Related Party Transactions

12 Months Ended

Dec. 31, 2020

On January 3, 2020, the Company became a wholly owned subsidiary of Natura &Co Holding. From this point Natura &Co Holding, its subsidiaries and affiliates became related parties of the Company.

The following tables present the related party transactions with Natura &Co and its affiliates, New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. On August 14, 2019, we sold our investment in New Avon to LG Household & Health Care Ltd. Upon completion of the sale, New Avon was no longer a related party. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party.


	Year Ended December 31,		Year Ended December 31,
	2020		2019
Statement of Operations Data
Revenue from sale of product to New Avon(1)	$	—	$	12.0
Gross profit from sale of product to New Avon(1)	$	—	$	.2

Cost of sales for purchases from New Avon(2)	$	—	$	2.1

Revenue from affiliates of Natura &Co(6)	$	6.7	$	—
Gross profit from affiliates of Natura &Co(6)	$	.8	$	—

Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, research and development and subleases(3)	$	—	$	(.5)
Project management team(3)	$	—	$	4.0
Interest income from Instituto Avon(4)	$	.1	$	.2
Interest expense on Loan from affiliates of Natura &Co(5)	$	7.5	$	—

	December 31, 2020		December 31, 2019
Balance Sheet Data
Receivables due from Instituto Avon(4)	$	.8	$	2.1
Receivables due from affiliates of Natura &Co(6)	$	6.1	$	—
Payables due to an affiliate of Cerberus(3)	$	—	$	2.1

Loan from affiliates of Natura &Co(5)	$	1,008.6	$	—

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd.; from this point New Avon is no longer a related party. Transactions entered into with New Avon for the period it was a related party in 2019 and the twelve month period ended December 31, 2019 have been disclosed above.

(2) New Avon supplies products to the Company as part of the same manufacturing and supply agreement discussed in footnote (1) above. The Company purchased $1.6 from New Avon associated with this agreement during the years ended December 31, 2019, and recorded $2.1 associated with these purchases within cost of sales during the year ended December 31, 2019. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd; from this point New Avon is no longer a related party. Transactions entered into with New Avon for the period it was a related party have been disclosed above.

(3) The Company also entered into agreements with an affiliate of Cerberus, which provided for the secondment of Cerberus affiliate personnel to the Company's project management team responsible for assisting with the execution of the implementation of the Company’s strategic initiatives. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party. The Company recorded $4.0 in SG&A expenses associated with these agreements during the year ended December 31, 2019. Payables due to an affiliate of Cerberus related to the agreement for the project management team, classified within other accrued liabilities in our Consolidated Balance Sheets.

(4) During the second quarter of 2018, the Company entered into an agreement to loan the Instituto Avon, an independent non-government charitable organization in Brazil, R$12 million (Brazilian real) for an unsecured 5-year term at a fixed interest rate

of 7% per annum, to be paid back in five equal annual installments. The Instituto Avon was created by an Avon subsidiary in Brazil, with the board and executive team comprised of Avon Brazil management. The purpose of the loan was to provide the Instituto Avon with the means to donate funds to Fundação Pio XII (a leading cancer prevention and treatment organization in Brazil and owner of the Hospital do Câncer de Barretos), in order to invest in equipment with the objective of expanding breast cancer prevention and treatment.

(5) Loans from affiliates of Natura &Co Holding at December 31, 2020 of $1,008.6 include $965 outstanding under a Promissory Note between Avon International Operations Inc. and a subsidiary of Natura &Co Holding S.A.. Loans from affiliates of Natura &Co Holding at December 31, 2020 also include $41.6 outstanding under the Revolving Credit Facility between Avon Luxembourg Holdings S.à r.l and Natura &Co International S.à r.l.. See Note 7, Debt and Other Financing, for further information relating to these loans.

(6) During the second quarter of 2020, the Company entered into manufacturing agreements with affiliates of Natura &Co Holding. The Company recorded revenue from related party of $6.7 associated with these agreements during the year ended December 31, 2020. The Company recorded gross profit from related party of $.8 associated with these agreements during the year ended December 31, 2020. The receivables from Natura &Co Holding relate to these manufacturing agreements.