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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3662955
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One New York Plaza, New York, New York
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10004
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A Common Stock
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New York Stock Exchange
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine and Safety Disclosures. Not applicable.
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Index to Consolidated Financial Statements and Schedules
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Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements)
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Report of Independent Registered Public Accounting Firm (Internal Control Over Financial Reporting)
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Financial Statements
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Financial Statement Schedule: Schedule II - Valuation and Qualifying Accounts
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Signatures
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Certifications
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Exhibits
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1.
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Manage financial drivers for value creation.
Gross profit margin expansion, which includes optimizing price, allocating sales allowances to maximize our return on trade spending and reducing costs across our global supply chain. In addition, we are focused on eliminating non-value added general and administrative costs in order to fund reinvestment to facilitate growth.
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2.
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Grow profitability through intensive innovation and geographical expansion
. Creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful, distinctive and ownable. We are also focused on pursuing organic growth opportunities within our existing brand portfolio and existing channels, and pursuing opportunities to expand our geographical presence.
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3.
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Improve cash flow.
Improving our cash flows through, among other things, continued effective management of our working capital and by focusing on appropriate return on capital spending.
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4.
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People.
Attracting, developing and supporting employees who fit into our innovative culture and inspire the creative drive that represents the foundation of our vision and execution of our strategy.
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•
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February 2014 Term Loan Amendment
: In February 2014, Products Corporation entered into an amendment (the “February 2014 Term Loan Amendment”) to its amended term loan agreement, which is comprised of (i) the
$675.0 million
term loan due November 19, 2017 (the "2011 Term Loan") and (ii) the $700.0 million term loan due October 8, 2019 (the "Acquisition Term Loan"), which has
$693.0 million
in aggregate principal balance outstanding as of December 31, 2014 (together, the "Amended Term Loan Agreement"). The February 2014 Term Loan Amendment reduced the interest rates applicable to Eurodollar Loans under the 2011 Term Loan to the Eurodollar Rate plus
2.5%
per annum, with the Eurodollar Rate not to be less than
0.75%
(as compared to 3.0% and 1.0%, respectively, prior to the February 2014 Term Loan Amendment) and the interest rates applicable to Alternate Base Rate Loans under the 2011 Term Loan to the Alternate Base Rate plus
1.5%
, with the Alternate Base Rate not to be less than
1.75%
(as compared to 2.0% in each case prior to the February 2014 Term Loan Amendment).
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•
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Repayment of Non-Contributed Loan
:
In
May 2014, Products Corporation used available cash on hand to optionally prepay in full the remaining
$58.4 million
principal amount outstanding under the non-contributed loan portion of the Amended and Restated Senior Subordinated Term Loan Agreement (the "Non-Contributed Loan") that remained owing from Products Corporation to various third parties. The Non-Contributed Loan would have otherwise matured on October 8, 2014.
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Segment
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COSMETICS
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HAIR
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MEN'S GROOMING
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BEAUTY TOOLS
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FRAGRANCE
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ANTI-PERSPIRANT DEODORANTS
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SKINCARE / BODYCARE
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Consumer
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Revlon
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Revlon ColorSilk
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Revlon
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Charlie
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Mitchum
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Gatineau
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Almay
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Llongueras*
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Jean Naté
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Natural Honey
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SinfulColors
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Pure Ice
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Professional
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CND
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Revlon Professional
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American Crew
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Intercosmo
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d:fi
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Orofluido
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UniqOne
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Creme of Nature
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•
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Revlon
: The Company sells a broad range of cosmetics under its flagship brand designed to fulfill consumer wants and needs, principally priced in the upper range of the mass retail channel. 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 wide range of consumers. Key franchises within the
Revlon
brand include:
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Revlon ColorStay
offers consumers a full range of products with long-wearing technology;
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Revlon PhotoReady
products are offered in face and eye and are designed with innovative photochromatic pigments that bend and reflect light to give a flawless, airbrushed appearance in any light;
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◦
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Revlon Age Defying
in face is targeted for women in the over-35 age bracket, incorporating the Company's patented
Botafirm
ingredients to help reduce the appearance of fine lines and wrinkles;
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Revlon Super Lustrous
is the Company's flagship wax-based lipcolor, offered in a wide variety of shades of lipstick and lip gloss;
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Revlon ColorBurst
in lip offers on-trend lip glosses and balms in vibrant colors that address consumers' needs for high-shine lipgloss and softening, smoothing and instantly hydrating balm; and
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Revlon Grow Luscious
includes both a lengthening and plumping mascara with a lash enhancing formula that improves the lashes' overall appearance and conditions with each use.
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Almay
: The Company’s
Almay
brand consists of hypo-allergenic, dermatologist-tested, fragrance-free cosmetics and skincare 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 franchises within the
Almay
brand include
Almay Smart Shade
in face;
Almay Intense i-Color
in eye; and
Almay Color + Care
in lip.
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SinfulColors
and
Pure Ice
:
The Company’s
SinfulColors
and
Pure Ice
brands consist primarily of value-priced nail enamels, available in many bold, vivid and on-trend colors.
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•
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Revlon
Professional:
The Company’s
Revlon Professional
brand includes hair color, hair care and hair treatment products, which are distributed exclusively in the professional channel to salons, salon professionals and salon distributors and sold in more than 60 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
.
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•
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American Crew
and
d:fi
: The
Company sells men's shampoos, conditioners, gels and other hair care and 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 30 countries. The Company also sells men's hair products under the
d:fi
brand, which is a value-priced full line of cleansing, conditioning and styling products.
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CND
: The Company sells nail enhancement systems and nail color and treatment products and services for use by the professional salon industry under the
CND
brand name.
CND
is the global leader in professional nail, hand and foot care products, and CND-branded products are sold in more than 75 countries. CND nail products include:
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CND Shellac
, the original
Power Polish
that requires UV curing, delivers more than 14 days of flawless wear, superior color and mirror shine with zero dry-time and no nail damage.
CND Shellac
is a true innovation of chip-free, extended-wear nail color; and
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CND Vinylux,
a breakthrough polish system that uses a patent-pending technology to provide an enduring, long-lasting polish that lasts 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.
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The Company also sells professional hair products under brand names such as
Orofluido
,
UniqOne
and
Intercosmo
.
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developing quality products with innovative performance features, shades, finishes, components and packaging;
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educating consumers and salon professionals about the benefits of the Company’s products;
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anticipating and responding to changing consumer and salon professional demands in a timely manner, including the timing of new product introductions and line extensions;
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offering attractively priced products relative to the product benefits provided;
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maintaining favorable brand recognition;
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generating competitive margins and inventory turns for its customers in both the Consumer and Professional segments by providing relevant products and executing effective pricing, incentive and promotion programs;
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ensuring product availability through effective planning and replenishment collaboration with retailers and salons;
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providing strong and effective advertising, marketing, promotion and merchandising support;
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maintaining an effective sales force and distributor network; and
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obtaining and retaining sufficient retail floor space, optimal in-store positioning and effective presentation of its products at retail and in salons.
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limiting the Company’s ability to fund (including by obtaining additional financing) the costs and expenses of the execution of the Company’s business strategy (including activities related to continuing the integration of the Colomer business into the Company’s business), future working capital, capital expenditures, advertising, promotional and/or marketing expenses, new product development costs, purchases and reconfigurations of wall displays, acquisitions, acquisition integration costs, investments, restructuring programs and other general corporate requirements;
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requiring the Company to dedicate a substantial portion of its cash flow from operations to payments on Products Corporation’s indebtedness, thereby reducing the availability of the Company’s cash flow for the execution of the Company’s business strategy and for other general corporate purposes;
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placing the Company at a competitive disadvantage compared to its competitors that have less debt;
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exposing the Company to potential events of default (if not cured or waived) under the financial and operating covenants contained in Products Corporation’s debt instruments;
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limiting the Company’s flexibility in responding to changes in its business and the industry in which it operates; and
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making the Company more vulnerable in the event of adverse economic conditions or a downturn in its business.
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borrow money;
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use assets as security in other borrowings or transactions;
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pay dividends on stock or purchase stock;
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sell assets and use the proceeds from such sales;
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enter into certain transactions with affiliates;
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make certain investments;
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prepay, redeem or repurchase specified indebtedness; and
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permit restrictions on the payment of dividends to Products Corporation by its subsidiaries.
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Eurodollar Rate
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LIBOR
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Alternate Base Rate
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Acquisition Term Loan
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1.00%
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0.26%
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3.25%
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2011 Term Loan
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0.75%
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0.26%
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3.25%
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Excess Availability
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Alternate Base Rate Loans
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Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
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Greater than or equal to $92,000,000
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0.50%
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1.50%
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Less than $92,000,000 but greater than or equal to $46,000,000
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0.75%
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1.75%
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Less than $46,000,000
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1.00%
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2.00%
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•
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the acceptance of the new product launches by, and sales of such new products to, the Company's customers may not be as high as the Company anticipates;
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the Company's advertising, promotional and/or marketing 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;
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the rate of purchases by the Company's consumers may not be as high as the Company anticipates;
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the Company's wall displays to showcase its new products may fail to achieve their intended effects;
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the Company may experience out-of-stocks and/or product returns exceeding its expectations as a result of its new product launches or space reconfigurations or reductions in retail display space by its customers or the Company's net sales may be impacted by inventory management by its customers or changes in pricing or promotional strategies by its customers;
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the Company may incur costs exceeding its expectations as a result of the continued development and launch of new products, including, for example, advertising, promotional and/or marketing expenses, sales return expenses or other costs related to launching new products;
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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 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, financial condition and/or results of operations.")
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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;
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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
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any delays or difficulties impacting the Company's ability, or the ability of the Company's suppliers, to timely manufacture, distribute and ship products, displays or display walls in connection with launching new products, such as due to inclement weather conditions or those delays or difficulties discussed under Item 1A. Risk Factors - "The Company depends on its Oxford, North Carolina facility for production of a substantial portion of the Company's products within the Consumer segment. Disruptions at this facility, and/or at other Company or third party facilities at which the Company's products are manufactured for both its Consumer and Professional segments, could affect the Company's business, financial condition and/or results of operations,” could have a material adverse effect on the Company's ability to ship and deliver products to meet its customers’ reset deadlines.
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delaying the implementation of or revising certain aspects of the Company's business strategy (including activities related to continuing the integration of the Colomer business into the Company’s business);
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reducing or delaying purchases of wall displays and/or expenses related to the Company's advertising, promotional and/or marketing activities;
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reducing or delaying capital spending;
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implementing new restructuring programs;
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refinancing Products Corporation's indebtedness;
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selling assets or operations;
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seeking additional capital contributions and/or loans from MacAndrews & Forbes, the Company's other affiliates and/or third parties;
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selling additional Revlon, Inc. equity or debt securities or Products Corporation's debt securities; or
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reducing other discretionary spending.
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developing quality products with innovative performance features, shades, finishes and packaging;
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•
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educating consumers and salon professionals about the benefits of the Company’s products;
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•
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anticipating and responding to changing consumer and salon professional demands in a timely manner, including the timing of new product introductions and line extensions;
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offering attractively priced products, relative to the product benefits provided;
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•
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maintaining favorable brand recognition;
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•
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generating competitive margins and inventory turns for the Company’s customers by providing relevant products and executing effective pricing, incentive and promotion programs;
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•
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ensuring product availability through effective planning and replenishment collaboration with the Company's customers;
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•
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providing strong and effective advertising, promotion, marketing and merchandising support;
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•
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maintaining an effective sales force and distribution network; and
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•
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obtaining and retaining sufficient display space, optimal in-store positioning and effective presentation of the Company’s products on-shelf.
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•
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inability to fill customer orders accurately or on a timely basis, or at all;
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•
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inability to process payments to vendors accurately or in a timely manner;
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disruption of the Company's internal control structure;
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•
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inability to fulfill the Company's SEC or other governmental reporting requirements in a timely or accurate manner;
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•
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inability to fulfill federal, state and local tax filing requirements in a timely or accurate manner;
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•
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increased demands on management and staff time to the detriment of other corporate initiatives; and
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significant capital and operating expenditures.
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•
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difficulties or complications in combining the companies' operations;
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differences in controls, procedures and policies, regulatory standards and business cultures among the combined companies;
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the diversion of management's attention from the Company's ongoing core business operations;
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•
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difficulties or delays in consolidating Colomer’s information technology platforms, including implementing systems designed to continue to ensure that the Company maintains effective disclosure controls and procedures and internal control over financial reporting for the combined company and enable the Company to continue to comply with U.S. GAAP and applicable U.S. securities laws and regulations;
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possible disruptions that could result from efforts to consolidate the combined Company’s manufacturing facilities or changes in the combined Company’s supply chain, including work stoppages;
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unanticipated costs and other assumed contingent liabilities; and/or
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possible tax costs or inefficiencies associated with integrating the operations of the combined company.
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Location
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Segment
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Use
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Approximate Floor Space Sq. Ft.
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Oxford, North Carolina
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Consumer
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Manufacturing, warehousing, distribution and office
(a)
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1,012,000
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Jacksonville, Florida
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Professional
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Manufacturing, warehousing, distribution and office
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725,000
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Tarragona, Spain
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Professional
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Manufacturing, warehousing, distribution and office
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300,000
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Mississauga, Canada
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Consumer
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Warehousing, distribution and office (leased)
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195,000
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Queretaro, Mexico
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Professional
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Manufacturing, warehousing, distribution and office
|
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128,000
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Canberra, Australia
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Consumer
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Warehousing and distribution
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125,000
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Edison, New Jersey
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Consumer
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Research and office (leased)
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123,000
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Rietfontein, South Africa
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Consumer
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Warehousing, distribution and office (leased)
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120,000
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Isando, South Africa
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Consumer
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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 Amended Credit Agreements.
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
High
|
$
|
27.58
|
|
|
$
|
31.52
|
|
|
$
|
34.99
|
|
|
$
|
35.55
|
|
|
Low
|
22.54
|
|
|
25.40
|
|
|
29.75
|
|
|
31.04
|
|
||||
|
|
Year Ended December 31, 2013
|
||||||||||||||
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
High
|
$
|
23.34
|
|
|
$
|
22.62
|
|
|
$
|
28.00
|
|
|
$
|
29.12
|
|
|
Low
|
14.96
|
|
|
18.24
|
|
|
22.38
|
|
|
23.32
|
|
||||
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
(in millions, except per share amounts)
|
||||||||||||||||||
|
Statement of Operations Data:
|
|
2014
(a)
|
|
2013
(b)
|
|
2012
(c)
|
|
2011
(d)
|
|
2010
(e)
|
||||||||||
|
Net sales
|
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
|
$
|
1,396.4
|
|
|
$
|
1,347.5
|
|
|
$
|
1,295.8
|
|
|
Gross profit
|
|
1,272.7
|
|
|
949.6
|
|
|
902.6
|
|
|
866.3
|
|
|
848.5
|
|
|||||
|
Selling, general and administrative expenses
|
|
1,009.5
|
|
|
731.7
|
|
|
682.6
|
|
|
660.2
|
|
|
650.0
|
|
|||||
|
Acquisition and integration costs
|
|
6.4
|
|
|
25.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Restructuring charges and other, net
|
|
21.3
|
|
|
3.5
|
|
|
20.5
|
|
|
—
|
|
|
(0.3
|
)
|
|||||
|
Operating income
|
|
235.5
|
|
|
189.0
|
|
|
199.5
|
|
|
206.1
|
|
|
198.8
|
|
|||||
|
Interest expense
|
|
84.4
|
|
|
73.8
|
|
|
79.1
|
|
|
84.9
|
|
|
90.5
|
|
|||||
|
Interest expense - preferred stock dividend
|
|
—
|
|
|
5.0
|
|
|
6.5
|
|
|
6.4
|
|
|
6.4
|
|
|||||
|
Amortization of debt issuance costs
|
|
5.5
|
|
|
5.2
|
|
|
5.3
|
|
|
5.3
|
|
|
5.9
|
|
|||||
|
Loss on early extinguishment of debt, net
|
|
2.0
|
|
|
29.7
|
|
|
—
|
|
|
11.2
|
|
|
9.7
|
|
|||||
|
Foreign currency losses, net
|
|
25.0
|
|
|
3.7
|
|
|
2.8
|
|
|
4.7
|
|
|
6.4
|
|
|||||
|
Provision for (benefit from) income taxes
|
|
77.8
|
|
|
46.0
|
|
|
43.7
|
|
|
36.8
|
|
|
(247.2
|
)
|
|||||
|
Income from continuing operations, net of taxes
|
|
39.6
|
|
|
24.6
|
|
|
61.2
|
|
|
55.2
|
|
|
325.9
|
|
|||||
|
(Loss) income from discontinued operations, net of taxes
|
|
1.3
|
|
|
(30.4
|
)
|
|
(10.1
|
)
|
|
(1.8
|
)
|
|
1.4
|
|
|||||
|
Net income (loss)
|
|
40.9
|
|
|
(5.8
|
)
|
|
51.1
|
|
|
53.4
|
|
|
327.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Continuing operations
|
|
0.76
|
|
|
0.47
|
|
|
1.17
|
|
|
1.06
|
|
|
6.28
|
|
|||||
|
Discontinued operations
|
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|
(0.04
|
)
|
|
0.03
|
|
|||||
|
Net income (loss)
|
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
$
|
1.02
|
|
|
$
|
6.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Diluted income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Continuing operations
|
|
0.76
|
|
|
0.47
|
|
|
1.17
|
|
|
1.06
|
|
|
6.23
|
|
|||||
|
Discontinued operations
|
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|
(0.04
|
)
|
|
0.03
|
|
|||||
|
Net income (loss)
|
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
$
|
1.02
|
|
|
$
|
6.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted average number of common shares outstanding (in millions)
(f)
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic
|
|
52.4
|
|
|
52.4
|
|
|
52.3
|
|
|
52.2
|
|
|
51.9
|
|
|||||
|
Diluted
|
|
52.4
|
|
|
52.4
|
|
|
52.4
|
|
|
52.3
|
|
|
52.3
|
|
|||||
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
(in millions, except per share amounts)
|
||||||||||||||||||
|
Balance Sheet Data:
|
|
2014
(a)
|
|
2013
(b)
|
|
2012
(c)
|
|
2011
(d)
|
|
2010
(e)
|
||||||||||
|
Total current assets
|
|
$
|
773.8
|
|
|
$
|
799.1
|
|
|
$
|
541.2
|
|
|
$
|
518.7
|
|
|
$
|
476.1
|
|
|
Total non-current assets
|
|
1,170.3
|
|
|
1,217.8
|
|
|
695.4
|
|
|
638.4
|
|
|
610.6
|
|
|||||
|
Total assets
|
|
$
|
1,944.1
|
|
|
$
|
2,016.9
|
|
|
$
|
1,236.6
|
|
|
$
|
1,157.1
|
|
|
$
|
1,086.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total current liabilities
(g)
|
|
$
|
464.9
|
|
|
$
|
552.7
|
|
|
$
|
453.1
|
|
|
$
|
335.4
|
|
|
$
|
318.5
|
|
|
Redeemable preferred stock
(h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48.4
|
|
|
48.1
|
|
|||||
|
Total other non-current liabilities
|
|
2,123.3
|
|
|
2,060.7
|
|
|
1,432.8
|
|
|
1,466.2
|
|
|
1,416.5
|
|
|||||
|
Total liabilities
|
|
$
|
2,588.2
|
|
|
$
|
2,613.4
|
|
|
$
|
1,885.9
|
|
|
$
|
1,850.0
|
|
|
$
|
1,783.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total indebtedness
|
|
$
|
1,870.5
|
|
|
$
|
1,935.6
|
|
|
$
|
1,220.7
|
|
|
$
|
1,227.7
|
|
|
$
|
1,219.1
|
|
|
Total stockholders' deficiency
|
|
(644.1
|
)
|
|
(596.5
|
)
|
|
(649.3
|
)
|
|
(692.9
|
)
|
|
(696.4
|
)
|
|||||
|
(a)
|
Results from continuing operations for 2014 include: (1)
$21.3 million
in restructuring charges and other, net, primarily related to the 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 related to the Colomer Acquisition; and (3) a
$6.0 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).
|
|
(b)
|
Results from continuing operations for 2013 include: (1) a $29.7 million aggregate loss on the early extinguishment of debt primarily in connection with Products Corporation’s issuance in February 2013 of $500.0 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 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 related to the Colomer Acquisition; and (4) $21.4 million in restructuring and related charges, of which $20.0 million related to the Company's exit of its business operations in China and is 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).
|
|
(c)
|
Results from continuing operations for 2012 include: (1) $24.1 million in restructuring and related charges recorded as a result of the September 2012 Program (See Note 3, “Restructuring Charges” of the Consolidated Financial Statements in this Form 10-K); and (2) an increase in net income driven by a non-cash benefit of $15.8 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions in the U.S. at December 31, 2012, as a result of the Company’s improved earnings trends and cumulative taxable income in those jurisdictions, which was reflected in the provision for income taxes; and (3) an $8.9 million loss contingency recognized related to previously outstanding litigation associated with the Company’s 2009 Exchange Offer (see Note 21, "Commitments and Contingencies," to the Consolidated Financial Statements in this Form 10-K).
|
|
(d)
|
Results from continuing operations for 2011 include: (1) an increase in net income driven by a non-cash benefit of $16.9 million related to the reduction of the Company’s deferred tax valuation allowance on its net deferred tax assets for certain jurisdictions outside the U.S. at December 31, 2011 as a result of the Company’s then improved earnings trends and cumulative taxable income in those jurisdictions, which was reflected in the provision for income taxes; and (2) an $11.2 million loss on the early extinguishment of debt in connection with the 2011 refinancings of Products Corporation’s 2010 term loan facility and 2010 revolving credit facility.
|
|
(e)
|
Results from continuing operations for 2010 include: (1) an increase in net income driven by a non-cash benefit of $260.6 million related to the reduction of the Company’s deferred tax valuation allowance on its net U.S. deferred tax assets at December 31, 2010 as a result of the Company having achieved three cumulative years of positive U.S. GAAP pre-tax income and taxable income in the U.S., and based upon the Company’s then current expectations as of December 31, 2010 for the realization of such deferred tax benefits in the U.S., which was reflected in the provision for income taxes; (2) a $9.7 million loss on the early extinguishment of debt in connection with the 2010 refinancing of the Company’s 2006 bank term loan facility and revolving credit facility; and (3) a $2.8 million one-time foreign currency loss related to the required re-measurement of the balance sheet of the Company’s subsidiary in Venezuela in order to reflect the impact of the devaluation of Venezuela’s local currency relative to the U.S. Dollar, as Venezuela was designated as a highly inflationary economy effective January 1, 2010.
|
|
(f)
|
Represents the weighted average number of common shares outstanding for each respective period presented.
|
|
(g)
|
Total current liabilities at December 31, 2013 included $58.4 million related to the Company's Non-Contributed Loan which was prepaid on May 1, 2014 prior to its scheduled maturity on October 8, 2014.
|
|
(h)
|
Total current liabilities at December 31, 2012 included $48.4 million related to the carrying amount of the Revlon, Inc.'s Series A Preferred Stock, which matured and was fully redeemed on October 8, 2013.
|
|
•
|
Overview;
|
|
•
|
Operating Segments;
|
|
•
|
Results of Operations;
|
|
•
|
Financial Condition, Liquidity and Capital Resources;
|
|
•
|
Disclosures about Contractual Obligations and Commercial Commitments;
|
|
•
|
Off-Balance Sheet Transactions (there are none);
|
|
•
|
Discussion of Critical Accounting Policies;
|
|
•
|
Recently Adopted Accounting Pronouncements;
|
|
•
|
Recently Issued Accounting Standards or Updates Not Yet Effective; and
|
|
•
|
Inflation.
|
|
•
|
$323.1 million
of higher gross profit due to a
$446.3 million
increase in consolidated net sales, partially offset by a
$123.2 million
increase in cost of sales, both of which were primarily driven by the inclusion of net sales and cost of sales as a result of the Colomer Acquisition beginning in October 2013;
|
|
•
|
a $27.7 decrease in loss on the early extinguishment of debt primarily due to $
29.7 million
of loss recognized during 2013 as a result of the 2013 Senior Notes Refinancing; and
|
|
•
|
a
$19.0 million
decrease in acquisition and integration costs as compared to 2013, as total costs incurred during 2013 included legal and consulting fees related to completing the Colomer Acquisition, as well as the impairment of in-progress capitalized software development costs;
|
|
•
|
$277.8 million
of higher SG&A expenses primarily driven by the inclusion of additional SG&A expenses as a result of the Colomer Acquisition beginning in 2013, in addition to higher advertising costs within the Company's Consumer segment;
|
|
•
|
$21.3 million
of higher foreign currency losses, net, primarily due to the unfavorable impact of the revaluation of certain U.S. Dollar denominated payables during 2014, as compared to 2013, as well as a
$6.0 million
foreign currency loss recognized in the second quarter of 2014 as a result of the re-measurement of Revlon Venezuela's balance sheet;
|
|
•
|
$17.8 million
of higher restructuring charges and other, net primarily due to the changes incurred from the Integration Program;
|
|
•
|
$10.6 million
of higher interest expense in 2014 primarily due to higher average debt as a result of the Acquisition Term Loan which was used to fund the Colomer Acquisition in 2013, partially offset by
$5.0 million
of interest expense incurred in 2013 related to dividends on Revlon, Inc.'s Series A Preferred Stock, which matured and was fully redeemed on October 8, 2013; and
|
|
•
|
a
$31.8 million
increase in the provision for income taxes in 2014, as compared to 2013, primarily due to higher pre-tax income, establishing a valuation allowance against certain deferred tax assets within the Professional segment, as well as certain income tax benefits and discrete items realized within each comparable period.
|
|
•
|
The Consumer segment is comprised of the Company's consumer brands, which primarily include
Revlon
,
Almay
,
SinfulColors
and
Pure Ice
in color cosmetics;
Revlon ColorSilk
in women’s hair color;
Revlon
in beauty tools; and
Mitchum
in anti-perspirant deodorants. The Company’s principal customers for its consumer products include the mass retail channel in the U.S. and internationally, consisting of large mass volume retailers and chain drug and food stores in the U.S., as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S. The Consumer segment also includes a skincare line and a hair color line sold in the mass retail channel, primarily in Spain, which were acquired as part of the Colomer Acquisition.
|
|
•
|
The Professional segment is comprised primarily of the brands which the Company acquired in the Colomer Acquisition, which include
Revlon Professional
in hair color and hair care;
CND
-
branded products
in nail polishes and nail enhancements; and
American Crew
in men’s grooming products, all of which are sold worldwide in the professional salon channel. The Company’s principal customers for its professional products include hair and nail salons and distributors in the U.S. and internationally. The Professional segment also includes a multi-cultural hair care line sold in the mass retail channel and in professional salons, primarily in the U.S. The Company's principal customers for its professional products include hair and nail salons and distributors in the U.S. and internationally.
|
|
|
Net Sales
|
|
Segment Profit
|
|||||||||||||||||||||||||||||||||
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||||||||||||
|
Consumer
|
$
|
1,438.3
|
|
|
$
|
1,394.2
|
|
|
$
|
44.1
|
|
|
3.2
|
%
|
|
$
|
98.3
|
|
|
7.1
|
%
|
|
$
|
347.6
|
|
|
$
|
347.2
|
|
|
$
|
0.4
|
|
|
0.1
|
%
|
|
Professional
|
502.7
|
|
|
100.5
|
|
|
402.2
|
|
|
400.2
|
%
|
|
408.1
|
|
|
406.1
|
%
|
|
104.8
|
|
|
5.1
|
|
|
99.7
|
|
|
1,954.9
|
%
|
|||||||
|
Total Net Sales
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
|
$
|
446.3
|
|
|
29.9
|
%
|
|
$
|
506.4
|
|
|
33.9
|
%
|
|
$
|
452.4
|
|
|
$
|
352.3
|
|
|
$
|
100.1
|
|
|
28.4
|
%
|
|
|
Net Sales
|
|
Segment Profit
|
|||||||||||||||||||||||||||||||||
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||||||||||||
|
Consumer
|
$
|
1,394.2
|
|
|
$
|
1,396.4
|
|
|
$
|
(2.2
|
)
|
|
(0.2
|
)%
|
|
$
|
34.0
|
|
|
2.4
|
%
|
|
$
|
347.2
|
|
|
$
|
363.1
|
|
|
$
|
(15.9
|
)
|
|
(4.4
|
)%
|
|
Professional
|
100.5
|
|
|
—
|
|
|
100.5
|
|
|
—
|
|
|
100.5
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|||||||
|
Total Net Sales
|
$
|
1,494.7
|
|
|
$
|
1,396.4
|
|
|
$
|
98.3
|
|
|
7.0
|
%
|
|
$
|
134.5
|
|
|
9.6
|
%
|
|
$
|
352.3
|
|
|
$
|
363.1
|
|
|
$
|
(10.8
|
)
|
|
(3.0
|
)%
|
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
United States
|
$
|
1,021.9
|
|
|
$
|
832.8
|
|
|
$
|
189.1
|
|
|
22.7
|
%
|
|
$
|
189.1
|
|
|
22.7
|
%
|
|
International
|
919.1
|
|
|
661.9
|
|
|
257.2
|
|
|
38.9
|
%
|
|
317.3
|
|
|
47.9
|
%
|
||||
|
Total Net Sales
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
|
$
|
446.3
|
|
|
29.9
|
%
|
|
$
|
506.4
|
|
|
33.9
|
%
|
|
|
Year Ended December 31,
|
|
Change
|
|
XFX Change
(a)
|
||||||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||
|
United States
|
$
|
832.8
|
|
|
$
|
799.8
|
|
|
$
|
33.0
|
|
|
4.1
|
%
|
|
$
|
33.0
|
|
|
4.1
|
%
|
|
International
|
661.9
|
|
|
596.6
|
|
|
65.3
|
|
|
10.9
|
%
|
|
101.5
|
|
|
17.0
|
%
|
||||
|
Total Net Sales
|
$
|
1,494.7
|
|
|
$
|
1,396.4
|
|
|
$
|
98.3
|
|
|
7.0
|
%
|
|
$
|
134.5
|
|
|
9.6
|
%
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Gross profit
|
$
|
1,272.7
|
|
|
$
|
949.6
|
|
|
$
|
902.6
|
|
|
$
|
323.1
|
|
|
$
|
47.0
|
|
|
Percentage of net sales
|
65.6
|
%
|
|
63.5
|
%
|
|
64.6
|
%
|
|
2.0
|
%
|
|
(1.1
|
)%
|
|||||
|
•
|
the inclusion of gross profit from the Colomer Acquisition beginning in October 2013, which increased gross profit by $314.8 million and increased gross profit as a percentage of net sales by 1.3 percentage points;
|
|
•
|
favorable sales mix within the Consumer segment, which increased gross profit by $19.3 million and increased gross profit as a percentage of net sales by 1.0 percentage points;
|
|
•
|
favorable volume, which increased gross profit by $15.2 million, with no impact on gross profit as a percentage of net sales; and
|
|
•
|
the favorable impact of returns accrual adjustments, net of related inventory write-off charges, due to lower expected discontinued products in the future related to the Company's strategy to focus on fewer, bigger and better innovations, which increased gross profit by $12.1 million and increased gross profit as a percentage of net sales by 0.1 percentage points;
|
|
•
|
unfavorable foreign currency fluctuations, which reduced gross profit by $45.1 million and reduced gross profit as a percentage of net sales by 0.4 percentage points.
|
|
•
|
the inclusion of gross profit from the October 2013 Colomer Acquisition, which increased gross profit by $70.7 million and reduced gross profit as a percentage of net sales by 0.3 percentage points;
|
|
•
|
favorable volume, which increased gross profit by $22.6 million, with no impact on gross profit as a percentage of net sales; and
|
|
•
|
lower manufacturing and freight costs, as a result of supply chain cost reduction initiatives and restructuring savings, which increased gross profit by $5.7 million and increased gross profit as a percentage of net sales by 0.4 percentage points;
|
|
•
|
additional inventory costs as a result of the recognition of an increase in the fair value of inventory acquired in the Colomer Acquisition, which reduced gross profit by $8.5 million and reduced gross profit as a percentage of net sales by 0.6 percentage points;
|
|
•
|
unfavorable foreign currency fluctuations, which reduced gross profit by $28.5 million and reduced gross profit as a percentage of net sales by 0.4 percentage points; and
|
|
•
|
higher sales returns and markdowns, which reduced gross profit by $13.8 million and reduced gross profit as a percentage of net sales by 0.4 percentage points.
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
SG&A expenses
|
$
|
1,009.5
|
|
|
$
|
731.7
|
|
|
$
|
682.6
|
|
|
$
|
(277.8
|
)
|
|
$
|
49.1
|
|
|
•
|
the inclusion of SG&A expenses as a result of the Colomer Acquisition, beginning in October 2013, which contributed $226.2 million to the increase in SG&A expenses;
|
|
•
|
$33.0 million of higher advertising expenses to support the Company's brands within the Consumer segment;
|
|
•
|
a $26.4 million gain from insurance proceeds in 2013 due to the settlement of the Company's claim for the loss of inventory from the fire that destroyed the Company's facility in Venezuela, partially offset by an accrual in 2013 of $7.6 million for estimated clean-up costs related to the destroyed facility, which did not recur in 2014;
|
|
•
|
$18.3 million of higher general and administrative expenses, primarily due to increased severance related costs, higher incentive and stock-based compensation expense, and higher occupancy costs due to overlapping rents as a result of the Company's relocation of its New York City headquarters during 2014; and
|
|
•
|
$4.0 million of higher amortization of permanent wall displays;
|
|
•
|
$24.8 million of favorable impacts due to foreign currency fluctuations.
|
|
•
|
the inclusion of SG&A expenses in the Professional segment as a result of the Colomer Acquisition, commencing on the Acquisition Date, which contributed $74.8 million to the increase in SG&A expenses; and
|
|
•
|
$5.1 million of increased permanent display amortization costs;
|
|
•
|
higher incentive compensation expense related to a modification to the structure of the Company's long-term incentive plan during 2013, which was implemented to better align the plan with the Company's long-term performance. While the new structure did not change the amount of an employees' annual incentive award opportunity, the transition resulted in higher expense of $4.5 million in 2013 as compared to 2012;
|
|
•
|
a net decrease of $16.0 million related to the fire that destroyed the Company's facility in Venezuela in June 2011, comprised of:
|
|
◦
|
a $26.4 million gain from insurance proceeds recognized in 2013 as a result of the settlement of the Company’s insurance claims for the loss of inventory, business interruption losses and property losses;
|
|
◦
|
partially offset by: (i) an accrual of $7.6 million for estimated clean-up costs related to the destroyed facility in Venezuela, which was recognized in 2013; and (ii) $2.8 million of income from insurance proceeds recognized in 2012 related to business interruption losses incurred.
|
|
•
|
$14.4 million of favorable impact of foreign currency fluctuations; and
|
|
•
|
$8.6 million of lower general and administrative expenses primarily due to:
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Acquisition and integration costs
|
$
|
6.4
|
|
|
$
|
25.4
|
|
|
$
|
—
|
|
|
$
|
19.0
|
|
|
$
|
25.4
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Acquisition costs
|
$
|
0.5
|
|
|
$
|
12.9
|
|
|
Integration costs
|
5.9
|
|
|
12.5
|
|
||
|
Total acquisition and integration costs
|
$
|
6.4
|
|
|
$
|
25.4
|
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Restructuring charges and other, net
|
$
|
21.3
|
|
|
$
|
3.5
|
|
|
$
|
20.5
|
|
|
$
|
(17.8
|
)
|
|
$
|
(17.0
|
)
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Interest expense
|
$
|
84.4
|
|
|
$
|
73.8
|
|
|
$
|
79.1
|
|
|
$
|
(10.6
|
)
|
|
$
|
(5.3
|
)
|
|
Interest expense - preferred stock dividends
|
—
|
|
|
5.0
|
|
|
6.5
|
|
|
5.0
|
|
|
$
|
(1.5
|
)
|
||||
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Loss on early extinguishment of debt
|
$
|
2.0
|
|
|
$
|
29.7
|
|
|
$
|
—
|
|
|
$
|
27.7
|
|
|
$
|
29.7
|
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Foreign currency losses, net
|
$
|
25.0
|
|
|
$
|
3.7
|
|
|
$
|
2.8
|
|
|
$
|
(21.3
|
)
|
|
$
|
0.9
|
|
|
•
|
the unfavorable impact of the revaluation of certain U.S. Dollar denominated intercompany payables during 2014, as compared to 2013; and
|
|
•
|
a $6.0 million foreign currency loss related to the required re-measurement of Revlon Venezuela's balance sheet during the second quarter of 2014.
|
|
•
|
the unfavorable impact of the revaluation of certain foreign currency denominated intercompany receivables and U.S. dollar denominated payables from the Company’s foreign subsidiaries during 2013 as compared to 2012; and
|
|
•
|
a $0.6 million foreign currency loss related to the required re-measurement of Revlon Venezuela's balance sheet during the first quarter of 2013;
|
|
•
|
a $2.2 million foreign currency gain for 2013 as compared to a $1.9 million foreign currency loss for 2012 related to the Company’s foreign currency forward exchange contracts ("FX Contracts").
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Provision for income taxes
|
$
|
77.8
|
|
|
$
|
46.0
|
|
|
$
|
43.7
|
|
|
$
|
31.8
|
|
|
$
|
2.3
|
|
|
|
Year Ended December 31,
|
|
Change
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014 vs. 2013
|
|
2013 vs. 2012
|
||||||||||
|
Income (loss) from Discontinued Operations, net of taxes
|
$
|
1.3
|
|
|
$
|
(30.4
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
31.7
|
|
|
$
|
(20.3
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Net cash provided by operating activities
|
$
|
174.0
|
|
|
$
|
123.3
|
|
|
$
|
104.1
|
|
|
Net cash used in investing activities
|
(52.1
|
)
|
|
(639.4
|
)
|
|
(86.3
|
)
|
|||
|
Net cash (used in) provided by financing activities
|
(75.1
|
)
|
|
649.0
|
|
|
(3.4
|
)
|
|||
|
Effect of exchange rate changes on cash and cash equivalents
|
(15.6
|
)
|
|
(5.1
|
)
|
|
0.2
|
|
|||
|
•
|
$55.5 million
of cash used for capital expenditures, which were partially offset by $3.4 million in proceeds from the sale of property, plant and equipment, primarily related to other immaterial restructuring actions.
|
|
•
|
a cash payment of $664.5 million for the Colomer Acquisition, offset by $36.9 million of cash and cash equivalents acquired in such transaction, for a net cash use of $627.6 million; and
|
|
•
|
$28.6 million
of cash used for capital expenditures;
|
|
•
|
$13.1 million of insurance proceeds received in July 2013 for the Company's property claim related to the June 2011 fire at the Company's facility in Venezuela.
|
|
•
|
a cash payment of $66.2 million in July 2012 to acquire certain assets, including trademarks and other intellectual property related to Pure Ice nail enamel and Bon Bons cosmetics brands (the "Pure Ice Acquisition"); and
|
|
•
|
$20.9 million of cash used for capital expenditures.
|
|
•
|
the repayment in May 2014 of the $58.4 million aggregate principal amount outstanding of the Non-Contributed Loan;
|
|
•
|
$7.0 million of scheduled amortization payments on the Acquisition Term Loan;
|
|
•
|
$4.7 million of short-term borrowings and overdraft; and
|
|
•
|
the payment of $1.8 million of financing costs primarily related to the February 2014 Term Loan Amendment.
|
|
•
|
Cash proceeds received in connection with the Acquisition Term Loan, in the aggregate principal amount of $700.0 million, or $698.3 million, net of discounts; and
|
|
•
|
Products Corporation's issuance of the $500.0 million aggregate principal amount of the 5¾% Senior Notes at par;
|
|
•
|
the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of Products Corporation's 9¾% Senior Secured Notes in connection with the 2013 Senior Notes Refinancing;
|
|
•
|
the repayment of the $113.0 million in principal on the 2011 Term Loan in connection with the consummation of the February 2013 Term Loan Amendments (as hereinafter defined); and
|
|
•
|
the payment of $48.8 million of financing costs comprised of: (i) $17.5 million of redemption and tender offer premiums, as well as fees and expenses related to the repayment and redemption of all of the $330.0 million aggregate principal amount outstanding of the 9¾% Senior Secured Notes in connection with the 2013 Senior Notes Refinancing; (ii) $10.2 million of underwriters' fees and other fees in connection with the issuance of the 5¾% Senior Notes in connection with the 2013 Senior Notes Refinancing; (iii) $1.2 million of fees incurred in connection with the February 2013 Term Loan Amendments (as hereinafter defined); (iv) $3.5 million of fees incurred in connection with the August 2013 Term Loan Amendments (as hereinafter defined); (v) $15.9 million of fees incurred in connection with the Incremental Amendment (as hereinafter defined); and (vi) $0.5 million of fees incurred in connection with the 2013 Revolver Amendments (as hereinafter defined).
|
|
•
|
an aggregate $8.0 million of scheduled amortization payments of principal on the 2011 Term Loan Facility (as hereinafter defined) in 2012;
|
|
•
|
a $6.3 million increase in short term borrowings and overdraft.
|
|
Excess Availability
|
|
Alternate Base Rate Loans
|
|
Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
|
|
Greater than or equal to $92,000,000
|
|
0.50%
|
|
1.50%
|
|
Less than $92,000,000 but greater than or equal to $46,000,000
|
|
0.75%
|
|
1.75%
|
|
Less than $46,000,000
|
|
1.00%
|
|
2.00%
|
|
Year
|
|
Percentage
|
|
|
2016
|
|
104.313
|
%
|
|
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 5¾% 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”).
|
|
|
|
Payments Due by Period
(dollars in millions) |
||||||||||||||||||
|
Contractual Obligations
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
After 5 years
|
||||||||||
|
Long-term debt, including current portion
(a)
|
|
$
|
1,863.9
|
|
|
$
|
31.5
|
|
|
$
|
673.4
|
|
|
$
|
658.7
|
|
|
$
|
500.3
|
|
|
Interest on long-term debt
(b)
|
|
388.6
|
|
|
81.0
|
|
|
161.6
|
|
|
102.9
|
|
|
43.1
|
|
|||||
|
Capital lease obligations
|
|
7.7
|
|
|
3.7
|
|
|
3.7
|
|
|
0.3
|
|
|
—
|
|
|||||
|
Operating leases
(c)
|
|
146.2
|
|
|
25.7
|
|
|
36.1
|
|
|
25.7
|
|
|
58.7
|
|
|||||
|
Purchase obligations
(d)
|
|
91.2
|
|
|
89.6
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|||||
|
Other long-term obligations
(e)
|
|
115.0
|
|
|
69.5
|
|
|
31.1
|
|
|
14.2
|
|
|
0.2
|
|
|||||
|
Total contractual obligations
|
|
$
|
2,612.6
|
|
|
$
|
301.0
|
|
|
$
|
907.5
|
|
|
$
|
801.8
|
|
|
$
|
602.3
|
|
|
(a)
|
Consists primarily of (i) the
675.0 million
aggregate principal amount outstanding under the 2011 Term Loan as of
December 31, 2014
; (ii) the
693.0 million
aggregate principal amount outstanding under the Acquisition Term Loan as of
December 31, 2014
; and (iii) the $
500.0 million
aggregate principal amount outstanding under the 5¾% Senior Notes as of
December 31, 2014
.
|
|
(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, 2014
.
|
|
(c)
|
Included in the obligations for operating leases as of December 31, 2014 is the lease for the Company's new headquarters in New York City, which includes minimum lease payments in the aggregate of approximately $70 million over the 15-year term.
|
|
(d)
|
Consists of purchase commitments for finished goods, raw materials, components 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
|
|
$
|
(0.1
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
—
|
|
|
$
|
22.8
|
|
|
Expected long-term rate of return
|
|
(1.4
|
)
|
|
—
|
|
|
1.4
|
|
|
—
|
|
||||
|
|
Expected Maturity Date for the year ended December 31,
|
|
|
|||||||||||||||||||||||||||||
|
|
(dollars in millions, except for rate information)
|
|
|
|||||||||||||||||||||||||||||
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
|
Fair Value December 31, 2014
|
||||||||||||||||
|
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Short-term variable rate (various currencies)
|
|
$
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.8
|
|
|
$
|
4.8
|
|
||||||||||
|
Average interest rate
(a)
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Short-term fixed rate (third party - EUR)
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
1.8
|
|
|
1.8
|
|
|||||||||||||
|
Average interest rate
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Long-term fixed rate – third party (USD)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500.0
|
|
|
500.0
|
|
|
497.5
|
|
||||||||||||
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
5.75
|
%
|
|
|
|
|
|||||||||||||||
|
Long-term fixed rate – third party (EUR)
|
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
0.3
|
|
|
0.7
|
|
|
0.7
|
|
|||||
|
Average interest rate
|
|
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
|
|
|
|||||||||||
|
Long-term variable rate – third party (USD)
(b)
|
|
31.5
|
|
|
6.9
|
|
|
669.7
|
|
|
6.9
|
|
|
653.0
|
|
|
|
|
1,368.0
|
|
|
1,345.8
|
|
|||||||||
|
Average interest rate
(a)(c)
|
|
3.9
|
%
|
|
4.2
|
%
|
|
3.9
|
%
|
|
4.8
|
%
|
|
5.0
|
%
|
|
|
|
|
|
|
|||||||||||
|
Total debt
|
|
$
|
38.1
|
|
|
$
|
7.0
|
|
|
$
|
669.8
|
|
|
$
|
7.0
|
|
|
$
|
653.1
|
|
|
$
|
500.3
|
|
|
$
|
1,875.3
|
|
|
$
|
1,850.6
|
|
|
(a)
|
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at
December 31, 2014
.
|
|
(b)
|
Includes total quarterly amortization payments required within each year under the Acquisition Term Loan, as well as the required $24.6 million “excess cash flow” prepayment to be made on or before April 10, 2015 under the Amended Term Loan Agreement. The 2017 amount includes the aggregate principal amount expected to be outstanding under the 2011 Term Loan which matures on November 19, 2017 and the 2019 amount includes the aggregate principal amount expected to be outstanding under the Acquisition Term Loan assuming a maturity date of October 9, 2019, in each case after giving effect to amortization payments and the excess cash flow prepayment.
|
|
(c)
|
At
December 31, 2014
, the Acquisition Term Loan bears interest at the Eurodollar Rate (as defined in the Amended Term Loan Agreement) plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%). As a result of the February 2014 Term Loan Amendment, the 2011 Term Loan bears interest at the Eurodollar Rate plus 2.5% per annum (with the Eurodollar Rate not to be less than 0.75%). For discussion of the February 2014 Term Loan Amendment, which reduced interest rates on the 2011 Term Loan, refer to Note 11, "Long-Term Debt," to the Consolidated Financial Statements in this Form 10-K.
|
|
Forward Contracts (“FC”)
|
|
Average Contractual Rate
$/FC
|
|
Original US Dollar Notional Amount
|
|
Contract Value
December 31, 2014
|
|
Asset Fair Value December 31, 2014
|
||||||
|
Sell Canadian Dollars/Buy USD
|
|
0.8916
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
Sell New Zealand Dollars/Buy USD
|
|
0.7722
|
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|||
|
Sell Hong Kong Dollars/Buy USD
|
|
0.1289
|
|
1.4
|
|
|
1.4
|
|
|
—
|
|
|||
|
Sell Australian Dollars/Buy USD
|
|
0.9027
|
|
1.0
|
|
|
1.1
|
|
|
0.1
|
|
|||
|
Sell Japanese Yen/Buy USD
|
|
0.0097
|
|
0.6
|
|
|
0.7
|
|
|
0.1
|
|
|||
|
Sell South African Rand/Buy USD
|
|
0.0895
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|||
|
Sell Canadian Dollars/Buy Euros
|
|
1.4574
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|||
|
Buy Australian Dollars/Sell NZ dollars
|
|
1.0776
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|||
|
Sell Danish Krone/Buy Euros
|
|
7.4460
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|||
|
Total forward contracts
|
|
|
|
$
|
7.6
|
|
|
$
|
7.8
|
|
|
$
|
0.2
|
|
|
•
|
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;
|
|
(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 either the Consumer or Professional segment; adverse changes in currency exchange rates, 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, changes in consumer purchasing habits, including with respect to shopping channels; inventory management by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; changes in pricing 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 and/or marketing plans; or if the Company’s expenses, including, without limitation, for pension expense under its benefit plans, acquisition-related integration costs (including, without limitation, costs related to the continued integration of the Colomer Acquisition), costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
|
|
(iii)
|
the Company's belief that the continued execution of its business strategy could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands, 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 integration of the Colomer Acquisition (including the Company’s plans to continue to integrate the operations of Colomer into the
|
|
(iv)
|
the Company’s vision to establish Revlon as the quintessential and most innovative beauty company in the world by offering products that make consumers feel attractive and beautiful and to inspire its consumers to express themselves boldly and confidently; and the Company's expectations regarding its strategic goal to optimize the market and financial performance of its portfolio of brands and assets by: (a) managing financial drivers for value creation through gross profit margin expansion, which includes optimizing price, allocating sales allowances to maximize our return on trade spending, reducing costs across our global supply chain and eliminating non-value added general and administrative costs in order to fund reinvestment to facilitate growth; (b) grow profitability through intensive innovation and geographical expansion by creating fewer, bigger and better innovations across our brands that are relevant, unique, impactful, distinctive and ownable; pursuing organic growth opportunities within our existing brand portfolio and existing channels; and pursuing opportunities to expand our geographical presence; (c) improving our cash flows through, among other things, continued effective management of our working capital and by focusing on appropriate return on capital spending; and (d) attracting, developing and supporting employees who fit into our innovative culture and inspire the creative drive that represents the foundation of our vision and execution of our strategy;
|
|
(v)
|
the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities; including, without limitation, the Company’s expectation (i) that total restructuring and related charges related to the Integration Program will be approximately
$25 million
, with
$20.1 million
of charges recognized during 2014 and any remaining charges to be recognized in 2015; (ii) that cash payments related to the restructuring and related charges in connection with the Integration Program will total approximately
$24 million
, of which
$9.6 million
was paid in 2014 and the majority of the remaining balance is expected to be paid in 2015; (iii) that total restructuring and related charges under the December 2013 Program will be approximately
$18.9 million
; (iv) that cash payments will total approximately
$17 million
related to the December 2013 Program, of which
$15.5 million
was paid during 2014,
$0.1 million
was paid in 2013, and the remaining balance of
$1.4 million
is expected to be paid in 2015; (v) that total cash paid for its discontinued operations in China will be approximately $13 million, which is in addition to restructuring cash payments for the December 2013 Program; (vi) that annualized cost reductions related to the December 2013 Program will be approximately $11 million in the aggregate in 2015 and thereafter; and (vii) that the Company expects to substantially complete the Integration Program by the end of 2015;
|
|
(vi)
|
the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2015, including the cash requirements referred to in item (viii) below, and the Company's beliefs that (a) the cash generated by its domestic operations and availability under the Amended Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its domestic liquidity needs for at least the next twelve months, and (b) restrictions or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
|
|
(vii)
|
the Company’s expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under Products Corporation's Amended Revolving Credit Facility and other permitted lines of credit, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending;
|
|
(viii)
|
the Company's expected principal uses of funds, including amounts required for the payment of operating expenses, including expenses in connection with the continued execution of the Company’s business strategy; payments in connection with the Company's purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs, cash tax payments, pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; costs related to the continuing integration of the Colomer
|
|
(ix)
|
matters concerning the Company's market-risk sensitive instruments, as well as the Company’s expectations as to the counterparty’s performance, including that any risk of loss under its derivative instruments arising from any non-performance by any of the counterparties is remote;
|
|
(x)
|
the Company's expectation to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables and accounts payable; and controls on general and administrative spending; and the Company’s belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
|
|
(xi)
|
the Company’s expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
|
|
(xii)
|
the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year;
|
|
(xiii)
|
the Company's expectation that it will decide whether to exchange Bolivars for U.S. Dollars to the extent permitted through the CENCOEX, SICAD and/or SICAD II markets based on its ability to participate in those markets and to the extent reasonable for its business in the future, the Company's belief that current or additional governmental restrictions, worsening import authorization controls, price and profit controls or labor unrest in Venezuela could have further adverse impacts on the Company's business and results of operations and the Company's expectation that use of the SICAD II Rate in lieu of the official rate to translate Revlon Venezuela's financial statements will have a negative impact on Revlon Venezuela's results of operations going forward;
|
|
(xiv)
|
the Company’s belief that while the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, financial condition and/or its results of operations, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period;
|
|
(xv)
|
the Company’s beliefs and expectations regarding certain benefits of the Colomer Acquisition, including that it provides the Company with broad brand, geographic and channel diversification and substantially expands the Company's business, providing both distribution into new channels and cost synergy opportunities; and
|
|
(xvi)
|
the Company's plans in connection with continuing to integrate Colomer into the Company's business and to implement a company-wide, SAP ERP system.
|
|
(i)
|
unanticipated circumstances or results affecting the Company's financial performance, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in either the Consumer or Professional segment; adverse changes in currency exchange rates, 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; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products, including new product launches; changes in consumer purchasing habits, including with respect to shopping channels; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company’s existing or new products; higher than expected restructuring costs, acquisition-related integration costs, including, without limitation, costs related to the continued integration of the Colomer 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 and/or marketing plans; higher than expected sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise or decreased sales of the Company’s existing or new products; actions by the Company’s customers, such as inventory management and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including business combinations, technological breakthroughs, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
|
|
(ii)
|
in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as continued volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
|
|
(iii)
|
unanticipated costs or difficulties or delays in completing projects associated with the continued execution of the Company’s business strategy or lower than expected revenues or the inability to create value through improving our financial performance as a result of such strategy, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands, divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising, and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing, supply chain or organizational size and structure, including optimizing the integration of the Colomer Acquisition (including difficulties or delays in and/or the Company’s inability to continue to integrate the Colomer business which could result in less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions and/or less than expected benefits from the Integration Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the Integration Program), as well as the unavailability of cash on hand and/or funds under the Amended Revolving Credit Facility or from other permitted additional sources of capital to fund such potential activities;
|
|
(iv)
|
difficulties, delays in or less than expected results from the Company’s efforts to optimize the market and financial performance of its portfolio of brands and assets due to, among other things, less than effective product development, less than expected acceptance of its new or existing products by consumers, salon professionals and/or customers in the Consumer or Professional segments, less than expected acceptance of its advertising, promotional and/or marketing plans and/or brand communication by consumers, salon professionals and/or customers in the Consumer or Professional segments, less than expected investment in advertising, promotional and/or marketing activities or greater than expected competitive investment, less than expected levels of advertising, promotional and/or marketing activities for its new product launches and/or less than expected levels of execution with its customers in the Consumer or Professional segments or higher than expected costs and expenses, as well as due to (i) difficulties, delays in or less than expected results from the Company’s efforts to manage financial drivers for value creation, such as due to higher than expected costs; (ii) difficulties, delays in or less than expected results from the Company’s efforts to grow profitability through intensive innovation and geographical expansion, such as less than effective product development and/or difficulties, delays in and/or the Company's inability to consummate transactions to expand its geographical presence; (iii) difficulties, delays in or less than expected results from the Company's efforts to improve cash flow; (iv) difficulties, delays in and/or the inability to attract or retain employees essential to the execution of our strategy;
|
|
(v)
|
difficulties, delays or unanticipated costs or charges or less than expected cost reductions and other benefits resulting from the Company's restructuring activities, such as greater than anticipated costs or charges or less than anticipated
|
|
(vi)
|
lower than expected operating revenues, cash on hand and/or funds available under the Amended Revolving Credit Facility and/or other permitted lines of credit or higher than anticipated operating expenses, such as referred to in clause (viii) below, and/or less than anticipated cash generated by the Company's domestic operations or unanticipated restrictions or taxes on repatriation of foreign earnings, either of which could have a material adverse effect on the Company's liquidity needs;
|
|
(vii)
|
the unavailability of funds under Products Corporation's Amended Revolving Credit Facility or other permitted lines of credit; or from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
|
|
(viii)
|
higher than expected operating expenses, sales returns, working capital expenses, permanent wall display costs, capital expenditures, debt service payments, cash tax payments, cash pension plan contributions, other post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, costs related to the continuing integration of the Colomer Acquisition, restructuring costs, severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, costs related to litigation and/or payments in connection with discontinuing non-core business lines and/or exiting certain territories;
|
|
(ix)
|
interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments and/or difficulties, delays or the inability of the counterparty to perform such transactions;
|
|
(x)
|
difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
|
|
(xi)
|
lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
|
|
(xii)
|
unexpected significant variances in the Company's tax provision and effective tax rate;
|
|
(xiii)
|
difficulties, delays in or the Company's inability to exchange Bolivars for U.S. Dollars, whether due to the lack of a market developing for such exchange or otherwise and/or unanticipated adverse impacts to the Company's results of operations such as due to higher than expected exchange rates; and difficulties or delays in the Company's ability to import certain products through Venezuela's monetary systems (including, without limitation, the CADIVI, SICAD, SICAD II and/or CENCOEX markets);
|
|
(xiv)
|
unexpected effects on the Company’s business, financial condition and/or its results of operations as a result of legal proceedings; and
|
|
(xv)
|
difficulties or delays in realizing, or less than anticipated, benefits from the Colomer Acquisition, such as (i) less than expected cost reductions, more than expected costs to achieve the expected cost reductions or delays in achieving the expected cost reductions, such as due to difficulties or delays in and/or the Company’s inability to continue to integrate the Colomer business, in whole or in part, and/or changes in the timing of completing its expected integration actions; and/or (ii) less than expected growth from the Colomer brands, such as due to difficulties, delays, unanticipated costs or the Company’s inability to launch innovative new products within the Professional segment and/or difficulties or delays in and/or the Company’s inability to expand its distribution into new channels; and/or (iii) less than expected synergistic benefits to the Company's Consumer segment from the Company having a presence in the professional channel.
|
|
(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 Revlon Consumer Products Corporation (“Products Corporation”), Beauty Care Professional Products Participations, S.A., Romol Hair & Beauty Group, S.L., Norvo, S.L. and Staubinus España, S.L. (incorporated by reference to Exhibit 2.1 to Revlon, Inc.’s Current Report on Form 8-K filed with the SEC on August 5, 2013).
|
|
3.
|
Certificate of Incorporation and By-laws.
|
|
3.1
|
Restated Certificate of Incorporation of Revlon, Inc., dated February 25, 2014 (incorporated by reference to Exhibit 3.1 of Revlon Inc.'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
|
Amended and Restated By-Laws of Revlon, Inc., dated as of May 1, 2009 (incorporated by reference to Exhibit 3.1 of Revlon, Inc.’s Current Report on Form 8-K filed with the SEC on April 29, 2009).
|
|
4.
|
Instruments Defining the Rights of Security Holders, Including Indentures.
|
|
4.1
|
Third Amended and Restated Term Loan Agreement dated as of May 19, 2011 (the "2011 Term Loan Agreement"), among Products Corporation, as borrower, the lenders party thereto, Citigroup Global Markets Inc. ("CGMI"), J.P. Morgan Securities LLC ("JPM Securities"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse Securities (USA) LLC ("Credit Suisse") and Wells Fargo Securities, LLC ("WFS"), as the joint lead arrangers; CGMI, JPM Securities, Merrill Lynch, Credit Suisse, WFS and Natixis, New York Branch ("Natixis"), as joint bookrunners; JPMorgan Chase Bank, N.A. and Bank of America, N.A., as co-syndication agents; Credit Suisse, Wells Fargo Bank, N.A. and Natixis, as co-documentation agents; and Citicorp USA, Inc. ("CUSA"), as administrative agent and collateral agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on May 20, 2011 (the "Products Corporation May 20, 2011 Form 8-K")).
|
|
4.2
|
Amendment No. 1 to Credit Agreement, dated as of February 21, 2013, to the Third Amended and Restated Term Loan Agreement, dated as of May 19, 2011, among Products Corporation, as borrower, CUSA, as Administrative Agent and Collateral Agent, and each lender thereunder (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on February 21, 2013).
|
|
4.3
|
Amendment No. 2 to Term Loan Agreement, dated as of August 19, 2013, among Products Corporation, CUSA, as Administrative Agent and Collateral Agent (each as defined therein), and the Lenders (as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on August 19, 2013 (the "Products Corporation August 19, 2013 Form 8-K")).
|
|
4.4
|
Incremental Amendment, dated as of August 19, 2013, to the Amended Term Loan Agreement, among Products Corporation, CUSA, as Administrative Agent and Collateral Agent (each as defined therein), and the Lenders (as defined therein) (incorporated by reference to Exhibit 4.2 to the Products Corporation August 19, 2013 Form 8-K).
|
|
4.5
|
Third Amended and Restated Revolving Credit Agreement, dated as of June 16, 2011 (the "2011 Revolving Credit Agreement"), among Products Corporation and certain of its foreign subsidiaries, as borrowers, and CGMI and Wells Fargo Capital Finance, LLC ("WFCF"), as the joint lead arrangers; CGMI, WFCF, Merrill Lynch, JPM Securities and Credit Suisse, as joint bookrunners; and CUSA, as administrative agent and collateral agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Products Corporation filed with the SEC on June 17, 2011 (the "Products Corporation June 17, 2011 Form 8-K")).
|
|
4.6
|
Amendment No. 1 to Revolving Credit Agreement, dated as of August 14, 2013 ("Amendment No. 1"), among Products Corporation, the Local Borrowing Subsidiaries (as defined therein) from time to time party thereto, CUSA, as Administrative Agent and Collateral Agent (as defined therein), and the Lenders and Issuing Lenders (each as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on August 15, 2013).
|
|
4.7
|
Incremental Amendment, dated as of December 24, 2013, to the 2011 Revolving Credit Agreement (as amended by Amendment No. 1), among Products Corporation, the Local Borrowing Subsidiaries (as defined therein) from time to time party thereto, CUSA, as Administrative Agent and Collateral Agent (as defined therein), and the Lenders and Issuing Lenders (each as defined therein) (incorporated by reference to Exhibit 4.1 to Products Corporation's Form 8-K filed with the SEC on December 24, 2013).
|
|
4.8
|
Third Amended and Restated Pledge and Security Agreement dated as of March 11, 2010 among Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of Products Corporation filed with the SEC on March 16, 2010 (the “Products Corporation March 16, 2010 Form 8-K”)).
|
|
4.9
|
Third Amended and Restated Intercreditor and Collateral Agency Agreement, dated as of March 11, 2010, among CUSA, as administrative agent for certain bank lenders, U.S. Bank National Association, as trustee for certain noteholders, CUSA, as collateral agent for the secured parties, Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation (incorporated by reference to Exhibit 4.4 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.10
|
Amended and Restated Guaranty, dated as of March 11, 2010, by and among Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation, in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.5 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.11
|
Form of Revolving Credit Note under the 2011 Revolving Credit Agreement (incorporated by reference to Exhibit 4.3 to the Products Corporation June 17, 2011 Form 8-K).
|
|
4.12
|
Third Amended and Restated Copyright Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.8 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.13
|
Third Amended and Restated Copyright Security Agreement, dated as of March 11, 2010, among Almay, Inc. and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.9 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.14
|
Third Amended and Restated Patent Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.10 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.15
|
Third Amended and Restated Trademark Security Agreement, dated as of March 11, 2010, among Products Corporation and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.11 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.16
|
Third Amended and Restated Trademark Security Agreement, dated as of March 11, 2010, among Charles Revson Inc. and CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.12 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.17
|
Form of Term Loan Note under the 2011 Term Loan Agreement (incorporated by reference to Exhibit 4.4 to the Products Corporation May 20, 2011 Form 8-K).
|
|
4.18
|
Amended and Restated Term Loan Guaranty, dated as of March 11, 2010, by Revlon, Inc., Products Corporation and certain domestic subsidiaries of Products Corporation in favor of CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.14 to the Products Corporation March 16, 2010 Form 8-K).
|
|
4.19
|
Reaffirmation Agreement, dated as of February 21, 2013, made by Revlon, Inc., Products Corporation and certain of its domestic subsidiaries and acknowledged by CUSA, as collateral agent for the secured parties (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Products Corporation for the fiscal quarter ended March 31, 2013 filed with the SEC on April 25, 2013 (the “Products Corporation Q1 2013 Form 10-Q”)).
|
|
4.20
|
Reaffirmation Agreement, dated as of August 19, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Term Loan (incorporated by reference to Exhibit 4.4 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2013 filed with the SEC on October 24, 2013 (the "Products Corporation Q3 2013 Form 10-Q")).
|
|
4.21
|
Reaffirmation Agreement, dated as of August 14, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Revolving Credit Agreement (incorporated by reference to Exhibit 4.5 to the Products Corporation Q3 2013 Form 10-Q).
|
|
4.22
|
Reaffirmation Agreement, dated as of December 24, 2013, among Products Corporation, Revlon, Inc., certain domestic subsidiaries of Products Corporation and CUSA, as Collateral Agent (as defined therein) in connection with the Amended Revolving Credit Agreement (incorporated by reference to Exhibit 4.22 to Products Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 5, 2014 (the "Products Corporation 2013 Form 10-K")).
|
|
4.23
|
Master Assignment and Acceptance, dated as of May 19, 2011 among certain lenders and Citibank, N.A. (incorporated by reference to Exhibit 4.3 to the Products Corporation May 20, 2011 Form 8-K).
|
|
4.24
|
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”) (incorporated by reference to Exhibit 4.3 to the Products Corporation Q1 2013 Form 10-Q).
|
|
4.25
|
Form of 5.75% Senior Notes (included in Exhibit 4.24) (incorporated by reference to Exhibit 4.4 to the Products Corporation Q1 2013 Form 10-Q).
|
|
4.26
|
Registration Rights Agreement, dated as of February 8, 2013, among Products Corporation, certain subsidiaries of Products Corporation and 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).
|
|
4.27
|
Supplemental Indenture, dated as of February 8, 2013, among Products Corporation, Revlon, Inc. and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.6 to the Products Corporation Q1 2013 Form 10-Q).
|
|
4.28
|
Supplemental Indenture, dated as of January 21, 2014, among Products Corporation, Revlon, Inc. and certain subsidiaries of Products Corporation, as guarantors thereto, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.27 to the Products Corporation 2013 Form 10-K).
|
|
4.29
|
Schedules and Exhibits to the 2011 Term Loan Agreement (Confidential information has been omitted from this exhibit and filed separately with the Securities and Exchange Commission. Revlon, Inc. has requested confidential treatment from the Securities and Exchange Commission with respect to this omitted information)(incorporated by reference to Exhibit 4.1 to Products Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014 filed with the SEC on April 30, 2014 ("Products Corporation's Q1 2014 Form 10-Q")).
|
|
4.30
|
Amendment No. 3 to the 2011 Term Loan Agreement, dated as of February 26, 2014 (incorporated by reference to Exhibit 4.1 to Products Corporation's Current Report on Form 8-K filed with the SEC on February 26, 2014 (the “Products Corporation February 26, 2014 Form 8-K”)).
|
|
4.31
|
Reaffirmation Agreement, dated as of February 26, 2014, among Products Corporation, Revlon, Inc., certain of Products Corporation's domestic subsidiaries and CUSA, as administrative agent and collateral agent in connection with Amendment No. 3 to the 2011 Term Loan Agreement (incorporated by reference to Exhibit 4.2 to the Products Corporation February 26, 2014 Form 8-K).
|
|
4.32
|
Schedule to Incremental Amendment, dated as of August 19, 2013, to the 2011 Term Loan Agreement, as amended on February 21, 2013 and August 19, 2013 (incorporated by reference to Exhibit 4.4 to Products Corporation's Q1 2014 Form 10-Q).
|
|
4.33
|
Schedules and Exhibits to the 2011 Revolving Credit Agreement (Confidential information has been omitted from this exhibit and filed separately with the Securities and Exchange Commission. Revlon, Inc. has requested confidential treatment from the Securities and Exchange Commission with respect to this omitted information)(incorporated by reference to Exhibit 4.5 to Products Corporation's Q1 2014 Form 10-Q).
|
|
10.
|
Material Contracts.
|
|
10.1
|
Amended and Restated Senior Subordinated Term Loan Agreement, dated as of April 30, 2012, by and between Products Corporation, as the borrower, and MacAndrews & Forbes, as the initial lender (incorporated by reference to Exhibit 10.1 to Products Corporation’s Current Report on Form 8-K filed with the SEC on May 1, 2012 (the "Products Corporation May 1, 2012 Form 8-K")).
|
|
10.2
|
Administrative Letter Agreement in connection with the Amended and Restated Senior Subordinated Term Loan Agreement, dated as of April 30, 2012, by and among Products Corporation, as the borrower, MacAndrews & Forbes, as the initial lender and Citibank, N.A., as the administrative agent for the Non-Contributed Loan (incorporated by reference to Exhibit 10.2 to the Products Corporation May 1, 2012 Form 8-K).
|
|
10.3
|
Stipulation and Agreement of Compromise, Settlement and Release, dated as of July 20, 2012, by and among Fidelity Management & Research Company and its investment advisory affiliates, all of which are direct or indirect subsidiaries of FMR LLC, on behalf of certain managed mutual funds and other accounts, on the one hand, and Ronald O. Perelman, Barry F. Schwartz, David L. Kennedy, Alan T. Ennis, Alan S. Bernikow, Paul J. Bohan, Meyer Feldberg, Ann D. Jordan, Debra L. Lee, Tamara Mellon, Kathi P. Seifert, Revlon, Inc. and MacAndrews & Forbes, on the other hand (Confidential information has been omitted from this exhibit and filed separately with the SEC. Revlon, Inc. has requested confidential treatment from the SEC with respect to this omitted information) (incorporated by reference to Exhibit 10.1 to Revlon, Inc.’s Form 10-Q for the fiscal quarter ended June 30, 2012 filed with the SEC on July 31, 2012).
|
|
10.4
|
Stipulation of Settlement, dated October 8, 2012, by and among: (i) Richard Smutek, derivatively in the right of and for the benefit of nominal defendant Revlon, Inc.; (ii) nominal defendant Revlon, Inc.; and (iii) Ronald O. Perelman, Barry F. Schwartz, David L. Kennedy, Alan T. Ennis, Alan S. Bernikow, Paul J. Bohan, Meyer Feldberg, Ann D. Jordan, Debra L. Lee, Tamara Mellon, Kathi P. Seifert and MacAndrews & Forbes (Revlon, Inc., together with such directors and MacAndrews & Forbes, the "Defendants") (incorporated by reference to Exhibit 10.1 to Revlon, Inc.’s Form 10-Q for the fiscal quarter ended September 30, 2012 filed with the SEC on October 25, 2012 (the "Revlon, Inc. Q3 2012 Form 10-Q")).
|
|
10.5
|
Stipulation and Agreement of Compromise, Settlement and Release, dated October 8, 2012, by and among: (i) the plaintiffs in the actions captioned Mercier v. Perelman, et al., C.A. No. 4532-VCL (Del. Ch.); Jurkowitz v. Perelman, et al., C.A. No. 4557-VCL (Del. Ch.); Lefkowitz v. Revlon, Inc., et al., C.A. No. 4563-VCL (Del. Ch.); Heiser v. Revlon, Inc., et al., C.A. No. 4578-VCL (Del. Ch.); Gutman v. Perelman, et al., C.A. No. 5158-VCL (Del. Ch.); Corneck v. Perelman, et al., C.A. No. 5160-VCL (Del. Ch.), which were consolidated under the caption In re Revlon, Inc. Shareholders Litigation, C.A. No. 4578-VCL (Del. Ch.); Garofalo v. Revlon, Inc., et al., C.A. No. 1:09-CV-01008-GMS (D. Del.); and Sullivan v. Perelman, et al., No. 650257/2009 (N.Y. Sup. Ct.); and (ii) the Defendants (incorporated by reference to Exhibit 10.1 to the Revlon, Inc. Q3 2012 Form 10-Q.
|
|
10.6
|
Amendment No.1, dated March 7, 2013, to Stipulation and Agreement of Compromise, Settlement and Release, dated October 8, 2012, by and among: (i) the plaintiffs in the actions captioned Mercier v. Perelman, et al., C.A. No. 4532-VCL (Del. Ch.); Jurkowitz v. Perelman, et al., C.A. No. 4557-VCL (Del. Ch.); Lefkowitz v. Revlon, Inc., et al., C.A. No. 4563-VCL (Del. Ch.); Heiser v. Revlon, Inc., et al., C.A. No. 4578-VCL (Del. Ch.); Gutman v. Perelman, et al., C.A. No. 5158-VCL (Del. Ch.); Corneck v. Perelman, et al., C.A. No. 5160-VCL (Del. Ch.), which were consolidated under the caption In re Revlon, Inc. Shareholders Litigation, C.A. No. 4578-VCL (Del. Ch.); Garofalo v. Revlon, Inc., et al., C.A. No. 1:09-CV-01008-GMS (D. Del.); and Sullivan v. Perelman, et al., No. 650257/2009 (N.Y. Sup. Ct.); and (ii) the Defendants named therein (incorporated by reference to Exhibit 10.1 to Revlon, Inc.'s Form 10-Q for the fiscal quarter ended March 31, 2013 filed with the SEC on April 25, 2013.)
|
|
10.7
|
Tax Sharing Agreement, dated as of June 24, 1992, among MacAndrews & Forbes, Revlon, Inc., Products Corporation and certain subsidiaries of Products Corporation, as amended and restated as of January 1, 2001 (incorporated by reference to Exhibit 10.2 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the SEC on February 25, 2002).
|
|
10.8
|
Tax Sharing Agreement, dated as of March 26, 2004, by and among Revlon, Inc., Products Corporation and certain subsidiaries of Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004 filed with the SEC on May 17, 2004).
|
|
10.9*
|
Amended and Restated Employment Agreement, dated as of December 12, 2014, by and between Products Corporation and Lorenzo Delpani.
|
|
10.10
|
Employment Agreement, dated as of September 24, 2014 between Products Corporation and Roberto Simon (incorporated by reference to Exhibit 10.1 to Revlon, Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014 filed with the SEC on October 29, 2014 (the “Revlon, Inc. Q3 2014 Form 10-Q”)).
|
|
10.11*
|
Employment Agreement, dated as of October 9, 2014, between Products Corporation and Gianni Pieraccioni.
|
|
10.12
|
Employment Agreement, dated as of July 30, 2013, between Products Corporation and Lawrence Alletto (incorporated by reference to Exhibit 10.1 to the Revlon, Inc. Q3 2013 Form 10-Q).
|
|
10.13
|
Amended and Restated Employment Agreement, dated as of May 1, 2009, between Products Corporation and Chris Elshaw (incorporated by reference to Exhibit 10.7 to Revlon, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC on February 25, 2010 (the “Revlon, Inc. 2009 Form 10-K”)).
|
|
10.14
|
Letter Agreement and Release, dated as of March 24, 2014, between Products Corporation and Chris Elshaw (incorporated by reference to Exhibit 10.1 to Revlon, Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014 filed with the SEC on April 30, 2014).
|
|
10.15
|
Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan") (incorporated by reference to Annex A to Revlon, Inc.’s Definitive Information Statement on Schedule 14C filed with the SEC on July 3, 2014).
|
|
10.16
|
Form of Restricted Stock Agreement under the Stock Plan (incorporated by reference to Exhibit 10.3 to the Revlon, Inc. Q3 2014 Form 10-Q).
|
|
10.17
|
Revlon Executive Incentive Compensation Plan (incorporated by reference to Annex C to Revlon, Inc.’s Annual Proxy Statement on Schedule 14A filed with the SEC on April 21, 2010).
|
|
10.18
|
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, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998 filed with the SEC on March 3, 1999).
|
|
10.19
|
Amendment to the PEP, dated as of May 28, 2009 (incorporated by reference to Exhibit 10.13 to the Revlon, Inc. 2009 Form 10-K).
|
|
10.20
|
Executive Supplemental Medical Expense Plan Summary, dated July 2000 (incorporated by reference to Exhibit 10.10 to Revlon, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed with the SEC on March 21, 2003).
|
|
10.21
|
Benefit Plans Assumption Agreement, dated as of July 1, 1992, by and among Revlon Holdings, Revlon, Inc. and Products Corporation (incorporated by reference to Exhibit 10.25 to Products Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992 filed with the SEC on March 12, 1993).
|
|
10.22
|
Revlon Executive Severance Pay Plan (incorporated by reference to Exhibit 10.2 to Revlon, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 filed with the SEC on April 30, 2009).
|
|
21.
|
Subsidiaries.
|
|
*21.1
|
Subsidiaries of Revlon, Inc.
|
|
23.
|
Consents of Experts and Counsel.
|
|
*23.1
|
Consent of KPMG LLP.
|
|
24.
|
Powers of Attorney.
|
|
*24.1
|
Power of Attorney executed by Ronald O. Perelman.
|
|
*24.2
|
Power of Attorney executed by Barry F. Schwartz.
|
|
*24.3
|
Power of Attorney executed by Alan S. Bernikow.
|
|
*24.4
|
Power of Attorney executed by Diana F. Cantor.
|
|
*24.5
|
Power of Attorney executed by Viet D. Dinh.
|
|
*24.6
|
Power of Attorney executed by Meyer Feldberg.
|
|
*24.7
|
Power of Attorney executed by David L. Kennedy.
|
|
*24.8
|
Power of Attorney executed by Robert K. Kretzman.
|
|
*24.9
|
Power of Attorney executed by Ceci Kurzman
|
|
*24.10
|
Power of Attorney executed by Debra L. Lee.
|
|
*24.11
|
Power of Attorney executed by Tamara Mellon
|
|
*24.12
|
Power of Attorney executed by Kathi P. Seifert.
|
|
*24.13
|
Power of Attorney executed by Cristiana Falcone Sorrell.
|
|
*31.1
|
Certification of Lorenzo Delpani, Chief Executive Officer, dated March 12, 2015, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
|
|
*31.2
|
Certification of Roberto Simon, Chief Financial Officer, dated March 12, 2015, pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act.
|
|
32.1 (furnished herewith)
|
Certification of Lorenzo Delpani, Chief Executive Officer, dated March 12, 2015, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2 (furnished herewith)
|
Certification of Roberto Simon, Chief Financial Officer, dated March 12, 2015, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
*99.1
|
Revlon, Inc. Audit Committee Pre-Approval Policy.
|
|
*101.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, 2014 and 2013
|
|
|
|
Consolidated Statements of Operations and Comprehensive (Loss) Income for each of the years in the three-year period ended December 31, 2014
|
|
|
|
Consolidated Statements of Stockholders' Deficiency for each of the years in the three-year period ended December 31, 2014
|
|
|
|
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2014
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Financial Statement Schedule:
|
|
|
|
Schedule II - Valuation and Qualifying Accounts
|
|
|
|
|
December 31, 2014
|
|
December 31, 2013
(a)
|
||||
|
|
|
|
|
||||
|
ASSETS
|
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
275.3
|
|
|
$
|
244.1
|
|
|
Trade receivables, less allowance for doubtful accounts of $9.3 and $4.2 as of December 31, 2014 and December 31, 2013, respectively
|
238.9
|
|
|
253.5
|
|
||
|
Inventories
|
156.6
|
|
|
175.0
|
|
||
|
Deferred income taxes – current
|
58.4
|
|
|
65.1
|
|
||
|
Prepaid expenses and other
|
44.6
|
|
|
61.4
|
|
||
|
Total current assets
|
773.8
|
|
|
799.1
|
|
||
|
Property, plant and equipment, net of accumulated depreciation of $250.5 and $243.1 as of December 31, 2014 and December 31, 2013, respectively
|
212.0
|
|
|
195.9
|
|
||
|
Deferred income taxes – noncurrent
|
53.1
|
|
|
65.7
|
|
||
|
Goodwill
|
464.1
|
|
|
472.3
|
|
||
|
Intangible assets, net of accumulated amortization of $39.3 and $19.0 as of December 31, 2014 and December 31, 2013, respectively
|
327.8
|
|
|
360.1
|
|
||
|
Other assets
|
113.3
|
|
|
123.8
|
|
||
|
Total assets
|
$
|
1,944.1
|
|
|
$
|
2,016.9
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Short-term borrowings
|
$
|
6.6
|
|
|
$
|
7.9
|
|
|
Current portion of long-term debt
|
31.5
|
|
|
65.4
|
|
||
|
Accounts payable
|
153.5
|
|
|
165.7
|
|
||
|
Accrued expenses and other
|
273.3
|
|
|
313.7
|
|
||
|
Total current liabilities
|
464.9
|
|
|
552.7
|
|
||
|
Long-term debt
|
1,832.4
|
|
|
1,862.3
|
|
||
|
Long-term pension and other post-retirement plan liabilities
|
200.9
|
|
|
118.3
|
|
||
|
Other long-term liabilities
|
90.0
|
|
|
80.1
|
|
||
|
Stockholders’ deficiency:
|
|
|
|
||||
|
Class A Common Stock, par value $0.01 per share; 900,000,000 shares authorized; 53,925,029 and 53,231,651 shares issued as of December 31, 2014 and December 31, 2013, respectively
|
0.5
|
|
|
0.5
|
|
||
|
Additional paid-in capital
|
1,020.9
|
|
|
1,015.3
|
|
||
|
Treasury stock, at cost: 777,181 and 754,853 shares of Class A Common Stock as of December 31, 2014 and 2013, respectively.
|
(10.5
|
)
|
|
(9.8
|
)
|
||
|
Accumulated deficit
|
(1,411.8
|
)
|
|
(1,452.7
|
)
|
||
|
Accumulated other comprehensive loss
|
(243.2
|
)
|
|
(149.8
|
)
|
||
|
Total stockholders’ deficiency
|
(644.1
|
)
|
|
(596.5
|
)
|
||
|
Total liabilities and stockholders’ deficiency
|
$
|
1,944.1
|
|
|
$
|
2,016.9
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
||||||
|
Net sales
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
|
$
|
1,396.4
|
|
|
Cost of sales
|
668.3
|
|
|
545.1
|
|
|
493.8
|
|
|||
|
Gross profit
|
1,272.7
|
|
|
949.6
|
|
|
902.6
|
|
|||
|
Selling, general and administrative expenses
|
1,009.5
|
|
|
731.7
|
|
|
682.6
|
|
|||
|
Acquisition and integration costs
|
6.4
|
|
|
25.4
|
|
|
—
|
|
|||
|
Restructuring charges and other, net
|
21.3
|
|
|
3.5
|
|
|
20.5
|
|
|||
|
Operating income
|
235.5
|
|
|
189.0
|
|
|
199.5
|
|
|||
|
Other expenses, net:
|
|
|
|
|
|
||||||
|
Interest expense
|
84.4
|
|
|
73.8
|
|
|
79.1
|
|
|||
|
Interest expense – preferred stock dividends
|
—
|
|
|
5.0
|
|
|
6.5
|
|
|||
|
Amortization of debt issuance costs
|
5.5
|
|
|
5.2
|
|
|
5.3
|
|
|||
|
Loss on early extinguishment of debt
|
2.0
|
|
|
29.7
|
|
|
—
|
|
|||
|
Foreign currency losses, net
|
25.0
|
|
|
3.7
|
|
|
2.8
|
|
|||
|
Miscellaneous, net
|
1.2
|
|
|
1.0
|
|
|
0.9
|
|
|||
|
Other expenses, net
|
118.1
|
|
|
118.4
|
|
|
94.6
|
|
|||
|
Income from continuing operations before income taxes
|
117.4
|
|
|
70.6
|
|
|
104.9
|
|
|||
|
Provision for income taxes
|
77.8
|
|
|
46.0
|
|
|
43.7
|
|
|||
|
Income from continuing operations, net of taxes
|
39.6
|
|
|
24.6
|
|
|
61.2
|
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
1.3
|
|
|
(30.4
|
)
|
|
(10.1
|
)
|
|||
|
Net income (loss)
|
$
|
40.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
51.1
|
|
|
Other comprehensive (loss) income :
|
|
|
|
|
|
|
|
|
|||
|
Currency translation adjustment, net of tax
(a)
|
(24.6
|
)
|
|
(4.1
|
)
|
|
(1.5
|
)
|
|||
|
Amortization of pension related costs, net of tax
(b)(e)
|
4.5
|
|
|
7.7
|
|
|
9.4
|
|
|||
|
Pension re-measurement, net of tax
(c)
|
(69.6
|
)
|
|
53.3
|
|
|
(15.4
|
)
|
|||
|
Pension curtailment gain
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
|
Revaluation of derivative financial instruments, net of tax
(d)
|
(3.7
|
)
|
|
1.5
|
|
|
—
|
|
|||
|
Other comprehensive (loss) income
|
(93.4
|
)
|
|
58.4
|
|
|
(7.3
|
)
|
|||
|
Total comprehensive (loss) income
|
$
|
(52.5
|
)
|
|
$
|
52.6
|
|
|
$
|
43.8
|
|
|
|
|
|
|
|
|
||||||
|
Basic earnings (loss) per common share:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
0.76
|
|
|
$
|
0.47
|
|
|
$
|
1.17
|
|
|
Discontinued operations
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|||
|
Net income (loss)
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
0.76
|
|
|
$
|
0.47
|
|
|
$
|
1.17
|
|
|
Discontinued operations
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|||
|
Net income (loss)
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|||||
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|||||
|
Basic
|
52,359,897
|
|
|
52,356,798
|
|
|
52,348,636
|
|
|||
|
Diluted
|
52,423,939
|
|
|
52,357,729
|
|
|
52,356,882
|
|
|||
|
(a)
|
Net of tax benefit of
$2.1 million
,
$3.3 million
and
$1.0 million
for 2014,
2013
and
2012
, respectively.
|
|
(b)
|
Net of tax expense of
$0.1 million
,
$1.2 million
and
$1.0 million
for 2014,
2013
and
2012
, respectively.
|
|
(c)
|
Net of tax (benefit) expense of
$(42.0) million
,
$33.5 million
and
$(7.2) million
for 2014,
2013
and
2012
, respectively.
|
|
(d)
|
Net of tax (benefit) expense of
$(2.3) million
and
$1.0 million
for 2014 and
2013
, respectively.
|
|
(e)
|
This other comprehensive income component is included in the computation of net periodic benefit (income) costs. See Note 14, “Savings, Pension and Post-Retirement Benefits,” for additional information regarding net periodic benefit (income) costs.
|
|
|
Common Stock
|
|
Additional Paid-In-Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Deficiency
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Balance, January 1, 2012
|
$
|
0.5
|
|
|
$
|
1,014.1
|
|
|
$
|
(8.6
|
)
|
|
$
|
(1,498.0
|
)
|
|
$
|
(200.9
|
)
|
|
$
|
(692.9
|
)
|
|
Treasury stock acquired, at cost
(a)
|
|
|
|
|
(1.2
|
)
|
|
|
|
|
|
(1.2
|
)
|
||||||||||
|
Stock-based compensation amortization
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|||||||
|
Excess tax benefits from stock-based compensation
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
|||||||
|
Net income
|
|
|
|
|
|
|
|
|
51.1
|
|
|
|
|
|
51.1
|
|
|||||||
|
Other comprehensive loss, net
(b)
|
|
|
|
|
|
|
|
|
|
|
|
(7.3
|
)
|
|
(7.3
|
)
|
|||||||
|
Balance, December 31, 2012
|
0.5
|
|
|
1,015.1
|
|
|
(9.8
|
)
|
|
(1,446.9
|
)
|
|
(208.2
|
)
|
|
(649.3
|
)
|
||||||
|
Stock-based compensation amortization
|
|
|
0.2
|
|
|
|
|
|
|
|
|
0.2
|
|
||||||||||
|
Net loss
|
|
|
|
|
|
|
(5.8
|
)
|
|
|
|
|
(5.8
|
)
|
|||||||||
|
Other comprehensive income, net
(b)
|
|
|
|
|
|
|
|
|
|
58.4
|
|
|
58.4
|
|
|||||||||
|
Balance, December 31, 2013
|
$
|
0.5
|
|
|
$
|
1,015.3
|
|
|
$
|
(9.8
|
)
|
|
$
|
(1,452.7
|
)
|
|
$
|
(149.8
|
)
|
|
$
|
(596.5
|
)
|
|
Treasury stock acquired, at cost
(a)
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
(0.7
|
)
|
||||||||||
|
Stock-based compensation amortization
|
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
5.5
|
|
||||||
|
Excess tax benefits from stock-based compensation
|
|
|
0.1
|
|
|
|
|
|
|
|
|
0.1
|
|
||||||||||
|
Net income
|
|
|
|
|
|
|
40.9
|
|
|
|
|
40.9
|
|
||||||||||
|
Other comprehensive loss, net
(b)
|
|
|
|
|
|
|
|
|
(93.4
|
)
|
|
(93.4
|
)
|
||||||||||
|
Balance, December 31, 2014
|
$
|
0.5
|
|
|
$
|
1,020.9
|
|
|
$
|
(10.5
|
)
|
|
$
|
(1,411.8
|
)
|
|
$
|
(243.2
|
)
|
|
$
|
(644.1
|
)
|
|
(a)
|
Pursuant to the share withholding provisions of both the Third and Fourth Amended and Restated Revlon, Inc. Stock Plan (the “Stock Plan”), certain employees, in lieu of paying withholding taxes on the vesting of certain restricted stock, authorized the withholding of an aggregate
22,328
and
83,582
shares of Revlon, Inc. Class A Common Stock during 2014 and 2012, respectively, to satisfy the minimum statutory tax withholding requirements related to such vesting. These shares were recorded as treasury stock using the cost method, at a weighted average price per share of
$33.54
and
$14.20
during 2014 and 2012, respectively, based on the closing price of Revlon, Inc. Class A Common Stock as reported on the NYSE consolidated tape on the respective vesting dates, for a total of
$0.7 million
in 2014 and
$1.2 million
in 2012. For details on such withholding taxes on the vesting of certain restricted stock, see Note 18, “Stockholders’ Deficiency.”
|
|
(b)
|
See Note 17, “Accumulated Other Comprehensive Loss,” regarding the changes in the accumulated balances for each component of other comprehensive income (loss) during each of
2014
,
2013
and
2012
.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Net income (loss)
|
$
|
40.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
51.1
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
|
Depreciation and amortization
|
102.6
|
|
|
76.7
|
|
|
64.9
|
|
|||
|
Foreign currency loss from Venezuela re-measurement
|
6.0
|
|
|
0.6
|
|
|
—
|
|
|||
|
Amortization of debt discount
|
1.4
|
|
|
1.5
|
|
|
2.1
|
|
|||
|
Stock-based compensation amortization
|
5.5
|
|
|
0.2
|
|
|
0.3
|
|
|||
|
Provision for deferred income taxes
|
64.3
|
|
|
30.8
|
|
|
28.4
|
|
|||
|
Loss on early extinguishment of debt
|
2.0
|
|
|
29.7
|
|
|
—
|
|
|||
|
Amortization of debt issuance costs
|
5.5
|
|
|
5.2
|
|
|
5.3
|
|
|||
|
Insurance proceeds for property, plant and equipment
|
—
|
|
|
(13.1
|
)
|
|
—
|
|
|||
|
(Gain) loss on sale of certain assets
|
(2.1
|
)
|
|
(2.9
|
)
|
|
0.4
|
|
|||
|
Pension and other post-retirement (income) loss
|
(5.3
|
)
|
|
(0.2
|
)
|
|
4.0
|
|
|||
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
||||
|
(Increase) decrease in trade receivables
|
(5.5
|
)
|
|
40.1
|
|
|
(4.7
|
)
|
|||
|
Decrease (Increase) in inventories
|
9.2
|
|
|
10.2
|
|
|
(4.4
|
)
|
|||
|
Decrease (Increase) in prepaid expenses and other current assets
|
15.2
|
|
|
7.5
|
|
|
(2.9
|
)
|
|||
|
Increase in accounts payable
|
0.2
|
|
|
19.0
|
|
|
4.5
|
|
|||
|
(Decrease) Increase in accrued expenses and other current liabilities
|
(2.7
|
)
|
|
(11.4
|
)
|
|
47.3
|
|
|||
|
Pension and other post-retirement plan contributions
|
(19.0
|
)
|
|
(18.5
|
)
|
|
(29.8
|
)
|
|||
|
Purchases of permanent displays
|
(45.3
|
)
|
|
(44.5
|
)
|
|
(43.2
|
)
|
|||
|
Other, net
|
1.1
|
|
|
(1.8
|
)
|
|
(19.2
|
)
|
|||
|
Net cash provided by operating activities
|
174.0
|
|
|
123.3
|
|
|
104.1
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Capital expenditures
|
(55.5
|
)
|
|
(28.6
|
)
|
|
(20.9
|
)
|
|||
|
Business acquisitions, net of cash and cash equivalents acquired
|
—
|
|
|
(627.6
|
)
|
|
(66.2
|
)
|
|||
|
Insurance proceeds for property, plant and equipment
|
—
|
|
|
13.1
|
|
|
—
|
|
|||
|
Proceeds from the sale of certain assets
|
3.4
|
|
|
3.7
|
|
|
0.8
|
|
|||
|
Net cash used in investing activities
|
(52.1
|
)
|
|
(639.4
|
)
|
|
(86.3
|
)
|
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
|
Net (decrease) increase in short-term borrowings and overdraft
|
(4.7
|
)
|
|
(6.3
|
)
|
|
6.3
|
|
|||
|
Repayment under the Amended and Restated Senior Subordinated Term Loan
|
(58.4
|
)
|
|
—
|
|
|
—
|
|
|||
|
Repayments under the Acquisition Term Loan
|
(7.0
|
)
|
|
—
|
|
|
—
|
|
|||
|
Borrowings under the Acquisition Term Loan
|
—
|
|
|
698.3
|
|
|
—
|
|
|||
|
Proceeds from the issuance of the 5¾% Senior Notes
|
—
|
|
|
500.0
|
|
|
—
|
|
|||
|
Repayment of the 9¾% Senior Secured Notes
|
—
|
|
|
(330.0
|
)
|
|
—
|
|
|||
|
Repayments under the 2011 Term Loan
|
—
|
|
|
(113.0
|
)
|
|
(8.0
|
)
|
|||
|
Redemption of Preferred Stock
|
—
|
|
|
(48.6
|
)
|
|
—
|
|
|||
|
Payment of financing costs
|
(1.8
|
)
|
|
(48.8
|
)
|
|
(0.4
|
)
|
|||
|
Other financing activities
|
(3.2
|
)
|
|
(2.6
|
)
|
|
(1.3
|
)
|
|||
|
Net cash (used in) provided by financing activities
|
(75.1
|
)
|
|
649.0
|
|
|
(3.4
|
)
|
|||
|
Effect of exchange rate changes on cash and cash equivalents
|
(15.6
|
)
|
|
(5.1
|
)
|
|
0.2
|
|
|||
|
Net increase in cash and cash equivalents
|
31.2
|
|
|
127.8
|
|
|
14.6
|
|
|||
|
Cash and cash equivalents at beginning of period
|
244.1
|
|
|
116.3
|
|
|
101.7
|
|
|||
|
Cash and cash equivalents at end of period
|
$
|
275.3
|
|
|
$
|
244.1
|
|
|
$
|
116.3
|
|
|
Supplemental schedule of cash flow information:
|
|
|
|
|
|
||||||
|
Cash paid during the period for:
|
|
|
|
|
|
||||||
|
Interest
|
$
|
85.6
|
|
|
$
|
72.5
|
|
|
$
|
78.6
|
|
|
Income taxes, net of refunds
|
21.1
|
|
|
12.7
|
|
|
18.0
|
|
|||
|
Preferred stock dividends
|
—
|
|
|
6.2
|
|
|
6.2
|
|
|||
|
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
|
Treasury stock received to satisfy minimum tax withholding liabilities
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Acquisition costs
|
$
|
0.5
|
|
|
$
|
12.9
|
|
|
Integration costs
|
5.9
|
|
|
12.5
|
|
||
|
Total acquisition and integration costs
|
$
|
6.4
|
|
|
$
|
25.4
|
|
|
|
Amounts Previously Recognized as of October 9, 2013 (Provisional)
(a)
|
|
Measurement Period Adjustments
|
|
Amounts Recognized as of Acquisition Date (Adjusted)
|
||||||
|
Cash and cash equivalents
|
$
|
36.9
|
|
|
$
|
—
|
|
|
$
|
36.9
|
|
|
Trade receivables
|
83.9
|
|
|
—
|
|
|
83.9
|
|
|||
|
Inventories
|
75.1
|
|
|
—
|
|
|
75.1
|
|
|||
|
Prepaid expenses and other
|
31.3
|
|
|
—
|
|
|
31.3
|
|
|||
|
Property, plant and equipment
|
96.7
|
|
|
—
|
|
|
96.7
|
|
|||
|
Intangible assets
(b)
|
292.7
|
|
|
5.4
|
|
|
298.1
|
|
|||
|
Goodwill
(b)(c)
|
255.7
|
|
|
(2.4
|
)
|
|
253.3
|
|
|||
|
Deferred tax asset - noncurrent
|
53.1
|
|
|
—
|
|
|
53.1
|
|
|||
|
Other assets
(c)
|
1.9
|
|
|
3.9
|
|
|
5.8
|
|
|||
|
Total assets acquired
|
927.3
|
|
|
6.9
|
|
|
934.2
|
|
|||
|
Accounts payable
|
48.0
|
|
|
—
|
|
|
48.0
|
|
|||
|
Accrued expenses and other
|
65.6
|
|
|
—
|
|
|
65.6
|
|
|||
|
Long-term debt
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||
|
Long-term pension and other benefit plan liabilities
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||
|
Deferred tax liability
(b)
|
123.3
|
|
|
2.1
|
|
|
125.4
|
|
|||
|
Other long-term liabilities
(c)
|
20.5
|
|
|
4.8
|
|
|
25.3
|
|
|||
|
Total liabilities assumed
|
262.8
|
|
|
6.9
|
|
|
269.7
|
|
|||
|
Total consideration
|
$
|
664.5
|
|
|
$
|
—
|
|
|
$
|
664.5
|
|
|
|
Fair Values at October 9, 2013
|
|
Weighted Average Useful Life (in years)
|
||
|
Trade names, indefinite-lived
|
$
|
108.6
|
|
|
Indefinite
|
|
Trade names, finite-lived
|
109.4
|
|
|
5 - 20
|
|
|
Customer relationships
|
62.4
|
|
|
15 - 20
|
|
|
License agreement
|
4.1
|
|
|
10
|
|
|
Internally-developed IP
|
13.6
|
|
|
10
|
|
|
Total acquired intangible assets
|
$
|
298.1
|
|
|
|
|
|
Unaudited Pro Forma Results
|
||||||
|
|
Year Ended December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
Net sales
|
$
|
1,908.9
|
|
|
$
|
1,911.6
|
|
|
Income from continuing operations, before income taxes
|
125.2
|
|
|
106.0
|
|
||
|
1.
|
$5.9 million
and $
12.5 million
and of non-restructuring integration costs recognized during 2014 and 2013, respectively. Such costs have been reflected within acquisition and integration costs in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income and are related to combining Colomer’s operations into the Company’s business;
|
|
2.
|
Expected integration-related capital expenditures of approximately
$7 million
,
$4.4 million
of which has been paid during 2014 with the remaining balance expected to be paid in 2015; and
|
|
3.
|
Expected total restructuring and related charges of approximately
$25 million
,
$20.1 million
of which was recognized during 2014 with the remaining charges expected to be recognized in 2015. A summary of the restructuring and related charges for the Integration Program incurred through 2014 and those expected to be incurred in 2015, are as follows:
|
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
||||||||||||||||
|
|
Employee Severance and Other Personnel Benefits
|
|
Other
|
|
Total Restructuring Charges
|
|
Inventory Write-offs and Other Manufacturing-Related Costs (a)
|
|
Other Charges (b)
|
|
Total Restructuring and Related Charges
|
||||||||||||
|
Charges incurred through December 31, 2014
|
$
|
17.3
|
|
|
$
|
1.6
|
|
|
$
|
18.9
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
20.1
|
|
|
Total expected charges
|
$
|
18.0
|
|
|
$
|
3.0
|
|
|
$
|
21.0
|
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
|
$
|
25.0
|
|
|
(a)
|
Inventory write-offs and other manufacturing-related costs are recorded within cost of sales within the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.
|
|
(b)
|
Other charges are recorded within SG&A expenses within the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.
|
|
|
Restructuring Charges and Other, Net
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Employee Severance and Other Personnel Benefits
|
|
Other
|
|
Total Restructuring Charges
|
|
Allowances and Returns
|
|
Inventory Write-offs
|
|
Other Charges
|
|
Total Restructuring and Related Charges
|
||||||||||||||
|
Charges incurred through December 31, 2013
|
$
|
9.1
|
|
|
$
|
0.5
|
|
|
$
|
9.6
|
|
|
$
|
7.4
|
|
|
$
|
4.0
|
|
|
$
|
0.4
|
|
|
$
|
21.4
|
|
|
Adjustments recorded for the year ended December 31, 2014
(a)
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||||
|
Cumulative charges incurred through December 31, 2014
|
$
|
8.6
|
|
|
$
|
0.3
|
|
|
$
|
8.9
|
|
|
$
|
6.5
|
|
|
$
|
3.1
|
|
|
$
|
0.4
|
|
|
$
|
18.9
|
|
|
Total expected charges
|
$
|
8.6
|
|
|
$
|
0.3
|
|
|
$
|
8.9
|
|
|
$
|
6.5
|
|
|
$
|
3.1
|
|
|
$
|
0.4
|
|
|
$
|
18.9
|
|
|
(a)
|
Of the
$2.5 million
adjustment for 2014 related to the December 2013 Program,
$2.3 million
relates to the Company's exit of its business operations in China which were recorded within income (loss) from discontinued operations, net of taxes. See Note 4, "Discontinued Operations," for further discussion. The remaining
$0.2 million
of such adjustment was recorded in restructuring charges and other, net within income from continuing operations, net of taxes.
|
|
|
|
|
|
|
|
|
Utilized, Net
|
|
|
||||||||||||||
|
Balance
Beginning of Year
|
|
(Income) Expense, Net
|
|
Foreign Currency Translation
|
|
Cash
|
|
Non-cash
|
|
Balance End of Year
|
|||||||||||||
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Integration Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Employee severance and other personnel benefits
|
$
|
—
|
|
|
$
|
17.3
|
|
|
$
|
(0.1
|
)
|
|
$
|
(7.6
|
)
|
|
$
|
—
|
|
|
$
|
9.6
|
|
|
Other
|
—
|
|
|
1.6
|
|
|
—
|
|
|
(1.2
|
)
|
|
(0.3
|
)
|
|
0.1
|
|
||||||
|
December 2013 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Employee severance and other personnel benefits
|
9.0
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(7.3
|
)
|
|
0.2
|
|
|
1.2
|
|
||||||
|
Other
|
0.5
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||||
|
September 2012 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Employee severance and other personnel benefits
|
2.7
|
|
|
—
|
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|
0.1
|
|
|
0.2
|
|
||||||
|
Other
|
1.5
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
||||||
|
2014 Other immaterial actions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Employee severance and other personnel benefits
|
—
|
|
|
5.0
|
|
|
(0.1
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
2.9
|
|
||||||
|
Other
|
—
|
|
|
0.2
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||||
|
Total restructuring reserve
|
$
|
13.7
|
|
|
$
|
23.4
|
|
|
$
|
(0.5
|
)
|
|
$
|
(22.6
|
)
|
|
$
|
—
|
|
|
$
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gain on sale of property, plant and equipment for 2014 other immaterial actions
|
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portion of restructuring benefits recorded within income (loss) from discontinued operations
(a)
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total restructuring charges and other, net, from continuing operations
|
|
|
$
|
21.3
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 2013 Program:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Employee severance and other personnel benefits
|
$
|
—
|
|
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
9.0
|
|
|
Other
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||||
|
September 2012 Program:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Employee severance and other personnel benefits
|
18.0
|
|
|
2.9
|
|
|
(0.1
|
)
|
|
(18.1
|
)
|
|
—
|
|
|
2.7
|
|
||||||
|
Other
|
0.9
|
|
|
2.3
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
1.5
|
|
||||||
|
Lease exit
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
||||||
|
Total restructuring reserve
|
$
|
19.2
|
|
|
14.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
(20.2
|
)
|
|
$
|
—
|
|
|
$
|
13.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gain on sale of France facility
|
|
|
(2.5
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portion of restructuring charges recorded within (loss) income from discontinued operations
(a)
|
|
|
(8.8
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total restructuring charges and other, net from continuing operations
|
|
|
$
|
3.5
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Net sales
(a)
|
$
|
2.6
|
|
|
$
|
13.8
|
|
|
$
|
29.7
|
|
|
Income (loss) from discontinued operations, before taxes
(b)
|
1.5
|
|
|
(30.8
|
)
|
|
(10.5
|
)
|
|||
|
Benefit for income taxes
|
0.2
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
|
Income (loss) from discontinued operations, net of taxes
|
1.3
|
|
|
(30.4
|
)
|
|
(10.1
|
)
|
|||
|
(a)
|
Net sales during 2014 include favorable adjustments to sales returns related to the Company's exit of its China operations.
|
|
(b)
|
Included in loss from discontinued operations, before taxes for 2013 is
$20.0 million
of restructuring and related charges related to the Company's exit of its business operations in China as part of the December 2013 Program. Refer to Note 3, "Restructuring Charges - December 2013 Program," for related disclosures.
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Cash and cash equivalents
|
$
|
2.4
|
|
|
$
|
0.9
|
|
|
Trade receivables, net
|
0.2
|
|
|
1.9
|
|
||
|
Total current assets
|
2.6
|
|
|
2.8
|
|
||
|
Total assets
|
$
|
2.6
|
|
|
$
|
2.8
|
|
|
|
|
|
|
||||
|
Accounts payable
|
$
|
0.2
|
|
|
$
|
4.7
|
|
|
Accrued expenses and other
|
3.9
|
|
|
27.6
|
|
||
|
Total current liabilities
|
4.1
|
|
|
32.3
|
|
||
|
Other long-term liabilities
|
—
|
|
|
2.8
|
|
||
|
Total liabilities
|
$
|
4.1
|
|
|
$
|
35.1
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Raw materials and supplies
|
$
|
47.2
|
|
|
$
|
50.8
|
|
|
Work-in-process
|
9.0
|
|
|
12.8
|
|
||
|
Finished goods
|
100.4
|
|
|
111.4
|
|
||
|
|
$
|
156.6
|
|
|
$
|
175.0
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Prepaid expenses
|
$
|
17.3
|
|
|
$
|
22.5
|
|
|
Other
|
27.3
|
|
|
38.9
|
|
||
|
|
$
|
44.6
|
|
|
$
|
61.4
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Land and improvements
|
$
|
11.7
|
|
|
$
|
12.9
|
|
|
Building and improvements
|
83.9
|
|
|
86.6
|
|
||
|
Machinery, equipment and capital leases
|
198.7
|
|
|
193.5
|
|
||
|
Office furniture, fixtures and capitalized software
|
104.2
|
|
|
107.0
|
|
||
|
Leasehold improvements
|
28.1
|
|
|
16.5
|
|
||
|
Construction-in-progress
|
35.9
|
|
|
22.5
|
|
||
|
Property, plant and equipment, gross
|
462.5
|
|
|
439.0
|
|
||
|
Accumulated depreciation
|
(250.5
|
)
|
|
(243.1
|
)
|
||
|
Property, plant and equipment, net
|
$
|
212.0
|
|
|
$
|
195.9
|
|
|
|
Consumer
|
|
Professional
|
|
Total
|
||||||
|
Balance at January 1, 2013
|
$
|
217.8
|
|
|
$
|
—
|
|
|
$
|
217.8
|
|
|
Goodwill acquired
|
—
|
|
|
255.7
|
|
|
255.7
|
|
|||
|
Foreign currency translation adjustment
|
$
|
0.1
|
|
|
$
|
1.1
|
|
|
$
|
1.2
|
|
|
Balance at December 31, 2013 before Measurement Period Adjustments
(a)
|
$
|
217.9
|
|
|
$
|
256.8
|
|
|
$
|
474.7
|
|
|
Measurement Period Adjustments
|
—
|
|
|
(2.4
|
)
|
|
(2.4
|
)
|
|||
|
Balance at December 31, 2013
|
217.9
|
|
|
254.4
|
|
|
472.3
|
|
|||
|
Foreign currency translation adjustment
|
—
|
|
|
(8.2
|
)
|
|
(8.2
|
)
|
|||
|
Balance at December 31, 2014
|
$
|
217.9
|
|
|
$
|
246.2
|
|
|
$
|
464.1
|
|
|
|
December 31, 2014
|
||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (in Years)
|
||||||
|
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
|
Trademarks and Licenses
|
$
|
140.5
|
|
|
$
|
(23.5
|
)
|
|
$
|
117.0
|
|
|
14
|
|
Customer relationships
|
109.1
|
|
|
(13.4
|
)
|
|
95.7
|
|
|
17
|
|||
|
Patents and Internally-Developed IP
|
16.2
|
|
|
(2.4
|
)
|
|
13.8
|
|
|
10
|
|||
|
Total finite-lived intangible assets
|
$
|
265.8
|
|
|
$
|
(39.3
|
)
|
|
$
|
226.5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
|
Trade Names
|
$
|
101.3
|
|
|
$
|
—
|
|
|
$
|
101.3
|
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
101.3
|
|
|
$
|
—
|
|
|
$
|
101.3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total intangible assets
|
$
|
367.1
|
|
|
$
|
(39.3
|
)
|
|
$
|
327.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2013
(a)
|
||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (in Years)
|
||||||
|
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
|
Trademarks and Licenses
|
$
|
142.1
|
|
|
$
|
(11.0
|
)
|
|
$
|
131.1
|
|
|
14
|
|
Customer relationships
|
111.5
|
|
|
(6.7
|
)
|
|
104.8
|
|
|
16
|
|||
|
Patents and Internally-Developed IP
|
15.8
|
|
|
(1.3
|
)
|
|
14.5
|
|
|
10
|
|||
|
Total finite-lived intangible assets
|
$
|
269.4
|
|
|
$
|
(19.0
|
)
|
|
$
|
250.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
|
Trade Names
|
$
|
109.7
|
|
|
$
|
—
|
|
|
$
|
109.7
|
|
|
|
|
Total indefinite-lived intangible assets
|
$
|
109.7
|
|
|
$
|
—
|
|
|
$
|
109.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total intangible assets
|
$
|
379.1
|
|
|
$
|
(19.0
|
)
|
|
$
|
360.1
|
|
|
|
|
|
Estimated Amortization Expense
|
||
|
2015
|
$
|
20.9
|
|
|
2016
|
20.7
|
|
|
|
2017
|
20.6
|
|
|
|
2018
|
19.6
|
|
|
|
2019
|
16.9
|
|
|
|
Thereafter
|
127.8
|
|
|
|
Total
|
$
|
226.5
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Sales returns and allowances
|
$
|
70.6
|
|
|
$
|
91.5
|
|
|
Compensation and related benefits
|
66.8
|
|
|
74.5
|
|
||
|
Advertising and promotional costs
|
44.9
|
|
|
42.9
|
|
||
|
Taxes
|
23.4
|
|
|
28.5
|
|
||
|
Interest
|
11.0
|
|
|
13.8
|
|
||
|
Restructuring reserve
|
13.7
|
|
|
13.7
|
|
||
|
Other
|
42.9
|
|
|
48.8
|
|
||
|
|
$
|
273.3
|
|
|
$
|
313.7
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
|
Amended Term Loan Facility: Acquisition Term Loan due 2019, net of discounts (see (a)
below)
|
$
|
691.6
|
|
|
$
|
698.3
|
|
|
Amended Term Loan Facility: 2011 Term Loan due 2017, net of discounts (see (a) below)
|
671.6
|
|
|
670.1
|
|
||
|
Amended Revolving Credit Facility (see (a) below)
|
—
|
|
|
—
|
|
||
|
5¾% Senior Notes due 2021 (see (b) below)
|
500.0
|
|
|
500.0
|
|
||
|
Non-Contributed Loan portion of the Amended and Restated Senior Subordinated Term Loan due 2014 (see (c) below)
|
—
|
|
|
58.4
|
|
||
|
Spanish Government Loan due 2025 (see (d) below)
|
0.7
|
|
|
0.9
|
|
||
|
|
1,863.9
|
|
|
1,927.7
|
|
||
|
Less current portion (*)
|
(31.5
|
)
|
|
(65.4
|
)
|
||
|
|
$
|
1,832.4
|
|
|
$
|
1,862.3
|
|
|
Excess Availability
|
|
Alternate Base Rate Loans
|
|
Eurodollar Loans, Eurocurrency Loan or Local Rate Loans
|
|
Greater than or equal to $92,000,000
|
|
0.50%
|
|
1.50%
|
|
Less than $92,000,000 but greater than or equal to $46,000,000
|
|
0.75%
|
|
1.75%
|
|
Less than $46,000,000
|
|
1.00%
|
|
2.00%
|
|
|
|
Eurodollar Loans
|
|
Alternate Base Rate Loans
|
|
2011 Term Loans
|
|
Eurodollar Rate plus 2.50% per annum (with the Eurodollar Rate not to be less than 0.75%)
|
|
Alternate Base Rate plus 1.50% (with the Alternate Base Rate not to be less than 1.75%)
|
|
Acquisition Term Loans
|
|
Eurodollar Rate plus 3.00% per annum (with the Eurodollar Rate not to be less than 1.00%)
|
|
Alternate Base Rate plus 2.00% (with the Alternate Base Rate not to be less than 2.00%)
|
|
Year
|
|
Percentage
|
|
|
2016
|
|
104.313
|
%
|
|
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 5¾% 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”).
|
|
i.
|
modify the interest rate on the Non-Contributed Loan from its prior 12% fixed rate to a floating rate of LIBOR plus 7%, with a 1.5% LIBOR floor, resulting in an interest rate of approximately 8.5% per annum (or a 3.5% reduction per annum) upon the effectiveness of the Amended and Restated Senior Subordinated Term Loan Agreement;
|
|
ii.
|
insert prepayment premiums such that Products Corporation could optionally prepay the Non-Contributed Loan (a) from November 1, 2013 through April 30, 2014 with a 2% prepayment premium on the aggregate principal amount of the Non-Contributed Loan being prepaid, and (b) from May 1, 2014 through maturity on October 8, 2014 with no prepayment premium; and
|
|
iii.
|
designate Citibank, N.A. as the administrative agent for the Non-Contributed Loan.
|
|
Years Ended December 31,
|
|
Long-Term Debt Maturities
|
|
||
|
2015
|
|
$
|
31.5
|
|
(a)
|
|
2016
|
|
7.0
|
|
(a)
|
|
|
2017
|
|
669.8
|
|
(b)
|
|
|
2018
|
|
7.0
|
|
(a)
|
|
|
2019
|
|
653.1
|
|
(c)
|
|
|
Thereafter
|
|
500.3
|
|
(d)
|
|
|
Total long-term debt
|
|
1,868.7
|
|
|
|
|
Discounts
|
|
(4.8
|
)
|
|
|
|
Total long-term debt, net of discounts
|
|
$
|
1,863.9
|
|
|
|
(a)
|
Amount includes the quarterly amortization payments required under the Acquisition Term Loan as well as the required
$24.6 million
“excess cash flow” prepayment to be made on or before April 10, 2015 under the Amended Term Loan Agreement (as defined under the Amended Term Loan Agreement).
|
|
(b)
|
Amount includes the aggregate principal amount expected to be outstanding under the 2011 Term Loan which matures on November 19, 2017, after giving effect to the quarterly amortization payments required under the Acquisition Term Loan and the excess cash flow prepayment discussed in note (a) above.
|
|
(c)
|
Amount is comprised of the aggregate principal amount expected to be outstanding under the Acquisition Term Loan assuming a maturity date of October 9, 2019, after giving effect to the amortization payments and excess cash flow prepayment referred to in note (a) above.
|
|
(d)
|
Amount is primarily comprised of the
$500.0 million
aggregate principal amount outstanding as of
December 31, 2014
under the 5¾% Senior Notes, which mature on February 21, 2021.
|
|
•
|
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)
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
Total assets at fair value
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Derivatives:
|
|
|
|
|
|
|
|
||||||||
|
FX Contracts
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2013 Interest Rate Swap
(b)
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
|
Total liabilities at fair value
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Derivatives:
|
|
|
|
|
|
|
|
||||||||
|
FX Contracts
(a)
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
2013 Interest Rate Swap
(b)
|
2.5
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
||||
|
Total assets at fair value
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Derivatives:
|
|
|
|
|
|
|
|
||||||||
|
FX Contracts
(a)
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
Total liabilities at fair value
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
(a)
|
The fair value of the Company’s foreign currency forward exchange contracts ("FX Contracts") was measured based on observable market transactions of spot and forward rates on the respective dates. See Note 13, “Financial Instruments.”
|
|
(b)
|
The fair value of the Company's 2013 Interest Rate Swap was measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve on the respective dates. See Note 13, “Financial Instruments.”
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
1,844.0
|
|
|
$
|
—
|
|
|
$
|
1,844.0
|
|
|
$
|
1,863.9
|
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Carrying Value
|
||||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Long-term debt, including current portion
|
$
|
—
|
|
|
$
|
1,931.9
|
|
|
$
|
—
|
|
|
$
|
1,931.9
|
|
|
$
|
1,927.7
|
|
|
(a)
|
Fair Values of Derivative Financial Instruments in Consolidated Balance Sheets:
|
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
|
Assets
|
|
Liabilities
|
||||||||||||||||
|
|
Balance Sheet
|
|
December 31,
2014 |
|
December 31,
2013 |
|
Balance Sheet
|
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
|
|
Classification
|
|
Fair Value
|
|
Fair Value
|
|
Classification
|
|
Fair Value
|
|
Fair Value
|
||||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
|
2013 Interest Rate Swap
(i)
|
Prepaid expenses and other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accrued expenses and other
|
|
$
|
2.1
|
|
|
$
|
—
|
|
|
|
Other assets
|
|
—
|
|
|
2.5
|
|
|
Other long-term liabilities
|
|
1.4
|
|
|
—
|
|
||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||||
|
FX Contracts
(ii)
|
Prepaid expenses and other
|
|
$
|
0.2
|
|
|
$
|
1.0
|
|
|
Accrued Expenses
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income
|
|||||||||||
|
|
Year Ended December 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|||||||
|
2013 Interest Rate Swap, net of tax
(a)
|
|
$
|
(3.7
|
)
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
|
(a)
|
Net of tax (benefit) expense of
$(2.3) million
and
$1.0 million
for each of 2014 and 2013.
|
|
|
Income Statement Classification
|
|
Amount of Gain (Loss) Recognized in Net Income
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|||||||||
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||||||
|
FX Contracts
|
Foreign currency gain (loss), net
|
|
$
|
0.5
|
|
|
$
|
2.2
|
|
|
$
|
(1.9
|
)
|
|
|
|
Pension Plans
|
|
Other Post-Retirement Benefit Plans
|
||||||||||||
|
|
December 31,
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
|
Benefit obligation - beginning of year
|
$
|
(668.2
|
)
|
|
$
|
(744.6
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
(16.5
|
)
|
|
Service cost
|
(0.8
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
||||
|
Interest cost
|
(30.1
|
)
|
|
(27.6
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
||||
|
Actuarial gain (loss)
|
(108.0
|
)
|
|
65.5
|
|
|
(0.2
|
)
|
|
1.6
|
|
||||
|
Benefits paid
|
41.0
|
|
|
39.1
|
|
|
0.7
|
|
|
0.8
|
|
||||
|
Currency translation adjustments
|
4.4
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.3
|
|
||||
|
Other
|
—
|
|
|
0.4
|
|
|
1.5
|
|
|
—
|
|
||||
|
Benefit obligation - end of year
|
$
|
(761.7
|
)
|
|
$
|
(668.2
|
)
|
|
$
|
(12.9
|
)
|
|
$
|
(14.4
|
)
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
|
Fair value of plan assets - beginning of year
|
$
|
557.6
|
|
|
$
|
520.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Actual return on plan assets
|
37.6
|
|
|
58.1
|
|
|
—
|
|
|
—
|
|
||||
|
Employer contributions
|
18.2
|
|
|
17.7
|
|
|
0.7
|
|
|
0.8
|
|
||||
|
Benefits paid
|
(41.0
|
)
|
|
(39.1
|
)
|
|
(0.7
|
)
|
|
(0.8
|
)
|
||||
|
Currency translation adjustments
|
(4.7
|
)
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
|
Fair value of plan assets - end of year
|
$
|
567.7
|
|
|
$
|
557.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Unfunded status of plans at December 31,
|
$
|
(194.0
|
)
|
|
$
|
(110.6
|
)
|
|
$
|
(12.9
|
)
|
|
$
|
(14.4
|
)
|
|
|
Pension Plans
|
|
Other Post-Retirement Benefit Plans
|
||||||||||||
|
|
December 31,
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Other long-term assets
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Accrued expenses and other
|
$
|
(6.1
|
)
|
|
$
|
(5.9
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.8
|
)
|
|
Pension and other post-retirement benefit liabilities
|
(188.7
|
)
|
|
(104.7
|
)
|
|
(12.2
|
)
|
|
(13.6
|
)
|
||||
|
Total liability
|
(194.0
|
)
|
|
(110.6
|
)
|
|
(12.9
|
)
|
|
(14.4
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Accumulated other comprehensive loss, gross
|
277.6
|
|
|
170.1
|
|
|
2.5
|
|
|
2.8
|
|
||||
|
Income tax (benefit) expense
|
(43.7
|
)
|
|
(1.8
|
)
|
|
0.1
|
|
|
0.1
|
|
||||
|
Portion allocated to Revlon Holdings
|
(1.0
|
)
|
|
(0.7
|
)
|
|
(0.2
|
)
|
|
—
|
|
||||
|
Accumulated other comprehensive loss, net
|
$
|
232.9
|
|
|
$
|
167.6
|
|
|
$
|
2.4
|
|
|
$
|
2.9
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Projected benefit obligation
|
$
|
761.7
|
|
|
$
|
668.2
|
|
|
Accumulated benefit obligation
|
761.0
|
|
|
667.3
|
|
||
|
Fair value of plan assets
|
567.7
|
|
|
557.6
|
|
||
|
|
Pension Plans |
|
Other
Post-Retirement Benefit Plans |
||||||||||||||||||||
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
Net periodic benefit (income) costs:
|
|
|
|
||||||||||||||||||||
|
Service cost
|
$
|
0.8
|
|
|
$
|
0.9
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest cost
|
30.1
|
|
|
27.6
|
|
|
30.0
|
|
|
0.5
|
|
|
0.6
|
|
|
0.7
|
|
||||||
|
Expected return on plan assets
|
(41.3
|
)
|
|
(38.3
|
)
|
|
(35.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Amortization of actuarial loss
|
4.5
|
|
|
8.6
|
|
|
8.1
|
|
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
||||||
|
Curtailment gain
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
(5.9
|
)
|
|
(1.2
|
)
|
|
3.0
|
|
|
0.6
|
|
|
1.0
|
|
|
1.0
|
|
||||||
|
Portion allocated to Revlon Holdings
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||||
|
|
$
|
(6.0
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
2.9
|
|
|
$
|
0.6
|
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
Net periodic benefit (income) costs:
|
|
|
|
||||
|
Cost of sales
|
$
|
(4.2
|
)
|
|
$
|
(2.3
|
)
|
|
Selling, general and administrative expense
|
(0.7
|
)
|
|
2.4
|
|
||
|
Inventories
|
(0.5
|
)
|
|
(0.5
|
)
|
||
|
|
$
|
(5.4
|
)
|
|
$
|
(0.4
|
)
|
|
|
Pension Benefits
|
|
Post-Retirement Benefits
|
|
Total
|
||||||
|
Net actuarial loss
|
$
|
277.6
|
|
|
$
|
2.5
|
|
|
$
|
280.1
|
|
|
Prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
Accumulated Other Comprehensive Loss, Gross
|
277.6
|
|
|
2.5
|
|
|
280.1
|
|
|||
|
Income tax (benefit) expense
|
(43.7
|
)
|
|
0.1
|
|
|
(43.6
|
)
|
|||
|
Portion allocated to Revlon Holdings
|
(1.0
|
)
|
|
(0.2
|
)
|
|
(1.2
|
)
|
|||
|
Accumulated Other Comprehensive Loss, Net
|
$
|
232.9
|
|
|
$
|
2.4
|
|
|
$
|
235.3
|
|
|
|
U.S. Plans
|
|
International Plans
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
|
Discount rate
|
3.89
|
%
|
|
4.68
|
%
|
|
3.74
|
%
|
|
4.48
|
%
|
|
Rate of future compensation increases
|
3.00
|
%
|
|
3.00
|
%
|
|
2.33
|
%
|
|
3.40
|
%
|
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Discount rate
|
4.68
|
%
|
|
3.78
|
%
|
|
4.38
|
%
|
|
4.48
|
%
|
|
4.33
|
%
|
|
4.77
|
%
|
|
Expected long-term return on plan assets
|
7.75
|
%
|
|
7.75
|
%
|
|
7.75
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
6.22
|
%
|
|
Rate of future compensation increases
|
3.00
|
%
|
|
3.00
|
%
|
|
3.50
|
%
|
|
3.40
|
%
|
|
2.97
|
%
|
|
3.05
|
%
|
|
|
Target Ranges
|
||
|
|
U.S. Plans
|
|
International Plans
|
|
Asset Class:
|
|
|
|
|
Common and preferred stock
|
0% - 10%
|
|
—
|
|
Mutual funds
|
20% - 30%
|
|
—
|
|
Fixed income securities
|
10% - 30%
|
|
—
|
|
Common and collective funds
|
25% - 55%
|
|
100%
|
|
Hedge funds
|
0% - 15%
|
|
—
|
|
Group annuity contract
|
0% - 5%
|
|
—
|
|
Cash and other investments
|
0% - 10%
|
|
—
|
|
|
U.S. Plans
|
|
International Plans
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Fair value of plan assets
|
$
|
496.1
|
|
|
$
|
492.5
|
|
|
$
|
71.6
|
|
|
$
|
65.1
|
|
|
•
|
Common and preferred stock: The fair values of the 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 the investments included in the mutual funds asset class are determined using net asset value (“NAV”) provided by the administrator of the funds. 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 the 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 the investments included in the common and collective funds asset class are determined using NAV provided by the administrator of the funds. 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 hedge funds that 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 administrator of the funds. 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
|
$
|
20.5
|
|
|
$
|
20.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Mutual Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
17.5
|
|
|
17.5
|
|
|
—
|
|
|
—
|
|
||||
|
Government bonds
|
13.6
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
||||
|
U.S. large cap equity
|
68.5
|
|
|
68.5
|
|
|
—
|
|
|
—
|
|
||||
|
International equities
|
7.3
|
|
|
7.3
|
|
|
—
|
|
|
—
|
|
||||
|
Emerging markets international equity
|
6.1
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
||||
|
Other
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
||||
|
Fixed Income Securities:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
55.0
|
|
|
—
|
|
|
55.0
|
|
|
—
|
|
||||
|
Government bonds
|
10.9
|
|
|
—
|
|
|
10.9
|
|
|
—
|
|
||||
|
Common and Collective Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
75.4
|
|
|
—
|
|
|
75.4
|
|
|
—
|
|
||||
|
Government bonds
|
60.0
|
|
|
—
|
|
|
60.0
|
|
|
—
|
|
||||
|
U.S. large cap equity
|
24.3
|
|
|
—
|
|
|
24.3
|
|
|
—
|
|
||||
|
U.S. small/mid cap equity
|
21.0
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
||||
|
International equities
|
89.9
|
|
|
—
|
|
|
89.9
|
|
|
—
|
|
||||
|
Emerging markets international equity
|
17.6
|
|
|
—
|
|
|
17.6
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
||||
|
Other
|
3.1
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
||||
|
Hedge Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
6.8
|
|
|
—
|
|
|
6.8
|
|
|
—
|
|
||||
|
Government bonds
|
(8.8
|
)
|
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
||||
|
U.S. large cap equity
|
9.1
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
||||
|
International equities
|
15.9
|
|
|
—
|
|
|
15.9
|
|
|
—
|
|
||||
|
Emerging markets international equity
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
26.8
|
|
|
—
|
|
|
26.8
|
|
|
—
|
|
||||
|
Other
|
4.2
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
||||
|
Group Annuity Contract
|
2.8
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
9.3
|
|
|
9.3
|
|
|
—
|
|
|
—
|
|
||||
|
Fair value of plan assets at December 31, 2014
|
$
|
567.7
|
|
|
$
|
145.9
|
|
|
$
|
421.8
|
|
|
$
|
—
|
|
|
(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.
|
|
|
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
|
$
|
23.1
|
|
|
$
|
23.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Mutual Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
24.4
|
|
|
24.4
|
|
|
—
|
|
|
—
|
|
||||
|
Government bonds
|
15.1
|
|
|
15.1
|
|
|
—
|
|
|
—
|
|
||||
|
U.S. large cap equity
|
68.7
|
|
|
68.7
|
|
|
—
|
|
|
—
|
|
||||
|
International equities
|
4.3
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
||||
|
Emerging markets international equity
|
4.2
|
|
|
4.2
|
|
|
—
|
|
|
—
|
|
||||
|
Other
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
||||
|
Fixed Income Securities:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
46.1
|
|
|
—
|
|
|
45.8
|
|
|
0.3
|
|
||||
|
Government bonds
|
9.6
|
|
|
—
|
|
|
8.0
|
|
|
1.6
|
|
||||
|
Common and Collective Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
53.7
|
|
|
—
|
|
|
53.7
|
|
|
—
|
|
||||
|
Government bonds
|
69.8
|
|
|
—
|
|
|
69.8
|
|
|
—
|
|
||||
|
U.S. large cap equity
|
33.8
|
|
|
—
|
|
|
33.8
|
|
|
—
|
|
||||
|
U.S. small/mid cap equity
|
23.0
|
|
|
—
|
|
|
23.0
|
|
|
—
|
|
||||
|
International equities
|
92.1
|
|
|
—
|
|
|
92.1
|
|
|
—
|
|
||||
|
Emerging markets international equity
|
17.3
|
|
|
—
|
|
|
17.3
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
||||
|
Other
|
2.9
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
||||
|
Hedge Funds
(a)
:
|
|
|
|
|
|
|
|
||||||||
|
Corporate bonds
|
11.8
|
|
|
—
|
|
|
11.8
|
|
|
—
|
|
||||
|
Government bonds
|
24.5
|
|
|
—
|
|
|
24.5
|
|
|
—
|
|
||||
|
U.S. large cap equity
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
||||
|
International equities
|
6.1
|
|
|
—
|
|
|
6.1
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
||||
|
Other
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
||||
|
Group Annuity Contract
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
|
Cash and cash equivalents
|
7.5
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
||||
|
Fair value of plan assets at December 31, 2013
|
$
|
557.6
|
|
|
$
|
148.2
|
|
|
$
|
407.5
|
|
|
$
|
1.9
|
|
|
(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.
|
|
|
Total
|
|
Fixed Income Securities
|
|
Hedge Funds
|
||||||
|
Balance, December 31, 2012
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
Purchases, sales, and settlements, net
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|||
|
Loss on assets held during the period
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
|
Transfers into Level 3
|
0.9
|
|
|
0.9
|
|
|
—
|
|
|||
|
Balance, December 31, 2013
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|||
|
Purchases, sales and settlements, net
|
(0.5
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
|
Loss on assets held during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
Transfers out of Level 3
|
(1.4
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
|
Balance, December 31, 2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total Pension Benefits
|
|
Total Other Benefits
|
||||
|
2015
|
$
|
41.3
|
|
|
$
|
0.8
|
|
|
2016
|
42.0
|
|
|
0.9
|
|
||
|
2017
|
42.9
|
|
|
0.9
|
|
||
|
2018
|
43.8
|
|
|
0.9
|
|
||
|
2019
|
44.4
|
|
|
0.9
|
|
||
|
Years 2020 to 2024
|
231.8
|
|
|
4.6
|
|
||
|
|
Stock Options (000's)
|
|
Weighted Average Exercise Price
|
|||
|
Outstanding at January 1, 2012
|
264.5
|
|
|
$
|
31.02
|
|
|
Forfeited and expired
|
(256.4
|
)
|
|
31.06
|
|
|
|
Outstanding at December 31, 2012
|
8.1
|
|
|
29.91
|
|
|
|
Forfeited and expired
|
(7.3
|
)
|
|
30.17
|
|
|
|
Outstanding at December 31, 2013
|
0.8
|
|
|
27.50
|
|
|
|
Forfeited and expired
|
(0.8
|
)
|
|
27.50
|
|
|
|
Outstanding at December 31, 2014
|
—
|
|
|
—
|
|
|
|
|
Restricted Stock (000's)
|
|
Weighted Average Grant Date Fair Value
|
|||
|
Outstanding at January 1, 2012
|
257.4
|
|
|
$
|
7.04
|
|
|
Vested
(a)
|
(257.4
|
)
|
|
7.04
|
|
|
|
Outstanding at December 31, 2012
|
—
|
|
|
—
|
|
|
|
Granted
|
120.0
|
|
|
24.80
|
|
|
|
Outstanding at December 31, 2013
|
120.0
|
|
|
24.80
|
|
|
|
Granted
|
693.4
|
|
|
31.01
|
|
|
|
Vested
(a)
|
(40.0
|
)
|
|
24.80
|
|
|
|
Outstanding at December 31, 2014
|
773.4
|
|
|
30.37
|
|
|
|
(a)
|
Of the amounts vested during
2014
and
2012
,
22,328
and
83,582
shares, respectively, were withheld by the Company to satisfy certain grantees’ minimum withholding tax requirements, which withheld shares became Revlon, Inc. treasury stock and are not sold on the open market. (See discussion under “Treasury Stock” in Note 18, “Stockholders’ Deficiency”).
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Income from continuing operations before income taxes:
|
|
|
|
|
|
||||||
|
United States
|
$
|
137.1
|
|
|
$
|
26.0
|
|
|
$
|
87.2
|
|
|
Foreign
|
(19.7
|
)
|
|
44.6
|
|
|
17.7
|
|
|||
|
|
$
|
117.4
|
|
|
$
|
70.6
|
|
|
$
|
104.9
|
|
|
Provision for (benefit from) income taxes:
|
|
|
|
|
|
||||||
|
United States federal
|
$
|
54.6
|
|
|
$
|
24.8
|
|
|
$
|
41.8
|
|
|
State and local
|
18.1
|
|
|
13.8
|
|
|
(9.6
|
)
|
|||
|
Foreign
|
5.1
|
|
|
7.4
|
|
|
11.5
|
|
|||
|
|
$
|
77.8
|
|
|
$
|
46.0
|
|
|
$
|
43.7
|
|
|
Current:
|
|
|
|
|
|
||||||
|
United States federal
|
$
|
2.6
|
|
|
$
|
3.2
|
|
|
$
|
2.2
|
|
|
State and local
|
3.7
|
|
|
0.7
|
|
|
2.4
|
|
|||
|
Foreign
|
7.2
|
|
|
11.3
|
|
|
10.7
|
|
|||
|
|
13.5
|
|
|
15.2
|
|
|
15.3
|
|
|||
|
Deferred:
|
|
|
|
|
|
||||||
|
United States federal
|
52.0
|
|
|
21.6
|
|
|
39.6
|
|
|||
|
State and local
|
14.4
|
|
|
13.1
|
|
|
(12.0
|
)
|
|||
|
Foreign
|
(2.1
|
)
|
|
(3.9
|
)
|
|
0.8
|
|
|||
|
|
64.3
|
|
|
30.8
|
|
|
28.4
|
|
|||
|
Total provision for income taxes
|
$
|
77.8
|
|
|
$
|
46.0
|
|
|
$
|
43.7
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Computed income tax expense
|
$
|
41.1
|
|
|
$
|
24.7
|
|
|
$
|
36.7
|
|
|
State and local taxes, net of U.S. federal income tax benefit
|
19.9
|
|
|
8.9
|
|
|
4.0
|
|
|||
|
Foreign and U.S. tax effects attributable to operations outside the U.S.
|
4.2
|
|
|
(4.9
|
)
|
|
(4.4
|
)
|
|||
|
Establishment (release) of valuation allowance
|
6.4
|
|
|
—
|
|
|
(15.8
|
)
|
|||
|
Foreign dividends and earnings taxable in the U.S.
|
5.4
|
|
|
11.0
|
|
|
12.7
|
|
|||
|
Restructuring charges and litigation loss contingency for which there is no tax benefit
|
—
|
|
|
2.7
|
|
|
11.1
|
|
|||
|
Other
|
0.8
|
|
|
3.6
|
|
|
(0.6
|
)
|
|||
|
Tax expense
|
$
|
77.8
|
|
|
$
|
46.0
|
|
|
$
|
43.7
|
|
|
|
December 31,
|
||||||
|
|
2014
|
|
2013
(a)
|
||||
|
Deferred tax assets:
|
|
|
|
||||
|
Inventories
|
$
|
7.6
|
|
|
$
|
9.1
|
|
|
Net operating loss carryforwards - U.S.
|
94.1
|
|
|
140.7
|
|
||
|
Net operating loss carryforwards - foreign
|
57.9
|
|
|
69.9
|
|
||
|
Employee benefits
|
100.7
|
|
|
65.0
|
|
||
|
State and local taxes
|
2.7
|
|
|
2.3
|
|
||
|
Sales related reserves
|
26.2
|
|
|
33.3
|
|
||
|
Other
|
46.1
|
|
|
42.9
|
|
||
|
Total gross deferred tax assets
|
335.3
|
|
|
363.2
|
|
||
|
Less valuation allowance
|
(57.1
|
)
|
|
(61.7
|
)
|
||
|
Total deferred tax assets, net of valuation allowance
|
278.2
|
|
|
301.5
|
|
||
|
Deferred tax liabilities:
|
|
|
|
||||
|
Plant, equipment and other assets
|
(30.0
|
)
|
|
(29.3
|
)
|
||
|
Intangibles
|
(88.0
|
)
|
|
(98.8
|
)
|
||
|
Foreign currency translation adjustment
|
3.9
|
|
|
1.9
|
|
||
|
Other
|
(55.3
|
)
|
|
(45.2
|
)
|
||
|
Total gross deferred tax liabilities
|
(169.4
|
)
|
|
(171.4
|
)
|
||
|
Net deferred tax assets
|
$
|
108.8
|
|
|
$
|
130.1
|
|
|
Balance at January 1, 2013
|
$
|
49.9
|
|
|
Increase based on tax positions taken in a prior year
|
25.8
|
|
|
|
Decrease based on tax positions taken in a prior year
|
(1.6
|
)
|
|
|
Increase based on tax positions taken in the current year
|
9.3
|
|
|
|
Decrease resulting from the lapse of statutes of limitations
|
(8.9
|
)
|
|
|
Balance at December 31, 2013
|
74.5
|
|
|
|
Increase based on tax positions taken in a prior year
|
12.6
|
|
|
|
Decrease based on tax positions taken in a prior year
|
(22.8
|
)
|
|
|
Increase based on tax positions taken in the current year
|
8.0
|
|
|
|
Decrease resulting from the lapse of statutes of limitations
|
(10.3
|
)
|
|
|
Balance at December 31, 2014
|
$
|
62.0
|
|
|
|
Foreign Currency Translation
|
|
Actuarial (Loss) Gain on Post-retirement Benefits
|
|
Prior Service Cost on Post-retirement Benefits
|
|
Deferred Gain (Loss) - Hedging
|
|
Other
|
|
Accumulated Other Comprehensive Loss
|
||||||||||||
|
Balance at January 1, 2012
|
$
|
24.8
|
|
|
$
|
(225.6
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(200.9
|
)
|
|
Unrealized gains (losses), net of tax of $1.0 million
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||
|
Amortization of pension related costs, net of tax of $(1.0) million
(a)(b)
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
||||||
|
Pension re-measurement, net of tax of $7.2 million
|
—
|
|
|
(15.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.4
|
)
|
||||||
|
Pension curtailment gain
(c)
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||||
|
Balance at December 31, 2012
|
$
|
23.3
|
|
|
$
|
(231.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(208.2
|
)
|
|
Unrealized gains (losses), net of tax of $3.3 million
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||||
|
Amortization of pension related costs, net of tax of $(1.2) million
(a)
|
—
|
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||||
|
Pension re-measurement, net of tax of $(33.5) million
|
—
|
|
|
53.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53.3
|
|
||||||
|
Revaluation of derivative financial instrument, net of tax of $(1.0) million
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
||||||
|
Balance at December 31, 2013
|
$
|
19.2
|
|
|
$
|
(170.5
|
)
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
(149.8
|
)
|
|
Currency translation adjustment, net of tax of $2.1 million
|
(24.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.6
|
)
|
||||||
|
Amortization of pension related costs, net of tax of $(0.1) million
(a)
|
—
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||||
|
Pension re-measurement, net of tax of $42.0 million
|
—
|
|
|
(69.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69.6
|
)
|
||||||
|
Revaluation of derivative financial instrument, net of tax of $2.3 million
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
(3.7
|
)
|
||||||
|
Other
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||||
|
Other comprehensive loss
|
(24.6
|
)
|
|
(64.8
|
)
|
|
—
|
|
|
(3.7
|
)
|
|
(0.3
|
)
|
|
(93.4
|
)
|
||||||
|
Balance at December 31, 2014
|
$
|
(5.4
|
)
|
|
$
|
(235.3
|
)
|
|
$
|
—
|
|
|
$
|
(2.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(243.2
|
)
|
|
(a)
|
Amounts represent the change in Accumulated Other Comprehensive Loss as a result of the amortization of unrecognized prior service costs and actuarial losses (gains) arising during each year related to the Company’s pension and other post-retirement plans. See Note 14, “Savings Plan, Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
|
|
(b)
|
Included in this amount is a
$2.0 million
reclassification adjustment recorded in the first quarter of 2012 related to deferred taxes on the amortization of actuarial losses.
|
|
(c)
|
As a result of the September 2012 Program,
the Company recognized a curtailment gain of
$1.7 million
, partially offset by
$0.1 million
of accumulated actuarial losses and
$0.1 million
of prior service costs previously reported within Accumulated Other Comprehensive Loss, for a net gain of
$1.5 million
, which was recorded within restructuring charges for 2012. See Note 14, “Savings Plan, Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
|
|
(d)
|
For 2014 and 2013, the 2013 Interest Rate Swap was deemed effective and therefore, the changes in fair value related to the 2013 Interest Rate Swap are recorded in Other Comprehensive Income. See Note 13, "Financial Instruments" for further discussion of the 2013 Interest Rate Swap.
|
|
|
Common Stock
|
|
|
|||||
|
|
Class A
|
|
Class B
|
|
Treasury Stock
|
|||
|
Balance, January 1, 2012
|
49,986,651
|
|
|
3,125,000
|
|
|
671,271
|
|
|
Withholding of restricted stock to satisfy taxes
|
—
|
|
|
—
|
|
|
83,582
|
|
|
Balance, December 31, 2012
|
49,986,651
|
|
|
3,125,000
|
|
|
754,853
|
|
|
Conversion of Class B shares to Class A shares
|
3,125,000
|
|
|
(3,125,000
|
)
|
|
—
|
|
|
Restricted stock grants
|
120,000
|
|
|
—
|
|
|
—
|
|
|
Balance, December 31, 2013
|
53,231,651
|
|
|
—
|
|
|
754,853
|
|
|
Restricted stock grants
|
693,378
|
|
|
—
|
|
|
—
|
|
|
Withholding of restricted stock to satisfy taxes
|
—
|
|
|
—
|
|
|
22,328
|
|
|
Balance, December 31, 2014
|
53,925,029
|
|
|
—
|
|
|
777,181
|
|
|
•
|
Consumer
- The Consumer segment is comprised of the Company's consumer brands, which primarily include
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 Company’s principal customers for its consumer products include the mass retail channel, consisting of large mass volume retailers and chain drug and food stores in the U.S. and internationally, as well as certain department stores and other specialty stores, such as perfumeries, outside the U.S. The Consumer segment also includes a skincare and hair color line sold in the mass retail channel, primarily in Spain, which were acquired as part of the Colomer Acquisition.
|
|
•
|
Professional
- The Professional segment is comprised primarily of the brands which the Company acquired in the Colomer Acquisition, which include
Revlon Professional
in hair color and hair care;
CND
-branded products
in nail polishes and nail enhancements; and
American Crew
in men’s grooming products, all of which are sold worldwide in the professional salon channel. The Company’s principal customers for its professional products include hair and nail salons and distributors in the U.S. and internationally. The Professional segment also includes a multi-cultural line consisting of
Creme of Nature
hair care products sold in the mass retail channel and in professional salons, primarily in the U.S.
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
|
2014
(a)
|
|
2013
(a)
|
|
2012
|
||||||
|
Segment Net Sales:
|
|
|
|
|
|
|
||||||
|
Consumer
|
|
$
|
1,438.3
|
|
|
$
|
1,394.2
|
|
|
$
|
1,396.4
|
|
|
Professional
|
|
502.7
|
|
|
100.5
|
|
|
—
|
|
|||
|
Total
|
|
$
|
1,941.0
|
|
|
$
|
1,494.7
|
|
|
$
|
1,396.4
|
|
|
|
|
|
|
|
|
|
||||||
|
Segment Profit:
|
|
|
|
|
|
|
||||||
|
Consumer
|
|
$
|
347.6
|
|
|
$
|
347.2
|
|
|
$
|
363.1
|
|
|
Professional
|
|
104.8
|
|
|
5.1
|
|
|
—
|
|
|||
|
Total
|
|
$
|
452.4
|
|
|
$
|
352.3
|
|
|
$
|
363.1
|
|
|
|
|
|
|
|
|
|
||||||
|
Reconciliation:
|
|
|
|
|
|
|
||||||
|
Segment Profit
|
|
$
|
452.4
|
|
|
$
|
352.3
|
|
|
$
|
363.1
|
|
|
Less:
|
|
|
|
|
|
|
|
|||||
|
Unallocated corporate expenses
|
|
77.2
|
|
|
68.6
|
|
|
65.4
|
|
|||
|
Depreciation and amortization
|
|
102.6
|
|
|
76.7
|
|
|
64.9
|
|
|||
|
Non-cash stock compensation expense
|
|
5.5
|
|
|
0.2
|
|
|
0.3
|
|
|||
|
Non-recurring items:
|
|
|
|
|
|
|
|
|||||
|
Restructuring and related charges
|
|
22.6
|
|
|
4.5
|
|
|
—
|
|
|||
|
Acquisition and integration costs
|
|
6.4
|
|
|
25.4
|
|
|
—
|
|
|||
|
Inventory purchase accounting adjustment, cost of sales
|
|
2.6
|
|
|
8.5
|
|
|
—
|
|
|||
|
Gain from insurance proceeds related to Venezuela fire
|
|
—
|
|
|
(26.4
|
)
|
|
—
|
|
|||
|
Accrual for clean-up costs related to destroyed facility in Venezuela
|
|
—
|
|
|
7.6
|
|
|
24.1
|
|
|||
|
Shareholder litigation recoveries
|
|
—
|
|
|
(1.8
|
)
|
|
8.9
|
|
|||
|
Operating Income
|
|
235.5
|
|
|
189.0
|
|
|
199.5
|
|
|||
|
Less:
|
|
|
|
|
|
|
||||||
|
Interest Expense
|
|
84.4
|
|
|
73.8
|
|
|
79.1
|
|
|||
|
Interest Expense - Preferred Stock
|
|
—
|
|
|
5.0
|
|
|
6.5
|
|
|||
|
Amortization of debt issuance costs
|
|
5.5
|
|
|
5.2
|
|
|
5.3
|
|
|||
|
Loss on early extinguishment of debt
|
|
2.0
|
|
|
29.7
|
|
|
—
|
|
|||
|
Foreign currency losses (gains), net
|
|
25.0
|
|
|
3.7
|
|
|
2.8
|
|
|||
|
Miscellaneous, net
|
|
1.2
|
|
|
1.0
|
|
|
0.9
|
|
|||
|
Income from continuing operations before income taxes
|
|
$
|
117.4
|
|
|
$
|
70.6
|
|
|
$
|
104.9
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
Geographic area:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
United States
|
$
|
1,021.9
|
|
|
53%
|
|
$
|
832.8
|
|
|
56%
|
|
$
|
799.8
|
|
|
57%
|
|
Outside of the United States
|
919.1
|
|
|
47%
|
|
661.9
|
|
|
44%
|
|
596.6
|
|
|
43%
|
|||
|
|
$
|
1,941.0
|
|
|
|
|
$
|
1,494.7
|
|
|
|
|
$
|
1,396.4
|
|
|
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||||||||
|
Long-lived assets, net:
|
|
|
|
|
|
|
|||||
|
United States
|
$
|
845.5
|
|
|
76%
|
|
$
|
837.0
|
|
|
73%
|
|
Outside of the United States
|
271.7
|
|
|
24%
|
|
315.1
|
|
|
27%
|
||
|
|
$
|
1,117.2
|
|
|
|
$
|
1,152.1
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
Classes of similar products:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Color cosmetics
|
$
|
1,032.4
|
|
|
53%
|
|
$
|
926.4
|
|
|
62%
|
|
$
|
913.0
|
|
|
65%
|
|
Hair care
|
545.0
|
|
|
28%
|
|
263.9
|
|
|
18%
|
|
191.1
|
|
|
14%
|
|||
|
Beauty care and fragrance
|
363.6
|
|
|
19%
|
|
304.4
|
|
|
20%
|
|
292.3
|
|
|
21%
|
|||
|
|
$
|
1,941.0
|
|
|
|
|
$
|
1,494.7
|
|
|
|
|
$
|
1,396.4
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
Numerator:
|
|
|
|
|
|
||||||
|
Income from continuing operations, net of taxes
|
$
|
39.6
|
|
|
$
|
24.6
|
|
|
$
|
61.2
|
|
|
Income (loss) from discontinued operations, net of taxes
|
1.3
|
|
|
(30.4
|
)
|
|
(10.1
|
)
|
|||
|
Net income
|
$
|
40.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
51.1
|
|
|
Denominator:
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding – Basic
|
52,359,897
|
|
|
52,356,798
|
|
|
52,348,636
|
|
|||
|
Effect of dilutive restricted stock
|
64,042
|
|
|
931
|
|
|
8,246
|
|
|||
|
Weighted average common shares outstanding – Diluted
|
52,423,939
|
|
|
52,357,729
|
|
|
52,356,882
|
|
|||
|
Basic earnings (loss) per common share:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
0.76
|
|
|
$
|
0.47
|
|
|
$
|
1.17
|
|
|
Discontinued operations
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|||
|
Net income
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
||||||
|
Continuing operations
|
$
|
0.76
|
|
|
$
|
0.47
|
|
|
$
|
1.17
|
|
|
Discontinued operations
|
0.02
|
|
|
(0.58
|
)
|
|
(0.19
|
)
|
|||
|
Net income
|
$
|
0.78
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.98
|
|
|
Minimum Rental Commitments
|
|
Total
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
||||||||||||||
|
Capital leases
|
|
$
|
7.7
|
|
|
$
|
3.7
|
|
|
$
|
2.7
|
|
|
$
|
1.0
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
Operating leases
|
|
146.2
|
|
|
25.7
|
|
|
20.1
|
|
|
16.0
|
|
|
13.8
|
|
|
11.9
|
|
|
58.7
|
|
|||||||
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
Net sales
|
$
|
469.8
|
|
|
$
|
497.9
|
|
|
$
|
472.3
|
|
|
$
|
501.0
|
|
|
Gross profit
|
306.3
|
|
|
330.7
|
|
|
307.7
|
|
|
328.0
|
|
||||
|
Income from continuing operations, net of taxes
(a) (b)
|
8.7
|
|
|
14.4
|
|
|
14.2
|
|
|
2.3
|
|
||||
|
(Loss) income from discontinued operations, net of taxes
(c)
|
(3.2
|
)
|
|
3.7
|
|
|
0.4
|
|
|
0.4
|
|
||||
|
Net income
(a)(b)
|
5.5
|
|
|
18.1
|
|
|
14.6
|
|
|
2.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
*
Basic income (loss) per common share
(a)(b)(c)
:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
0.17
|
|
|
0.27
|
|
|
0.27
|
|
|
0.04
|
|
||||
|
Discontinued operations
|
(0.06
|
)
|
|
0.07
|
|
|
0.01
|
|
|
0.01
|
|
||||
|
Net income (loss)
|
$
|
0.11
|
|
|
$
|
0.34
|
|
|
$
|
0.28
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
*
Diluted income (loss) per common share
(a)(b)(c)
:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
0.17
|
|
|
0.27
|
|
|
0.27
|
|
|
0.04
|
|
||||
|
Discontinued operations
|
(0.06
|
)
|
|
0.07
|
|
|
0.01
|
|
|
0.01
|
|
||||
|
Net income (loss)
|
$
|
0.11
|
|
|
$
|
0.34
|
|
|
$
|
0.28
|
|
|
$
|
0.05
|
|
|
|
Year Ended December 31, 2013
|
||||||||||||||
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
Net sales
|
$
|
325.9
|
|
|
$
|
344.7
|
|
|
$
|
333.1
|
|
|
$
|
491.0
|
|
|
Gross profit
|
211.5
|
|
|
222.1
|
|
|
212.0
|
|
|
304.0
|
|
||||
|
(Loss) income from continuing operations, net of taxes
(d)(e)(f)
|
(4.5
|
)
|
|
27.1
|
|
|
11.0
|
|
|
(9.0
|
)
|
||||
|
Loss from discontinued operations, net of taxes
|
(2.4
|
)
|
|
(2.4
|
)
|
|
(1.5
|
)
|
|
(24.1
|
)
|
||||
|
Net (loss) income
(d)(e)(f)
|
(6.9
|
)
|
|
24.7
|
|
|
9.5
|
|
|
(33.1
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
*
Basic (loss) income per common share
(d)(e)(f)
:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
(0.08
|
)
|
|
0.52
|
|
|
0.21
|
|
|
(0.17
|
)
|
||||
|
Discontinued operations
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.03
|
)
|
|
(0.46
|
)
|
||||
|
Net (loss) income
|
$
|
(0.13
|
)
|
|
$
|
0.47
|
|
|
$
|
0.18
|
|
|
$
|
(0.63
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
*
Diluted (loss) income per common share
(d)(e)(f)
:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations
|
(0.08
|
)
|
|
0.52
|
|
|
0.21
|
|
|
(0.17
|
)
|
||||
|
Discontinued operations
|
(0.05
|
)
|
|
(0.05
|
)
|
|
(0.03
|
)
|
|
(0.46
|
)
|
||||
|
Net (loss) income
|
$
|
(0.13
|
)
|
|
$
|
0.47
|
|
|
$
|
0.18
|
|
|
$
|
(0.63
|
)
|
|
(*)
|
The sum of the quarterly earnings per share amounts does not equal the annual 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)
|
Income from continuing operations, net income and basic and diluted income per share for the first quarter of 2014 were unfavorably impacted by restructuring charges of
$13.5 million
related to the Integration Program, as well as
$3.8 million
of acquisition and integration costs related to the Colomer Acquisition (See Note 2, "Business Combinations," and Note 3, “Restructuring Charges”). Additionally, in the first quarter of 2014, the Company incurred a
$1.9 million
aggregate loss on early extinguishment of debt due to the February 2014 Term Loan Amendment. (See Note 11, “Long-Term Debt”).
|
|
(b)
|
Income from continuing operations, net income and basic and diluted income per share for the second and third quarter of 2014 were unfavorably impacted by foreign currency losses, net, of
$7.2 million
and
$9.3 million
, respectively, related to the required re-measurement of Revlon Venezuela's monetary assets and liabilities at June 30, 2014, and the results of unfavorable impacts of the revaluation of certain U.S. Dollar denominated intercompany payables during the third quarter of 2014. (See Note 1, "Description of Business and Summary of Significant Accounting Policies - Foreign Currency Translation" for further discussion on Venezuela currency restrictions and related devaluation).
|
|
(c)
|
(Loss) income from discontinued operations includes the results of the Company's China operations (See Note 4, "Discontinued Operations").
|
|
(d)
|
(Loss) income from continuing operations, net (loss) and basic and diluted (loss) per share for the first quarter of 2013 were unfavorably impacted by a
$27.9 million
aggregate loss on early extinguishment of debt due to the 2013 Senior Notes Refinancing and the February 2013 Term Loan Amendments. (See Note 11, “Long-Term Debt”).
|
|
(e)
|
(Loss) income from continuing operations, net (loss) income and basic and diluted (loss) income per share for the first quarter of 2013 and the second quarter of 2013 were favorably impacted by an
$8.3 million
and an
$18.1 million
, respectively, gain from insurance proceeds due to the settlement of the Company's claims for the loss of inventory, business interruption and property losses as a result of the fire at the Company's Venezuela facility.
|
|
(f)
|
(Loss) from continuing operations, net (loss) and basic and diluted (loss) per share for the fourth quarter of 2013 were unfavorably impacted by
$19.1 million
of acquisition and integration costs related to the Colomer Acquisition. Additionally, the Company incurred
$21.4 million
of restructuring and related charges in the fourth quarter of 2013 related to the December 2013 Program, of which
$20.0 million
relates to the Company's exit of its business operations in China which was recorded in loss from discontinued operations, net of taxes.
|
|
|
Balance at Beginning of Year
|
|
Charged to Cost and Expenses
|
|
Other Deductions
|
|
Balance at End of Year
|
||||||||
|
Allowance for Doubtful Accounts:
|
|
|
|
|
|
|
|
||||||||
|
2014
|
$
|
4.2
|
|
|
$
|
8.4
|
|
|
$
|
(3.3
|
)
|
|
$
|
9.3
|
|
|
2013
|
3.5
|
|
|
1.6
|
|
|
(0.9
|
)
|
|
4.2
|
|
||||
|
2012
|
3.2
|
|
|
0.6
|
|
|
(0.3
|
)
|
|
3.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Allowance for Volume and Early Payment Discounts:
|
|
|
|
|
|
|
|
||||||||
|
2014
|
$
|
12.1
|
|
|
$
|
84.7
|
|
|
$
|
(73.4
|
)
|
|
$
|
23.4
|
|
|
2013
|
14.6
|
|
|
57.6
|
|
|
(60.1
|
)
|
|
12.1
|
|
||||
|
2012
|
15.7
|
|
|
58.4
|
|
|
(59.5
|
)
|
|
14.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Allowance for Sales Returns:
|
|
|
|
|
|
|
|
||||||||
|
2014
|
$
|
53.1
|
|
|
$
|
64.3
|
|
|
$
|
(72.0
|
)
|
|
$
|
45.4
|
|
|
2013
|
54.5
|
|
|
77.8
|
|
|
(79.2
|
)
|
|
53.1
|
|
||||
|
2012
|
57.8
|
|
|
73.7
|
|
|
(77.0
|
)
|
|
54.5
|
|
||||
|
Revlon, Inc.
|
||||
|
(Registrant)
|
||||
|
|
|
|
|
|
|
By: /s/ Lorenzo Delpani
|
|
By: /s/ Roberto Simon
|
|
By: /s/ Siobhan Anderson
|
|
Lorenzo Delpani
|
|
Roberto Simon
|
|
Siobhan Anderson
|
|
President,
|
|
Executive Vice President and
|
|
Vice President,
|
|
Chief Executive Officer and
|
|
Chief Financial Officer
|
|
Chief Accounting Officer,
|
|
Director
|
|
|
|
Corporate Controller, Treasurer
|
|
|
|
|
|
and Investor Relations
|
|
Signature
|
|
Title
|
|
|
|
|
|
*
|
|
Chairman of the Board and Director
|
|
(Ronald O. Perelman)
|
|
|
|
*
|
|
Director
|
|
(Barry F. Schwartz)
|
|
|
|
*
|
|
Vice Chairman of the Board and Director
|
|
(David L. Kennedy)
|
|
|
|
*
|
|
Director
|
|
(Alan S. Bernikow)
|
|
|
|
*
|
|
Director
|
|
(Diana F. Cantor)
|
|
|
|
*
|
|
Director
|
|
(Viet D. Dinh)
|
|
|
|
*
|
|
Director
|
|
(Meyer Feldberg)
|
|
|
|
*
|
|
Director
|
|
(Robert K. Kretzman)
|
|
|
|
*
|
|
Director
|
|
(Ceci Kurzman)
|
|
|
|
*
|
|
Director
|
|
(Debra L. Lee)
|
|
|
|
*
|
|
Director
|
|
(Tamara Mellon)
|
|
|
|
*
|
|
Director
|
|
(Kathi P. Seifert)
|
|
|
|
*
|
|
Director
|
|
(Cristiana Falcone Sorrell)
|
|
|
|
By: /s/ Lucinda K. Treat
|
|
Lucinda K. Treat
|
|
Attorney-in-fact
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|