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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

(Mark One)


			☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2020
			OR
			☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from__________________ to _______________

Commission File Number

Registrant; State of Incorporation; Address and Telephone Number

IRS Employer Identification No.

1-11178

Revlon, Inc.

13-3662955

Delaware

One New York Plaza

New York, New York 10004

212-527-4000

33-59650

Revlon Consumer Products Corporation

13-3662953

Delaware

One New York Plaza

New York, New York 10004

212-527-4000

Securities registered pursuant to Section 12(b) or 12(g) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Revlon, Inc.

Class A Common Stock

REV

New York Stock Exchange

Revlon Consumer Products Corporation

None

N/A

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.


Revlon, Inc.	Yes ☒	No ☐
Revlon Consumer Products Corporation	Yes ☐	No ☒

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

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting Company

Emerging Growth Company

Revlon, Inc.

Yes ☐ No ☒

Yes ☒ No ☐

Yes ☐ No ☒

Yes ☒ No ☐

Yes ☐ No ☒

Revlon Consumer Products Corporation

Yes ☐ No ☒

Yes ☒ No ☐

Yes ☐ No ☒

If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).


Revlon, Inc.	Yes ☐	No ☒
Revlon Consumer Products Corporation	Yes ☐	No ☒

Number of shares of common stock outstanding as of March 31, 2020:


Revlon, Inc. Class A Common Stock:			53,163,901
Revlon Consumer Products Corporation Common Stock:			5,260

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

Products Corporation meets the conditions set forth in General Instructions I(1)(a) and (b) of Form 10-Q as, among other things, all of Products Corporation's equity securities are owned directly by Revlon, Inc., which is a reporting company under the Securities Exchange Act of 1934 and which has filed with the SEC on May 11, 2020 all of the material required to be filed pursuant to Section 13, 14, or 15(d) thereof. Products Corporation is therefore filing this Form 10-Q with a reduced disclosure format applicable to Products Corporation.

REVLON, INC. AND SUBSIDIARIES

INDEX

PART I - Financial Information

Item 1.

Financial Statements of Revlon, Inc. and Subsidiaries

Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and December 31, 2019

Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019

Unaudited Consolidated Statement of Stockholders' Deficiency for the Three Months Ended March 31, 2020 and 2019

Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019

Financial Statements of Revlon Consumer Products Corporation and Subsidiaries

Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and December 31, 2019

Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019

Unaudited Consolidated Statement of Stockholders' Deficiency for the Three Months Ended March 31, 2020 and 2019

Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019

Combined Notes to Unaudited Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II - Other Information

Item 1.

Item 1A.

Item 5.

Item 6.

Table of Contents

REVLON, INC. AND SUBSIDIARIES

PART I - FINANCIAL INFORMATION

REVLON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in millions, except share and per share amounts)


	March 31, 2020		December 31, 2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	62.8	$	104.3
Trade receivables, less allowance for doubtful accounts of $12.8 and $11.4 as of March 31, 2020 and December 31, 2019, respectively	326.5		423.4
Inventories	479.8		448.4
Prepaid expenses and other assets	169.8		135.3
Total current assets	1,038.9		1,111.4
Property, plant and equipment, net of accumulated depreciation of $491.7 and $488.1 as of March 31, 2020 and December 31, 2019, respectively	383.1		408.6
Deferred income taxes	209.3		175.1
Goodwill	573.7		673.7
Intangible assets, net of accumulated amortization and impairment of $258.7 and $226.4 as of March 31, 2020 and December 31, 2019, respectively	456.6		490.7
Other assets	118.0		121.1
Total assets	$	2,779.6	$	2,980.6

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Short-term borrowings	$	2.9	$	2.2
Current portion of long-term debt	856.1		288.0
Accounts payable	253.3		251.8
Accrued expenses and other current liabilities	374.1		414.9

Total current liabilities	1,486.4		956.9
Long-term debt	2,405.5		2,906.2
Long-term pension and other post-retirement plan liabilities	174.9		181.2
Other long-term liabilities	148.6		157.5

Stockholders’ deficiency:
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 57,667,501 and 56,470,490 shares issued as of March 31, 2020 and December 31, 2019, respectively	0.5		0.5
Additional paid-in capital	1,074.3		1,071.9
Treasury stock, at cost: 1,675,901 and 1,625,580 shares of Class A Common Stock as of March 31, 2020 and December 31, 2019, respectively	(33.9)		(33.5)
Accumulated deficit	(2,226.6)		(2,012.7)
Accumulated other comprehensive loss	(250.1)		(247.4)
Total stockholders’ deficiency	(1,435.8)		(1,221.2)
Total liabilities and stockholders’ deficiency	$	2,779.6	$	2,980.6

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(dollars in millions, except share and per share amounts)


	Three Months Ended March 31,

	2020		2019

Net sales	$	453.0	$	553.2
Cost of sales	197.8		237.8
Gross profit	255.2		315.4
Selling, general and administrative expenses	289.4		332.6
Acquisition, integration and divestiture costs	2.1		0.6
Restructuring charges and other, net	24.8		5.5
Impairment charges	124.3		—
Loss on divested assets	0.8		—
Operating loss	(186.2)		(23.3)
Other expenses:
Interest expense, net	48.4		47.7

Amortization of debt issuance costs	4.0		3.2

Foreign currency losses, net	16.6		0.2
Miscellaneous, net	(4.1)		1.3
Other expenses	64.9		52.4
Loss from continuing operations before income taxes	(251.1)		(75.7)
(Benefit from) provision for income taxes	(37.2)		0.1
Loss from continuing operations, net of taxes	(213.9)		(75.8)
Income from discontinued operations, net of taxes	—		0.7
Net loss	$	(213.9)	$	(75.1)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(5.2)		(1.3)
Amortization of pension related costs, net of tax^(a)(b)	2.5		2.2





Other comprehensive (loss) income, net	(2.7)		0.9
Total comprehensive loss	$	(216.6)	$	(74.2)

Basic and Diluted (loss) earnings per common share:
Continuing operations	$	(4.02)	$	(1.43)
Discontinued operations	—		0.01
Net loss	$	(4.02)	$	(1.42)






Weighted average number of common shares outstanding:
Basic	53,167,453		52,913,388
Diluted	53,167,453		52,913,388

^(a) Net of tax expense of $0.3 million for each of the three months ended March 31, 2020 and 2019.

^(b) This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY

(dollars in millions, except share and per share amounts)


	Common Stock		Additional Paid-In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficiency

Balance, January 1, 2020	$	0.5	$	1,071.9	$	(33.5)	$	(2,012.7)	$	(247.4)	$	(1,221.2)















Treasury stock acquired, at cost ^(a)	—		—		(0.4)		—		—		(0.4)
Stock-based compensation amortization	—		2.4		—		—		—		2.4
Net loss	—		—		—		(213.9)		—		(213.9)
Other comprehensive loss, net ^(b)	—		—		—		—		(2.7)		(2.7)
Balance, March 31, 2020	$	0.5	$	1,074.3	$	(33.9)	$	(2,226.6)	$	(250.1)	$	(1,435.8)


	Common Stock		Additional Paid-In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficiency
Balance, January 1, 2019	$	0.5	$	1,063.8	$	(31.9)	$	(1,855.0)	$	(234.2)	$	(1,056.8)















Treasury stock acquired, at cost ^(a)	—		—		(1.6)		—		—		(1.6)
Stock-based compensation amortization	—		0.4		—		—		—		0.4
Net loss	—		—		—		(75.1)		—		(75.1)
Other comprehensive loss, net ^(b)	—		—		—		—		0.9		0.9
Balance, March 31, 2019	$	0.5	$	1,064.2	$	(33.5)	$	(1,930.1)	$	(233.3)	$	(1,132.2)

^(a) Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan"), the Company withheld an aggregate of 14,977 and 85,607 shares of Revlon Class A Common Stock during the three months ended March 31, 2020 and 2019, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares and restricted stock units ("RSUs") for certain senior executives and employees. These withheld shares were recorded as treasury stock using the cost method, at a weighted-average price per share of $23.47 and $18.86 during the three months ended March 31, 2020 and 2019, respectively, based on the closing price of Revlon Class A Common Stock as reported on the New York Stock Exchange (the "NYSE") consolidated tape on each respective vesting date, for a total of $0.4 million and $1.6 million during the three months ended March 31, 2020 and 2019, See Note 11, "Stock Compensation Plan," for details regarding restricted stock awards and RSUs under the Stock Plan.

^(b) See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three months ended March 31, 2020 and 2019, respectively.

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)


	Three Months Ended March 31,
	2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(213.9)	$	(75.1)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	36.8		47.0
Foreign currency losses from re-measurement	16.6		0.2
Amortization of debt discount	0.4		0.4
Stock-based compensation amortization	2.4		0.4
Impairment charges	124.3		—
Benefit from deferred income taxes	(37.2)		(5.6)

Amortization of debt issuance costs	4.0		3.2

Loss on divested assets	0.8		—
Pension and other post-retirement cost	1.2		2.0
Change in assets and liabilities:
Decrease in trade receivables	84.6		52.4
Increase in inventories	(42.5)		(24.0)
(Increase) decrease in prepaid expenses and other current assets	(23.3)		1.5
Increase in accounts payable	14.9		41.1
Decrease in accrued expenses and other current liabilities	(34.8)		(66.7)
Pension and other post-retirement plan contributions	(3.6)		(1.8)
Purchases of permanent displays	(7.0)		(9.7)
Other, net	(1.3)		6.3
Net cash used in operating activities	(77.6)		(28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(1.8)		(5.8)



Net cash used in investing activities	(1.8)		(5.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft	(6.4)		(17.2)
Net borrowings under the Amended 2016 Revolving Credit Facility	69.1		40.6


Repayments under the 2016 Term Loan Facility	(4.5)		(4.5)
Payment of financing costs	(0.3)		(0.9)
Tax withholdings related to net share settlements of restricted stock and RSUs	(0.4)		(1.6)

Other financing activities	(0.1)		(0.2)
Net cash provided by financing activities	57.4		16.2
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3.3)		0.3
Net decrease in cash, cash equivalents and restricted cash	(25.3)		(17.7)
Cash, cash equivalents and restricted cash at beginning of period ^(a)	104.5		87.5
Cash, cash equivalents and restricted cash at end of period ^(a)	$	79.2	$	69.8
Supplemental schedule of cash flow information:^(b)
Cash paid during the period for:
Interest	$	62.9	$	61.3
Income taxes, net of refunds	1.0		0.4

^(a) These amounts include restricted cash of $16.4 million and $1.5 million as of March 31, 2020 and 2019, respectively. The balance as of March 31, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; (ii) restricted cash under the terms of 2019 Term Loan Agreement; and (iii) cash on deposit to support outstanding undrawn letters of credit. The balance as of March 31, 2019 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Unaudited Consolidated Balance Sheets as of March 31, 2020 and March 31, 2019, respectively.

^(b) See Note 4, "Leases," for supplemental disclosure of non-cash financing and investing activities in relation to the lease liabilities arising from obtaining right-of-use assets following the implementation of the Financial Accounting Standards Board ("FASB"), Accounting Standard Codification ("ASC") Topic 842, Leases.

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in millions, except share and per share amounts)


	March 31, 2020		December 31, 2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	62.8	$	104.3
Trade receivables, less allowance for doubtful accounts of $12.8 and $11.4 as of March 31, 2020 and December 31, 2019, respectively	326.5		423.4
Inventories	479.8		448.4
Prepaid expenses and other assets	165.8		131.4
Receivable from Revlon, Inc.	163.5		161.2
Total current assets	1,198.4		1,268.7
Property, plant and equipment, net of accumulated depreciation of $491.7 and $488.1 as of March 31, 2020 and December 31, 2019, respectively	383.1		408.6
Deferred income taxes	191.7		158.1
Goodwill	573.7		673.7
Intangible assets, net of accumulated amortization and impairment of $258.7 and $226.4 as of March 31, 2020 and December 31, 2019, respectively	456.6		490.7
Other assets	118.0		121.1
Total assets	$	2,921.5	$	3,120.9

LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:
Short-term borrowings	$	2.9	$	2.2
Current portion of long-term debt	856.1		288.0
Accounts payable	253.3		251.8
Accrued expenses and other current liabilities	377.3		418.2

Total current liabilities	1,489.6		960.2
Long-term debt	2,405.5		2,906.2
Long-term pension and other post-retirement plan liabilities	174.9		181.2
Other long-term liabilities	153.4		162.7

Stockholder's deficiency:
Products Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	54.6		54.6
Products Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	—		—
Additional paid-in capital	998.9		996.5
Accumulated deficit	(2,105.3)		(1,893.1)
Accumulated other comprehensive loss	(250.1)		(247.4)
Total stockholder's deficiency	(1,301.9)		(1,089.4)
Total liabilities and stockholder's deficiency	$	2,921.5	$	3,120.9

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(dollars in millions)


	Three Months Ended March 31,

	2020		2019

Net sales	$	453.0	$	553.2
Cost of sales	197.8		237.8
Gross profit	255.2		315.4
Selling, general and administrative expenses	287.4		330.8
Acquisition, integration and divestiture costs	2.1		0.6
Restructuring charges and other, net	24.8		5.5
Impairment charges	124.3		—
Loss on divested assets	0.8		—
Operating income (loss)	(184.2)		(21.5)
Other expenses:
Interest expense, net	48.4		47.7

Amortization of debt issuance costs	4.0		3.2

Foreign currency losses, net	16.6		0.2
Miscellaneous, net	(4.1)		1.3
Other expenses	64.9		52.4
Loss from continuing operations before income taxes	(249.1)		(73.9)
(Benefit from) provision for income taxes	(36.9)		0.3
Loss from continuing operations, net of taxes	(212.2)		(74.2)
Income (loss) from discontinued operations, net of taxes	—		0.7
Net loss	$	(212.2)	$	(73.5)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(5.2)		(1.3)
Amortization of pension related costs, net of tax^(a)(b)	2.5		2.2





Other comprehensive (loss) income, net	(2.7)		0.9
Total comprehensive loss	$	(214.9)	$	(72.6)

^(a)Net of tax expense of $0.3 million for each of the three months ended March 31, 2020 and 2019.

^(b)This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIENCY

(dollars in millions)


	Preferred Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholder's Deficiency

Balance, January 1, 2020	$	54.6	$	996.5	$	(1,893.1)	$	(247.4)	$	(1,089.4)












Stock-based compensation amortization	—		2.4		—		—		2.4
Net loss	—		—		(212.2)		—		(212.2)
Other comprehensive income, net ^(a)	—		—		—		(2.7)		(2.7)
Balance, March 31, 2020	$	54.6	$	998.9	$	(2,105.3)	$	(250.1)	$	(1,301.9)


	Preferred Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholder's Deficiency

Balance, January 1, 2019	$	54.6	$	988.4	$	(1,741.9)	$	(234.2)	$	(933.1)












Stock-based compensation amortization	—		0.4		—		—		0.4
Net loss	—		—		(73.5)		—		(73.5)
Other comprehensive income, net ^(a)	—		—		—		0.9		0.9
Balance, March 31, 2019	$	54.6	$	988.8	$	(1,815.4)	$	(233.3)	$	(1,005.3)

^(a)See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three months ended March 31, 2020 and 2019, respectively.

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)


	Three Months Ended March 31,
	2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(212.2)	$	(73.5)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	36.8		47.0
Foreign currency losses from re-measurement	16.6		0.2
Amortization of debt discount	0.4		0.4
Stock-based compensation amortization	2.4		0.4
Impairment charges	124.3		—
Benefit from deferred income taxes	(36.9)		(5.4)

Amortization of debt issuance costs	4.0		3.2

Loss on divested assets	0.8		—
Pension and other post-retirement cost	1.2		2.0
Change in assets and liabilities:
Decrease in trade receivables	84.6		52.4
Increase in inventories	(42.5)		(24.0)
Increase in prepaid expenses and other current assets	(25.6)		(1.9)
Increase in accounts payable	14.9		41.1
Decrease in accrued expenses and other current liabilities	(34.6)		(65.1)
Pension and other post-retirement plan contributions	(3.6)		(1.8)
Purchases of permanent displays	(7.0)		(9.7)
Other, net	(1.2)		6.3
Net cash used in operating activities	(77.6)		(28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(1.8)		(5.8)



Net cash used in investing activities	(1.8)		(5.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft	(6.4)		(17.2)
Net borrowings under the Amended 2016 Revolving Credit Facility	69.1		40.6


Repayments under the 2016 Term Loan Facility	(4.5)		(4.5)
Payment of financing costs	(0.3)		(0.9)
Tax withholdings related to net share settlements of restricted stock and RSUs	(0.4)		(1.6)

Other financing activities	(0.1)		(0.2)
Net cash provided by financing activities	57.4		16.2
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3.3)		0.3
Net decrease in cash, cash equivalents and restricted cash	(25.3)		(17.7)
Cash, cash equivalents and restricted cash at beginning of period^(a)	104.5		87.5
Cash, cash equivalents and restricted cash at end of period ^(a)	$	79.2	$	69.8
Supplemental schedule of cash flow information:^(b)
Cash paid during the period for:
Interest	$	62.9	$	61.3
Income taxes, net of refunds	1.0		0.4

^(a) These amounts include restricted cash of $16.4 million and $1.5 million as of March 31, 2020 and 2019, respectively, The balance as of March 31, 2020 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; (ii) restricted cash under the terms of 2019 Term Loan Agreement; and (iii) cash on deposit to support outstanding undrawn letters of credit. The balance as of March 31, 2019 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2018 Foreign Asset-Based Term Facility; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Unaudited Consolidated Balance Sheets as of March 31, 2020 and March 31, 2019, respectively.

See Accompanying Notes to Unaudited Consolidated Financial Statements

Table of Contents

COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revlon, Inc. ("Revlon" and together with its subsidiaries, the "Company") conducts its business exclusively through its direct wholly-owned operating subsidiary, Revlon Consumer Products Corporation ("Products Corporation") and its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, "MacAndrews & Forbes"), a corporation beneficially owned by Ronald O. Perelman. Mr. Perelman is Chairman of Revlon's and Products Corporation's Board of Directors.

The Company is a leading global beauty company with an iconic portfolio of brands that develops, manufactures, markets, distributes and sells an extensive array of color cosmetics; hair color, hair care and hair treatments; fragrances; skin care; beauty tools; men’s grooming products; anti-perspirant deodorants; and other beauty care products across a variety of distribution channels.

The Company operates in four brand-centric reporting units that are aligned with its organizational structure based on four global brand teams: Revlon; Elizabeth Arden; Portfolio; and Fragrances, which represent the Company's four reporting segments. For further information, refer to Note 14, "Segment Data and Related Information."

The accompanying Consolidated Financial Statements are unaudited. In management's opinion, all adjustments necessary for a fair presentation of the Company's financial information have been made. The Unaudited Consolidated Financial Statements include the Company's accounts after the elimination of all material intercompany balances and transactions.

Certain prior year amounts have been reclassified to conform to the current year presentation.

The preparation of the Company's Unaudited Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the Unaudited Consolidated Financial Statements in the period they are determined to be necessary. Significant estimates made in the accompanying Unaudited Consolidated Financial Statements include, but are not limited to: expected sales returns; certain assumptions related to the valuation of acquired intangible and long-lived assets and the recoverability of goodwill, intangible and long-lived assets; income taxes, including deferred tax valuation allowances and reserves for estimated tax liabilities; and certain estimates and assumptions used in the calculation of the net periodic benefit (income) costs and the projected benefit obligations for the Company’s pension and other post-retirement plans, including the expected long-term return on pension plan assets and the discount rate used to value the Company’s pension benefit obligations. The Unaudited Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes contained in Revlon's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the "2019 Form 10-K").

The Company's results of operations and financial position for interim periods are not necessarily indicative of those to be expected for the full year.

Recently Evaluated and/or Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, "Internal Use Software (Subtopic 350-40) - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract," which requires a customer in a cloud computing hosting arrangement that is a service contract to follow the existing guidance in ASC 350-40 on internal-use software to determine which implementation costs are to be deferred and recognized as an asset and which costs are to be expensed as incurred. This guidance is effective for annual periods beginning after December 15, 2019, with early adoption permitted, and may be applied either retrospectively or prospectively to all software implementation costs incurred after adoption. The Company adopted ASU No. 2018-15 prospectively, beginning as of January 1, 2020. The Company completed its assessment and determined that this new guidance does not have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The new guidance under ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is in the process of assessing the impact, if any, that ASU No. 2020-04 is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes," which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocations and calculating income taxes in interim periods. This ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This guidance is effective for annual periods beginning after December 15, 2020, with early adoption permitted, including adoption in any interim period. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The amendments in this ASU that are related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments in this ASU that are related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments in this ASU that are related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments under this ASU should be applied on a prospective basis. The Company is in the process of assessing the impact, if any, that this ASU is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

In August 2018, the FASB issued ASU No. 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” This new guidance removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. This guidance is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The Company will adopt this guidance (on a retrospective basis for certain new additional disclosures), beginning as of January 1, 2021. While the Company is currently assessing the impact of this new pronouncement, the new guidance, which only affects disclosure items, is not expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which was subsequently amended in November 2018 through ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses." ASU No. 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. Further, the new credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms. ASU No. 2018-19 further clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment from receivables of operating leases should be accounted for in accordance with Topic 842, Leases. In November 2019, the FASB issued ASU No. 2019-10, which, among other things, deferred the application of the new guidance on credit losses for smaller reporting companies ("SRC") to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., a modified-retrospective approach). Under the above-mentioned deferral, the Company expects to adopt ASU No. 2016-03, and the related ASU No. 2018-19 amendments, beginning as of January 1, 2023 and is in the process of assessing the impact, if any, that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

2. RESTRUCTURING CHARGES

Revlon 2020 Restructuring Program

Building upon its previously-announced 2018 Optimization Program, in March 2020 the Company announced that it is implementing a worldwide organizational restructuring (the “Revlon 2020 Restructuring Program”) designed to reduce the Company’s selling, general and administrative expenses, as well as cost of goods sold, improve the Company’s gross profit and Adjusted EBITDA and maximize productivity, cash flow and liquidity. The Revlon 2020 Restructuring Program includes rightsizing the organization and operating with more efficient workflows and processes. The leaner organizational structure is also expected to improve communication flow and cross-functional collaboration, leveraging the more efficient business processes.

As a result of the Revlon 2020 Restructuring Program, the Company expects to eliminate approximately 1,000 positions worldwide, including approximately 650 current employees and approximately 350 open positions of which approximately 700 were eliminated by March 31, 2020. In March 2020, the Company began informing certain employees that were affected by the Revlon 2020 Restructuring Program. While certain aspects of the Revlon 2020 Restructuring Program may be subject to consultations with employees, works councils, unions and/or governmental authorities, the Company currently expects to substantially complete the employee-related actions by the end of 2020 and the other consolidation and outsourcing actions during 2021 and 2022.

In connection with implementing the Revlon 2020 Restructuring Program, the Company expects to recognize during 2020 approximately $60 million to $70 million of total pre-tax restructuring and related charges (the “2020 Restructuring Charges”), consisting primarily of employee-related costs, such as severance, retention and other contractual termination benefits. In addition, the Company expects restructuring charges in the range of $75 million to $85 million to be charged and paid during 2021 and 2022. The Company expects that substantially all of these restructuring charges will be paid in cash, with approximately $55 million to $65 million of the total charges expected to be paid in 2020, approximately $40 million to $45 million expected to be paid in 2021, with the balance expected to be paid in 2022.

A summary of the 2020 Restructuring Charges incurred since its inception and through March 31, 2020 is presented in the following table:



	Restructuring Charges and Other, Net
	Employee Severance and Other Personnel Benefits		Other Costs		Total Restructuring Charges		Leases (a)		Other Related Charges(b)		Total Restructuring and Related Charges

Cumulative charges incurred through March 31, 2020	$	25.6	$	—	$	25.6	$	8.6	$	0.2	$	34.4

^(a) Lease-related charges are recorded within SG&A in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss. These lease-related charges include: (i) $3.5 million for accelerated recognition of rent expense related to certain abandoned leases; (ii) $3.0 million for the disposal of leasehold improvements and other equipment in connection with certain leases; (iii) $1.2 million of rent expense related to the Revlon 2020 Restructuring Program; and (iv) $0.9 million of disposal of leasehold improvements and other equipment in connection with the abandoned leases identified in clause (i) of this footnote (a).

^(b)Other related charges are recorded within SG&A in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.

A summary of the 2020 Restructuring Charges incurred since its inception in March 2020 and through March 31, 2020 by reportable segment is presented in the following table:



	Cumulative charges incurred through March 31, 2020
Revlon	$	10.3
Elizabeth Arden	5.4
Portfolio	6.1
Fragrances	3.8
Total	$	25.6

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

2018 Optimization Restructuring Program

In November 2018, the Company announced that it was implementing the 2018 Optimization Restructuring Program (the "2018 Optimization Program") designed to streamline the Company’s operations, reporting structures and business processes, with the objective of maximizing productivity and improving profitability, cash flows and liquidity. The 2018 Optimization Program was substantially completed by December 31, 2019.

As of March 31, 2020, restructuring and related charges under the 2018 Optimization Program expected to be paid in cash are approximately $35 million of the total $39.8 million of recorded charges, of which approximately $29.1 million were already paid through March 31, 2020, with any residual balance expected to be paid during the remainder of 2020.

A summary of the 2018 Optimization Restructuring Charges incurred since its inception in November 2018 and through March 31, 2020 is presented in the following table:



	Restructuring Charges and Other, Net
	Employee Severance and Other Personnel Benefits^(a)		Other Costs		Total Restructuring Charges		Inventory Adjustments^(b)		Other Related Charges^(c)		Total Restructuring and Related Charges
Charges incurred through December 31, 2019	$	20.3	$	0.3	$	20.6	$	4.9	$	14.0	$	39.5
Charges incurred during the three months ended March 31, 2020	(0.4)		—		(0.4)		—		0.7		0.3
Cumulative charges incurred through March 31, 2020	$	19.9	$	0.3	$	20.2	$	4.9	$	14.7	$	39.8

^(a) Includes reversal due to true-up of previously-accrued restructuring charges.

^(b) Inventory adjustments are recorded within cost of sales in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.

^(c)Other related charges are recorded within SG&A in the Company’s Unaudited Consolidated Statement of Operations and Comprehensive Loss.

A summary of the 2018 Optimization Restructuring Charges incurred since its inception in November 2018 and through March 31, 2020 by reportable segment is presented in the following table:



	Charges incurred during the three months ended March 31, 2020		Cumulative charges incurred through March 31, 2020
Revlon	$	(0.2)	$	8.6
Elizabeth Arden	(0.1)		4.2
Portfolio	—		4.0
Fragrances	(0.1)		3.4
Total	$	(0.4)	$	20.2

Restructuring Reserve

The liability balance and related activity for each of the Company's restructuring programs are presented in the following table:



										Utilized, Net
			Liability Balance at January 1, 2020			Expense, Net			Foreign Currency Translation			Cash			Non-cash			Liability Balance at March 31, 2020
Revlon 2020 Restructuring Program:
Employee severance and other personnel benefits	$	—		$	25.6		$	—		$	(0.8)		$	—		$	24.8



2018 Optimization Program:
Employee severance and other personnel benefits	5.7			(0.4)			—			(2.5)			—			2.8











Other immaterial actions:^(a)
Employee severance and other personnel benefits	4.3			(0.4)			(0.1)			(0.3)			—			3.5


Total restructuring reserve	$	10.0		$	24.8		$	(0.1)		$	(3.6)		$	—		$	31.1

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

^(a) The balance of other immaterial restructuring initiatives primarily consists of balances outstanding under the EA Integration Restructuring Program implemented by the Company in December 2016, which was completed by December 2018. The reversal of charges and payments made during the first quarter of 2020 primarily related to other individually and collectively immaterial restructuring initiatives.

As of March 31, 2020 and 2019, all of the restructuring reserve balances were included within accrued expenses and other current liabilities in the Company's Consolidated Balance Sheets.

3. INVENTORIES

As of March 31, 2020 and December 31, 2019, the Company's inventory balances consisted of the following:


	March 31,		December 31,
	2020		2019
Finished goods	$	363.9	$	326.5
Raw materials and supplies	104.1		110.4
Work-in-process	11.8		11.5
	$	479.8	$	448.4

4. LEASES AND PROPERTY, PLANT AND EQUIPMENT

The Company leases facilities for executive offices, warehousing, research and development and sales operations and leases various types of equipment under operating and finance lease agreements. The majority of the Company’s real estate leases, in terms of total undiscounted payments, are located in the U.S.

At the effective date of January 1, 2019, the Company adopted ASU No. 2016-02 using a modified retrospective approach applying the standard’s transition provisions provided by such ASU. Refer to Note 1, "Description of Business and Summary of Significant Accounting Policies," in the 2019 Form 10-K for additional information regarding the Company's adoption of ASU No. 2016-02.

During the first quarter of 2020, as a result of COVID-19’s impact on the Company’s operations, the Company considered whether indicators of impairment existed for its Property, Plant and Equipment ("PP&E"), including its Right-of-Use ("ROU") assets consisting of the Company's leases as described above. In accordance with ASC Topic 360, "Property, Plant and Equipment," for purposes of recognition and measurement of an impairment loss, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss is recognized only if the carrying amount of a long-lived asset and/or asset group is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset and/or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset and/or asset group and the impairment loss is measured as the amount by which the carrying amount of a long-lived asset and/or asset group exceeds its fair value. In performing such review, the Company considers several indicators of impairment, including, among other factors, the following: (i) whether there exists any significant adverse change in the extent or manner in which a long-lived asset and/or asset group is being used; (ii) whether there exists any projection or forecast demonstrating losses associated with the use of a long-lived asset and/or asset group; and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset and/or asset group will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. Following its interim assessment, the Company concluded that the carrying amounts of its PP&E, including its lease ROU assets, were not impaired as of March 31, 2020.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table includes disclosure related to the ASC 842 lease standard for the periods presented, after application of the applicable practical expedients and short-term lease considerations:


	Three Months Ended
	March 31, 2020			March 31, 2019
Lease Cost:
Finance Lease Cost:
Amortization of ROU assets	$	0.1		$	0.0
Interest on lease liabilities	0.0			0.0
Operating Lease Cost	13.0			10.6
Total Lease Cost	$	13.1		$	10.6

Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	0.0			0.0
Operating cash flows from operating leases	9.9			11.0
Financing cash flows from finance leases	0.1			0.2

	March 31, 2020			December 31, 2019
ROU assets for finance leases	0.9			1.0
ROU assets for operating leases	90.8			91.4
Accumulated amortization on ROU assets for finance leases	0.4			0.3
Accumulated amortization on ROU assets for operating leases	26.3			23.2

Weighted-average remaining lease term - finance leases	2.6 years			2.8 years
Weighted-average remaining lease term - operating leases	6.0 years			6.2 years

Weighted-average discount rate - finance leases	15.0		%	15.6		%
Weighted-average discount rate - operating leases	15.7		%	15.8		%

Maturities of lease liabilities as of March 31, 2020 were as follows:


	Operating Leases		Finance Leases
April 2020 through December 2020	$	26.4	$	0.5
2021	32.8		0.5
2022	26.2		0.3
2023	21.9		0.0
2024	16.5		—
Thereafter	46.7		—
Total undiscounted cash flows	$	170.5	$	1.3

Present value:
Short-term lease liability	$	19.2	$	0.5
Long-term lease liability	89.2		0.4
Total lease liability	$	108.4	$	0.9
Difference between undiscounted cash flows and discounted cash flows	$	62.1	$	0.4

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

5. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

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

During the first quarter of 2020, as a result of COVID-19’s impact on the Company’s operations, the Company determined that indicators of potential impairment existed requiring the Company to perform an interim goodwill impairment analysis. These indicators included a deterioration in the general economic conditions, adverse developments in equity and credit markets, deterioration in some of the economic channels in which the Company's operates (especially in the mass retail channel), the recent trading values of the Company's capital stock and the corresponding decline in the Company’s market capitalization and the revision of the Company's internal forecasts as a result of COVID-19.

As a result, for the first quarter of 2020 the Company examined and performed quantitative interim goodwill impairment assessments for all its reporting units, namely: (i) Revlon; (ii) Elizabeth Arden Skin and Color; (iii) Elizabeth Arden Fragrances; (iv) Fragrances; (v) Mass Portfolio; and (vi) Professional Portfolio. In performing these assessments the Company used the simplified approach allowed under ASU No. 2017-04, "Simplifying the Test for Goodwill Impairment."

Based upon such assessments, the Company determined that it was more likely than not that the fair values of each of its Revlon, Elizabeth Arden Skin and Color and Fragrances reporting units exceeded their respective carrying amounts for the first quarter of 2020. As of March 31, 2020, the Revlon, Elizabeth Arden Skin and Color and Fragrances reporting units had goodwill balances of $264.7 million, $67.4 million and $120.8 million, respectively.

Additionally, based on its first quarter 2020 quantitative interim assessment, the Company determined that indicators of impairment existed for the (i) Elizabeth Arden Fragrances; (ii) Mass Portfolio; and (iii) Professional Portfolio reporting units. Following the results of such assessments, the Company recorded non-cash impairment charges in the amount by which the carrying value of each reporting unit exceeded its respective fair value, limited to the amount of each reporting unit's goodwill. For the three months ended March 31, 2020, the Company recognized a total of $99.8 million of non-cash goodwill impairment charges consisting of: $54.3 million and $19.6 million for the Mass Portfolio and Professional Portfolio reporting units, respectively, within the Company's Portfolio segment and $25.9 million for the Elizabeth Arden Fragrances reporting unit within the Company's Elizabeth Arden segment. These impairment charges were included as a separate component of operating income within the "Impairment charges" caption on the face of the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2020. Following the recognition of these non-cash goodwill impairment charges, as of March 31, 2020, the Elizabeth Arden Fragrances, Mass Portfolio and Professional Portfolio reporting units had approximately $23.5 million, nil and $97.2 million, respectively, in remaining goodwill.

The above-mentioned fair values were primarily determined using a weighted average market and income approach. The income approach requires several assumptions including those regarding future sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) margins, and capital expenditures, which are the basis for the information used in the discounted cash flow model. The weighted-average cost of capital used in the income approach ranged from 11.5% to 12.0%, with a perpetual growth rate of 2%. For the market approach, the Company considered the market comparable method based upon total enterprise value multiples of other comparable publicly-traded companies.

The key assumptions used to determine the estimated fair value of the reporting units included the expected success of the Company's future new product launches, the Company's achievement of its expansion plans, the Company's realization of its cost reduction initiatives and other efficiency efforts, as well as certain assumptions regarding COVID-19's expected impact on the Company. If such plans and assumptions do not materialize as anticipated, or if there are further challenges in the business environment in which the Company's reporting units operate, a resulting change in actual results from the Company's key assumptions could have a negative impact on the estimated fair values of the reporting units, which could require the Company to recognize additional impairment charges in future reporting periods.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

The inputs and assumptions utilized in the impairment analyses are classified as Level 3 inputs in the fair value hierarchy as defined in ASC Topic 820, “Fair Value Measurements.”

The following table presents the changes in goodwill by segment for the three months ended March 31, 2020:



	Revlon		Portfolio		Elizabeth Arden		Fragrances		Total




Balance at January 1, 2020	$	264.9	$	171.1	$	116.9	$	120.8	$	673.7
Foreign currency translation adjustment	(0.2)		—		—		—		(0.2)

Goodwill impairment charge			(73.9)		(25.9)		—		(99.8)
Balance at March 31, 2020	$	264.7	$	97.2	$	91.0	$	120.8	$	573.7

Cumulative goodwill impairment charges^(a)									$	(155.0)

^(a)Amount refers to cumulative goodwill impairment charges related to impairments recognized in 2015, 2017, 2018 and 2020; $99.8 million of impairment charges were recognized for the three months ended March 31, 2020.

In connection with recognizing these goodwill impairment charges for the first quarter of 2020, the Company recognized a tax benefit of approximately $8.3 million during such period.

Intangible Assets, Net

In accordance with ASC Topic 360, and in conjunction with the Company's performance of its interim impairment testing of goodwill for the first quarter of 2020, the Company reviewed its finite-lived intangible assets for impairment. In performing such review, the Company makes judgments about the recoverability of its purchased finite-lived intangible assets whenever events or changes in circumstances indicate that an impairment to its finite-lived intangible assets may exist. The Company also considers several indicators of impairment, including, among other factors, the following: (i) whether there exists any significant adverse change in the extent or manner in which a long-lived asset and/or asset group is being used; (ii) whether there exists any projection or forecast demonstrating losses associated with the use of a long-lived asset and/or asset group; and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset and/or asset group will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. The carrying amount of a finite-lived intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the finite-lived intangible asset and/or asset group and the impairment loss is measured as the amount by which the carrying amount of the finite-lived intangible asset exceeds its fair value.

In connection with the interim impairment assessment for the first quarter of 2020, the Company also reviewed indefinite-lived intangible assets, consisting of certain trade names, using March 31, 2020 carrying values similar to goodwill, in accordance with ASC Topic 350.

As a result of COVID-19’s impact on the Company’s operations and on the expected future cash flows of certain asset groups, in connection with the Company's interim assessment of finite-lived and indefinite-lived intangible assets, as of March 31, 2020 the Company recognized $24.5 million of total non-cash impairment charges related to certain indefinite-lived intangible assets within the Company's Mass Portfolio, Elizabeth Arden Fragrances and Elizabeth Arden Skin and Color reporting units. The fair values of the Company's intangible assets were determined based on the undiscounted cash flows method for its finite-lived intangibles and based on the relief from royalty method for its indefinite-lived intangibles, respectively. The inputs and assumptions utilized in the impairment analyses are classified as Level 3 inputs in the fair value hierarchy as defined in ASC Topic 820, “Fair Value Measurements.” These impairment charges were included as a separate component of operating income within the "Impairment charges" caption on the face of the Company's Unaudited Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2020. A summary of such impairment charges by segments is included in the following table:


	March 31, 2020
	Revlon		Portfolio		Elizabeth Arden		Fragrances		Total

Indefinite-lived intangible assets	$	—	$	(2.5)	$	(22.0)	$	—	$	(24.5)
Total Intangibles Impairment	$	—	$	(2.5)	$	(22.0)	$	—	$	(24.5)

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

In connection with recognizing these intangible assets impairment charges for the first quarter of 2020, the Company recognized a tax benefit of approximately $5.1 million during such period.

The following tables present details of the Company's total intangible assets as of March 31, 2020 and December 31, 2019:


	March 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount		Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses	$	271.0	$	(114.8)	$	—	$	156.2	13
Customer relationships	247.4		(99.4)		—		148.0		11
Patents and internally-developed intellectual property	21.7		(12.6)		—		9.1		5
Distribution rights	31.0		(6.1)		—		24.9		14
Other	1.3		(1.3)		—		—		0
Total finite-lived intangible assets	$	572.4	$	(234.2)	$	—	$	338.2

Indefinite-lived intangible assets:
Trade names	$	142.9	N/A		$	(24.5)	$	118.4
Total indefinite-lived intangible assets	$	142.9	N/A		$	(24.5)	$	118.4

Total intangible assets	$	715.3	$	(234.2)	$	(24.5)	$	456.6

	December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Impairment		Net Carrying Amount		Weighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses	$	271.2	$	(110.9)	$	—	$	160.3	13
Customer relationships	248.3		(96.5)		—		151.8		11
Patents and internally-developed intellectual property	21.5		(12.1)		—		9.4		5
Distribution rights	31.0		(5.6)		—		25.4		15
Other	1.3		(1.3)		—		—		0
Total finite-lived intangible assets	$	573.3	$	(226.4)	$	—	$	346.9

Indefinite-lived intangible assets:
Trade names	$	143.8	N/A		$	—	$	143.8
Total indefinite-lived intangible assets	$	143.8	N/A		$	—	$	143.8

Total intangible assets	$	717.1	$	(226.4)	$	—	$	490.7

Amortization expense for finite-lived intangible assets was $8.5 million and $14.8 million for the three months ended March 31, 2020 and 2019, respectively. The variance was attributable primarily to the accelerated amortization of the Pure Ice intangible assets during the quarter ended March 31, 2019 as a result of the revision of the brand’s intangible assets useful lives following the termination of a business relationship with the brand's principal customer.

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

The following table reflects the estimated future amortization expense for each period presented, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of March 31, 2020:



	Estimated Amortization Expense
2020	$	25.6
2021	33.2
2022	32.3
2023	30.8
2024	27.5
Thereafter	188.8
Total	$	338.2

6. ACCRUED EXPENSES AND OTHER

As of March 31, 2020 and December 31, 2019, the Company's accrued expenses and other current liabilities consisted of the following:


	March 31,		December 31,
	2020		2019
Sales returns and allowances	$	76.8	$	89.7
Advertising, marketing and promotional costs	63.3		82.8
Taxes ^(a)	46.5		54.3
Compensation and related benefits	30.7		42.1
Interest	18.8		34.0
Professional services and insurance	18.4		16.3
Short term lease liability	19.7		14.5
Freight and distribution costs	8.7		13.2
Restructuring reserve	31.1		10.0
Software	3.8		4.0
Other ^(b)	56.3		54.0
Total	$	374.1	$	414.9

^(a) Accrued Taxes for Products Corporation as of March 31, 2020 and December 31, 2019 were $49.7 million and $57.6 million, respectively.

^(b)Accrued Other as of December 31, 2019 includes approximately $2.3 million of severance to Mr. Fabian Garcia, the Company's former President and Chief Executive Officer, which was paid in 2020.

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7. DEBT

As of March 31, 2020 and December 31, 2019, the Company's debt balances consisted of the following:


	March 31,		December 31,
	2020		2019
2019 Term Loan Facility due 2023, net of discounts and debt issuance costs (see (a) below)	$	187.7	$	187.1
2018 Foreign Asset-Based Term Facility due 2021, net of discounts and debt issuance costs (see (b) below)	81.5		82.3
Amended 2016 Revolving Credit Facility due 2021, net of debt issuance costs (see (c) below)	339.5		269.9
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (see (d) below)	1,710.9		1,713.6
5.75% Senior Notes due 2021, net of debt issuance costs (see (e) below)	498.5		498.1
6.25% Senior Notes due 2024, net of debt issuance costs (see (f) below)	443.1		442.8


Spanish Government Loan due 2025	0.4		0.4
Debt	$	3,261.6	$	3,194.2
Less current portion^(*)	(856.1)		(288.0)
Long-term debt	$	2,405.5	$	2,906.2

Short-term borrowings (see (g) below)	$	2.9	$	2.2

^(*) At March 31, 2020, the Company classified $856.1 million as its current portion of long-term debt, comprised primarily of $498.5 million of Products Corporation's 5.75% Senior Notes due February 15, 2021 (the "5.75% Senior Notes"), net of debt issuance costs, $339.5 million net borrowings under the Amended 2016 Revolving Credit Facility, net of debt issuance costs, and $18.0 million of amortization payments on the 2016 Term Loan Facility scheduled to be paid over the next four calendar quarters. At December 31, 2019, the Company classified $288.0 million as its current portion of long-term debt, comprised primarily of $269.9 million of net borrowings under the Amended 2016 Revolving Credit Facility, net of debt issuance costs, and $18.0 million of amortization payments on the 2016 Term Loan Facility. See Note 19 "Subsequent Events," for detail regarding the extension of the maturity of the Tranche B of the Amended 2016 Revolving Credit Facility.

^(a) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding the 2019 Term Loan Facility, which will mature on the earliest of: (x) August 6, 2023; (y) the 180th day prior to the stated maturity of Products Corporation’s existing 2016 Term Loan Facility, if any loans under the 2016 Term Loan Facility remain outstanding and have not been replaced or refinanced by such date; and (z) the date of any springing maturity of the 2016 Term Loan Facility (i.e., the 91st day prior to the maturity of the 5.75% Senior Notes due February 15, 2021 if any 5.75% Senior Notes remain outstanding by such date and certain liquidity thresholds are not met). The aggregate principal amount outstanding under the 2019 Term Loan Facility at March 31, 2020 was $200.0 million. See Note 19 "Subsequent Events," for detail regarding the closing of the 2020 Refinancing Transaction and related transactions, which included the full repayment of the 2019 Term Loan Facility.

^(b) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding the euro-denominated senior secured asset-based term loan facility in an aggregate principal amount of €77 million that various foreign subsidiaries of Products Corporation entered into in July 2018 (the “2018 Foreign Asset-Based Term Facility”). See Note 19 "Subsequent Events," for detail regarding certain the closing of the 2020 Refinancing Transaction and related transactions, which included a partial repayment of the 2018 Foreign Asset-Based Term Facility.

^(c) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's Amended 2016 Revolving Credit Facility. In April 2018, Products Corporation amended the Amended 2016 Revolving Credit Facility Agreement, as detailed below, to, among other things, add a new $41.5 million senior secured first in, last out "Tranche B," while the original $400 million tranche under such facility became a senior secured last in, first out "Tranche A." Tranche A matures on the earlier of: (x) September 7, 2021; and (y) the 91^st day prior to the maturity of Products Corporation’s 5.75% Senior Notes, if, on that date (and solely for so long as), (i) any of Products Corporation’s 5.75% Senior Notes remain outstanding and (ii) Products Corporation’s available liquidity does not exceed the aggregate principal amount of the then outstanding 5.75% Senior Notes by at least $200 million. Tranche B matures on May 17, 2020. See Note 19 "Subsequent Events," for detail regarding the extension of the maturity of the Tranche B of the Amended 2016 Revolving Credit Facility. Total borrowings at face amount under Tranche A and Tranche B under the Amended 2016 Revolving Credit Facility at March 31, 2020 were $306.7 million (excluding $11.0 million of outstanding undrawn letters of credit) and $34.8 million, respectively (the 2016 Term Loan Facility and the Amended 2016 Revolving Credit Facility are collectively referred to as the "2016 Senior Credit Facilities" and the applicable agreements being the “2016 Credit Agreements”).

^(d) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's 2016 Term Loan that matures on the earlier of: (x) September 7, 2023; and (y) the 91^st day prior to the maturity of Products Corporation’s 5.75% Senior Notes due 2021 if, on that date (and solely for so long as), (i) any of Products Corporation's 5.75% Senior Notes remain outstanding and (ii) Products Corporation’s available liquidity does not exceed the aggregate principal amount of the then outstanding 5.75% Senior Notes by at least $200 million. The aggregate principal amount outstanding under the 2016 Term Loan Facility at March 31, 2020 was $1,737.0 million. See Note 19 "Subsequent Events," for detail regarding the closing of the 2020 Refinancing Transaction and related transactions, which included various amendments to the 2016 Term Loan.

^(e) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's 5.75% Senior Notes that mature on February 15, 2021. The aggregate principal amount outstanding under the 5.75% Senior Notes at March 31, 2020 was $500 million.

^(f) See Note 9, "Long-Term Debt," to the Consolidated Financial Statements in the Company's 2019 Form 10-K for certain details regarding Products Corporation's 6.25% Senior Notes that mature on August 1, 2024 (the "6.25% Senior Notes"). The aggregate principal amount outstanding under the 6.25% Senior Notes at March 31, 2020 was $450 million.

^(g)There were no borrowings at March 31, 2020 under the 2019 Senior Line of Credit Facility between Products Corporation and MacAndrews & Forbes Group, LLC, a related party, discussed below.

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Current Year Debt Transactions

In March 2020, Products Corporation entered into a commitment letter with Jefferies Finance LLC and, separately, in April 2020 entered into a further commitment letter with an ad hoc group of lenders under its 2016 Term Loan Facility. These commitment letters currently provide the Company with several alternative financing arrangements. See Note 19, "Subsequent Events," for details regarding the consummation of the 2020 Refinancing Transactions.

2020 Committed Debt Financing from Jefferies Finance, LLC

In March 2020, Products Corporation entered into a binding Commitment Letter with Jefferies Finance LLC (the “Jefferies Commitment Party” and the “Jefferies Commitment Letter,” respectively). Pursuant to the Jefferies Commitment Letter and subject to the terms and conditions set forth therein, the Jefferies Commitment Party has committed to provide senior secured term loan facilities in an aggregate principal amount of up to $850 million (the “Jefferies Facilities” and the “Jefferies 2020 Refinancing Transactions”). The proceeds of the Jefferies Facilities were expected to be used: (i) to repay in full indebtedness outstanding under Products Corporation’s 5.75% Senior Notes due February 2021 and Products Corporation's 2019 Term Loan Facility (the “Jefferies Refinancing”); (ii) to pay fees and expenses in connection with the Jefferies Facilities and the Jefferies Refinancing; and (iii) to the extent of any excess, for general corporate purposes. The funding of the Jefferies Facilities was contingent on the satisfaction of a limited number of customary conditions, including the execution of definitive loan documentation for the Jefferies Facilities, absence of material adverse change and certain other customary conditions. The commitments under the Jefferies Commitment Letter were available to the Company until June 30, 2020, unless the Jefferies Refinancing was consummated or the maturity of certain other material indebtedness of Products Corporation was accelerated prior to such date. As of March 31, 2020, the Jefferies 2020 Refinancing Transactions had not been consummated and following such date it was superseded by the closing of the 2020 Refinancing Transactions with the Ad Hoc Group (as hereinafter defined). See Note 19, "Subsequent Events," for details regarding the consummation of the 2020 Refinancing Transactions.

Principal and Maturity: The Jefferies Facilities would consist of (i) a senior secured term loan facility in a principal amount of up to $300 million (the “Jefferies Brandco Facility”) and (ii) a senior secured term loan facility in a principal amount of up to $550 million (the “Jefferies Specified Brands Facility”). Jefferies Finance LLC would act as administrative agent and collateral agent in respect of the Jefferies Facilities.

The Jefferies Facilities would mature on the fifth anniversary of the closing date of the Jefferies Facilities (the “Jefferies Closing Date”), subject to a springing maturity 91 days prior to the maturity date of Products Corporation’s 6.25% Senior Notes due 2024 (the “6.25% Senior Notes”) if, on such date, $100 million or more in aggregate principal amount of the 6.25% Senior Notes remains outstanding.

Jefferies Brandco Facility. The borrower under the Jefferies Brandco Facility would be Products Corporation, and the Jefferies Brandco Facility would be guaranteed by certain indirect foreign subsidiaries of Products Corporation (the “Jefferies BrandCos”), whose direct and indirect subsidiaries (the “Jefferies Specified Brands Subsidiaries”) would be “Unrestricted Subsidiaries” for purposes of the existing debt agreements of Products Corporation and would hold various intellectual property assets related to the Elizabeth Arden and American Crew brands and certain other portfolio brands (the “Jefferies Specified Brand Assets”). The Jefferies BrandCos would not guarantee Products Corporation’s 2016 Term Loan Facility, but all guarantors of the 2016 Term Loan Facility would guarantee the Jefferies Brandco Facility. All of the assets of the Jefferies BrandCos (including the equity of the first-tier Jefferies Specified Brands Subsidiary) would be pledged to secure the Jefferies Brandco Facility on a first-priority basis and would not secure the 2016 Term Loan Facility, but the Jefferies Brandco Facility would be secured on a pari passu basis by the assets securing the 2016 Term Loan Facility.

Jefferies Specified Brands Facility. The borrower of the Jefferies Specified Brands Facility would be a Jefferies Specified Brands Subsidiary that is an indirect subsidiary of the Jefferies BrandCos (the “Jefferies Specified Brands Borrower”). The Jefferies Specified Brands Facility would be guaranteed by the direct parent of the Jefferies Specified Brands Borrower and each of the subsidiaries of the Jefferies Specified Brands Borrower. The Jefferies Specified Brands Facility would be secured by substantially all of the assets of the Jefferies Specified Brands Borrower and the other Jefferies Specified Brands Subsidiaries, which would include the Jefferies Specified Brand Assets.

Contribution and License Agreements: In connection with the pledge of the Jefferies Specified Brand Assets, Products Corporation would enter into intercompany arrangements pursuant to which the Jefferies Specified Brand Assets would be contributed to the Jefferies Specified Brand Subsidiaries. Products Corporation and/or its operating subsidiaries would enter

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into license and royalty arrangements on arm’s length terms with the relevant Jefferies Specified Brand Subsidiary to provide for their continued use of the Jefferies Specified Brand Assets during the term of the Jefferies Facilities.

Interest and Fees: Interest would accrue on the Jefferies Facilities at a rate per annum of adjusted LIBOR plus a fixed margin. Products Corporation was also obligated to pay customary fees and expenses in connection with the Jefferies Facilities.

Affirmative and Negative Covenants: The Jefferies Facilities would contain certain affirmative and negative covenants that, among other things, limit the Jefferies Restricted Group’s (as defined below) ability to: (i) incur additional debt; (ii) incur liens; (iii) sell, transfer or dispose of assets; (iv) make investments; (v) make dividends and distributions on, or repurchases of, equity; (vi) make prepayments of contractually subordinated or junior lien debt; (vii) enter into certain transactions with their affiliates; (viii) enter into sale-leaseback transactions; (ix) change their lines of business; (x) restrict dividends from their subsidiaries or restrict liens; (xi) change their fiscal year; and (xii) modify the terms of certain debt. The “Jefferies Restricted Group” means (a) with respect to the Jefferies Brandco Facility, Products Corporation and its restricted subsidiaries under the Jefferies Brandco Facility and (b) with respect to the Jefferies Specified Brands Facility, the Jefferies Specified Brands Subsidiaries.

Prepayments: The Jefferies Facilities would be subject to certain mandatory prepayments, including from the net proceeds from the issuance of certain additional debt and asset sale proceeds of certain non-ordinary course asset sales or other dispositions of property, subject to certain exceptions. The Jefferies Facilities would be repayable at any time, subject to customary prepayment premiums.

The Jefferies Facilities would also contain certain customary representations, warranties and events of default.

Fees and expenses incurred in connection with the Jefferies Commitment Letter of approximately $3.9 million were capitalized and are being amortized to interest expense on a straight-line basis over the contractual term of the binding commitment.

Covenants

Products Corporation was in compliance with all applicable covenants under the 2016 Credit Agreements, the 2019 Term Loan Agreement (which was fully repaid as part of consummating the 2020 Refinancing Transactions), the 2018 Foreign Asset-Based Term Agreement, the Amended 2019 Senior Line of Credit Agreement, as well as with all applicable covenants under its Senior Notes Indentures, as of March 31, 2020. At March 31, 2020, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:



	Commitment		Borrowing Base		Aggregate principal amount outstanding at March 31, 2020		Availability at March 31, 2020 ^(a)
Tranche A of the Amended 2016 Revolving Credit Facility	$	400.0	$	352.0	$	306.7	$	34.3
Tranche B of the Amended 2016 Revolving Credit Facility	41.5		34.8		34.8		—
Total Tranche A & B of the Amended 2016 Revolving Credit Facility^(a)	$	441.5	$	386.8	$	341.5	$	34.3
Amended 2019 Senior Line of Credit Facility	$	30.0	N/A		$	—	$	30.0

^(a) Availability as of March 31, 2020 is based upon the borrowing base then in effect under the Amended 2016 Revolving Credit Facility of $386.8 million, less $11.0 million of outstanding undrawn letters of credit and $341.5 million then drawn. As Products Corporation’s consolidated fixed charge coverage ratio was greater than 1.0 to 1.0 as of March 31, 2020, all of the $34.3 million of availability under the Amended 2016 Revolving Credit Facility was available as of such date.

The Company’s foreign subsidiaries held $57.7 million out of the Company's total $62.8 million in cash and cash equivalents as of March 31, 2020. While the cash held by the Company’s foreign subsidiaries is primarily used to fund their operations, the Company regularly assesses its global cash needs and the available sources of cash to fund these needs, which regularly includes repatriating foreign-held cash to settle historical intercompany loans and other intercompany payables. The Company believes that it has and will have sufficient liquidity to meet its cash needs for at least the next 12 months based upon the cash generated by its operations, cash on hand, availability under the Amended 2016 Revolving Credit Facility, the Amended 2019 Senior Line of Credit Facility, the consummated 2020 Refinancing Transactions, as detailed in Note 19, "Subsequent Events," as well as other permissible borrowings, along with the option to further settle historical intercompany

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loans and payables with certain foreign subsidiaries. The Company also expects to generate additional liquidity from cost reductions resulting from the implementation of the Revlon 2020 Restructuring Program, which was initiated during the first quarter of 2020, the 2018 Optimization Program and cost reductions generated from other cost control initiatives, including, without limitation, new interim measures to reduce costs in response to COVID-19 (such as: (i) switching to a reduced work week and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based employees and those in certain other locations; (iii) suspending Company discretionary profit sharing contributions and matching contributions to the Company’s 401(k) plan; (iv) reducing Board and committee compensation by 50% and eliminating Board and committee meeting fees; and (v) ceasing services and payments under consulting agreements with 2 non-independent directors), as well as funds provided by selling certain assets (such as the Natural Honey and Floid brands that were sold in December 2019) in connection with the Company's ongoing Strategic Review. For information regarding certain risks related to the Company’s indebtedness, see Item 1A. “Risk Factors” in the Company's 2019 Form 10-K.

8. FAIR VALUE MEASUREMENTS

Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to value the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing the fair value measurement of assets and liabilities are as follows:

•Level 1: Fair valuing the asset or liability using observable inputs, such as quoted prices in active markets for identical assets or liabilities;

•Level 2: Fair valuing the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

•Level 3: Fair valuing the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.

As of both March 31, 2020 and December 31, 2019, the Company did not have any financial assets and liabilities that were required to be measured at fair value.

As of March 31, 2020, the fair value and carrying value of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:


	March 31, 2020
	Fair Value
	Level 1		Level 2		Level 3		Total		Carrying Value
Liabilities:
Long-term debt, including current portion^(a)	$	—	$	1,768.3	$	—	$	1,768.3	$	3,261.6

As of December 31, 2019, the fair value and carrying value of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:


	December 31, 2019
	Fair Value
	Level 1		Level 2		Level 3		Total		Carrying Value
Liabilities:
Long-term debt, including current portion^(a)	$	—	$	2,522.2	$	—	$	2,522.2	$	3,194.2

^(a)The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on quoted market prices for similar issuances and maturities.

The carrying amounts of the Company's cash and cash equivalents, trade receivables, notes receivable, accounts payable and short-term borrowings approximate their respective fair values.

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9. FINANCIAL INSTRUMENTS

Letters of Credit

Products Corporation maintains standby and trade letters of credit for various corporate purposes under which Products Corporation is obligated, of which $11.0 million and $11.4 million (including amounts available under credit agreements in effect at that time) were maintained as of March 31, 2020 and December 31, 2019, respectively. Included in these amounts are approximately $8.3 million in standby letters of credit that support Products Corporation’s self-insurance programs, in each case as outstanding as of March 31, 2020 and December 31, 2019, respectively. The estimated liability under such programs is accrued by Products Corporation.

10. PENSION AND POST-RETIREMENT BENEFITS

Net Periodic Benefit Cost

The components of net periodic benefit costs for the Company's pension and the other post-retirement benefit plans for the three months March 31, 2020 and 2019, respectively, were as follows:


	Pension Plans						Other Post-Retirement Benefit Plans
	Three Months Ended March 31,
	2020		2019		2020		2019
Net periodic benefit costs:
Service cost	$	0.4	$	0.5	$	—	$	—
Interest cost	3.7		4.9		0.1		0.1
Expected return on plan assets	(5.8)		(6.0)		—		—
Amortization of actuarial loss	2.7		2.4		0.1		0.1

Total net periodic benefit costs prior to allocation	$	1.0	$	1.8	$	0.2	$	0.2
Portion allocated to Revlon Holdings	—		—		—		—
Total net periodic benefit costs	$	1.0	$	1.8	$	0.2	$	0.2

In the three months ended March 31, 2020, the Company recognized net periodic benefit cost of $1.2 million, compared to net periodic benefit cost of $2.0 million in the three months ended March 31, 2019, primarily due to lower interest costs partially offset by higher amortization of actuarial loss.

Net periodic benefit costs are reflected in the Company's Unaudited Consolidated Financial Statements as follows for the periods presented:


	Three Months Ended March 31,
	2020		2019
Net periodic benefit costs:

Selling, general and administrative expense	0.4		0.5
Miscellaneous, net	0.8		1.5
Total net periodic benefit costs	$	1.2	$	2.0

The Company expects that it will have net periodic benefit cost of approximately $5.0 million for its pension and other post-retirement benefit plans for all of 2020, compared with net periodic benefit cost of $7.2 million in 2019.

Contributions:

The Company’s intent is to fund at least the minimum contributions required to meet applicable federal employee benefit laws and local laws, or to directly pay benefit payments where appropriate. During the first quarter of 2020, $3.4 million and $0.2 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During 2020, the Company expects to contribute approximately $18 million in the aggregate to its pension and other post-retirement benefit plans.

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As a result of the CARES Act passed by the U.S. Congress in March 2020 to address the economic environment resulting from COVID-19, and in accordance with the Limited Relief for Pension Funding and Retirement Plan Distributions provision of such act, the Company expects to defer approximately $9 million of contributions that were otherwise scheduled to be paid to its two qualified pension plans during 2020. The first quarterly contributions for the two qualified plans were originally due by April 15, 2020. The Company had already made $1.6 million in contributions to its qualified pension plans during the first quarter of 2020, prior to adopting the aforementioned provision of the CARES Act. The deferral is in effect only for 2020 and under the CARES relief provisions the Company will be required to pay the contributions by no later than January 1, 2021, including interest at the plans’ 2020 effective interest rate ("EIR") from the original due date to the actual payment date.

Relevant aspects of the qualified defined benefit pension plans, non-qualified pension plans and other post-retirement benefit plans sponsored by Products Corporation are disclosed in Note 12, "Pension and Post-Retirement Benefits," to the Consolidated Financial Statements in the Company's 2019 Form 10-K.

11. STOCK COMPENSATION PLAN

Revlon maintains the Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan"), which provides for awards of stock options, stock appreciation rights, restricted or unrestricted stock and restricted stock units ("RSUs") to eligible employees and directors of Revlon and its affiliates, including Products Corporation. An aggregate of 6,565,000 shares were reserved for issuance as Awards under the Stock Plan, of which there remained approximately 2.4 million shares available for grant as of March 31, 2020. In July 2014, the Stock Plan was amended to renew the Stock Plan for a 7-year renewal term expiring on April 14, 2021. In September 2019 the Stock Plan was amended in connection with the 2019 TIP, described below, to: (1) allow the Compensation Committee to delegate to Revlon’s Chief Executive Officer the authority to grant RSUs to the Company’s employees, other than its officers who are subject to Section 16 of the Securities Exchange Act of 1934, as amended (i.e., the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer & Controller); (2) allow for accelerated vesting of equity awards upon a termination without cause; (3) change the minimum vesting period for specified equity awards from 3 years to 2 years; and (4) to increase by 250,000 shares the number of shares of Revlon common stock that are not subject to the Stock Plan’s minimum vesting requirements.

Revlon 2019 Transaction Incentive Program

In August 2019, it was disclosed that MacAndrews & Forbes and Revlon determined to explore strategic transactions involving Revlon and third parties (the "Strategic Review"). In light of this, the Compensation Committee of Revlon’s Board of Directors approved a Revlon 2019 Transaction Incentive Program (the “2019 TIP”) that enables the Company to award cash-based and RSU-based retention grants and transaction bonus awards, as well as providing for the accelerated vesting of time-based RSUs and restricted shares following a termination without cause or due to death or disability.

Each Tier 1 participant’s 2019 TIP award is payable two-thirds in cash and one-third in RSUs vesting in 50% tranches on each of December 31, 2020 and December 31, 2021, while Tier 2 awards are payable 100% in cash in one lump-sum on December 31, 2020, in each case subject to certain earlier vesting for a change of control or termination of employment without cause, as described below. As of September 5, 2019, the Company approved a total of 206,812 time-based RSUs under Tier 1 of the 2019 TIP, which are scheduled to vest in equivalent amounts on each of December 31, 2020 and December 31, 2021, subject to continued employment (the “2019 TIP RSUs”). As of March 31, 2020, a total of 204,151 time-based RSUs under Tier 1 of the 2019 TIP had been granted. The Company’s President and Chief Executive Officer declined an award under the retention program and will receive a transaction bonus only if the Company completes a transaction.

The 2019 TIP RSUs vest in full upon an involuntary termination, other than if due to cause; provided that if a change of control occurs or a brand or business segment is sold and (i) the impacted grantee accepts an offer of employment from the buyer, then: (A) if the buyer assumes the 2019 TIP RSUs, the grantee will continue to vest in the assumed awards (with the grantee having the continued right to accelerated vesting upon an involuntary termination, other than if due to cause); and (B) if the buyer does not assume the 2019 TIP RSUs, the grantee’s 2019 TIP RSUs will vest upon closing the change of control; and (ii) the impacted grantee declines an offer of employment from the buyer for substantially comparable total compensation and benefits, the grantee will forfeit their unvested 2019 TIP RSUs (collectively, the “Special Vesting Rules”).

The 2019 TIP also provides for the following cash-based awards payable to certain employees, subject to continued employment through the respective vesting dates: (i) Tier 1 - $6.8 million payable in two equal installments as of December 31, 2020 and December 31, 2021; and (ii) Tier 2 - $2.5 million payable in one installment as of December 31, 2020. Such cash-based awards follow the Special Vesting Rules following a termination without cause or due to death or disability. During 2019 and through March 31, 2020, the Company granted $5.1 million and $2.0 million cash-based awards, net of forfeitures, under

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Tier 1 and Tier 2 of the 2019 TIP, respectively, which are being amortized over the period from the grant dates to December 31, 2021 and December 31, 2020, respectively. The total amount amortized for these cash-based awards since the program's inception and through March 31, 2020 is approximately $2.7 million, of which $1.4 million was recorded during the three months ended March 31, 2020 within "Acquisition, integration and divestiture costs" in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.

Long-Term Incentive Program

The Company's LTIP RSUs consist of time-based RSUs and performance-based RSUs. Time-based RSUs are generally scheduled to vest ratably over a 3-year service period, while performance-based RSUs are scheduled to vest based on the achievement of certain Company performance metrics and cliff-vest at the completion of a 3-year performance period.

The fair value of the LTIP and TIP RSUs is determined based on the NYSE closing share price on the grant date.

In connection with the announcement of the 2019 TIP, in August 2019 the Company also approved applying the Special Vesting Rules to outstanding, pre-existing LTIP RSUs, except that accelerated vesting in the case of termination of employment without cause will apply only to any tranche of outstanding, pre-existing LTIP RSUs scheduled to vest in the 12-month period following termination, with any future tranches being forfeited. Prior to the approval of these Special Vesting Rules, while the outstanding, pre-existing LTIP RSUs would generally have accelerated vesting upon a change of control, they did not feature accelerated vesting for termination and, in such cases, they were entirely forfeited upon termination.

During the first quarter of 2020, the Company granted approximately 1.3 million time-based and performance-based RSU awards under the Stock Plan (the "2020 LTIP RSUs").

Acceleration of Vesting

As of March 31, 2020, 29,350 LTIP RSUs and 21,077 2019 TIP Tier 1 RSUs were vested on an accelerated basis due to involuntary terminations under the above-mentioned provisions, resulting in accelerated amortization of approximately $1.0 million. In addition, as of March 31, 2020 and under the same accelerated vesting provisions, the Company also recorded approximately $0.7 million of accelerated amortization in connection with the cash portion of the 2019 TIP Tier 1 and Tier 2 awards that were vested on an accelerated basis due to involuntary terminations.

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COMBINED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

During the first quarter of 2020, the activity related to time-based and performance-based RSUs previously granted to eligible employees and the grant date fair value per share related to these RSUs were as follows under the LTIP and 2019 TIP programs, respectively:


	Time-Based LTIP			Performance-Based LTIP
	RSUs (000's)	Weighted-Average Grant Date Fair Value per RSU	RSUs (000's)		Weighted-Average Grant Date Fair Value per RSU
Outstanding as of December 31, 2019
2019 TIP RSUs ^(b)	200.6	16.44	n/a		—
LTIP RSUs:
2019	425.6	22.55	425.6		22.55
2018	241.9	19.00	364.7		19.00
2017 ^(a)	54.0	19.70	110.9		19.70
Total LTIP RSUs	721.5		901.2
Total LTIP and TIP RSUs Outstanding as of December 31, 2019	922.1		901.2
Granted
2019 TIP RSUs Granted ^(b)	—	—	n/a		—
LTIP RSUs:
2020	648.4	14.96	648.4		14.96
2019	—	—	—		—
2018	—	—	—		—
2017 ^(a)	—	—	—		—
Total LTIP RSUs Granted	648.4		648.4
Vested
2019 TIP RSUs Vested ^(b)(c)	(21.1)	16.44	n/a		—
LTIP RSUs:
2019^(c)	(129.3)	22.55	—		—
2018^(c)	(103.8)	19.30	—		—
2017 ^(a)(c)	(53.4)	19.70	(14.2)		19.70

REVLON CONSUMER PRODUCTS CORP 10-Q