NEW YORK, Feb. 8, 2011 /PRNewswire-FirstCall/ -- Avon
Products, Inc. (NYSE: AVP) today reported fourth-quarter 2010 total
revenue of $3.2 billion, 1% higher
than that of fourth-quarter 2009. Constant dollar sales rose 5% in
the fourth quarter as foreign exchange reduced growth by 4%. Total
units declined 2%, while price/mix rose 7% during the quarter.
Active Representatives were flat in the quarter. Acquisitions
contributed approximately 3% to revenue growth in the fourth
quarter, 1% to units, and 2% to price/mix.
Andrea Jung, Chairman and CEO,
commented, “As we closed out the year, we continued to experience
disappointing sales results which were negatively impacted by
service disruptions in Brazil and
weak performance in Russia.
Looking ahead, we are aggressively addressing execution challenges
which dampened our second-half 2010 performance. Our business
fundamentals remain solid, and we believe our strong field programs
and innovation pipeline that begin in the second quarter of 2011
should drive another year of mid-single digit constant dollar
revenue growth. We expect improvement in operating margin this year
in line with our commitment to mid-teens operating margin by 2013.”
Avon’s Beauty sales declined 1% year over year during the fourth
quarter of 2010, or up 2% in constant dollars. On a reported basis,
fragrance was up 4%, personal care was up 3%, color was down 2%,
and skin care was down 12% for the fourth quarter. Constant dollar
revenue was up 9% in fragrance, up 6% in personal care, up 1% in
color, and down 10% in skin care.
Fourth-quarter 2010 gross margin of 61.8% was 90 basis points
below that of the prior-year quarter, due to higher product costs
and adverse product mix which were partially offset by increased
pricing.
Selling, general and administrative expenses in the quarter
increased as a percent of revenue by 90 basis points versus
fourth-quarter 2009. On an adjusted basis, it increased by 20 basis
points.
Advertising for the quarter was $92
million, down 15% or $17
million from a year ago, primarily due to reductions in
China. Avon invested an incremental $32 million in the Representative Value
Proposition (“RVP”) in the fourth quarter in Sales Leadership,
Service Model Transformation and Web enablement.
Fourth-quarter 2010 costs associated with the company’s 2005 and
2009 restructuring programs were $58
million pre-tax, or $0.09 per
share after-tax. These costs compared with $34 million pre-tax, or $0.06 per share after-tax, related to the
company’s 2005 and 2009 restructuring programs in the prior-year
period. The total cost of the 2009 restructuring program is now
expected to be approximately $300-$310
million, at the lower end of our expected $300-$400 million range. We continue to expect to
reach our original target of approximately $200 million in annualized savings from our 2009
restructuring program once all initiatives are fully implemented by
2012-2013. The company does not expect to announce any further
initiatives in connection with the 2009 restructuring program.
In addition, Avon sold its
ownership interest in Avon Japan in the fourth quarter of 2010.
This transaction and the operating results of Avon Japan are now
reported as discontinued operations for all periods.
Fourth-quarter 2010 operating profit of $356 million was down 13% compared with the
year-ago quarter and operating margin was 11.2%, down 180 basis
points year over year. Adjusted operating profit was down 6%, and
adjusted operating margin was 13.1%, down 100 basis points from a
year ago. The decline was due primarily to the lower gross
margin.
Fourth-quarter 2010’s effective tax rate was 34%, compared with
30.6% in fourth-quarter 2009. The tax rate was affected in the year
over year comparisons by unfavorable geographic mix.
Income from continuing operations in the fourth quarter of 2010
was $220 million, or $0.50 per share, compared with $268 million, or $0.62 per share, in the year-ago quarter.
Adjusted income from continuing operations was $259 million, or $0.59 per share, compared with $293 million, or $0.68 per share, in the year-ago fourth
quarter.
Fourth-Quarter Regional Results
Latin America’s fourth-quarter 2010 revenue was up 5% year over
year, or up 11% in constant dollars. On a reported basis,
Brazil was up 4%, Mexico was up 20%, and Venezuela was down 27%. Constant dollar
revenue growth was 2% in Brazil,
14% in Mexico, and 47% in
Venezuela. Brazil’s results were
significantly impacted by service disruptions during the quarter.
The region’s Active Representatives grew 6% and units sold were up
3%. Fourth-quarter operating profit was down 19%. Operating margin
was 14.9%, or down 430 basis points from the fourth quarter of
2009. On an adjusted basis, Latin America’s fourth-quarter
operating profit was down 14% and the operating margin was 15.9%,
down 340 basis points. The adjusted operating profit and margin
declines were due to high labor cost inflation, investments in RVP
and higher distribution costs.
Fourth-quarter revenue in North
America was up 1%, or flat in constant dollars. The
acquisition of Silpada Designs Inc. (“Silpada”) had a favorable
impact on fourth-quarter revenue of approximately 11 percentage
points. Active Representatives were down 7%. Units sold
declined 14% compared with a year ago. Silpada contributed 1
percentage point to both Active Representatives and unit growth in
the quarter. North America’s fourth-quarter operating profit was up
19%. Operating margin was 7.1%, up 100 basis points versus last
year’s quarter. Adjusted operating profit was up 59%, with an
adjusted operating margin of 10.8%, up 390 basis points as gross
margin improvements and lower advertising helped to offset the
impact of lower sales. Silpada added 330 basis points to the
North America adjusted operating
margin, including a $15 million
benefit from acquisition-related adjustments.
In Central & Eastern
Europe, fourth-quarter revenue declined 6% year over year,
or down 1% in constant dollars. Russia was down 3% on a reported basis and up
1% in constant dollars, driven by weaker Active Representative
growth versus a year ago. The region’s Active Representatives were
down 1% and units sold were down 2% in the quarter. Operating
profit declined 24% versus the 2009 quarter. The region’s operating
margin was 19.6%, down 460 basis points from the prior year
quarter. Fourth-quarter 2010 adjusted operating profit was down
26%. Adjusted operating margin was 19.9%, down 550 basis points,
due primarily to unfavorable product mix and pricing.
Western Europe, Middle East & Africa’s fourth-quarter
revenue increased 9% versus the prior-year quarter or up 13% in
constant dollars. The increase was driven by growth in Active
Representatives as well as the inclusion of Liz Earle Beauty Co.
Limited (“Liz Earle”), which contributed approximately 3 percentage
points to revenue growth. On a reported basis, Turkey rose 4%, South Africa rose 69%, and U.K. was up 3%.
Constant-dollar revenue growth was 3% in Turkey, 58% in South
Africa, and 7% in the U.K. The region’s Active
Representatives grew 11% year over year and units sold increased
12%. Operating profit was up 15% versus the prior-year quarter.
Operating margin was 12.9%, up 70 basis points from the prior-year
quarter. Fourth-quarter 2010 adjusted operating profit was up 4%
with an adjusted operating margin of 13.9%, down 80 basis points,
due to Liz Earle, whose results included acquisition-related
expenses.
Asia Pacific’s fourth-quarter revenue increased 8% year over
year or up 1% in constant dollars. The
Philippines was up 15% on a reported basis and up 7% in
constant dollars. The region’s Active Representatives grew 3% and
units sold increased by 1%. Operating profit was up 18% versus the
2009 quarter. The region’s operating margin was 12.7%, up 110 basis
points from the prior-year quarter due primarily to lower
restructuring costs. The region’s adjusted operating profit was up
5% versus the 2009 quarter. Adjusted operating margin was 13.1%,
down slightly from last year. As mentioned previously, Avon Japan
is now excluded from Asia Pacific
and is reported as discontinued operations.
Fourth-quarter revenue in China
decreased 45% year over year, or down 47% in constant dollars. The
region’s revenues continued to be impacted by the company’s planned
transition away from a hybrid model to one which focuses on direct
selling. Units sold decreased 44% and Active Representatives were
down 68%. Despite the lower revenues, China reported operating profit of
$4 million compared with a
$3 million loss in last year’s fourth
quarter. The quarter benefited from lower incentives and suspended
advertising during this transition phase. China’s operating margin
was 7.8% as compared to (3%) in the prior-year quarter. The
region’s adjusted operating margin was 9.3%, up approximately 10
percentage points from prior year.
Full-Year 2010 Results
Full-year 2010 total revenue of $10.9
billion was 6% higher than that of 2009, and up 6% in
constant dollars. Acquisitions contributed 1% to revenue growth
during the year. Total Beauty sales were up 6% on both a reported
and constant-dollar basis. Active Representatives grew 4% and
units sold increased by 1%. Beauty units were flat versus a year
ago. Full-year advertising expense increased by $48 million to $400 million as the company
invested in both product and recruiting advertising. Avon
also invested an incremental $83
million for full-year 2010 to further improve its RVP. Costs
associated with the company’s 2005 and 2009 restructuring programs
totaled $81 million pre-tax, or
$0.12 per share after-tax compared
with $171 million pre-tax, or
$0.32 per share after-tax in the
prior-year period. Full-year 2010 operating profit of $1.1 billion was up 7% compared with the year-ago
period and operating margin was 9.9%, flat year over year. Adjusted
operating profit was up 5%, and operating margin was 11.4%, down 10
basis points from a year ago. Improvements in gross margin offset
the higher costs associated with the company’s internal FCPA
investigation and higher investments in RVP and Advertising.
Full-year income from continuing operations was $595 million, or $1.36 per share, compared with $619 million, or $1.43 per share last year. Adjusted income from
continuing operations was $787
million, or $1.80 per share,
compared with $760 million or
$1.75 per share in the year ago.
Cash flow from operations was $689
million in 2010 versus $755
million in 2009, due to both higher inventories resulting
from lower than expected sales and the negative impacts of timing
of restructuring payments. Avon’s net debt at year-end 2010 was
$2.0 billion, up $809 million from the prior-year period due to
the financing of the Liz Earle and Silpada acquisitions. Capital
expenditure was $331 million for the
year.
Avon will conduct a conference
call at 9:00 A.M. today to discuss
the quarter and full-year 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: 36538915). The call and related
slide presentation will be webcast live at www.avoninvestor.com and
can be accessed or downloaded from that site for a period of one
year. In addition, a slide presentation covering our geographic
segments and overall results will be made available after the call
at www.avoninvestor.com and 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 $10 billion in annual revenue. As the world's
largest direct seller, Avon
markets to women in more than 100 countries through approximately
6.5 million 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” items refer to financial results
presented in accordance with US GAAP that have been adjusted to
exclude the impact of 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
US 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
and 2) 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 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 initiatives,
product mix and pricing strategies, enterprise resource planning,
customer service initiatives, product line simplification program,
sales and operation planning process, strategic sourcing
initiative, outsourcing strategies, zero-overhead-growth
philosophy, 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
projections concerning future revenue and operating margin
increases) from our multi-year restructuring initiatives or other
strategic 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 initiatives or other strategic
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 optimizing our
product portfolio and enhancing field fundamentals;
- a general economic downturn, a recession globally or in one or
more of our geographic regions, such as North America, or sudden disruption in
business conditions, and the ability of our broad-based geographic
portfolio to withstand such economic downturn, recession or
conditions;
- the effect of political, legal, tax and regulatory risks
imposed on us, our operations or our Representatives, including
foreign exchange or other restrictions, 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;
- the inventory obsolescence and other costs associated with our
product line simplification program;
- our ability to effectively implement initiatives to reduce
inventory levels in the time period and in the amounts we
expect;
- our ability to achieve growth objectives or maintain rates of
growth, particularly in our largest markets 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 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, 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 internal investigations
and compliance reviews that we conduct, and any litigation related
thereto, including the ongoing 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;
- information technology systems outages, disruption in our
supply chain or manufacturing and distribution operations, or 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 and large scale power outages;
- 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 and
executives;
- competitive uncertainties in our markets, including competition
from companies in the cosmetics, fragrances, skin care 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 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 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 and our access to financing and ability to secure
financing at attractive rates; and
- 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.
Additional information identifying such factors is contained in
Item 1A of our 2009 Form 10-K for the year ended
December 31, 2009. 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
|
|
|
2010
|
|
2009
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 3,137.8
|
|
$ 3,101.1
|
|
1%
|
|
$ 10,731.3
|
|
$ 10,084.8
|
|
6%
|
|
Other revenue
|
37.8
|
|
32.9
|
|
|
|
131.5
|
|
120.4
|
|
|
|
Total
revenue
|
3,175.6
|
|
3,134.0
|
|
1%
|
|
10,862.8
|
|
10,205.2
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
1,211.5
|
|
1,170.2
|
|
|
|
4,041.3
|
|
3,825.5
|
|
|
|
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
1,608.2
|
|
1,556.6
|
|
|
|
5,748.4
|
|
5,374.1
|
|
|
|
Operating
profit
|
355.9
|
|
407.2
|
|
(13)%
|
|
1,073.1
|
|
1,005.6
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
23.8
|
|
26.0
|
|
|
|
87.1
|
|
104.8
|
|
|
|
Interest income
|
(4.0)
|
|
(4.9)
|
|
|
|
(14.0)
|
|
(20.2)
|
|
|
|
Other expense (income),
net
|
2.2
|
|
(0.7)
|
|
|
|
54.6
|
|
7.3
|
|
|
|
Total other
expenses
|
22.0
|
|
20.4
|
|
|
|
127.7
|
|
91.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, before tax
|
333.9
|
|
386.8
|
|
(14)%
|
|
945.4
|
|
913.7
|
|
3%
|
|
Income taxes
|
(113.6)
|
|
(118.5)
|
|
|
|
(350.2)
|
|
(294.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of tax
|
220.3
|
|
268.3
|
|
(18)%
|
|
595.2
|
|
619.2
|
|
(4)%
|
|
Discontinued operations, net of
tax
|
9.0
|
|
0.2
|
|
|
|
14.1
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
229.3
|
|
268.5
|
|
|
|
609.3
|
|
628.2
|
|
|
|
Net income (loss) attributable
to noncontrolling interest
|
0.2
|
|
0.9
|
|
|
|
(3.0)
|
|
(2.4)
|
|
|
|
Net income attributable to
Avon
|
$ 229.5
|
|
$ 269.4
|
|
(15)%
|
|
$
606.3
|
|
$
625.8
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS from continuing
operations
|
$
.51
|
|
$
.62
|
|
(18)%
|
|
$
1.37
|
|
$
1.43
|
|
(4)%
|
|
Basic EPS from
discontinued operations
|
$
.02
|
|
-
|
|
|
|
$
.04
|
|
$
.02
|
|
|
|
Basic EPS attributable to
Avon
|
$
.53
|
|
$
.63
|
|
(16)%
|
|
$
1.40
|
|
$
1.45
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from
continuing operations
|
$
.50
|
|
$
.62
|
|
(19)%
|
|
$
1.36
|
|
$
1.43
|
|
(5)%
|
|
Diluted EPS from
discontinued operations
|
$
.02
|
|
-
|
|
|
|
$
.03
|
|
$
.02
|
|
|
|
Diluted EPS attributable
to Avon
|
$
.53
|
|
$
.62
|
|
(15)%
|
|
$
1.39
|
|
$
1.45
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
December
31
|
|
December
31
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
1,179.9
|
|
$
1,298.1
|
|
Accounts receivable,
net
|
826.3
|
|
765.7
|
|
Inventories
|
1,152.9
|
|
1,049.8
|
|
Prepaid expenses and
other
|
1,025.2
|
|
1,042.3
|
|
Current assets of discontinued
operations
|
-
|
|
50.3
|
|
|
Total current assets
|
4,184.3
|
|
4,206.2
|
|
|
|
|
|
|
|
Property, plant and equipment,
at cost
|
2,750.9
|
|
2,505.9
|
|
Less accumulated
depreciation
|
(1,123.5)
|
|
(1,036.9)
|
|
|
|
1,627.4
|
|
1,469.0
|
|
|
|
|
|
|
|
Goodwill
|
|
675.1
|
|
215.5
|
|
Other intangible assets,
net
|
368.3
|
|
13.8
|
|
Other assets
|
1,018.6
|
|
846.1
|
|
Non current assets of
discontinued operations
|
-
|
|
72.8
|
|
|
Total assets
|
$
7,873.7
|
|
$
6,823.4
|
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Debt maturing within one
year
|
$
727.6
|
|
$
137.8
|
|
Accounts payable
|
809.8
|
|
739.0
|
|
Accrued compensation
|
293.2
|
|
282.6
|
|
Other accrued
liabilities
|
771.6
|
|
706.3
|
|
Sales and taxes other than
income
|
207.6
|
|
254.1
|
|
Income taxes
|
146.5
|
|
134.5
|
|
Current liabilities of
discontinued operations
|
-
|
|
37.4
|
|
|
Total current
liabilities
|
2,956.3
|
|
2,291.7
|
|
Long-term debt
|
2,408.6
|
|
2,307.2
|
|
Employee benefit
plans
|
561.3
|
|
577.8
|
|
Long-term income
taxes
|
128.9
|
|
147.6
|
|
Other liabilities
|
146.0
|
|
174.4
|
|
Non current liabilities of
discontinued operations
|
-
|
|
12.1
|
|
|
Total liabilities
|
$
6,201.1
|
|
$
5,510.8
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Common stock
|
$
186.6
|
|
$
186.1
|
|
Additional
paid-in-capital
|
2,024.2
|
|
1,941.0
|
|
Retained earnings
|
4,610.8
|
|
4,383.9
|
|
Accumulated other comprehensive
loss
|
(605.8)
|
|
(692.6)
|
|
Treasury stock, at
cost
|
(4,559.3)
|
|
(4,545.8)
|
|
|
Total Avon shareholders'
equity
|
1,656.5
|
|
1,272.6
|
|
Noncontrolling
Interest
|
16.1
|
|
40.0
|
|
|
Total shareholders'
equity
|
$
1,672.6
|
|
$
1,312.6
|
|
|
Total liabilities and
shareholders' equity
|
$
7,873.7
|
|
$
6,823.4
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
|
December
31
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities
|
|
|
|
|
Income from continuing
operations, net of tax
|
$ 595.2
|
|
$ 619.2
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
145.2
|
|
127.8
|
|
|
Amortization
|
49.6
|
|
47.5
|
|
|
Provision for doubtful
accounts
|
215.7
|
|
221.2
|
|
|
Provision for
obsolescence
|
131.1
|
|
120.0
|
|
|
Share-based
compensation
|
57.6
|
|
54.9
|
|
|
Deferred income taxes
|
(103.1)
|
|
(166.3)
|
|
|
Charge for Venezuelan monetary
assets and liabilities
|
46.1
|
|
-
|
|
|
Other
|
32.8
|
|
56.1
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts receivable
|
(281.9)
|
|
(259.5)
|
|
|
Inventories
|
(189.8)
|
|
(127.8)
|
|
|
Prepaid expenses and
other
|
(3.3)
|
|
(90.4)
|
|
|
Accounts payable and accrued
liabilities
|
76.7
|
|
145.0
|
|
|
Income and other
taxes
|
(63.2)
|
|
16.1
|
|
|
Noncurrent assets and
liabilities
|
(19.7)
|
|
(9.1)
|
|
Net cash provided by operating
activities
|
689.0
|
|
754.7
|
|
|
|
|
|
|
|
Cash Flows from Investing
Activities
|
|
|
|
|
Capital expenditures
|
(331.2)
|
|
(296.3)
|
|
Disposal of assets
|
11.9
|
|
11.2
|
|
Purchases of
investments
|
(1.9)
|
|
(0.9)
|
|
Proceeds from sale of
investments
|
11.3
|
|
61.9
|
|
Acquisitions and other investing
activities
|
(785.8)
|
|
5.8
|
|
Net cash used by investing
activities
|
(1,095.7)
|
|
(218.3)
|
|
|
|
|
|
|
|
Cash Flows from Financing
Activities
|
|
|
|
|
Cash dividends
|
(384.1)
|
|
(364.7)
|
|
Debt, net (maturities of three
months or less)
|
(3.6)
|
|
(507.6)
|
|
Proceeds from debt
|
661.5
|
|
957.8
|
|
Repayment of debt
|
(53.2)
|
|
(450.5)
|
|
Proceeds from exercise of stock
options
|
23.9
|
|
13.1
|
|
Excess tax benefit realized from
share-based compensation
|
4.3
|
|
(0.7)
|
|
Repurchase of common
stock
|
(14.1)
|
|
(8.6)
|
|
Net cash provided (used) by
financing activities
|
234.7
|
|
(361.2)
|
|
|
|
|
|
|
|
Cash provided by operating
activities - Disc Ops
|
13.0
|
|
27.3
|
|
Cash provided (used) by
investing activities - Disc Ops
|
61.3
|
|
(0.6)
|
|
Cash used by financing
activities - Disc Ops
|
(0.3)
|
|
(0.6)
|
|
Net cash provided by
Discontinued Operations
|
74.0
|
|
26.1
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and equivalents
|
(33.7)
|
|
5.6
|
|
Net (decrease) increase in cash
and equivalents
|
(131.7)
|
|
206.9
|
|
Cash and equivalents at
beginning of year (1)
|
$ 1,311.6
|
|
$ 1,104.7
|
|
Cash and equivalents at end of
period (2)
|
$ 1,179.9
|
|
$ 1,311.6
|
|
|
|
|
|
|
|
(1)
|
Includes cash and cash
equivalents of discontinued operations of $13.5M and $3.2M at
January 1, 2010 and 2009, respectively.
|
|
(2)
|
Includes cash and cash
equivalents of discontinued operations of $13.5M at December 31,
2009.
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
(Unaudited)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED 12/31/10
|
|
|
|
REGIONAL
RESULTS
|
|
$ in
Millions
|
Total
Revenue US$
|
|
C$
|
|
Units
|
|
Price/Mix
|
|
Active
Reps
|
|
Average
Order C$
|
|
|
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
Latin America
|
$ 1,274.6
|
5%
|
|
11%
|
|
3%
|
|
8%
|
|
6%
|
|
5%
|
|
North America
|
644.4
|
1
|
|
-
|
|
(14)
|
|
14
|
|
(7)
|
|
7
|
|
Central & Eastern
Europe
|
508.8
|
(6)
|
|
(1)
|
|
(2)
|
|
1
|
|
(1)
|
|
-
|
|
Western Europe, Middle East
& Africa
|
477.6
|
9
|
|
13
|
|
12
|
|
1
|
|
11
|
|
2
|
|
Asia Pacific
|
215.2
|
8
|
|
1
|
|
1
|
|
-
|
|
3
|
|
(2)
|
|
China
|
55.0
|
(45)
|
|
(47)
|
|
(44)
|
|
(3)
|
|
(68)
|
|
21
|
|
Total from operations
|
3,175.6
|
1
|
|
5
|
|
(2)
|
|
7
|
|
-
|
|
5
|
|
Global and other
|
-
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
$ 3,175.6
|
1%
|
|
5%
|
|
(2)%
|
|
7%
|
|
0%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
GAAP
Operating
Profit US$
|
% var.
vs
4Q09
|
|
2010
GAAP
Operating
Margin US$
|
|
2010
Non-GAAP
Operating
Profit US$ (1)
|
|
2009
Non-GAAP
Operating
Profit US$ (1)
|
|
2010
Non-GAAP
Operating
Margin (1)
|
|
2009
Non-GAAP
Operating
Margin (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
189.8
|
(19)%
|
|
14.9%
|
|
$
203.0
|
|
$
235.3
|
|
15.9%
|
|
19.3%
|
|
North America
|
45.9
|
19
|
|
7.1
|
|
69.9
|
|
43.9
|
|
10.8
|
|
6.9
|
|
Central & Eastern
Europe
|
99.7
|
(24)
|
|
19.6
|
|
101.3
|
|
137.0
|
|
19.9
|
|
25.4
|
|
Western Europe, Middle East
& Africa
|
61.5
|
15
|
|
12.9
|
|
66.6
|
|
64.1
|
|
13.9
|
|
14.7
|
|
Asia Pacific
|
27.3
|
18
|
|
12.7
|
|
28.1
|
|
26.7
|
|
13.1
|
|
13.4
|
|
China
|
4.3
|
245
|
|
7.8
|
|
5.1
|
|
(0.9)
|
|
9.3
|
|
(0.9)
|
|
Total from operations
|
428.5
|
(10)
|
|
13.5
|
|
474.0
|
|
506.1
|
|
14.9
|
|
16.1
|
|
Global and other
|
(72.6)
|
(5)
|
|
-
|
|
(59.4)
|
|
(65.1)
|
|
-
|
|
-
|
|
Total
|
$
355.9
|
(13)%
|
|
11.2%
|
|
$
414.6
|
|
$
441.0
|
|
13.1%
|
|
14.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATEGORY
SALES (US$)
|
|
|
Consolidated
|
|
|
|
US$
|
|
C$
|
|
|
|
|
% var.
vs
4Q09
|
|
% var.
vs
4Q09
|
|
Beauty (color
cosmetics/fragrances/skin care/personal care)
|
$2,186.7
|
|
(1)%
|
|
2%
|
|
Fashion (fashion
jewelry/watches/apparel/footwear/accessories/childrens)
(2)
|
629.5
|
|
14
|
|
16
|
|
Home (gift & decorative
products/housewares/entertainment &
leisure/childrens/nutrition) (2)
|
321.6
|
|
(7)
|
|
(2)
|
|
|
Net sales
|
$3,137.8
|
|
1%
|
|
4%
|
|
Other revenue
|
37.8
|
|
15
|
|
14
|
|
|
Total revenue
|
$3,175.6
|
|
1%
|
|
5%
|
|
|
|
|
|
|
|
|
TWELVE
MONTHS ENDED 12/31/10
|
|
|
|
REGIONAL
RESULTS
|
|
$ in Millions
|
Total
Revenue US$
|
|
C$
|
|
Units
|
|
Price/Mix
|
|
Active
Reps
|
|
Average
Order C$
|
|
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
Latin America
|
$ 4,589.5
|
12%
|
|
13%
|
|
5%
|
|
8%
|
|
8%
|
|
5%
|
|
North America
|
2,244.0
|
(2)
|
|
(3)
|
|
(7)
|
|
4
|
|
(3)
|
|
-
|
|
Central & Eastern
Europe
|
1,585.8
|
6
|
|
5
|
|
3
|
|
2
|
|
4
|
|
1
|
|
Western Europe, Middle East
& Africa
|
1,462.1
|
14
|
|
15
|
|
12
|
|
3
|
|
12
|
|
3
|
|
Asia Pacific
|
752.4
|
11
|
|
3
|
|
3
|
|
-
|
|
5
|
|
(2)
|
|
China
|
229.0
|
(35)
|
|
(36)
|
|
(38)
|
|
2
|
|
(39)
|
|
3
|
|
Total from operations
|
10,862.8
|
6
|
|
6
|
|
1
|
|
5
|
|
4
|
|
2
|
|
Global and other
|
-
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
$ 10,862.8
|
6%
|
|
6%
|
|
1%
|
|
5%
|
|
4%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
GAAP
Operating
Profit US$
|
% var.
vs
12M09
|
|
2010
GAAP
Operating
Margin US$
|
|
2010
Non-GAAP
Operating
Profit US$ (1)
|
|
2009
Non-GAAP
Operating
Profit US$ (1)
|
|
2010
Non-GAAP
Operating
Margin (1)
|
|
2009
Non-GAAP
Operating
Margin (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
$
604.7
|
(7)%
|
|
13.2%
|
|
$
705.5
|
|
$
682.3
|
|
15.4%
|
|
16.6%
|
|
North America
|
155.9
|
41
|
|
6.9
|
|
197.2
|
|
150.9
|
|
8.8
|
|
6.6
|
|
Central & Eastern
Europe
|
297.8
|
22
|
|
18.8
|
|
302.5
|
|
274.6
|
|
19.1
|
|
18.3
|
|
Western Europe, Middle East
& Africa
|
176.5
|
110
|
|
12.1
|
|
178.1
|
|
115.2
|
|
12.2
|
|
9.0
|
|
Asia Pacific
|
93.4
|
52
|
|
12.4
|
|
93.2
|
|
80.1
|
|
12.4
|
|
11.8
|
|
China
|
|
(10.8)
|
(154)
|
|
(4.7)
|
|
(10.9)
|
|
22.0
|
|
(4.8)
|
|
6.2
|
|
Total from operations
|
1,317.5
|
13
|
|
12.1
|
|
1,465.6
|
|
1,325.1
|
|
13.5
|
|
13.0
|
|
Global and other
|
(244.4)
|
(49)
|
|
-
|
|
(230.8)
|
|
(148.5)
|
|
-
|
|
-
|
|
Total
|
|
$ 1,073.1
|
7%
|
|
9.9%
|
|
$
1,234.8
|
|
$
1,176.6
|
|
11.4%
|
|
11.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATEGORY
SALES (US$)
|
|
|
Consolidated
|
|
|
|
US$
|
|
C$
|
|
|
|
|
% var.
vs
12M09
|
|
% var.
vs
12M09
|
|
Beauty (color
cosmetics/fragrances/skin care/personal care)
|
$7,671.3
|
|
6%
|
|
6%
|
|
Fashion (fashion
jewelry/watches/apparel/footwear/accessories/childrens)
(2)
|
2,016.5
|
|
11
|
|
11
|
|
Home (gift & decorative
products/housewares/entertainment &
leisure/childrens/nutrition) (2)
|
1,043.5
|
|
3
|
|
5
|
|
|
Net sales
|
$10,731.3
|
|
6%
|
|
6%
|
|
Other revenue
|
131.5
|
|
9
|
|
7
|
|
|
Total revenue
|
$10,862.8
|
|
6%
|
|
6%
|
|
|
|
(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.
|
|
|
|
|
(2) During the third quarter of
2010, items associated with children's products, that were
previously reported in Home, were reclassified into
|
|
Fashion if
such children's product was Fashion related.
|
|
|
|
|
|
|
|
|
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 12/31/10
|
|
|
Reported
(GAAP)
|
CTI
restructuring
initiatives
|
Venezuelan
special
items
|
Rounding
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
|
Cost of Sales
|
$1,211.5
|
$2.6
|
$0.0
|
|
$1,208.9
|
|
Selling, general and
administrative expenses
|
1,608.2
|
55.7
|
0.4
|
|
1,552.1
|
|
Operating profit
|
355.9
|
58.3
|
0.4
|
|
414.6
|
|
Income from continuing
operations before taxes
|
333.9
|
58.3
|
0.4
|
|
392.6
|
|
Income taxes
|
(113.6)
|
(19.8)
|
-
|
|
(133.4)
|
|
Income from continuing
operations
|
$220.3
|
$38.5
|
$0.4
|
|
$259.2
|
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
0.50
|
0.09
|
0.00
|
|
0.59
|
|
|
|
|
|
|
|
|
Gross margin
|
61.8%
|
0.1
|
0.0
|
|
61.9%
|
|
SG&A as a % of
Revenues
|
50.6%
|
(1.8)
|
0.0
|
0.1
|
48.9%
|
|
Operating margin
|
11.2%
|
1.8
|
0.0
|
0.1
|
13.1%
|
|
Effective tax rate
|
34.0%
|
0.0
|
0.0
|
|
34.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
|
Latin America
|
$189.8
|
$12.8
|
$0.4
|
|
$203.0
|
|
North America
|
45.9
|
24.0
|
0.0
|
|
69.9
|
|
Central & Eastern
Europe
|
99.7
|
1.6
|
0.0
|
|
101.3
|
|
Western Europe, Middle East
& Africa
|
61.5
|
5.1
|
0.0
|
|
66.6
|
|
Asia Pacific
|
27.3
|
0.8
|
0.0
|
|
28.1
|
|
China
|
4.3
|
0.8
|
0.0
|
|
5.1
|
|
Global and other
|
(72.6)
|
13.2
|
0.0
|
|
(59.4)
|
|
Total
|
$355.9
|
$58.3
|
$0.4
|
|
$414.6
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
Latin America
|
14.9%
|
1.0
|
0.0
|
|
15.9%
|
|
North America
|
7.1%
|
3.7
|
0.0
|
|
10.8%
|
|
Central & Eastern
Europe
|
19.6%
|
0.3
|
0.0
|
|
19.9%
|
|
Western Europe, Middle East
& Africa
|
12.9%
|
1.1
|
0.0
|
(0.1)
|
13.9%
|
|
Asia Pacific
|
12.7%
|
0.4
|
0.0
|
|
13.1%
|
|
China
|
7.8%
|
1.5
|
0.0
|
|
9.3%
|
|
Global and other
|
0.0%
|
0.0
|
0.0
|
|
0.0%
|
|
Total
|
11.2%
|
1.8
|
0.0
|
0.1
|
13.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
|
|
|
|
|
|
TWELVE
MONTHS ENDED 12/31/10
|
|
|
Reported
(GAAP)
|
CTI
restructuring
initiatives
|
Venezuelan
special
items
|
Rounding
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
|
Cost of Sales
|
$4,041.3
|
$9.4
|
$70.1
|
|
$3,961.8
|
|
Selling, general and
administrative expenses
|
5,748.4
|
71.3
|
10.9
|
|
5,666.2
|
|
Operating profit
|
1,073.1
|
80.7
|
81.0
|
|
1,234.8
|
|
Income from continuing
operations before taxes
|
945.4
|
80.7
|
127.1
|
|
1,153.2
|
|
Income taxes
|
(350.2)
|
(28.3)
|
12.7
|
|
(365.8)
|
|
Income from continuing
operations
|
$595.2
|
$52.4
|
$139.8
|
|
$787.4
|
|
|
|
|
|
|
|
|
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)
|
|
31.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
|
Latin America
|
$604.7
|
$19.8
|
$81.0
|
|
$705.5
|
|
North America
|
155.9
|
41.3
|
0.0
|
|
197.2
|
|
Central & Eastern
Europe
|
297.8
|
4.7
|
0.0
|
|
302.5
|
|
Western Europe, Middle East
& Africa
|
176.5
|
1.6
|
0.0
|
|
178.1
|
|
Asia Pacific
|
93.4
|
(0.2)
|
0.0
|
|
93.2
|
|
China
|
(10.8)
|
(0.1)
|
0.0
|
|
(10.9)
|
|
Global and other
|
(244.4)
|
13.6
|
0.0
|
|
(230.8)
|
|
Total
|
$1,073.1
|
$80.7
|
$81.0
|
|
$1,234.8
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
|
Latin America
|
13.2%
|
0.4
|
1.8
|
|
15.4%
|
|
North America
|
6.9%
|
1.8
|
0.0
|
0.1
|
8.8%
|
|
Central & Eastern
Europe
|
18.8%
|
0.3
|
0.0
|
|
19.1%
|
|
Western Europe, Middle East
& Africa
|
12.1%
|
0.1
|
0.0
|
|
12.2%
|
|
Asia Pacific
|
12.4%
|
0.0
|
0.0
|
|
12.4%
|
|
China
|
(4.7)%
|
0.0
|
0.0
|
(0.1)
|
(4.8)%
|
|
Global and other
|
0.0%
|
0.0
|
0.0
|
|
0.0%
|
|
Total
|
9.9%
|
0.7
|
0.7
|
0.1
|
11.4%
|
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
|
|
THREE MONTHS
ENDED 12/31/09
|
|
|
Reported
(GAAP)
|
CTI
restructuring
initiatives
|
Rounding
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
Cost of Sales
|
$1,170.2
|
$3.3
|
|
$1,166.9
|
|
Selling, general and
administrative expenses
|
1,556.6
|
30.5
|
|
1,526.1
|
|
Operating profit
|
407.2
|
33.8
|
|
441.0
|
|
Income from continuing
operations before taxes
|
386.8
|
33.8
|
|
420.6
|
|
Income taxes
|
(118.5)
|
(8.8)
|
|
(127.3)
|
|
Income from continuing
operations
|
$268.3
|
$25.0
|
|
$293.3
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
0.62
|
0.06
|
|
0.68
|
|
|
|
|
|
|
|
Gross margin
|
62.7%
|
0.1
|
|
62.8%
|
|
SG&A as a % of
Revenues
|
49.7%
|
(1.0)
|
|
48.7%
|
|
Operating margin
|
13.0%
|
1.1
|
|
14.1%
|
|
Effective tax rate
|
30.6%
|
(0.3)
|
|
30.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
Latin America
|
$233.5
|
$1.8
|
|
$235.3
|
|
North America
|
38.7
|
5.2
|
|
43.9
|
|
Central & Eastern
Europe
|
130.5
|
6.5
|
|
137.0
|
|
Western Europe, Middle East
& Africa
|
53.4
|
10.7
|
|
64.1
|
|
Asia Pacific
|
23.1
|
3.6
|
|
26.7
|
|
China
|
(3.0)
|
2.1
|
|
(0.9)
|
|
Global and other
|
(69.0)
|
3.9
|
|
(65.1)
|
|
Total
|
$407.2
|
$33.8
|
|
$441.0
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
Latin America
|
19.2%
|
0.1
|
|
19.3%
|
|
North America
|
6.1%
|
0.8
|
|
6.9%
|
|
Central & Eastern
Europe
|
24.2%
|
1.2
|
|
25.4%
|
|
Western Europe, Middle East
& Africa
|
12.2%
|
2.5
|
|
14.7%
|
|
Asia Pacific
|
11.6%
|
1.8
|
|
13.4%
|
|
China
|
(3.0)%
|
2.1
|
|
(0.9)%
|
|
Global and other
|
0.0%
|
0.0
|
|
0.0%
|
|
Total
|
13.0%
|
1.1
|
|
14.1%
|
|
|
|
|
|
|
AVON
PRODUCTS, INC.
|
|
SUPPLEMENTAL
SCHEDULE
|
|
NON-GAAP
FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
$ in Millions (except per share
data)
|
|
|
|
|
|
|
TWELVE
MONTHS ENDED 12/31/09
|
|
|
Reported
(GAAP)
|
CTI
restructuring
initiatives
|
Rounding
|
Adjusted
(Non-GAAP)
|
|
|
|
|
|
|
|
Cost of Sales
|
$3,825.5
|
$6.6
|
|
$3,818.9
|
|
Selling, general and
administrative expenses
|
5,374.1
|
164.4
|
|
5,209.7
|
|
Operating profit
|
1,005.6
|
171.0
|
|
1,176.6
|
|
Income from continuing
operations before taxes
|
913.7
|
171.0
|
|
1,084.7
|
|
Income taxes
|
(294.5)
|
(30.7)
|
|
(325.2)
|
|
Income from continuing
operations
|
$619.2
|
$140.3
|
|
$759.5
|
|
|
|
|
|
|
|
Diluted EPS from continuing
operations
|
1.43
|
0.32
|
|
1.75
|
|
|
|
|
|
|
|
Gross margin
|
62.5%
|
0.1
|
|
62.6%
|
|
SG&A as a % of
Revenues
|
52.7%
|
(1.6)
|
(0.1)
|
51.0%
|
|
Operating margin
|
9.9%
|
1.7
|
(0.1)
|
11.5%
|
|
Effective tax rate
|
32.2%
|
(2.2)
|
|
30.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING
PROFIT
|
|
|
|
|
|
Latin America
|
$647.9
|
$34.4
|
|
$682.3
|
|
North America
|
110.4
|
40.5
|
|
150.9
|
|
Central & Eastern
Europe
|
244.9
|
29.7
|
|
274.6
|
|
Western Europe, Middle East
& Africa
|
84.2
|
31.0
|
|
115.2
|
|
Asia Pacific
|
61.6
|
18.5
|
|
80.1
|
|
China
|
20.1
|
1.9
|
|
22.0
|
|
Global and other
|
(163.5)
|
15.0
|
|
(148.5)
|
|
Total
|
$1,005.6
|
$171.0
|
|
$1,176.6
|
|
|
|
|
|
|
|
SEGMENT OPERATING
MARGIN
|
|
|
|
|
|
Latin America
|
15.8%
|
0.8
|
|
16.6%
|
|
North America
|
4.8%
|
1.8
|
|
6.6%
|
|
Central & Eastern
Europe
|
16.3%
|
2.0
|
|
18.3%
|
|
Western Europe, Middle East
& Africa
|
6.6%
|
2.4
|
|
9.0%
|
|
Asia Pacific
|
9.1%
|
2.7
|
|
11.8%
|
|
China
|
5.7%
|
0.5
|
|
6.2%
|
|
Global and other
|
0.0%
|
0.0
|
|
0.0%
|
|
Total
|
9.9%
|
1.7
|
(0.1)
|
11.5%
|
|
|
|
|
|
|
SOURCE Avon Products, Inc.