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BUSINESS COMBINATIONS (Tables)
 9 Months Ended
Sep. 30, 2016
Elizabeth Arden [Member]  
Business Acquisition [Line Items]  
Components of Purchase Price
The components of the purchase price for the Elizabeth Arden Acquisition are as follows:
 
As of
September 7, 2016
Purchase price of Elizabeth Arden common stock (1)
$
431.5

Repayment of Existing Elizabeth Arden senior notes (2)
350.0

Repayment of Elizabeth Arden revolving credit facility, including accrued interest (3)
142.5

Repayment of Elizabeth Arden Second lien credit facility, including accrued interest (3)
25.0

Repurchase of Elizabeth Arden preferred stock (4)
55.0

Payment of accrued interest and call premium on Elizabeth Arden Existing Senior Notes (5)
27.4

Payment of Elizabeth Arden dividends payable at Acquisition Date (6) 
2.9

Total Purchase Price
$
1,034.3


(1)
All of Elizabeth Arden’s issued and outstanding common stock was canceled and extinguished on the Acquisition Date and converted into the right to receive $14.00 in cash, without interest, less any required withholding taxes, and was paid by Products Corporation upon the completion of the Acquisition. The $431.5 million purchase price for Elizabeth Arden common stock includes the settlement of all outstanding Elizabeth Arden stock options and all outstanding Elizabeth Arden restricted share units at the Acquisition Date for a total cash payment of $11.1 million.
(2)
The purchase price includes the repurchase of the entire $350.0 million aggregate principal amount outstanding of Elizabeth Arden’s 7.375% senior notes due 2021 (the “Elizabeth Arden Existing Senior Notes”).
(3)
The purchase price includes the repayment of the entire $142.0 million aggregate principal amount of borrowings outstanding as of the Acquisition Date under Elizabeth Arden’s $300.0 million revolving credit facility and the entire $25.0 million aggregate principal amount of borrowings outstanding as of the Acquisition Date under Elizabeth Arden's second lien credit facility;
(4)
The purchase price includes $55.0 million that was paid to retire the $55.0 million liquidation preference of all of the issued and outstanding 50,000 shares of Elizabeth Arden preferred stock, par value $0.01 per share (the “Elizabeth Arden Preferred Stock”), which amount includes a $5.0 million change of control premium.
(5)
Interest on the Elizabeth Arden Existing Senior Notes accrued at a rate of 7.375% per annum and was payable semi-annually on March 15 and September 15 of every year. The approximately $12.3 million of accrued and unpaid interest was calculated based on 176 days of accrued interest as of the Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Existing Senior Notes, upon a change in control, such notes were subject to repurchase at a price equal to 103.69% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the date of such repurchase. The repurchase of the Elizabeth Arden Existing Senior Notes was consummated on October 7, 2016.
(6)
The purchase price includes the payment of approximately $2.9 million in accrued dividends payable at the Acquisition Date to the holders of Elizabeth Arden Preferred Stock.
Allocation of Consideration
The Company accounted for the Elizabeth Arden Acquisition as a business combination during the third quarter of 2016 and, accordingly, the total consideration of $1,034.3 million has been recorded based on the respective estimated fair values of the net
assets acquired on the Acquisition Date with resulting goodwill, as follows:
 
Amounts Recognized at September 7, 2016
Cash
$
41.1

Accounts Receivable
132.6

Inventories (a)
342.5

Prepaid expenses and other current assets
30.7

Property and equipment
91.2

Deferred taxes, net (b)
68.7

Intangible assets
332.8

Goodwill
202.0

Other assets
21.1

     Total assets acquired
1,262.7

Accounts payable
(116.0
)
Accrued expenses
(109.3
)
Other long-term liabilities
(3.1
)
     Total liabilities acquired
(228.4
)
     Total consideration transferred
$
1,034.3

(a) The Company recorded a $40.7 million step-up for the estimated fair value of Elizabeth Arden’s inventory, which has been determined based upon the estimated selling price of the inventories less the remaining manufacturing and selling costs and normal profit margin on those manufacturing and selling efforts. Following the Elizabeth Arden Acquisition, the step-up in fair value will increase cost of sales over approximately seven months, as the acquired inventory is sold. For the three and nine months ended September 30, 2016, the Company recognized a $4.2 million charge within cost of sales related to this step-up.

(b) Deferred tax assets acquired in the Elizabeth Arden Acquisition primarily relate to approximately $107.3 million of tax loss carryforwards which the Company preliminarily estimates it will be able to realize in future periods, of which $0.5 million are foreign and $106.8 million are domestic (federal).
Acquired Intangible Assets
The intangible assets acquired in the Elizabeth Arden Acquisition based on the estimate of the fair values of the identifiable intangible assets are as follows:
 
Amounts Recognized at September, 7 2016
 

Remaining Useful Life
(in years)
Trademarks, indefinite-lived
$
142.0

 
Indefinite
Trademarks, finite lived
15.0

 
15.0
Technology
2.5

 
10.0
Customer relationships
117.0

 
16.0
License agreements
24.0

 
19.0
Distribution rights
31.0

 
18.0
Favorable lease commitments
1.3

 
3.0
     Total acquired intangible assets
$
332.8

 
 
Pro Forma Results
The following table presents the Company's pro forma consolidated net sales and income from continuing operations, before income taxes for the three and nine months ended September 30, 2016 and 2015, respectively. The unaudited pro forma results include the historical consolidated statements of operations of the Company and Elizabeth Arden, giving effect to the Elizabeth Arden Acquisition and related financing transactions as if they had occurred at the beginning of the earliest period presented. As stated below, the Company also acquired certain international Cutex businesses ("Cutex International"); however the Company has not included the Cutex International results prior to its acquisition date in these pro forma results as the impact would not have been material to the Company's financial results.


 
Unaudited Pro Forma Results
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
Net sales
$
745.1

 
$
737.5

 
$
2,058.2

 
$
2,025.5

Income (loss) from continuing operations, before income taxes
(4.3
)
 
9.2

 
(22.4
)
 
(86.3
)
Pro Forma Adjustments to Interest Expense
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
($ in millions)
2016
 
2015
 
2016
 
2015
Interest Expense
 
 
 
 
 
 
 
Pro forma interest on New Senior Facilities and 6.25% Senior Notes
$
26.7

 
$
26.9

 
$
79.4

 
$
79.9

Reversal of Elizabeth Arden’s historical interest expense
(5.2
)
 
(6.5
)
 
(18.2
)
 
(19.2
)
Company historical interest expense, as reflected in the historical consolidated financial statements
(12.5
)
 
(12.8
)
 
(37.6
)
 
(38.2
)
Total Adjustment for Pro Forma Interest Expense
$
9.0

 
$
7.6

 
$
23.6

 
$
22.5

Debt issuance costs
 
 
 
 
 
 
 
Pro forma amortization of debt issuance costs
$
1.8

 
$
1.8

 
$
5.3

 
$
5.3

Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements
(1.1
)
 
(1.3
)
 
(3.3
)
 
(3.3
)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs
(0.4
)
 
(0.4
)
 
(1.3
)
 
(1.1
)
Total Adjustment for Pro Forma Amortization of Debt Issuance Costs
$
0.3

 
$
0.1

 
$
0.7

 
$
0.9
Cutex International [Member]  
Business Acquisition [Line Items]  
Allocation of Consideration
The Company accounted for the Cutex International Acquisition as a business combination in the second quarter of 2016. The table below summarizes the allocation of the total consideration of $29.1 million paid on the Cutex International Acquisition Date, as well as adjustments that have been made to the preliminary estimate of fair values during the third quarter of 2016:
 
Amounts Recognized at May 31, 2016 (Provisional) (a)
 
Adjustments
 
Amounts Recognized at May 31, 2016 (Adjusted)
Inventory
$
0.8

 
$
—

 
$
0.8

Purchased Intangible Assets (b)
19.7

 
(0.2
)
 
19.5

Goodwill
8.6

 
0.2

 
8.8

        Total consideration transferred
$
29.1

 
$
—

 
$
29.1


(a) As previously reported in Revlon's second quarter 2016 Form 10-Q.

(b) Purchased intangible assets include customer networks fair valued at $13.5 million, intellectual property fair valued at $0.9 million, which are amortized over useful lives of 15 and 10 years, respectively, and indefinite lived trade names fair valued at $5.1 million.