Guarantor Financial Information

6 Months Ended

Jun. 30, 2012

Guarantor Financial Information [Abstract]

GUARANTOR FINANCIAL INFORMATION

14. GUARANTOR FINANCIAL INFORMATION

Products Corporation’s 9  ³/₄ % Senior Secured Notes are fully and unconditionally guaranteed on a senior secured basis by Revlon, Inc. and Products Corporation’s domestic subsidiaries (other than certain immaterial subsidiaries) that guarantee Products Corporation’s obligations under its 2011 Credit Agreements (the “Guarantor Subsidiaries”).

The following Condensed Consolidating Financial Statements present the financial information as of June 30, 2012 and December 31, 2011, and for the three and six months ended June 30, 2012 and 2011 for (i) Products Corporation on a stand-alone basis; (ii) the Guarantor Subsidiaries on a stand-alone basis; (iii) the subsidiaries of Products Corporation that do not guarantee Products Corporation’s 9  ³/₄ % Senior Secured Notes (the “Non-Guarantor Subsidiaries”) on a stand-alone basis; and (iv) Products Corporation, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis. The Condensed Consolidating Financial Statements are presented on the equity method, under which the investments in subsidiaries are recorded at cost and adjusted for the applicable share of the subsidiary’s cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheets

As of June 30, 2012

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$		45.7	$		-	$		34.1	$		-	$		79.8
Trade receivables, less allowances for doubtful accounts			87.8			20.1			96.6			-			204.5
Inventories			77.4			12.3			43.6			-			133.3
Deferred income taxes – current			39.7			-			10.2			-			49.9
Prepaid expenses and other			94.4			4.8			25.8			-			125.0
Intercompany receivables			933.6			471.8			379.3			(1,784.7)			-
Investment in subsidiaries			(156.6)			(197.3)			-			353.9			-
Property, plant and equipment, net			85.3			0.8			12.4			-			98.5
Deferred income taxes – noncurrent			194.4			-			13.2			-			207.6
Goodwill, net			150.6			42.2			1.8			-			194.6
Other assets			68.5			23.9			32.5			-			124.9
Total assets	$		1,620.8	$		378.6	$		649.5	$		(1,430.8)	$		1,218.1
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings	$		-	$		5.8	$		2.7	$		-	$		8.5
Current portion of long-term debt			11.4			-			-			-			11.4
Accounts payable			59.2			5.1			30.6			-			94.9
Accrued expenses and other			133.8			13.6			74.8			-			222.2
Intercompany payables			586.0			619.0			579.7			(1,784.7)			-
Long-term debt			1,158.9			-			-			-			1,158.9
Long-term debt – affiliates			48.6			-			-			-			48.6
Other long-term liabilities			225.2			3.8			46.9			-			275.9
Total liabilities			2,223.1			647.3			734.7			(1,784.7)			1,820.4
Stockholder’s deficiency			(602.3)			(268.7)			(85.2)			353.9			(602.3)
Total liabilities and stockholder’s deficiency	$		1,620.8	$		378.6	$		649.5	$		(1,430.8)	$		1,218.1

Condensed Consolidating Balance Sheets

As of December 31, 2011

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$		57.7	$		0.1	$		43.9	$		-	$		101.7
Trade receivables, less allowances for doubtful accounts			107.1			18.2			86.7			-			212.0
Inventories			68.3			8.4			34.3			-			111.0
Deferred income taxes – current			40.0			-			9.6			-			49.6
Prepaid expenses and other			78.3			4.2			25.1			-			107.6
Intercompany receivables			907.6			445.5			362.4			(1,715.5)			-
Investment in subsidiaries			(164.2)			(193.0)			-			357.2			-
Property, plant and equipment, net			85.2			0.9			12.8			-			98.9
Deferred income taxes – noncurrent			206.9			-			14.5			-			221.4
Goodwill, net			150.6			42.2			1.9			-			194.7
Other assets			53.6			24.5			31.1			-			109.2
Total assets	$		1,591.1	$		351.0	$		622.3	$		(1,358.3)	$		1,206.1
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings	$		-	$		3.6	$		2.3	$		-	$		5.9
Current portion of long-term debt			8.0			-			-			-			8.0
Accounts payable			56.0			3.9			29.1			-			89.0
Accrued expenses and other			150.8			10.8			68.4			-			230.0
Intercompany payables			559.0			609.9			546.6			(1,715.5)			-
Long-term debt			1,107.0			-			-			-			1,107.0
Long-term debt – affiliates			107.0			-			-			-			107.0
Other long-term liabilities			244.9			5.3			50.6			-			300.8
Total liabilities			2,232.7			633.5			697.0			(1,715.5)			1,847.7
Stockholder’s deficiency			(641.6)			(282.5)			(74.7)			357.2			(641.6)
Total liabilities and stockholder’s deficiency	$		1,591.1	$		351.0	$		622.3	$		(1,358.3)	$		1,206.1

Condensed Consolidating Statement of Income and Comprehensive Income

For the Three Months Ended June 30, 2012

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$		241.1	$		26.0	$		141.9	$		(51.9)	$		357.1
Cost of sales			108.6			12.2			55.5			(51.9)			124.4
Gross profit			132.5			13.8			86.4			-			232.7
Selling, general and administrative expenses			103.4			12.1			64.9			-			180.4
Operating income			29.1			1.7			21.5			-			52.3
Other expenses (income):
Intercompany interest, net			0.2			(0.2)			1.5			-			1.5
Interest expense			19.5			-			0.1			-			19.6
Amortization of debt issuance costs			0.9			-			-			-			0.9
Foreign currency (gains) losses, net			(0.4)			(0.1)			0.9			-			0.4
Miscellaneous, net			(20.8)			(5.2)			26.1			-			0.1
Other expenses (income), net			(0.6)			(5.5)			28.6			-			22.5
Income (loss) from continuing operations before income taxes			29.7			7.2			(7.1)			-			29.8
Provision for (benefit from) income taxes			7.7			2.3			(0.3)			-			9.7
Income (loss) from continuing operations			22.0			4.9			(6.8)			-			20.1
Income from discontinued operations, net of taxes			0.4			-			-			-			0.4
Equity in (loss) income of subsidiaries			(1.9)			(1.0)			-			2.9			-
Net income (loss)	$		20.5	$		3.9	$		(6.8)	$		2.9	$		20.5
Other comprehensive income (loss)			2.9			(4.6)			(6.4)			11.0			2.9
Total comprehensive income (loss)	$		23.4	$		(0.7)	$		(13.2)	$		13.9	$		23.4

Condensed Consolidating Statement of Income and Comprehensive Income

For the Three Months Ended June 30, 2011

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$		227.8	$		25.8	$		144.2	$		(46.6)	$		351.2
Cost of sales			102.3			11.8			54.4			(46.6)			121.9
Gross profit			125.5			14.0			89.8			-			229.3
Selling, general and administrative expenses			100.1			10.6			68.6			-			179.3
Operating income			25.4			3.4			21.2			-			50.0
Other expenses (income):
Intercompany interest, net			(0.1)			(0.2)			1.9			-			1.6
Interest expense			21.6			-			0.1			-			21.7
Amortization of debt issuance costs			1.0			-			-			-			1.0
Loss on early extinguishment of debt, net			11.3			-			-			-			11.3
Foreign currency (gains) losses, net			(1.5)			0.1			4.4			-			3.0
Miscellaneous, net			(25.3)			11.8			13.8			-			0.3
Other expenses, net			7.0			11.7			20.2			-			38.9
Income (loss) from continuing operations before income taxes			18.4			(8.3)			1.0			-			11.1
Provision for income taxes			1.3			1.0			1.6			-			3.9
Income (loss) from continuing operations			17.1			(9.3)			(0.6)			-			7.2
Income from discontinued operations, net of taxes			0.6			-			-			-			0.6
Equity in (loss) income of subsidiaries			(9.9)			(3.2)			-			13.1			-
Net income (loss)	$		7.8	$		(12.5)	$		(0.6)	$		13.1	$		7.8
Other comprehensive income (loss)			2.0			(2.4)			(2.5)			4.9			2.0
Total comprehensive income (loss)	$		9.8	$		(14.9)	$		(3.1)	$		18.0	$		9.8

Condensed Consolidating Statement of Income and Comprehensive Income

For the Six Months Ended June 30, 2012

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$		459.6	$		49.0	$		276.2	$		(97.0)	$		687.8
Cost of sales			207.6			22.5			107.0			(97.0)			240.1
Gross profit			252.0			26.5			169.2			-			447.7
Selling, general and administrative expenses			203.1			22.0			124.6			-			349.7
Operating income			48.9			4.5			44.6			-			98.0
Other expenses (income):
Intercompany interest, net			0.5			(0.4)			3.0			-			3.1
Interest expense			39.3			0.1			0.2			-			39.6
Amortization of debt issuance costs			1.7			-			-			-			1.7
Foreign currency losses, net			0.1			0.2			1.8			-			2.1
Miscellaneous, net			(33.1)			(6.2)			39.6			-			0.3
Other expenses (income), net			8.5			(6.3)			44.6			-			46.8
Income from continuing operations before income taxes			40.4			10.8			-			-			51.2
Provision for income taxes			15.5			2.8			2.8			-			21.1
Income (loss) from continuing operations			24.9			8.0			(2.8)			-			30.1
Income from discontinued operations, net of taxes			0.4			-			-			-			0.4
Equity in income (loss) of subsidiaries			5.2			(0.5)			-			(4.7)			-
Net income (loss)	$		30.5	$		7.5	$		(2.8)	$		(4.7)	$		30.5
Other comprehensive income (loss)			7.9			5.5			5.3			(10.8)			7.9
Total comprehensive income (loss)	$		38.4	$		13.0	$		2.5	$		(15.5)	$		38.4

Condensed Consolidating Statement of Income and Comprehensive Income

For the Six Months Ended June 30, 2011

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$		447.0	$		43.7	$		280.7	$		(87.0)	$		684.4
Cost of sales			196.7			19.9			105.6			(87.0)			235.2
Gross profit			250.3			23.8			175.1			-			449.2
Selling, general and administrative expenses			203.9			19.6			128.9			-			352.4
Operating income			46.4			4.2			46.2			-			96.8
Other expenses (income):
Intercompany interest, net			(0.1)			(0.5)			3.7			-			3.1
Interest expense			44.0			0.1			0.2			-			44.3
Amortization of debt issuance costs			2.1			-			-			-			2.1
Loss on early extinguishment of debt, net			11.3			-			-			-			11.3
Foreign currency (gains) losses, net			(1.2)			0.4			4.1			-			3.3
Miscellaneous, net			(34.6)			7.2			28.4			-			1.0
Other expenses, net			21.5			7.2			36.4			-			65.1
Income (loss) from continuing operations before income taxes			24.9			(3.0)			9.8			-			31.7
Provision for income taxes			4.1			2.4			6.0			-			12.5
Income (loss) from continuing operations			20.8			(5.4)			3.8			-			19.2
Income from discontinued operations, net of taxes			0.6			-			-			-			0.6
Equity in (loss) income of subsidiaries			(1.6)			(1.1)			-			2.7			-
Net income (loss)	$		19.8	$		(6.5)	$		3.8	$		2.7	$		19.8
Other comprehensive income (loss)			2.0			0.2			(0.6)			0.4			2.0
Total comprehensive income (loss)	$		21.8	$		(6.3)	$		3.2	$		3.1	$		21.8

Condensed Consolidating Statement of Cash Flow

For the Six Months Ended June 30, 2012

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities	$		(10.0)	$		(2.3)	$		(9.4)	$		-	$		(21.7)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(7.8)			(0.2)			(0.9)			-			(8.9)
Proceeds from the sale of certain assets			-			-			0.1			-			0.1
Net cash used in investing activities			(7.8)			(0.2)			(0.8)			-			(8.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term borrowings and overdraft			9.9			2.4			0.5			-			12.8
Repayments under the 2011 Term Loan Facility			(4.0)			-			-			-			(4.0)
Payment of financing costs			(0.1)			-			-			-			(0.1)
Other financing activities			-			-			(0.2)			-			(0.2)
Net cash provided by financing activities			5.8			2.4			0.3			-			8.5
Effect of exchange rate changes on cash and cash equivalents			-			-			0.1			-			0.1
Net decrease in cash and cash equivalents			(12.0)			(0.1)			(9.8)			-			(21.9)
Cash and cash equivalents at beginning of period			57.7			0.1			43.9			-			101.7
Cash and cash equivalents at end of period	$		45.7	$		-	$		34.1	$		-	$		79.8

Condensed Consolidating Statement of Cash Flow

For the Six Months Ended June 30, 2011

		Products Corporation			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities	$		(21.2)	$		35.8	$		(11.3)	$		-	$		3.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(4.8)			(0.1)			(1.0)			-			(5.9)
Acquisition			-			(39.0)			-						(39.0)
Proceeds from sales of certain assets			0.1			-			-			-			0.1
Net cash used in investing activities			(4.7)			(39.1)			(1.0)			-			(44.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in short-term borrowings and overdraft			(1.7)			4.1			1.2			-			3.6
Borrowings under the 2011 Revolving Credit Facility			10.0			-			-						10.0
Repayments under the 2010 Term Loan Facility			(794.0)			-			-			-			(794.0)
Borrowings under the 2011 Term Loan Facility			796.0			-			-			-			796.0
Payment of financing costs			(3.9)			-			-			-			(3.9)
Other financing activities			(0.3)			-			(0.4)			-			(0.7)
Net cash provided by financing activities			6.1			4.1			0.8			-			11.0
Effect of exchange rate changes on cash and cash equivalents			-			-			(1.3)			-			(1.3)
Net (decrease) increase in cash and cash equivalents			(19.8)			0.8			(12.8)			-			(31.8)
Cash and cash equivalents at beginning of period			20.5			0.1			56.1			-			76.7
Cash and cash equivalents at end of period	$		0.7	$		0.9	$		43.3	$		-	$		44.9

15.SUBSEQUENT EVENT

On July 2, 2012, the Company acquired certain assets of Bari Cosmetics, Ltd., including trademarks and other intellectual property related to Pure Ice nail enamel and Bon Bons cosmetics brands (the “Pure Ice Acquisition”) for a cash purchase price of $66.2 million. The cash payment of $66.2 million was comprised of $45.0 million cash on hand and $21.2 million drawn under Products Corporation’s 2011 Revolving Credit Facility. The results of operations related to the Pure Ice Acquisition will be included in the Company’s consolidated financial statements commencing on the date of the acquisition. Pro forma results of operations have not been presented, as the impact on the Company’s consolidated financial results is not material. The Company will account for the Pure Ice Acquisition as a business combination during the third quarter of 2012.