RELATED PARTY TRANSACTIONS

The following tables present the related party transactions with New Avon and affiliates of Cerberus. There are no other related party transactions. New Avon is majority owned and managed by Cerberus NA. See Note 3, Discontinued Operations and Note 4, Investment in New Avon for further details.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Statement of Operations Data
Revenue from sale of product to New Avon⁽¹⁾	$	8.3		$	6.9		$	25.9		$	20.4
Gross profit from sale of product to New Avon⁽¹⁾	$	.2		$	.5		$	1.5		$	1.4

Cost of sales for purchases from New Avon⁽²⁾	$	.9		$	1.2		$	3.0		$	4.1

Selling, general and administrative expenses:
Transition services, intellectual property, research and development and subleases⁽³⁾	$	(7.4	)	$	(10.2	)	$	(22.5	)	$	(25.1	)
Project management team⁽⁴⁾	$	.6		.8			$	2.2		1.8
Net reduction of selling, general and administrative expenses	$	(6.8	)	$	(9.4	)	$	(20.3	)	$	(23.3	)



	September 30, 2017		December 31, 2016
Balance Sheet Data
Inventories⁽⁵⁾	$	.4	$	1.0
Receivables due from New Avon⁽⁶⁾	$	9.1	$	11.6
Payables due to New Avon⁽⁷⁾	$	.3	$	.7
Payables due to an affiliate of Cerberus⁽⁸⁾	$	.5	$	.6

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement. The Company recorded revenue of $8.3 and $6.9, within other revenue, and gross profit of $.2 and $.5 associated with this agreement during the three months ended September 30, 2017 and 2016, respectively. The Company recorded revenue of $25.9 and $20.4, within other revenue, and gross profit of $1.5 and $1.4 associated with this agreement during the nine months ended September 30, 2017 and 2016, respectively.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement noted above. The Company purchased $.8 and $1.0 from New Avon associated with this agreement during the three months ended September 30, 2017 and 2016, respectively, and recorded $.9 and $1.2 associated with these purchases within cost of sales during the three months ended September 30, 2017 and 2016, respectively. The Company purchased $2.7 and $4.6 from New Avon associated with this agreement during the nine months ended September 30, 2017 and 2016, respectively and recorded $3.0 and $4.1 associated with these purchases within cost of sales during the nine months ended September 30, 2017 and 2016, respectively.

(3) The Company also entered into a transition services agreement to provide certain services to New Avon, as well as an intellectual property ("IP") license agreement, an agreement for research and development and subleases for office space. In addition, New Avon is performing certain services for the Company under a similar transition services agreement. The Company recorded a net $7.4 and $10.2 reduction of selling, general and administrative expenses associated with these agreements during the three months ended September 30, 2017 and 2016, respectively, and a net $22.5 and $25.1 reduction of selling, general and administrative expenses associated with these agreements during the nine months ended September 30, 2017 and 2016, respectively. The net reduction of selling, general and administrative expenses associated with these agreements generally represents a recovery of the related costs.

(4) The Company also entered into agreements with an affiliate of Cerberus, which provide for the secondment of Cerberus affiliate personnel to the Company's project management team responsible for assisting with the execution of the transformation plan (the "Transformation Plan") announced in January 2016. The Company recorded $.6 and $.8 in selling, general and administrative expenses associated with these agreements during the three months ended September 30, 2017 and 2016, respectively, and recorded $2.2 and $1.8 in selling, general and administrative expenses associated with these agreements during the nine months ended September 30, 2017 and 2016, respectively. See Note 12, Restructuring Initiatives for additional information related to the Transformation Plan.

(5) Inventories relate to purchases from New Avon, associated with the manufacturing and supply agreement, which have not yet been sold, and were classified within inventories in the Consolidated Balance Sheets.

(6) The receivables due from New Avon relate to the agreements for transition services, the IP license, research and development and subleases for office space, as well as the manufacturing and supply agreement, and were classified within prepaid expenses and other in the Consolidated Balance Sheets.

(7) The payables due to New Avon relate to the manufacturing and supply agreement, and were classified within other accrued liabilities in the Consolidated Balance Sheets.

(8) The payables due to an affiliate of Cerberus relate to the agreement for the project management team, and were classified within other accrued liabilities in the Consolidated Balance Sheets.

In addition, the Company also issued standby letters of credit to the lessors of certain equipment, a lease for which was transferred to New Avon in connection with the separation of the Company's North America business. As of September 30, 2017, the Company has a liability of $1.6 for the estimated value of such standby letters of credit. The recognition of the initial liability of $2.1 was included in the estimated loss on sale of the North America business in loss from discontinued operations, net of tax during the year ended December 31, 2016.

Series C Preferred Stock

On March 1, 2016, the Company issued and sold to Cerberus Investor 435,000 shares of newly issued series C preferred stock for an aggregate purchase price of $435.0. Cumulative preferred dividends accrue daily on the series C preferred stock at a rate of 1.25% per quarter. The series C preferred stock had accrued unpaid dividends of $35.6 as of September 30, 2017. There were no dividends declared in the nine months ended September 30, 2017 and 2016.