CONDENSED CONSOLIDATION DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2022

CONDENSED CONSOLIDATION DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

LIABILITIES SUBJECT TO COMPROMISE

As discussed in Note 1. "Description of Business and Summary of Significant Accounting Policies", since the Petition Date, the Company has been operating as debtors in possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying Consolidated Balance Sheets, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Liabilities subject to compromise at September 30, 2022 consisted of the following:


	September 30,
	2022
Accounts payable	$	89.6
Accrued expenses	141.9
Other liabilities	106.3
Debt subject to compromise	3,277.3

Total liabilities subject to compromise	$	3,615.1

The Company will continue to evaluate the amount and classification of its pre-petition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of liabilities subject to compromise may change.

REORGANIZATION ITEMS, NET

Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying statements of operations for the three and nine months ended September 30, 2022 and were as follows:


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Write off of deferred financing costs and discount on debt subject to compromise	$	—	$	124.8
DIP facilities financing costs	2.0		16.8
Professional fees	81.6		96.0
Other	0.4		4.7
Gain on settlement of pre-petition accounts payable	(9.3)		(9.3)
Bankruptcy related employee compensation programs	$	10.3	$	10.3
Reorganization items, net	$	85.0	$	243.3

CONDENSED CONSOLIDATION DEBTOR-IN-POSSESSION FINANCIAL INFORMATION

The financial statements below represent the condensed combined financial statements of the Debtors as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021.

REVLON, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED BALANCE SHEETS

(dollars in millions, except share and per share amounts)

(Unaudited)


	September 30, 2022		December 31, 2021

ASSETS
Current assets:
Cash and cash equivalents	$	168.5	$	17.9
Trade receivables (net of allowance for doubtful accounts of $0.7 and $2.3, respectively)	188.4		258.7
Trade receivables from non-debtor subsidiaries	453.8		400.4
Inventories, net	292.4		261.8
Prepaid expenses and other assets	171.4		74.5
Total current assets	1,274.5		1,013.3
Property, plant and equipment (net of accumulated depreciation of $433.2 and $426.0, respectively)	185.2		219.4
Deferred income taxes	2.7		17.5
Goodwill	540.0		540.0
Intangible assets (net of accumulated amortization and impairment of $226.3 and $274.4, respectively)	278.7		320.8
Investment in subsidiaries	877.7		874.5
Due from affiliates	254.8		249.8
Other assets	75.3		74.8
Total assets	$	3,488.9	$	3,310.1

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Short-term borrowings	$	—	$	—
Current portion of long-term debt	746.8		137.1
Accounts payable	52.6		134.7
Accounts payable to non-debtors	7.9		234.5
Accrued expenses and other current liabilities	231.2		267.1
Total current liabilities	$	1,038.5	$	773.4
Long-term debt	—		3,234.2
Long-term pension and other post-retirement plan liabilities	79.8		141.3
Other long-term liabilities	7.8		337.9
Liabilities subject to compromise	4,098.4		—
Total liabilities	5,224.5		4,486.8
Stockholder’s (deficiency) equity	(1,735.6)		(1,176.7)
Total liabilities and stockholders’ deficiency	$	3,488.9	$	3,310.1

REVLON, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(dollars in millions, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,

	2022		2021		2022		2021

Net sales	$	249.7	$	305.8	$	744.0	$	819.9
Cost of sales	122.1		144.2		355.7		376.2
Gross profit	127.6		161.6		388.3		443.7
Selling, general and administrative expenses	161.9		156.7		486.8		487.1
Acquisition, integration and divestiture costs	0.2		0.6		0.6		1.8
Restructuring charges and other, net	(1.7)		7.1		2.5		17.1
Impairment charges	—		—		20.5		—

Operating income (loss)	(32.8)		(2.8)		(122.1)		(62.3)
Other expenses:
Interest expense, net	51.4		56.3		163.5		176.4

Amortization of debt issuance costs	—		8.7		16.8		29.9

Foreign currency losses, net	5.1		1.9		14.5		(0.8)
Miscellaneous, net	2.4		(324.2)		9.7		(321.4)
Reorganization items, net	85.0		—		243.3		—
Equity in net loss of subsidiary	(30.8)		(34.1)		(53.9)		(47.3)
Other expenses	113.1		(291.4)		393.9		(163.2)
Loss from operations before income taxes	(145.9)		288.6		(516.0)		100.9
Provision for income taxes	0.9		7.6		13.8		9.7


Net loss	$	(146.8)	$	281.0	$	(529.8)	$	91.2
Other comprehensive income, net	4.1		4.5		4.4		4.1
Total comprehensive loss	$	(142.7)	$	285.5	$	(525.4)	$	95.3

REVLON, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

(Unaudited)


	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:


























Net cash used in operating activities	(310.9)		30.2
CASH FLOWS FROM INVESTING ACTIVITIES:




Net cash used in investing activities	(5.4)		(4.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft	(0.7)		(10.6)
Borrowings on term loans	—		230.0
Repayments on term loans	(13.6)		(127.8)


Net (repayments) borrowings under the revolving credit facilities	(0.6)		(2.7)
Borrowings on DIP Term Loan Facility	575.0		—
Repayments on Tranche A DIP ABL Facility	(67.2)		—





Payment of financing costs	(18.8)		(13.7)

Tax withholdings related to net share settlements of restricted stock and RSUs	(3.3)		(2.4)

Cash transfer to non-debtor affiliates	—		(97.5)
Other financing activities	(0.2)		(0.3)
Net cash provided by financing activities	470.6		(25.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1.0)		(0.1)
Net increase in cash, cash equivalents and restricted cash	153.3		0.7
Cash, cash equivalents and restricted cash at beginning of period	17.9		10.8
Cash, cash equivalents and restricted cash at end of period (a)	$	171.2	$	11.5

(a)These amounts include restricted cash of $2.7 million and nil as of September 30, 2022 and 2021, respectively. The balance is included within prepaid expenses and other current assets and other assets in the Company's Consolidated Balance Sheets as of September 30, 2022.