SUBSEQUENT EVENTS

Integration Program

In January 2014, the Company announced that it was implementing actions to integrate Colomer’s operations into the Company’s business, as well as additional restructuring actions identified to reduce costs across the Company’s businesses (all such actions, together the “Integration Program”).

The Company expects to recognize total restructuring charges, capital expenditures and related non-restructuring costs under the Integration Program of approximately $45 million to $50 million in the aggregate over the periods described below, and to achieve annualized cost reductions of approximately $30 million to $35 million. Approximately $10 million to $15 million of these cost reductions are expected to benefit 2014 results.

The Integration Program is designed to deliver cost reductions throughout the combined organization by generating synergies and operating efficiencies within the Company’s global supply chain and consolidating offices and back office support, and other actions designed to reduce selling, general and administrative expenses. Certain actions that are part of the Integration Program are subject to consultations with employees, works councils or unions and governmental authorities. The Company expects to substantially complete the Integration Program by the end of 2015.

The approximately $45 million to $50 million of total restructuring charges, capital expenditures and related non-restructuring costs under the Integration Program referred to above consist of the following:


1.	$12.5 million of non-restructuring integration costs recognized in 2013 within acquisition and integration costs in the Company's Consolidated Statements of Operations and Comprehensive Income related to combining Colomer’s operations into the Company’s business. The Company expects to incur in 2014 approximately $2 million of additional similar non-restructuring costs.


2.	Expected total pre-tax restructuring and related charges of approximately $22 million to $27 million, with approximately $22 million to $25 million expected to be recognized in 2014 and any remaining charges to be recognized in 2015.


a.	These total charges consist primarily of approximately $20 million to $23 million in employee-related costs, including severance and other contractual termination benefits.


b.	All of these charges are expected to be cash, with approximately $20 million to $25 million to be paid in 2014 and the remaining balance in 2015.


3.	Expected integration-related capital expenditures of approximately $8 million, of which approximately $7 million is expected to be paid in 2014 and the remaining balance in 2015.

All amounts reported above (1) supersede the Company’s previously-disclosed expected Colomer acquisition-related integration costs of approximately $40 million and annualized cost synergies of approximately $25 million and (2) are in addition to the December 2013 Program discussed in Note 3, "Restructuring Charges."

February 2014 Term Loan Amendment

In February 2014, Products Corporation entered into an amendment (the “February 2014 Term Loan Amendment”) to the Amended Term Loan Agreement which reduced the interest rates applicable to the $675.0 million 2011 Term Loan under the Amended Term Loan Agreement (the “Amended Tranche”). After giving effect to such amendment, Eurodollar Loans under the Amended Tranche bear interest at the Eurodollar Rate plus 2.5% per annum, with the Eurodollar Rate not to be less than 0.75% (compared to 3.0% and 1.0%, respectively, prior to the February 2014 Term Loan Amendment), while Alternate Base Rate Loans under the Amended Tranche bear interest at the Alternate Base Rate plus 1.5%, with the Alternate Base Rate not to be less than 1.75% (compared to 2.0% in each case prior to the February 2014 Term Loan Amendment) (and as each such term is defined in the Amended Term Loan Agreement). The $675.0 million Amended Tranche is subject to a 1% premium in connection with any repricing transaction occurring prior to the date that is 12 months after the closing of such amendment (or February 26, 2015).