x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
__
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
13-3662955
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
One New York Plaza, New York, New York
|
10004
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
Class A Common Stock
|
New York Stock Exchange
|
Large accelerated filer
¨
|
|
|
|
Accelerated filer
x
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
|
||
|
|
|
|
Emerging growth company
¨
|
PART I
|
||
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Mine and Safety Disclosures
|
|
|
|
|
PART II
|
||
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
|
Item 9A.
|
Controls and Procedures
|
|
Item 9B.
|
Other Information
|
|
|
|
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accountant Fees and Services
|
|
|
|
|
PART IV
|
||
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
|
Index to Consolidated Financial Statements and Schedules
|
|
|
Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements)
|
|
|
Report of Independent Registered Public Accounting Firm (Internal Control Over Financial Reporting)
|
|
|
Financial Statements
|
|
|
Financial Statement Schedule: Schedule II - Valuation and Qualifying Accounts
|
|
Item 16.
|
Form 10-K Summary
|
|
|
Signatures
|
|
|
Certifications
|
|
|
Exhibits
|
|
|
|
|
Segment
|
|
COSMETICS
|
|
HAIR
|
|
MEN'S GROOMING
|
|
BEAUTY TOOLS
|
|
FRAGRANCES
|
|
ANTI-PERSPIRANT DEODORANTS
|
|
SKIN CARE / BODY CARE
|
|
|
|
|
|
|
Owned
|
Licensed*
|
|
|
|||||||
Consumer
|
|
Revlon
|
|
Revlon ColorSilk
|
|
|
|
Revlon
|
|
Charlie
|
|
|
Mitchum
|
|
Gatineau
|
|
|
Almay
|
|
Llongueras*
|
|
|
|
|
|
Jean Naté
|
|
|
|
|
Natural Honey
|
|
|
SinfulColors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pure Ice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cutex
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
|
|
CND
|
|
Revlon Professional
|
|
American Crew
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercosmo
|
|
d:fi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orofluido
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UniqOne
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creme of Nature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden
|
|
Elizabeth Arden
|
|
|
|
|
|
|
|
Curve
|
Elizabeth Taylor
|
|
|
|
Visible Difference
|
|
|
|
|
|
|
|
|
|
|
Giorgio Beverly Hills
|
Britney Spears
|
|
|
|
SUPERSTART
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden White Tea
|
Christina Aguilera
|
|
|
|
Elizabeth Arden Pro
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden 5th Avenue
|
Jennifer Aniston
|
|
|
|
Prevage
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden Green Tea
|
PS Fine Cologne for Men
|
|
|
|
Eight Hour
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden Red Door
|
Geoffrey Beene
|
|
|
|
Elizabeth Arden Ceramide
|
|
|
|
|
|
|
|
|
|
|
Elizabeth Arden Always Red
|
Lucky Brand
|
|
|
|
Skin Illuminating
|
|
|
|
|
|
|
|
|
|
|
|
Ed Hardy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alfred Sung
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Juicy Couture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Varvatos
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Halston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
White Shoulders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wildfox
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mariah Carey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shawn Mendes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Saints
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La Perla
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tapout
|
|
|
|
|
•
|
Revlon
: The Company sells a broad range of cosmetics under its flagship
Revlon
brand, which are designed to fulfill consumer wants and needs and are principally priced in the upper range for large volume retailers. The
Revlon
brand is comprised of face makeup, including foundation, powder, blush and concealers; lip makeup, including lipstick, lip gloss and lip liner; eye makeup, including mascaras, eyeliners, eye shadows and brow products; and nail color and nail care lines.
Revlon
products include innovative formulas and attractive colors that appeal to a wide range of consumers. The following are the key brands within the
Revlon
segment:
|
◦
|
Revlon ColorStay
offers consumers a full range of products with long-wearing technology;
|
◦
|
Revlon PhotoReady
products that are offered in face and eye makeup and are designed with innovative photochromatic pigments that bend and reflect light to give a flawless, airbrushed appearance in any light;
|
◦
|
Revlon Age Defying
, which consists of face makeup for women in the over-35 age bracket, with ingredients to help reduce the appearance of fine lines and wrinkles;
|
◦
|
Revlon Ultra HD
, which is a liquid-based lip color offered globally;
|
◦
|
Revlon Super Lustrous
, which is the Company’s flagship wax-based lipcolor and is offered in a wide variety of shades of lipstick and lip gloss; and
|
◦
|
Revlon Mascara
,
which consists of a collection of five mascaras, each with a distinct lash benefit including lash definition, length, volume, magnified volume and length and a high impact all-in-one formula.
|
•
|
Almay
: The Company’s
Almay
brand consists of hypo-allergenic, dermatologist-tested, fragrance-free cosmetics and skin care products. The
Almay
brand is comprised of face makeup, including foundation, pressed powder, primer and concealer; eye makeup, including eye shadows, mascaras and eyeliners; lip makeup; and makeup removers. Key brands within
Almay
include
Almay Smart Shade
in face;
Almay One Coat
in eye; and
Almay Color + Care
in lip. The
Almay
brand also has a significant makeup remover business under the core
Almay
brand name.
|
•
|
SinfulColors
and
Pure Ice
: In addition to color cosmetics under
SinfulColors
, the Company’s
SinfulColors
and
Pure Ice
brands consist primarily of value-priced nail enamels, available in many bold, vivid and on-trend colors.
|
•
|
Cutex
: The Company's
Cutex
brand consists of a full range of nail care products, including nail polish remover, nail enamels, nail tools and hand and nail care treatments.
|
•
|
Elizabeth Arden
: Elizabeth Arden produces skin care, color cosmetics and fragrances under the Elizabeth Arden brand, including
Visible Difference
,
Ceramide
,
SUPERSTART
,
Prevage
,
Eight Hour, Skin Illuminating, White Tea, Red Door and Green Tea
.
|
•
|
Heritage, Designer, and Celebrity Fragrances
: Elizabeth Arden’s heritage fragrances include a number of core brands, including
Britney Spears
,
Christina Aguilera
,
Elizabeth Taylor
,
Curve
,
Giorgio Beverly Hills
,
Ed Hardy
,
Jennifer Aniston
,
Lucky Brand
,
PS Fine Cologne for Men
,
Halston
,
Geoffrey Beene
,
Alfred Sung
,
White Shoulders
and
Tapout
. Designer fragrance brands include
Juicy Couture
,
John Varvatos
,
All Saints
,
La Perla
and
Wildfox
. Celebrity fragrances include
Shawn Mendes
and
Mariah Carey
.
|
•
|
Revlon Professional
: The Company’s
Revlon Professional
brand includes hair color, hair care and hair treatment products that are distributed exclusively to professional salons, salon professionals and salon distributors and are sold in more than 85 countries.
Revlon Professional
is synonymous with innovation, fashion and technology to service the most creative salon professionals and their clients.
Revlon Professional
salon products include
Revlonissimo NMT
,
Nutri Color Creme
,
Sensor Perm
and
Revlon Professional Equave
.
|
•
|
American Crew
and
d:fi
: The Company sells men’s shampoos, conditioners, gels and other hair care and men's grooming products for use and sale by professional salons under the
American Crew
brand name.
American Crew
is the "Official Supplier to Men" of quality grooming products that provide the ultimate usage experience and enhance a man’s personal image. American Crew is the leading salon brand created specifically for men and is sold in more than 70 countries. The Company also sells unisex hair products under the
d:fi
brand, which is a value-priced full line of cleansing, conditioning and styling products.
|
•
|
CND
: The Company sells nail enhancement systems and nail color and treatment products and services for use by the professional nail salon industry under the
CND
brand name. CND-branded professional nail, hand and foot care products are sold in more than 85 countries and the Company recently introduced the
CND
brand into mass retail through CVS stores. CND nail products include:
|
◦
|
CND Shellac
brand 14+ day nail color system, which delivers 14+ days of flawless wear, superior color and mirror shine with zero dry-time and no nail damage. The
CND Shellac
system is a true innovation in chip-free, extended-wear nail color; and
|
◦
|
CND Vinylux
weekly polish, a breakthrough nail polish that uses a patent-pending technology and lasts approximately a week. While ordinary polishes become brittle and deteriorate over time,
CND Vinylux
dries with exposure to natural light to a flawless finish and strengthens its resistance to chips over time.
|
•
|
The Company also sells professional hair products under brand names such as
Orofluido
,
UniqOne
and
Intercosmo
.
|
•
|
The Company sells multi-cultural hair-care products to professional salons, large volume retailers and other retailers, primarily in the U.S., under the
Creme of Nature
brand.
|
•
|
developing quality products with innovative performance features, shades, finishes, components and packaging;
|
•
|
educating consumers, retail customers and salon professionals about the benefits of the Company’s products;
|
•
|
anticipating and responding to changing consumer, retail customer and salon professional demands in a timely manner, including the timing of new product introductions and line extensions;
|
•
|
offering attractively priced products relative to the product benefits provided;
|
•
|
maintaining favorable brand recognition;
|
•
|
generating competitive margins and inventory turns for its customers by providing relevant products and executing effective pricing, incentive and promotional programs and marketing campaigns, as well as social media and influencer marketing activities;
|
•
|
ensuring product availability through effective planning and replenishment collaboration with the Company's customers;
|
•
|
providing strong and effective advertising, marketing, promotion, social media, influencer and merchandising support;
|
•
|
leveraging e-commerce, social media and mobile commerce initiatives and developing an effective omni-channel strategy to optimize the opportunity for consumers to interact with and purchase the Company's products;
|
•
|
maintaining an effective sales force and distributor network; and
|
•
|
obtaining and retaining sufficient retail display and floor space, optimal in-store positioning and effective presentation of its products on-shelf.
|
•
|
limiting the Company’s ability to fund (including by obtaining additional financing) the costs and expenses of executing the Company’s business initiatives (including activities related to the integration of the Elizabeth Arden business), future working capital, capital expenditures, advertising, promotional and/or marketing expenses, new product development costs, purchases and reconfigurations of wall displays, acquisitions, acquisition integration costs, investments, restructuring programs and other general corporate purposes;
|
•
|
requiring the Company to dedicate a substantial portion of its cash flow from operations to payments on Products Corporation’s indebtedness, thereby reducing the availability of the Company’s cash flow necessary for executing the Company’s business initiatives and for other general corporate purposes;
|
•
|
placing the Company at a competitive disadvantage compared to its competitors that have less debt;
|
•
|
exposing the Company to potential events of default (if not cured or waived) under the financial and operating covenants contained in Products Corporation’s various debt instruments;
|
•
|
limiting the Company’s flexibility in responding to changes in its business and the industry in which it operates; and
|
•
|
making the Company more vulnerable in the event of adverse economic conditions or a downturn in its business.
|
•
|
borrow money;
|
•
|
use assets as security in other borrowings or transactions;
|
•
|
pay dividends on stock or purchase stock;
|
•
|
sell assets and use the proceeds from such sales;
|
•
|
enter into certain transactions with affiliates;
|
•
|
make certain investments;
|
•
|
prepay, redeem or repurchase specified indebtedness; and
|
•
|
permit restrictions on the payment of dividends to Products Corporation by its subsidiaries.
|
•
|
delaying the implementation of or revising certain aspects of the Company's business initiatives;
|
•
|
reducing or delaying purchases of wall displays and/or expenses related to the Company's advertising, promotional and/or marketing activities;
|
•
|
reducing or delaying capital spending;
|
•
|
implementing new restructuring programs;
|
•
|
refinancing Products Corporation's indebtedness;
|
•
|
selling assets or operations;
|
•
|
seeking additional capital contributions and/or loans from MacAndrews & Forbes, the Company's other affiliates and/or third parties;
|
•
|
selling additional Revlon equity or debt securities or Products Corporation's debt securities; and/or
|
•
|
reducing other discretionary spending.
|
•
|
the acceptance of the Company's new product launches by, and sales of such new products to, the Company's customers may not be as high as the Company anticipates;
|
•
|
the Company's marketing, promotional, advertising and/or pricing strategies for its new products may be less effective than planned and may fail to effectively reach the targeted consumer base or engender the desired consumption of the Company's products by consumers;
|
•
|
the rate of purchases by the Company's consumers may not be as high as the Company anticipates;
|
•
|
the Company's wall displays to showcase its new products may fail to achieve their intended effects;
|
•
|
the Company may experience out-of-stocks and/or product returns exceeding its expectations as a result of the Company's new product launches or space reconfigurations or as a result of reductions in retail display space by the Company's customers;
|
•
|
the Company's net sales may also be impacted by inventory management by its customers or changes in pricing, marketing, advertising and/or promotional strategies by its customers;
|
•
|
the Company may incur costs exceeding its expectations as a result of the continued development and launch of new products, including, for example, unanticipated levels of research and development costs, advertising, promotional and/or marketing expenses, sales return expenses or other costs related to launching new products;
|
•
|
the Company may experience a decrease in sales of certain of the Company's existing products as a result of newly-launched products, the impact of which could be exacerbated by shelf space limitations and/or any shelf space loss. (See also Item 1A. Risk Factors - "Competition in the cosmetics, hair and beauty care products business could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows").
|
•
|
the Company's product pricing strategies for new product launches may not be accepted by its customers and/or its consumers, which may result in the Company's sales being less than it anticipates;
|
•
|
the Company may experience a decrease in sales of certain of the Company's products as a result of counterfeit products and/or products sold outside of their intended territories; and/or
|
•
|
delays or difficulties impacting the Company's ability, or the ability of the Company's suppliers, to timely manufacture, distribute and ship products or raw materials, as the case may be, displays or display walls in connection with launching new
|
•
|
developing quality products with innovative performance features, shades, finishes, components and packaging;
|
•
|
educating consumers, retail customers and salon professionals about the benefits of the Company’s products;
|
•
|
anticipating and responding to changing consumer, retail customer and salon professional demands in a timely manner, including as to the timing of new product introductions and line extensions;
|
•
|
offering attractively priced products relative to the product benefits provided;
|
•
|
maintaining favorable brand recognition;
|
•
|
generating competitive margins and inventory turns for the Company’s customers by providing relevant products and executing effective pricing, incentive and promotional programs and marketing and advertising campaigns, as well as social media and influencer marketing activities;
|
•
|
ensuring product availability through effective planning and replenishment collaboration with the Company's customers;
|
•
|
providing strong and effective advertising, promotion, marketing, social media, influencer and merchandising support;
|
•
|
leveraging e-commerce, social media and mobile commerce initiatives and developing an effective omni-channel strategy to optimize the opportunity for consumers to interact with and purchase the Company's products;
|
•
|
maintaining an effective sales force and distribution network; and
|
•
|
obtaining and retaining sufficient display space, optimal in-store positioning and effective presentation of the Company’s products on-shelf.
|
•
|
the inability to fill customer orders accurately or on a timely basis, or at all;
|
•
|
increased demands on management and staff time to the detriment of other corporate initiatives;
|
•
|
significant capital and operating expenditures;
|
•
|
the inability to process payments to vendors accurately or in a timely manner;
|
•
|
disruption of the Company's internal control structure; and/or
|
•
|
the inability to fulfill federal, state and local reporting and filing requirements in a timely or accurate manner.
|
•
|
develop Elizabeth Arden's brand portfolio through branding, innovation and execution;
|
•
|
identify and develop new and existing brands with the potential to become successful global brands;
|
•
|
innovate and develop new products that are appealing to consumers;
|
•
|
acquire or license additional brands or secure additional distribution arrangements and our ability to obtain the required financing for these agreements and arrangements;
|
•
|
expand Elizabeth Arden's geographic presence to take advantage of opportunities in developed and emerging regions;
|
•
|
continue to expand Elizabeth Arden's distribution channels within existing geographies to increase trade presence, brand recognition and sales;
|
•
|
expand Elizabeth Arden's trade presence through alternative distribution channels, such as through e-commerce channels;
|
•
|
expand margins through sales growth, the development of higher margin products and overhead and supply chain integration and efficiency initiatives;
|
•
|
effectively manage capital investments and working capital to improve the generation of cash flow; and
|
•
|
execute any acquisitions quickly and efficiently and integrate new businesses successfully.
|
Location
|
|
Segment
|
|
Use
|
|
Approximate Floor Space Sq. Ft.
|
|
Oxford, North Carolina
|
|
Consumer
|
|
Manufacturing, warehousing, distribution and office
(a)
|
|
1,012,000
|
|
Jacksonville, Florida
|
|
Professional
|
|
Manufacturing, warehousing, distribution and office
|
|
725,000
|
|
Salem, Virginia
|
|
Elizabeth Arden
|
|
Warehousing and distribution (leased)
|
|
482,000
|
|
Roanoke, Virginia
|
|
Elizabeth Arden
|
|
Warehousing and distribution (leased)
|
|
400,000
|
|
Tarragona, Spain
|
|
Professional
|
|
Manufacturing, warehousing, distribution and office
|
|
300,000
|
|
Mississauga, Canada
|
|
Consumer
|
|
Warehousing, distribution and office (leased)
|
|
195,000
|
|
Queretaro, Mexico
|
|
Professional
|
|
Manufacturing, warehousing, distribution and office
|
|
128,000
|
|
Canberra, Australia
|
|
Consumer
|
|
Warehousing and distribution
|
|
125,000
|
|
Edison, New Jersey
|
|
Consumer
|
|
Research and development and office (leased)
|
|
123,000
|
|
Rietfontein, South Africa
|
|
Consumer
|
|
Warehousing, distribution and office (leased)
|
|
120,000
|
|
Isando, South Africa
|
|
Consumer
|
|
Manufacturing, warehousing, distribution and office
|
|
94,000
|
|
Stone, United Kingdom
|
|
Consumer
|
|
Warehousing and distribution (leased)
|
|
92,000
|
|
Bologna, Italy
|
|
Professional
|
|
Manufacturing, warehousing, distribution and office
|
|
80,000
|
|
(a)
|
Property subject to liens under the 2016 Credit Agreements.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
Statement of Operations Data:
|
|
2017
(a)
|
|
2016
(b)
|
|
2015
(c)
|
|
2014
(d)
|
|
2013
(e)
|
||||||||||
Net sales
|
|
$
|
2,693.7
|
|
|
$
|
2,334.0
|
|
|
$
|
1,914.3
|
|
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
Gross profit
|
|
1,542.4
|
|
|
1,416.9
|
|
|
1,246.5
|
|
|
1,272.7
|
|
|
949.6
|
|
|||||
Selling, general and administrative expenses
|
|
1,467.6
|
|
|
1,161.0
|
|
|
1,002.5
|
|
|
1,009.5
|
|
|
731.7
|
|
|||||
Acquisition and integration costs
|
|
52.9
|
|
|
43.2
|
|
|
8.0
|
|
|
6.4
|
|
|
25.4
|
|
|||||
Restructuring charges and other, net
|
|
33.4
|
|
|
34.0
|
|
|
10.5
|
|
|
21.3
|
|
|
3.5
|
|
|||||
Impairment charge
|
|
10.8
|
|
|
23.4
|
|
|
9.7
|
|
|
—
|
|
|
—
|
|
|||||
Operating (loss) income
|
|
(22.3
|
)
|
|
155.3
|
|
|
215.8
|
|
|
235.5
|
|
|
189.0
|
|
|||||
Interest expense
|
|
149.8
|
|
|
105.2
|
|
|
83.3
|
|
|
84.4
|
|
|
73.8
|
|
|||||
Interest expense - preferred stock dividend
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|||||
Amortization of debt issuance costs
|
|
9.1
|
|
|
6.8
|
|
|
5.7
|
|
|
5.5
|
|
|
5.2
|
|
|||||
Loss on early extinguishment of debt, net
|
|
—
|
|
|
16.9
|
|
|
—
|
|
|
2.0
|
|
|
29.7
|
|
|||||
Foreign currency (gains) losses, net
|
|
(18.5
|
)
|
|
18.5
|
|
|
15.7
|
|
|
25.0
|
|
|
3.7
|
|
|||||
Provision for income taxes
|
|
21.8
|
|
|
25.5
|
|
|
51.4
|
|
|
77.8
|
|
|
46.0
|
|
|||||
(Loss) income from continuing operations, net of taxes
|
|
(185.3
|
)
|
|
(17.0
|
)
|
|
59.3
|
|
|
39.6
|
|
|
24.6
|
|
|||||
Income (loss) from discontinued operations, net of taxes
|
|
2.1
|
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|
1.3
|
|
|
(30.4
|
)
|
|||||
Net (loss) income
|
|
(183.2
|
)
|
|
(21.9
|
)
|
|
56.1
|
|
|
40.9
|
|
|
(5.8
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic (loss) income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
(3.52
|
)
|
|
(0.33
|
)
|
|
1.13
|
|
|
0.76
|
|
|
0.47
|
|
|||||
Discontinued operations
|
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|
0.02
|
|
|
(0.58
|
)
|
|||||
Basic net (loss) income per common share
|
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted (loss) income per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
(3.52
|
)
|
|
(0.33
|
)
|
|
1.13
|
|
|
0.76
|
|
|
0.47
|
|
|||||
Discontinued operations
|
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|
0.02
|
|
|
(0.58
|
)
|
|||||
Diluted net (loss) income per common share
|
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average number of common shares outstanding (in millions):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
52.6
|
|
|
52.5
|
|
|
52.4
|
|
|
52.4
|
|
|
52.4
|
|
|||||
Diluted
|
|
52.6
|
|
|
52.5
|
|
|
52.6
|
|
|
52.4
|
|
|
52.4
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
Balance Sheet Data:
|
|
2017
(a)
|
|
2016
as adjusted
(b)
|
|
2015
as adjusted
(c)
|
|
2014
as adjusted
(d)
|
|
2013
as adjusted
(e)
|
||||||||||
Total current assets
|
|
$
|
1,143.2
|
|
|
$
|
1,123.7
|
|
|
$
|
808.9
|
|
|
$
|
715.4
|
|
|
$
|
734.0
|
|
Total non-current assets
|
|
1,913.7
|
|
|
1,899.8
|
|
|
1,158.4
|
|
|
1,203.8
|
|
|
1,253.1
|
|
|||||
Total assets
|
|
$
|
3,056.9
|
|
|
$
|
3,023.5
|
|
|
$
|
1,967.3
|
|
|
$
|
1,919.2
|
|
|
$
|
1,987.1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current liabilities
(f)
|
|
$
|
932.3
|
|
|
$
|
708.7
|
|
|
$
|
515.0
|
|
|
$
|
464.9
|
|
|
$
|
552.7
|
|
Total other non-current liabilities
|
|
2,895.0
|
|
|
2,929.6
|
|
|
2,039.8
|
|
|
2,098.4
|
|
|
2,030.9
|
|
|||||
Total liabilities
|
|
$
|
3,827.3
|
|
|
$
|
3,638.3
|
|
|
$
|
2,554.8
|
|
|
$
|
2,563.3
|
|
|
$
|
2,583.6
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total indebtedness
|
|
$
|
2,836.3
|
|
|
$
|
2,692.0
|
|
|
$
|
1,825.0
|
|
|
$
|
1,845.6
|
|
|
$
|
1,905.8
|
|
Total stockholders' deficiency
|
|
(770.4
|
)
|
|
(614.8
|
)
|
|
(587.5
|
)
|
|
(644.1
|
)
|
|
(596.5
|
)
|
(a)
|
Comparability of results from continuing operations for
2017
are affected by: (1)
$52.9 million
of acquisition and integration costs incurred during 2017, primarily related to the Elizabeth Arden Acquisition; (2)
$33.4 million
in restructuring charges and other, net, primarily related
|
(b)
|
Comparability of results from continuing operations for 2016 are affected by: (1) $43.2 million of acquisition and integration costs incurred during 2016, primarily related to the Elizabeth Arden Acquisition; (2) $34 million in restructuring charges and other, net, primarily related to the EA Integration Restructuring Program (See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K); (3) a $23.4 million non-cash impairment charge related to goodwill and acquired identifiable intangible assets for the Company's Other reporting unit (see Note 8, "Goodwill and Intangible Assets, Net," to the Consolidated Financial Statements in this Form 10-K); and (4) a $16.9 million aggregate loss on the early extinguishment of debt in connection with
Products Corporation entering into the 2016 Senior Credit Facilities and the corresponding complete refinancing and repayment of Products Corporation's Old Term Loan Facility.
|
(c)
|
Comparability of results from continuing operations for 2015 are affected by: (1) a $20.7 million pension lump sum settlement charge related to a one-time lump sum payment option offered to certain former employees (See Note 14, "Savings Plan, Pension and Post-Retirement Benefits," to the Consolidated Financial Statements in this Form 10-K); (2) a decrease in the provision for income taxes, primarily driven by a non-cash benefit related to the net reduction of the Company's deferred tax valuation allowance on its net deferred tax assets for certain foreign jurisdictions (See Note 16, "Income Taxes," to the Consolidated Financial Statements in this Form 10-K); (3) $10.5 million in restructuring charges and other, net, primarily related to the 2015 Efficiency Program (See Note 3, "Restructuring Charges" to the Consolidated Financial Statements in this Form 10-K); (4) a $9.7 million non-cash goodwill impairment charge related to goodwill for the Company's Global Color Brands reporting unit (see Note 8, "Goodwill and Intangible Assets, Net," to the Consolidated Financial Statements in this Form 10-K); and (5) $8 million of acquisition and integration costs incurred during 2015 primarily related to costs incurred in connection with the 2015 CBB Acquisition and the 2014 Integration Program.
|
(d)
|
Comparability of results from continuing operations for 2014 are affected by: (1) $21.3 million in restructuring charges and other, net, primarily related to the 2014 Integration Program (See Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K); (2) $6.4 million of acquisition and integration costs incurred during 2014 (see note (d)(3) below) related to the Colomer Acquisition; and (3) a $6 million foreign currency loss recognized in the second quarter of 2014 as a result of the re-measurement of Revlon Venezuela’s monetary assets and liabilities
(See Note 1, "Description of Business and Summary of Significant Accounting Policies," to the Consolidated Financial Statements in this Form 10-K).
|
(e)
|
Comparability of results from continuing operations for 2013 are affected by: (1) a $29.7 million aggregate loss on the early extinguishment of debt, primarily in connection with Products Corporation’s issuance in February 2013 of $500 million aggregate principal amount of its 5¾% Senior Notes due February 15, 2021, of which Products Corporation used $491.2 million of the net proceeds (net of underwriters' fees) to repay and redeem all of the $330 million outstanding aggregate principal amount of its previous 9¾% Senior Secured Notes due November 2015 (the "9¾% Senior Secured Notes" and such transaction being the "2013 Senior Notes Refinancing"); (2) a $26.4 million gain from insurance proceeds due to the settlement of the Company's claims for business interruption and property losses as a result of the June 2011 fire at the Company's facility in Venezuela; (3) $25.4 million of acquisition and integration costs incurred in 2013 (see note (c)(2) above) related to the Colomer Acquisition; and (4) $21.4 million in restructuring and related charges, of which $20 million related to the Company's exit of its direct manufacturing, warehousing and sales business operations in mainland China within the Consumer segment in 2013 and was reflected in loss from discontinued operations, net of taxes. (See Note 3, "Restructuring Charges," and Note 4, "Discontinued Operations," to the Consolidated Financial Statements in this Form 10-K).
|
(f)
|
Total current liabilities at December 31, 2013 included $58.4 million related to a loan that was outstanding to various third parties that was prepaid in May 2014 (the "Non-Contributed Loan").
|
•
|
$306.6 million
of higher SG&A expenses, primarily driven by the inclusion of the SG&A expenses within the Elizabeth Arden segment; and
|
•
|
a
$44.6 million
increase in interest expense incurred during 2017, primarily as a result of higher average debt outstanding and higher weighted average borrowing rates as a result of the debt transactions completed in the third quarter of 2016 in connection with the Elizabeth Arden Acquisition;
|
•
|
$125.5 million
of higher gross profit in
2017
, primarily due to the inclusion of gross profit from the Elizabeth Arden segment, partially offset by lower gross profit within the Consumer and Professional segments;
|
•
|
$37 million
of favorable variance in foreign currency gains, resulting from
$18.5 million
in foreign currency gains during 2017, as compared to
$18.5 million
of foreign currency losses during 2016;
|
•
|
a $16.9 million aggregate loss on the early extinguishment of debt as a result of the debt-related transactions completed in 2016; and
|
•
|
a
$3.7 million
decrease in the provision for income taxes in 2017, primarily due to the pretax loss from continuing operations in
2017
, partially offset by the
$47.9 million
non-cash expense associated with the impact of the Tax Act.
|
•
|
The Consumer segment is comprised of the Company's consumer brands, which primarily include
Revlon
,
Almay
,
SinfulColors
and
Pure Ice
in color cosmetics;
Revlon ColorSilk
in women’s hair color;
Revlon
in beauty tools; and
Mitchum
in anti-perspirant deodorants. The Company’s principal customers for its consumer products include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Consumer segment also includes: (i) a skin care line under the
Natural Honey
brand; (ii) a hair color line under the
Llongueras
brand (licensed from a third party) sold to large volume retailers and other retailers, primarily in Spain, which were acquired as part of the Colomer Acquisition; and (iii)
Cutex
nail care products, which (combined with other
Cutex
businesses that the Company acquired in 1998) were acquired as part of the October 2015 and May 2016 acquisitions of the
Cutex
businesses and related assets in the U.S. (the "Cutex U.S. Acquisition") and in certain international territories (the "Cutex International Acquisition" and together with the Cutex U.S. Acquisition, the "Cutex Acquisitions"), respectively.
|
•
|
The Elizabeth Arden segment includes the operating results of the Elizabeth Arden business and related purchase accounting of the Elizabeth Arden Acquisition. Elizabeth Arden is a global prestige beauty products company with an iconic portfolio of prestige fragrance, skin care and cosmetic brands, which includes the
Elizabeth Arden
skin care brands, color cosmetics and fragrances; designer fragrances such as
Juicy Couture
,
John Varvatos
and
Wildfox
;
and heritage fragrances such as
Curve
,
Elizabeth Taylor
,
Britney Spears
and
Christina Aguilera
.
|
•
|
The Professional segment is comprised primarily of the Company's professional brands, which include
Revlon Professional
in hair color, hair care and hair treatments;
CND
-
branded products
in nail polishes and nail enhancements; and
American Crew
in men’s grooming products, all of which are sold worldwide to professional salons. The Company’s principal customers for its professional products include hair and nail salons and distributors to professional salons in the U.S. and internationally. The Professional segment also includes a multi-cultural hair care line consisting of
Creme of Nature
hair care products sold to professional salons, large volume retailers and other retailers, primarily in the U.S.
|
•
|
The Other segment primarily includes the operating results related to the development, marketing and distribution of certain licensed fragrances and other beauty products. The results included within the Other segment are not material to the Company’s consolidated financial results.
|
|
Net Sales
|
|
Segment Profit
|
||||||||||||||||||||||||||||||||||||||||
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||||
Consumer
|
$
|
1,288.5
|
|
|
$
|
1,389.8
|
|
|
$
|
(101.3
|
)
|
|
(7.3
|
)%
|
|
$
|
(101.6
|
)
|
|
(7.3
|
)%
|
|
$
|
239.6
|
|
|
$
|
349.2
|
|
|
$
|
(109.6
|
)
|
|
(31.4
|
)%
|
|
$
|
(108.7
|
)
|
|
(31.1
|
)%
|
Elizabeth Arden
(b)
|
952.5
|
|
|
441.4
|
|
|
511.1
|
|
|
115.8
|
%
|
|
509.1
|
|
|
115.3
|
%
|
|
114.2
|
|
|
68.2
|
|
|
46.0
|
|
|
67.4
|
%
|
|
45.5
|
|
|
66.7
|
%
|
||||||||
Professional
|
432.2
|
|
|
476.5
|
|
|
(44.3
|
)
|
|
(9.3
|
)%
|
|
(49.3
|
)
|
|
(10.3
|
)%
|
|
54.9
|
|
|
99.4
|
|
|
(44.5
|
)
|
|
(44.8
|
)%
|
|
(45.7
|
)
|
|
(46.0
|
)%
|
||||||||
Other
|
20.5
|
|
|
26.3
|
|
|
(5.8
|
)
|
|
(22.1
|
)%
|
|
(4.8
|
)
|
|
(18.3
|
)%
|
|
(3.7
|
)
|
|
(2.7
|
)
|
|
(1.0
|
)
|
|
(37.0
|
)%
|
|
(1.1
|
)
|
|
(40.7
|
)%
|
||||||||
Total
|
$
|
2,693.7
|
|
|
$
|
2,334.0
|
|
|
$
|
359.7
|
|
|
15.4
|
%
|
|
$
|
353.4
|
|
|
15.1
|
%
|
|
$
|
405.0
|
|
|
$
|
514.1
|
|
|
$
|
(109.1
|
)
|
|
(21.2
|
)%
|
|
$
|
(110.0
|
)
|
|
(21.4
|
)%
|
|
Net Sales
|
|
Segment Profit
|
||||||||||||||||||||||||||||||||||||||||
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||||||||||
Consumer
|
$
|
1,389.8
|
|
|
$
|
1,414.8
|
|
|
$
|
(25.0
|
)
|
|
(1.8
|
)%
|
|
$
|
9.7
|
|
|
0.7
|
%
|
|
$
|
349.2
|
|
|
$
|
360.2
|
|
|
$
|
(11.0
|
)
|
|
(3.1
|
)%
|
|
$
|
(8.3
|
)
|
|
(2.3
|
)%
|
Elizabeth Arden
(b)
|
441.4
|
|
|
—
|
|
|
441.4
|
|
|
N.M.
|
|
|
441.4
|
|
|
N.M.
|
|
|
68.2
|
|
|
—
|
|
|
68.2
|
|
|
N.M.
|
|
|
68.2
|
|
|
N.M.
|
|
||||||||
Professional
|
476.5
|
|
|
471.1
|
|
|
5.4
|
|
|
1.1
|
%
|
|
11.1
|
|
|
2.4
|
%
|
|
99.4
|
|
|
103.9
|
|
|
(4.5
|
)
|
|
(4.3
|
)%
|
|
(3.5
|
)
|
|
(3.4
|
)%
|
||||||||
Other
|
26.3
|
|
|
28.4
|
|
|
(2.1
|
)
|
|
(7.4
|
)%
|
|
1.4
|
|
|
4.9
|
%
|
|
(2.7
|
)
|
|
1.4
|
|
|
(4.1
|
)
|
|
(292.9
|
)%
|
|
(4.3
|
)
|
|
(307.1
|
)%
|
||||||||
Total
|
$
|
2,334.0
|
|
|
$
|
1,914.3
|
|
|
$
|
419.7
|
|
|
21.9
|
%
|
|
$
|
463.6
|
|
|
24.2
|
%
|
|
$
|
514.1
|
|
|
$
|
465.5
|
|
|
$
|
48.6
|
|
|
10.4
|
%
|
|
$
|
52.1
|
|
|
11.2
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
750.8
|
|
|
$
|
882.4
|
|
|
$
|
(131.6
|
)
|
|
(14.9
|
)%
|
|
$
|
(132.5
|
)
|
|
(15.0
|
)%
|
International
|
537.7
|
|
|
507.4
|
|
|
30.3
|
|
|
6.0
|
%
|
|
30.9
|
|
|
6.1
|
%
|
||||
Elizabeth Arden
(b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
509.0
|
|
|
$
|
274.8
|
|
|
$
|
234.2
|
|
|
85.2
|
%
|
|
$
|
233.6
|
|
|
85.0
|
%
|
International
|
443.5
|
|
|
166.6
|
|
|
276.9
|
|
|
166.2
|
%
|
|
275.5
|
|
|
165.4
|
%
|
||||
Professional
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
173.5
|
|
|
$
|
223.9
|
|
|
$
|
(50.4
|
)
|
|
(22.5
|
)%
|
|
$
|
(50.9
|
)
|
|
(22.7
|
)%
|
International
|
258.7
|
|
|
252.6
|
|
|
6.1
|
|
|
2.4
|
%
|
|
1.6
|
|
|
0.6
|
%
|
||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N.M.
|
|
(c)
|
$
|
—
|
|
|
N.M.
|
|
International
|
20.5
|
|
|
26.3
|
|
|
(5.8
|
)
|
|
(22.1
|
)%
|
|
(4.8
|
)
|
|
(18.3
|
)%
|
||||
Total Net Sales
|
$
|
2,693.7
|
|
|
$
|
2,334.0
|
|
|
$
|
359.7
|
|
|
15.4
|
%
|
|
$
|
353.4
|
|
|
15.1
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
882.4
|
|
|
$
|
921.3
|
|
|
$
|
(38.9
|
)
|
|
(4.2
|
)%
|
|
$
|
(36.9
|
)
|
|
(4.0
|
)%
|
International
|
507.4
|
|
|
493.5
|
|
|
13.9
|
|
|
2.8
|
%
|
|
46.6
|
|
|
9.4
|
%
|
||||
Elizabeth Arden
(b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
274.8
|
|
|
$
|
—
|
|
|
$
|
274.8
|
|
|
N.M.
|
|
|
$
|
274.8
|
|
|
N.M.
|
|
International
|
166.6
|
|
|
—
|
|
|
166.6
|
|
|
N.M.
|
|
|
166.6
|
|
|
N.M.
|
|
||||
Professional
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
223.9
|
|
|
$
|
216.8
|
|
|
$
|
7.1
|
|
|
3.3
|
%
|
|
$
|
7.9
|
|
|
3.6
|
%
|
International
|
252.6
|
|
|
254.3
|
|
|
(1.7
|
)
|
|
(0.7
|
)%
|
|
3.2
|
|
|
1.3
|
%
|
||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N.M.
|
|
(c)
|
$
|
—
|
|
|
N.M.
|
|
International
|
26.3
|
|
|
28.4
|
|
|
(2.1
|
)
|
|
(7.4
|
)%
|
|
1.4
|
|
|
4.9
|
%
|
||||
Total Net Sales
|
$
|
2,334.0
|
|
|
$
|
1,914.3
|
|
|
$
|
419.7
|
|
|
21.9
|
%
|
|
$
|
463.6
|
|
|
24.2
|
%
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Gross profit
|
$
|
1,542.4
|
|
|
$
|
1,416.9
|
|
|
$
|
1,246.5
|
|
|
$
|
125.5
|
|
|
$
|
170.4
|
|
Percentage of net sales
|
57.3
|
%
|
|
60.7
|
%
|
|
65.1
|
%
|
|
(3.4
|
)%
|
|
(4.4
|
)%
|
•
|
the inclusion of gross profit for the Elizabeth Arden segment, which decreased gross margin by 2.3 percentage points;
|
•
|
higher sales incentives, which decreased gross margin by 0.5 percentage points;
|
•
|
unfavorable product mix, which decreased gross margin by 0.4 percentage points; and
|
•
|
higher allowances for sales returns, which decreased gross margin by 0.2 percentage points;
|
•
|
favorable foreign currency fluctuations, which increased gross margin by 0.3 percentage points.
|
•
|
the inclusion of gross profit from the Elizabeth Arden segment, which decreased gross margin by 2.4 percentage points;
|
•
|
unfavorable foreign currency fluctuations, which decreased gross margin by 1.0 percentage point;
|
•
|
higher promotional allowances, which decreased gross margin by 0.6 percentage points;
|
•
|
additional inventory costs as a result of the recognition of an increase in the fair value of inventory acquired in the Elizabeth Arden Acquisition, which decreased gross margin by 0.5 percentage points; and
|
•
|
unfavorable product mix, which decreased gross margin by 0.5 percentage points;
|
•
|
the favorable impact in 2016 related to the portion of the 2015 pension lump sum settlement charge recorded in the fourth quarter of 2015 within cost of sales, which did not recur in 2016, which increased gross margin by 0.3 percentage points.
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
SG&A expenses
|
$
|
1,467.6
|
|
|
$
|
1,161.0
|
|
|
$
|
1,002.5
|
|
|
$
|
306.6
|
|
|
$
|
158.5
|
|
•
|
the inclusion of SG&A expenses in the Elizabeth Arden segment as a result of the Elizabeth Arden Acquisition, which contributed $303.7 million to the increase in SG&A expenses; and
|
•
|
higher general and administrative expenses of $9.7 million, primarily due to higher professional services fees related to the Company's digital transformation initiatives;
|
•
|
a $4.4 million decrease in brand support expenses, primarily within the Consumer Segment, due to the decline in net sales; and
|
•
|
lower incentive compensation expense.
|
•
|
the inclusion of SG&A expenses in the Elizabeth Arden segment as a result of the Elizabeth Arden Acquisition, commencing on and after the Elizabeth Arden Acquisition Date, which contributed $184.2 million to the increase in SG&A expenses; and
|
•
|
$6.5 million of higher general and administrative expenses in 2016, primarily driven by higher compensation due to changes in senior executive management, higher professional and legal fees and a total of $6.5 million in gains recognized in 2015 related to the sales of certain non-core assets, partially offset by $10.2 million of charges recognized in 2015 related to a pension lump sum settlement recorded as a component of SG&A expense and lower non-restructuring severance;
|
•
|
$19.8 million of favorable FX impacts; and
|
•
|
a $24.3 million decrease in brand support expenses for lower performing brands, primarily within the Consumer segment.
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Acquisition Costs
|
$
|
3.6
|
|
|
$
|
21.5
|
|
|
$
|
5.9
|
|
|
$
|
(17.9
|
)
|
|
$
|
15.6
|
|
Integration Costs
|
49.3
|
|
|
21.7
|
|
|
2.1
|
|
|
27.6
|
|
|
19.6
|
|
|||||
Total acquisition and integration costs
|
$
|
52.9
|
|
|
$
|
43.2
|
|
|
$
|
8.0
|
|
|
$
|
9.7
|
|
|
$
|
35.2
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Restructuring charges and other, net
|
$
|
33.4
|
|
|
$
|
34.0
|
|
|
$
|
10.5
|
|
|
$
|
(0.6
|
)
|
|
$
|
23.5
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Interest expense
|
$
|
149.8
|
|
|
$
|
105.2
|
|
|
$
|
83.3
|
|
|
$
|
44.6
|
|
|
$
|
21.9
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Loss on early extinguishment of debt
|
$
|
—
|
|
|
$
|
16.9
|
|
|
$
|
—
|
|
|
$
|
(16.9
|
)
|
|
$
|
16.9
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Foreign currency (gains) losses, net
|
$
|
(18.5
|
)
|
|
$
|
18.5
|
|
|
$
|
15.7
|
|
|
$
|
(37.0
|
)
|
|
$
|
2.8
|
|
•
|
the favorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables and foreign currency denominated receivables,
|
•
|
a $4.1 million foreign currency loss in 2017, compared to a $2.1 million foreign currency gain in 2016, in each case related to the Company's foreign currency forward exchange contracts.
|
•
|
a $2.1 million foreign currency gain in 2016, compared to a $3.8 million foreign currency gain in 2015, in each case related to the Company’s foreign currency forward exchange contracts; and
|
•
|
the net unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables and foreign currency denominated receivables.
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||
Provision for income taxes
|
$
|
21.8
|
|
|
$
|
25.5
|
|
|
$
|
51.4
|
|
|
$
|
(3.7
|
)
|
|
$
|
(25.9
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(139.3
|
)
|
|
$
|
120.1
|
|
|
$
|
158.1
|
|
Net cash used in investing activities
|
(108.3
|
)
|
|
(1,087.5
|
)
|
|
(83.8
|
)
|
|||
Net cash provided by (used in) financing activities
|
136.9
|
|
|
829.9
|
|
|
(14.9
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
11.3
|
|
|
(2.6
|
)
|
|
(7.8
|
)
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
$
|
(99.4
|
)
|
|
$
|
(140.1
|
)
|
|
$
|
51.6
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
186.8
|
|
|
326.9
|
|
|
275.3
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
87.4
|
|
|
$
|
186.8
|
|
|
$
|
326.9
|
|
•
|
$157 million
of borrowings under the 2016 Revolving Credit Facility;
|
•
|
$18 million
of repayments under the 2016 Term Loan Facility.
|
•
|
cash proceeds received in connection with originating the 2016 Term Loan Facility, in the aggregate principal amount of $1.8 billion, or $1.791 billion, net of discounts;
|
•
|
cash proceeds received in connection with issuance of the 6.25% Senior Notes, in the aggregate principal amount of $450 million; and
|
•
|
$658.6 million of cash used to repay all of the aggregate principal balance outstanding under Products Corporation’s 2011 Term Loan;
|
•
|
$651.4 million of cash used to repay all of the aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan;
|
•
|
(i) $45 million of fees incurred in connection with originating the 2016 Term Loan Facility; (ii) $5.7 million of fees incurred in connection with originating the 2016 Revolving Credit Facility; and (iii) $10.9 million of fees incurred in connection with issuing Products Corporation's 6.25% Senior Notes;
|
•
|
a $23.2 million required excess cash flow prepayment made under the Old Term Loan Facility, as discussed below; and
|
•
|
$2.7 million utilized for the repurchase of shares from a former executive.
|
•
|
a $24.6 million required excess cash flow prepayment made under the Old Term Loan Facility; and
|
•
|
$6.8 million of scheduled amortization payments on the Old Acquisition Term Loan;
|
•
|
$23 million increase in short-term borrowings and overdrafts.
|
Period
|
|
Optional Redemption Premium Percentage
|
|
2019
|
|
104.688
|
%
|
2020
|
|
103.125
|
%
|
2021
|
|
101.563
|
%
|
2022 and thereafter
|
|
100.000
|
%
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
||||||||||
Long-term debt, including current portion
(a)
|
|
$
|
2,885.0
|
|
|
$
|
175.1
|
|
|
$
|
36.2
|
|
|
$
|
536.2
|
|
|
$
|
2,137.5
|
|
Interest on long-term debt
(b)
|
|
812.1
|
|
|
151.3
|
|
|
297.6
|
|
|
247.4
|
|
|
115.8
|
|
|||||
Capital lease obligations
|
|
2.9
|
|
|
1.4
|
|
|
1.3
|
|
|
0.2
|
|
|
—
|
|
|||||
Operating leases
(c)
|
|
245.4
|
|
|
48.0
|
|
|
70.6
|
|
|
48.2
|
|
|
78.6
|
|
|||||
Purchase obligations
(d)
|
|
329.6
|
|
|
276.2
|
|
|
32.6
|
|
|
18.5
|
|
|
2.3
|
|
|||||
Other long-term obligations
(e)
|
|
85.6
|
|
|
52.2
|
|
|
23.9
|
|
|
8.5
|
|
|
1.0
|
|
|||||
Total contractual obligations
|
|
$
|
4,360.6
|
|
|
$
|
704.2
|
|
|
$
|
462.2
|
|
|
$
|
859.0
|
|
|
$
|
2,335.2
|
|
(a)
|
Consists primarily of: (i) the $
1,777.5 million
in aggregate principal amount outstanding under the 2016 Term Loan Facility; (ii) the
$450 million
in aggregate principal amount outstanding under the 6.25% Senior Notes; and (iii) the
$500 million
in aggregate principal amount outstanding under the 5.75% Senior Notes, in each case as of
December 31, 2017
.
|
(b)
|
Consists of interest through the respective maturity dates on the outstanding debt discussed in (a) above; based on interest rates under such debt agreements as of
December 31, 2017
.
|
(c)
|
Included in the obligations for operating leases as of
December 31, 2017
is the lease for the Company's headquarters in New York City, which includes minimum lease payments in the aggregate of approximately $70 million over the 15-year term; a leased distribution and office facility in Roanoke, Virginia; and a leased warehouse and returns processing facility in Salem, Virginia.
|
(d)
|
Consists of purchase commitments for finished goods, raw materials, components, minimum royalty guarantees and services pursuant to enforceable and legally binding obligations which include all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transactions.
|
(e)
|
Consists primarily of media and advertising contracts, pension funding obligations (amount due within one year only, as subsequent pension funding obligation amounts cannot be reasonably estimated since the return on pension assets in future periods, as well as future pension assumptions, are not known), software licensing agreements and obligations related to third-party warehousing and distribution services. Such amounts exclude employment agreements, severance and other immaterial contractual commitments, which severance and other contractual commitments related to restructuring activities are discussed in Note 3, "Restructuring Charges," to the Consolidated Financial Statements in this Form 10-K.
|
|
|
Effect of
|
|
Effect of
|
||||||||||||
|
|
25 basis points increase
|
|
25 basis points decrease
|
||||||||||||
|
|
Net periodic benefit costs
|
|
Projected pension benefit obligation
|
|
Net periodic benefit costs
|
|
Projected pension benefit obligation
|
||||||||
Discount rate
|
|
$
|
1.1
|
|
|
$
|
(16.9
|
)
|
|
$
|
0.8
|
|
|
$
|
17.7
|
|
Expected long-term rate of return
|
|
(2.0
|
)
|
|
—
|
|
|
0.4
|
|
|
—
|
|
1.
|
reducing the U.S. federal corporate tax rate;
|
2.
|
requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; and
|
3.
|
imposing a new limitation on the deductibility of interest.
|
1.
|
a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
|
2.
|
a new provision designed to tax global intangible low-taxed income ("GILTI");
|
3.
|
increased limitations on the deductibility of certain executive compensation; and
|
4.
|
changes to net operating loss carryforward periods and annual utilization.
|
|
Expected Maturity Date for the Year Ended December 31,
|
|
|
|||||||||||||||||||||||||||||
|
(dollars in millions, except for rate information)
|
|
|
|||||||||||||||||||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
Fair Value December 31, 2017
|
||||||||||||||||
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Short-term variable rate (third party - various currencies)
|
|
$
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10.6
|
|
|
$
|
10.6
|
|
||||||||||
Average interest rate
(a)
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Short-term fixed rate (third party - EUR)
|
|
$
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
||||||||||
Average interest rate
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Long-term fixed rate (third party - USD)
|
|
|
|
|
|
|
|
$
|
500.0
|
|
|
|
|
$
|
450.0
|
|
|
$
|
950.0
|
|
|
$
|
649.8
|
|
||||||||
Average interest rate
|
|
|
|
|
|
|
|
5.75
|
%
|
|
|
|
6.25
|
%
|
|
|
|
|
||||||||||||||
Long-term fixed rate (third party - EUR)
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
Average interest rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
||||||||||
Long-term variable rate (third party - USD)
(b)
|
|
$
|
175.0
|
|
|
$
|
18.0
|
|
|
$
|
18.0
|
|
|
$
|
18.0
|
|
|
$
|
18.0
|
|
|
$
|
1,687.5
|
|
|
$
|
1,934.5
|
|
|
$
|
1,481.2
|
|
Average interest rate
(a)(c)
|
|
3.5
|
%
|
|
5.5
|
%
|
|
5.6
|
%
|
|
5.7
|
%
|
|
5.7
|
%
|
|
5.7
|
%
|
|
|
|
|
||||||||||
Total debt
|
|
$
|
187.5
|
|
|
$
|
18.1
|
|
|
$
|
18.1
|
|
|
$
|
518.1
|
|
|
$
|
18.1
|
|
|
$
|
2,137.5
|
|
|
$
|
2,897.4
|
|
|
$
|
2,143.9
|
|
(a)
|
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at
December 31, 2017
.
|
(b)
|
Includes total quarterly amortization payments required for each year under the 2016 Term Loan Facility and the borrowings under the 2016 Revolving Credit Facility.
|
(c)
|
At
December 31, 2017
, the interest rate for the 2016 Term Loan Facility was the Eurodollar Rate (as defined in the 2016 Term Loan Agreement) plus 3.5% per annum (with the Eurodollar Rate not to be less than 0.75%). See Note 11, "Long-Term Debt," to the Consolidated Financial Statements. At
December 31, 2017
, the interest rate for the 2016 Revolving Credit Facility was 3.2% per annum, which is based on the Eurodollar Rate plus the applicable margin, as described in this Form 10-K. See "Financial Condition, Liquidity and Capital Resources - 2016 Revolving Credit Facility - Interest and Fees."
|
Forward Contracts ("FC")
|
|
Average Contractual Rate
$/FC
|
|
U.S. Dollar Equivalent Notional Amount
|
|
Contract Value
December 31, 2017
|
|
Asset (Liability) Fair Value
December 31, 2017
|
|||||||
Sell British Pound/Buy USD
|
|
1.3228
|
|
|
30.5
|
|
|
29.8
|
|
|
(0.7
|
)
|
|||
Sell Canadian Dollars/Buy USD
|
|
0.7856
|
|
|
27.3
|
|
|
27.0
|
|
|
(0.3
|
)
|
|||
Sell Australian Dollars/Buy USD
|
|
0.7724
|
|
|
23.5
|
|
|
23.3
|
|
|
(0.2
|
)
|
|||
Buy Euro/Sell USD
|
|
1.1882
|
|
|
17.7
|
|
|
17.9
|
|
|
0.2
|
|
|||
Buy Mexican Peso/Sell USD
|
|
0.0524
|
|
|
12.2
|
|
|
11.6
|
|
|
(0.6
|
)
|
|||
Sell USD/Buy Swiss Franc
|
|
1.0369
|
|
|
9.6
|
|
|
9.6
|
|
|
—
|
|
|||
Sell Japanese Yen/Buy USD
|
|
0.0091
|
|
|
7.4
|
|
|
7.5
|
|
|
0.1
|
|
|||
Buy Euro/Sell British Pound
|
|
0.8902
|
|
|
6.2
|
|
|
6.2
|
|
|
—
|
|
|||
Sell Danish Krone/Buy USD
|
|
0.1592
|
|
|
4.0
|
|
|
3.9
|
|
|
(0.1
|
)
|
|||
Buy Australian Dollars/Sell NZ dollars
|
|
1.0961
|
|
|
3.2
|
|
|
3.2
|
|
|
—
|
|
|||
Sell USD/Buy South African Rand
|
|
0.0733
|
|
|
2.0
|
|
|
2.2
|
|
|
0.2
|
|
|||
Sell USD/Buy Australian Dollar
|
|
0.7708
|
|
|
1.9
|
|
|
2.0
|
|
|
0.1
|
|
|||
Sell USD/Buy British Pound
|
|
1.3417
|
|
|
1.0
|
|
|
1.0
|
|
|
—
|
|
|||
Sell Hong Kong Dollars/Buy USD
|
|
7.8108
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|||
Total forward contracts
|
|
|
|
$
|
147.1
|
|
|
$
|
145.8
|
|
|
$
|
(1.3
|
)
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of its assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of its financial statements in accordance with generally accepted accounting principles, and that its receipts and expenditures are being made only in accordance with authorizations of its management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on its financial statements.
|
(i)
|
the Company's future financial performance and/or sales growth;
|
(ii)
|
the effect on sales of decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third-party suppliers, changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America; inventory management by the Company's customers; inventory de-stocking by certain retail customers; space reconfigurations or reductions in display space by the Company's customers; store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, for pension expense under its benefit plans, acquisition and acquisition-related integration costs, capital expenditures, costs related to the Company’s synergy and integration programs in connection with the Elizabeth Arden Acquisition, restructuring and severance costs, costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
|
(iii)
|
the Company's belief that continuing to execute its business initiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Colomer Acquisition, the Cutex Acquisitions and/or the Elizabeth Arden Acquisition, any of which, the intended purpose would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities, which activities may be funded with cash on hand, funds available under the 2016 Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt;
|
(iv)
|
certain beliefs and expectations regarding actions that the Company is pursuing to enhance and accelerate its e-commerce and social media penetration, such as the following: (a) the Company’s belief that changes in consumer shopping patterns for beauty products in which consumers have continued to increasingly engage with beauty brands through e-commerce and other social media channels have resulted in slower retail traffic in brick-and-mortar stores in the mass retail channel in North America, which has resulted in continuing declines in the brick-and-mortar retail channel, including store closures; (b) the Company’s expectation that, to address the pace and impact of this new commercial landscape, the Company’s shifting of its brand marketing spend toward facilitating increased penetration of e-commerce and social media channels and its focus on (1) developing and implementing effective content to enhance its online retail position; (2) improving its consumer engagement across social media platforms; and (3) transforming its technology and data to support efficient management of its digital infrastructure;
|
(v)
|
the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities, including, without limitation: in connection with implementing the EA Integration Restructuring Program: (1) consolidating offices, eliminating certain duplicative activities and streamlining back-office support (which are designed to reduce the Company’s SG&A expenses) and (2) recognizing approximately
$90 million
to
$95 million
of the EA Integration Restructuring Charges (all of which are expected to be cash payments), consisting of: (i) approximately
$65 million
to
$70 million
of employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately
$15 million
of lease termination costs; and (iii) approximately
$10 million
of other related charges;
|
(vi)
|
the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's 2016 Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2018, including the cash requirements referred to in item (viii) below, and the Company's beliefs that (a) the cash generated by its operations, cash on hand, availability under the 2016 Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its liquidity needs for at least the next 12 months from the issuance date of this Form 10-K, (b) the cash generated by its domestic operations, cash on hand, availability under the 2016 Revolving Credit Facility and other permitted lines of credit, as well as the option to further settle intercompany loans and payables with certain foreign subsidiaries, should be sufficient to meet its domestic liquidity needs for at least the next 12 months and (c) restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
|
(vii)
|
the Company’s expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under Products Corporation's 2016 Revolving Credit Facility and other permitted lines of credit, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending;
|
(viii)
|
the Company's expected principal uses of funds, including amounts required for the payment of operating expenses, including expenses incurred in connection with continuing to execute the Company’s business initiatives; payments in connection with the Company’s synergy and integration programs related to the Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); payments in connection with the Company's purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions, if any); severance not otherwise included in the Company’s restructuring programs; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade (including, without limitation, that the Company may also, from time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, block trades, privately negotiated purchase transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any such retirement or purchase of debt and/or equity may be funded with operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material); and its estimates of the amount and timing of such operating and other expenses;
|
(ix)
|
matters concerning the Company's market-risk sensitive instruments, including that any risk of loss under its derivative instruments arising from any non-performance by any of the counterparties is remote;
|
(x)
|
the Company's expectation to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables and accounts payable; the effects of service level disruptions to the Company’s manufacturing operations as a result of the launch of its new ERP system and actions that the Company is taking to implement a service recovery plan; and controls on general and administrative spending and the Company’s belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
|
(xi)
|
the Company’s expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
|
(xii)
|
the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year and, with respect to the Tax Act, the Company’s expectation that it will not have a transition tax liability due to its deficit in foreign earnings, that the Tax Act’s limitation on interest deductibility will not impact the Company’s 2018 federal cash taxes due to its net operating loss carryover balance, and that the Tax Act will not have a material impact on its cash taxes or liquidity in 2018;
|
(xiii)
|
the Company's belief that the allegations contained in the Third Consolidated Amended Class Action Complaint are without merit and its plans to continue to vigorously defend against them and its belief that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows, but that in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period;
|
(xiv)
|
certain estimates used by management in estimating the fair value of the assets acquired in the Elizabeth Arden Acquisition and in valuing other assets and liabilities; and
|
(xv)
|
the Company's expected benefits and other impacts from the Elizabeth Arden Acquisition.
|
(i)
|
unanticipated circumstances or results affecting the Company's financial performance and or sales growth, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors, decreased performance by third-party suppliers and/or supply disruptions at the Company’s manufacturing facilities; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products, including new product launches; changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company’s existing or new products; higher than expected store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; higher than expected restructuring or severance costs, acquisition costs and/or acquisition-related integration costs and capital expenditures, including, without limitation, synergy and integration program costs and expenses related to the Elizabeth Arden Acquisition; higher than expected pension expense and/or cash contributions under its benefit plans, costs related to litigation, advertising, promotional and/or marketing expenses or lower than expected results from the Company’s advertising, promotional, pricing and/or marketing plans; higher than expected sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise or decreased sales of the Company’s existing or new products; actions by the Company’s customers, such as greater than expected inventory management and/or de-stocking, and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing, marketing, advertising and/or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including, among other things, business combinations, technological breakthroughs, implementation of new pricing strategies, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
|
(ii)
|
in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
|
(iii)
|
unanticipated costs or difficulties or delays in completing projects associated with continuing to execute the Company’s business initiatives or lower than expected revenues or the inability to create value through improving our financial performance as a result of such initiatives, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories or converting the Company's go-to-trade structure in certain countries to other business models), further refining its approach to retail merchandising and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing, supply chain or organizational size and structure, including optimizing the Colomer Acquisition, the Cutex Acquisitions and/or the Elizabeth Arden Acquisition (including difficulties or delays in and/or the Company’s inability to optimally integrate the Elizabeth Arden business which could result in less than expected synergies and/or cost reductions, more than expected costs to achieve the expected synergies and/or cost reductions or delays in achieving the expected synergies and/or cost reductions and/or less than expected benefits from the EA Integration Restructuring Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the EA Integration Restructuring Program), as well as the unavailability of cash generated by operations, cash on hand and/or funds under the 2016 Revolving Credit Facility or from other permitted additional sources of capital to fund such potential activities;
|
(iv)
|
difficulties, delays in or less than expected results from the Company’s efforts to enhance and accelerate its e-commerce and social media penetration, such as: (a) greater than anticipated levels of consumers choosing to purchase their beauty products through e-commerce and other social media channels and/or greater than anticipated declines in the brick-and-mortar retail channel, or either of those conditions occurring at a rate faster than anticipated; (b) the Company’s inability to address the pace and impact of this new commercial landscape, such as its inability to enhance its e-commerce and social media capabilities and/or increase its penetration of e-commerce and social media channels; (c) the Company’s inability to drive a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; (d) difficulties, delays and/or the Company's inability to (in whole or in part): (1) develop and implement effective content to enhance its online retail position; (2) improve its consumer engagement across social media platforms; and/or (3) transform its technology and data to support efficient management of its digital infrastructure; and/or (e) the Company incurring greater than anticipated levels of expenses and/or debt to facilitate the foregoing objectives, which could result in, among other things, less than anticipated revenues and/or profitability;
|
(v)
|
difficulties, delays or unanticipated costs or charges or less than expected cost reductions and other benefits resulting from the Company's restructuring activities, such as (a) difficulties, delays or the inability of the Company to successfully complete the EA Integration Restructuring Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions; (b) difficulties, delays or the inability of the Company to realize, in whole or in part, the anticipated benefits from the EA Integration Restructuring Program, such as difficulties with, delays in or the Company’s inability to generate certain reductions in its SG&A and/or eliminate certain positions; (c) delays in completing the EA Integration Restructuring Program, which could reduce the benefits realized from such activities; (d) higher than anticipated restructuring charges and/or payments in connection with completing the EA Integration Restructuring Program and/or changes in the expected timing of such charges and/or payments; and/or (e) greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the EA Integration Restructuring Program; and/or (g) the risk that such program may not satisfy the Company’s objectives;
|
(vi)
|
lower than expected operating revenues, cash on hand and/or funds available under the 2016 Revolving Credit Facility and/or other permitted lines of credit or higher than anticipated operating expenses, such as referred to in clause (viii) below, and/or less than anticipated cash generated by the Company's domestic operations or unanticipated restrictions or taxes on repatriation of foreign earnings;
|
(vii)
|
the unavailability of funds under Products Corporation's 2016 Revolving Credit Facility or other permitted lines of credit; or from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
|
(viii)
|
higher than expected operating expenses, sales returns, working capital expenses, integration and/or synergy costs related to the Elizabeth Arden Acquisition, permanent wall display costs, capital expenditures, debt service payments, cash tax payments, cash pension plan contributions, other post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, restructuring costs, (including, without limitation, in connection with implementing the EA Integration Restructuring Program), severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, costs related to litigation and/or payments in connection with business and/or brand acquisitions (including, without limitation, through licensing transactions, if any), and discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade;
|
(ix)
|
interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments and/or difficulties, delays or the inability of the counterparty to perform such transactions;
|
(x)
|
difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
|
(xi)
|
lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
|
(xii)
|
unexpected significant variances in the Company's tax provision, effective tax rate and/or unrecognized tax benefits, whether due to the enactment of the Tax Act or otherwise, such as due to the issuance of unfavorable guidance, interpretations, technical clarifications and/or technical corrections legislation by the U.S. Congress, the U.S. Treasury Department or the IRS, unexpected changes in foreign, state or local tax regimes in response to the Tax Act, and/or changes in estimates that may impact the calculation of the Company's tax provisions;
|
(xiii)
|
unanticipated adverse effects on the Company’s business, prospects, results of operations, financial condition and/or cash flows as a result of unexpected developments with respect to the Company's legal proceedings;
|
(xiv)
|
changes in the fair values of the assets acquired in the Elizabeth Arden Acquisition due to, among other things, unanticipated future performance of the acquired licenses and/or other brands; and/or
|
(xv)
|
difficulties with, delays in and/or the Company’s inability to achieve, in whole or in part, or within the expected timeframe the expected benefits from the Elizabeth Arden Acquisition, such as (a) the Company’s or the Elizabeth Arden’s respective businesses experiencing disruptions due to management’s focus on executing the business integration activities and/or due to employee uncertainty during the integration transition period or other factors making it more difficult to maintain relationships with customers, suppliers, employees and other business partners; (b) the Company being unable to successfully implement, in whole or in part, its integration strategies, including the possibility that the expected synergies and cost reductions from the Elizabeth Arden Acquisition will not be realized or will not be realized within the expected time period.
|
(a)
|
List of documents filed as part of this Report:
|
|
(1) Consolidated Financial Statements and Reports of Independent Registered Public Accounting Firm included herein: See Index on page F-1.
|
|
(2) Financial Statement Schedule: See Index on page F-1.
|
|
All other schedules are omitted as they are inapplicable or the required information is furnished in the Company’s Consolidated Financial Statements or the Notes thereto.
|
|
(3) List of Exhibits:
|
2.
|
Plan of acquisition, reorganization, arrangement, liquidation or succession
|
2.1
|
Share Sale and Purchase Agreement, dated as of August 3, 2013, by and among Products Corporation, Beauty Care Professional Products Participations, S.A., Romol Hair & Beauty Group, S.L., Norvo, S.L. and Staubinus España, S.L. (incorporated by reference to Exhibit 2.1 to Revlon’s Current Report on Form 8-K filed with the SEC on August 5, 2013).
|
2.2
|
Agreement and Plan of Merger, dated as of June 16, 2016, by and among Revlon, Products Corporation, RR Transaction Corp. and Elizabeth Arden (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Revlon filed with the SEC on June 17, 2016 (the "Revlon June 2016 Form 8-K")).
|
3.
|
Certificate of Incorporation and By-laws.
|
3.1
|
Restated Certificate of Incorporation of Revlon, dated February 25, 2014 (incorporated by reference to Exhibit 3.1 of Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 5, 2014).
|
3.2
|
Second Amended and Restated By-Laws of Revlon, dated November 3, 2016 (incorporated by reference to Exhibit 3.1 to Revlon’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 filed with the SEC on November 4, 2016 (the "Revlon Q3 2016 Form 10-Q")).
|
4.
|
Instruments Defining the Rights of Security Holders, Including Indentures.
|
4.1
|
Indenture, dated as of February 8, 2013, among Products Corporation, certain subsidiaries of Products Corporation as guarantors thereto, and U.S. Bank National Association, as trustee, relating to Products Corporation's 5.75% Senior Notes due 2021 (the "5.75% Senior Notes Indenture") (incorporated by reference to Exhibit 4.3 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal period ended March 30, 2013 filed with the SEC on April 25, 2013 (the "Products Corporation Q1 2013 Form 10-Q")).
|
4.2
|
Form of 5.75% Senior Notes (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.4 to the Products Corporation Q1 2013 Form 10-Q).
|
4.3
|
Registration Rights Agreement, dated as of February 8, 2013, among Products Corporation, certain subsidiaries of Products Corporation and Citigroup Global Markets Inc. ("CGMI"), as representative of the several initial purchasers of the 5.75% Senior Notes (incorporated by reference to Exhibit 4.5 to the Products Corporation Q1 2013 Form 10-Q).
|
4.4
|
Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of February 8, 2013, among Products Corporation, Revlon and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.6 to the Products Corporation Q1 2013 Form 10-Q).
|
4.5
|
Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of January 21, 2014, among Products Corporation, Revlon and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.27 to Products Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 5, 2014 (the "Products Corporation 2013 Form 10-K")).
|
4.6
|
Third Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of January 14, 2015, among Realistic Roux Professional Products Inc., Products Corporation, the Guarantors defined in the 5.75% Senior Notes Indenture, and U.S Bank National Association (incorporated by reference to Exhibit 10.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2015, filed with the SEC on July 29, 2015 (the "Products Corporation Q2 2015 Form 10-Q")).
|
4.7
|
Fourth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of May 8, 2015, among RML, LLC, Products Corporation, the Guarantors defined in the 5.75% Senior Notes Indenture, and U.S Bank National Association (incorporated by reference to Exhibit 10.2 to the Products Corporation Q2 2015 Form 10-Q).
|
4.8
|
Escrow Agreement for the 6.25% Senior Notes, dated as of August 4, 2016, by and among Revlon Escrow Corporation ("Escrow Corp."), U.S. Bank National Association, as trustee, and Citibank, N.A., as escrow agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Revlon filed with the SEC on August 5, 2016 (the "Revlon August 2016 Form 8-K")).
|
4.9
|
Indenture for the 6.25% Senior Notes, dated as of August 4, 2016 (the "6.25% Senior Notes Indenture"), by and between Escrow Corp. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Revlon August 2016 Form 8-K).
|
4.10
|
Registration Rights Agreement, dated as of August 4, 2016, by and among Escrow Corp, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and CGMI as representatives of the initial purchasers (incorporated by reference to Exhibit 4.3 to the Revlon August 2016 Form 8-K).
|
4.11
|
First Supplemental Indenture to the 6.25% Senior Notes Indenture, dated as of September 7, 2016, by and among Products Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Revlon filed with the SEC on September 9, 2016 (the "Revlon September 2016 Form 8-K")).
|
4.12
|
Joinder Agreement to the Registration Rights Agreement, dated as of September 7, 2016, by and among Products Corporation, the guarantors party thereto and Merrill Lynch and CGMI, as representatives of the initial purchasers (incorporated by reference to Exhibit 4.2 to the Revlon September 2016 Form 8-K).
|
4.13
|
Term Loan Agreement, dated as of September 7, 2016, by and among Products Corporation, Revlon (solely for the purposes set forth therein), certain lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Revlon September 2016 Form 8-K).
|
4.14
|
Asset-Based Revolving Credit Agreement, dated as of September 7, 2016, by and among Products Corporation, certain local borrowing subsidiaries from time to time party thereto, Revlon (solely for the purposes set forth therein), certain lenders and issuing lenders party thereto and Citibank, N.A., as administrative agent, collateral agent, issuing lender and swingline lender (incorporated by reference to Exhibit 10.2 to the Revlon September 2016 Form 8-K).
|
4.15
|
Term Loan Guarantee and Collateral Agreement, dated as of September 7, 2016, made by each of the signatories thereto in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Term Loan Agreement (incorporated by reference to Exhibit 10.3 to the Revlon September 2016 Form 8-K).
|
4.16
|
Holdings Term Loan Guarantee and Pledge Agreement, dated as of September 7, 2016, made by Revlon in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Term Loan Agreement (incorporated by reference to Exhibit 10.4 to the Revlon September 2016 Form 8-K).
|
4.17
|
ABL Guarantee and Collateral Agreement, dated as of September 7, 2016, made by each of the signatories thereto in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Asset-Based Revolving Credit Agreement (incorporated by reference to Exhibit 10.5 to the Revlon September 2016 Form 8-K).
|
4.18
|
Holdings ABL Guarantee and Pledge Agreement, dated as of September 7, 2016, made by Revlon in favor of Citibank, N.A., as collateral agent, for the benefit of the secured parties under the 2016 Asset-Based Revolving Credit Agreement (incorporated by reference to Exhibit 10.6 to the Revlon September 2016 Form 8-K).
|
4.19
|
ABL Intercreditor Agreement, dated as of September 7, 2016, among Citibank, N.A., as ABL Agent, Citibank, N.A., as Initial Term Loan Agent, Revlon, Products Corporation, each subsidiary listed therein or that becomes a party thereto and each Other Term Loan Agent from time to time party thereto (incorporated by reference to Exhibit 10.7 to the Revlon September 2016 Form 8-K).
|
4.20
|
Second Supplemental Indenture to the 6.25% Senior Notes Indenture, dated as of February 13, 2017, by and among Products Corporation, Cutex, Inc. (a subsidiary of Products Corporation), the other Subsidiary Guarantors (as defined in the 6.25% Senior Notes Indenture) and U.S. Bank National Association, as trustee under the 6.25% Senior Notes Indenture (incorporated by reference to Exhibit 4.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017 filed with the SEC on May 5, 2017 (the "Products Corporation Q1 2017 Form 10-Q")).
|
4.21
|
Fifth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of February 13, 2017, by and among Cutex, Inc., Products Corporation, the other Guarantors (as defined in the 5.75% Senior Notes Indenture) and U.S. Bank National Association, as trustee under the 5.75% Senior Notes Indenture (incorporated by reference to Exhibit 4.2 to the Products Corporation Q1 2017 Form 10-Q).
|
4.22
|
Sixth Supplemental Indenture to the 5.75% Senior Notes Indenture, dated as of May 31, 2017, by and among Products Corporation and various of its subsidiaries, the other Guarantors (as defined in the Indenture ) and U.S. Bank National Association, as trustee under the Indenture (incorporated by reference to Exhibit 4.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2017, filed with the SEC on August 4, 2017).
|
10.
|
Material Contracts.
|
10.1
|
Tax Sharing Agreement, dated as of June 24, 1992, among MacAndrews & Forbes, Revlon, Products Corporation and certain subsidiaries of Products Corporation, as amended and restated as of January 1, 2001 (incorporated by reference to Exhibit 10.2 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the SEC on February 25, 2002).
|
10.2
|
Tax Sharing Agreement, dated as of March 26, 2004, by and among Revlon, Products Corporation and certain subsidiaries of Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004 filed with the SEC on May 17, 2004).
|
10.3
|
Employment Agreement, dated as of March 27, 2016, by and among Revlon, Products Corporation and Fabian T. Garcia (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on March 28, 2016 (the "Revlon March 2016 Form 8-K")).
|
10.4
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.2 to the Revlon March 2016 Form 8-K).
|
10.5
|
Employment Agreement, dated as of April 12, 2016, by and among Revlon, Products Corporation and Juan R. Figuereo (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on April 12, 2016).
|
10.6
|
Consulting Agreement by and among Revlon, Products Corporation and E. Scott Beattie, dated as of November 3, 2016 (incorporated by reference to Exhibit 10.1 to the Revlon Q3 2016 Form 10-Q).
|
10.7
|
Restricted Stock Unit Agreement between Revlon and E. Scott Beattie, dated November 3, 2016 (incorporated by reference to Exhibit 10.2 to the Revlon Q3 2016 Form 10-Q).
|
10.8
|
Employment Agreement, dated as of October 9, 2014, by and among Revlon, Products Corporation and Gianni Pieraccioni (incorporated by reference to Exhibit 10.11 to Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on March 12, 2015 (the "Revlon 2014 Form 10-K")).
|
10.9
|
First Amendment to Employment Agreement by and among Revlon, Products Corporation and Gianni Pieraccioni, dated as of February 26, 2016 (incorporated by reference to Exhibit 10.7 to Revlon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on February 26, 2016).
|
10.10
|
Transition and Separation Agreement and Release dated March 1, 2016 by and among Revlon, Products Corporation and Lorenzo Delpani (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on March 4, 2016).
|
10.11
|
Amendment, dated April 21, 2016, to the Transition and Separation Agreement and Release by and among Revlon, Products Corporation and Lorenzo Delpani (incorporated by reference to Exhibit 10.1 to Revlon's Current Report on Form 8-K filed with the SEC on April 22, 2016).
|
10.12
|
Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan") (incorporated by reference to Annex A to Revlon’s Definitive Information Statement on Schedule 14C filed with the SEC on July 3, 2014).
|
10.13
|
Form of Restricted Stock Agreement under the Stock Plan (incorporated by reference to Exhibit 10.3 to Revlon's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 filed with the SEC on October 29, 2014).
|
10.14
|
Revlon Amended and Restated Executive Incentive Compensation Plan, dated as of March 24, 2016 (incorporated by reference to Annex D to Revlon's Annual Proxy Statement on Schedule 14A filed with the SEC on April 29, 2016).
|
10.15
|
Amended and Restated Revlon Pension Equalization Plan, amended and restated as of December 14, 1998 (the "PEP") (incorporated by reference to Exhibit 10.15 to Revlon’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 filed with the SEC on March 3, 1999).
|
10.16
|
Amendment to the PEP, dated as of May 28, 2009 (incorporated by reference to Exhibit 10.13 to Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC on February 25, 2010).
|
10.17
|
Executive Supplemental Medical Expense Plan Summary, dated July 2000 (incorporated by reference to Exhibit 10.10 to Revlon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the SEC on March 21, 2003).
|
10.18
|
Benefit Plans Assumption Agreement, dated as of July 1, 1992, by and among Revlon Holdings, Revlon and Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992 filed with the SEC on March 12, 1993).
|
*10.19
|
|
10.20
|
Preferred Stock Repurchase and Warrant Cancellation Agreement, dated June 16, 2016, by and among Revlon, Products Corporation, RR Transaction Corp., Elizabeth Arden, Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (incorporated by reference to Exhibit 10.1 to the Revlon June 2016 Form 8-K).
|
10.21
|
Employment Agreement, dated as of April 17, 2017, between Revlon, Products Corporation and Christopher Peterson (incorporated by reference to Revlon's Current Report on Form 8-K filed with the SEC on April 17, 2017).
|
21.
|
Subsidiaries.
|
*21.1
|
|
23.
|
Consents of Experts and Counsel.
|
*23.1
|
|
24.
|
Powers of Attorney.
|
*24.1
|
|
*24.2
|
|
*24.3
|
|
*24.4
|
|
*24.5
|
|
*24.6
|
|
*24.7
|
|
*24.8
|
|
*24.9
|
|
*24.10
|
|
*24.11
|
|
*24.12
|
|
*24.13
|
|
*31.1
|
|
*31.2
|
|
32.1 (furnished herewith)
|
|
32.2 (furnished herewith)
|
|
*99.1
|
|
*101.INS
|
XBRL Instance Document
|
*101.SCH
|
XBRL Taxonomy Extension Schema
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements)
|
|
|
Report of Independent Registered Public Accounting Firm (Internal Control Over Financial Reporting)
|
|
|
Audited Financial Statements:
|
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
|
Consolidated Statements of Operations and Comprehensive (Loss) Income for each of the years in the three-year period ended December 31, 2017
|
|
|
Consolidated Statements of Stockholders' Deficiency for each of the years in the three-year period ended December 31, 2017
|
|
|
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2017
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Financial Statement Schedule:
|
|
|
Schedule II - Valuation and Qualifying Accounts
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
(as adjusted)
(a)
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
87.1
|
|
|
$
|
186.4
|
|
Trade receivables, less allowance for doubtful accounts of $13.5 and $11.1 as of December 31, 2017 and December 31, 2016, respectively
|
444.8
|
|
|
423.9
|
|
||
Inventories
|
497.9
|
|
|
424.6
|
|
||
Prepaid expenses and other
|
113.4
|
|
|
88.8
|
|
||
Total current assets
|
1,143.2
|
|
|
1,123.7
|
|
||
Property, plant and equipment, net of accumulated depreciation of $385.5 and $304.7 as of December 31, 2017 and December 31, 2016, respectively
|
372.7
|
|
|
320.5
|
|
||
Deferred income taxes
|
138.0
|
|
|
149.7
|
|
||
Goodwill
|
692.5
|
|
|
689.5
|
|
||
Intangible assets, net of accumulated amortization of $130.9 and $84.8 as of December 31, 2017 and December 31, 2016, respectively
|
592.1
|
|
|
636.6
|
|
||
Other assets
|
118.4
|
|
|
103.5
|
|
||
Total assets
|
$
|
3,056.9
|
|
|
$
|
3,023.5
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
12.4
|
|
|
$
|
10.8
|
|
Current portion of long-term debt
|
170.2
|
|
|
18.1
|
|
||
Accounts payable
|
336.9
|
|
|
296.9
|
|
||
Accrued expenses and other
|
412.8
|
|
|
382.9
|
|
||
Total current liabilities
|
932.3
|
|
|
708.7
|
|
||
Long-term debt
|
2,653.7
|
|
|
2,663.1
|
|
||
Long-term pension and other post-retirement plan liabilities
|
172.8
|
|
|
184.1
|
|
||
Other long-term liabilities
|
68.5
|
|
|
82.4
|
|
||
Stockholders’ deficiency:
|
|
|
|
||||
Class A Common Stock, par value $0.01 per share; 900,000,000 shares authorized; 54,556,100 and 53,956,073 shares issued as of December 31, 2017 and December 31, 2016, respectively
|
0.5
|
|
|
0.5
|
|
||
Additional paid-in capital
|
1,040.0
|
|
|
1,033.2
|
|
||
Treasury stock, at cost: 1,114,528 and 1,024,908 shares of Class A Common Stock as of December 31, 2017 and December 31, 2016, respectively
|
(21.7
|
)
|
|
(19.2
|
)
|
||
Accumulated deficit
|
(1,560.8
|
)
|
|
(1,377.6
|
)
|
||
Accumulated other comprehensive loss
|
(228.4
|
)
|
|
(251.7
|
)
|
||
Total stockholders’ deficiency
|
(770.4
|
)
|
|
(614.8
|
)
|
||
Total liabilities and stockholders’ deficiency
|
$
|
3,056.9
|
|
|
$
|
3,023.5
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
2,693.7
|
|
|
$
|
2,334.0
|
|
|
$
|
1,914.3
|
|
Cost of sales
|
1,151.3
|
|
|
917.1
|
|
|
667.8
|
|
|||
Gross profit
|
1,542.4
|
|
|
1,416.9
|
|
|
1,246.5
|
|
|||
Selling, general and administrative expenses
|
1,467.6
|
|
|
1,161.0
|
|
|
1,002.5
|
|
|||
Acquisition and integration costs
|
52.9
|
|
|
43.2
|
|
|
8.0
|
|
|||
Restructuring charges and other, net
|
33.4
|
|
|
34.0
|
|
|
10.5
|
|
|||
Impairment charges
|
10.8
|
|
|
23.4
|
|
|
9.7
|
|
|||
Operating (loss) income
|
(22.3
|
)
|
|
155.3
|
|
|
215.8
|
|
|||
Other expenses:
|
|
|
|
|
|
||||||
Interest expense
|
149.8
|
|
|
105.2
|
|
|
83.3
|
|
|||
Amortization of debt issuance costs
|
9.1
|
|
|
6.8
|
|
|
5.7
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
16.9
|
|
|
—
|
|
|||
Foreign currency (gains) losses, net
|
(18.5
|
)
|
|
18.5
|
|
|
15.7
|
|
|||
Miscellaneous, net
|
0.8
|
|
|
(0.6
|
)
|
|
0.4
|
|
|||
Other expenses
|
141.2
|
|
|
146.8
|
|
|
105.1
|
|
|||
(Loss) income from continuing operations before income taxes
|
(163.5
|
)
|
|
8.5
|
|
|
110.7
|
|
|||
Provision for income taxes
|
21.8
|
|
|
25.5
|
|
|
51.4
|
|
|||
(Loss) income from continuing operations, net of taxes
|
(185.3
|
)
|
|
(17.0
|
)
|
|
59.3
|
|
|||
Income (loss) from discontinued operations, net of taxes
|
2.1
|
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|||
Net (loss) income
|
$
|
(183.2
|
)
|
|
$
|
(21.9
|
)
|
|
$
|
56.1
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments, net of tax
(a)
|
9.0
|
|
|
(0.5
|
)
|
|
(18.1
|
)
|
|||
Amortization of pension related costs, net of tax
(b)(c)
|
8.1
|
|
|
7.6
|
|
|
7.2
|
|
|||
Pension re-measurement, net of tax
(d)
|
1.8
|
|
|
(14.3
|
)
|
|
(6.9
|
)
|
|||
Pension settlement, net of tax
(e)
|
—
|
|
|
—
|
|
|
17.3
|
|
|||
Pension curtailment, net of tax
(f)
|
2.1
|
|
|
—
|
|
|
—
|
|
|||
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax
(g)
|
2.3
|
|
|
—
|
|
|
—
|
|
|||
Revaluation of derivative financial instruments, net of reclassifications into earnings, net of tax
(h)
|
—
|
|
|
0.8
|
|
|
(1.6
|
)
|
|||
Other comprehensive income, net
|
23.3
|
|
|
(6.4
|
)
|
|
(2.1
|
)
|
|||
Total comprehensive (loss) income
|
$
|
(159.9
|
)
|
|
$
|
(28.3
|
)
|
|
$
|
54.0
|
|
|
|
|
|
|
|
||||||
Basic (loss) earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.52
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
1.13
|
|
Discontinued operations
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|||
Net (loss) income
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
|
|
|
|
|
|
||||||
Diluted (loss) earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.52
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
1.13
|
|
Discontinued operations
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|||
Net (loss) income
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
52,597,582
|
|
|
52,504,196
|
|
|
52,431,193
|
|
|||
Diluted
|
52,597,582
|
|
|
52,504,196
|
|
|
52,591,545
|
|
(a)
|
Net of tax (benefit) expense of $
(0.4) million
,
$1.1 million
and
$(5.1) million
for
2017
,
2016
and
2015
, respectively.
|
(b)
|
Net of tax expense of
$1.6 million
for
2017
, and
$1.3 million
for each of
2016
and
2015
.
|
(c)
|
This amount is included in the computation of net periodic benefit (income) costs. See Note
14
, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit (income) costs.
|
(d)
|
Net of tax benefit of
$0.3 million
,
$4.1 million
and
$3.3 million
for
2017
,
2016
and
2015
, respectively.
|
(e)
|
Net of tax expense of
$3.7 million
for
2015
.
|
(f)
|
Net of tax expense of
$0.3 million
for
2017
.
|
(g)
|
Net of tax benefit of
$1.4 million
for
2017
.
|
(h)
|
Net of tax expense (benefit) of
$0.5 million
and
$(1.0) million
for
2016
and
2015
, respectively.
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Deficiency
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, January 1, 2015
|
$
|
0.5
|
|
|
$
|
1,020.9
|
|
|
$
|
(10.5
|
)
|
|
$
|
(1,411.8
|
)
|
|
$
|
(243.2
|
)
|
|
$
|
(644.1
|
)
|
Treasury stock acquired, at cost
(a)
|
|
|
|
|
(2.8
|
)
|
|
|
|
|
|
(2.8
|
)
|
||||||||||
Stock-based compensation amortization
|
|
|
5.1
|
|
|
|
|
|
|
|
|
5.1
|
|
||||||||||
Excess tax benefits from stock-based compensation
|
|
|
0.3
|
|
|
|
|
|
|
|
|
0.3
|
|
||||||||||
Net income
|
|
|
|
|
|
|
56.1
|
|
|
|
|
56.1
|
|
||||||||||
Other comprehensive loss, net
(b)
|
|
|
|
|
|
|
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||||||||||
Balance, December 31, 2015
|
$
|
0.5
|
|
|
$
|
1,026.3
|
|
|
$
|
(13.3
|
)
|
|
$
|
(1,355.7
|
)
|
|
$
|
(245.3
|
)
|
|
$
|
(587.5
|
)
|
Treasury stock acquired, at cost
(a)
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
(3.2
|
)
|
||||||||||
Repurchase of common stock
(c)
|
|
|
|
|
(2.7
|
)
|
|
|
|
|
|
(2.7
|
)
|
||||||||||
Stock-based compensation amortization
|
|
|
6.4
|
|
|
|
|
|
|
|
|
6.4
|
|
||||||||||
Excess tax benefits from stock-based compensation
|
|
|
0.5
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||||||
Net loss
|
|
|
|
|
|
|
(21.9
|
)
|
|
|
|
(21.9
|
)
|
||||||||||
Other comprehensive loss, net
(b)
|
|
|
|
|
|
|
|
|
(6.4
|
)
|
|
(6.4
|
)
|
||||||||||
Balance, December 31, 2016
|
$
|
0.5
|
|
|
$
|
1,033.2
|
|
|
$
|
(19.2
|
)
|
|
$
|
(1,377.6
|
)
|
|
$
|
(251.7
|
)
|
|
$
|
(614.8
|
)
|
Treasury stock acquired, at cost
(a)
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
||||||
Stock-based compensation amortization
|
—
|
|
|
6.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(183.2
|
)
|
|
—
|
|
|
(183.2
|
)
|
||||||
Other comprehensive income, net
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.3
|
|
|
23.3
|
|
||||||
Balance, December 31, 2017
|
$
|
0.5
|
|
|
$
|
1,040.0
|
|
|
$
|
(21.7
|
)
|
|
$
|
(1,560.8
|
)
|
|
$
|
(228.4
|
)
|
|
$
|
(770.4
|
)
|
(a)
|
Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (the "Stock Plan"), the Company withheld an aggregate of
89,620
,
92,092
and
82,740
shares of Revlon Class A Common Stock during
2017
,
2016
and
2015
, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares for certain senior executives. These withheld shares were recorded as treasury stock using the cost method, at a weighted-average price per share of
$27.67
, $
34.83
and $
34.40
, respectively, during
2017
,
2016
and
2015
, 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 $
2.5 million
, $
3.2 million
and $
2.8 million
in
2017
,
2016
and
2015
, respectively. See Note 15, "Stock Compensation Plan," for details regarding restricted stock awards under the Stock Plan.
|
(b)
|
See Note 17, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during
2017
,
2016
and
2015
.
|
(c)
|
On April 21, 2016, in connection with his separation from the Company, the Company repurchased
72,895
shares of Revlon Class A Common Stock (representing vested shares of restricted stock) from Lorenzo Delpani, the Company's former President and Chief Executive Officer, at a price of
$36.83
per share based upon the NYSE closing price of Revlon Class A Common Stock on April 20, 2016, for a total purchase price of
$2.7 million
.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
(as adjusted)
(a)
|
|
2015
(as adjusted)
(a)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(183.2
|
)
|
|
$
|
(21.9
|
)
|
|
$
|
56.1
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
155.8
|
|
|
123.2
|
|
|
103.2
|
|
|||
Foreign currency (gains) losses from re-measurement
|
(22.5
|
)
|
|
20.6
|
|
|
19.5
|
|
|||
Amortization of debt discount
|
1.2
|
|
|
1.4
|
|
|
1.4
|
|
|||
Stock-based compensation amortization
|
6.8
|
|
|
6.4
|
|
|
5.1
|
|
|||
Impairment charge
|
10.8
|
|
|
23.4
|
|
|
9.7
|
|
|||
Provision for (benefit from) deferred income taxes
|
22.6
|
|
|
(6.2
|
)
|
|
28.3
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
16.9
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
9.1
|
|
|
6.8
|
|
|
5.7
|
|
|||
Loss (gain) on sale of certain assets
|
1.6
|
|
|
0.4
|
|
|
(6.4
|
)
|
|||
Pension and other post-retirement cost (income)
|
1.5
|
|
|
(0.6
|
)
|
|
19.0
|
|
|||
Change in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
||||
Increase in trade receivables
|
(9.9
|
)
|
|
(59.5
|
)
|
|
(18.5
|
)
|
|||
(Increase) decrease in inventories
|
(63.0
|
)
|
|
74.5
|
|
|
(30.6
|
)
|
|||
Increase in prepaid expenses and other current assets
|
(21.2
|
)
|
|
(8.2
|
)
|
|
(13.4
|
)
|
|||
Increase (decrease) in accounts payable
|
26.8
|
|
|
(12.6
|
)
|
|
34.9
|
|
|||
Increase in accrued expenses and other current liabilities
|
12.3
|
|
|
11.7
|
|
|
10.1
|
|
|||
Pension and other post-retirement plan contributions
|
(8.5
|
)
|
|
(8.3
|
)
|
|
(18.1
|
)
|
|||
Purchases of permanent displays
|
(65.5
|
)
|
|
(52.1
|
)
|
|
(47.4
|
)
|
|||
Other, net
|
(14.0
|
)
|
|
4.2
|
|
|
(0.5
|
)
|
|||
Net cash (used in) provided by operating activities
|
(139.3
|
)
|
|
120.1
|
|
|
158.1
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(108.3
|
)
|
|
(59.3
|
)
|
|
(48.3
|
)
|
|||
Business acquisition, net of acquired cash
|
—
|
|
|
(1,028.7
|
)
|
|
(41.7
|
)
|
|||
Proceeds from the sale of certain assets
|
—
|
|
|
0.5
|
|
|
6.2
|
|
|||
Net cash used in investing activities
|
(108.3
|
)
|
|
(1,087.5
|
)
|
|
(83.8
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net increase (decrease) in short-term borrowings and overdraft
|
3.3
|
|
|
—
|
|
|
23.0
|
|
|||
Net borrowings under the 2016 Revolving Credit Facility
|
157.0
|
|
|
—
|
|
|
|
||||
Repayments under the 2016 Term Loan Facility
|
(18.0
|
)
|
|
(4.5
|
)
|
|
|
||||
Prepayments under the Old Acquisition Term Loan
|
—
|
|
|
(15.1
|
)
|
|
(19.3
|
)
|
|||
Prepayments under the 2011 Term Loan
|
—
|
|
|
(11.5
|
)
|
|
(12.1
|
)
|
|||
Repayment of Old Acquisition Term Loan
|
—
|
|
|
(658.6
|
)
|
|
—
|
|
|||
Repayment of 2011 Term Loan
|
—
|
|
|
(651.4
|
)
|
|
—
|
|
|||
Borrowings under the 2016 Term Loan Facility
|
—
|
|
|
1,791.0
|
|
|
—
|
|
|||
Proceeds from the issuance of 6.25% Senior Notes
|
—
|
|
|
450.0
|
|
|
—
|
|
|||
Payment of financing costs
|
(1.2
|
)
|
|
(61.6
|
)
|
|
—
|
|
|||
Tax withholdings related to net share settlements of restricted stock units and awards
|
(2.5
|
)
|
|
(3.2
|
)
|
|
(2.8
|
)
|
|||
Treasury stock purchased
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|||
Other financing activities
|
(1.7
|
)
|
|
(2.5
|
)
|
|
(3.7
|
)
|
|||
Net cash provided by (used in) financing activities
|
136.9
|
|
|
829.9
|
|
|
(14.9
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
11.3
|
|
|
(2.6
|
)
|
|
(7.8
|
)
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(99.4
|
)
|
|
(140.1
|
)
|
|
51.6
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
186.8
|
|
|
326.9
|
|
|
275.3
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
87.4
|
|
|
$
|
186.8
|
|
|
$
|
326.9
|
|
Supplemental schedule of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
149.1
|
|
|
$
|
91.7
|
|
|
$
|
79.9
|
|
Income taxes, net of refunds
|
0.4
|
|
|
21.9
|
|
|
$
|
25.4
|
|
|
|
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
87.1
|
|
|
$
|
186.4
|
|
|
$
|
326.9
|
|
Restricted cash
(a)
|
|
0.3
|
|
|
0.4
|
|
|
—
|
|
|||
Total cash, cash equivalents and restricted cash
|
|
$
|
87.4
|
|
|
$
|
186.8
|
|
|
$
|
326.9
|
|
|
As of
September 7, 2016
|
||
Purchase price of Elizabeth Arden common stock
(1)
|
$
|
431.5
|
|
Repayment of Elizabeth Arden senior notes
(2)
|
350.0
|
|
|
Repayment of Elizabeth Arden revolving credit facility, including accrued interest
(3)
|
142.5
|
|
|
Repayment of Elizabeth Arden second lien credit facility, including accrued interest
(3)
|
25.0
|
|
|
Repurchase of Elizabeth Arden preferred stock
(4)
|
55.0
|
|
|
Payment of accrued interest and call premium on Elizabeth Arden Senior Notes
(5)
|
27.4
|
|
|
Payment of Elizabeth Arden dividends payable at Elizabeth Arden Acquisition Date
(6)
|
2.9
|
|
|
Total Purchase Price
|
$
|
1,034.3
|
|
(1)
|
All of Elizabeth Arden’s then issued and outstanding common stock was canceled and extinguished on the Elizabeth Arden Acquisition Date and converted into the right to receive
$14
in cash per share, without interest, less any required withholding taxes, that was paid by Products Corporation upon the completion of the Elizabeth Arden Acquisition. The
$431.5 million
purchase price for Elizabeth Arden common stock included the settlement of all then outstanding Elizabeth Arden stock options and all then outstanding Elizabeth Arden restricted share units at the Elizabeth Arden Acquisition Date for a total cash payment of
$11.1 million
.
|
(2)
|
The purchase price included the repurchase of the entire
$350 million
aggregate principal amount then outstanding of Elizabeth Arden’s
7.375%
senior notes due 2021 (the "Elizabeth Arden Old Senior Notes").
|
(3)
|
The purchase price included the repayment of the entire
$142 million
aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s
$300 million
revolving credit facility and the entire
$25 million
aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility, each of which facilities were terminated as of the Elizabeth Arden Acquisition Date.
|
(4)
|
The purchase price included $
55 million
that was paid to retire the entire $
55 million
liquidation preference of all of the then issued and outstanding
50,000
shares of Elizabeth Arden preferred stock, par value
$0.01
per share (the "Elizabeth Arden Preferred Stock"), which amount included a
$5 million
change of control premium.
|
(5)
|
Interest on the Elizabeth Arden Old Senior Notes accrued at a rate of
7.375%
per annum and was payable semi-annually on March 15 and September 15 of every year. The approximately
$12.3 million
of accrued and unpaid interest was calculated based on
176 days
of accrued interest as of the Elizabeth Arden Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Old Senior Notes, upon a change in control, such notes were repurchased at a price equal to
103.69%
of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the date of such repurchase. The repurchase of the Elizabeth Arden Old Senior Notes was consummated on October 7, 2016.
|
(6)
|
The purchase price included the payment of approximately $
2.9 million
in accrued dividends payable at the Elizabeth Arden Acquisition Date to the holders of the then outstanding Elizabeth Arden Preferred Stock.
|
|
Estimated Fair Value as Previously Reported
(a)
|
|
Measurement Period Adjustments
|
|
Fair Value as Adjusted
|
||||||
Cash
|
$
|
41.1
|
|
|
$
|
—
|
|
|
$
|
41.1
|
|
Accounts Receivable
|
132.6
|
|
|
—
|
|
|
132.6
|
|
|||
Inventories
|
323.3
|
|
|
—
|
|
|
323.3
|
|
|||
Prepaid expenses and other current assets
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|||
Property and equipment
|
91.2
|
|
|
—
|
|
|
91.2
|
|
|||
Deferred taxes, net
(b)
|
68.7
|
|
|
10.0
|
|
|
78.7
|
|
|||
Intangible assets
(c)
|
336.8
|
|
|
(15.4
|
)
|
|
321.4
|
|
|||
Goodwill
|
221.7
|
|
|
12.3
|
|
|
234.0
|
|
|||
Other assets
|
16.6
|
|
|
—
|
|
|
16.6
|
|
|||
Total assets acquired
|
$
|
1,262.7
|
|
|
$
|
6.9
|
|
|
$
|
1,269.6
|
|
Accounts payable
|
(116.0
|
)
|
|
—
|
|
|
(116.0
|
)
|
|||
Accrued expenses
(d)
|
(109.3
|
)
|
|
1.7
|
|
|
(107.6
|
)
|
|||
Other long-term liabilities
(e)
|
(3.1
|
)
|
|
(8.6
|
)
|
|
(11.7
|
)
|
|||
Total liabilities assumed
|
$
|
(228.4
|
)
|
|
$
|
(6.9
|
)
|
|
$
|
(235.3
|
)
|
Total consideration transferred
|
$
|
1,034.3
|
|
|
$
|
—
|
|
|
$
|
1,034.3
|
|
|
As Previously Reported
(a)
|
|
|
|
As Adjusted
|
||||||||||
|
Estimated Fair Values
|
|
Remaining Useful Life at the Elizabeth Arden Acquisition Date (in years)
|
|
Measurement Period Adjustments
(b)
|
|
Fair Values
|
|
Remaining Useful Life at the Elizabeth Arden Acquisition Date
(in years) |
||||||
Trademarks, indefinite-lived
|
$
|
142.0
|
|
|
Indefinite
|
|
$
|
(103.0
|
)
|
|
$
|
39.0
|
|
|
Indefinite
|
Trademarks, finite-lived
|
15.0
|
|
|
15
|
|
87.6
|
|
|
102.6
|
|
|
5 - 20
|
|||
Technology
|
2.5
|
|
|
10
|
|
—
|
|
|
2.5
|
|
|
10
|
|||
Customer relationships
|
123.0
|
|
|
16
|
|
—
|
|
|
123.0
|
|
|
16
|
|||
License agreements
|
22.0
|
|
|
19
|
|
—
|
|
|
22.0
|
|
|
19
|
|||
Distribution rights
|
31.0
|
|
|
18
|
|
—
|
|
|
31.0
|
|
|
18
|
|||
Favorable lease commitments
|
1.3
|
|
|
3
|
|
—
|
|
|
1.3
|
|
|
3
|
|||
Total acquired intangible assets
|
$
|
336.8
|
|
|
|
|
$
|
(15.4
|
)
|
(b)
|
$
|
321.4
|
|
|
|
|
Unaudited Pro Forma Results
|
|||||||
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
2,858.9
|
|
|
$
|
2,863.5
|
|
Loss from continuing operations, before income taxes
|
|
(57.1
|
)
|
|
(74.6
|
)
|
|
|
Year Ended December 31,
|
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Interest Expense
|
|
|
|
|
||||
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes
|
|
$
|
121.9
|
|
|
$
|
106.4
|
|
Reversal of Elizabeth Arden’s historical interest expense
|
|
(19.5
|
)
|
|
(26.2
|
)
|
||
Company historical interest expense, as reflected in the historical consolidated financial statements
|
|
(75.9
|
)
|
|
(50.9
|
)
|
||
Total adjustment for pro forma interest expense
|
|
$
|
26.5
|
|
|
$
|
29.3
|
|
Debt issuance costs
|
|
|
|
|
||||
Pro forma amortization of debt issuance costs
|
|
$
|
8.1
|
|
|
$
|
8.1
|
|
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements
|
|
(3.3
|
)
|
|
(4.4
|
)
|
||
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs
|
|
(1.3
|
)
|
|
(1.5
|
)
|
||
Total adjustment for pro forma amortization of debt issuance costs
|
|
$
|
3.5
|
|
|
$
|
2.2
|
|
|
Amounts Recognized as of May 31, 2016
|
||
Inventory
|
$
|
0.8
|
|
Purchased Intangible Assets
(a)
|
17.2
|
|
|
Goodwill
|
11.1
|
|
|
Total consideration transferred
|
$
|
29.1
|
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
||||||||||||||||
|
Employee Severance and Other Personnel Benefits
|
|
Lease Termination and Other Costs
(a)
|
|
Total Restructuring Charges
|
|
Inventory Adjustments
(b)
|
|
Other Related Charges
(c)
|
|
Total Restructuring and Related Charges
|
||||||||||||
Charges incurred through December 31, 2016
|
$
|
31.5
|
|
|
$
|
0.2
|
|
|
$
|
31.7
|
|
|
$
|
0.5
|
|
|
$
|
2.3
|
|
|
$
|
34.5
|
|
Charges incurred during the year ended December 31, 2017
|
31.3
|
|
|
4.8
|
|
|
36.1
|
|
|
0.9
|
|
|
0.7
|
|
|
37.7
|
|
||||||
Cumulative charges incurred through December 31, 2017
|
$
|
62.8
|
|
|
$
|
5.0
|
|
|
$
|
67.8
|
|
|
$
|
1.4
|
|
|
$
|
3.0
|
|
|
$
|
72.2
|
|
|
|
Charges incurred during the twelve months ended December 31, 2017
|
|
Cumulative charges incurred through December 31, 2017
|
||||
Elizabeth Arden
|
|
$
|
16.1
|
|
|
$
|
22.6
|
|
Consumer
|
|
12.1
|
|
|
16.3
|
|
||
Professional
|
|
4.2
|
|
|
9.8
|
|
||
Unallocated Corporate Expenses
|
|
3.7
|
|
|
19.1
|
|
||
Total
|
|
$
|
36.1
|
|
|
$
|
67.8
|
|
|
|
|
|
|
|
|
Utilized, Net
|
|
|
||||||||||||||
Liability
Balance at January 1, 2017
|
|
Expense (Income), Net
|
|
Foreign Currency Translation
|
|
Cash
|
|
Non-cash
|
|
Liability Balance at December 31, 2017
|
|||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EA Integration Restructuring Program:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
$
|
31.5
|
|
|
$
|
31.3
|
|
|
$
|
—
|
|
|
$
|
(37.0
|
)
|
|
$
|
—
|
|
|
$
|
25.8
|
|
Other
|
3.0
|
|
|
6.4
|
|
|
—
|
|
|
(5.5
|
)
|
|
—
|
|
|
3.9
|
|
||||||
2015 Efficiency Program:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
4.5
|
|
|
(3.2
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
0.3
|
|
||||||
Other
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||||
December 2013 Program:
(c)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
1.2
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.1
|
|
||||||
Other immaterial actions:
(d)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
1.4
|
|
|
0.6
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
1.1
|
|
||||||
Other
|
1.0
|
|
|
1.1
|
|
|
0.1
|
|
|
(0.7
|
)
|
|
—
|
|
|
1.5
|
|
||||||
Total restructuring reserve
|
$
|
42.8
|
|
|
$
|
36.2
|
|
|
$
|
0.1
|
|
|
$
|
(45.2
|
)
|
|
$
|
—
|
|
|
$
|
33.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Liability
Balance at January 1, 2016
|
|
Expense (Income), Net
|
|
Foreign Currency Translation
|
|
Cash
|
|
Non-cash
|
|
Liability Balance at December 31, 2016
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EA Integration Restructuring Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
$
|
—
|
|
|
$
|
31.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31.5
|
|
Other
|
—
|
|
|
3.0
|
|
|
|
|
|
|
|
|
3.0
|
|
|||||||||
2015 Efficiency Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
6.6
|
|
|
0.6
|
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
|
4.5
|
|
||||||
Other
|
0.1
|
|
|
0.7
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
0.2
|
|
||||||
2014 Integration Program:
(e)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
0.8
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||||
December 2013 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||||
Other immaterial actions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee severance and other personnel benefits
|
2.3
|
|
|
2.1
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
1.4
|
|
||||||
Other
|
0.7
|
|
|
1.5
|
|
|
—
|
|
|
(1.5
|
)
|
|
0.3
|
|
|
1.0
|
|
||||||
Total restructuring reserve
|
$
|
11.8
|
|
|
$
|
39.4
|
|
|
$
|
—
|
|
|
$
|
(8.7
|
)
|
|
$
|
0.3
|
|
|
$
|
42.8
|
|
|
|
2015 Efficiency Program cumulative charges incurred through December 31, 2017
|
||
Consumer
|
|
$
|
3.6
|
|
Professional
|
|
3.5
|
|
|
Unallocated Corporate Expenses
|
|
0.5
|
|
|
Total
|
|
$
|
7.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income (loss) from discontinued operations, before taxes
|
2.4
|
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|||
Provision for income taxes
|
0.3
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations, net of taxes
|
2.1
|
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash and cash equivalents
|
$
|
1.3
|
|
|
$
|
1.7
|
|
Trade receivables, net
|
0.2
|
|
|
0.2
|
|
||
Total current assets
|
1.5
|
|
|
1.9
|
|
||
Total assets
|
$
|
1.5
|
|
|
$
|
1.9
|
|
|
|
|
|
||||
Accounts payable
|
$
|
0.5
|
|
|
$
|
0.5
|
|
Accrued expenses and other
|
3.5
|
|
|
3.3
|
|
||
Total current liabilities
|
4.0
|
|
|
3.8
|
|
||
Total liabilities
|
$
|
4.0
|
|
|
$
|
3.8
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials and supplies
|
$
|
123.4
|
|
|
$
|
72.9
|
|
Work-in-process
|
22.0
|
|
|
33.5
|
|
||
Finished goods
|
352.5
|
|
|
318.2
|
|
||
|
$
|
497.9
|
|
|
$
|
424.6
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Land and improvements
|
$
|
11.6
|
|
|
$
|
10.4
|
|
Building and improvements
|
97.0
|
|
|
88.6
|
|
||
Machinery, equipment and capital leases
|
275.1
|
|
|
243.3
|
|
||
Office furniture, fixtures and capitalized software
|
168.3
|
|
|
122.7
|
|
||
Counters and trade fixtures
|
62.0
|
|
|
60.8
|
|
||
Leasehold improvements
|
51.4
|
|
|
46.0
|
|
||
Construction-in-progress
|
92.8
|
|
|
53.4
|
|
||
Property, plant and equipment, gross
|
758.2
|
|
|
625.2
|
|
||
Accumulated depreciation and amortization
|
(385.5
|
)
|
|
(304.7
|
)
|
||
Property, plant and equipment, net
|
$
|
372.7
|
|
|
$
|
320.5
|
|
|
Consumer
|
|
Professional
|
|
Elizabeth Arden
|
|
Other
|
|
Total
|
||||||||||
Balance at January 1, 2016
|
$
|
210.1
|
|
|
$
|
240.7
|
|
|
$
|
—
|
|
|
$
|
18.9
|
|
|
$
|
469.7
|
|
Goodwill acquired
(a)
|
17.4
|
|
|
—
|
|
|
221.7
|
|
|
—
|
|
|
239.1
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
(2.6
|
)
|
|||||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.7
|
)
|
|
(16.7
|
)
|
|||||
Balance at December 31, 2016
|
$
|
227.5
|
|
|
$
|
240.3
|
|
|
$
|
221.7
|
|
|
$
|
—
|
|
|
$
|
689.5
|
|
Measurement Period Adjustments
(b)
|
—
|
|
|
—
|
|
|
12.3
|
|
|
—
|
|
|
12.3
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|||||
Goodwill impairment charge
|
(10.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.8
|
)
|
|||||
Balance at December 31, 2017
|
$
|
216.7
|
|
|
$
|
241.8
|
|
|
$
|
234.0
|
|
|
$
|
—
|
|
|
$
|
692.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cumulative goodwill impairment charges
|
$
|
(20.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(16.7
|
)
|
|
$
|
(37.2
|
)
|
|
December 31, 2017
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted-Average Useful Life (in Years)
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks and licenses
|
$
|
271.4
|
|
|
$
|
(72.8
|
)
|
|
$
|
198.6
|
|
|
13
|
Customer relationships
|
250.6
|
|
|
(46.8
|
)
|
|
203.8
|
|
|
13
|
|||
Patents and internally-developed IP
|
20.8
|
|
|
(8.4
|
)
|
|
12.4
|
|
|
7
|
|||
Distribution rights
|
31.0
|
|
|
(2.3
|
)
|
|
28.7
|
|
|
17
|
|||
Other
|
1.3
|
|
|
(0.6
|
)
|
|
0.7
|
|
|
2
|
|||
Total finite-lived intangible assets
|
$
|
575.1
|
|
|
$
|
(130.9
|
)
|
|
$
|
444.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trade names
|
$
|
147.9
|
|
|
$
|
—
|
|
|
$
|
147.9
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
147.9
|
|
|
$
|
—
|
|
|
$
|
147.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
723.0
|
|
|
$
|
(130.9
|
)
|
|
$
|
592.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
December 31, 2016
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted-Average Useful Life (in Years)
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks and licenses
|
$
|
177.9
|
|
|
$
|
(47.9
|
)
|
|
$
|
130.0
|
|
|
13
|
Customer relationships
|
247.6
|
|
|
(30.1
|
)
|
|
217.5
|
|
|
14
|
|||
Patents and internally-developed IP
|
20.3
|
|
|
(6.1
|
)
|
|
14.2
|
|
|
8
|
|||
Distribution rights
|
31.0
|
|
|
(0.5
|
)
|
|
30.5
|
|
|
18
|
|||
Other
|
1.3
|
|
|
(0.2
|
)
|
|
1.1
|
|
|
3
|
|||
Total finite-lived intangible assets
|
$
|
478.1
|
|
|
$
|
(84.8
|
)
|
|
$
|
393.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trade names
|
$
|
243.3
|
|
|
$
|
—
|
|
|
$
|
243.3
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
243.3
|
|
|
$
|
—
|
|
|
$
|
243.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
721.4
|
|
|
$
|
(84.8
|
)
|
|
$
|
636.6
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Compensation and related benefits
|
$
|
59.6
|
|
|
$
|
75.8
|
|
Advertising and promotional costs
|
84.0
|
|
|
66.7
|
|
||
Sales returns and allowances
|
61.7
|
|
|
51.9
|
|
||
Taxes
|
48.4
|
|
|
39.2
|
|
||
Restructuring reserve
|
33.3
|
|
|
38.0
|
|
||
Interest
|
23.8
|
|
|
24.4
|
|
||
Other
|
102.0
|
|
|
86.9
|
|
||
|
$
|
412.8
|
|
|
$
|
382.9
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (see (a) below)
|
$
|
1,735.9
|
|
|
$
|
1,747.8
|
|
2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (b) below)
|
152.1
|
|
|
—
|
|
||
6.25% Senior Notes due 2024, net of debt issuance costs (see (c) below)
|
440.3
|
|
|
439.1
|
|
||
5.75% Senior Notes due 2021, net of debt issuance costs (see (d) below)
|
495.1
|
|
|
493.8
|
|
||
Spanish Government Loan due 2025
|
0.5
|
|
|
0.5
|
|
||
|
2,823.9
|
|
|
2,681.2
|
|
||
Less current portion
(*)
|
(170.2
|
)
|
|
(18.1
|
)
|
||
|
$
|
2,653.7
|
|
|
$
|
2,663.1
|
|
Period
|
|
Optimal Redemption Premium Percentage
|
|
2019
|
|
104.688
|
%
|
2020
|
|
103.125
|
%
|
2021
|
|
101.563
|
%
|
2022 and thereafter
|
|
100.000
|
%
|
Period
|
|
Percentage
|
|
2017
|
|
102.875
|
%
|
2018
|
|
101.438
|
%
|
2019 and thereafter
|
|
100.000
|
%
|
•
|
incur or guarantee additional indebtedness ("Limitation on Debt");
|
•
|
pay dividends, make repayments on indebtedness that is subordinated in right of payment to the
5.75%
Senior Notes and make other "restricted payments" ("Limitation on Restricted Payments");
|
•
|
make certain investments;
|
•
|
create liens on their assets to secure debt;
|
•
|
enter into transactions with affiliates;
|
•
|
merge, consolidate or amalgamate with another company ("Successor Company");
|
•
|
transfer and sell assets ("Limitation on Asset Sales"); and
|
•
|
permit restrictions on the payment of dividends by Products Corporation’s subsidiaries ("Limitation on Dividends from Subsidiaries").
|
Years Ended December 31,
|
|
Long-Term Debt Maturities
|
|
||
2018
|
|
$
|
175.1
|
|
(a)
|
2019
|
|
18.1
|
|
(b)
|
|
2020
|
|
18.1
|
|
(b)
|
|
2021
|
|
518.1
|
|
(c)
|
|
2022
|
|
18.1
|
|
(b)
|
|
Thereafter
|
|
2,137.5
|
|
|
|
Total long-term debt
|
|
2,885.0
|
|
|
|
Discounts and deferred finance charges
|
|
(61.1
|
)
|
|
|
Total long-term debt, net of discounts and deferred finance charges
|
|
$
|
2,823.9
|
|
|
(a)
|
Amount consists primarily of
$157 million
in aggregate principal amount of borrowings under the 2016 Revolving Credit Facility and the quarterly amortization payments required under the 2016 Term Loan Facility.
|
(b)
|
Amount consists primarily of quarterly amortization payments described in (a) above.
|
(c)
|
Amount is primarily comprised of the
$500 million
in aggregate principal amount outstanding as of
December 31, 2017
under the
5.75%
Senior Notes, which mature on February 15, 2021, and the quarterly amortization payment described in (a) above.
|
•
|
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.
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
2013 Interest Rate Swap
(b)
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
FX Contracts
(a)
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
2013 Interest Rate Swap
(b)
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
2,131.5
|
|
|
$
|
—
|
|
|
$
|
2,131.5
|
|
|
$
|
2,823.9
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
2,770.9
|
|
|
$
|
—
|
|
|
$
|
2,770.9
|
|
|
$
|
2,681.2
|
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
Assets
|
|
Liabilities
|
||||||||||||||||
|
Balance Sheet
|
|
December 31,
2017 |
|
December 31,
2016 |
|
Balance Sheet
|
|
December 31,
2017 |
|
December 31,
2016 |
||||||||
|
Classification
|
|
Fair Value
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
|
Fair Value
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
FX Contracts
(a)
|
Prepaid expenses and other
|
|
$
|
0.6
|
|
|
$
|
2.3
|
|
|
Accrued Expenses
|
|
$
|
1.9
|
|
|
$
|
1.1
|
|
2013 Interest Rate Swap
(b)
|
Prepaid expenses and other
|
|
—
|
|
|
—
|
|
|
Accrued expenses and other
|
|
0.9
|
|
|
3.7
|
|
||||
|
Other assets
|
|
—
|
|
|
—
|
|
|
Other long-term liabilities
|
|
—
|
|
|
1.0
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income
|
||||||||||
Year Ended December 31,
|
|||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Derivatives previously designated as hedging instruments:
|
|
|
|
|
|
||||||
2013 Interest Rate Swap, net of tax
(a)
|
$
|
2.3
|
|
|
$
|
0.8
|
|
|
$
|
(1.6
|
)
|
|
Pension Plans
|
|
Other Post-Retirement Benefit Plans
|
||||||||||||
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation - beginning of year
|
$
|
(640.5
|
)
|
|
$
|
(649.4
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
(13.0
|
)
|
Service cost
|
(3.0
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
(19.6
|
)
|
|
(20.7
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||
Actuarial (loss) gain
|
(22.3
|
)
|
|
(21.6
|
)
|
|
(1.1
|
)
|
|
(1.0
|
)
|
||||
Curtailment gain
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other pension settlements
|
3.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
43.2
|
|
|
42.8
|
|
|
0.9
|
|
|
1.0
|
|
||||
Other
(a)
|
(18.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan participant contributions
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation adjustments
|
(7.0
|
)
|
|
8.9
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation - end of year
|
$
|
(661.4
|
)
|
|
$
|
(640.5
|
)
|
|
$
|
(14.0
|
)
|
|
$
|
(13.4
|
)
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets - beginning of year
|
$
|
464.0
|
|
|
$
|
473.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
53.5
|
|
|
35.8
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
7.6
|
|
|
7.3
|
|
|
0.9
|
|
|
1.0
|
|
||||
Other pension settlements
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(43.2
|
)
|
|
(42.8
|
)
|
|
(0.9
|
)
|
|
(1.0
|
)
|
||||
Other
(a)
|
11.6
|
|
|
|
|
|
|
|
|||||||
Plan participant contributions
|
0.7
|
|
|
|
|
|
|
|
|||||||
Foreign currency translation adjustments
|
6.6
|
|
|
(10.2
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets - end of year
|
$
|
497.2
|
|
|
$
|
464.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded status of plans at December 31,
|
$
|
(164.2
|
)
|
|
$
|
(176.5
|
)
|
|
$
|
(14.0
|
)
|
|
$
|
(13.4
|
)
|
(a)
|
Other includes the addition of a foreign non-qualified defined benefit plan assumed in connection with the Elizabeth Arden Acquisition
.
|
|
Pension Plans
|
|
Other Post-Retirement Benefit Plans
|
||||||||||||
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other long-term assets
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued expenses and other
|
(6.2
|
)
|
|
(6.1
|
)
|
|
(0.7
|
)
|
|
(0.8
|
)
|
||||
Pension and other post-retirement benefit liabilities
|
(159.5
|
)
|
|
(170.4
|
)
|
|
(13.3
|
)
|
|
(12.6
|
)
|
||||
Total liability
|
$
|
(164.2
|
)
|
|
$
|
(176.5
|
)
|
|
$
|
(14.0
|
)
|
|
$
|
(13.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive loss, gross
|
$
|
253.2
|
|
|
$
|
266.6
|
|
|
$
|
4.5
|
|
|
$
|
3.6
|
|
Income tax (benefit) expense
|
(43.3
|
)
|
|
(44.3
|
)
|
|
(0.9
|
)
|
|
(0.4
|
)
|
||||
Portion allocated to Revlon Holdings
|
(0.9
|
)
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Accumulated other comprehensive loss, net
|
$
|
209.0
|
|
|
$
|
221.4
|
|
|
$
|
3.4
|
|
|
$
|
3.0
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
$
|
661.4
|
|
|
$
|
640.5
|
|
Accumulated benefit obligation
|
661.1
|
|
|
640.2
|
|
||
Fair value of plan assets
|
497.2
|
|
|
464.0
|
|
|
Pension Plans |
|
Other
Post-Retirement Benefit Plans |
||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Net periodic benefit costs (income):
|
|
|
|
||||||||||||||||||||
Service cost
|
$
|
3.0
|
|
|
$
|
0.5
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
19.6
|
|
|
20.7
|
|
|
28.6
|
|
|
0.4
|
|
|
0.4
|
|
|
0.5
|
|
||||||
Expected return on plan assets
|
(28.6
|
)
|
|
(31.0
|
)
|
|
(40.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
9.5
|
|
|
8.8
|
|
|
8.4
|
|
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
||||||
Lump sum settlement charge
|
—
|
|
|
—
|
|
|
20.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment gain
(a)
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other pension settlements charge
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net periodic benefit costs (income) prior to allocation
|
$
|
0.9
|
|
|
$
|
(1.0
|
)
|
|
$
|
18.4
|
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
Portion allocated to Revlon Holdings
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
Total net periodic benefit costs (income)
|
$
|
0.8
|
|
|
$
|
(1.1
|
)
|
|
$
|
18.3
|
|
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
(a)
|
As a result of the Elizabeth Arden Acquisition, the Company recognized
$2.6 million
in curtailment gains related to a foreign non-qualified defined benefit plan of Elizabeth Arden
.
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net periodic benefit (income) costs:
|
|
|
|
||||
Cost of sales
|
$
|
(1.0
|
)
|
|
$
|
(2.5
|
)
|
Selling, general and administrative expense
|
2.5
|
|
|
1.9
|
|
||
Total net periodic benefit costs (income)
|
$
|
1.5
|
|
|
$
|
(0.6
|
)
|
|
Pension Benefits
|
|
Post-Retirement Benefits
|
|
Total
|
||||||
Net actuarial loss
|
$
|
253.2
|
|
|
$
|
4.5
|
|
|
$
|
257.7
|
|
Accumulated Other Comprehensive Loss, Gross
|
253.2
|
|
|
4.5
|
|
|
257.7
|
|
|||
Income tax benefit
|
(43.3
|
)
|
|
(0.9
|
)
|
|
(44.2
|
)
|
|||
Portion allocated to Revlon Holdings
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(1.1
|
)
|
|||
Accumulated Other Comprehensive Loss, Net
|
$
|
209.0
|
|
|
$
|
3.4
|
|
|
$
|
212.4
|
|
|
U.S. Plans
|
|
International Plans
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Discount rate
|
3.47
|
%
|
|
3.92
|
%
|
|
2.19
|
%
|
|
2.66
|
%
|
Rate of future compensation increases
|
3.50
|
%
|
|
3.50
|
%
|
|
1.75
|
%
|
|
2.20
|
%
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Discount rate
|
3.92
|
%
|
|
4.15
|
%
|
|
3.89
|
%
|
|
2.24
|
%
|
|
3.68
|
%
|
|
3.74
|
%
|
Expected long-term return on plan assets
|
6.50
|
%
|
|
7.00
|
%
|
|
7.50
|
%
|
|
4.81
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
Rate of future compensation increases
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
2.01
|
%
|
|
2.22
|
%
|
|
2.33
|
%
|
|
Target Ranges
|
||
|
U.S. Plans
|
|
International Plans
|
Asset Class:
|
|
|
|
Common and preferred stock
|
0% - 10%
|
|
—
|
Mutual funds
|
20% - 30%
|
|
—
|
Fixed income securities
|
10% - 20%
|
|
—
|
Common and collective funds
|
30% - 50%
|
|
100%
|
Hedge funds
|
5% - 15%
|
|
—
|
Cash and other investments
|
0% - 10%
|
|
—
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Fair value of plan assets
|
$
|
413.6
|
|
|
$
|
400.5
|
|
|
$
|
83.6
|
|
|
$
|
63.5
|
|
•
|
Common and preferred stock: The fair values of investments included in the common and preferred stock asset class generally reflect the closing price reported on the major market where the individual securities are traded. The Company classifies common and preferred stock investments within Level 1 of the fair value hierarchy.
|
•
|
Mutual funds: The fair values of investments included in the mutual funds asset class are determined using net asset value ("NAV") provided by the applicable fund administrators. The NAV is based on the closing price reported on the major market where the individual securities within the mutual fund are traded. The Company classifies mutual fund investments within Level 1 of the fair value hierarchy.
|
•
|
Fixed income securities: The fair values of investments included in the fixed income securities asset class are based on a compilation of primarily observable market information and/or broker quotes. The Company classifies fixed income securities investments primarily within Level 2 of the fair value hierarchy.
|
•
|
Common and collective funds: The fair values of investments included in the common and collective funds asset class are determined using NAV provided by the applicable fund administrators. The NAV is based on the value of the underlying assets owned by the common and collective fund, minus its liabilities, and then divided by the number of shares outstanding. The Company classifies common and collective fund investments within Level 2 of the fair value hierarchy.
|
•
|
Hedge funds: The hedge fund asset class includes investments in hedge funds that, in turn, primarily invest in a grouping of equities, fixed income instruments, currencies, derivatives and/or commodities. The fair values of investments included in the hedge funds class are determined using NAV provided by the applicable fund administrators. The NAV is based on securities listed or quoted on a national securities exchange or market, or traded in the over-the-counter market, and is valued at the closing quotation posted by that exchange or trading system. Securities not listed or quoted on a national securities exchange or market are valued primarily through observable market information or broker quotes. The hedge fund investments generally can be sold on a quarterly or monthly basis and may employ leverage. The Company classifies hedge fund investments within Level 2 of the fair value hierarchy.
|
•
|
Group annuity contract: The group annuity contract asset class primarily invests in equities, corporate bonds and government bonds. The fair values of securities listed or quoted on a national securities exchange or market, or traded in the over-the-counter market, are valued at the closing quotation posted by that exchange or trading system. Securities not listed or quoted on a national securities exchange or market are valued primarily through observable market information or broker quotes. The Company classifies group annuity contract investments within Level 2 of the fair value hierarchy.
|
•
|
Cash and cash equivalents: Cash and cash equivalents are measured at cost, which approximates fair value. The Company classifies cash and cash equivalents within Level 1 of the fair value hierarchy.
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Common and Preferred Stock:
|
|
|
|
|
|
|
|
||||||||
U.S. small/mid cap equity
|
$
|
18.3
|
|
|
$
|
18.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
17.7
|
|
|
17.7
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
8.4
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
||||
U.S. large cap equity
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
3.8
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
||||
Emerging markets international equity
|
7.4
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
||||
Other
|
4.5
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
46.7
|
|
|
—
|
|
|
46.7
|
|
|
—
|
|
||||
Government bonds
|
15.4
|
|
|
—
|
|
|
15.4
|
|
|
—
|
|
||||
Common and Collective Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
51.5
|
|
|
42.3
|
|
|
9.2
|
|
|
—
|
|
||||
Government bonds
|
55.3
|
|
|
44.1
|
|
|
11.2
|
|
|
—
|
|
||||
U.S. large cap equity
|
78.6
|
|
|
68.7
|
|
|
9.9
|
|
|
—
|
|
||||
U.S. small/mid cap equity
|
16.1
|
|
|
16.1
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
77.9
|
|
|
42.8
|
|
|
35.1
|
|
|
—
|
|
||||
Emerging markets international equity
|
18.9
|
|
|
12.8
|
|
|
6.1
|
|
|
—
|
|
||||
Cash and cash equivalents
|
13.0
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
||||
Other
|
6.6
|
|
|
1.8
|
|
|
4.8
|
|
|
—
|
|
||||
Hedge Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
10.3
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
||||
Government bonds
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
||||
U.S. large cap equity
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
||||
Cash and cash equivalents
|
3.3
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
||||
Other
(b)
|
33.3
|
|
|
—
|
|
|
33.3
|
|
|
—
|
|
||||
Group Annuity Contract
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash and cash equivalents
|
8.2
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at December 31, 2017
|
$
|
497.2
|
|
|
$
|
313.3
|
|
|
$
|
183.9
|
|
|
$
|
—
|
|
(a)
|
The investments in mutual funds, common and collective funds and hedge funds are disclosed above within the respective underlying investments’ class (i.e., various equities, corporate bonds, government bonds and other investment classes), while the fair value hierarchy levels of the investments are based on the Company’s direct ownership unit of account.
|
(b)
|
Comprised of investments in equities, fixed income instruments, currencies, derivatives and/or commodities.
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Common and Preferred Stock:
|
|
|
|
|
|
|
|
||||||||
U.S. small/mid cap equity
|
$
|
15.5
|
|
|
$
|
15.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
14.3
|
|
|
14.3
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
11.9
|
|
|
11.9
|
|
|
—
|
|
|
—
|
|
||||
U.S. large cap equity
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
3.9
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
||||
Emerging markets international equity
|
6.3
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
||||
Other
|
3.0
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
41.0
|
|
|
—
|
|
|
41.0
|
|
|
—
|
|
||||
Government bonds
|
13.9
|
|
|
—
|
|
|
13.9
|
|
|
—
|
|
||||
Common and Collective Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
56.0
|
|
|
54.3
|
|
|
1.7
|
|
|
—
|
|
||||
Government bonds
|
68.4
|
|
|
57.0
|
|
|
11.4
|
|
|
—
|
|
||||
U.S. large cap equity
|
68.8
|
|
|
67.5
|
|
|
1.3
|
|
|
—
|
|
||||
U.S. small/mid cap equity
|
20.0
|
|
|
20.0
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
67.0
|
|
|
34.9
|
|
|
32.1
|
|
|
—
|
|
||||
Emerging markets international equity
|
15.3
|
|
|
9.4
|
|
|
5.9
|
|
|
—
|
|
||||
Cash and cash equivalents
|
4.8
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
||||
Other
|
(7.2
|
)
|
|
(10.3
|
)
|
|
3.1
|
|
|
—
|
|
||||
Hedge Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
||||
Government bonds
|
6.5
|
|
|
—
|
|
|
6.5
|
|
|
—
|
|
||||
U.S. large cap equity
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
Cash and cash equivalents
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||
Other
(b)
|
31.9
|
|
|
—
|
|
|
31.9
|
|
|
—
|
|
||||
Group Annuity Contract
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
||||
Cash and cash equivalents
|
10.6
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at December 31, 2016
|
$
|
464.0
|
|
|
$
|
303.2
|
|
|
$
|
160.8
|
|
|
$
|
—
|
|
(a)
|
The investments in mutual funds, common and collective funds and hedge funds are disclosed above within the respective underlying investments’ class (i.e., various equities, corporate bonds, government bonds and other investment classes), while the fair value hierarchy levels of the investments are based on the Company’s direct ownership unit of account.
|
(b)
|
Comprised of investments in equities, fixed income instruments, currencies, derivatives and/or commodities.
|
|
Total Pension Benefits
|
|
Total Other Benefits
|
||||
2018
|
$
|
46.9
|
|
|
$
|
1.2
|
|
2019
|
43.6
|
|
|
1.2
|
|
||
2020
|
45.3
|
|
|
1.2
|
|
||
2021
|
42.7
|
|
|
1.2
|
|
||
2022
|
43.0
|
|
|
1.2
|
|
||
Years 2023 to 2027
|
202.6
|
|
|
5.1
|
|
|
Restricted Stock (000's)
|
|
Weighted Average Grant Date Fair Value Per Share
|
|||
Outstanding at January 1, 2015
|
773.4
|
|
|
$
|
30.37
|
|
Granted
|
220.6
|
|
|
29.46
|
|
|
Vested
(a)
|
(171.7
|
)
|
|
29.09
|
|
|
Forfeited
|
(57.5
|
)
|
|
30.44
|
|
|
Outstanding at December 31, 2015
|
764.8
|
|
|
30.39
|
|
|
Granted
|
125.5
|
|
|
31.86
|
|
|
Vested
(a)
|
(221.7
|
)
|
|
29.51
|
|
|
Forfeited
|
(257.6
|
)
|
|
31.05
|
|
|
Outstanding at December 31, 2016
(b)
|
411.0
|
|
|
30.78
|
|
|
Granted
|
853.1
|
|
|
30.94
|
|
|
Vested
(a)
|
(216.0
|
)
|
|
32.63
|
|
|
Forfeited
|
(253.1
|
)
|
|
32.60
|
|
|
Outstanding at December 31, 2017
|
795.0
|
|
|
29.87
|
|
(a)
|
Of the amounts vested during 2017, 2016 and 2015,
89,620
,
92,092
and
82,740
, respectively, were withheld by the Company to satisfy certain grantees’ minimum withholding tax requirements, which withheld shares became Revlon treasury stock and are not sold on the open market. (See discussion under "Treasury Stock" in Note 18, "Stockholders' Deficiency").
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(Loss) income from continuing operations before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(190.7
|
)
|
|
$
|
4.2
|
|
|
$
|
114.4
|
|
Foreign
|
27.2
|
|
|
4.3
|
|
|
(3.7
|
)
|
|||
|
$
|
(163.5
|
)
|
|
$
|
8.5
|
|
|
$
|
110.7
|
|
Provision for income taxes:
|
|
|
|
|
|
||||||
United States federal
|
$
|
7.0
|
|
|
$
|
7.6
|
|
|
$
|
37.7
|
|
State and local
|
9.0
|
|
|
2.3
|
|
|
16.9
|
|
|||
Foreign
|
5.8
|
|
|
15.6
|
|
|
(3.2
|
)
|
|||
|
$
|
21.8
|
|
|
$
|
25.5
|
|
|
$
|
51.4
|
|
Current:
|
|
|
|
|
|
||||||
United States federal
|
$
|
(20.2
|
)
|
|
$
|
9.0
|
|
|
$
|
(2.7
|
)
|
State and local
|
1.9
|
|
|
2.5
|
|
|
4.1
|
|
|||
Foreign
|
17.5
|
|
|
20.2
|
|
|
21.7
|
|
|||
|
(0.8
|
)
|
|
31.7
|
|
|
23.1
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
United States federal
|
$
|
27.2
|
|
|
$
|
(1.4
|
)
|
|
$
|
40.4
|
|
State and local
|
7.1
|
|
|
(0.2
|
)
|
|
12.8
|
|
|||
Foreign
|
(11.7
|
)
|
|
(4.6
|
)
|
|
(24.9
|
)
|
|||
|
$
|
22.6
|
|
|
$
|
(6.2
|
)
|
|
$
|
28.3
|
|
Total provision for income taxes
|
$
|
21.8
|
|
|
$
|
25.5
|
|
|
$
|
51.4
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Computed income tax (benefit) expense
|
$
|
(57.2
|
)
|
|
$
|
3.0
|
|
|
$
|
38.8
|
|
State and local taxes, net of U.S. federal income tax benefit
|
6.1
|
|
|
1.8
|
|
|
11.1
|
|
|||
Foreign and U.S. tax effects attributable to operations outside the U.S.
|
(6.5
|
)
|
|
3.1
|
|
|
13.6
|
|
|||
Net establishment (release) of valuation allowance
|
(1.2
|
)
|
|
2.0
|
|
|
(15.5
|
)
|
|||
Foreign dividends and earnings taxable in the U.S.
|
1.8
|
|
|
1.7
|
|
|
3.2
|
|
|||
Impairment for which there is no tax benefit
|
0.4
|
|
|
8.9
|
|
|
—
|
|
|||
Tax effect of basis reclassification
|
23.7
|
|
|
—
|
|
|
—
|
|
|||
Impact of the Tax Act
(a)
|
47.9
|
|
|
—
|
|
|
—
|
|
|||
Other
|
6.8
|
|
|
5.0
|
|
|
0.2
|
|
|||
Total provision for income taxes
|
$
|
21.8
|
|
|
$
|
25.5
|
|
|
$
|
51.4
|
|
•
|
reducing the U.S. federal corporate tax rate;
|
•
|
requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; and
|
•
|
imposing a new limitation on the deductibility of interest.
|
•
|
a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
|
•
|
a new provision designed to tax global intangible low-taxed income ("GILTI");
|
•
|
increased limitations on the deductibility of certain executive compensation; and
|
•
|
changes to net operating loss carryforward periods and annual utilization.
|
•
|
interest income plus 30% of taxable income before interest, tax, depreciation and amortization for years through 2021; and
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Inventories
|
$
|
21.2
|
|
|
$
|
30.9
|
|
Net operating loss carryforwards - U.S.
|
161.0
|
|
|
140.4
|
|
||
Net operating loss carryforwards - foreign
|
47.0
|
|
|
50.5
|
|
||
Employee benefits
|
54.5
|
|
|
91.7
|
|
||
Sales-related reserves
|
19.1
|
|
|
23.9
|
|
||
Foreign currency translation adjustment
|
10.3
|
|
|
9.9
|
|
||
Other
|
67.6
|
|
|
89.4
|
|
||
Total gross deferred tax assets
|
380.7
|
|
|
436.7
|
|
||
Less valuation allowance
|
(90.7
|
)
|
|
(81.4
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
290.0
|
|
|
355.3
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Plant, equipment and other assets
|
(21.7
|
)
|
|
(26.0
|
)
|
||
Intangibles
|
(95.0
|
)
|
|
(132.4
|
)
|
||
Other
|
(36.0
|
)
|
|
(57.6
|
)
|
||
Total gross deferred tax liabilities
|
(152.7
|
)
|
|
(216.0
|
)
|
||
Net deferred tax assets
|
$
|
137.3
|
|
|
$
|
139.3
|
|
|
Tax
|
|
Interest and Penalties
|
|
Total
|
||||||
Balance at January 1, 2016
|
$
|
54.7
|
|
|
$
|
10.3
|
|
|
$
|
65.0
|
|
Increase based on tax positions taken in a prior year
|
24.4
|
|
|
1.5
|
|
|
25.9
|
|
|||
Decrease based on tax positions taken in a prior year
|
(1.2
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|||
Increase based on tax positions taken in the current year
|
9.1
|
|
|
0.2
|
|
|
9.3
|
|
|||
Decrease resulting from the lapse of statutes of limitations
|
(4.3
|
)
|
|
(1.3
|
)
|
|
(5.6
|
)
|
|||
Balance at December 31, 2016
|
82.7
|
|
|
10.6
|
|
|
93.3
|
|
|||
Increase based on tax positions taken in a prior year
|
9.1
|
|
|
1.5
|
|
|
10.6
|
|
|||
Decrease based on tax positions taken in a prior year
(a)
|
(19.6
|
)
|
|
(1.5
|
)
|
|
(21.1
|
)
|
|||
Increase based on tax positions taken in the current year
|
11.0
|
|
|
0.2
|
|
|
11.2
|
|
|||
Decrease resulting from the lapse of statutes of limitations
|
(7.3
|
)
|
|
(1.8
|
)
|
|
(9.1
|
)
|
|||
Balance at December 31, 2017
|
$
|
75.9
|
|
|
$
|
9.0
|
|
|
$
|
84.9
|
|
(a)
|
Includes a provisional amount for the expected impact of the Tax Act on the Company’s unrecognized tax benefits.
|
|
Foreign Currency Translation
|
|
Actuarial (Loss) Gain on Post-retirement Benefits
|
|
Deferred Gain (Loss) - Hedging
|
|
Other
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at January 1, 2015
|
$
|
(5.4
|
)
|
|
$
|
(235.6
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(243.2
|
)
|
Currency translation adjustment, net of tax of $5.1 million
|
(18.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.1
|
)
|
|||||
Amortization of pension related costs, net of tax of $(1.3) million
(a)
|
—
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|||||
Pension re-measurement, net of tax of $3.3 million
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|||||
Settlement of certain pension liabilities, net of tax of $(3.7) million
(b)
|
—
|
|
|
17.3
|
|
|
—
|
|
|
—
|
|
|
17.3
|
|
|||||
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax of $1.0 million
(c)
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||||
Other comprehensive (loss) income
|
$
|
(18.1
|
)
|
|
$
|
17.6
|
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(2.1
|
)
|
Balance at December 31, 2015
|
$
|
(23.5
|
)
|
|
$
|
(217.7
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(245.3
|
)
|
Currency translation adjustment, net of tax of $(1.1) million
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||||
Amortization of pension related costs, net of tax of $(1.3) million
(a)
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Pension re-measurement, net of tax of $4.1 million
|
—
|
|
|
(14.3
|
)
|
|
—
|
|
|
—
|
|
|
(14.3
|
)
|
|||||
Revaluation of derivative financial instrument, net of amounts reclassified into earnings and tax of $(0.5) million
(b)
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|||||
Other comprehensive (loss) income
|
$
|
(0.5
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
(6.4
|
)
|
Balance at December 31, 2016
|
$
|
(24.0
|
)
|
|
$
|
(224.4
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(251.7
|
)
|
Currency translation adjustment, net of tax of $0.4 million
|
9.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|||||
Amortization of pension related costs, net of tax of $(1.6) million
(a)
|
—
|
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|||||
Pension re-measurement, net of tax of $0.3 million
|
—
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|||||
Amortization of deferred losses related to the de-designated 2013 Interest Rate Swap, net of tax of $1.4 million
(c)
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||||
Curtailment gain, net of tax of $(0.3) million
(d)
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Other comprehensive income
|
$
|
9.0
|
|
|
$
|
12.0
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
23.3
|
|
Balance at December 31, 2017
|
$
|
(15.0
|
)
|
|
$
|
(212.4
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(228.4
|
)
|
(a)
|
Amounts represent the change in accumulated other comprehensive loss as a result of the amortization of actuarial losses (gains) arising during each year related to the Company’s pension and other post-retirement plans. See Note 14, "Pension and Post-retirement Benefits," for further discussion of the Company’s pension and other post-retirement plans.
|
(b)
|
Represents the after-tax effective portion of the changes in fair value of the Company’s 2013 Interest Rate Swap, net of amounts reclassified into earnings during 2016 and 2015
.
See Note 13, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.
|
(c)
|
See Note 10, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.
|
(d)
|
As a result of the Elizabeth Arden Acquisition, the Company recognized
$2.1 million
in curtailment gains related to a foreign non-qualified defined benefit plan of Elizabeth Arden.
|
|
|
2013
Interest Rate Swap
|
||
Beginning accumulated losses at December 31, 2015
|
|
$
|
(3.8
|
)
|
Reclassifications into earnings (net of $1.6 million tax expense)
(a)
|
|
2.7
|
|
|
Change in fair value (net of $1.1 million tax benefit)
|
|
(1.9
|
)
|
|
Ending accumulated losses at December 31, 2016
|
|
$
|
(3.0
|
)
|
Reclassifications into earnings (net of $1.4 million tax benefit)
(a)
|
|
2.3
|
|
|
Ending accumulated losses at December 31, 2017
|
|
$
|
(0.7
|
)
|
(a)
|
Reclassified to interest expense.
|
|
Class A Common Stock
|
|
Treasury Stock
|
||
Balance, January 1, 2015
|
53,925,029
|
|
|
777,181
|
|
Restricted stock grants
|
220,635
|
|
|
—
|
|
Restricted stock forfeitures
|
(57,490
|
)
|
|
—
|
|
Withholding of restricted stock to satisfy taxes
|
—
|
|
|
82,740
|
|
Balance, December 31, 2015
|
54,088,174
|
|
|
859,921
|
|
Restricted stock grants
|
125,540
|
|
|
—
|
|
Restricted stock forfeitures
|
(257,641
|
)
|
|
—
|
|
Withholding of restricted stock to satisfy taxes
|
—
|
|
|
92,092
|
|
Treasury stock repurchased
|
—
|
|
|
72,895
|
|
Balance, December 31, 2016
|
53,956,073
|
|
|
1,024,908
|
|
Restricted stock grants
|
853,111
|
|
|
—
|
|
Restricted stock forfeitures
|
(253,084
|
)
|
|
—
|
|
Withholding of restricted stock to satisfy taxes
|
—
|
|
|
89,620
|
|
Balance, December 31, 2017
|
54,556,100
|
|
|
1,114,528
|
|
•
|
Consumer
- The Company’s Consumer segment is comprised of products that are marketed, distributed and sold in large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, e-commerce sites, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as
Revlon
,
Almay
,
SinfulColors
and
Pure Ice
in cosmetics;
Revlon ColorSilk
in women’s hair color;
Revlon
in beauty tools; and
Mitchum
in anti-perspirant deodorants. The Consumer segment also includes a skin care line under the
Natural Honey
brand and hair color line under the
Llongueras
brand (licensed from a third party) that are sold in large volume retailers and other retailers, primarily in Spain, as well as
Cutex
nail care products.
|
•
|
Elizabeth Arden
- The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics to prestige retailers, the mass retail channel, specialty stores, perfumeries, department stores, boutiques, e-commerce, travel retailers and distributors, as well as direct sales to consumers via its Elizabeth Arden branded retail stores and ElizabethArden.com e-commerce business under brands such as
Skin Illuminating, SUPERSTART, Prevage, Eight Hour, Elizabeth Arden Ceramide
and
Visible Difference
in the Elizabeth Arden skin care brands;
Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue
,
Elizabeth Arden Green Tea
and
UNTOLD
in Elizabeth Arden fragrances;
Juicy Couture, John Varvatos, All Saints, La Perla
and
Wildfox
in designer fragrances; and
Curve, Elizabeth Taylor
,
Britney Spears
,
Christina Aguilera
,
Shawn
Mendes
,
Halston,
Ed Hardy
,
Geoffrey Beene
,
Alfred Sung
,
Giorgio Beverly Hills
,
Lucky Brand
,
PS Fine Cologne for Men
,
White Shoulders
and
Jennifer Aniston
in heritage fragrances.
|
•
|
Professional
- The Company’s Professional segment markets, distributes and sells professional products primarily to hair and nail salons and professional salon distributors in the U.S. and internationally under brands such as
Revlon Professional
in hair color, hair care and hair treatments;
CND
in nail polishes and nail enhancements, including
CND Shellac
and
CND Vinylux
nail polishes; and
American Crew
in men’s grooming products. The Professional segment also includes a multi-cultural hair care line consisting of
Creme of Nature
hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S.
|
•
|
Other
- The Other segment includes the operating results related to the development, marketing and distribution of certain licensed fragrances and other beauty products. The results included within the Other segment are not material to the Company’s consolidated results of operations.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Segment Net Sales:
|
|
|
|
|
|
||||||
Consumer
|
$
|
1,288.5
|
|
|
$
|
1,389.8
|
|
|
$
|
1,414.8
|
|
Elizabeth Arden
|
952.5
|
|
|
441.4
|
|
|
—
|
|
|||
Professional
|
432.2
|
|
|
476.5
|
|
|
471.1
|
|
|||
Other
|
20.5
|
|
|
26.3
|
|
|
28.4
|
|
|||
Total
|
$
|
2,693.7
|
|
|
$
|
2,334.0
|
|
|
$
|
1,914.3
|
|
|
|
|
|
|
|
||||||
Segment Profit:
|
|
|
|
|
|
||||||
Consumer
|
$
|
239.6
|
|
|
$
|
349.2
|
|
|
$
|
360.2
|
|
Elizabeth Arden
|
114.2
|
|
|
68.2
|
|
|
—
|
|
|||
Professional
|
54.9
|
|
|
99.4
|
|
|
103.9
|
|
|||
Other
|
(3.7
|
)
|
|
(2.7
|
)
|
|
1.4
|
|
|||
Total
|
$
|
405.0
|
|
|
$
|
514.1
|
|
|
$
|
465.5
|
|
|
|
|
|
|
|
||||||
Reconciliation:
|
|
|
|
|
|
||||||
Segment Profit
|
$
|
405.0
|
|
|
$
|
514.1
|
|
|
$
|
465.5
|
|
Less:
|
|
|
|
|
|
|
|||||
Unallocated corporate expenses
|
146.2
|
|
|
98.8
|
|
|
88.0
|
|
|||
Depreciation and amortization
|
155.8
|
|
|
123.2
|
|
|
103.2
|
|
|||
Non-cash stock compensation expense
|
6.8
|
|
|
6.4
|
|
|
5.1
|
|
|||
Non-Operating items:
|
|
|
|
|
|
||||||
Restructuring and related charges
|
34.5
|
|
|
36.8
|
|
|
11.6
|
|
|||
Acquisition and integration costs
|
52.9
|
|
|
43.2
|
|
|
8.0
|
|
|||
Elizabeth Arden 2016 Business Transformation Program
|
1.1
|
|
|
2.6
|
|
|
—
|
|
|||
Elizabeth Arden inventory purchase accounting adjustment, cost of sales
|
17.2
|
|
|
20.7
|
|
|
—
|
|
|||
Inventory purchase accounting adjustment, cost of sales
|
—
|
|
|
0.2
|
|
|
0.9
|
|
|||
Pension lump-sum settlement
|
—
|
|
|
—
|
|
|
20.7
|
|
|||
Impairment charge
|
10.8
|
|
|
23.4
|
|
|
9.7
|
|
|||
Deferred compensation
|
2.0
|
|
|
3.5
|
|
|
2.5
|
|
|||
Operating (loss) income
|
(22.3
|
)
|
|
155.3
|
|
|
215.8
|
|
|||
Less:
|
|
|
|
|
|
||||||
Interest Expense
|
149.8
|
|
|
105.2
|
|
|
83.3
|
|
|||
Amortization of debt issuance costs
|
9.1
|
|
|
6.8
|
|
|
5.7
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
16.9
|
|
|
—
|
|
|||
Foreign currency (gains) losses, net
|
(18.5
|
)
|
|
18.5
|
|
|
15.7
|
|
|||
Miscellaneous, net
|
0.8
|
|
|
(0.6
|
)
|
|
0.4
|
|
|||
(Loss) income from continuing operations before income taxes
|
$
|
(163.5
|
)
|
|
$
|
8.5
|
|
|
$
|
110.7
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Geographic area:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
1,315.1
|
|
|
49%
|
|
$
|
1,290.2
|
|
|
55%
|
|
$
|
1,058.7
|
|
|
55%
|
International
|
1,378.6
|
|
|
51%
|
|
1,043.8
|
|
|
45%
|
|
855.6
|
|
|
45%
|
|||
|
$
|
2,693.7
|
|
|
|
|
$
|
2,334.0
|
|
|
|
|
$
|
1,914.3
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||
Long-lived assets, net:
|
|
|
|
|
|
|
|||||
United States
|
$
|
1,480.1
|
|
|
83%
|
|
$
|
1,494.3
|
|
|
85%
|
International
|
295.6
|
|
|
17%
|
|
255.4
|
|
|
15%
|
||
|
$
|
1,775.7
|
|
|
|
$
|
1,749.7
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Classes of similar products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Color cosmetics
|
$
|
955.3
|
|
|
35%
|
|
$
|
998.3
|
|
|
43%
|
|
$
|
1,022.4
|
|
|
53%
|
Fragrance
|
731.3
|
|
|
27%
|
|
408.4
|
|
|
17%
|
|
80.8
|
|
|
4%
|
|||
Hair care
|
517.3
|
|
|
19%
|
|
544.3
|
|
|
23%
|
|
522.1
|
|
|
27%
|
|||
Beauty care
|
262.4
|
|
|
10%
|
|
294.4
|
|
|
13%
|
|
277.5
|
|
|
15%
|
|||
Skin care
|
227.4
|
|
|
8%
|
|
88.6
|
|
|
4%
|
|
11.5
|
|
|
1%
|
|||
|
$
|
2,693.7
|
|
|
|
|
$
|
2,334.0
|
|
|
|
|
$
|
1,914.3
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
(Loss) income from continuing operations, net of taxes
|
$
|
(185.3
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
59.3
|
|
Income (loss) from discontinued operations, net of taxes
|
2.1
|
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|||
Net (loss) income
|
$
|
(183.2
|
)
|
|
$
|
(21.9
|
)
|
|
$
|
56.1
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding – Basic
|
52,597,582
|
|
|
52,504,196
|
|
|
52,431,193
|
|
|||
Effect of dilutive restricted stock
|
—
|
|
|
—
|
|
|
160,352
|
|
|||
Weighted-average common shares outstanding – Diluted
|
52,597,582
|
|
|
52,504,196
|
|
|
52,591,545
|
|
|||
Basic (loss) earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.52
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
1.13
|
|
Discontinued operations
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|||
Net (loss) income per common share
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
Diluted (loss) earnings per common share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.52
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
1.13
|
|
Discontinued operations
|
0.04
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|||
Net (loss) income per common share
|
$
|
(3.48
|
)
|
|
$
|
(0.42
|
)
|
|
$
|
1.07
|
|
|
|
|
|
|
|
||||||
Unvested restricted stock awards under the Stock Plan
(a)
|
20,804
|
|
|
109,481
|
|
|
—
|
|
Minimum Rental Commitments
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
Capital leases
|
|
$
|
2.9
|
|
|
$
|
1.4
|
|
|
$
|
0.9
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Operating leases
|
|
245.4
|
|
|
48.0
|
|
|
39.3
|
|
|
31.3
|
|
|
27.1
|
|
|
21.1
|
|
|
78.6
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
Net sales
|
$
|
594.9
|
|
|
$
|
645.7
|
|
|
$
|
666.5
|
|
|
$
|
786.6
|
|
Gross profit
|
329.8
|
|
|
377.5
|
|
|
376.2
|
|
|
458.9
|
|
||||
Loss from continuing operations, net of taxes
(a)
|
(37.7
|
)
|
|
(37.1
|
)
|
|
(32.8
|
)
|
|
(77.7
|
)
|
||||
Income from discontinued operations, net of taxes
(c)
|
0.3
|
|
|
0.6
|
|
|
0.4
|
|
|
0.8
|
|
||||
Net loss
(a)(c)
|
(37.4
|
)
|
|
(36.5
|
)
|
|
(32.4
|
)
|
|
(76.9
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
*
Basic (loss) income per common share
(a)(c)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.72
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.48
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
0.02
|
|
||||
Net (loss) income per common share
|
$
|
(0.71
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.46
|
)
|
|
|
|
|
|
|
|
|
||||||||
*
Diluted (loss) income per common share
(a)(c)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.72
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(1.48
|
)
|
Discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
0.02
|
|
||||
Net (loss) income per common share
|
$
|
(0.71
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.46
|
)
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
Net sales
|
$
|
439.6
|
|
|
$
|
488.9
|
|
|
$
|
604.8
|
|
|
$
|
800.7
|
|
Gross profit
|
285.7
|
|
|
317.4
|
|
|
361.4
|
|
|
452.4
|
|
||||
(Loss) Income from continuing operations, net of taxes
(b)
|
10.6
|
|
|
10.8
|
|
|
(4.5
|
)
|
|
(33.9
|
)
|
||||
(Loss) from discontinued operations, net of taxes
(c)
|
0.4
|
|
|
(2.5
|
)
|
|
(0.2
|
)
|
|
(2.6
|
)
|
||||
Net (loss) income
(b)(c)
|
11.0
|
|
|
8.3
|
|
|
(4.7
|
)
|
|
(36.5
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
*Basic (loss) income per common share
(b)(c)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.20
|
|
|
$
|
0.21
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.65
|
)
|
Discontinued operations
|
0.01
|
|
|
(0.05
|
)
|
|
—
|
|
|
(0.05
|
)
|
||||
Net (loss) income per common share
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.70
|
)
|
|
|
|
|
|
|
|
|
||||||||
*Diluted (loss) income per common share
(b)(c)
:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.20
|
|
|
$
|
0.21
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.65
|
)
|
Discontinued operations
|
0.01
|
|
|
(0.05
|
)
|
|
—
|
|
|
(0.05
|
)
|
||||
Net (loss) income per common share
|
$
|
0.21
|
|
|
$
|
0.16
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.70
|
)
|
(*)
|
The sum of the quarterly earnings per share amounts may not equal the full year amount reported since per share amounts are computed independently for each quarter and for the full year based upon the respective weighted average common shares outstanding and other dilutive potential common shares for each respective period.
|
(a)
|
Loss from continuing operations, net loss and basic and diluted net loss per share for the fourth quarter of 2017 were impacted by: (i) a
$59.6 million
provision for income taxes, primarily due to the impact of the Tax Act (See Note 16, "Income Taxes" for more information); (ii) $
22.1 million
of restructuring charges, primarily related to the EA Integration Restructuring Program (See Note 3, "Restructuring Charges" for more information); and (iii)
$12.7 million
of acquisition and integration costs primarily related to the Elizabeth Arden Acquisition.
|
(b)
|
Income from continuing operations, net income and basic and diluted income per share for the fourth quarter of 2016 were unfavorably impacted by: (i)
$31.7 million
of restructuring charges related to the EA Integration Restructuring Charges (See Note 3, "Restructuring Charges"); and (ii)
$16.7 million
and
$6.7 million
of non-cash impairment charges on goodwill and intangible assets, respectively, within the Other reporting unit (see Note 8, "Goodwill and Intangible Assets, Net").
|
(c)
|
Income (loss) from discontinued operations includes the results of the Company's former China operations within the Consumer segment (See Note 4, "Discontinued Operations").
|
|
Balance at Beginning of Year
|
|
Charged to Cost and Expenses
|
|
Other Deductions
|
|
Balance at End of Year
|
||||||||
Allowance for Doubtful Accounts:
|
|
|
|
|
|
|
|
||||||||
2017
|
$
|
11.1
|
|
|
$
|
3.0
|
|
|
$
|
(0.6
|
)
|
|
$
|
13.5
|
|
2016
|
10.5
|
|
|
2.2
|
|
|
(1.6
|
)
|
|
11.1
|
|
||||
2015
|
9.3
|
|
|
2.8
|
|
|
(1.6
|
)
|
|
10.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Allowance for Volume and Early Payment Discounts:
|
|
|
|
|
|
|
|
||||||||
2017
|
$
|
23.0
|
|
|
$
|
100.4
|
|
|
$
|
(92.7
|
)
|
|
$
|
30.7
|
|
2016
|
22.6
|
|
|
80.1
|
|
|
(79.7
|
)
|
|
23.0
|
|
||||
2015
|
23.4
|
|
|
51.6
|
|
|
(52.4
|
)
|
|
22.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Allowance for Sales Returns:
|
|
|
|
|
|
|
|
||||||||
2017
|
$
|
47.2
|
|
|
$
|
68.3
|
|
|
$
|
(55.7
|
)
|
|
$
|
59.8
|
|
2016
|
39.3
|
|
|
64.5
|
|
|
(56.6
|
)
|
|
47.2
|
|
||||
2015
|
45.4
|
|
|
48.5
|
|
|
(54.6
|
)
|
|
39.3
|
|
Revlon, Inc.
|
||||
(Registrant)
|
||||
|
|
|
|
|
By: /s/ Paul Meister
|
|
By: /s/ Christopher H. Peterson
|
|
By: /s/ Wendel F. Kralovich
|
Paul Meister
|
|
Christopher H. Peterson
|
|
Wendel F. Kralovich
|
Executive Vice Chairman & Director
|
|
Chief Operating Officer, Operations
|
|
Senior Vice President,
|
|
|
& Principal Financial Officer
|
|
Chief Accounting Officer
|
|
|
|
|
& Controller
|
Signature
|
|
Title
|
|
|
|
*
|
|
Chairman of the Board and Director
|
(Ronald O. Perelman)
|
|
|
*
|
|
Vice Chairman of the Board and Director
|
(E. Scott Beattie)
|
|
|
*
|
|
Director
|
(Alan S. Bernikow)
|
|
|
*
|
|
Director
|
(Kristin Dolan)
|
|
|
*
|
|
Director
|
(Robert K. Kretzman)
|
|
|
*
|
|
Director
|
(Ceci Kurzman)
|
|
|
*
|
|
Director
|
(Tamara Mellon)
|
|
|
*
|
|
Chief Operating Officer and Director
|
(Debra G. Perelman)
|
|
|
*
|
|
Director
|
(Paul Savas)
|
|
|
*
|
|
Director
|
(Barry F. Schwartz)
|
|
|
*
|
|
Director
|
(Jonathan Schwartz)
|
|
|
*
|
|
Director
|
(Cristiana Falcone Sorrell)
|
|
|
By: /s/ Mitra Hormozi
|
Mitra Hormozi
|
Attorney-in-fact
|
*
|
The employee is employed by the Company in a domestic (United States) position and classified as a Director (or equivalent Grade Level) or above;
|
*
|
Following his/her termination date, the employee executes and complies with the terms of a release and confidentiality agreement satisfactory to the Company in its sole discretion, including not revoking such release within the time permitted for such revocation;
|
*
|
The employee executes and complies with the terms of the Company’s “Employee Agreement As To Confidentiality, Non-Competition and Non-Interference” then in effect (the “Employee Agreement”) during all periods of employment and during all periods for which separation pay is provided; and
|
*
|
The employee’s employment is terminated due to circumstances other than those described in the “Exclusions” section of this Plan.
|
1.
|
Separation pay will not be granted, under any circumstances, to an employee who leaves the Company voluntarily, including, without limitation, by:
|
a.
|
Resignation; or
|
b.
|
Retirement, including, but not limited to, retirement under the terms of the Revlon Employees’ Retirement Plan or any other pension plan that might be provided by the Company.
|
2.
|
Separation pay will not be granted to an employee who is discharged for good reason as determined by the Company in its sole discretion, including, without limitation, for:
|
a.
|
Unsatisfactory work performance, conduct or attitude, including, but not limited to: poor quality of work; lack of
|
b.
|
Violation of Company policy, including, without limitation, the Code of Conduct and Business Ethics;
|
c.
|
Violation of the Employee Agreement, including, without limitation, misappropriation or unauthorized disclosure of confidential information, trade secrets or corporate opportunities;
|
d.
|
Negligent failure to safeguard Company property or negligently defacing or destroying Company property;
|
e.
|
Engaging in physical violence or threatening conduct in connection with employment;
|
f.
|
Insubordination;
|
g.
|
Commission of an act which constitutes a felony or misdemeanor under applicable Federal, State, foreign or local law;
|
h.
|
Unlawful manufacture, distribution, dispensation, possession or use of a controlled substance on Company premises or while conducting Company business off Company premises;
|
i.
|
Misappropriation, falsification and/or unauthorized alteration of Company records;
|
j.
|
Possession of firearms or lethal weapons of any kind on Company premises or while conducting Company business off Company premises, without Company authorization;
|
k.
|
Conflict of interest, not duly reported and approved in accordance with the Company’s Conflict of Interest Policy;
|
l.
|
Sabotage, malicious adulteration of product, or industrial espionage; or
|
m.
|
Commission of any other act that is detrimental to the Company’s business or reputation.
|
3.
|
Separation pay will not be granted where the Company sells or otherwise disposes of the business or unit in which the employee was employed, and either:
|
a.
|
the employee accepts employment with the buyer of those operations; or
|
b.
|
the employee rejects an offer of employment by the buyer involving compensation and benefits substantially equivalent, taken as a whole, and determined in the Company’s sole discretion, to the employee’s compensation and benefits with the Company.
|
4.
|
Separation pay will not be granted to an employee whose employment terminates due to death or disability.
|
5.
|
If subsequent to the commencement of separation pay the Company discovers that the employee committed acts while employed which would have constituted good reason under paragraph 2 above, or discovers that the employee at any time violated either of the release and confidentiality agreement described in the “Eligibility” section above or the Employee Agreement, the Company may cease further separation payments and may require the employee to reimburse the Company for all separation payments previously made.
|
1.
|
Separation Pay
:
There is no guarantee of any amount of separation pay or benefits to any employee.
Separation pay and/or benefits may be awarded at the discretion of the Plan Administrator based upon factors such as the employee’s position and length of service with reference to the Separation Pay Guidelines below or otherwise, provided that the employee meets all of the eligibility requirements described in the “Eligibility” section above. In determining whether, and how much separation pay, to award in any individual case the Plan Administrator may, in its sole discretion, consider the circumstances of the employee’s termination and the employee’s tenure and performance history, among other factors. For purposes of the application of the Separation Pay Guidelines, 4 weeks of severance shall be considered one calendar month.
|
Grade Level
|
Basic Severance Period
|
Supplemental Severance Period: 2 weeks Per Full Year of Service to a Maximum of:
|
Total Maximum Combined Benefit
|
Executive Leadership Team*
|
12 months
|
6 months
|
18 months
|
GM, VP and SVP
|
6 months
|
6 months
|
12 months
|
Director and Sr. Director
|
3 months
|
9 months
|
12 months
|
2.
|
Timing and Method of Payment
: Generally, if separation pay is awarded, an eligible employee’s base salary will continue at the same rate, and be paid in the same manner, as was in effect on the date of his or her termination, for the duration of the applicable severance pay period (the “Severance Period”). However, to the extent permitted under Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the Company, in its sole discretion, may elect to pay separation benefits in any form.
|
3.
|
Tax Withholding
: Required federal, state and local taxes will be withheld from all payments made under this Plan in accordance with applicable law.
|
4.
|
Reduction for Pension Enhancement
: To the extent permissible under applicable law, including Section 409A, if an employee is involuntarily terminated in connection with a reduction in force or layoff implemented by the Company, for which the Company in its sole discretion has elected to provide for enhanced pension benefits under any pension plan maintained by the Company, the amount payable to the employee pursuant to this Plan shall be reduced by the Actuarial Value of such enhanced pension benefits if the employee is eligible (with or without such enhanced pension benefits) to receive an immediate pension under such plan as of his or her date of termination. For purposes of this paragraph 4, the Actuarial Value of any enhanced pension benefits made available to the employee shall be determined based on the actuarial assumptions and
|
5.
|
Coordination of Separation Pay
: To the extent permissible under applicable law, including Section 409A, separation pay and/or benefits awarded to the employee shall be reduced by compensation payable to the employee as a result of (a) other severance or termination payments (other than unpaid vacation) due from sources other than this Plan; and (b) any payments required by federal, state or local law in any jurisdiction and/or foreign laws, rules, regulations or practices, because of the termination of the employee’s employment or any related notice requirement, including, without limitation, under the W.A.R.N. Act or any local equivalent, including termination, indemnity, redundancy pay or pay in lieu of notice.
|
6.
|
Mitigation
: In the event an employee receiving separation pay and/or benefits under this Plan obtains employment by another employer during the Severance Period, the Company reserves the right to reduce the cash separation pay provided under this Plan by the amount of base cash compensation the individual receives from such other employer.
|
7.
|
Other Benefits
:
|
8.
|
Non-Competition
: The non-competition provision of the Employee Agreement shall remain in effect for the full duration of the period that severance benefits are awarded under this Plan without regard to the schedule, form or manner of payment.
|
9.
|
Employment Contracts or Other Written Agreements
In Effect
: If, on the date of termination, an employment contract or other written agreement between an eligible employee and the Company is in effect, which sets forth the separation pay and other benefits payable to such eligible employee upon termination, then, unless otherwise provided by the terms of such
|
10.
|
Non-Uniform Determinations
: The Plan Administrator’s determinations under this Plan need not be uniform and may be made selectively among the persons who receive, or are eligible to receive, awards hereunder (whether or not such persons are similarly situated).
|
11.
|
Plan Construction
: RCPC has the final authority with respect to the construction, interpretation and application of the terms of the Plan and the eligibility for separation pay or other benefits under this Plan. RCPC’s decisions in all such matters are final and binding. Employees who have questions with respect to this Plan may contact RCPC’s senior-most Human Resources executive or his/her designee.
|
12.
|
Governing Law
: The Plan will be construed, administered and enforced according to the laws of the State of New York, to the extent not pre-empted by federal law.
|
Almay, Inc.
|
Elizabeth Arden NM, LLC
|
Revlon Consumer Products Corporation
|
Art & Science, Ltd.
|
Elizabeth Arden Travel Retail, Inc.
|
Revlon Development Corp.
|
Bari Cosmetics, Ltd.
|
Elizabeth Arden USC, LLC
|
Revlon Government Sales, Inc.
|
Beautyge Brands USA Inc.
|
Elizabeth Arden, Inc.
|
Revlon International Corporation
|
Beautyge USA, Inc.
|
FD Management, Inc.
|
Revlon Professional Holding Company LLC
|
Charles Revson Inc.
|
North America Revsale Inc.
|
Revlon, Inc.
|
Creative Nail Design Inc.
|
OPP Products, Inc.
|
RIROS Corporation
|
Cutex, Inc.
|
PPI Two Corporation
|
RIROS Group Inc.
|
DF Enterprises, Inc.
|
RDEN Management, Inc.
|
RML, LLC
|
Elizabeth Arden (Financing), Inc.
|
Realistic Roux Professional Products Inc
|
Roux Laboratories, Inc.
|
Elizabeth Arden International Holding, Inc.
|
Revlon (Puerto Rico) Inc.
|
Roux Properties Jacksonville, LLC
|
Elizabeth Arden Investments, LLC
|
Revlon Canada Inc.
|
SinfulColors, Inc.
|
|
|
|
|
|
/s/ Ronald O. Perelman
|
RONALD O. PERELMAN
|
|
|
|
/s/ E. Scott Beattie
|
E. SCOTT BEATTIE
|
|
|
|
/s/ Alan S. Bernikow
|
ALAN S. BERNIKOW
|
|
|
|
/s/ Kristin Dolan
|
KRISTIN DOLAN
|
|
|
|
/s/ Robert K. Kretzman
|
ROBERT K. KRETZMAN
|
|
|
|
/s/ Ceci Kurzman
|
CECI KURZMAN
|
|
|
|
/s/ Paul Meister
|
PAUL MEISTER
|
|
|
|
/s/ Tamara Mellon
|
TAMARA MELLON
|
|
|
|
/s/ Debra G. Perelman
|
DEBRA G. PERELMAN
|
|
|
|
/s/ Paul Savas
|
PAUL SAVAS
|
|
|
|
/s/ Barry F. Schwartz
|
BARRY F. SCHWARTZ
|
|
|
|
/s/ Jonathan Schwartz
|
JONATHAN SCHWARTZ
|
|
|
|
/s/ Cristiana Falcone Sorrell
|
CRISTIANA FALCONE SORRELL
|
|
1.
|
I have reviewed this annual report on Form 10-K (the "Report") of Revlon, Inc. (the "Registrant");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
1.
|
I have reviewed this annual report on Form 10-K (the "Report") of Revlon, Inc. (the "Registrant");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
|
|
I.
|
Statement of Principles
|
|
|
II.
|
Delegation
|
|
|
III.
|
Audit Services
|
|
|
IV.
|
Audit-related Services
|
|
|
V.
|
Tax Services
|
|
|
VI.
|
All Other Services
|
|
|
VII.
|
Prohibited Services
|
|
|
VIII.
|
Pre-Approval Fee Levels
|
|
|
IX.
|
Procedures
|
|
|
|
|
Service
|
Total Pre-Approved Annual Fees for Pre-Approved Audit Services:
$250,000
|
1. Statutory audits or financial audits for subsidiaries of the Company
|
|
2. Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to SEC comment letters
|
|
3. Consultations by the Company’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies
|
|
|
|
|
Service
|
Total Pre-Approved Annual Fees for Pre-Approved Audit-Related Services:
$200,000
|
Due diligence services pertaining to potential business acquisitions/dispositions
|
|
Financial statement audits of employee benefit plans
|
|
Agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters
|
|
Attest services and internal control reviews not required by statute or regulation
|
|
Audit work in connection with liquidations and contract terminations; legal entity dissolution/restructuring assistance; and inventory audits
|
|
|
|
|
Service
|
Total Pre-Approved Annual Fees for Pre-Approved Tax Services:
$675,000
|
U.S. federal, state and local tax compliance, including, without limitation, review of income, franchise and other tax returns
|
|
International tax compliance, including, without limitation, review of income, franchise and other tax returns
|
|
U.S. federal, state and local tax advice, including, without limitation, general tax advisory services
|
|
International tax advice, including, without limitation, intercompany pricing and advanced pricing agreement services, general tax advisory services and tax audits and appeals services
|
|
|
|
|
Service
|
Total Pre-Approved Annual Fees for All Other Services:
$35,000 per project
|
All Other Services approved by the Chairman of the Audit Committee pursuant to Section II of this policy, provided that the independent auditor complies with any applicable rules and requirements of this Policy to document the services to the Audit Committee and to discuss such services with the Audit Committee (and in each case excluding Audit Services described in Section III and prohibited services described in Section VII).
|
•
|
Bookkeeping or other services related to the accounting records or financial statements of the audit client
|
•
|
Financial information systems design and implementation*
|
•
|
Appraisal or valuation services, fairness opinions or contribution-in-kind reports*
|
•
|
Actuarial services*
|
•
|
Internal audit outsourcing services*
|
•
|
Management functions
|
•
|
Human resources
|
•
|
Broker-dealer, investment adviser or investment banking services
|
•
|
Legal services
|
•
|
Expert services unrelated to the audit
|
•
|
any service or product by the independent auditor or any of its affiliates for the Company and its affiliates for a contingent fee or a commission, including any fee established for the sale of a product or the performance of any service pursuant to an arrangement in which no fee would be payable unless a specified finding or result is attained or the amount of the fee is otherwise dependent on the finding or result of such product or service, taking into account any rights to reimbursements, refunds or other repayments that could modify the amount received in a manner that make it contingent on a finding or result (excluding fees where the amount is fixed by courts or other public authorities and is not dependent on a finding or result), or the independent auditor or any of its affiliates receives, directly or indirectly, a contingent fee or commission;
|
•
|
non-audit services by the independent auditor or any of its affiliates for the Company and its affiliates related to marketing, planning or opining in favor of the tax treatment of a "confidential transaction" as defined under PCAOB Rule 3501(c)(i) or an "aggressive tax position transaction" (including, without limitation, any transaction that is a "listed transaction" under applicable U.S. Treasury regulations) that was (i) initially recommended, directly or indirectly, by the independent auditor or another tax advisor with which the independent auditor has a formal agreement or other arrangement related to the promotion of such transactions, and (ii) a significant purpose of which is tax avoidance, unless the proposed tax treatment is at least more likely than not to be allowable under applicable tax laws; and
|
•
|
tax services by the independent auditor or any of its affiliates for persons that serve in a financial reporting oversight role at the Company or its affiliates, including any employee who is in a position to, or does, exercise influence over the contents of the Company's financial statements or any employee who prepares the financial statements, including, without limitation, the Company's chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, controller, director of internal audit, director of financial reporting, treasurer or any equivalent position, including for any immediate family member of such employees (being such employee's spouse, spousal equivalent and dependents), but excluding tax services for: (i) any person who serves in a financial reporting oversight role for the Company or its affiliates solely because such person serves as a member of the Board of Directors, the Audit Committee, any other Board committee or similar management or governing body of the Company or its affiliates (in each case who do not otherwise occupy an employment position in a financial oversight role); (ii) any person serving in a financial reporting oversight role at the Company or its affiliates only because of such person’s relationship to an affiliate of the Company if such affiliate’s financial statements (1) are not material to the Company's consolidated financial statements or (2) are audited by an auditor other than the Company's independent auditor or its associated persons; and (iii) employees who were not in a financial reporting oversight role for the Company or its affiliates before a hiring, promotion or other change in employment event and the tax services were provided by the independent auditor or any of its affiliates to such person pursuant to an engagement in process before the hiring, promotion or other change in employment event, provided that such tax services are completed on or before 180 days after the hiring or promotion event.
|