NEW YORK, Feb. 14, 2012 /PRNewswire/ -- Avon Products, Inc.
(NYSE: AVP) today reported fourth-quarter and full-year 2011
results. Andrea Jung, Avon's Chairman and Chief Executive Officer
said: "Despite a challenging fourth quarter, 2011 revenue was up 4%
(1% in constant dollars) to $11.3
billion. Adjusted operating profit for the year was
$1.16 billion and cash from
operations was $656 million. While
2012 is a year of transition and we are not planning for margin
recovery, our priorities are to improve top-line performance, cost
management, and cash generation. Additionally, the company plans to
maintain its annual $0.92 dividend in
2012. As previously announced, the company is conducting an
operational and financial assessment of the business. We will
update investors at the appropriate time after a new CEO is on
board."
Fourth-Quarter 2011 (compared to fourth-quarter 2010)
Total revenue of $3.0 billion
decreased 4% or 1% in constant dollars. Total units declined 2%,
while price/mix was a benefit of 1% during the quarter. Active
Representatives were down 3%.
Fourth-quarter 2011 gross margin was 61.1%, 70 basis points
lower than the prior-year quarter primarily due to an
inventory-related charge in Brazil
and commodity cost pressures.
Selling, general and administrative expense in the quarter
increased as a percent of revenue by 2% versus fourth-quarter 2010,
and increased 3% on an adjusted non-GAAP basis due to higher
distribution costs, bad debt expense, and investments in
Representative Value Proposition ("RVP"). Avon invested an incremental $35 million in RVP in the fourth quarter of 2011
in Sales Leadership and higher incentives. This more than offset a
$21 million decline in advertising,
which was down 23% to $71
million.
Fourth-quarter 2011 costs associated with the company's 2005 and
2009 restructuring programs were $9
million pre-tax, down from $58
million pre-tax, or $0.01 and
$0.09 per diluted share,
respectively.
During the quarter, the Company took a non-cash charge of
$263 million, or $0.38 per diluted share, to adjust goodwill and
an intangible asset related to the acquisition of Silpada Designs,
Inc. ("Silpada"). This non-cash impairment charge was largely
driven by the rise in silver prices since the acquisition and the
negative impact on Silpada's revenues and margins.
Operating profit was $13 million
in the quarter and operating margin was 0.4%, significantly
impacted by the Silpada impairment charge. Adjusted non-GAAP
operating profit was down 31%, and adjusted non-GAAP operating
margin was 9.4%, down 360 basis points from a year ago due to
higher field and distribution costs in Brazil, higher investments in RVP in the U.S.,
and lower gross margin.
Fourth-quarter 2011's effective tax rate was 101.7%, compared
with 34.0% in the year-ago quarter. Excluding the impact of
restructuring costs and the Silpada impairment charge, the
fourth-quarter 2011 adjusted non-GAAP tax rate was 32.2% versus
34.0% in fourth-quarter 2010.
Income from continuing operations in the fourth quarter of 2011
was $0.3 million or zero cents per
diluted share, significantly impacted by the Silpada impairment
charge. Excluding the impact of restructuring costs and the
impairment charge, adjusted non-GAAP income from continuing
operations was $172 million, or
$0.39 per diluted share.
Fourth-Quarter 2011 Regional Results (compared to
fourth-quarter 2010)
Latin America's fourth-quarter
2011 revenue was up 2% year over year, or up 6% in constant
dollars. Brazil was down 6%, or
down 1% in constant dollars. Strong growth continued in
Mexico, which was up 2%, or up 12%
in constant dollars. The region's Active Representatives were flat
and units sold increased 4%. Fourth-quarter operating profit was
down 33%. Operating margin was 9.9%, or 10.4% on an adjusted
non-GAAP basis. The decline in operating margin was due to a
$16 million inventory-related charge
and the field and distribution costs associated with Brazil's continued service challenge. The
final quarter of dual distribution costs were also a factor.
Fourth-quarter revenue in North
America was down 7% on both a reported and constant-dollar
basis. Avon's core U.S. business,
which excludes Silpada, was down 5%, as recent product portfolio
enhancements of giftables and smart-value offerings within Beauty
resulted in positive average order growth for the quarter,
partially offsetting a decline in Active Representatives. Silpada
sales were down double digits, negatively impacted by recent price
increases. The region's Active Representatives were down 8% and
units sold were flat. North
America reported a fourth-quarter operating loss of
$241 million, compared with an
operating profit of $46 million in
the year-ago quarter, due to the Silpada impairment charge.
Excluding restructuring charges and the Silpada impairment charge,
adjusted non-GAAP operating profit was down 69%, with an adjusted
non-GAAP operating margin of 3.6%. The decline in adjusted non-GAAP
operating margin reflects fixed overhead costs with lower revenues
and costs related to the One Simple Sales Model implementation.
In Central & Eastern
Europe, fourth-quarter revenue was down 9%, or down 8% in
constant dollars. The region's results were pressured by a
challenging beauty market as well as aggressive competitive
pricing. Russia was down 11%, or
down 10% in constant dollars. The region's Active Representatives
and units sold were down 3% and 12%, respectively. Operating profit
was down 10%. The region's operating margin was 19.4%, or 19.8% on
an adjusted non-GAAP basis, as gains in gross margin were offset by
investments in brochure and the impact of fixed overhead costs on
lower revenues.
Western Europe, Middle East & Africa's fourth-quarter revenue decreased 9%
or down 3% in constant dollars. The region's results reflect
continued weakness in macroeconomic conditions and weaker
performance in the Fashion & Home categories. The region's
Active Representatives and units sold were down 3% and 5%,
respectively. Operating profit was down 23% versus the prior-year
quarter. Operating margin was 11.0% and adjusted non-GAAP operating
margin was 10.9%, primarily due to lower gross margin, negatively
impacted by foreign exchange and fixed overhead costs with lower
revenues.
Asia Pacific's fourth-quarter
revenue was down 6% year over year, or down 7% in constant dollars.
The region's Active Representatives and units sold declined 7% and
6%, respectively. Operating profit was down 24%. Operating margin
was 9.5% and adjusted non-GAAP operating margin was 9.6%. The
decline was due to fixed overhead costs with lower revenues and
higher investments in RVP.
Full-Year 2011 Results (compared to full-year 2010)
Total revenue of $11.3 billion
increased 4% or up 1% in constant dollars. Acquisitions contributed
1% to revenue growth during the year. Total Beauty sales were up
5%, or 2% on a constant-dollar basis. Active Representatives
declined 1% and units sold were down by 2%.
Operating profit of $855 million
decreased 20% and operating margin was 7.6%, down 230 basis points.
Excluding the impact of restructuring costs and the Silpada
impairment charge, adjusted non-GAAP operating profit was
$1.2 billion, down 6%, and adjusted
non-GAAP operating margin was 10.3%, down 110 basis points from a
year ago.
Full-year income from continuing operations was $526 million, or $1.20 per diluted share, compared with
$595 million, or $1.36 per diluted share last year. Adjusted
non-GAAP income from continuing operations was $719 million, or $1.64 per diluted share, compared with
$786 million, or $1.80 per diluted share.
Cash flow from operations was $656
million in 2011, $33 million
lower, primarily due to a $75 million
pension contribution, a $36 million
payment associated with a long-term incentive compensation plan,
and higher restructuring payments during the year. Partially
offsetting these items were higher cash net income from operations
and higher recovery of value added taxes in Brazil. Avon's net debt (total debt less cash) at
year-end 2011 was $2.1 billion, up
$107 million from the prior-year
period. Capital expenditures were $277
million for the year.
Avon will conduct a conference
call at 9:00 A.M. today to discuss
the quarter results. The dial-in number for the call is (800)
843-2086 in the U.S. or (706) 643-1815 from non-U.S. locations
(conference ID number: 42704239). The call will be webcast live at
www.avoninvestor.com and the call and related slides can be
accessed or downloaded from that site for a period of one year.
Avon, the company for
women, is a leading global beauty company, with over $11 billion in annual revenue. As the world's
largest direct seller, Avon
markets to women in more than 100 countries through approximately
6.4 million active independent Avon Sales Representatives.
Avon's product line includes
beauty products, as well as fashion and home products, and features
such well-recognized brand names as Avon Color, ANEW,
Skin-So-Soft, Advance Techniques, Avon Naturals, and
mark. Learn more about Avon
and its products at www.avoncompany.com.
Footnote
(1) "Adjusted non-GAAP" items refer to financial results
presented in accordance with US GAAP that have been adjusted to
exclude the impact of the Silpada impairment charge, Venezuelan
special items, and restructuring costs, as described below, under
"Non-GAAP Financial Measures."
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with
generally accepted accounting principles in the United States ("GAAP"), we disclose
operating results that have been adjusted to exclude the impact of
changes due to the translation of foreign currencies into U.S.
dollars. We refer to these adjusted growth rates as Constant $
growth, which is a non-GAAP financial measure. We believe this
measure provides investors an additional perspective on trends. To
exclude the impact of changes due to the translation of foreign
currencies into U.S. dollars, we calculate current year results and
prior year results at a constant exchange rate. Currency impact is
determined as the difference between actual growth rates and
constant currency growth rates.
We present gross margin, selling, general and administrative
expenses as a percentage of revenue, operating profit, operating
margin, income from continuing operations, earnings per share from
continuing operations and effective tax rate on a non-GAAP basis.
The discussion of our segments presents operating profit and
operating margin on a non-GAAP basis. We have provided a
quantitative reconciliation of the difference between the non-GAAP
financial measure and the financial measure calculated and reported
in accordance with GAAP. These non-GAAP measures should not be
considered in isolation, or as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. The Company
uses the non-GAAP financial measures to evaluate its operating
performance and believes that it is meaningful for investors to be
made aware of, on a period-to-period basis, the impacts of 1) costs
to implement ("CTI") restructuring initiatives, 2) goodwill and
indefinite-lived intangible impairment charge related to Silpada
("Impairment charge"), and 3) costs and charges related to
Venezuela being designated as a
highly inflationary economy and the subsequent devaluation of its
currency in January 2010 ("Venezuelan
special items"). The Company believes investors find the non-GAAP
information helpful in understanding the ongoing performance of
operations separate from items that may have a disproportionate
positive or negative impact on the Company's financial results in
any particular period. The Impairment charge includes the impact on
the Statement of Income caused by the goodwill and indefinite-lived
intangible impairment charge related to Silpada in 2011. The
Venezuelan special items include the impact on the Statement of
Income caused by the devaluation of the Venezuelan currency on
monetary assets and liabilities, such as cash, receivables and
payables; deferred tax assets and liabilities; and nonmonetary
assets, such as inventory and prepaid expenses. For nonmonetary
assets, the Venezuelan special items include the earnings impact
caused by the difference between the historical cost of the assets
at the previous official exchange rate of 2.15 and the revised
official exchange rate of 4.30.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Statements in this release that are not historical facts or
information are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as
"estimate," "project," "forecast," "plan," "believe," "may,"
"expect," "anticipate," "intend," "planned," "potential," "can,"
"expectation" and similar expressions, or the negative of those
expressions, may identify forward-looking statements. Such
forward-looking statements are based on management's reasonable
current assumptions and expectations. Such forward-looking
statements involve risks, uncertainties and other factors, which
may cause the actual results, levels of activity, performance or
achievement of Avon to be
materially different from any future results expressed or implied
by such forward-looking statements, and there can be no assurance
that actual results will not differ materially from management's
expectations. Such factors include, among others, the
following:
- our ability to implement the key initiatives of, and realize
the gross and operating margins and projected benefits (in the
amounts and time schedules we expect) from, our global business
strategy, including our multi-year restructuring programs and any
initiatives arising under our long-range business review, product
mix and pricing strategies, Enterprise Resource Planning, customer
service initiatives, sales and operation planning process,
outsourcing strategies, Internet platform and technology
strategies, information technology and related system enhancements
and cash management, tax, foreign currency hedging and risk
management strategies;
- our ability to realize the anticipated benefits (including any
financial projections concerning, for example, future revenue,
profit, cash flow and operating margin increases) from our
multi-year restructuring programs, any initiatives arising under
our long-range business review or other initiatives on the time
schedules or in the amounts that we expect, and our plans to invest
these anticipated benefits ahead of future growth;
- the possibility of business disruption in connection with our
multi-year restructuring programs, long-range business review or
other initiatives;
- our ability to realize sustainable growth from our investments
in our brand and the direct-selling channel;
- our ability to transition our business in North America, including enhancing our Sales
Leadership model and optimizing our product portfolio;
- a general economic downturn, a recession globally or in one or
more of our geographic regions, or sudden disruption in business
conditions, and the ability of our broad-based geographic portfolio
to withstand an economic downturn, recession, cost inflation,
commodity cost pressures, economic or political instability,
competitive or other market pressures or conditions;
- the effect of political, legal, tax and regulatory risks
imposed on us in the United States
and abroad, our operations or our Representatives, including
foreign exchange or other restrictions, adoption, interpretation
and enforcement of foreign laws including any changes thereto, as
well as reviews and investigations by government regulators that
have occurred or may occur from time to time, including, for
example, local regulatory scrutiny in China;
- our ability to effectively manage inventory and implement
initiatives to reduce inventory levels, including the potential
impact on cash flows and obsolescence;
- our ability to achieve growth objectives, particularly in our
largest markets, such as the U.S., and developing and emerging
markets, such as Brazil or
Russia;
- our ability to successfully identify new business opportunities
and identify and analyze acquisition candidates, secure financing
on favorable terms and negotiate and consummate acquisitions as
well as to successfully integrate or manage any acquired
business;
- the challenges to our acquired businesses, such as Silpada,
including the effect of rising costs, macro-economic pressures,
competition, and the impact of declines in expected future cash
flows and growth rates, and a change in the discount rate used to
determine the fair value of expected future cash flows, which have
impacted, and may continue to impact, the estimated fair value of
the recorded goodwill and intangible assets;
- the effect of economic factors, including inflation and
fluctuations in interest rates and currency exchange rates, as well
as the designation of Venezuela as
a highly inflationary economy, foreign exchange restrictions and
the potential effect of such factors on our business, results of
operations and financial condition;
- our ability to successfully transition and evolve our business
in China in connection with the
development and evolution of the direct-selling business in that
market, our ability to operate using a direct-selling model
permitted in that market and our ability to retain and increase the
number of Active Representatives there over a sustained period of
time;
- general economic and business conditions in our markets,
including social, economic and political uncertainties in the
international markets in our portfolio;
- any developments in or consequences of investigations and
compliance reviews, and any litigation related thereto, including
the ongoing internal investigation and compliance reviews of
Foreign Corrupt Practices Act and related U.S. and foreign law
matters in China and additional
countries, as well as any disruption or adverse consequences
resulting from such investigations, reviews, related actions or
litigation;
- key information technology systems, process or site outages and
disruptions;
- disruption in our supply chain or manufacturing and
distribution operations;
- other sudden disruption in business operations beyond our
control as a result of events such as acts of terrorism or war,
natural disasters, pandemic situations, large-scale power outages
and similar events;
- the risk of product or ingredient shortages resulting from our
concentration of sourcing in fewer suppliers;
- the quality, safety and efficacy of our products;
- the success of our research and development activities;
- our ability to attract and retain key personnel;
- competitive uncertainties in our markets, including competition
from companies in the cosmetics, fragrances, skincare and
toiletries industry, some of which are larger than we are and have
greater resources;
- our ability to implement our Sales Leadership program globally,
to generate Representative activity, to increase the number of
consumers served per Representative and their engagement online, to
enhance the Representative and consumer experience and increase
Representative productivity through field activation programs,
execution of Service Model Transformation and other investments in
the direct-selling channel, and to compete with other
direct-selling organizations to recruit, retain and service
Representatives and to continue to innovate the direct-selling
model;
- the impact of the typically seasonal nature of our business,
adverse effect of rising energy, commodity and raw material prices,
changes in market trends, purchasing habits of our consumers and
changes in consumer preferences, particularly given the global
nature of our business and the conduct of our business in primarily
one channel;
- our ability to protect our intellectual property rights;
- the risk of an adverse outcome in any material pending and
future litigations or with respect to the legal status of
Representatives;
- our ratings, our access to cash and short and long-term
financing and ability to secure financing, or financing at
attractive rates;
- the impact of possible pension funding obligations, increased
pension expense and any changes in pension regulations or
interpretations thereof on our cash flow and results of operations;
and
- the impact of changes in tax rates on the value of our deferred
tax assets.
Additional information identifying such factors is contained in
Item 1A of our 2010 Form 10-K for the year ended December 31, 2010. We undertake no obligation to
update any such forward-looking statements.
AVON
PRODUCTS, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(Unaudited)
|
|
(In
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Percent
|
|
Twelve
months ended
|
|
Percent
|
|
|
|
December
31
|
|
Change
|
|
December
31
|
|
Change
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,997.9
|
|
$
|
3,137.8
|
|
(4)%
|
|
$
|
11,112.0
|
|
$
|
10,731.3
|
|
4%
|
|
Other revenue
|
|
|
45.8
|
|
|
37.8
|
|
|
|
|
179.6
|
|
|
131.5
|
|
|
|
Total revenue
|
|
|
3,043.7
|
|
|
3,175.6
|
|
(4)%
|
|
|
11,291.6
|
|
|
10,862.8
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
1,182.5
|
|
|
1,211.5
|
|
|
|
|
4,148.6
|
|
|
4,041.3
|
|
|
|
Selling, general and
administrative expenses
|
|
|
1,585.3
|
|
|
1,608.2
|
|
|
|
|
6,025.4
|
|
|
5,748.4
|
|
|
|
Impairment of goodwill and
intangible asset
|
|
|
263.0
|
|
|
-
|
|
|
|
|
263.0
|
|
|
-
|
|
|
|
Operating
profit
|
|
|
12.9
|
|
|
355.9
|
|
(96)%
|
|
|
854.6
|
|
|
1,073.1
|
|
(20)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
23.4
|
|
|
23.8
|
|
|
|
|
92.9
|
|
|
87.1
|
|
|
|
Interest income
|
|
|
(3.2)
|
|
|
(4.0)
|
|
|
|
|
(16.5)
|
|
|
(14.0)
|
|
|
|
Other expense, net
|
|
|
10.0
|
|
|
2.2
|
|
|
|
|
35.6
|
|
|
54.6
|
|
|
|
Total other
expenses
|
|
|
30.2
|
|
|
22.0
|
|
|
|
|
112.0
|
|
|
127.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations, before tax
|
|
|
(17.3)
|
|
|
333.9
|
|
(105)%
|
|
|
742.6
|
|
|
945.4
|
|
(21)%
|
|
Income taxes
|
|
|
17.6
|
|
|
(113.6)
|
|
|
|
|
(216.2)
|
|
|
(350.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
|
|
0.3
|
|
|
220.3
|
|
(100)%
|
|
|
526.4
|
|
|
595.2
|
|
(12)%
|
|
Discontinued operations, net of
tax
|
|
|
-
|
|
|
9.0
|
|
|
|
|
(8.6)
|
|
|
14.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
0.3
|
|
|
229.3
|
|
|
|
|
517.8
|
|
|
609.3
|
|
|
|
Net (income) loss attributable
to noncontrolling interest
|
|
|
(0.7)
|
|
|
0.2
|
|
|
|
|
(4.2)
|
|
|
(3.0)
|
|
|
|
Net (loss) income attributable
to Avon
|
|
$
|
(0.4)
|
|
$
|
229.5
|
|
(100)%
|
|
$
|
513.6
|
|
$
|
606.3
|
|
(15)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS from continuing
operations
|
|
$
|
-
|
|
$
|
.51
|
|
(100)%
|
|
$
|
1.20
|
|
$
|
1.37
|
|
(12)%
|
|
Basic EPS from
discontinued operations
|
|
$
|
-
|
|
$
|
.02
|
|
|
|
$
|
(.02)
|
|
$
|
.04
|
|
|
|
Basic EPS attributable to
Avon
|
|
$
|
-
|
|
$
|
.53
|
|
(100)%
|
|
$
|
1.18
|
|
$
|
1.40
|
|
(16)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from
continuing operations
|
|
$
|
-
|
|
$
|
.50
|
|
(100)%
|
|
$
|
1.20
|
|
$
|
1.36
|
|
(12)%
|
|
Diluted EPS from
discontinued operations
|
|
$
|
-
|
|
$
|
.02
|
|
|
|
$
|
(.02)
|
|
$
|
.03
|
|
|
|
Diluted EPS attributable
to Avon
|
|
$
|
-
|
|
$
|
.53
|
|
(100)%
|
|
$
|
1.18
|
|
$
|
1.39
|
|
(15)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,245.1
|
|
$
|
1,179.9
|
|
Accounts receivable,
net
|
|
|
761.5
|
|
|
826.3
|
|
Inventories
|
|
|
1,161.3
|
|
|
1,152.9
|
|
Prepaid expenses and
other
|
|
|
930.9
|
|
|
1,025.2
|
|
Total current
assets
|
|
|
4,098.8
|
|
|
4,184.3
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
at cost
|
|
|
2,708.8
|
|
|
2,750.9
|
|
Less accumulated
depreciation
|
|
|
(1,137.3)
|
|
|
(1,123.5)
|
|
Property, plant and equipment,
net
|
|
|
1,571.5
|
|
|
1,627.4
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
473.1
|
|
|
675.1
|
|
Other intangible assets,
net
|
|
|
279.9
|
|
|
368.3
|
|
Other assets
|
|
|
1,311.7
|
|
|
1,018.6
|
|
Total
assets
|
|
$
|
7,735.0
|
|
$
|
7,873.7
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Debt maturing within one
year
|
|
$
|
849.3
|
|
$
|
727.6
|
|
Accounts payable
|
|
|
850.2
|
|
|
809.8
|
|
Accrued compensation
|
|
|
217.1
|
|
|
293.2
|
|
Other accrued
liabilities
|
|
|
663.6
|
|
|
771.6
|
|
Sales and taxes other than
income
|
|
|
212.4
|
|
|
207.6
|
|
Income taxes
|
|
|
98.4
|
|
|
146.5
|
|
Total current
liabilities
|
|
|
2,891.0
|
|
|
2,956.3
|
|
Long-term debt
|
|
|
2,459.1
|
|
|
2,408.6
|
|
Employee benefit
plans
|
|
|
603.0
|
|
|
561.3
|
|
Long-term income
taxes
|
|
|
67.0
|
|
|
128.9
|
|
Other liabilities
|
|
|
129.7
|
|
|
146.0
|
|
Total
liabilities
|
|
$
|
6,149.8
|
|
$
|
6,201.1
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
Common stock
|
|
$
|
187.3
|
|
$
|
186.6
|
|
Additional
paid-in-capital
|
|
|
2,077.7
|
|
|
2,024.2
|
|
Retained earnings
|
|
|
4,726.1
|
|
|
4,610.8
|
|
Accumulated other comprehensive
loss
|
|
|
(854.4)
|
|
|
(605.8)
|
|
Treasury stock, at
cost
|
|
|
(4,566.3)
|
|
|
(4,559.3)
|
|
Total Avon shareholders'
equity
|
|
|
1,570.4
|
|
|
1,656.5
|
|
Noncontrolling
interest
|
|
|
14.8
|
|
|
16.1
|
|
Total shareholders'
equity
|
|
$
|
1,585.2
|
|
$
|
1,672.6
|
|
Total
liabilities and shareholders' equity
|
|
$
|
7,735.0
|
|
$
|
7,873.7
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
|
December
31
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
|
$
|
526.4
|
|
$
|
595.2
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
239.6
|
|
|
194.8
|
|
Provision for doubtful
accounts
|
|
|
247.2
|
|
|
215.7
|
|
Provision for
obsolescence
|
|
|
128.1
|
|
|
131.1
|
|
Share-based
compensation
|
|
|
36.6
|
|
|
57.6
|
|
Deferred income
taxes
|
|
|
(196.6)
|
|
|
(103.1)
|
|
Impairment of goodwill and
intangible asset
|
|
|
263.0
|
|
|
-
|
|
Charge for Venezuelan
monetary assets and liabilities
|
|
|
-
|
|
|
46.1
|
|
Other
|
|
|
52.7
|
|
|
17.2
|
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(241.5)
|
|
|
(280.3)
|
|
Inventories
|
|
|
(210.3)
|
|
|
(189.8)
|
|
Prepaid expenses and
other
|
|
|
24.6
|
|
|
(4.9)
|
|
Accounts payable and
accrued liabilities
|
|
|
(55.7)
|
|
|
76.7
|
|
Income and other
taxes
|
|
|
(50.7)
|
|
|
(63.2)
|
|
Noncurrent
assets and liabilities
|
|
|
(107.6)
|
|
|
(4.1)
|
|
Net cash provided by operating
activities of continuing operations
|
|
|
655.8
|
|
|
689.0
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing
Activities
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(276.7)
|
|
|
(331.2)
|
|
Disposal of assets
|
|
|
17.1
|
|
|
11.9
|
|
Purchases of
investments
|
|
|
(28.8)
|
|
|
(1.9)
|
|
Proceeds from sale of
investments
|
|
|
33.7
|
|
|
11.3
|
|
Acquisitions and other investing
activities
|
|
|
(13.0)
|
|
|
(785.8)
|
|
Net cash used by investing
activities of continuing operations
|
|
|
(267.7)
|
|
|
(1,095.7)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing
Activities
|
|
|
|
|
|
|
|
Cash dividends
|
|
|
(403.4)
|
|
|
(384.1)
|
|
Debt, net (maturities of three
months or less)
|
|
|
635.7
|
|
|
(3.6)
|
|
Proceeds from debt
|
|
|
88.9
|
|
|
661.5
|
|
Repayment of debt
|
|
|
(614.6)
|
|
|
(53.2)
|
|
Proceeds from exercise of stock
options
|
|
|
16.8
|
|
|
23.9
|
|
Excess tax benefit realized from
share-based compensation
|
|
|
(0.2)
|
|
|
4.3
|
|
Repurchase of common
stock
|
|
|
(7.7)
|
|
|
(14.1)
|
|
Net cash (used) provided by
financing activities of continuing operations
|
|
|
(284.5)
|
|
|
234.7
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities of discontinued operations
|
|
|
-
|
|
|
13.0
|
|
Net cash (used) provided by
investing activities of discontinued operations
|
|
|
(1.2)
|
|
|
61.3
|
|
Net cash used by financing
activities of discontinued operations
|
|
|
-
|
|
|
(0.3)
|
|
Net cash (used) provided by
discontinued operations
|
|
|
(1.2)
|
|
|
74.0
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and equivalents
|
|
|
(37.2)
|
|
|
(33.7)
|
|
Net change in cash and
equivalents
|
|
|
65.2
|
|
|
(131.7)
|
|
Cash and equivalents at
beginning of year (1)
|
|
$
|
1,179.9
|
|
$
|
1,311.6
|
|
Cash and equivalents at end
of year
|
|
$
|
1,245.1
|
|
$
|
1,179.9
|
|
|
|
|
|
|
|
|
|
(1) Includes cash and cash
equivalents of discontinued operations of $13.5M at January 1,
2010.
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
THREE MONTHS
ENDED 12/31/11
|
|
|
|
REGIONAL
RESULTS
|
|
$ in
Millions
|
Total
Revenue US$
|
|
C$
|
|
Units
|
|
Price/Mix
C$
|
|
Active Reps
|
|
Average
Order C$
|
|
|
|
% var. vs
4Q10
|
|
% var. vs
4Q10
|
|
% var. vs
4Q10
|
|
% var. vs
4Q10
|
|
% var.
vs
4Q10
|
|
% var. vs
4Q10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
1,296.2
|
2%
|
|
6%
|
|
4%
|
|
2%
|
|
-
%
|
|
6%
|
|
North America
|
596.8
|
(7)
|
|
(7)
|
|
-
|
|
(7)
|
|
(8)
|
|
1
|
|
Central & Eastern
Europe
|
461.4
|
(9)
|
|
(8)
|
|
(12)
|
|
4
|
|
(3)
|
|
(5)
|
|
Western Europe, Middle East & Africa
|
434.4
|
(9)
|
|
(3)
|
|
(5)
|
|
2
|
|
(3)
|
|
-
|
|
Asia Pacific
|
254.9
|
(6)
|
|
(7)
|
|
(6)
|
|
(1)
|
|
(7)
|
|
-
|
|
Total from operations
|
3,043.7
|
(4)
|
|
(1)
|
|
(2)
|
|
1
|
|
(3)
|
|
2
|
|
Global and other
|
-
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
$
3,043.7
|
(4)%
|
|
(1)%
|
|
(2)%
|
|
1%
|
|
(3)%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
GAAP
Operating
Profit (Loss) US$
|
% var. vs
4Q10
|
|
2011
GAAP
Operating
Margin US$
|
|
2011
Non-GAAP
Operating
Profit US$ (1)
|
|
2010
Non-GAAP
Operating
Profit US$
(1)
|
|
2011
Non-GAAP
Operating
Margin
(1)
|
|
2010
Non-GAAP
Operating
Margin
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
128.1
|
(33)%
|
|
9.9%
|
|
$
|
134.5
|
|
$
|
202.6
|
|
10.4%
|
|
15.9%
|
|
North America
|
(241.4)
|
(626)
|
|
(40.4)
|
|
|
21.6
|
|
|
69.9
|
|
3.6
|
|
10.8
|
|
Central & Eastern
Europe
|
89.5
|
(10)
|
|
19.4
|
|
|
91.2
|
|
|
101.3
|
|
19.8
|
|
19.9
|
|
Western Europe, Middle
East & Africa
|
47.6
|
(23)
|
|
11.0
|
|
|
47.5
|
|
|
66.6
|
|
10.9
|
|
13.9
|
|
Asia Pacific
|
24.1
|
(24)
|
|
9.5
|
|
|
24.4
|
|
|
33.2
|
|
9.6
|
|
12.3
|
|
Total from operations
|
47.9
|
(89)
|
|
1.6
|
|
|
319.2
|
|
|
473.6
|
|
10.5
|
|
14.9
|
|
Global and other
|
(35.0)
|
52
|
|
-
|
|
|
(34.6)
|
|
|
(59.4)
|
|
-
|
|
-
|
|
Total
|
$
12.9
|
(96)%
|
|
0.4%
|
|
$
|
284.6
|
|
$
|
414.2
|
|
9.4%
|
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATEGORY
SALES (US$)
|
|
|
Consolidated
|
|
|
US$
|
|
C$
|
|
|
|
|
|
% var. vs
4Q10
|
|
% var. vs
4Q10
|
|
Beauty (color
cosmetics/fragrances/skincare/personal care)
|
|
$
|
2,146.9
|
|
(2)%
|
|
1%
|
|
Fashion
(jewelry/watches/apparel/footwear/accessories/children's)
|
|
|
541.8
|
|
(14)
|
|
(12)
|
|
Home (gift & decorative
products/housewares/entertainment &
leisure/children's/nutrition)
|
|
|
309.2
|
|
(4)
|
|
(1)
|
|
Net sales
|
|
|
|
|
$
|
2,997.9
|
|
(4)%
|
|
(2)%
|
|
Other revenue
|
|
|
|
|
|
45.8
|
|
21
|
|
23
|
|
Total revenue
|
|
|
|
|
$
|
3,043.7
|
|
(4)%
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beauty
Category:
|
|
|
|
|
|
|
|
|
|
|
|
Fragrance
|
|
|
|
|
|
|
|
(2)%
|
|
2%
|
|
Color
|
|
|
|
|
|
|
|
-
|
|
4
|
|
Skincare
|
|
|
|
|
|
|
|
1
|
|
4
|
|
Personal care
|
|
|
|
|
|
|
|
(6)%
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For a further discussion on our non-GAAP
financial measures, please refer to our discussion of non-GAAP
financial measures in this release and
reconciliations of our
non-GAAP financial measures to the related GAAP financial measure
in the following supplemental schedules.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
(Unaudited)
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE
MONTHS ENDED 12/31/11
|
|
|
|
REGIONAL
RESULTS
|
|
|
$ in Millions
|
Total
Revenue US$
|
|
C$
|
|
Units
|
|
Price/Mix
C$
|
|
Active Reps
|
|
Average
Order C$
|
|
|
|
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
5,116.0
|
11%
|
|
8%
|
|
2%
|
|
6%
|
|
3%
|
|
5%
|
|
North America
|
|
2,110.4
|
(6)
|
|
(6)
|
|
(10)
|
|
4
|
|
(8)
|
|
2
|
|
Central & Eastern Europe
|
|
1,580.6
|
-
|
|
(4)
|
|
(6)
|
|
2
|
|
(2)
|
|
(2)
|
|
Western Europe, Middle East & Africa
|
|
1,542.2
|
5
|
|
5
|
|
1
|
|
4
|
|
4
|
|
1
|
|
Asia Pacific
|
|
942.4
|
(4)
|
|
(9)
|
|
(9)
|
|
-
|
|
(11)
|
|
2
|
|
Total from operations
|
|
11,291.6
|
4
|
|
1
|
|
(2)
|
|
3
|
|
(1)
|
|
2
|
|
Global and other
|
|
-
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
$
|
11,291.6
|
4%
|
|
1%
|
|
(2)%
|
|
3%
|
|
(1)%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
GAAP
Operating
Profit
(Loss) US$
|
% var. vs
12M10
|
|
2011
GAAP
Operating
Margin
US$
|
|
2011
Non-GAAP
Operating
Profit US$
(1)
|
|
2010
Non-GAAP
Operating
Profit US$
(1)
|
|
2011
Non-GAAP
Operating
Margin
(1)
|
|
2010
Non-GAAP
Operating
Margin (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
630.4
|
4%
|
|
12.3%
|
|
$
|
633.5
|
|
$
|
704.0
|
|
12.4%
|
|
15.3%
|
|
North America
|
|
(184.4)
|
(218)
|
|
(8.7)
|
|
|
103.3
|
|
|
197.2
|
|
4.9
|
|
8.8
|
|
Central & Eastern
Europe
|
|
295.2
|
(1)
|
|
18.7
|
|
|
297.7
|
|
|
302.5
|
|
18.8
|
|
19.1
|
|
Western Europe, Middle East
& Africa
|
|
183.7
|
4
|
|
11.9
|
|
|
186.5
|
|
|
178.1
|
|
12.1
|
|
12.2
|
|
Asia Pacific
|
|
81.4
|
(1)
|
|
8.6
|
|
|
81.1
|
|
|
82.3
|
|
8.6
|
|
8.4
|
|
Total from operations
|
|
1,006.3
|
(24)
|
|
8.9
|
|
|
1,302.1
|
|
|
1,464.1
|
|
11.5
|
|
13.5
|
|
Global and other
|
|
(151.7)
|
38
|
|
-
|
|
|
(144.5)
|
|
|
(230.8)
|
|
-
|
|
-
|
|
Total
|
$
|
854.6
|
(20)%
|
|
7.6%
|
|
$
|
1,157.6
|
|
$
|
1,233.3
|
|
10.3%
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATEGORY
SALES (US$)
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
US$
|
|
C$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% var. vs
12M10
|
|
% var. vs
12M10
|
|
Beauty (color
cosmetics/fragrances/skincare/personal care)
|
|
|
|
|
$
|
8,067.8
|
|
5%
|
|
2%
|
|
Fashion
(jewelry/watches/apparel/footwear/accessories/children's)
|
|
|
|
|
|
1,995.5
|
|
(1)
|
|
(3)
|
|
Home (gift & decorative products/housewares/entertainment & leisure/children's/nutrition)
|
|
|
|
|
|
1,048.7
|
|
1
|
|
(2)
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
$
|
11,112.0
|
|
4%
|
|
1%
|
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
179.6
|
|
37
|
|
34
|
|
Total revenue
|
|
|
|
|
|
|
|
|
|
$
|
11,291.6
|
|
4%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beauty
Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fragrance
|
|
|
|
|
|
|
|
|
|
|
|
|
7%
|
|
5%
|
|
|
Color
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
2
|
|
|
Skincare
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
-
|
|
|
Personal care
|
|
|
|
|
|
|
|
|
|
|
|
|
4%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For a further discussion on our
non-GAAP financial measures, please refer to our discussion of
non-GAAP financial measures in this release and reconciliations of
our non-GAAP financial measures to the related GAAP financial
measure in the following supplemental schedules.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This supplemental schedule
provides adjusted non-GAAP financial information and a quantitative
reconciliation of the difference between the non-GAAP financial
measure and the financial measure calculated and reported in
accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
THREE MONTHS
ENDED 12/31/11
|
|
|
|
|
|
CTI
|
|
|
|
|
|
|
|
Reported
|
restructuring
|
Impairment
|
|
Adjusted
|
|
|
|
|
(GAAP)
|
initiatives
|
charge
|
Rounding
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
$
|
1,182.5
|
$
|
3.0
|
$
|
-
|
|
$
|
1,179.5
|
|
Selling, general and administrative expenses
|
|
|
1,585.3
|
|
5.7
|
|
-
|
|
|
1,579.6
|
|
Operating profit
|
|
|
|
12.9
|
|
8.7
|
|
263.0
|
|
|
284.6
|
|
(Loss) income from continuing
operations before taxes
|
|
(17.3)
|
|
8.7
|
|
263.0
|
|
|
254.4
|
|
Income taxes
|
|
|
|
17.6
|
|
(2.8)
|
|
(96.8)
|
|
|
(82.0)
|
|
Income from continuing
operations
|
|
$
|
0.3
|
$
|
5.9
|
$
|
166.2
|
|
$
|
172.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
|
-
|
|
0.01
|
|
0.38
|
|
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
61.1%
|
|
0.1
|
|
-
|
|
|
61.2%
|
|
SG&A as a % of
revenues
|
|
|
|
52.1%
|
|
(0.2)
|
|
-
|
|
|
51.9%
|
|
Operating margin
|
|
0.4%
|
|
0.3
|
|
8.6
|
0.1
|
|
9.4%
|
|
Effective tax rate
|
|
|
|
101.7%
|
|
-
|
|
(69.9)
|
0.4
|
|
32.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING PROFIT
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
128.1
|
$
|
6.4
|
$
|
-
|
|
$
|
134.5
|
|
North America
|
|
(241.4)
|
|
-
|
|
263.0
|
|
|
21.6
|
|
Central & Eastern
Europe
|
|
89.5
|
|
1.7
|
|
-
|
|
|
91.2
|
|
Western Europe, Middle East
& Africa
|
|
47.6
|
|
(0.1)
|
|
-
|
|
|
47.5
|
|
Asia Pacific
|
|
24.1
|
|
0.3
|
|
-
|
|
|
24.4
|
|
Global and other
|
|
(35.0)
|
|
0.4
|
|
-
|
|
|
(34.6)
|
|
Total
|
|
|
$
|
12.9
|
$
|
8.7
|
$
|
263.0
|
|
$
|
284.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
9.9%
|
|
0.5
|
|
-
|
|
|
10.4%
|
|
North America
|
|
(40.4)%
|
|
-
|
|
44.1
|
(0.1)
|
|
3.6%
|
|
Central & Eastern
Europe
|
|
19.4%
|
|
0.4
|
|
-
|
|
|
19.8%
|
|
Western Europe, Middle East
& Africa
|
|
11.0%
|
|
-
|
|
-
|
(0.1)
|
|
10.9%
|
|
Asia Pacific
|
|
9.5%
|
|
0.1
|
|
-
|
|
|
9.6%
|
|
Global and other
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
0.4%
|
|
0.3
|
|
8.6
|
0.1
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
TWELVE
MONTHS ENDED 12/31/11
|
|
|
|
|
|
CTI
|
|
|
|
|
|
|
|
Reported
|
restructuring
|
Impairment
|
|
Adjusted
|
|
|
|
|
(GAAP)
|
initiatives
|
charge
|
Rounding
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
$
|
4,148.6
|
$
|
11.2
|
$
|
-
|
|
$
|
4,137.4
|
|
Selling, general and
administrative expenses
|
|
|
6,025.4
|
|
28.8
|
|
-
|
|
|
5,996.6
|
|
Operating profit
|
|
|
|
854.6
|
|
40.0
|
|
263.0
|
|
|
1,157.6
|
|
Income from continuing
operations before taxes
|
|
|
742.6
|
|
40.0
|
|
263.0
|
|
|
1,045.6
|
|
Income taxes
|
|
|
|
(216.2)
|
|
(13.9)
|
|
(96.8)
|
|
|
(326.9)
|
|
Income from continuing
operations
|
|
$
|
526.4
|
$
|
26.1
|
$
|
166.2
|
|
$
|
718.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
|
1.20
|
|
0.06
|
|
0.38
|
|
|
1.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
63.3%
|
|
0.1
|
|
-
|
|
|
63.4%
|
|
SG&A as a % of
revenues
|
|
|
|
53.4%
|
|
(0.3)
|
|
-
|
|
|
53.1%
|
|
Operating margin
|
|
7.6%
|
|
0.4
|
|
2.3
|
|
|
10.3%
|
|
Effective tax rate
|
|
|
|
29.1%
|
|
0.1
|
|
2.0
|
0.1
|
|
31.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING PROFIT
(LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
630.4
|
$
|
3.1
|
$
|
-
|
|
$
|
633.5
|
|
North America
|
|
(184.4)
|
|
24.7
|
|
263.0
|
|
|
103.3
|
|
Central & Eastern
Europe
|
|
295.2
|
|
2.5
|
|
-
|
|
|
297.7
|
|
Western Europe, Middle East
& Africa
|
|
183.7
|
|
2.8
|
|
-
|
|
|
186.5
|
|
Asia Pacific
|
|
81.4
|
|
(0.3)
|
|
-
|
|
|
81.1
|
|
Global and other
|
|
(151.7)
|
|
7.2
|
|
-
|
|
|
(144.5)
|
|
Total
|
|
|
$
|
854.6
|
$
|
40.0
|
$
|
263.0
|
|
$
|
1,157.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
12.3%
|
|
0.1
|
|
-
|
|
|
12.4%
|
|
North America
|
|
(8.7)%
|
|
1.2
|
|
12.5
|
(0.1)
|
|
4.9%
|
|
Central & Eastern
Europe
|
|
18.7%
|
|
0.2
|
|
-
|
(0.1)
|
|
18.8%
|
|
Western Europe, Middle East
& Africa
|
|
11.9%
|
|
0.2
|
|
-
|
|
|
12.1%
|
|
Asia Pacific
|
|
8.6%
|
|
-
|
|
-
|
|
|
8.6%
|
|
Global and other
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Total
|
|
|
|
7.6%
|
|
0.4
|
|
2.3
|
|
|
10.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
THREE MONTHS
ENDED 12/31/10
|
|
|
|
|
CTI
|
|
|
|
|
|
Reported
|
restructuring
|
|
Adjusted
|
|
|
|
(GAAP)
|
initiatives
|
Rounding
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
1,211.5
|
$
|
2.6
|
|
$
|
1,208.9
|
|
Selling, general and
administrative expenses
|
|
|
1,608.2
|
|
55.7
|
|
|
1,552.5
|
|
Operating profit
|
|
|
355.9
|
|
58.3
|
|
|
414.2
|
|
Income from continuing
operations before taxes
|
|
|
333.9
|
|
58.3
|
|
|
392.2
|
|
Income taxes
|
|
|
(113.6)
|
|
(19.8)
|
|
|
(133.4)
|
|
Income from continuing
operations
|
|
$
|
220.3
|
$
|
38.5
|
|
$
|
258.8
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
|
0.50
|
|
0.09
|
|
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
61.8%
|
|
0.1
|
|
|
61.9%
|
|
SG&A as a % of
revenues
|
|
|
50.6%
|
|
(1.8)
|
0.1
|
|
48.9%
|
|
Operating margin
|
|
11.2%
|
|
1.8
|
|
|
13.0%
|
|
Effective tax rate
|
|
|
34.0%
|
|
-
|
|
|
34.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
189.8
|
$
|
12.8
|
|
$
|
202.6
|
|
North America
|
|
45.9
|
|
24.0
|
|
|
69.9
|
|
Central & Eastern
Europe
|
|
99.7
|
|
1.6
|
|
|
101.3
|
|
Western Europe, Middle East
& Africa
|
|
61.5
|
|
5.1
|
|
|
66.6
|
|
Asia Pacific
|
|
31.6
|
|
1.6
|
|
|
33.2
|
|
Global and other
|
|
(72.6)
|
|
13.2
|
|
|
(59.4)
|
|
Total
|
|
$
|
355.9
|
$
|
58.3
|
|
$
|
414.2
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
14.9%
|
|
1.0
|
|
|
15.9%
|
|
North America
|
|
7.1%
|
|
3.7
|
|
|
10.8%
|
|
Central & Eastern
Europe
|
|
19.6%
|
|
0.3
|
|
|
19.9%
|
|
Western Europe, Middle East
& Africa
|
|
12.9%
|
|
1.1
|
(0.1)
|
|
13.9%
|
|
Asia Pacific
|
|
11.7%
|
|
0.6
|
|
|
12.3%
|
|
Global and other
|
|
-
|
|
-
|
|
|
-
|
|
Total
|
|
|
11.2%
|
|
1.8
|
|
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
TWELVE
MONTHS ENDED 12/31/10
|
|
|
|
|
CTI
|
|
|
|
|
|
|
Reported
|
restructuring
|
Venezuelan
|
|
Adjusted
|
|
|
|
(GAAP)
|
initiatives
|
special
items
|
Rounding
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
4,041.3
|
$
|
9.5
|
$
|
70.1
|
|
$
|
3,961.7
|
|
Selling, general and
administrative expenses
|
|
|
5,748.4
|
|
71.2
|
|
9.4
|
|
|
5,667.8
|
|
Operating profit
|
|
|
1,073.1
|
|
80.7
|
|
79.5
|
|
|
1,233.3
|
|
Income from continuing
operations before taxes
|
|
|
945.4
|
|
80.7
|
|
125.6
|
|
|
1,151.7
|
|
Income taxes
|
|
|
(350.2)
|
|
(28.3)
|
|
12.7
|
|
|
(365.8)
|
|
Income from continuing
operations
|
|
$
|
595.2
|
$
|
52.4
|
$
|
138.3
|
|
$
|
785.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
|
1.36
|
|
0.12
|
|
0.32
|
|
|
1.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
62.8%
|
|
0.1
|
|
0.6
|
|
|
63.5%
|
|
SG&A as a % of
revenues
|
|
|
52.9%
|
|
(0.7)
|
|
(0.1)
|
0.1
|
|
52.2%
|
|
Operating margin
|
|
9.9%
|
|
0.7
|
|
0.7
|
0.1
|
|
11.4%
|
|
Effective tax rate
|
|
|
37.0%
|
|
0.3
|
|
(5.6)
|
0.1
|
|
31.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
|
604.7
|
$
|
19.8
|
$
|
79.5
|
|
$
|
704.0
|
|
North America
|
|
155.9
|
|
41.3
|
|
-
|
|
|
197.2
|
|
Central & Eastern
Europe
|
|
297.8
|
|
4.7
|
|
-
|
|
|
302.5
|
|
Western Europe, Middle East
& Africa
|
|
176.5
|
|
1.6
|
|
-
|
|
|
178.1
|
|
Asia Pacific
|
|
82.6
|
|
(0.3)
|
|
-
|
|
|
82.3
|
|
Global and other
|
|
(244.4)
|
|
13.6
|
|
-
|
|
|
(230.8)
|
|
Total
|
|
$
|
1,073.1
|
$
|
80.7
|
$
|
79.5
|
|
$
|
1,233.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
13.2%
|
|
0.4
|
|
1.7
|
|
|
15.3%
|
|
North America
|
|
6.9%
|
|
1.8
|
|
-
|
0.1
|
|
8.8%
|
|
Central & Eastern
Europe
|
|
18.8%
|
|
0.3
|
|
-
|
|
|
19.1%
|
|
Western Europe, Middle East
& Africa
|
|
12.1%
|
|
0.1
|
|
-
|
|
|
12.2%
|
|
Asia Pacific
|
|
8.4%
|
|
-
|
|
-
|
|
|
8.4%
|
|
Global and other
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
Total
|
|
|
9.9%
|
|
0.7
|
|
0.7
|
0.1
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Avon Products, Inc.