Instrument (Excluding Discounts) Coupon Capital Structure as of 30 June 2017 (USD m) Face Amt Out Market Amt Price REVLON, INC CONSUMER PRODUCTS, US YTM Maturity Date Face Leverage at LTM Adj Market Leverage at LTM Adj Face Leverage at 2017E Adj Market Leverage at LTM Adj USD 400m 2016 ABL RC Facility 1.2.3 L + 1.25% 244 244 100 2.7% 7-Sep-21 0.8x 0.8x 1.0x 1.0x 2016 Term Loan Facility 3 L + 3.5% 1,782 1,479 83 8.8% 21-Jul-23 6.8x 5.8x 7.3x 7.1x Spanish Government Loan - 1 ` 100 - - Total Secured Debt 2,027 1,724 6.8x 5.8x 7.3x 7.1x 5.75% Senior Notes due 2021 5.75% 500 410 82 12.7% 15-Feb-21 10.1x 8.2x 12.2x 10.0x 6.25% Senior Notes due 2024 6.25% 450 297 66 14.4% 1-Aug-24 10.1x 8.2x 12.2x 10.0x Total Debt 2,977 2,431 10.1x 8.2x 12.2x 10.0x Cash 79 79 Net Debt 2,898 2,352 9.8x 7.9x 11.9x 9.6x Revlon Market Cap 1,201 1,201 $21.55/Sh Enterprise Value (EV) 4,099 3,553 13.8x 12.0x 16.8x 14.6x Pro Forma LTM Adjusted to 2Q17 296 2017E PF Adjusted 244 Source: Company reports and Market Axess for bond prices. 1. Citibank is the administrative agent on the ABL, which has a maximum level of USD 400m with a USD 100m sublimit for LCs, of which USD 10m were issued at 30 September 2017. The revolver maturity date springs to 16 November 2020 if any of the 5.75% notes due 2021 remain outstanding, and available liquidity exceeds the outstanding remaining 5.75% notes by USD 200m. 2. The borrowing base is calculated at (i) 85% of AR, (ii) the lesser of 85% of the OLV or a set percentage for inventory, (iii) restricted cash to USD 75m, and (iv) a temporary increase between 15 August and 15 October. At 30 September 2017, the borrowing base availability under the USD 400m ABL was USD 126m. 3. The ABL is secured by a first lien on all tangible assets in the US and Canada, including inventory and accounts receivable. The Term Loan is secured by capital stock, intellectual property and intangibles. Both have a second lien on the first lien collateral of the other. OVERVIEW Revlon s results on a pro forma basis, which adjust last year s results for the inclusion of Elizabeth Arden, showed a total revenue decrease of 10.6%, and an adjusted decline of 52.2% to USD 54m from USD 113m at 3Q16. The deterioration in performance reflects a myriad of issues that have not only negatively impacted the business in 2017, but are likely to continue into next year. We view these as structural issues related to where consumers purchase their beauty-care items, the marketing of products and how media influences on purchasing decisions have changed. On the retail side, the mid-tier department stores that are a core part of Revlon s business have been closing locations and experiencing declining sales. Macy s, for example, reported 3Q17 results that fell 4% on a comp basis. Revlon s department store customers continue to face challenges from the incursion of online retailers, which the company could offset with its own online presence. But Revlon s online sales are less than 5% of total revenue, though growing. By its own admission, Revlon has been slower to market with product innovations and recognizing the influence of social media RECENT DEBTWIRE COVERAGE and social-media influencers. This has left it vulnerable to incursions from faster-moving competitors that have connected with younger consumers. We think a prime example of what has been occurring in the beauty-care market is the rise of the Kylie Jenner cosmetics business. In its first 18 months of existence, this business, tied to one of the top social media celebrities, has reportedly grown to more than USD 420m in revenue as of August 2017. We think Revlon s main problem is being caught flat-footed as the market changed around it. In North America, its total sales decreased on a pro-forma basis by 21.9% YoY in 3Q. However, the challenges facing retailers in North America are not new, and store closures and weak sales at traditional brick-and-mortar retail have been a persistent theme for more than a year. Yet even knowing what had been occurring, Revlon was hit with even greater markdown pressure as its retail customers needed additional incentives to drive sales. The solutions, outlined by the company to revamp its online business, benefit from planned changes at the department stores it sells to, but reworking the speed that it gets products to market will take time. These are not solutions that lead us to believe that Revlon will see substantial improvement within the next several quarters. LEGAL ANALYSIS: Revlon could pull a J. Crew style IP transfer with less litigation exposure 7 November 2017 BUSINESS DESCRIPTION Revlon, Inc manufactures, markets, and sells beauty and personal care products worldwide with a broad array of items that include cosmetics, hair care, fragrances and skin care. The company operates in four operating segments, following the 2016 acquisition of fragrance manufacturer Elizabeth Arden. USD m FY15 FY16 LTM 1,914 2,334 2,707 Adj. 371 419 296 Adj. Margin 19.4% 18.0% 10.9% Interest Expense (83) (105) (147) Capex (48) (59) (96) Levered FCF 240 255 53 Management continues to talk about the USD 55m-USD 60m of synergies it will achieve in 2017 from the integration of Elizabeth Arden, but that segment is deteriorating now as well. To the extent Revlon benefits from synergies, we view them as mitigating some of the downside cash flow pressure and not a solution to its core revenue problem. Debtwire North America Philip Emma Senior Analyst 646.378.3132 Philip.Emma@acuris.com Timothy Hynes Head North American Research Timothy.Hynes@acuris.com Page 1
RECENT PERFORMANCE AND OUTLOOK Segment Comparison and 2017 Projections (USDm) % Change Fiscal Period: 1Q16PF 2Q16APF 3Q16APF 4Q16A FY 16A 1Q17A 2Q17A 3Q17A 4Q17E FY 2017E 1H17/ 3Q17/ 4Q17E/ FY17E/ Period Ended: 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 31-Dec-17 31-Dec-17 1H16 3Q16 4Q16A FY16A Consumer North America 214 232 211 226 883 175 202 157 181 715-15.5% -25.6% -20.0% -19.0% International 105 127 132 142 506 115 134 149 153 551 7.3% 12.9% 8.0% 9.0% Total Consumer 320 360 343 368 1,389 290 336 306 334 1,266-7.9% -10.8% -9.2% -8.8% Elizabeth Arden North America 108 102 176 187 573 100 96 144 159 499-6.7% -18.2% -15.0% -12.9% International 84 91 99 119 393 92 103 104 125 424 11.4% 5.1% 5.0% 7.9% Total Elizabeth Arden 192 193 275 306 966 192 199 248 284 923 1.6% -9.8% -7.2% -4.5% Professional North America 54 54 52 51 211 44 40 42 43 169-22.2% -19.2% -15.0% -19.7% International 62 69 67 69 267 64 66 65 67 262-0.4% -3.0% -3.0% -1.7% Total Professional 116 123 119 120 478 108 106 107 110 431-10.3% -10.1% -8.1% -9.7% Other - International 5 6 8 8 27 5 5 5 5 20-9.5% -37.5% -37.5% -26.4% North America Total 376 388 439 464 1,667 319 338 343 383 1,383-14.0% -21.9% -17.4% -17.0% International Total 255 293 306 338 1,192 276 308 323 350 1,257 6.5% 5.6% 3.6% 5.4% Total s 632 682 745 802 2,859 595 646 666 733 2,640-5.6% -10.6% -8.6% -7.7% Adjusted 65 83 113 148 409 32 61 54 97 244-37.2% -52.2% -34.6% -40.4% Adjusted Margin 10.3% 12.2% 15.2% 18.5% 14.3% 5.4% 9.4% 8.1% 13.2% 9.2% Pro Forma Reconciliation 3Q (USDm) Fiscal Period: 3Q16 3Q16 Period Ended: 30-Sep-16 30-Sep-17 Pro Forma As Reported Revlon Reported 605 Pro forma Elizabeth Arden 140 Adjusted Net 745 666 Reported Revlon Gross Profit 361 PF Gross Profit adjustment 77 Adjusted Gross Profit 438 377 Pro Forma Gross Profit Margin 58.8% 56.5% As Reported Gross Profit Margin 59.8% 56.5% Adjusted 113 54 Adjusted Margin 15.2% 8.0% Liquidity (USD m) Cash 79 Revolver Availability 126 Total Liquidity at 30 September 2017 205 Liquidity Forecast - Before Synergies Total Liquidity 205 DW FY 2017E Adjusted 244 LTM CAPEX (96) LTM Interest Expense (147) Total Estimated 12-Month Liquidity Forecast 205 On an LTM basis through 3Q17, adjusted dropped to USD 296m. As a result of the decline in 3Q17, we have revised lower our forecast for FY17 to USD 244m from USD 300m. Based on what occurred in 3Q17, and our expectation that Revlon will not easily solve the reasons for the decline in one quarter, we have forecast total revenue in 4Q17 to decline by 8.6%. We re giving the company some credit for one-time items that impacted 3Q17, such as an inventory takeback from a customer, by reducing the YoY declines in total revenue and adjusted in 4Q17 compared to what did occur in 3Q17. For revenue, we forecast a decline in North America of 17.4% compared to 21.9% in 3Q17. For adjusted, we forecast USD 97m in 4Q17, which is a 34.6% decrease over 4Q16. In 3Q17, adjusted declined by 52.2% compared to 3Q16. If the company can only generate full-year 2017 adjusted in the range of our forecast of USD 244m, then the business may barely see break-even FCF. Given the expected erosion in operating cash flow, management s handling of working capital will be critical. In 3Q17, Revlon s inventory rose YoY by 7%, despite the drop in sales, which gives us further reason to view a rebound in 4Q17 as unlikely. Availability under its revolving credit facility fell to USD 125.6m from USD 231m at 2Q17, as borrowings under its revolving credit facility increased to USD 238.7m from USD 87.5m. For the company to reduce that funded level, it will need to turn working capital into a source of cash. Revlon does have something of an untapped source of borrowing capacity to add to its liquidity, as we estimate half of its combined USD 1bn of inventory and A/R at 30 September 2017 was outside the US, and therefore not included, but for some small portion of the international assets, in the borrowing base for its revolving credit facility. Page 2
Company Net Debt Market Cap Enterprise Value LTM COMPS, USD m Multiple Margin NTM NTM Multiple LTM Multiple NTM L'Oreal 1,729 122,667 124,396 6,545 19.0x 21.1% 6,948 17.9x 31,004 4.0x 30,753 4.0x The Estee Lauder Companies 2,108 44,623 46,731 2,544 18.4x 20.8% 2,790 16.7x 12,233 3.8x 13,313 3.5x Coty Inc 6,602 11,430 18,032 1,030 17.5x 13.5% 1,398 12.9x 7,650 2.4x 9,095 2.0x Inter Parfums (171) 1,506 1,335 89 15.0x 15.8% 91 14.7x 565 2.4x 586 2.3x Avon Products 1,225 1,375 2,600 357 7.3x 6.2% 465 5.6x 5,715 0.5x 5,818 0.4x Peer Average 15.4x 13.6x 2.6x 2.5x Peer Average - Ex. Avon 17.5x 15.6x 3.1x 3.0x Revlon Consumer Products 2,898 1,201 4,099 349 11.7x 12.5% 244 16.8x 2,784 1.5x 2,640 1.6x NTM Multiple Three-year price comparing COTY to Revlon Historic Trading Multiples (USDm) Revlon Average from January 2010 to Current TEV/LTM Total Average 1.6x High 1.9x Low 1.4x TEV/LTM Average 10.2x High 12.0x Low 8.8x Source: S&P CapIQ VALUATION: From a business perspective, we continue to view Coty as the best comp to Revlon for its similar business mix and leverage profile, although Coty s leverage is far less than Revlon s. The two businesses are also similar in that Coty is absorbing its own acquisition with the stock purchase of P&G s beauty business in September of 2016. The results for Coty through 30 September 2017 aren t as easily broken out on a pro forma comparable basis. But for 3Q17, it flagged an 8% revenue decline for its Consumer Beauty segment on a comparable basis and challenges in North America. Even with the challenge in North America, Coty s overall business is performing better. While its stock has been in a similar pattern to Revlon s, it has not had the same rate of deterioration over the last three years. The question with Revlon s valuation is what happens if results continue to erode at the same pace they have over the last several quarters? While it does not have the same challenge as Avon s dependence on Latin America, a reversion towards Avon s valuation multiple may be more likely if the problems continue without any signs of progress. On an basis, Revlon currently trades at a 25% discount to its peer group average EV of 15.4x. However, if that discount starts to widen to 40% of peer EV, the unsecured debt recovery values would fall into the 33%-range. With our expectation that adjusted will continue to erode, we think there is a risk that valuation multiples will fall as the business weakens, especially if it starts generating negative FCF and its peers, such as Coty, have issues in the parts of the business that overlap Revlon. Revlon Stock Valuation (USDm) Metric: TEV/LTM Total TEV/NTM Total TEV/LTM Adj TEV/LTM Adj TEV/LTM Adj TEV/NTM Adj Multiple Applied at: Eight-Year Average Multiple Current Revlon Multiple Eight-Year Average Multiple Peer Average Multiple 40% Discount Peer Average Peer Average NTM Multiple Revlon Level 2,784 2,640 296 296 296 244 Selected Multiple 1.6x 1.5x 10.2x 15.4x 9.3x 13.6x Implied EV 4,526 3,886 3,006 4,568 2,741 3,307 Less: Net Debt (2,898) (2,898) (2,898) (2,898) (2,898) (2,898) Implied Equity Value 1,628 989 108 1,670 0 409 Shares Outstanding (millions) 56 56 56 56 56 56 Implied Share Price $29.21 $17.74 $1.94 $29.97 $0.00 $7.35 Current Share Price $21.55 $21.55 $21.55 $21.55 $21.55 $21.55 % Upside/Downside 36% -18% -91% 39% -100% -66% Page 3
RECOVERY VALUE SCENARIOS: REVLON, INC CONSUMER PRODUCTS, US LTM Adj at Peer Avg EV Estimated Recovery Values (USDm) Scenario #1 Scenario #2 Scenario #3 Scenario #4 Scenario #5 DW 2017 E Adj DW 2017 E Adj at 40% Discount LTM Adj at Peer Avg EV to Peer Avg EV at Avon EV DW 2017E Adjusted at Avon EV Revlon Adjusted 296 244 244 296 244 Peer Valuation Multiple 15.4x 15.4x 9.3x 7.3x 7.3x Valuation 4,568 3,763 2,258 2,156 1,776 Claims Pool Secured Claims Revolving Credit Facility 244 244 244 244 244 Less Cash (79) (79) (79) (79) (79) Total Net Revolving Credit Claim 165 165 165 165 165 Additional Secured Claims Term Loan Facility 1,782 1,782 1,782 1,782 1,782 Total Secured Claims 1,947 1,947 1,947 1,947 1,947 Unsecured Claims 5.75% Senior Notes due 2021 500 500 500 500 500 6.25% Senior Notes due 2024 450 450 450 450 450 Total Unsecured Claims 950 950 950 950 950 Total Claims 2,897 2,897 2,897 2,897 2,897 Estimated Recovery Value available to Revolving Credit 4,568 3,763 2,258 2,156 1,776 Revolving Credit Claim 165 165 165 165 165 Recovery for Revolving Credit 100.0% 100.0% 100.0% 100.0% 100.0% Value available to Term Loan 4,403 3,598 2,093 1,991 1,611 Term Loan Claim 1,782 1,782 1,782 1,782 1,782 Recovery for Term Loan 100.0% 100.0% 100.0% 100.0% 90.4% Residual Value for Unsecured Claims 2,621 1,816 311 209 0 Unsecured Claims 950 950 950 950 950 Recovery for Unsecured Claims 100.0% 100.0% 32.7% 22.0% 0.0% Summary Recoveries Revolving Credit Facility 100.0% 100.0% 100.0% 100.0% 100.0% 100 Term Loan Facility 100.0% 100.0% 100.0% 100.0% 90.4% 83 5.75% Senior Notes due 2021 100.0% 100.0% 32.7% 22.0% 0.0% 82 6.25% Senior Notes due 2024 100.0% 100.0% 32.7% 22.0% 0.0% 66 Trading Price Page 4
USD millions Annual Quarterly Fiscal Period: FY15 FY16 LTM 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Period Ended: 31-Dec-15 31-Dec-16 30-Sep-17 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 Income Statement - AS REPORTED Net 1,914 2,334 2,707 438 482 472 522 440 489 605 801 595 646 666 Cost of Sales 668 917 1,171 142 161 168 197 154 172 243 348 265 268 290 Gross Profit 1,246 1,417 1,536 296 322 304 325 286 317 362 453 330 378 376 SG&A 899 1,039 1,290 223 234 218 224 222 233 257 326 317 322 325 Depr & Amort 103 123 154 26 25 26 26 26 26 29 42 37 37 38 Acquisition costs 8 43 44 2 5 1 2 1 5 33 4 17 10 13 Impairment/Restruct Charges 20 57 66 0 (3) 4 20 1 1 1 55 1 4 6 Operating Earnings 216 155 (18) 45 61 55 53 36 52 42 25 (42) 5 (6) Reported Adj. 371 419 296 71 90 84 125 67 87 113 149 32 61 54 LTM Adj. 371 419 296 350 354 353 370 366 363 392 416 381 355 296 Interest Expense 83 105 147 20 20 21 22 21 21 27 36 35 37 39 LTM Interest Expense 83 105 147 84 82 82 83 84 85 91 105 119 135 147 Other Expenses 22 41 2 17 (5) 2 8 (1) 10 20 12 (1) (7) (1) Income from continuing ops 111 9 (168) 8 46 32 23 16 21 (5) (23) (76) (25) (44) Provision for taxes (51) (25) 30 (9) (20) (25) 3 (6) (11) 0 (8) 39 (12) 11 Impact discontinued operations (3) (5) (2) 0 0 (1) (2) 1 (2) 0 (4) 0 1 1 Net Income (Loss) 57 (21) (140) (1) 26 6 27 11 8 (5) (35) (37) (36) (32) Balance Sheet Current Assets Cash and Equivalents 326 187 79 208 199 181 326 182 186 99 187 121 84 79 Accounts Receivable 245 424 460 232 256 260 245 270 268 484 424 376 390 460 Merchandise inventories 184 425 555 175 197 218 184 210 210 519 425 453 518 555 Prepaid Exp. and Other Current Assets 53 88 106 120 121 121 53 69 74 103 88 110 121 106 Non-Current Assets 808 1,124 1,200 735 773 780 808 731 738 1,205 1,124 1,060 1,113 1,200 PP&E, Net 281 385 349 200 205 205 281 217 217 312 385 323 334 349 Intangible Assets 788 1,326 1,304 771 803 799 788 787 806 1,342 1,326 1,314 1,311 1,304 Other Long-term Assets 90 189 315 167 146 140 90 153 154 254 189 302 304 315 Total Assets 1,967 3,024 3,168 1,873 1,927 1,924 1,967 1,888 1,915 3,113 3,024 2,999 3,062 3,168 Current Liabilities Accounts Payable 201 297 344 167 189 183 201 178 188 308 297 302 345 344 Accrued Liabilities 126 167 140 102 107 112 126 91 99 145 167 141 157 140 Other Short-term Liabilities 146 216 205 138 139 134 146 135 135 199 216 204 198 205 CPLTD/Short-term Borrowings 41 29 269 13 15 17 41 19 21 95 29 70 117 269 Non-Current Liabilities 515 709 958 420 450 446 515 423 442 747 709 717 816 958 Gross Debt 1,827 2,693 2,925 1,847 1,847 1,849 1,827 1,806 1,808 2,763 2,693 2,731 2,775 2,925 Net Debt 1,501 2,506 2,846 1,639 1,648 1,668 1,501 1,624 1,622 2,664 2,506 2,610 2,691 2,846 OPEB 185 184 180 197 192 181 185 182 178 175 184 186 183 180 Other Long-term Liabilities 68 81 76 81 82 89 68 69 69 83 81 77 77 76 Total Liabilities 2,554 3,638 3,870 2,532 2,556 2,547 2,554 2,461 2,477 3,673 3,638 3,641 3,734 3,870 Shareholders' Equity (587) (615) (702) (659) (629) (623) (587) (573) (562) (560) (615) (642) (672) (702) Total Liab. and Shld Equity 1,967 3,023 3,168 1,873 1,927 1,924 1,967 1,888 1,915 3,113 3,023 2,999 3,062 3,168 Page 5
USD millions Annual Quarterly Fiscal Period: FY15 FY16 LTM 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Period Ended: 31-Dec-15 31-Dec-16 30-Sep-17 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 Cash Flow Statement Adjusted 371 419 296 71 90 84 125 67 87 113 149 32 61 54 Capital Expenditures (48) (59) (96) (5) (12) (10) (21) (7) (11) (15) (26) (15) (24) (30) Total Interest Expense (83) (105) (147) (20) (20) (21) (22) (21) (21) (27) (36) (35) (37) (39) Free Cash Flow Levered 240 255 53 46 58 53 82 39 55 72 87 (18) (0) (15) Net Cash from Operating Activities 155 120 (86) (26) 28 (5) 158 (100) 48 (16) 188 (86) (54) (135) Net Cash from Investing Activities (84) (1,088) (95) (8) (42) (6) (28) (7) (40) (1,014) (26) (15) (24) (29) Net Cash from Financing Activities (12) 831 159 (26) 2 (5) 16 (39) (3) 940 (68) 30 37 160 F/X Impact (8) (3) 3 (8) 2 (2) (0) 1 (1) 4 (6) 5 3 1 Net Change in Cash 51 (140) (19) (68) (9) (18) 146 (145) 4 (87) 88 (65) (38) (4) Cash at Beginning of the Period 275 326 98 275 208 199 181 326 182 185 98 186 120 83 Net Change in Cash 51 (140) (19) (68) (9) (18) 146 (145) 4 (87) 88 (65) (38) (4) Cash at the End of the Period 326 186 79 208 199 181 326 182 185 98 186 120 83 79 Ratio Analysis Y/Y Total Growth -1.4% 21.9% 16.0% -6.6% -3.1% -0.1% 4.2% 0.4% 1.3% 28.3% 53.4% 35.3% 32.1% 10.1% Gross Margin Merchandise 65.1% 60.7% 56.7% 67.6% 66.7% 64.4% 62.2% 65.0% 64.8% 59.8% 56.5% 55.4% 58.5% 56.5% SG&A as % of Sales 47.0% 44.5% 47.7% 51.0% 48.4% 46.2% 42.9% 50.5% 47.7% 42.5% 40.7% 53.3% 49.9% 48.8% Adj. Margin 19.4% 18.0% 10.9% 16.2% 18.7% 17.8% 24.0% 15.2% 17.8% 18.7% 18.6% 5.4% 9.4% 8.1% Net Income Margin 3.0% -0.9% -5.2% -0.2% 5.3% 1.2% 5.1% 2.5% 1.6% -0.9% -4.4% -6.2% -5.6% -4.8% Total Debt / LTM Adj. 4.9x 6.4x 9.9x 5.3x 5.2x 5.2x 4.9x 4.9x 5.0x 7.0x 6.5x 7.2x 7.8x 9.9x Net Debt / LTM Adj. 4.0x 6.0x 9.6x 4.7x 4.7x 4.7x 4.1x 4.4x 4.5x 6.8x 6.0x 6.9x 7.6x 9.6x Adj. / LTM Interest Expense 4.5x 4.0x 2.0x 4.2x 4.3x 4.3x 4.5x 4.4x 4.3x 4.3x 4.0x 3.2x 2.6x 2.0x Working Capital Comparison (USDm) Fiscal Period: FY15 FY16 LTM 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Period Ended: 31-Dec-15 31-Dec-16 30-Sep-17 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep-17 Total 1,914 2,334 2,707 438 482 472 522 440 489 605 801 595 646 666 Accounts Receivable 245 424 460 232 256 260 245 270 268 484 424 376 390 460 Merchandise Inventories 184 425 555 175 197 218 184 210 210 519 425 453 518 555 Prepaid and Other CA 53 88 106 120 121 121 53 69 74 103 88 110 121 106 Accounts Payable 201 297 344 167 189 183 201 178 188 308 297 302 345 344 Accrued Liabilities 126 167 140 102 107 112 126 91 99 145 167 141 157 140 Other Accrued Liabilities 146 216 205 138 139 134 146 135 135 199 216 204 198 205 Ratio Analysis A/R as % of Total 12.8% 18.2% 17.0% 53.0% 53.1% 55.1% 46.9% 61.4% 54.8% 80.0% 53.0% 63.2% 60.4% 69.1% Inv as % of Total 9.6% 18.2% 20.5% 40.0% 40.8% 46.2% 35.3% 47.8% 43.0% 85.8% 53.1% 76.1% 80.2% 83.3% Payable as % of Inventory 109.4% 69.9% 62.0% 95.4% 95.9% 83.9% 109.4% 85.0% 89.3% 59.3% 69.9% 66.6% 66.5% 62.0% Y/Y Change Accounts Receivable 2.6% 73.1% 8.5% -12.6% -5.3% 1.6% 2.6% 16.4% 4.7% 86.2% 73.1% 39.3% 45.5% -5.0% Merchandise inventories 17.2% 131.0% 30.6% -7.1% 3.8% 16.5% 17.5% 20.0% 6.6% 138.1% 131.0% 115.7% 146.7% 6.9% Accounts Payable 31.6% 47.5% 15.9% -9.3% -11.4% -8.9% 3.0% -10.8% -7.7% 29.5% 32.0% 69.2% 83.7% 11.7% Performance Metrics Gross Profit Margin 65.1% 60.7% 56.7% 67.6% 66.7% 64.4% 62.2% 65.0% 64.8% 59.8% 56.5% 55.4% 58.5% 56.5% SG&A $/Gross Profit $ 72.2% 73.3% 84.0% 75.5% 72.6% 71.8% 69.0% 77.7% 73.5% 71.0% 72.1% 96.1% 85.3% 86.4% Page 6
CORPORATE STRUCTURE CHART: REVLON, INC CONSUMER PRODUCTS, US The corporate structure chart is for informational purposes only as a visual representation of issuers and guarantors under debt agreements, and is not intended to be a complete representation of Revlon s legal structure. Sources: The corporate structure chart can be found in the Preliminary Prospectus filed with the SEC on 20 October 2016. Page 7
INVOLVED PARTIES: Involved Parties Administrative Agent/Trustee Involved Arrangers Holders Merrill Lynch/BoFA Citibank Merrill Lynch/BoFA 2016 Revolving Credit Facility Citibank (also Collateral Agent) Wells Fargo Wells Fargo Credit Suisse Credit Suisse Deutsche Bank Macquarie Capital (USA) Barclays Bank Merrill Lynch/BodA Deutsche Bank Macquarie Capital (USA) Barclays Bank JPMorgan Oppenheimer CIFC Funding Credit Suisse Highbridge Loan Management 2016 Term Loan Facility Citibank (also Collateral Agent) Deutsche Bank Halcyon Loan Adv Funding Macquarie Capital (USA) Hartford Financial Management Barclays Bank ALM Loan Funding Nuveen Fund FMR JP Morgan 5.75% Senior Notes due 2021 US Bank Vanguard Unicredit SPA Transamerica 14 additional Holders each with < 3% Vanguard Unicredit SPA 6.25% Senior Notes due 2024 US Bank JPMorgan Alliance Bernstein Manulife Putnam Investors 13 additional Holders each with < 3% Largest Holder - Reported Position 52.6 Million Shares Outstanding MacAndrews & Forbes Holdings 75.98% Ron Perelman 8.67% Source: Loan Agreement, Capital IQ, Debtwire Mittleman Brothers 5.71% Dimensional Fund 2.0% The Vanguard Group, Inc. 1.91% Cumulative 94.27% Disclaimer We have obtained the information provided in this report in good faith from publicly available data as well as Debtwire data and intelligence, which we consider to be reliable. This information is not intended to provide tax, legal or investment advice. You should seek independent tax, legal and/or investment advice before acting on information obtained from this report. We shall not be liable for any mistakes, errors, inaccuracies or omissions in, or incompleteness of, any information contained in this report, and not for any delays in updating the information. We make no representations or warranties in regard to the contents of and materials provided on this report and exclude all representations, conditions, and warranties, express or implied arising by operation of law or otherwise, to the fullest extent permitted by law. We shall not be liable under any circumstances for any trading, investment, or other losses which may be incurred as a result of use of or reliance on information provided by this report. All such liability is excluded to the fullest extent permitted by law. Any opinions expressed herein are statements of our judgment at the date of publication and are subject to change without notice. Reproduction without written permission is prohibited. For additional information call Debtwire Analytics at (212) 686-5374. Copyright 2017 S&P Capital IQ (and its affiliates, as applicable). This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIR D PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTI AL DAMAGES, COSTS, EXPENSES, LEGAL FEES. OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CO NNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice Page 8