited/Canceled
2019 TIP RSUs Forfeited/Canceled (a)
(8.1)15.11 n/a— 
LTIP RSUs:
2021(81.2)10.75 — — 
2020(52.1)14.96 (73.5)14.96 
2019(6.2)22.55 (38.6)22.55 
2018(0.5)16.80 (177.4)19.42 
Total LTIP RSUs Forfeited/Canceled(140.0)(289.5)
Outstanding as of September 30, 2021
2019 TIP RSUs121.9 14.09 n/a— 
LTIP RSUs:
20211,477.8 10.77 — — 
2020261.7 14.96 389.4 14.96 
201971.7 22.57 216.7 22.55 
2018— — — — 
Total LTIP RSUs1,811.2 606.1 
Total LTIP and TIP RSUs Outstanding as of September 30, 20211,933.1 606.1 
((a) The 2019 TIP provides for RSU awards that are only time-based.
(b) Includes acceleration of vesting upon involuntary terminations for the three and nine months ended September 30, 2021 of 887 and 8,121 RSUs, respectively, under the 2019 and 2018 LTIPs as well as 355 and 6,540 RSUs, respectively, under the 2019 TIP Tier I awards.


28

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

12. INCOME TAXES
The Company's provision for income taxes represents federal, foreign, state and local income taxes. The Company's effective tax rate differs from the applicable federal statutory rate due to the effect of state and local income taxes, tax rates and income in foreign jurisdictions. The Company’s tax provision changes quarterly based on various factors including, but not limited to, the geographical level and mix of earnings; enacted tax legislation; foreign, state and local income taxes; changes in valuation allowances; tax audit settlements; and the interaction of various global tax strategies.
The Company recorded a provision for income taxes of $5.4 million (Products Corporation - provision for income taxes of $5.5 million) for the three months ended September 30, 2021 and a provision for income taxes of $1.9 million (Products Corporation - provision for income taxes of $2.3 million) for the three months ended September 30, 2020, respectively. The $3.5 million increase (Products Corporation $3.2 million in the provision for income taxes in the three months ended September 30, 2021, compared to the three months ended September 30, 2020, was primarily due to an increase in losses for which no tax benefit can be recognized.
The Company recorded a provision for income taxes of $23.8 million (Products Corporation - provision for income taxes of $23.9 million) for the nine months ended September 30, 2021 and a benefit from income taxes of $45.2 million (Products Corporation - benefit from income taxes of $44.2 million) for the nine months ended September 30, 2020, respectively. The $69.0 million increase (Products Corporation - $68.1 million) in the provision for income taxes in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, was primarily due to an increase in losses for which no tax benefit can be recognized.
For the three and nine month periods ended September 30, 2020, the Company concluded that the use of the cut-off tax rate method was more appropriate than the annual effective tax rate method, because the annual effective tax rate method would have not been reliable due to its sensitivity to minimal changes in forecasted annual pre-tax earnings.
The Company's effective tax rate for the three and nine month periods ended September 30, 2021 was lower than the federal statutory rate of 21% primarily due to losses for which no tax benefit can be recognized. On March 11, 2021, President Biden signed into law the “American Rescue Plan Act of 2021” (the "ARPA") which expands the Employee Retention Credit and the roster of ‘covered employees’ under §162(m) deduction limits. The ARPA did not have a significant impact on the Company’s financial results.
The Company's effective tax rate for the three months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due to the mix and level of earnings and the change in valuation allowance related to the limitation on the deductibility of interest. The Company's effective tax rate for the nine months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due to the impact of non-deductible impairment charges and the valuation allowance related to the limitation on the deductibility of interest, partially offset by the impact of the "Coronavirus Aid, Relief and Economic Security Act" (the "CARES Act"), signed into law on March 27, 2020 by President Trump, which resulted in a partial release of a valuation allowance on the Company's 2019 federal tax attributes associated with the limitation on the deductibility of interest.
The CARES Act, among other things, includes provisions providing for refundable payroll tax credits, the deferral of employer social security tax payments, acceleration of alternative minimum tax credit refunds and the increase of the net interest deduction limitation from 30% to 50%. The Company adopted the net interest deduction limitation of 50% for the taxable period ending December 31, 2020 as outlined in the CARES Act.
In assessing the recoverability of its deferred tax assets, the Company continually evaluates all available positive and negative evidence to assess the amount of deferred tax assets which are more likely than not to be realized. Deferred tax assets are reduced by a valuation allowance if some portion or all of the deferred tax assets will not be realized. A valuation allowance is a non-cash charge, and it in no way limits the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts.
For further information, see Note 13, "Income Taxes," to the Consolidated Financial Statements in the Company's 2020 Form 10-K and Item 1A. “Risk Factors - Uncertainties in the interpretation and application of the income tax provisions could have a material impact on the Company's financial condition, results of operations and/or cash flows” in the Company's 2020 Form 10-K.


29

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

13. ACCUMULATED OTHER COMPREHENSIVE LOSS

A roll-forward of the Company's accumulated other comprehensive loss as of September 30, 2021 is as follows:
Foreign Currency TranslationActuarial (Loss) Gain on Post-retirement BenefitsOtherAccumulated Other Comprehensive Loss
Balance at January 1, 2021$(17.1)$(260.5)$(0.3)$(277.9)
Foreign currency translation adjustment, net of tax (b)
(6.0)— — (6.0)
Amortization of pension related costs, net of tax (a) (b)
— 10.5 — 10.5 
Other comprehensive (loss) gain$(6.0)$10.5 $— $4.5 
Balance at September 30, 2021$(23.1)$(250.0)$(0.3)$(273.4)
(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 10, "Pension and Post-retirement Benefits," for further information on the Company’s pension and other post-retirement plans.
(b) Amounts presented are net of tax expense of nil for the nine months ended September 30, 2021.

For the nine months ended and September 30, 2021, the Company did not have any activity related to derivative instruments.


14. SEGMENT DATA AND RELATED INFORMATION
Operating Segments
Operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Company's "Chief Executive Officer") in deciding how to allocate resources and in assessing the Company's performance. As a result of the similarities in the procurement, manufacturing and distribution processes for the Company’s products, much of the information provided in the Consolidated Financial Statements and provided in the segment table below is similar to, or the same as, that reviewed on a regular basis by the Company's Chief Executive Officer. The Company operates in 4 brand-centric reporting units that are aligned with its organizational structure based on 4 global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances, which represent the Company's 4 reporting segments.
The Company's management evaluates segment profit for each of the Company's reportable segments. The Company allocates corporate expenses to each reportable segment to arrive at segment profit, and these expenses are included in the internal measure of segment operating performance. The Company defines segment profit as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses. Segment profit also excludes the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance. Such items are shown below in the table reconciling segment profit to consolidated income from continuing operations before income taxes. The Company does not have any material inter-segment sales.
The accounting policies for each of the reportable segments are the same as those described in the Company's 2020 Form 10-K, in Note 1, "Description of Business and Summary of Significant Accounting Policies." The Company's assets and liabilities are managed centrally and are reported internally in the same manner as the Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's Chief Executive Officer or included in these Consolidated Financial Statements.
The following table is a comparative summary of the Company’s net sales and segment profit for Revlon and Products Corporation by reportable segment for the periods presented.

30

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

Revlon, Inc.
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Segment Net Sales:
Revlon$173.0 $166.0 $521.8 $482.8 
Elizabeth Arden122.8 106.3 359.7 282.4 
Portfolio112.7 99.6 307.4 298.1 
Fragrances112.6 105.2 274.6 214.4 
Total$521.1 $477.1 $1,463.5 $1,277.7 
Segment Profit:
Revlon$16.1 $13.5 $45.3 $41.4 
Elizabeth Arden21.3 3.4 42.1 18.4 
Portfolio22.1 12.2 46.3 33.9 
Fragrances22.9 25.4 50.8 34.6 
Total$82.4 $54.5 $184.5 $128.3 
Reconciliation:
Total Segment Profit$82.4 $54.5 $184.5 $128.3 
Less:
Depreciation and amortization31.2 35.1 96.8 108.3 
Non-cash stock compensation expense3.9 5.1 10.4 8.6 
Non-Operating items:
Restructuring and related charges10.8 4.5 28.0 61.2 
Acquisition, integration and divestiture costs0.6 0.9 1.8 4.2 
Loss (gain) on divested assets0.1 (1.1)(1.7)(0.5)
Financial control remediation and sustainability actions and related charges— 0.7 0.4 8.5 
Excessive coupon redemptions— — — 4.2 
COVID-19 charges(0.1)9.7 6.1 35.1 
Capital structure and related charges1.8 9.3 6.8 9.3 
Impairment charges— — — 144.1 
      Operating income (loss)34.1 (9.7)35.9 (254.7)
Less:
Interest Expense63.1 68.7 183.9 178.0 
Amortization of debt issuance costs8.7 7.8 30.7 17.8 
   Gain on early extinguishment of debt— (31.2)— (43.1)
   Foreign currency losses (gains), net9.9 (9.8)11.5 9.1 
Miscellaneous, net0.1 (2.6)2.8 13.9 
Loss from operations before income taxes$(47.7)$(42.6)$(193.0)$(430.4)



31

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

Products Corporation
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Segment Net Sales:
Revlon$173.0 $166.0 $521.8 $482.8 
Elizabeth Arden122.8 106.3 359.7 282.4 
Portfolio112.7 99.6 307.4 298.1 
Fragrances112.6 105.2 274.6 214.4 
Total$521.1 $477.1 $1,463.5 $1,277.7 
Segment Profit:
Revlon$16.6 $14.2 $46.8 $43.6 
Elizabeth Arden21.7 3.8 43.1 19.7 
Portfolio22.5 12.6 47.3 35.3 
Fragrances23.2 25.9 51.6 35.6 
Total$84.0 $56.5 $188.8 $134.2 
Reconciliation:
Total Segment Profit$84.0 $56.5 $188.8 $134.2 
Less:
Depreciation and amortization31.2 35.1 96.8 108.3 
Non-cash stock compensation expense3.9 5.1 10.4 8.6 
Non-Operating items:
Restructuring and related charges10.8 4.5 28.0 61.2 
Acquisition, integration and divestiture costs0.6 0.9 1.8 4.2 
Loss (gain) on divested assets0.1 (1.1)(1.7)(0.5)
Financial control remediation and sustainability actions and related charges— 0.7 0.4 8.5 
Excessive coupon redemptions— — — 4.2 
COVID-19 charges(0.1)9.7 6.1 35.1 
Capital structure and related charges1.8 9.3 6.8 9.3 
Impairment charge— — — 144.1 
      Operating income (loss)35.7 (7.7)40.2 (248.8)
Less:
Interest Expense63.1 68.7 183.9 178.0 
Amortization of debt issuance costs8.7 7.8 30.7 17.8 
Gain on early extinguishment of debt— (31.2)— (43.1)
   Foreign currency losses (gains), net9.9 (9.8)11.5 9.1 
Miscellaneous, net0.1 (2.6)2.8 13.9 
Loss from operations before income taxes$(46.1)$(40.6)$(188.7)$(424.5)

As of September 30, 2021, the Company had operations established in approximately 25 countries outside of the U.S. and its products are sold throughout the world. Generally, net sales by geographic area are presented by attributing revenues from external customers on the basis of where the products are sold.

32

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

The following tables present the Company's segment net sales by geography and total net sales by classes of similar products for the periods presented:
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
RevlonElizabeth ArdenPortfolioFragrancesTotalRevlonElizabeth ArdenPortfolioFragrancesTotal
Geographic Area:
 Net Sales
   North America$88.4 $32.3 $75.2 $81.5 $277.4 $270.9 $80.9 $201.9 $193.8 $747.5 
   EMEA*43.8 30.4 28.7 20.5 123.4 125.4 85.9 80.6 54.0 345.9 
   Asia9.1 52.0 0.4 3.5 65.0 31.7 171.8 2.3 10.4 216.2 
   Latin America*14.2 2.5 4.8 3.4 24.9 40.7 5.8 12.2 7.9 66.6 
   Pacific*17.5 5.6 3.6 3.7 30.4 53.1 15.3 10.4 8.5 87.3 
$173.0 $122.8 $112.7 $112.6 $521.1 $521.8 $359.7 $307.4 $274.6 $1,463.5 
Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
RevlonElizabeth ArdenPortfolioFragrancesTotalRevlonElizabeth ArdenPortfolioFragrancesTotal
Geographic Area:
 Net Sales
   North America$86.4 $30.5 $59.9 $79.2 $256.0 $265.6 $66.9 $182.8 $151.1 $666.4 
   EMEA*41.4 25.3 32.8 18.8 118.3 105.2 64.9 93.6 44.4 308.1 
   Asia12.1 43.3 0.4 2.7 58.5 33.6 135.5 1.6 8.1 178.8 
   Latin America*11.3 2.5 3.3 1.5 18.6 35.3 3.5 11.6 2.6 53.0 
   Pacific*14.8 4.7 3.2 3.0 25.7 43.1 11.6 8.5 8.2 71.4 
$166.0 $106.3 $99.6 $105.2 $477.1 $482.8 $282.4 $298.1 $214.4 $1,277.7 
* The EMEA region includes Europe, the Middle East and Africa; the Latin America region includes Mexico, Central America and South America; and the Pacific region includes Australia and New Zealand.

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Classes of similar products:
   Net sales:
Color cosmetics$124.8 24%$104.7 22%$368.5 25%$305.3 24%
Fragrance160.1 31%141.6 30%395.4 27%300.5 24%
Hair care124.2 24%115.9 24%351.6 24%338.0 26%
Beauty care45.6 9%50.4 11%124.8 9%141.9 11%
Skin care66.4 12%64.5 13%223.2 15%192.0 15%
$521.1 $477.1 $1,463.5 $1,277.7 

The following table presents the Company's long-lived assets by geographic area:
September 30, 2021December 31, 2020
Long-lived assets, net:
United States$1,137.7 83%$1,194.9 82%
International228.0 17%260.7 18%
$1,365.7 $1,455.6 

33

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


15. REVLON, INC. BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Following are the components of Revlon's basic and diluted loss per common share for the periods presented:
Three months ended September 30,Nine months ended September 30,
2021202020212020
Numerator:
Net loss$(53.1)$(44.5)$(216.8)$(385.2)
Denominator:
Weighted-average common shares outstanding – Basic54,025,861 53,476,354 53,899,732 53,371,986 
Effect of dilutive restricted stock and RSUs— — — — 
Weighted-average common shares outstanding – Diluted54,025,861 53,476,354 53,899,732 53,371,986 
Basic and Diluted (loss) earnings per common share:
Net loss per common share$(0.98)$(0.83)$(4.02)$(7.22)
Unvested restricted stock and RSUs under the Stock Plan(a)
759,994 — 581,856 — 
(a) These are outstanding common stock equivalents that were not included in the computation of Revlon's diluted earnings per common share because their inclusion would have had an anti-dilutive effect.


16. CONTINGENCIES

Citibank Litigation

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

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

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

34

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

17. RELATED PARTY TRANSACTIONS
Transfer and Reimbursement Agreements

Revlon, Products Corporation and MacAndrews & Forbes have entered into reimbursement agreements (the "Reimbursement Agreements") pursuant to which: (i) MacAndrews & Forbes is obligated to provide (directly or through its affiliates) certain professional and administrative services, including, without limitation, employees, to the Company, and to purchase services from third-party providers, such as insurance, legal, accounting and air transportation services, on behalf of the Company, to the extent requested by Products Corporation; and (ii) Products Corporation is obligated to provide certain professional and administrative services, including, without limitation, employees, to MacAndrews & Forbes and to purchase services from third-party providers, such as insurance, legal and accounting services, on behalf of MacAndrews & Forbes, to the extent requested by MacAndrews & Forbes, provided that in each case the performance of such services does not cause an unreasonable burden to MacAndrews & Forbes or Products Corporation, as the case may be.
The Company reimburses MacAndrews & Forbes for the allocable costs of the services that MacAndrews & Forbes purchases for or provides to the Company and for the reasonable out-of-pocket expenses that MacAndrews & Forbes incurs in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services that Products Corporation purchases for or provides to MacAndrews & Forbes and for the reasonable out-of-pocket expenses incurred by Products Corporation in connection with the purchase or provision of such services. Each of the Company, on the one hand, and MacAndrews & Forbes, on the other, has agreed to indemnify the other party for losses arising out of the services provided by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.
The Reimbursement Agreements may be terminated by either party on 90 days' notice. The Company does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to the Company as could be obtained from unaffiliated third parties.
The Company participates in MacAndrews & Forbes' directors and officers liability insurance program (the "D&O Insurance Program"), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which cover the Company, as well as MacAndrews & Forbes and its subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews & Forbes from time-to-time for their allocable portion of the premiums for such coverage or the Company pays the insurers directly, which premiums the Company believes are more favorable than the premiums that the Company would pay were it to secure stand-alone coverage. Any amounts paid by the Company directly to MacAndrews & Forbes in respect of premiums are included in the amounts paid under the Reimbursement Agreements. To ensure the availability of directors and officers liability insurance coverage through January 2023, the Company and MacAndrews & Forbes agreed to collectively make payments under MacAndrews & Forbes’ D&O Insurance Program. In furtherance of such arrangement, during 2020, the Company made a payment of approximately $5.3 million to MacAndrews & Forbes under the Reimbursement Agreements. The Company made a payment of approximately $1.3 million during the third quarter of 2021 in respect of its participation in the D&O Insurance Program.
The net activity related to services purchased under the Transfer and Reimbursement Agreements during the nine months ended September 30, 2021 and 2020 was approximately $0.2 million and $0.6 million income, respectively. As of both September 30, 2021 and December 31, 2020, a receivable balance of $0.1 million from MacAndrews & Forbes was included in the Company's Unaudited Consolidated Balance Sheet for transactions subject to the Transfer and Reimbursement Agreements.

Tax Sharing Agreements

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

Registration Rights Agreement

Prior to the consummation of Revlon's initial public equity offering in February 1996, Revlon and Revlon Worldwide Corporation (which subsequently merged into REV Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of MacAndrews & Forbes ("REV Holdings")), the then direct parent of Revlon entered into a registration rights agreement (the "Registration Rights Agreement"). In February 2003, MacAndrews & Forbes executed a joinder agreement to the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon's Common Stock held by REV Holdings (the "Holders") have the right to require Revlon to register under the Securities Act all or part of the Class A Common Stock owned by such Holders, including, without limitation, the shares of Class A
35

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

Common Stock purchased by MacAndrews & Forbes in connection with Revlon's 2003 $50.0 million equity rights offering and the shares of Class A Common Stock which were issued to REV Holdings upon its conversion of all 3,125,000 shares of its Class B Common Stock in October 2013 (a "Demand Registration"). In connection with closing the 2004 Revlon Exchange Transactions and pursuant to the 2004 Investment Agreement, MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with Revlon’s March 2006 $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, and Revlon’s January 2007 $100 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes. Pursuant to the Registration Rights Agreement, in 2009 Revlon registered under the Securities Act all 9,336,905 shares of Class A Common Stock issued to MacAndrews & Forbes in the 2009 Exchange Offer, in which, among other things, Revlon issued to MacAndrews & Forbes shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the then-outstanding Senior Subordinated Term Loan that MacAndrews & Forbes contributed to Revlon

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

As of September 30, 2021, MacAndrews & Forbes beneficially owned approximately 86.1% of Revlon's Class A Common Stock, which at such date was Revlon's only class of capital stock outstanding. As a result, MacAndrews & Forbes is able to elect Revlon’s entire Board of Directors and control the vote on all matters submitted to a vote of Revlon's stockholders. MacAndrews & Forbes is beneficially owned by Ronald O. Perelman. Mr. Perelman is Chairman of Revlon’s and Products Corporation's Board of Directors.

Other

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

During the nine months ended September 30, 2021 and 2020, 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 $8.7 million and $28.2 million of coupon redemptions for the Company's retail customers for the nine months ended September 30, 2021 and 2020, respectively, for which the Company incurred fees of approximately $0.2 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively, and other similar advertising, coupon redemption and raw material supply services, for which the Company had net payables aggregating to approximately $0.3 million as of both September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, payable balances of $1.6 million and approximately $0.6 million, respectively, were included in the Company's Consolidated Balance Sheet for the aforementioned coupon redemption services. The Company believes that its engagement of each of these affiliates was on arm's length terms, taking into account each firm's expertise in its respective field, and that the fees paid or received were at least as favorable as those available from unaffiliated parties.


36

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

18. PRODUCTS CORPORATION AND SUBSIDIARIES GUARANTOR FINANCIAL INFORMATION

Products Corporation's 6.25% Senior Notes are fully and unconditionally guaranteed on a senior basis by certain of Products Corporation’s direct and indirect wholly-owned domestic subsidiaries (the "Guarantors Subsidiaries").

The following Condensed Consolidating Financial Statements present the financial information as of September 30, 2021 and December 31, 2020, and for each of the nine months September 30, 2021 and 2020 for: (i) Products Corporation on a stand-alone basis; (ii) the Guarantor Subsidiaries on a stand-alone basis; (iii) the subsidiaries of Products Corporation that did not guarantee and do not guarantee Products Corporation's 6.25% Senior Notes (the "Non-Guarantor Subsidiaries") on a stand-alone basis; and; (iv) Products Corporation, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis. The Condensed Consolidating Financial Statements are presented on the equity method, under which the investments in subsidiaries are recorded at cost and adjusted to the applicable share of the subsidiary's cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of September 30, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$5.6 $3.2 $64.5 $— $73.3 
Trade receivables, less allowances for doubtful accounts88.0 119.3 184.0 — 391.3 
Inventories, net121.5 154.8 185.2 — 461.5 
Prepaid expenses and other215.4 26.2 63.8 — 305.4 
Intercompany receivables4,098.4 4,011.3 726.7 (8,836.4)— 
Investment in subsidiaries1,231.7 (206.0)— (1,025.7)— 
Property, plant and equipment, net159.8 62.8 83.3 — 305.9 
Deferred income taxes— 12.2 20.2 — 32.4 
Goodwill404.9 30.0 128.2 — 563.1 
Intangible assets, net9.4 174.6 217.5 — 401.5 
Other assets60.5 8.4 26.3 — 95.2 
      Total assets$6,395.2 $4,396.8 $1,699.7 $(9,862.1)$2,629.6 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$— $— $0.6 $— $0.6 
Current portion of long-term debt163.7 — 0.1 — 163.8 
Accounts payable95.1 55.3 95.2 — 245.6 
Accrued expenses and other149.4 75.3 179.0 — 403.7 
Intercompany payables4,390.2 3,552.4 893.6 (8,836.2)— 
Long-term debt3,229.5 — 72.8 — 3,302.3 
Other long-term liabilities272.5 109.5 32.3 — 414.3 
      Total liabilities8,300.4 3,792.5 1,273.6 (8,836.2)4,530.3 
Stockholder’s (deficiency) equity(1,905.2)604.3 426.1 (1,025.9)(1,900.7)
Total liabilities and stockholder’s (deficiency) equity$6,395.2 $4,396.8 $1,699.7 $(9,862.1)$2,629.6 

37

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

Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of December 31, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$5.5 $2.5 $89.1 $— $97.1 
Trade receivables, less allowances for doubtful accounts86.0 95.7 170.6 — 352.3 
Inventories, net121.3 147.7 193.6 — 462.6 
Prepaid expenses and other220.6 24.6 55.3 — 300.5 
Intercompany receivables3,592.2 3,549.6 614.1 (7,755.9)— 
Investment in subsidiaries1,653.6 2.3 — (1,655.9)— 
Property, plant and equipment, net178.5 72.1 101.4 — 352.0 
Deferred income taxes— 10.6 23.5 — 34.1 
Goodwill48.9 264.0 250.8 — 563.7 
Intangible assets, net10.0 187.8 233.0 — 430.8 
Other assets67.9 9.3 31.9 — 109.1 
      Total assets$5,984.5 $4,366.2 $1,763.3 $(9,411.8)$2,702.2 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$— $— $2.5 $— $2.5 
Current portion of long-term debt159.2 — 58.3 — 217.5 
Accounts payable72.5 48.0 82.8 — 203.3 
Accrued expenses and other144.1 61.7 217.4 — 423.2 
Intercompany payables3,897.1 3,162.0 696.6 (7,755.7)— 
Long-term debt3,104.7 — 0.3 — 3,105.0 
Other long-term liabilities377.3 33.8 42.6 — 453.7 
      Total liabilities7,754.9 3,305.5 1,100.5 (7,755.7)4,405.2 
Stockholder’s (deficiency) equity(1,770.4)1,060.7 662.8 (1,656.1)(1,703.0)
Total liabilities and stockholder’s (deficiency) equity$5,984.5 $4,366.2 $1,763.3 $(9,411.8)$2,702.2 
38

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

Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$103.1 $162.2 $255.8 $— $521.1 
Cost of sales56.7 72.4 92.1 — 221.2 
Gross profit46.4 89.8 163.7 — 299.9 
Selling, general and administrative expenses74.0 65.9 114.6 — 254.5 
Acquisition and integration costs0.6 — — — 0.6 
Restructuring charges and other, net6.7 0.3 2.0 — 9.0 
Impairment charges— — — — — 
Loss (gain) on divested assets0.1 — — — 0.1 
Operating (loss) income(35.0)23.6 47.1 — 35.7 
Other (income) expense:
Intercompany interest, net(3.1)0.7 2.4 — — 
Interest expense58.7 — 4.4 — 63.1 
Amortization of debt issuance costs8.7 — — — 8.7 
Gain on early extinguishment of debt— — — — — 
Foreign currency losses (gains), net— 0.6 9.3 — 9.9 
Miscellaneous, net194.4 (115.1)(79.2)— 0.1 
Other expense (income), net258.7 (113.8)(63.1)— 81.8 
(Loss) income from continuing operations before income taxes(293.7)137.4 110.2 — (46.1)
(Benefit from) provision for income taxes— 3.2 2.3 — 5.5 
(Loss) income from continuing operations, net of taxes(293.7)134.2 107.9 — (51.6)
Equity in income (loss) of subsidiaries243.9 92.5 — (336.4)— 
Net (loss) income$(49.8)$226.7 $107.9 $(336.4)$(51.6)
Other comprehensive income (loss)2.9 3.9 (2.5)(1.4)2.9 
Total comprehensive (loss) income$(46.9)$230.6 $105.4 $(337.8)$(48.7)
39

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

Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$95.7 $148.9 $232.4 $0.1 $477.1 
Cost of sales45.6 92.6 96.0 0.1 234.3 
Gross profit50.1 56.3 136.4 — 242.8 
Selling, general and administrative expenses84.4 47.7 119.3 — 251.4 
Acquisition and integration costs0.8 — 0.1 — 0.9 
Restructuring charges and other, net(8.4)2.7 5.0 — (0.7)
 Impairment charges(23.4)22.0 1.4 — — 
 Gain on divested assets(1.1)— — — (1.1)
Operating (loss) income(2.2)(16.1)10.6 — (7.7)
Other (income) expense:
Intercompany interest, net(0.5)0.7 (0.2)— — 
Interest expense67.3 — 1.4 — 68.7 
Amortization of debt issuance costs7.8 — — — 7.8 
Gain on early extinguishment of debt, net(31.2)— — — (31.2)
Foreign currency losses (gains), net1.0 (0.7)(10.1)— (9.8)
Miscellaneous, net(1.8)(55.4)54.6 — (2.6)
Other expense (income), net42.6 (55.4)45.7 — 32.9 
(Loss) income from continuing operations before income taxes(44.8)39.3 (35.1)— (40.6)
(Benefit from) provision for income taxes(6.3)17.8 (9.2)— 2.3 
Loss (income) from continuing operations, net of taxes(38.5)21.5 (25.9)— (42.9)
Equity in income (loss) of subsidiaries30.0 (10.0)— (20.0)— 
Net (loss) income$(8.5)$11.5 $(25.9)$(20.0)$(42.9)
Other comprehensive income (loss)5.0 (7.1)1.6 5.5 5.0 
Total comprehensive (loss) income$(3.5)$4.4 $(24.3)$(14.5)$(37.9)
40

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

Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$311.6 $411.6 $740.3 $— $1,463.5 
Cost of sales155.4 182.8 270.5 — 608.7 
Gross profit156.2 228.8 469.8 — 854.8 
Selling, general and administrative expenses262.8 178.9 350.0 — 791.7 
Acquisition, integration and divestiture costs1.7 — 0.1 — 1.8 
Restructuring charges and other, net13.5 2.5 6.8 — 22.8 
(Gain) loss on divested assets(1.7)— — — (1.7)
Operating (loss) income(120.1)47.4 112.9 — 40.2 
Other (income) expense:
Intercompany interest, net(3.9)1.9 2.0 — — 
Interest expense178.4 — 5.5 — 183.9 
Amortization of debt issuance costs30.7 — — — 30.7 
Foreign currency losses, net(0.2)(0.3)12.0 — 11.5 
Miscellaneous, net231.1 (126.9)(101.4)— 2.8 
Other expense (income), net436.1 (125.3)(81.9)— 228.9 
(Loss) income from operations before income taxes(556.2)172.7 194.8 — (188.7)
Provision for (benefit from) for income taxes— 4.6 19.3 — 23.9 
(Loss) income from operations, net of taxes(556.2)168.1 175.5 — (212.6)
Equity in income (loss) of subsidiaries353.9 102.2 — (456.1)— 
Net (loss) income$(202.3)$270.3 $175.5 $(456.1)$(212.6)
Other comprehensive (loss) income4.5 8.1 — (8.1)4.5 
Total comprehensive (loss) income$(197.8)$278.4 $175.5 $(464.2)$(208.1)
41

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

Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Nine Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$305.9 $339.6 $632.2 $— $1,277.7 
Cost of sales158.5 190.5 251.7 — 600.7 
Gross profit147.4 149.1 380.5 — 677.0 
Selling, general and administrative expenses247.6 163.8 321.8 — 733.2 
Acquisition, integration and divestiture costs4.0 — 0.2 — 4.2 
Restructuring charges and other, net32.3 7.0 5.5 — 44.8 
Impairment charges120.7 22.0 1.4 — 144.1 
Loss on divested assets(0.5)— — — (0.5)
Operating (loss) income(256.7)(43.7)51.6 — (248.8)
Other (income) expenses:
Intercompany interest, net(3.5)1.8 1.7 — — 
Interest expense173.0 — 5.0 — 178.0 
Amortization of debt issuance costs17.8 — — — 17.8 
Gain on early extinguishment of debt, net(43.1)— — — (43.1)
Foreign currency losses, net1.6 1.7 5.8 — 9.1 
Miscellaneous, net(0.9)(71.5)86.3 — 13.9 
Other expense (income), net144.9 (68.0)98.8 — 175.7 
Loss from operations before income taxes(401.6)24.3 (47.2)— (424.5)
Benefit from income taxes(58.4)19.2 (5.0)— (44.2)
(Loss) income from operations, net of taxes(343.2)5.1 (42.2)— (380.3)
Equity in (loss) income of subsidiaries0.7 (36.9)— 36.2 — 
Net (loss) income$(342.5)$(31.8)$(42.2)$36.2 $(380.3)
Other comprehensive (loss) income16.6 7.3 4.0 (11.3)16.6 
Total comprehensive (loss) income$(325.9)$(24.5)$(38.2)$24.9 $(363.7)
42

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

Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities$(418.6)$57.7 $274.2 $— $(86.7)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities(1.9)(0.8)(1.5)— (4.2)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(4.5)(5.6)(2.4)— (12.5)
Borrowings on term loans305.0 — — — 305.0 
Repayments on term loans(186.7)— — — (186.7)
Net (repayments) borrowings under the revolving credit facilities(2.7)— — — (2.7)
Payment of financing costs(17.9)— — — (17.9)
Tax withholdings related to net share settlements of restricted stock and RSUs(2.4)— — — (2.4)
Other financing activities(0.2)(0.1)— — (0.3)
Net cash provided by (used in) financing activities90.6 (5.7)(2.4)— 82.5 
Effect of exchange rate changes on cash, cash equivalents and restricted cash349.5 (57.8)(294.1)— (2.4)
Net increase (decrease) in cash, cash equivalents and restricted cash19.6 (6.6)(23.8)— (10.8)
Cash, cash equivalents and restricted cash at beginning of period$6.5 $7.8 $88.2 $— $102.5 
Cash, cash equivalents and restricted cash at end of period$26.1 $1.2 $64.4 $— $91.7 
43

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

Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2020
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities$(260.0)$6.6 $(3.5)$— $(256.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities(6.0)(0.5)(0.9)— (7.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft2.5 (3.8)0.6 — (0.7)
Borrowings on term loans880.0 — — — 880.0 
Repayments on Term Loans(354.7)— — — (354.7)
Net (repayments) borrowings under the revolving credit facilities19.5 — — — 19.5 
Payments of financing costs(109.4)— 1.1 — (108.3)
Tax withholdings related to net share settlements of restricted stock and RSUs(1.6)— — — (1.6)
Other financing activities(0.1)(0.1)(0.1)— (0.3)
Net cash provided by (used in) financing activities436.2 (3.9)1.6 — 433.9 
Effect of exchange rate changes on cash, cash equivalents and restricted cash0.4 2.0 (2.8)— (0.4)
Net increase (decrease) in cash, cash equivalents and restricted cash170.6 4.2 (5.6)— 169.2 
Cash, cash equivalents and restricted cash at beginning of period$1.0 $6.4 97.2 $— 104.5 
Cash, cash equivalents and restricted cash at end of period$171.6 $10.6 $91.6 $— $273.7 


44

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



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

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the information contained in the Unaudited Consolidated Financial Statements and related notes included elsewhere in this document, and in the Company's other public filings with the Securities and Exchange Commission (“SEC”), including our 2020 Form 10-K. As discussed in more detail in the Section entitled “Forward-Looking Statements,” this discussion contains forward-looking statements, which involve risks and uncertainties.

COVID-19 Pandemic

While the Company continues to execute its business strategy, the ongoing COVID-19 pandemic has adversely impacted net sales in all major commercial regions around the globe that are important to the Company's business. The COVID-19 pandemic’s adverse impact on the global economy has contributed to significant and extended quarantines, stay-at-home orders and other social distancing measures; closures and bankruptcies of retailers, beauty salons, spas, offices and manufacturing facilities; increased levels of unemployment; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse conditions have resulted in the general slowdown of the global economy, in turn contributing to declines in net sales within some of the Company’s reporting segments and regions. However, as COVID-19 restrictions are lifted, the Company is seeing a resumption in consumer spending and consumption. The Company continues to closely monitor the associated impacts and take appropriate actions in an effort to mitigate the COVID-19 pandemic’s negative effects on the Company’s operations and financial results.

Overview

Overview of the Business
Revlon, Inc. ("Revlon" and together with its subsidiaries, the "Company") conducts its business exclusively through its direct wholly-owned operating subsidiary, Revlon Consumer Products Corporation ("Products Corporation"), and its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation beneficially owned by Ronald O. Perelman.
The Company operates in four brand-centric reporting segments that are aligned with its organizational structure based on four global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances. The Company manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics; fragrances; skin care; hair color, hair care and hair treatments; beauty tools; men's grooming products; anti-perspirant deodorants; and other beauty care products.
Business Strategy

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

Strategic Review

MacAndrews & Forbes and the Company continue to explore strategic transactions involving the Company and third parties.

For additional information regarding the Company's business, see Part 1, Item 1 "Business" in the Company's 2020 Form 10-K.

45

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


Overview of Net Sales and Earnings Results

Consolidated net sales in the third quarter of 2021 were $521.1 million, a $44.0 million increase, or 9.2%, compared to $477.1 million in the third quarter of 2020. Excluding the $7.9 million favorable FX impact, consolidated net sales increased by $36.1 million, or 7.6%, during the third quarter of 2021.The XFX (as hereinafter defined) net sales increase of $36.1 million in the third quarter of 2021 was due to: a $13.1 million, or 12.3%, increase in Elizabeth Arden segment net sales, a $11.8 million or 11.8%, increase in Portfolio segment net sales, a $6.3 million, or 6.0%, increase in Fragrances segment net sales and $4.9 million, or 3.0% increase in Revlon segment net sales,

Consolidated net sales in the nine months ended September 30, 2021 were $1,463.5 million, a $185.8 million increase, or 14.5%, compared to $1,277.7 million in the nine months ended September 30, 2020. Excluding the $44.8 million favorable FX impact, consolidated net sales increased by $141.0 million, or 11.0%, during the nine months ended September 30, 2021. The XFX net sales increase of $141.0 million in the nine months ended September 30, 2021 was due to: a $60.0 million, or 21.2%, increase in Elizabeth Arden segment net sales, a $55.2 million, or 25.7%, increase in Fragrances segment net sales, a $23.1 million, or 4.8%, increase in Revlon segment net sales and a $2.7 million, or 0.9%, increase in Portfolio segment net sales.
Consolidated loss from continuing operations, net of taxes, in the third quarter of 2021 was $53.1 million, compared to $44.5 million in the third quarter of 2020. The $8.6 million increase in consolidated loss from continuing operations, net of taxes, in the third quarter of 2021 was primarily due to:
a $31.2 million decrease in net gain on the early extinguishment of debt from the cancellation of approximately $44.4 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes during the third quarter of 2020, compared to having no gain in the third quarter of 2021;
$19.7 million of unfavorable variance in foreign currency, resulting from $9.9 million in foreign currency losses during the third quarter of 2021, compared to $9.8 million in foreign currency gains during the third quarter of 2020;
a $9.7 million increase in restructuring charges, primarily related to higher expenditures under RGGA in the third quarter of 2021, compared to the subsequent true up of restructuring charges previously accrued in 2020 under the Revlon 2020 Restructuring Program during the third quarter of 2020;
a $3.5 million increase in the provision for income taxes in the third quarter of 2021 compared to the third quarter of 2020, primarily due to an increase in losses for which no tax benefit can be recognized;
$2.7 million of higher SG&A expenses in the third quarter of 2021 compared to the third quarter of 2020, primarily driven by the increased level of activity compared to the prior year quarter, as the Company shows signs of rebound from the negative effects of the ongoing COVID-19 pandemic;
a $2.7 million net increase in other miscellaneous expenses, net, in the third quarter of 2021 compared to the third quarter of 2020, primarily due to the subsequent true-up in the third quarter of 2020 of financing fees previously expensed in 2020 in connection with the 2020 BrandCo Refinancing Transactions;
$0.9 million increase in amortization of debt issuance costs in the third quarter of 2021, compared to the third quarter of 2020, primarily due to the additional debt issuance costs recorded and amortized in connection with the 2021 and 2020 Refinancing Transactions; and
a $1.2 million decrease in gain on divested assets, primarily related to the sale of certain assets in the third quarter of 2020;
with the foregoing partially offset by:
$57.1 million of higher gross profit, primarily due to higher net sales in the third quarter of 2021, primarily as a result of the effects of COVID-19 on net sales during the third quarter of 2020; and
a $5.6 million decrease in interest expense in the third quarter of 2021, compared to the third quarter of 2020, primarily due to lower average borrowings primarily resulting from the 5.75% Senior Notes Exchange Offer.
46

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


Consolidated loss from continuing operations, net of taxes, in the nine months ended September 30, 2021 was $216.8 million, compared to consolidated loss from continuing operations, net of taxes, of $385.2 million in the nine months ended September 30, 2020. The $168.4 million decrease in consolidated loss from continuing operations, net of taxes was primarily due to:
$177.8 million of higher gross profit in the nine months ended September 30, 2021, primarily due to higher net sales in the nine months ended September 30, 2021, primarily as a result of the effects of COVID-19 on net sales during the prior year period;
a $144.1 million decrease in impairment charges attributable to the non-cash impairment charges of $111.0 million and of $33.1 million recorded on the Company's goodwill and on certain of the Company's indefinite-lived intangible assets, respectively, following the Company's interim impairment assessments during the nine months ended September 30, 2020, all of which are primarily attributable to the effects of COVID-19, compared to having no impairment charges in 2021;
a $22.0 million decrease in restructuring charges, primarily related to lower expenditures under RGGA in the nine months ended September 30, 2021, compared to the expenditures incurred primarily under the 2020 Revlon Restructuring Program in the nine months ended September 30, 2020;
a $11.1 million decrease in other miscellaneous expenses, net, in the nine months ended September 30, 2021, compared to the prior year period, primarily due to financing fees expensed in 2020 in connection with the 2020 BrandCo Refinancing Transactions;
a $2.4 million decrease in acquisition, integration and divestiture costs in the nine months ended September 30, 2021, compared to the prior year period, primarily driven by higher amortization of the cash-based awards under Tier 1 and Tier 2 of the Revlon 2019 TIP in the prior year period; and
a $1.2 million of increase in gain on divested assets primarily related to the $1.7 million in gains on the sale of certain assets during the nine months ended September 30, 2021, consisting of the Company's Gatineau brand, compared to having $0.5 million in gains recorded during the nine months ended September 30, 2020 on the sale of certain assets;
with the foregoing partially offset by:
a $69.0 million increase in the provision for income taxes in the nine months ended September 30, 2021, compared to the prior year period, primarily due to an increase in losses for which no tax benefit can be recognized;
$56.9 million of higher SG&A expenses in the nine months ended September 30, 2021, compared to the prior year period, primarily driven by the increased level of activity compared to the prior year period, as the Company starts to show signs of rebound from the negative effects of the ongoing COVID-19 pandemic;
a $43.1 million decrease in net gain on the early extinguishment of debt from the repurchase and cancellation of approximately $157.2 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes during the nine months ended September 30, 2020, compared to having no gain during the nine months ended September 30, 2021;
a $12.9 million increase in amortization of debt issuance costs in the nine months ended September 30, 2021, compared to the prior year period, primarily due to the additional debt issuance costs recorded and amortized in connection with the 2021 and 2020 Refinancing Transactions;
a $5.9 million increase in interest expense in the nine months ended September 30, 2021, compared to the prior year period, primarily due to higher weighted average interest rates driven primarily by the 2020 BrandCo Term Loan Facility; and
$2.4 million of unfavorable variance in foreign currency, resulting from $11.5 million in foreign currency losses during the nine months ended September 30, 2021, compared to $9.1 million in foreign currency losses during the nine months ended September 30, 2020.

47

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


Operating Segments

The Company operates in four reporting segments: Revlon, Elizabeth Arden, Portfolio and Fragrances.
For additional information regarding the Company's Operating Segments, see Note 14, "Segment Data" to the Company's Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Results of Operations — Revlon, Inc.

Segment Results:

The Company's management evaluates segment profit for each of the Company's reportable segments. The Company allocates corporate expenses to each reportable segment to arrive at segment profit, as these expenses are included in the internal measure of segment operating performance. The Company defines segment profit as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses. Segment profit also excludes the impact of certain items that are not directly attributable to the segments' underlying operating performance. The Company does not have any material inter-segment sales. For a reconciliation of segment profit to loss from continuing operations before income taxes, see Note 14, "Segment Data and Related Information," to the Company's Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

The following tables provide a comparative summary of the Company's segment results for the periods presented.

Net SalesSegment Profit
Three Months Ended September 30,Change
XFX Change (a)
Three Months Ended September 30,Change
XFX Change (a)
20212020$%$%20212020$%$%
Revlon$173.0 $166.0 $7.0 4.2 %$4.9 3.0 %$16.1 $13.5 $2.6 19.3 %$2.0 14.8 %
Elizabeth Arden122.8 106.3 16.5 15.5 %13.1 12.3 %21.3 3.4 17.9 N.M.17.0 N.M.
Portfolio112.7 99.6 13.1 13.2 %11.8 11.8 %22.1 12.2 9.9 81.1 %9.6 78.7 %
Fragrances112.6 105.2 7.4 7.0 %6.3 6.0 %22.9 25.4 (2.5)(9.8)%(2.8)(11.0)%
Total$521.1 $477.1 $44.0 9.2 %$36.1 7.6 %$82.4 $54.5 $27.9 51.2 %$25.8 47.3 %

Net SalesSegment Profit
Nine Months Ended September 30,Change
XFX Change (a)
Nine Months Ended September 30,Change
XFX Change (a)
20212020$%$%20212020$%$%
Revlon$521.8 $482.8 $39.0 8.1 %$23.1 4.8 %$45.3 $41.4 $3.9 9.4 %$0.5 1.2 %
Elizabeth Arden359.7 282.4 77.3 27.4 %60.0 21.2 %42.1 18.4 23.7 128.8 %20.1 109.2 %
Portfolio307.4 298.1 9.3 3.1 %2.7 0.9 %46.3 33.9 12.4 36.6 %11.0 32.4 %
Fragrances274.6 214.4 60.2 28.1 %55.2 25.7 %50.8 34.6 16.2 46.8 %15.3 44.2 %
Total$1,463.5 $1,277.7 $185.8 14.5 %$141.0 11.0 %$184.5 $128.3 $56.2 43.8 %$46.9 36.6 %

(a) XFX excludes the impact of foreign currency fluctuations.
(N.M. - Not meaningful)

Revlon Segment

Third quarter results:

Revlon segment net sales in the three months ended September 30, 2021 were $173.0 million, a $7.0 million, or 4.2%, increase, compared to $166.0 million in the three months ended September 30, 2020. Excluding the $2.1 million favorable FX
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impact, total Revlon segment net sales in the three months ended September 30, 2021 increased by $4.9 million, or 3.0%, compared to the three months ended September 30, 2020. The Revlon segment XFX increase in net sales of $4.9 million in the three months ended September 30, 2021 was driven by higher net sales of Revlon ColorSilk and Revlon color cosmetics, both in North America and in International regions, higher net sales of Revlon-branded professional hair care products in International regions, and, to a lower extent, higher net sales of Revlon-branded beauty tools both in North America and in the International regions. This increase was due, primarily, to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, as well as salons' increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic, partially offset by decreased net sales in North America of Revlon-branded hair-care products.

Revlon segment profit in the three months ended September 30, 2021 was $16.1 million, a $2.6 million, or 19.3%, increase, compared to $13.5 million in the three months ended September 30, 2020. Excluding the $0.6 million favorable FX impact, Revlon segment profit in the three months ended September 30, 2021 increased by $2.0 million, or 14.8%, compared to the three months ended September 30, 2020. This increase was driven primarily by the Revlon segment's higher net sales, as described above, partially offset by moderately lower gross profit margin.

Year-to-date results:

Revlon segment net sales in the nine months ended September 30, 2021 were $521.8 million, a $39.0 million, or 8.1%, increase, compared to $482.8 million in the nine months ended September 30, 2020. Excluding the $15.9 million favorable FX impact, total Revlon segment net sales in the nine months ended September 30, 2021 increased by $23.1 million, or 4.8%, compared to the nine months ended September 30, 2020. The Revlon segment's XFX increase in net sales of $23.1 million in the nine months ended September 30, 2021 was driven by higher net sales of Revlon color cosmetics in North America and higher net sales of Revlon-branded professional hair care products in International regions. This increase was due, primarily, to the mass retail channel continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, as well as salons' increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic, partially offset by decreased net sales in North America of Revlon ColorSilk hair color products and Revlon-branded hair-care products.

Revlon segment profit in the nine months ended September 30, 2021 was $45.3 million, a $3.9 million, or 9.4%, increase, compared to $41.4 million in the nine months ended September 30, 2020. Excluding the $3.4 million favorable FX impact, Revlon segment profit in the nine months ended September 30, 2021 increased by $0.5 million, or 1.2%, compared to the nine months ended September 30, 2020. This increase was driven primarily by the Revlon segment's higher net sales, partially offset by higher brand support expenses to support the increase in sales' activity.

Elizabeth Arden Segment

Third quarter results:

Elizabeth Arden segment net sales in the three months ended September 30, 2021 were $122.8 million, a $16.5 million, or 15.5%, increase, compared to $106.3 million in the three months ended September 30, 2020. Excluding the $3.4 million favorable FX impact, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $13.1 million, or 12.3%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment XFX increase in net sales of $13.1 million in the three months ended September 30, 2021 was driven primarily by higher net sales of Green Tea and White Tea fragrances, as well as certain other Elizabeth Arden-branded fragrances and skin care products, primarily in International regions. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, primarily internationally.

Elizabeth Arden segment profit in the three months ended September 30, 2021 was $21.3 million, a $17.9 million increase, compared to $3.4 million in the three months ended September 30, 2020. Excluding the $0.9 million favorable FX impact, Elizabeth Arden segment profit in the three months ended September 30, 2021 increased by $17.0 million, compared to the three months ended September 30, 2020. This increase was driven primarily by the Elizabeth Arden segment's higher net sales and higher gross profit margin, partially offset by higher brand support and other SG&A expenses to support the increase in sales activity.

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Year-to-date results:

Elizabeth Arden segment net sales in the nine months ended September 30, 2021 were $359.7 million, a $77.3 million, or 27.4%, increase, compared to $282.4 million in the nine months ended September 30, 2020. Excluding the $17.3 million favorable FX impact, Elizabeth Arden segment net sales in the nine months ended September 30, 2021 increased by $60.0 million, or 21.2%, compared to the nine months ended September 30, 2020. The Elizabeth Arden segment XFX increase in net sales of $60.0 million in the nine months ended September 30, 2021 was driven primarily by higher net sales of Ceramide skin care products, both in International regions and in North America, and, to a lower extent, higher net sales of Green Tea and White Tea fragrances, as well as other Elizabeth Arden-branded fragrances and skin care products, primarily in International regions. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, and it was partially offset by lower net sales of Prevage, primarily in connection with the delayed launches on certain new products.

Elizabeth Arden segment profit in the nine months ended September 30, 2021 was $42.1 million, a $23.7 million, or 128.8%, increase, compared to $18.4 million in the nine months ended September 30, 2020. Excluding the $3.6 million favorable FX impact, Elizabeth Arden segment profit in the nine months ended September 30, 2021 increased by $20.1 million, or 109.2%, compared to the nine months ended September 30, 2020. This increase was driven primarily by the Elizabeth Arden segment's higher net sales and higher gross profit margin, partially offset by higher brand support and other SG&A expenses to support the increase in sales activity.

Portfolio Segment

Third quarter results:
Portfolio segment net sales in the three months ended September 30, 2021 were $112.7 million, a $13.1 million, or 13.2%, increase, compared to $99.6 million in the three months ended September 30, 2020. Excluding the $1.3 million favorable FX impact, total Portfolio segment net sales in the three months ended September 30, 2021 increased by $11.8 million, or 11.8%, compared to the three months ended September 30, 2020. The Portfolio segment XFX increase in net sales of $11.8 million in the three months ended September 30, 2021 was driven primarily by higher net sales of American Crew men's grooming products, Almay color cosmetics and CND nail products in North America, and higher net sales of Mitchum anti-perspirant deodorants in International regions, primarily in connection with the mass retail channel continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic. This increase was partially offset, primarily, by lower net sales of previously sold brands and of certain local and regional skin care products brands.

Portfolio segment profit in the three months ended September 30, 2021 was $22.1 million, a $9.9 million, or 81.1%, increase, compared to $12.2 million in the three months ended September 30, 2020. Excluding the $0.3 million favorable FX impact, Portfolio segment profit in the three months ended September 30, 2021 increased by $9.6 million, or 78.7%, compared to the three months ended September 30, 2020. This increase was driven primarily by the Portfolio segment's higher net sales and higher gross profit margin, partially offset by higher brand support expenses to support the increase in sales activity.
Year-to-date results:
Portfolio segment net sales in the nine months ended September 30, 2021 were $307.4 million, a $9.3 million, or 3.1%, increase, compared to $298.1 million in the nine months ended September 30, 2020. Excluding the $6.6 million favorable FX impact, total Portfolio segment net sales in the nine months ended September 30, 2021 increased by $2.7 million, or 0.9%, compared to the nine months ended September 30, 2020. The Portfolio segment XFX increase in net sales of $2.7 million in the nine months ended September 30, 2021 was driven primarily by higher net sales of American Crew men's grooming products, and also by higher net sales in North America of Almay color cosmetics and CND nail products, partially offset by lower net sales of previously sold brands and of certain local and regional skin care products brands, both in International regions and in North America. The increase was primarily in connection with retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic.
Portfolio segment profit in the nine months ended September 30, 2021 was $46.3 million, a $12.4 million, or 36.6%, increase compared to $33.9 million in the nine months ended September 30, 2020. Excluding the $1.4 million favorable FX impact, Portfolio segment profit in the nine months ended September 30, 2021 increased by $11.0 million, or 32.4%, compared to the nine months ended September 30, 2020. This increase was driven primarily by the Portfolio segment's higher net sales
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and higher gross profit margin, as well as lower SG&A, achieved primarily through RGGA, partially offset by higher brand support expenses to support the increase in sales activity.

Fragrances Segment

Third quarter results:
Fragrances segment net sales in the three months ended September 30, 2021 were $112.6 million, a $7.4 million, or 7.0%, increase, compared to $105.2 million in the three months ended September 30, 2020. Excluding the $1.1 million favorable FX impact, total Fragrances segment net sales in the three months ended September 30, 2021 increased by $6.3 million, or 6.0%, compared to the three months ended September 30, 2020. The Fragrances segment XFX increase in net sales of $6.3 million in the three months ended September 30, 2021 was driven primarily by higher net sales of Juicy Couture and John Varvatos fragrances, partially offset by lower net sales in North America of other branded and distributed fragrances, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.

Fragrances segment profit in the three months ended September 30, 2021 was $22.9 million, a $2.5 million, or 9.8%, decrease, compared to $25.4 million in the three months ended September 30, 2020. Excluding the $0.3 million favorable FX impact, Fragrances segment profit in the three months ended September 30, 2021 decreased by $2.8 million, or 11.0%, compared to the three months ended September 30, 2020. This decrease was driven primarily by the Fragrances segment's higher brand support and SG&A expenses, partially offset by higher net sales and moderately higher gross profit margin.
Year-to-date results:
Fragrances segment net sales in the nine months ended September 30, 2021 were $274.6 million, a $60.2 million, or 28.1%, increase, compared to $214.4 million in the nine months ended September 30, 2020. Excluding the $5.0 million favorable FX impact, total Fragrances segment net sales in the nine months ended September 30, 2021 increased by $55.2 million, or 25.7%, compared to the nine months ended September 30, 2020. The Fragrances segment XFX increase in net sales of $55.2 million in the nine months ended September 30, 2021 was driven primarily by higher net sales of Juicy Couture, John Varvatos, Britney Spears and Curve fragrances, partially offset by lower net sales of other distributed fragrances, primarily in North America, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.
Fragrances segment profit in the nine months ended September 30, 2021 was $50.8 million, a $16.2 million, increase, compared to $34.6 million in the nine months ended September 30, 2020. Excluding the $0.9 million favorable FX impact, Fragrances segment profit in the nine months ended September 30, 2021 increased by $15.3 million, compared to the nine months ended September 30, 2020. This increase was driven primarily by the Fragrances segment's higher net sales, as described above, partially offset by the segment's higher other SG&A and brand support expenses primarily due to the increase in sales activity.

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Geographic Results:

The following tables provide a comparative summary of the Company's North America and International net sales for the periods presented:
Three Months Ended September 30,


Change
XFX Change (a)
20212020$%$%
Revlon
North America$88.4 $86.4 $2.0 2.3 %$1.3 1.5 %
International84.6 79.6 5.0 6.3 %3.6 4.5 %
Elizabeth Arden
North America$32.3 $30.5 $1.8 5.9 %$1.6 5.2 %
International90.5 75.8 14.7 19.4 %11.5 15.2 %
Portfolio
North America$75.2 $59.9 $15.3 25.5 %$15.1 25.2 %
International37.5 39.7 (2.2)(5.5)%(3.3)(8.3)%
Fragrance
North America$81.5 $79.2 $2.3 2.9 %$2.0 2.5 %
International31.1 26.0 5.1 19.6 %4.3 16.5 %
        Total Net Sales$521.1 $477.1 $44.0 9.2 %$36.1 7.6 %
Nine Months Ended September 30,Change
XFX Change (a)
20212020$%$%
Revlon
North America$270.9 $265.6 $5.3 2.0 %$3.4 1.3 %
International250.9 217.2 33.7 15.5 %19.7 9.1 %
Elizabeth Arden
North America$80.9 $66.9 $14.0 20.9 %$12.4 18.5 %
International278.8 215.5 63.3 29.4 %47.6 22.1 %
Portfolio
North America$201.9 $182.8 $19.1 10.4 %$18.2 10.0 %
International105.5 115.3 (9.8)(8.5)%(15.5)(13.4)%
Fragrances
North America$193.8 $151.1 $42.7 28.3 %$42.1 27.9 %
International80.8 63.3 17.5 27.6 %13.1 20.7 %
        Total Net Sales$1,463.5 $1,277.7 $185.8 14.5 %$141.0 11.0 %
(a) XFX excludes the impact of foreign currency fluctuations.

Revlon Segment

Third quarter results:

North America

In North America, Revlon segment net sales in the three months ended September 30, 2021 increased by $2.0 million, or 2.3%, to $88.4 million, compared to $86.4 million in the three months ended September 30, 2020. Excluding the $0.7 million favorable FX impact, Revlon segment net sales in North America in the three months ended September 30, 2021 increased by $1.3 million, or 1.5%, compared to the three months ended September 30, 2020. The Revlon segment's $1.3 million XFX increase in North America net sales in the three months ended September 30, 2021 was due to higher net sales of Revlon ColorSilk hair color products and Revlon color cosmetics, and to a lower extent, Revlon-branded beauty tools due, primarily,
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to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, partially offset by lower net sales of Revlon-branded hair-care products.

International

Internationally, Revlon segment net sales in the three months ended September 30, 2021 increased by $5.0 million, or 6.3%, to $84.6 million, compared to $79.6 million in the three months ended September 30, 2020. Excluding the $1.4 million favorable FX impact, Revlon segment International net sales in the three months ended September 30, 2021 increased by $3.6 million, or 4.5%, compared to the three months ended September 30, 2020. The Revlon segment's $3.6 million XFX increase in International net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of Revlon-branded professional hair care products, and, to a lower extent, Revlon-branded beauty tools, across all of the Company's International regions, due, primarily, to salons' increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic and to retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic.

Year-to-date results:

North America

In North America, Revlon segment net sales in the nine months ended September 30, 2021 increased by $5.3 million, or 2.0%, to $270.9 million, compared to $265.6 million in the nine months ended September 30, 2020. Excluding the $1.9 million favorable FX impact, Revlon segment net sales in North America in the nine months ended September 30, 2021 increased by $3.4 million, or 1.3%, compared to the nine months ended September 30, 2020. The Revlon segment's $3.4 million XFX increase in North America net sales in the nine months ended September 30, 2021 was primarily due to higher net sales of Revlon color cosmetics, which year-to-date positive performance was driven by the increase in sales experienced in the nine months ended September 30, 2021 , as disclosed elsewhere above, partially offset by lower net sales of Revlon ColorSilk hair color products and Revlon-branded hair-care products.

International

Internationally, Revlon segment net sales in the nine months ended September 30, 2021 increased by $33.7 million, or 15.5%, to $250.9 million, compared to $217.2 million in the nine months ended September 30, 2020. Excluding the $14.0 million favorable FX impact, Revlon segment International net sales in the nine months ended September 30, 2021 increased by $19.7 million, or 9.1%, compared to the nine months ended September 30, 2020. The Revlon segment's $19.7 million XFX increase in International net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of Revlon-branded professional hair-care products and of Revlon ColorSilk hair color products, primarily in the EMEA region, and, to a lower extent, higher net sales of Revlon-branded beauty tools. This increase was partially offset primarily by lower net sales of Revlon color cosmetics attributable to the negative year-to-date effects of the COVID-19 pandemic on this item in this region.


Elizabeth Arden Segment

Third quarter results:

North America

In North America, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $1.8 million, or 5.9%, to $32.3 million, compared to $30.5 million in the three months ended September 30, 2020. Excluding the $0.2 million favorable FX impact, Elizabeth Arden net sales in North America in the three months ended September 30, 2021 increased by $1.6 million, or 5.2%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment's $1.6 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of certain Elizabeth Arden-branded fragrances and other skin care products due, primarily, to signs of
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improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets. This increase was partially offset by lower net sales of certain other Elizabeth Arden-branded skin care products.

International

Internationally, Elizabeth Arden segment net sales in the three months ended September 30, 2021 increased by $14.7 million, or 19.4%, to $90.5 million, compared to $75.8 million in the three months ended September 30, 2020. Excluding the $3.2 million favorable FX impact, Elizabeth Arden segment International net sales in the three months ended September 30, 2021 increased by $11.5 million, or 15.2%, compared to the three months ended September 30, 2020. The Elizabeth Arden segment's $11.5 million XFX increase in International net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of Green Tea and White Tea fragrances, as well as certain other Elizabeth Arden-branded fragrances and skin care products. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, and it was partially offset by lower net sales of Prevage.

Year-to-date results:

North America

In North America, Elizabeth Arden segment net sales in the nine months ended September 30, 2021 increased by $14.0 million, or 20.9%, to $80.9 million, compared to $66.9 million in the nine months ended September 30, 2020. Excluding the $1.6 million favorable FX impact, Elizabeth Arden segment net sales in North America in the nine months ended September 30, 2021 increased by $12.4 million, or 18.5%, compared to the nine months ended September 30, 2020. The Elizabeth Arden segment's $12.4 million XFX increase in North America net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of Ceramide skin care products, as well as certain other Elizabeth Arden-branded fragrances and skin care products. This increase was due, primarily, to signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, and it was partially offset by lower net sales of Prevage, primarily in connection with the delayed launches on certain new products.

International

Internationally, Elizabeth Arden segment net sales in the nine months ended September 30, 2021 increased by $63.3 million, or 29.4%, to $278.8 million, compared to $215.5 million in the nine months ended September 30, 2020. Excluding the $15.7 million favorable FX impact, Elizabeth Arden segment International net sales in the nine months ended September 30, 2021 increased by $47.6 million, or 22.1%, compared to the nine months ended September 30, 2020. The Elizabeth Arden segment's $47.6 million XFX increase in International net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of Ceramide skin care products and, to a lower extent, higher net sales of Green Tea and White Tea fragrances, as well as other Elizabeth Arden-branded fragrances and skin care products. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets, and it was partially offset by lower net sales of Prevage, primarily in connection with the delayed launches on certain new products.

Portfolio Segment

Third quarter results:

North America

In North America, Portfolio segment net sales in the three months ended September 30, 2021 increased by $15.3 million, or 25.5%, to $75.2 million, compared to $59.9 million in the three months ended September 30, 2020. Excluding the $0.2 million favorable FX impact, Portfolio segment North America net sales in the three months ended September 30, 2021 increased by $15.1 million, or 25.2%, compared to the three months ended September 30, 2020. The Portfolio segment's $15.1 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by higher net sales of American Crew men's grooming products, Almay color cosmetics, CND nail products, and also, to a lower extent, higher net sales of Cutex nail care products, partially offset by lower net sales of certain local and regional skin care products. This
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increase is primarily in connection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic.

International

Internationally, Portfolio segment net sales in the three months ended September 30, 2021 decreased by $2.2 million, or 5.5%, to $37.5 million, compared to $39.7 million in the three months ended September 30, 2020. Excluding the $1.1 million favorable FX impact, Portfolio segment International net sales decreased by $3.3 million, or 8.3%, in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The Portfolio segment's $3.3 million XFX decrease in International net sales in the three months ended September 30, 2021 was driven primarily by lower net sales of previously sold brands and of certain local and regional skin care products brands. This decrease was partially offset by higher net sales of Mitchum anti-perspirant deodorants, primarily in connection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic.

Year-to-date results:
North America

In North America, Portfolio segment net sales in the nine months ended September 30, 2021 increased by $19.1 million, or 10.4%, to $201.9 million, as compared to $182.8 million in the nine months ended September 30, 2020. Excluding the $0.9 million favorable FX impact, Portfolio segment net sales in North America in the nine months ended September 30, 2021 increased by $18.2 million, or 10.0%, compared to the nine months ended September 30, 2020. The Portfolio segment's $18.2 million XFX increase in North America net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of American Crew men's grooming products, Almay color cosmetics and CND nail products, primarily in connection with retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic. This increase was partially offset by lower net sales of certain local and regional skin care products brands and, to a lower extent, of Mitchum anti-perspirant deodorants.

International

Internationally, Portfolio segment net sales in the nine months ended September 30, 2021 decreased by $9.8 million, or 8.5%, to $105.5 million, compared to $115.3 million in the nine months ended September 30, 2020. Excluding the $5.7 million favorable FX impact, Portfolio segment International net sales decreased by $15.5 million, or 13.4%, in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The Portfolio segment's $15.5 million XFX decrease in International net sales in the nine months ended September 30, 2021 was driven primarily by lower net sales of previously sold brands and of certain local and regional skin care products brands. This decrease was partially offset primarily by higher net sales of Mitchum anti-perspirant deodorants and American Crew men's grooming products, primarily in connection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic.

Fragrances Segment

Third quarter results:

North America

In North America, Fragrances segment net sales in the three months ended September 30, 2021 increased by $2.3 million, or 2.9%, to $81.5 million, as compared to $79.2 million in the three months ended September 30, 2020. The segment's $2.0 million XFX increase in North America net sales in the three months ended September 30, 2021 was driven primarily by increases in net sales of Juicy Couture fragrances, partially offset by lower net sales of other distributed fragrances, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.

International

Internationally, Fragrances segment net sales in the three months ended September 30, 2021 increased by $5.1 million, or 19.6%, to $31.1 million, compared to $26.0 million in the three months ended September 30, 2020. Excluding the $0.8 million favorable FX impact, Fragrances segment International net sales increased by $4.3 million, or 16.5%, in the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The Fragrances segment's $4.3 million XFX increase in International net sales during the three months ended September 30, 2021 was driven primarily by higher net sales
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of certain licensed fragrance brands primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.

Year-to-date results:

North America

In North America, Fragrances segment net sales in the nine months ended September 30, 2021 increased by $42.7 million, or 28.3%, to $193.8 million, as compared to $151.1 million in the nine months ended September 30, 2020. Excluding the $0.6 million favorable FX impact, Fragrances segment net sales in North America increased by $42.1 million, or 27.9%, in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The Fragrances segment's $42.1 million XFX increase in North America net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of Juicy Couture, John Varvatos, Curve and Britney Spears fragrances, as well as other certain licensed fragrance brands, partially offset by lower net sales of other distributed fragrances. This increase is primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.

International

Internationally, Fragrances segment net sales in the nine months ended September 30, 2021 increased by $17.5 million, or 27.6%, to $80.8 million, compared to $63.3 million in the nine months ended September 30, 2020. Excluding the $4.4 million favorable FX impact, Fragrances segment International net sales increased by $13.1 million, or 20.7%, in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The Fragrances segment's $13.1 million XFX increase in International net sales in the nine months ended September 30, 2021 was driven primarily by higher net sales of Britney Spears, John Varvatos and Juicy Couture fragrances, as well as, to a lower extent, of other certain licensed fragrance brands, primarily due to a recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.

Gross profit:
The table below shows the Company's gross profit and gross margin for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
Gross profit$299.9 $242.8 $57.1 $854.8 $677.0 $177.8 
Percentage of net sales57.6 %50.9 %6.7 %58.4 %53.0 %5.4 %

Third quarter results:

Gross profit increased by $57.1 million in three months ended September 30, 2021, as compared to three months ended September 30, 2020. Gross profit as a percentage of net sales (i.e., gross margin) in the three months ended September 30, 2021 increased by 6.7% compared to the three months ended September 30, 2020. The increase in gross margin in the three months ended September 30, 2021, as compared to the prior year quarter, was impacted primarily by favorable foreign currency impacts, lower manufacturing costs attributable to the effects of the ongoing COVID-19 pandemic compared to the prior year's quarter and favorable product mix.

Year-to-date results:

Gross profit increased by $177.8 million in the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. Gross profit as a percentage of net sales (i.e., gross margin) in the nine months ended September 30, 2021 increased by 5.4% percentage points, as compared to the nine months ended September 30, 2020. The increase in gross margin in the nine months ended September 30, 2021, as compared to the prior year period, was impacted primarily by favorable foreign currency impacts, lower sales returns and lower manufacturing costs attributable to the effects of the ongoing COVID-19 pandemic compared to the prior year period, partially offset by lower favorable inventory adjustment in the nine months ended September 30, 2021.
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AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


SG&A expenses:
The table below shows the Company's SG&A expenses for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
SG&A expenses$256.1 $253.4 $2.7 $796.0 $739.1 $56.9 

Third quarter results:

SG&A expenses increased by $2.7 million in the three months ended September 30, 2021, compared to the three months ended September 30, 2020, driven primarily by:
higher brand support expenses of approximately $11.8 million, resulting from the resumption of activities to sustain the higher level of net sales across all segments, compared to the three months ended September 30, 2020, when brand support expense had been reduced in response to the early periods of the COVID-19 pandemic;
unfavorable FX impact of approximately $3.5 million; and
higher distribution expenses of approximately $1.8 million, driven primarily by the increase in net sales
with the foregoing partially offset by:
lower general and administrative expenses of approximately $13.1 million, primarily driven by higher expenses in connection with the 2020 Refinancing Transactions during the three months ended September 30, 2020 and cost reductions achieved through the 2020 Restructuring Program (subsequently renamed during 2021 the Revlon Global Growth Accelerator, “RGGA”, as further defined below) during the three months ended September 30, 2021.

Year-to-date results:

SG&A expenses increased by $56.9 million in the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, driven primarily by:
higher brand support expenses of approximately $47.3 million, resulting from the resumption of activities to sustain the higher level of net sales across all segments, compared to the nine months ended September 30, 2020, when brand support expense had been reduced in response to the early periods of the COVID-19 pandemic; and
unfavorable FX impact of approximately $21.7 million; and
higher distribution expenses of approximately $5.0 million, driven primarily by the increase in net sales
with the foregoing partially offset by:
lower general and administrative expenses of approximately $16.6 million, primarily driven by cost reductions achieved during the nine months ended September 30, 2021 through the Revlon 2020 Restructuring Program (subsequently renamed RGGA during 2021).

Restructuring charges and other, net:
The table below shows the Company's restructuring charges and other, net for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
Restructuring charges and other, net$9.0 $(0.7)$9.7 $22.8 $44.8 $(22.0)

Third quarter results:
Restructuring charges and other, net, increased $9.7 million during the three months ended September 30, 2021, compared to the three months ended September 30, 2020, primarily related to higher expenditures under RGGA (as further defined below) in the three months ended September 30, 2021, compared to the subsequent true up of restructuring charges previously accrued in 2020 under the Revlon 2020 Restructuring Program in the three months ended September 30, 2020.

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Year-to-date results:

Restructuring charges and other, net, decreased $22.0 million during the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, primarily related to lower expenditures under RGGA in the nine months ended September 30, 2021, compared to the expenditures incurred primarily under the 2020 Revlon Restructuring Program in the nine months ended September 30, 2020.

Revlon Global Growth Accelerator Program
On May 10, 2021, the Company announced that it is expanding the existing Revlon 2020 Restructuring Program through 2023. The Company renamed the revised program the Revlon Global Growth Accelerator (“RGGA”). RGGA includes a reinvestment strategy to strengthen our brands and drive long-term profitable margin and revenue growth through realized incremental productivity initiatives and enhanced capabilities.

The major initiatives underlying the RGGA program include:
Strategic Growth: Boost organic sales growth behind our strategic pillars – brands, markets, and channels -- to deliver an approximate mid-single digit compound average annual growth rate through 2023;
Operating Efficiencies: Drive additional operational efficiencies and cost savings to fuel investments in revenue growth; and
Build Capabilities: Enhance capabilities and up-skill employees in order to evolve our culture to promote agility and deliver transformational change.

Under RGGA, the Company expects to deliver an updated range of annualized cost reductions of approximately $275 million to $325 million from 2020 through the end of 2023. Approximately 50% of these annualized cost reductions were realized from the headcount reductions that occurred in 2020. The remaining cost reductions will be realized through reductions in SG&A expenses and cost of goods sold. The Company achieved $9 million and $44 million of cost reductions during the three and nine months ended September 30, 2021, bringing the total cost reductions realized since the inception of the program to approximately $171 million and expects to achieve approximately $50 million to $70 million for the full year 2021 (inclusive of the cost reductions during the first nine months of 2021), with the balance to be realized during 2022 and 2023.

In connection with implementing RGGA, the Company expects to recognize an updated cost range of approximately $185 million and $205 million of total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as related third party expenses. The Company also expects to incur approximately $15 million of additional capital expenditures. Under the RGGA program, the Company expects to incur pre-tax restructuring and related charges of approximately $65 million to $75 million during 2021 (inclusive of the charges during the first nine months of 2021) and the remainder during 2022 and 2023. The Company expects that substantially all of these restructuring and related charges will be paid in cash, with $32.8 million of the total charges paid as of September 30, 2021, approximately $20 million to $25 million of the total charges expected to be paid during the second half of 2021, with the remainder to be paid during 2022 and 2023.

In connection with RGGA, during the three months ended September 30, 2021, the Company recorded $10.8 million of total pre-tax restructuring and related charges consisting primarily of i) $9.0 million of employee severance, other personnel benefits and other costs; and (ii) $1.8 million of lease and other restructuring-related charges that were recorded within SG&A and cost of sales. During the nine months ended September 30, 2021, the Company recorded $28.0 million of total pre-tax restructuring and related charges consisting primarily of i) $22.8 million of employee severance, other personnel benefits and other costs; and (ii) $5.2 million of lease and other restructuring-related charges that were recorded within SG&A and cost of sales. Since its inception and through September 30, 2021, the Company recorded $96.8 million of total pre-tax restructuring and related charges consisting primarily of i) $73.3 million of employee severance, other personnel benefits and other costs; and (ii) $23.5 million of lease and other restructuring-related charges that were recorded within SG&A and cost of sales.

Since its inception in March 2020 and through September 30, 2021, approximately 960 positions have been eliminated worldwide under RGGA.

For further information on RGGA, see Note 2, "Restructuring Charges," to the Company's Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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


Impairment Charges:
The table below shows the Company's impairment charges for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
Impairment charges$— $— $— $— $144.1 $(144.1)

Third quarter results:
In the third quarter of 2021, the Company assessed whether indicators of impairment existed that might result in additional impairment charges. Based upon such assessment, no additional impairment changes were recognized for the three months ended September 30, 2021.

During the third quarter of 2020, due to the COVID-19 pandemic, the Company re-assessed whether further indicators of impairment arose during the third quarter of 2020 that might result in additional goodwill impairment charges. Based upon such assessment, the Company determined that it was more likely than not that the fair value of each of its reporting units exceeded their respective carrying amounts as of September 30, 2020. Consequently, no impairment changes were recognized during the third quarter of 2020.

Year-to-date results:

During the nine months ended September 30, 2021, the Company assessed whether indicators of impairment existed that might result in additional impairment charges. Based upon such assessment, no additional impairment changes were recognized for the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, as a result of the COVID-19 pandemic’s impact on the Company’s operations, the Company determined that indicators of potential impairment existed requiring the performance of interim impairment analyses during the first and second quarters of 2020. Based on interim impairment analyses performed during the nine months ended September 30, 2020, the Company recorded $111.0 million and $33.1 million of total non-cash impairment charges on its goodwill and indefinite-lived intangible assets, respectively.

Interest expense:
The table below shows the Company's interest expense for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
Interest expense$63.1 $68.7 $(5.6)$183.9 $178.0 $5.9 

Third quarter results:

The $5.6 million decrease in interest expense in the three months ended September 30, 2021, as compared to the three months ended September 30, 2020, was primarily due to lower average borrowings primarily resulting from the 5.75% Senior Notes Exchange Offer.

Year-to-date results:

The $5.9 million increase in interest expense during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020, was primarily due to higher weighted average interest rates driven primarily by the 2020 BrandCo Term Loan Facility.


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Gain on early extinguishment of debt:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
   Gain on early extinguishment of debt— $(31.2)$31.2 $— $(43.1)$43.1 

Gain on early extinguishment of debt for the three and nine months ended September 30, 2020 includes net debt extinguishment gains of $31.2 million recorded during the third quarter of 2020 and $11.9 million recorded during the second quarter of 2020 upon the repurchase and subsequent cancellation of approximately $157.2 million in aggregate principal face amount of Products Corporation's 5.75% Senior Notes occurring in the second and third quarters of 2020.
For information on the terms and conditions of these debt instruments, see Note 8, "Debt," in the Audited Consolidated Financial Statements in the Company's 2020 Form 10-K.

Provision for (benefit from) income taxes:

The table below shows the Company's provision for income taxes for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
20212020Change20212020Change
Provision for (benefit from) income taxes$5.4 $1.9 $3.5 $23.8 $(45.2)$69.0 

Third quarter results:
The Company recorded a provision for income taxes of $5.4 million for the three months ended September 30, 2021, compared to a provision for income taxes of $1.9 million for the three months ended September 30, 2020. The $3.5 million increase in the provision for income taxes for the three months ended September 30, 2021, compared to the three months ended September 30, 2020, was primarily due to an increase in losses for which no tax benefit can be recognized.

Year-to-date results:

The Company recorded a provision for income taxes of $23.8 million for the nine months ended September 30, 2021, compared to a benefit for income taxes of $45.2 million for the nine months ended September 30, 2020. The $69.0 million increase in the provision for income taxes for the nine months ended September 30, 2021, compared to same period in 2020, was primarily due to an increase in losses for which no tax benefit can be recognized.

For the three and nine months ended September 30, 2021, the Company used the annual effective tax rate method to calculate its tax provision.

For the three and nine month periods ended September 30, 2020, the Company concluded that the use of the cut-off tax rate method was more appropriate than the annual effective tax rate method, because the annual effective tax rate method would have not been reliable due to its sensitivity to minimal changes in forecasted annual pre-tax earnings.

The Company's effective tax rate for the three and nine month periods ended September 30, 2021 was lower than the federal statutory rate of 21% primarily due to losses for which no tax benefit can be recognized. On March 11, 2021, President Biden signed into law the “American Rescue Plan Act of 2021” (the "ARPA") which expands the Employee Retention Credit and the roster of ‘covered employees’ under §162(m) deduction limits. The ARPA did not have a significant impact on the Company’s financial results.
The Company's effective tax rate for the three months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due to the mix and level of earnings and the change in valuation allowance related to the limitation on the deductibility of interest. The Company's effective tax rate for the nine months ended September 30, 2020 was lower than the federal statutory rate of 21% primarily due to the impact of non-deductible impairment charges and the valuation allowance related to the limitation on the deductibility of interest, partially offset by the impact of the "Coronavirus Aid, Relief and Economic Security Act" (the "CARES Act"), signed into law on March 27, 2020 by President Trump, which resulted in a
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partial release of a valuation allowance on the Company's 2019 federal tax attributes associated with the limitation on the deductibility of interest.
The CARES Act, among other things, includes provisions providing for refundable payroll tax credits, the deferral of employer social security tax payments, acceleration of alternative minimum tax credit refunds and the increase of the net interest deduction limitation from 30% to 50%. The Company adopted the net interest deduction limitation of 50% for the taxable period ending December 31, 2020 as outlined in the CARES Act.
In assessing the recoverability of its deferred tax assets, the Company continually evaluates all available positive and negative evidence to assess the amount of deferred tax assets which are more likely than not to be realized. Deferred tax assets are reduced by a valuation allowance if some portion or all of the deferred tax assets will not be realized. A valuation allowance is a non-cash charge, and it in no way limits the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts.
For further information, see Note 12, "Income Taxes," to the Company's Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Results of Operations — Products Corporation

Products Corporation's Consolidated Statements of Operations and Comprehensive Loss are essentially identical to Revlon, Inc.'s Consolidated Statements of Operations and Comprehensive Loss, except for the following:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net loss - Revlon, Inc.$(53.1)$(44.5)$(216.8)$(385.2)
Selling, general and administrative expenses - public company costs1.6 2.0 4.3 5.9 
Provision for income taxes(0.1)(0.4)(0.1)(1.0)
Net loss - Products Corporation$(51.6)$(42.9)$(212.6)$(380.3)

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

Financial Condition, Liquidity and Capital Resources

At September 30, 2021, the Company had a liquidity position of $121.9 million, consisting of: (i) $73.3 million of unrestricted cash and cash equivalents (with approximately $67.1 million held outside the U.S.); (ii) $53.2 million in available borrowing capacity under the Amendment No.8 to the Amended 2016 Revolving Credit Facility (which had $316.2 million drawn at such date); and less (iii) approximately $4.6 million of outstanding checks.

Liquidity and Ability to Continue as a Going Concern
Each reporting period, the Company assesses its ability to continue as a going concern for one year from the date the financial statements are issued.

The Company continues to focus on cost reduction and risk mitigation actions to address the ongoing impact from the COVID-19 pandemic as well as other risks in the business environment. It expects to generate additional liquidity through continued cost control initiatives as well as funds provided by selling certain assets or other strategic transactions in connection with the Company's ongoing Strategic Review. If sales continue to decline, the Company’s cost control initiatives may include reductions in discretionary spend and reductions in investments in capital and permanent displays. Management believes that the debt transactions completed during the nine months ended September 30, 2021, along with existing cash and cash equivalents and cost control initiatives provides the Company with sufficient liquidity to meet its obligations and maintain business operations for the next twelve months.

However, there can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis, as, among other things, the Company’s liquidity can be impacted by a number of factors, including its level
of sales, costs and expenditures, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of liquidity available under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility. For example, subject to certain exceptions, revolving loans under the Amended 2016 Revolving Credit Facility and term loans under the 2021 Foreign Asset-Based Term Facility must be prepaid to the extent that such outstanding loans exceed the applicable borrowing base, consisting of certain accounts receivable, inventory and real estate.

Second Quarter of 2021 Financing Transactions

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

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

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

Fees of $0.8 million paid to the old lenders that were extinguished under the Tranche A Revolving Credit facility were expensed within SG&A on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021;
Deferred financing costs associated with the extinguished, old lenders prior to the effective date of Amendment No. 8, amounting to approximately $4.7 million, were expensed within "Amortization of debt issuance costs” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021; and
Fees of approximately $2.1 million paid to the new lender and third parties were recorded as deferred financing costs and are amortized in accordance with the straight-line method over the revised term of Tranche A through May 7, 2024.

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

Extinguishment accounting was applied to one existing prior lender, which is no longer involved with the SISO facility after Amendment No. 8. In connection with such extinguishment, deferred financing costs of approximately $1.4 million were expensed within "Amortization of debt issuance costs” on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021; and
Modification accounting was applied to those exiting lenders for which the cash flow effect between the amount owed to them before and after the consummation of Amendment No. 8, on a present value basis, was less than 10% and, thus, the debt instruments were not considered to be substantially different. In connection with such modification, fees
of approximately $0.9 million paid to the lenders were recorded as deferred financing costs and are amortized within "Amortization of debt issuance costs” (together with previously exiting deferred financing costs associated with these lenders of approximately $4.0 million), in accordance with the new effective interest rate computed over the revised term of the SISO facility. Additionally, approximately $0.4 million of fees paid to third parties were expensed within SG&A on the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the nine months ended September 30, 2021.

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

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

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