BUSINESS COMBINATIONS (Tables)

12 Months Ended

Dec. 31, 2017

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 paid:



	Amounts Recognized as of May 31, 2016
Inventory	$	0.8
Purchased Intangible Assets ^(a)	17.2
Goodwill	11.1
Total consideration transferred	$	29.1

Elizabeth Arden

Business Acquisition [Line Items]

Components of Purchase Price

The components of the purchase price for the Elizabeth Arden Acquisition were as follows:



	As of September 7, 2016
Purchase price of Elizabeth Arden common stock ⁽¹⁾	$	431.5
Repayment of 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 Senior Notes ⁽⁵⁾	27.4
Payment of Elizabeth Arden dividends payable at Elizabeth Arden Acquisition Date ⁽⁶⁾	2.9
Total Purchase Price	$	1,034.3

(1)

All of Elizabeth Arden’s then issued and outstanding common stock was canceled and extinguished on the Elizabeth Arden Acquisition Date and converted into the right to receive $14 in cash per share, without interest, less any required withholding taxes, that was paid by Products Corporation upon the completion of the Elizabeth Arden Acquisition. The $431.5 million purchase price for Elizabeth Arden common stock included the settlement of all then outstanding Elizabeth Arden stock options and all then outstanding Elizabeth Arden restricted share units at the Elizabeth Arden Acquisition Date for a total cash payment of $11.1 million.


(2)	The purchase price included the repurchase of the entire $350 million aggregate principal amount then outstanding of Elizabeth Arden’s 7.375% senior notes due 2021 (the "Elizabeth Arden Old Senior Notes").

(3)

The purchase price included the repayment of the entire $142 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden’s $300 million revolving credit facility and the entire $25 million aggregate principal amount of borrowings then outstanding as of the Elizabeth Arden Acquisition Date under Elizabeth Arden's second lien credit facility, each of which facilities were terminated as of the Elizabeth Arden Acquisition Date.


(4)	The purchase price included $55 million that was paid to retire the entire $55 million liquidation preference of all of the then issued and outstanding 50,000 shares of Elizabeth Arden preferred stock, par value $0.01 per share (the "Elizabeth Arden Preferred Stock"), which amount included a $5 million change of control premium.

(5)

Interest on the Elizabeth Arden Old 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 Elizabeth Arden Acquisition Date. Pursuant to the terms of the indenture governing the Elizabeth Arden Old Senior Notes, upon a change in control, such notes were repurchased 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 Old Senior Notes was consummated on October 7, 2016.


(6)	The purchase price included the payment of approximately $2.9 million in accrued dividends payable at the Elizabeth Arden Acquisition Date to the holders of the then outstanding Elizabeth Arden Preferred Stock.

Allocation of Consideration

The table below summarizes the allocation of the total consideration of $1,034.3 million paid on the Elizabeth Arden Acquisition Date, both as previously reported and as adjusted by the measurement period adjustments.



	Estimated Fair Value as Previously Reported^(a)			Measurement Period Adjustments			Fair Value as Adjusted
Cash	$	41.1		$	—		$	41.1
Accounts Receivable	132.6			—			132.6
Inventories	323.3			—			323.3
Prepaid expenses and other current assets	30.7			—			30.7
Property and equipment	91.2			—			91.2
Deferred taxes, net ^(b)	68.7			10.0			78.7
Intangible assets ^(c)	336.8			(15.4		)	321.4
Goodwill	221.7			12.3			234.0
Other assets	16.6			—			16.6
Total assets acquired	$	1,262.7		$	6.9		$	1,269.6
Accounts payable	(116.0		)	—			(116.0		)
Accrued expenses ^(d)	(109.3		)	1.7			(107.6		)
Other long-term liabilities^(e)	(3.1		)	(8.6		)	(11.7		)
Total liabilities assumed	$	(228.4	)	$	(6.9	)	$	(235.3	)
Total consideration transferred	$	1,034.3		$	—		$	1,034.3

^(a) As previously reported in Revlon's 2016 Form 10-K.

^(b) The Measurement Period Adjustments to deferred taxes, net, related to net increases in deferred tax assets as a result of the changes to the estimated fair values and remaining useful lives of acquired trade name intangible assets and the recognition of non-qualified benefit plan obligations of Elizabeth Arden, as discussed further below.

^(c)The Measurement Period Adjustments to intangible assets related to a revised approach in the determination of the fair values for the acquired Elizabeth Arden trade names. During the first quarter of 2017, the Company obtained further clarity into the product portfolio acquired through the Elizabeth Arden Acquisition, and, recognizing that each brand has its own distinct profile with its own defining attributes, as well as differing expected useful lives, determined that a revised valuation approach was needed. The Company valued the acquired trade names within the Elizabeth Arden product portfolio, including Visible Difference, Elizabeth Arden Ceramide, Prevage, Eight Hour, Elizabeth Arden Red Door, Elizabeth Arden Green Tea and Elizabeth Arden 5th Avenue. The Company determined the fair values of each acquired trade name using a risk-adjusted discounted cash flow approach, specifically the relief-from-royalty method, which requires identifying the hypothetical cash flows generated by an assumed royalty rate that a third party would pay to license the trade names, and discounting them back to the Elizabeth Arden Acquisition Date. The royalty rate used in the valuation of each acquired trade name was based on a consideration of market rates for similar categories of assets.

The difference between the preliminary valuation of the Elizabeth Arden trade name and the sum of the fair values of the individual trade names within the Elizabeth Arden product portfolio resulted in an increase to goodwill of $15.4 million, which was recorded in the fiscal quarter ended March 31, 2017. As a result of this revised approach, the Company recognized amortization expense of approximately $1.8 million in its consolidated statement of operations and comprehensive (loss) income in 2017 related to the amortization of the acquired trade names from the Elizabeth Arden Acquisition Date through December 31, 2016.

^(d) The Measurement Period Adjustments to accrued expenses related to changes in estimated payments for acquisition-related costs.

^(e) The Measurement Period Adjustments to other long-term liabilities related to the recognition of the projected benefit obligation of a certain foreign non-qualified benefit plan of Elizabeth Arden.

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:



	As Previously Reported^(a)							As Adjusted
	Estimated Fair Values		Remaining Useful Life at the Elizabeth Arden Acquisition Date (in years)	Measurement Period Adjustments^(b)				Fair Values		Remaining Useful Life at the Elizabeth Arden Acquisition Date (in years)
Trademarks, indefinite-lived	$	142.0	Indefinite	$	(103.0	)		$	39.0	Indefinite
Trademarks, finite-lived	15.0		15	87.6				102.6		5 - 20
Technology	2.5		10	—				2.5		10
Customer relationships	123.0		16	—				123.0		16
License agreements	22.0		19	—				22.0		19
Distribution rights	31.0		18	—				31.0		18
Favorable lease commitments	1.3		3	—				1.3		3
Total acquired intangible assets	$	336.8		$	(15.4	)	^(b)	$	321.4

^(a) As previously reported in Revlon's 2016 Form 10-K.

^(b) The Measurement Period Adjustments to the Elizabeth Arden acquired trade names resulted in a $15.4 million increase to goodwill, which was recorded in the fiscal quarter ended March 31, 2017.

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 years ended December 31, 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.



	Unaudited Pro Forma Results
		Year Ended December 31,
		2016			2015
Net sales		$	2,858.9		$	2,863.5
Loss from continuing operations, before income taxes		(57.1		)	(74.6		)

Pro Forma Adjustments to Interest Expense



	Year Ended December 31,
($ in millions)	2016			2015
Interest Expense
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes	$	121.9		$	106.4
Reversal of Elizabeth Arden’s historical interest expense	(19.5		)	(26.2		)
Company historical interest expense, as reflected in the historical consolidated financial statements	(75.9		)	(50.9		)
Total adjustment for pro forma interest expense	$	26.5		$	29.3
Debt issuance costs
Pro forma amortization of debt issuance costs	$	8.1		$	8.1
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements	(3.3		)	(4.4		)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs	(1.3		)	(1.5		)
Total adjustment for pro forma amortization of debt issuance costs	$	3.5		$	2.2