GUARANTOR FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2012

GUARANTOR FINANCIAL INFORMATION

23.    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”). See Note 24, “Subsequent Events – 2013 Senior Notes Refinancing,” for a discussion of the 2013 refinancing of the 9 ³/₄% Senior Secured Notes.

The following Condensed Consolidating Financial Statements present the financial information as of December 31, 2012 and 2011, and for the years ended December 31, 2012, 2011 and 2010 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 December 31, 2012

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	59.1		$	—		$	57.2		$	—		$	116.3
Trade receivables, less allowances for doubtful accounts		96.2			23.1			96.7			—			216.0
Inventories		74.1			6.1			34.5			—			114.7
Deferred income taxes—current		38.2			—			10.3			—			48.5
Prepaid expenses and other		92.1			4.7			23.7			—			120.5
Intercompany receivables		947.9			488.2			408.0			(1,844.1	)		—
Investment in subsidiaries		(94.6	)		(190.0	)		—			284.6			—
Property, plant and equipment, net		86.9			0.5			12.1			—			99.5
Deferred income taxes—noncurrent		189.9			—			13.2			—			203.1
Goodwill		150.6			65.2			2.0			—			217.8
Intangible assets, net		0.9			61.3			6.6						68.8
Other assets		63.5			3.5			25.5			—			92.5
Total assets	$	1,704.8		$	462.6		$	689.8		$	(1,559.5	)	$	1,297.7
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings	$	—		$	5.0		$	—		$	—		$	5.0
Current portion of long-term debt		21.5			—			—			—			21.5
Current portion of long-term debt – affiliates		48.6			—			—			—			48.6
Accounts payable		62.2			5.1			34.5			—			101.8
Accrued expenses and other		155.7			13.8			95.2			—			264.7
Intercompany payables		614.6			650.7			578.8			(1,844.1	)		—
Long-term debt		1,145.8			—			—			—			1,145.8
Other long-term liabilities		233.1			6.2			47.7			—			287.0
Total liabilities		2,281.5			680.8			756.2			(1,844.1	)		1,874.4
Stockholder’s deficiency		(576.7	)		(218.2	)		(66.4	)		284.6			(576.7	)
Total liabilities and stockholder’s deficiency	$	1,704.8		$	462.6		$	689.8		$	(1,559.5	)	$	1,297.7

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		150.6			42.2			1.9			—			194.7
Intangible assets, net		0.9			21.7			6.6			—			29.2
Other assets		52.7			2.8			24.5			—			80.0
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 Statements of Income and Comprehensive Income

For the Year Ended December 31, 2012

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	929.9		$	113.6		$	576.1		$	(193.5	)	$	1,426.1
Cost of sales		418.6			53.7			227.7			(193.5	)		506.5
Gross profit		511.3			59.9			348.4			—			919.6
Selling, general and administrative expenses		397.2			47.3			246.4			—			690.9
Restructuring charges		1.2			0.7			18.8			—			20.7
Operating income		112.9			11.9			83.2			—			208.0
Other expenses, net:
Intercompany interest, net		0.8			(0.8	)		6.2			—			6.2
Interest expense		78.4			0.3			0.4			—			79.1
Amortization of debt issuance costs		3.4			—			—			—			3.4
Foreign currency (gains) losses, net		(0.4	)		0.5			2.6			—			2.7
Miscellaneous, net		(70.1	)		6.8			64.3			—			1.0
Other expenses, net		12.1			6.8			73.5			—			92.4
Income from continuing operations before income taxes		100.8			5.1			9.7			—			115.6
Provision for income taxes		25.0			8.9			10.9			—			44.8
Income (loss) from continuing operations, net of taxes		75.8			(3.8	)		(1.2	)		—			70.8
Income from discontinued operations, net of taxes		0.4			—			—			—			0.4
Equity in loss of subsidiaries		(5.0	)		(11.9	)		—			16.9			—
Net income (loss)	$	71.2		$	(15.7	)	$	(1.2	)	$	16.9		$	71.2
Other comprehensive (loss) income		(7.3	)		10.6			12.8			(23.4	)		(7.3	)
Total comprehensive income (loss)	$	63.9		$	(5.1	)	$	11.6		$	(6.5	)	$	63.9

Condensed Consolidating Statements of Income and Comprehensive Income

For the Year Ended December 31, 2011

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	883.7		$	95.2		$	574.9		$	(172.4	)	$	1,381.4
Cost of sales		399.8			45.0			220.2			(172.4	)		492.6
Gross profit		483.9			50.2			354.7			—			888.8
Selling, general and administrative expenses		391.9			40.6			245.6			—			678.1
Operating income		92.0			9.6			109.1			—			210.7
Other expenses, net:
Intercompany interest, net		0.1			(1.0	)		7.1			—			6.2
Interest expense		84.2			0.3			0.4			—			84.9
Amortization of debt issuance costs		3.7			—			—			—			3.7
Loss on early extinguishment of debt, net		11.2			—			—			—			11.2
Foreign currency (gains) losses, net		(1.5	)		0.5			5.4			—			4.4
Miscellaneous, net		(47.9	)		(1.9	)		51.3			—			1.5
Other expenses, net		49.8			(2.1	)		64.2			—			111.9
Income from continuing operations before income taxes		42.2			11.7			44.9			—			98.8
Provision for income taxes		26.8			3.2			5.4			—			35.4
Income from continuing operations, net of taxes		15.4			8.5			39.5			—			63.4
Income from discontinued operations, net of taxes		0.6			—			—			—			0.6
Equity in income of subsidiaries		48.0			10.8			—			(58.8	)		—
Net income	$	64.0		$	19.3		$	39.5		$	(58.8	)	$	64.0
Other comprehensive loss		(50.6	)		(6.3	)		(14.3	)		20.6			(50.6	)
Total comprehensive income	$	13.4		$	13.0		$	25.2		$	(38.2	)	$	13.4

Condensed Consolidating Statements of Income and Comprehensive Income

For the Year Ended December 31, 2010

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	854.2		$	69.4		$	546.1		$	(148.3	)	$	1,321.4
Cost of sales		367.8			32.0			203.8			(148.3	)		455.3
Gross profit		486.4			37.4			342.3			—			866.1
Selling, general and administrative expenses		399.6			32.5			227.2			—			659.3
Restructuring charges		(0.2	)		—			(0.1	)		—			(0.3	)
Operating income		87.0			4.9			115.2			—			207.1
Other expenses, net:
Intercompany interest, net		(0.1	)		(1.1	)		7.4			—			6.2
Interest expense		89.9			0.3			0.3			—			90.5
Amortization of debt issuance costs		4.5			—			—			—			4.5
Loss on early extinguishment of debt, net		9.7			—			—			—			9.7
Foreign currency (gains) losses, net		(4.6	)		(0.3	)		11.2			—			6.3
Miscellaneous, net		(46.9	)		2.9			45.2			—			1.2
Other expenses, net		52.5			1.8			64.1			—			118.4
Income from continuing operations before income taxes		34.5			3.1			51.1			—			88.7
(Benefit from) provision for income taxes		(255.8	)		4.1			16.4			—			(235.3	)
Income (loss) from continuing operations, net of taxes		290.3			(1.0	)		34.7			—			324.0
Income from discontinued operations, net of taxes		0.3			—			—			—			0.3
Equity in income of subsidiaries		33.7			18.5			—			(52.2	)		—
Net income	$	324.3		$	17.5		$	34.7		$	(52.2	)	$	324.3
Other comprehensive income (loss)		7.6			(7.9	)		(7.7	)		15.6			7.6
Total comprehensive income	$	331.9		$	9.6		$	27.0		$	(36.6	)	$	331.9

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2012

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities	$	21.3		$	64.9		$	17.9		$	—	$	104.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(18.1	)		(0.4	)		(2.4	)		—		(20.9	)
Business acquisition		—			(66.2	)		—			—		(66.2	)
Proceeds from sales of certain assets		0.1			0.4			0.3			—		0.8
Net cash used in investing activities		(18.0	)		(66.2	)		(2.1	)		—		(86.3	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in short-term borrowings and overdraft		7.4			1.2			(2.3	)		—		6.3
Repayments under the 2011 Term Loan Facility		(8.0	)		—			—			—		(8.0	)
Payment of financing costs		(0.4	)		—			—			—		(0.4	)
Other financing activities		(0.9	)		—			(0.4	)		—		(1.3	)
Net cash (used in) provided by financing activities		(1.9	)		1.2			(2.7	)		—		(3.4	)
Effect of exchange rate changes on cash and cash equivalents		—			—			0.2			—		0.2
Net increase (decrease) in cash and cash equivalents		1.4			(0.1	)		13.3			—		14.6
Cash and cash equivalents at beginning of period		57.7			0.1			43.9			—		101.7
Cash and cash equivalents at end of period	$	59.1		$	—		$	57.2		$	—	$	116.3

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2011

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	58.2		$	37.4		$	(7.6	)	$	—	$	88.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(11.7	)		(0.4	)		(1.8	)		—		(13.9	)
Business acquisition		—			(39.0	)		—			—		(39.0	)
Proceeds from sales of certain assets		0.1			—			0.2			—		0.3
Net cash used in investing activities		(11.6	)		(39.4	)		(1.6	)		—		(52.6	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term borrowings and overdraft		(2.5	)		2.0			0.7			—		0.2
Repayments under the 2010 Term Loan Facility		(794.0	)		—			—			—		(794.0	)
Borrowings under the 2011 Term Loan Facility		796.0			—			—			—		796.0
Repayments under the 2011 Term Loan Facility		(4.0	)		—			—			—		(4.0	)
Payment of financing costs		(4.3	)		—			—			—		(4.3	)
Other financing activities		(0.6	)		—			(0.8	)		—		(1.4	)
Net cash (used in) provided by financing activities		(9.4	)		2.0			(0.1	)		—		(7.5	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(2.9	)		—		(2.9	)
Net increase (decrease) in cash and cash equivalents		37.2			—			(12.2	)		—		25.0
Cash and cash equivalents at beginning of period		20.5			0.1			56.1			—		76.7
Cash and cash equivalents at end of period	$	57.7		$	0.1		$	43.9		$	—	$	101.7

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2010

	Products Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	70.8		$	(0.9	)	$	26.8		$	—	$	96.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(13.7	)		(0.1	)		(1.4	)		—		(15.2	)
Proceeds from sales of certain assets		—			—			0.3			—		0.3
Net cash used in investing activities		(13.7	)		(0.1	)		(1.1	)		—		(14.9	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in short-term borrowings and overdraft		(12.8	)		0.7			1.5			—		(10.6	)
Repayments under the 2006 Term Loan Facility		(815.0	)		—			—			—		(815.0	)
Borrowings under the 2010 Term Loan Facility		786.0			—			—			—		786.0
Repayments under the 2010 Term Loan Facility		(6.0	)		—			—			—		(6.0	)
Payment of financing costs		(17.0	)		—			—			—		(17.0	)
Other financing activities		0.8			—			(0.5	)		—		0.3
Net cash (used in) provided by financing activities		(64.0	)		0.7			1.0			—		(62.3	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2.7			—		2.7
Net (decrease) increase in cash and cash equivalents		(6.9	)		(0.3	)		29.4			—		22.2
Cash and cash equivalents at beginning of period		27.4			0.4			26.7			—		54.5
Cash and cash equivalents at end of period	$	20.5		$	0.1		$	56.1		$	0	$	76.7