Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2022

The following tables present the related party transactions with Natura &Co and its affiliates and the Instituto Avon in Brazil, all of which were on an arm's-length basis. There are no other related party transactions.


	Year Ended December 31,		Year Ended December 31,		Year Ended December 31,
	2022		2021		2020
Statement of Operations Data
Revenue from affiliates of Natura &Co(2)(3)	$	21.7	$	25.2	$	6.7
Cost of sales from affiliates of Natura &Co(2)(3)	$	(20.4)	$	(22.4)	$	(5.9)
Gross profit from affiliates of Natura &Co(2)(3)	$	1.3	$	2.8	$	.8
Interest income from Instituto Avon(1)	$	—	$	—	$	.1
Interest expense on Loan from affiliates of Natura &Co(5)	$	(93.8)	$	(50.6)	$	(7.5)
Interest income on Loan to affiliates of Natura &Co(5)	$	3.9	$	1.6	$	—


	Year Ended December 31,2022		Year Ended December 31,2021
Balance Sheet Data

Trade Receivables due from affiliates of Natura &Co(2)	$	30.7	$	32.7
Derivative Receivables due from affiliates of Natura &Co(8)	$	9.5	$	—
Other receivables due from affiliates of Natura &Co(7)	$	32.7	$	1.4
Loans to affiliates of Natura &Co maturing within one year(7)	$	72.2	$	46.6
Loans to affiliates of Natura &Co maturing after one year(7)	$	54.8	$	46.7
Right-of-use asset from affiliates of Natura &Co(9)	$	6.0	$	—
Trade Payables due to affiliates of Natura &Co(7)	$	(33.7)	$	(24.5)
Derivative Payables due to affiliates of Natura &Co(8)	$	(12.9)	$	—
Other payables due to affiliates of Natura &Co(4)	$	(11.5)	$	(4.9)
Loans from affiliates of Natura &Co maturing within one year(5)	$	(537.2)	$	(371.7)
Loans from affiliates of Natura &Co maturing after one year(5)	$	(1,427.2)	$	(736.3)
Lease liability to affiliates of Natura &Co(9)	$	(6.0)	$	—
Investments in affiliates of Natura &Co(6)	$	.1	$	.1

(1) 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 (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. During the fourth quarter of 2021, the loan was repaid in full.

(2) 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 $21.7, $25.2 and $6.7 associated with these agreements during the years ended December 31, 2022, 2021 and 2020, respectively. The Company recorded gross profit from related party of $1.3, $2.8 and $.8 associated with these agreements during the years ended December 31, 2022, 2021 and 2020, respectively. Trade receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

(3) 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 nil associated with these agreements during the

year ended December 31, 2022, respectively. The Company recorded revenue and gross profit of $1 and $1, respectively, from related party associated with these agreements during the year ended December 31, 2021.

(4) The payable to Natura &Co 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.

(5) Loans from affiliates of Natura &Co Holding at December 31, 2022 of $1,964.4 include $692.2 outstanding under a Promissory Note with Avon Beauty Limited with a maturity date of December 6, 2028, $405 outstanding under a Promissory Note with Avon Products, Inc. with a maturity date of May 17, 2029 and $330 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 December 31, 2022 of $537.2 include 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. Loans from affiliates of Natura &Co Holding at December 31, 2021 of $1,108.0 include $736.3 outstanding under a Promissory Note between Avon Beauty Limited and a subsidiary of Natura &Co Holding, and $207.3 outstanding under a Promissory Note with a subsidiary of Natura &Co Holding and 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. See Note 7, Debt and Other Financing, for further information relating to these loans.

(6) 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.

(7) 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.

(8) During the first quarter 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 December 31, 2022, we had outstanding related party foreign exchange forward contracts with notional amounts totaling approximately $546 for various currencies for up to 12 months, of which $290 were designated as cash flow hedges. In addition we had $9.5 of Accounts Receivable and $12.9 of Accounts Payable recorded in our Consolidated Balance Sheets associated with these transactions, all of which are expected to be reclassified into earnings within the next 12 months.

(9) On December 20, 2022, the Company entered into a lease arrangement with a subsidiary of Natura &Co Holding resulting in a right-of-use asset and lease liability of $6.0 at December 31, 2022.