In Latin America, net sales in 2011 were $107.2 million, essentially unchanged year-over-year. Excluding the unfavorable impact of foreign currency fluctuations, net sales in Latin America increased $4.6 million, or 4.3%. The increase was primarily due to higher net sales of Revlon color cosmetics throughout the region and higher net sales of other beauty care products in Argentina. These increases were partially offset by lower net sales in Venezuela where the Company had not fully resumed business since the June 2011 fire.

In Canada, net sales in 2011 were $74.7 million, essentially unchanged year-over-year. Excluding the favorable impact of foreign currency fluctuations, net sales in Canada decreased $2.3 million, or 3.1%, primarily due to lower net sales of Almay color cosmetics.

Operating income was $203.3 million in 2011 compared to $199.8 million in 2010. Adjusted EBITDA was $266.0 million in 2011 compared to $260.4 million in 2010. Operating income and Adjusted EBITDA in 2011 benefited from higher net sales, partially offset by higher cost of sales and higher SG&A. Higher SG&A expenses, including the SG&A expenses of Sinful Colors, and the unfavorable impact of foreign currency fluctuations were partially offset by the benefit of business interruption insurance recoveries related to the fire in Venezuela, discussed below.

Interest expense, including preferred stock dividends, decreased $5.6 million to $91.3 million in 2011 primarily due to the refinancing of the Company’s term loan credit facility in May 2011 at lower interest rates.

Income from continuing operations before income taxes was $89.6 million in 2011 as compared to $79.8 million in 2010. Income from continuing operations before income taxes included before-tax charges of $11.2 million and $9.7 million in 2011 and 2010, respectively, related to the refinancing of the Company’s credit facilities.

The provision for income taxes was an expense of $36.8 million in 2011 as compared to a benefit of $247.2 million in 2010. Excluding a non-cash tax benefit of $16.9 million and $260.6 million in 2011 and 2010, respectively, the provision for income taxes was $53.7 million c in 2011 as compared to $13.4 million c in 2010. The higher tax provision in 2011 was primarily due to higher deferred tax expense in the U.S. as a result of the reduction in the Company’s U.S. deferred tax asset valuation allowance at the end of 2010, as well as higher pre-tax income in the U.S. The increase in the provision for income taxes resulting from the higher deferred tax expense in the U.S. did not affect the Company’s cash taxes paid in 2011. In 2011, the non-cash tax benefit of $16.9 million was primarily associated with the reduction in the Company’s deferred tax asset valuation allowance in certain markets outside the U.S. In 2010, the non-cash tax benefit of $260.6 million was associated with the reduction in the Company’s U.S. deferred tax asset valuation allowance. These reductions in the Company’s deferred tax asset valuation allowances had no impact on the Company’s cash flow or liquidity. Cash paid for income taxes, net of refunds, in 2011 was $20.5 million as compared to $16.2 million in 2010.

Net income in 2011 was $53.4 million, or $1.02 per diluted share compared to net income of $327.3 million, or $6.26 per diluted share, last year. Net income in 2011 included the non-cash tax benefit of $16.9 million, noted above, as well as charges of $11.2 million, before tax, associated with the 2011 refinancing of the Company’s revolving credit and term loan facilities. Net income in 2010 included the non-cash tax benefit of $260.6 million, noted above, as well as charges of $9.7 million, before tax, associated with the March 2010 refinancing of the Company’s revolving credit and term loan facilities.

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