RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2022

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. On July 1, 2021, the Company sold Avon Luxembourg, including our Mexican business, to a subsidiary of Natura &Co Holding. As a result, beginning on July 1, 2021, transactions and balances between Avon International and Avon Luxembourg are no longer eliminated on consolidation and instead are treated as transactions and balances with Related Parties.

The following tables present the related party transactions with Natura &Co and its affiliates and the Instituto Avon in Brazil. There are no other related party transactions.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Statement of Operations Data
Revenue from affiliates of Natura &Co(2)(1)	$	7.9	$	8.7	$	11.6	$	16.4
Cost of sales from affiliates of Natura &Co(2)(1)	$	(7.8)	$	(8.2)	$	(12.0)	$	(15.3)
Gross profit from affiliates of Natura &Co(2)(1)	$	.1	$	.5	$	(.4)	$	1.1




Interest expense on Loan from affiliates of Natura &Co(4)	$	(19.9)	$	(9.8)	$	(35.2)	$	(18.5)
Interest income on Loan to affiliates of Natura &Co(5)	$	.9	$	—	$	1.6	$	—


	June 30, 2022		December 31, 2021
Balance Sheet Data

Trade Receivables due from affiliates of Natura &Co(1)	$	31.7	$	32.7
Derivative Receivables due from affiliates of Natura &Co(7)	$	1.8	$	—
Other receivables due from affiliates of Natura &Co(6)	$	5.1	$	1.4
Loans to affiliates of Natura &Co maturing within one year(6)	$	40.8	$	46.6
Loans to affiliates of Natura &Co maturing after one year(6)	$	51.0	$	46.7
Trade Payables due to affiliates of Natura &Co(6)	$	(29.2)	$	(24.5)
Derivative Payables due to affiliates of Natura &Co(6)	$	(.6)	$	—
Other payables due to affiliates of Natura &Co(3)	$	(8.9)	$	(4.9)
Loans from affiliates of Natura &Co maturing within one year(4)	$	(265.1)	$	(371.7)
Loans from affiliates of Natura &Co maturing after one year(4)	$	(1,422.4)	$	(736.3)

Investments in affiliates of Natura &Co(5)	$	.1	$	.1

(1) 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 $7.9 and $8.7 associated with these agreements during the three months ended June 30, 2022 and 2021, respectively. The Company recorded gross profit from related party of $.1 and $.5 associated with these agreements during the three months ended June 30, 2022 and 2021, respectively. The Company recorded revenue from related party of $11.6 and $16.4 associated with these agreements during the six months ended June 30, 2022 and 2021, respectively. The Company recorded gross loss from related party of $.4 and gross profit from related party of $1.1 associated with these agreements during the six months ended June 30, 2022 and 2021, respectively. Trade receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

(2) The Company is party to a license agreement with Avon Mexico, whereby Avon Mexico pays the Company a variable royalty. The Company recorded revenue and gross profit from related party of $(.2) and $(.2) associated with these agreements during the three months ended June 30, 2022, respectively. The Company did not record any revenue or gross profit from related parties associated with these agreements during the six months ended June 30, 2022.

(3) The amount payable to Natura &Co mainly relates to the vesting and settlement of share-based compensation awards denominated in Natura &Co American Depository Receipts including the 2018 and 2019 long-term employee incentive program which vested and were automatically exercised in March 2021 and March 2022 respectively.

(4) Loans from affiliates of Natura &Co Holding at June 30, 2022 of $1,687.5 include $682.0 outstanding under a Promissory Note with Avon Beauty Limited with a maturity date of December 6, 2028, $408.4 outstanding under a Promissory Note with Avon Products, Inc. with a maturity date of May 17, 2029 and $331.8 outstanding under two Promissory Notes with Avon

Cosmetics Limited with maturity dates of May 17, 2029 and June 28, 2029. In addition, loans from affiliates of Natura &Co Holding at June 30, 2022 of $1,687.5 includes a number of intercompany loans between Natura &Co Luxembourg, Natura Cosméticos and Avon Products, Inc. and its affiliates. Loans from affiliates of Natura &Co Holding at December 31, 2021 of $1,108.0 include $736.3 outstanding under a Promissory Note with Avon Beauty Limited and $207.3 outstanding under a Promissory Note with an affiliate of the Company. In addition loans from affiliates of Natura &Co Holding at December 31, 2021 include $164.4 of intercompany loans between Avon Luxembourg and Avon Products, Inc. affiliates that, following the sale of Avon Luxembourg to a subsidiary of Natura &Co Holding on July 1, 2021, were redesignated as loans from affiliates of Natura & Co Holding.

(5) During the second quarter of 2021, Avon Cosméticos LTDA., made an investment of R$.5 in Natura &Co Pay Holding Financeira S.A., representing a 10% holding in the company. This is presented in other assets in our Consolidated Balance Sheets.

(6) On July 1, 2021, the Company sold Avon Luxembourg, including our Mexican business, to a subsidiary of Natura &Co Holding. As a result, transactions and balances between Avon International and Avon Luxembourg are no longer eliminated on consolidation and instead are treated as transactions and balances with Related Parties.

(7) During the first half of 2022, the Company entered into foreign exchange forward contracts with Natura &Co Luxembourg, a subsidiary of Natura &Co Holding, to manage a portion of its foreign currency exchange rate exposures. At June 30, 2022, we had outstanding related party foreign exchange forward contracts with notional amounts totaling approximately $221 for various currencies, all of which were designated as cash flow hedges. In addition we had $1.8 of Accounts Receivable and $.6 of Accounts Payable recorded in our Consolidated Balance Sheets associated with these transactions.