RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2022

On January 3, 2020, the Company became a wholly owned subsidiary of Natura &Co Holding. From this point, Natura &Co Holding, its subsidiaries and affiliates became related parties of the Company. On July 1, 2021, the Company sold Avon Luxembourg, including our Mexican business, to a subsidiary of Natura &Co Holding. As a result, beginning on July 1, 2021, transactions and balances between Avon International and Avon Luxembourg are no longer eliminated on consolidation and instead are treated as transactions and balances with Related Parties.

The following tables present the related party transactions with Natura &Co and its affiliates and the Instituto Avon in Brazil. There are no other related party transactions.


	Three Months Ended March 31,
	2022		2021
Statement of Operations Data
Revenue from affiliates of Natura &Co(2)(1)	$	3.7	$	7.7
Cost of sales from affiliates of Natura &Co(2)(1)	$	(4.2)	$	(7.1)
Gross profit from affiliates of Natura &Co(2)(1)	$	(.5)	$	.6




Interest expense on Loan from affiliates of Natura &Co(4)	$	(15.3)	$	(8.7)
Interest income on Loan to affiliates of Natura &Co(5)	$	.7	$	—


	March 31, 2022		December 31, 2021
Balance Sheet Data

Trade Receivables due from affiliates of Natura &Co(1)	$	25.4	$	32.7
Derivative Receivables due from affiliates of Natura &Co(7)	$	1.1	$	—
Other receivables due from affiliates of Natura &Co(6)	$	1.9	$	1.4
Loans to affiliates of Natura &Co maturing within one year(6)	$	45.5	$	46.6
Loans to affiliates of Natura &Co maturing after one year(6)	$	46.7	$	46.7
Trade Payables due to affiliates of Natura &Co(6)	$	(25.4)	$	(24.5)
Derivative Payables due to affiliates of Natura &Co(6)	$	(1.0)	$	—
Other payables due to affiliates of Natura &Co(3)	$	(8.2)	$	(4.9)
Loans from affiliates of Natura &Co maturing within one year(4)	$	(458.3)	$	(371.7)
Loans from affiliates of Natura &Co maturing after one year(4)	$	(721.0)	$	(736.3)

Investments in affiliates of Natura &Co(5)	$	.1	$	.1

(1) During the second quarter of 2020, the Company entered into manufacturing agreements with affiliates of Natura &Co Holding. The Company recorded revenue from related party of $3.5 and $7.7 associated with these agreements during the three months ended March 31, 2022 and 2021, respectively. The Company recorded gross loss from related party of $.7 and gross profit from related party of $.6 associated with these agreements during the three months ended March 31, 2022 and 2021, respectively. Trade receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

(2) The Company is party to a license agreement with Avon Mexico, whereby Avon Mexico pays the Company a variable royalty. The Company recorded revenue from related party of $.2 associated with these agreements during the three months ended March 31, 2022, respectively. The Company recorded gross profit from related party of $.2 associated with these agreements during the three months ended March 31, 2022, respectively.

(3) The amount payable to Natura &Co mainly relates to the vesting and settlement of share-based compensation awards denominated in Natura &Co American Depository Receipts including the 2018 and 2019 long-term employee incentive program which vested and were automatically exercised in March 2021 and March 2022 respectively.

(4) Loans from affiliates of Natura &Co Holding at March 31, 2022 of $1,179.3 include $721.0 outstanding under a Promissory Note between Avon Beauty Limited and a subsidiary of Natura &Co Holding, and $208.9 outstanding under a Promissory Note with a subsidiary of Natura &Co Holding and an affiliate of the Company. In addition, loans from affiliates of Natura &Co Holding at March 31, 2022 of $249.4 includes a number of intercompany loans between Natura &Co Luxembourg, Natura Cosméticos and Avon Products, Inc. and its affiliates. Loans from affiliates of Natura &Co Holding at December 31, 2021 of $1,108.0 include $736.3 outstanding under a Promissory Note between Avon Beauty Limited and a subsidiary of Natura &Co

Holding, and $207.3 outstanding under a Promissory Note with a subsidiary of Natura &Co Holding and an affiliate of the Company. In addition loans from affiliates of Natura &Co Holding at December 31, 2021 include $164.4 of intercompany loans between Avon Luxembourg and Avon Products, Inc. affiliates that, following the sale of Avon Luxembourg to a subsidiary of Natura &Co Holding on July 1, 2021, were redesignated as loans from affiliates of Natura & Co Holding.

(5) During the second quarter of 2021, Avon Cosméticos LTDA., made an investment of R$.5 in Natura &Co Pay Holding Financeira S.A., representing a 10% holding in the company. This is presented in other assets in our Consolidated Balance Sheets.

(6) On July 1, 2021, the Company sold Avon Luxembourg, including our Mexican business, to a subsidiary of Natura &Co Holding. As a result, transactions and balances between Avon International and Avon Luxembourg are no longer eliminated on consolidation and instead are treated as transactions and balances with Related Parties.

(7) During the quarter ended March 31, 2022, the Company entered into foreign exchange forward contracts with Natura &Co Luxembourg, a subsidiary of Natura &Co Holding, to manage a portion of its foreign currency exchange rate exposures. At March 31, 2022, we had outstanding related party foreign exchange forward contracts with notional amounts totaling approximately $175 for various currencies, all of which were designated as cash flow hedges. In addition we had $1.1 of Accounts Receivable and $1.0 of Accounts Payable recorded in our Consolidated Balance Sheets associated with these transactions.