x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
New York | 13-0544597 | |
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | Q | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page Numbers | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Three Months Ended | |||||||
(In millions, except per share data) | June 30, 2013 | June 30, 2012 | |||||
Net sales | $ | 2,466.8 | $ | 2,518.2 | |||
Other revenue | 42.1 | 40.0 | |||||
Total revenue | 2,508.9 | 2,558.2 | |||||
Costs, expenses and other: | |||||||
Cost of sales | 935.4 | 949.7 | |||||
Selling, general and administrative expenses | 1,371.3 | 1,479.6 | |||||
Operating profit | 202.2 | 128.9 | |||||
Interest expense | 31.1 | 24.9 | |||||
Loss on extinguishment of debt | 13.0 | — | |||||
Interest income | (2.8 | ) | (2.8 | ) | |||
Other expense, net | 15.6 | 13.8 | |||||
Total other expenses | 56.9 | 35.9 | |||||
Income from continuing operations, before taxes | 145.3 | 93.0 | |||||
Income taxes | (60.7 | ) | (27.9 | ) | |||
Income from continuing operations, net of tax | 84.6 | 65.1 | |||||
Loss from discontinued operations, net of tax | (50.4 | ) | (2.4 | ) | |||
Net income | 34.2 | 62.7 | |||||
Net income attributable to noncontrolling interests | (2.3 | ) | (1.1 | ) | |||
Net income attributable to Avon | $ | 31.9 | $ | 61.6 | |||
Earnings (loss) per share: | |||||||
Basic from continuing operations | $ | 0.19 | $ | 0.15 | |||
Basic from discontinued operations | $ | (0.12 | ) | $ | (0.01 | ) | |
Basic attributable to Avon | $ | 0.07 | $ | 0.14 | |||
Diluted from continuing operations | $ | 0.19 | $ | 0.15 | |||
Diluted from discontinued operations | $ | (0.11 | ) | $ | (0.01 | ) | |
Diluted attributable to Avon | $ | 0.07 | $ | 0.14 | |||
Cash dividends per common share | $ | 0.06 | $ | 0.23 |
Six Months Ended | |||||||
(In millions, except per share data) | June 30, 2013 | June 30, 2012 | |||||
Net sales | $ | 4,873.9 | $ | 5,019.4 | |||
Other revenue | 91.0 | 79.2 | |||||
Total revenue | 4,964.9 | 5,098.6 | |||||
Costs, expenses and other: | |||||||
Cost of sales | 1,860.8 | 1,944.4 | |||||
Selling, general and administrative expenses | 2,727.9 | 2,952.6 | |||||
Operating profit | 376.2 | 201.6 | |||||
Interest expense | 60.5 | 49.5 | |||||
Loss on extinguishment of debt | 86.0 | — | |||||
Interest income | (4.8 | ) | (6.7 | ) | |||
Other expense, net | 59.9 | 23.8 | |||||
Total other expenses | 201.6 | 66.6 | |||||
Income from continuing operations, before taxes | 174.6 | 135.0 | |||||
Income taxes | (101.5 | ) | (41.7 | ) | |||
Income from continuing operations, net of tax | 73.1 | 93.3 | |||||
Loss from discontinued operations, net of tax | (51.5 | ) | (3.0 | ) | |||
Net income | 21.6 | 90.3 | |||||
Net income attributable to noncontrolling interests | (3.4 | ) | (2.2 | ) | |||
Net income attributable to Avon | $ | 18.2 | $ | 88.1 | |||
Earnings (loss) per share: | |||||||
Basic from continuing operations | $ | 0.16 | $ | 0.21 | |||
Basic from discontinued operations | $ | (0.12 | ) | $ | (0.01 | ) | |
Basic attributable to Avon | $ | 0.04 | $ | 0.20 | |||
Diluted from continuing operations | $ | 0.16 | $ | 0.21 | |||
Diluted from discontinued operations | $ | (0.12 | ) | $ | (0.01 | ) | |
Diluted attributable to Avon | $ | 0.04 | $ | 0.20 | |||
Cash dividends per common share | $ | 0.12 | $ | 0.46 |
Three Months Ended | |||||||
(In millions) | June 30, 2013 | June 30, 2012 | |||||
Net income | $ | 34.2 | $ | 62.7 | |||
Other comprehensive loss: | |||||||
Foreign currency translation adjustments | (107.7 | ) | (189.7 | ) | |||
Change in derivative losses on cash flow hedges, net of taxes of $0.2 and $0.6 | 0.3 | 0.9 | |||||
Change in derivative losses on net investment hedges | — | — | |||||
Adjustments of and amortization of net actuarial loss, prior service cost, and transition obligation, net of taxes of $7.1 and $(1.3) | 19.6 | 0.3 | |||||
Total other comprehensive loss, net of taxes | (87.8 | ) | (188.5 | ) | |||
Comprehensive loss | (53.6 | ) | (125.8 | ) | |||
Less: comprehensive (loss) income attributable to noncontrolling interests | (0.4 | ) | 0.6 | ||||
Comprehensive loss attributable to Avon | $ | (53.2 | ) | $ | (126.4 | ) |
Six Months Ended | |||||||
(In millions) | June 30, 2013 | June 30, 2012 | |||||
Net income | $ | 21.6 | $ | 90.3 | |||
Other comprehensive loss: | |||||||
Foreign currency translation adjustments | (131.1 | ) | (64.8 | ) | |||
Change in derivative losses on cash flow hedges, net of taxes of $0.6 and $1.1 | 1.1 | 1.9 | |||||
Change in derivative losses on net investment hedge | — | (0.3 | ) | ||||
Adjustments of and amortization of net actuarial loss, prior service cost, and transition obligation, net of taxes of $12.1 and $3.1 | 29.7 | 9.6 | |||||
Total other comprehensive loss, net of taxes | (100.3 | ) | (53.6 | ) | |||
Comprehensive (loss) income | (78.7 | ) | 36.7 | ||||
Less: comprehensive income attributable to noncontrolling interests | 0.5 | 1.2 | |||||
Comprehensive (loss) income attributable to Avon | $ | (79.2 | ) | $ | 35.5 |
(In millions) | June 30, 2013 | December 31, 2012 | |||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 873.2 | $ | 1,206.9 | |||
Accounts receivable, net | 691.7 | 752.1 | |||||
Inventories | 1,154.3 | 1,101.1 | |||||
Prepaid expenses and other | 707.6 | 827.0 | |||||
Current assets of discontinued operations | 36.1 | 41.8 | |||||
Total current assets | 3,462.9 | 3,928.9 | |||||
Property, plant and equipment, at cost | 2,496.7 | 2,684.8 | |||||
Less accumulated depreciation | (1,102.8 | ) | (1,158.8 | ) | |||
Property, plant and equipment, net | 1,393.9 | 1,526.0 | |||||
Goodwill | 311.3 | 330.3 | |||||
Other intangible assets, net | 36.4 | 40.6 | |||||
Other assets | 1,413.4 | 1,407.9 | |||||
Noncurrent assets of discontinued operations | 67.4 | 148.8 | |||||
Total assets | $ | 6,685.3 | $ | 7,382.5 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities | |||||||
Debt maturing within one year | $ | 263.2 | $ | 572.0 | |||
Accounts payable | 861.1 | 914.3 | |||||
Accrued compensation | 241.1 | 264.7 | |||||
Other accrued liabilities | 564.7 | 645.3 | |||||
Sales and taxes other than income | 187.7 | 210.6 | |||||
Income taxes | 46.4 | 73.6 | |||||
Current liabilities of discontinued operations | 16.1 | 24.1 | |||||
Total current liabilities | 2,180.3 | 2,704.6 | |||||
Long-term debt | 2,634.8 | 2,623.8 | |||||
Employee benefit plans | 568.3 | 637.6 | |||||
Long-term income taxes | 49.8 | 52.0 | |||||
Other liabilities | 119.0 | 131.1 | |||||
Noncurrent liabilities of discontinued operations | 0.1 | 0.1 | |||||
Total liabilities | $ | 5,552.3 | $ | 6,149.2 | |||
Contingencies (Note 6) | |||||||
Shareholders’ Equity | |||||||
Common stock | $ | 189.3 | $ | 188.3 | |||
Additional paid-in capital | 2,159.5 | 2,119.6 | |||||
Retained earnings | 4,323.8 | 4,357.8 | |||||
Accumulated other comprehensive loss | (977.0 | ) | (876.7 | ) | |||
Treasury stock, at cost | (4,579.3 | ) | (4,571.9 | ) | |||
Total Avon shareholders’ equity | 1,116.3 | 1,217.1 | |||||
Noncontrolling interests | 16.7 | 16.2 | |||||
Total shareholders’ equity | $ | 1,133.0 | $ | 1,233.3 | |||
Total liabilities and shareholders’ equity | $ | 6,685.3 | $ | 7,382.5 |
Six Months Ended | |||||||
(In millions) | June 30, 2013 | June 30, 2012 | |||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 21.6 | $ | 90.3 | |||
Loss from discontinued operations, net of tax | 51.5 | 3.0 | |||||
Income from continuing operations | $ | 73.1 | $ | 93.3 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 119.8 | 109.1 | |||||
Provision for doubtful accounts | 113.4 | 134.5 | |||||
Provision for obsolescence | 53.7 | 59.7 | |||||
Share-based compensation | 26.2 | 23.2 | |||||
Deferred income taxes | (27.4 | ) | (72.0 | ) | |||
Charge for Venezuelan monetary assets and liabilities | 34.1 | — | |||||
Other | 30.1 | 20.9 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (103.3 | ) | (94.4 | ) | |||
Inventories | (154.3 | ) | (170.4 | ) | |||
Prepaid expenses and other | 67.6 | 45.6 | |||||
Accounts payable and accrued liabilities | (65.8 | ) | 1.0 | ||||
Income and other taxes | (28.6 | ) | (70.8 | ) | |||
Noncurrent assets and liabilities | (68.9 | ) | (43.0 | ) | |||
Net cash provided by operating activities of continuing operations | 69.7 | 36.7 | |||||
Cash Flows from Investing Activities | |||||||
Capital expenditures | (75.8 | ) | (87.5 | ) | |||
Disposal of assets | 12.8 | 9.5 | |||||
Purchases of investments | (14.2 | ) | (0.8 | ) | |||
Proceeds from sale of investments | 0.2 | — | |||||
Net cash used by investing activities of continuing operations | (77.0 | ) | (78.8 | ) | |||
Cash Flows from Financing Activities* | |||||||
Cash dividends | (53.9 | ) | (199.2 | ) | |||
Debt, net (maturities of three months or less) | 31.6 | (343.1 | ) | ||||
Proceeds from debt | 1,478.8 | 638.4 | |||||
Repayment of debt | (1,796.2 | ) | (71.2 | ) | |||
Interest rate swap termination | 88.1 | 43.6 | |||||
Proceeds from exercise of stock options | 16.8 | 7.6 | |||||
Excess tax benefit realized from share-based compensation | 0.1 | (2.6 | ) | ||||
Repurchase of common stock | (7.6 | ) | (8.1 | ) | |||
Net cash (used) provided by financing activities of continuing operations | (242.3 | ) | 65.4 | ||||
Cash Flows from Discontinued Operations | |||||||
Net cash (used) provided by operating activities of discontinued operations | (0.5 | ) | 4.4 | ||||
Net cash used by investing activities of discontinued operations | (0.2 | ) | (0.1 | ) | |||
Net cash (used) provided by discontinued operations | (0.7 | ) | 4.3 | ||||
Effect of exchange rate changes on cash and equivalents | (81.0 | ) | 3.7 | ||||
Net (decrease) increase in cash and equivalents | (331.3 | ) | 31.3 | ||||
Cash and equivalents at beginning of year(1) | $ | 1,209.6 | $ | 1,245.1 | |||
Cash and equivalents at end of period(2) | $ | 878.3 | $ | 1,276.4 |
* | Non-cash financing activities in the six months ended June 30, 2013 and 2012 included the change in fair market value of interest-rate swap agreements of $(.7) and $(1.1), respectively. |
(1) | Includes cash and cash equivalents of discontinued operations of $2.7 and $6.9 at the beginning of the year in 2013 and 2012, respectively. |
(2) | Includes cash and cash equivalents of discontinued operations of $5.1 and $8.0 at the end of the period in 2013 and 2012, respectively. |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Shares in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Numerator from continuing operations: | ||||||||||||||||
Income from continuing operations less amounts attributable to noncontrolling interests | $ | 82.3 | $ | 64.0 | $ | 69.7 | $ | 91.1 | ||||||||
Less: Earnings allocated to participating securities | (.7 | ) | (1.1 | ) | (.6 | ) | (1.9 | ) | ||||||||
Income from continuing operations allocated to common shareholders | 81.6 | 62.9 | 69.1 | 89.2 | ||||||||||||
Numerator from discontinued operations: | ||||||||||||||||
Loss from discontinued operations | $ | (50.4 | ) | $ | (2.4 | ) | $ | (51.5 | ) | $ | (3.0 | ) | ||||
Less: Loss (earnings) allocated to participating securities | .4 | (.6 | ) | .5 | (1.1 | ) | ||||||||||
Loss allocated to common shareholders | (50.0 | ) | (3.0 | ) | (51.0 | ) | (4.1 | ) | ||||||||
Numerator attributable to Avon: | ||||||||||||||||
Net income attributable to Avon | $ | 31.9 | $ | 61.6 | $ | 18.2 | $ | 88.1 | ||||||||
Less: Earnings allocated to participating securities | (.3 | ) | (1.1 | ) | (.2 | ) | (1.9 | ) | ||||||||
Income allocated to common shareholders | 31.6 | 60.5 | 18.0 | 86.2 | ||||||||||||
Denominator: | ||||||||||||||||
Basic EPS weighted-average shares outstanding | 433.5 | 432.0 | 433.0 | 431.6 | ||||||||||||
Diluted effect of assumed conversion of stock options | 1.1 | .8 | .9 | .8 | ||||||||||||
Diluted EPS adjusted weighted-average shares outstanding | 434.6 | 432.8 | 433.9 | 432.4 | ||||||||||||
Earnings per Common Share from continuing operations: | ||||||||||||||||
Basic | $ | .19 | $ | .15 | $ | .16 | $ | .21 | ||||||||
Diluted | $ | .19 | $ | .15 | $ | .16 | $ | .21 | ||||||||
Loss per Common Share from discontinued operations: | ||||||||||||||||
Basic | $ | (.12 | ) | $ | (.01 | ) | $ | (.12 | ) | $ | (.01 | ) | ||||
Diluted | $ | (.11 | ) | $ | (.01 | ) | $ | (.12 | ) | $ | (.01 | ) | ||||
Earnings per Common Share attributable to Avon: | ||||||||||||||||
Basic | $ | .07 | $ | .14 | $ | .04 | $ | .20 | ||||||||
Diluted | $ | .07 | $ | .14 | $ | .04 | $ | .20 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Total revenue | $ | 24.7 | $ | 33.5 | $ | 52.3 | $ | 68.5 | ||||||||
Operating loss(1) | (80.0 | ) | (2.3 | ) | (81.9 | ) | (3.5 | ) |
Components of Inventories | June 30, 2013 | December 31, 2012 | ||||||
Raw materials | $ | 382.2 | $ | 393.4 | ||||
Finished goods | 772.1 | 707.7 | ||||||
Total | $ | 1,154.3 | $ | 1,101.1 |
Three Months Ended June 30, | ||||||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||||||
Net Periodic Benefit Costs | U.S. Plans | Non-U.S. Plans | Postretirement Benefits | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Service cost | $ | 3.4 | $ | 3.7 | $ | 2.8 | $ | 4.5 | $ | .5 | $ | .5 | ||||||||||||
Interest cost | 7.0 | 7.4 | 9.0 | 9.7 | 1.1 | 1.4 | ||||||||||||||||||
Expected return on plan assets | (9.4 | ) | (8.8 | ) | (10.1 | ) | (9.8 | ) | — | — | ||||||||||||||
Amortization of prior service credit | (.1 | ) | — | — | (.4 | ) | (1.2 | ) | (3.3 | ) | ||||||||||||||
Amortization of net actuarial losses | 12.0 | 10.1 | 2.7 | 4.4 | .6 | 1.0 | ||||||||||||||||||
Curtailments | — | — | (7.5 | ) | — | — | (1.0 | ) | ||||||||||||||||
Net periodic benefit costs | $ | 12.9 | $ | 12.4 | $ | (3.1 | ) | $ | 8.4 | $ | 1.0 | $ | (1.4 | ) |
Six Months Ended June 30, | ||||||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||||||
Net Periodic Benefit Costs | U.S. Plans | Non-U.S. Plans | Postretirement Benefits | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Service cost | $ | 8.4 | $ | 7.5 | $ | 7.6 | $ | 9.0 | $ | 1.0 | $ | 1.0 | ||||||||||||
Interest cost | 13.6 | 14.8 | 18.1 | 19.5 | 2.5 | 2.9 | ||||||||||||||||||
Expected return on plan assets | (18.8 | ) | (18.0 | ) | (19.9 | ) | (19.6 | ) | — | — | ||||||||||||||
Amortization of prior service credit | (.2 | ) | (.1 | ) | (.3 | ) | (.8 | ) | (2.4 | ) | (6.6 | ) | ||||||||||||
Amortization of net actuarial losses | 23.3 | 21.9 | 7.3 | 8.8 | 1.4 | 2.0 | ||||||||||||||||||
Curtailments | — | — | (7.5 | ) | — | — | (1.0 | ) | ||||||||||||||||
Net periodic benefit costs | $ | 26.3 | $ | 26.1 | $ | 5.3 | $ | 16.9 | $ | 2.5 | $ | (1.7 | ) |
Three Months Ended June 30, 2013: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at March 31, 2013 | $ | (341.0 | ) | $ | (6.0 | ) | $ | (4.3 | ) | $ | (537.9 | ) | $ | (889.2 | ) | |||||
Other comprehensive loss other than reclassifications | (107.7 | ) | — | — | — | (107.7 | ) | |||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $.2(1) | — | .3 | — | — | .3 | |||||||||||||||
Adjustments of and amortization of net actuarial loss, prior service costs, and transition obligation, net of tax of $7.1(2) | — | — | — | 19.6 | 19.6 | |||||||||||||||
Total reclassifications into earnings | — | .3 | — | 19.6 | 19.9 | |||||||||||||||
Balance at June 30, 2013 | $ | (448.7 | ) | $ | (5.7 | ) | $ | (4.3 | ) | $ | (518.3 | ) | $ | (977.0 | ) |
Six Months Ended June 30, 2013: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at December 31, 2012 | $ | (317.6 | ) | $ | (6.8 | ) | $ | (4.3 | ) | $ | (548.0 | ) | $ | (876.7 | ) | |||||
Other comprehensive loss other than reclassifications | (131.1 | ) | — | — | — | (131.1 | ) | |||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $.6(1) | — | 1.1 | — | — | 1.1 | |||||||||||||||
Adjustments of and amortization of net actuarial loss, prior service costs, and transition obligation, net of tax of $12.1(2) | — | — | — | 29.7 | 29.7 | |||||||||||||||
Total reclassifications into earnings | — | 1.1 | — | 29.7 | 30.8 | |||||||||||||||
Balance at June 30, 2013 | $ | (448.7 | ) | $ | (5.7 | ) | $ | (4.3 | ) | $ | (518.3 | ) | $ | (977.0 | ) |
Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Revenue | Operating Profit (Loss) | Revenue | Operating Profit (Loss) | ||||||||||||
Latin America | $ | 1,252.1 | $ | 147.8 | $ | 1,242.8 | $ | 114.9 | |||||||
Europe, Middle East & Africa | 678.4 | 104.1 | 663.1 | 71.3 | |||||||||||
North America | 380.3 | (11.5 | ) | 433.9 | (1.6 | ) | |||||||||
Asia Pacific | 198.1 | 16.4 | 218.4 | 11.1 | |||||||||||
Total from operations | $ | 2,508.9 | $ | 256.8 | $ | 2,558.2 | $ | 195.7 | |||||||
Global and other | — | (54.6 | ) | — | (66.8 | ) | |||||||||
Total | $ | 2,508.9 | $ | 202.2 | $ | 2,558.2 | $ | 128.9 |
Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Revenue | Operating Profit (Loss) | Revenue | Operating Profit (Loss) | ||||||||||||
Latin America | $ | 2,396.5 | $ | 249.2 | $ | 2,392.3 | $ | 165.7 | |||||||
Europe, Middle East & Africa | 1,411.5 | 215.5 | 1,387.7 | 127.8 | |||||||||||
North America | 758.8 | (20.8 | ) | 878.5 | 3.4 | ||||||||||
Asia Pacific | 398.1 | 27.5 | 440.1 | 26.5 | |||||||||||
Total from operations | $ | 4,964.9 | $ | 471.4 | $ | 5,098.6 | $ | 323.4 | |||||||
Global and other | — | (95.2 | ) | — | (121.8 | ) | |||||||||
Total | $ | 4,964.9 | $ | 376.2 | $ | 5,098.6 | $ | 201.6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Beauty(1) | $ | 1,787.5 | $ | 1,854.5 | $ | 3,555.7 | $ | 3,713.1 | |||||||
Fashion(2) | 414.7 | 430.1 | 819.6 | 848.1 | |||||||||||
Home(3) | 264.6 | 233.6 | 498.6 | 458.2 | |||||||||||
Net sales | $ | 2,466.8 | $ | 2,518.2 | $ | 4,873.9 | $ | 5,019.4 | |||||||
Other revenue(4) | 42.1 | 40.0 | 91.0 | 79.2 | |||||||||||
Total revenue | $ | 2,508.9 | $ | 2,558.2 | $ | 4,964.9 | $ | 5,098.6 |
(1) | Beauty includes color cosmetics, fragrances, skincare and personal care. |
(2) | Fashion includes jewelry, watches, apparel, footwear, accessories and children’s products. |
(3) | Home includes gift and decorative products, housewares, entertainment and leisure products, children's products and nutritional products. |
(4) | Other revenue primarily includes shipping and handling and order processing fees billed to Representatives. |
Components of Prepaid Expenses and Other | June 30, 2013 | December 31, 2012 | ||||||
Deferred tax assets | $ | 233.1 | $ | 273.5 | ||||
Prepaid taxes and tax refunds receivable | 135.2 | 141.1 | ||||||
Prepaid brochure costs, paper, and other literature | 101.0 | 111.8 | ||||||
Receivables other than trade | 80.0 | 131.6 | ||||||
Short-term investments | 30.7 | 16.5 | ||||||
Healthcare trust assets | 14.7 | 26.9 | ||||||
Interest-rate swap agreements, including interest (Notes 12 and 13) | — | 19.5 | ||||||
Other | 112.9 | 106.1 | ||||||
Prepaid expenses and other | $ | 707.6 | $ | 827.0 |
Components of Other Assets | June 30, 2013 | December 31, 2012 | ||||||
Deferred tax assets | $ | 900.1 | $ | 826.9 | ||||
Capitalized software | 242.5 | 235.4 | ||||||
Long-term receivables | 173.4 | 174.9 | ||||||
Investments | 46.4 | 44.5 | ||||||
Interest-rate swap agreements (Notes 12 and 13) | — | 94.8 | ||||||
Other | 51.0 | 31.4 | ||||||
Other assets | $ | 1,413.4 | $ | 1,407.9 |
• | net charges of $3.2 and $16.5, respectively, primarily for employee-related costs, including severance benefits; |
• | contract termination and other charges of $3.9 and $3.9, respectively, primarily related to the costs associated with our exit from the Republic of Ireland market; |
• | accelerated depreciation of $4.9 and $11.8, respectively, associated with the closure and rationalization of certain facilities; |
• | net benefit of $3.5 and $3.5, respectively, primarily related to the accumulated foreign currency translation adjustments associated with our exit from the Vietnam market; |
• | implementation costs of $.4 and $.8, respectively, for professional service fees; and |
• | net benefits of $.4 and $.7, respectively, related to inventory adjustments. |
Employee- Related Costs | Inventory/ Asset Write-offs | Currency Translation Adjustment Write-offs | Contract Terminations/Other | Total | ||||||||||||||||
Balance at December 31, 2012 | $ | 41.3 | $ | — | $ | — | $ | 1.7 | $ | 43.0 | ||||||||||
2013 charges | 17.5 | .2 | (3.5 | ) | 4.4 | 18.6 | ||||||||||||||
Adjustments | (1.0 | ) | (.9 | ) | — | (.5 | ) | (2.4 | ) | |||||||||||
Cash payments | (31.9 | ) | — | — | (4.3 | ) | (36.2 | ) | ||||||||||||
Non-cash write-offs | — | .7 | 3.5 | — | 4.2 | |||||||||||||||
Balance at June 30, 2013 | $ | 25.9 | $ | — | $ | — | $ | 1.3 | $ | 27.2 |
Employee- Related Costs | Inventory/Asset Write-offs | Currency Translation Adjustment Write-offs | Contract Terminations/Other | Total | ||||||||||||||||
Charges incurred to date | $ | 61.7 | $ | .7 | $ | (3.5 | ) | $ | 5.8 | $ | 64.7 | |||||||||
Estimated charges to be incurred on approved initiatives | 5.0 | — | 6.0 | 8.3 | 19.3 | |||||||||||||||
Total expected charges on approved initiatives | $ | 66.7 | $ | .7 | $ | 2.5 | $ | 14.1 | $ | 84.0 |
Latin America | Europe, Middle East & Africa | North America | Asia Pacific | Corporate | Total | |||||||||||||||||||
2012 | $ | 12.9 | $ | 1.1 | $ | 18.0 | $ | 12.9 | $ | 3.6 | $ | 48.5 | ||||||||||||
First quarter 2013 | (1.1 | ) | 9.0 | 1.5 | 1.5 | 2.1 | 13.0 | |||||||||||||||||
Second quarter 2013 | 3.8 | 3.4 | (.1 | ) | (3.9 | ) | — | 3.2 | ||||||||||||||||
Charges incurred to date | 15.6 | 13.5 | 19.4 | 10.5 | 5.7 | 64.7 | ||||||||||||||||||
Estimated charges to be incurred on approved initiatives | 5.0 | 14.2 | — | .1 | — | 19.3 | ||||||||||||||||||
Total expected charges on approved initiatives | $ | 20.6 | $ | 27.7 | $ | 19.4 | $ | 10.6 | $ | 5.7 | $ | 84.0 |
• | net charges of $37.2 and $56.0, respectively, primarily for employee-related costs; |
• | implementation costs of $.9 and $3.9, respectively, for professional service fees; and |
• | accelerated depreciation of $1.1 and $1.1, respectively, associated with the relocation our corporate headquarters. |
Employee- Related Costs | Contract Terminations/Other | Total | ||||||||||
Balance at December 31, 2012 | $ | 17.6 | $ | 11.8 | $ | 29.4 | ||||||
2013 charges | .3 | .3 | .6 | |||||||||
Adjustments | (.9 | ) | — | (.9 | ) | |||||||
Cash payments | (11.4 | ) | (2.8 | ) | (14.2 | ) | ||||||
Foreign exchange | (.1 | ) | — | (.1 | ) | |||||||
Balance at June 30, 2013 | $ | 5.5 | $ | 9.3 | $ | 14.8 |
• | net benefits of $4.7 and $5.8, respectively, as a result of adjustments to the reserve, partially offset by employee-related costs; |
• | implementation costs of $2.9 and $7.3, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and |
• | accelerated depreciation of $.8 and $3.0, respectively, associated with our initiatives to realign certain distribution operations. |
Total | ||||
Balance December 31, 2012 | $ | 21.0 | ||
2013 charges | .7 | |||
Adjustments | (.9 | ) | ||
Cash payments | (14.2 | ) | ||
Foreign exchange | (.1 | ) | ||
Balance at June 30, 2013 | $ | 6.5 |
Latin America | Europe, Middle East & Africa | Asia Pacific | Total | ||||||||||||
Gross balance at December 31, 2012 | $ | 122.8 | $ | 167.3 | $ | 84.2 | $ | 374.3 | |||||||
Accumulated impairments | — | — | (44.0 | ) | (44.0 | ) | |||||||||
Net balance at December 31, 2012 | $ | 122.8 | $ | 167.3 | $ | 40.2 | $ | 330.3 | |||||||
Changes during the period ended June 30, 2013: | |||||||||||||||
Other(1) | (10.2 | ) | (9.4 | ) | .6 | (19.0 | ) | ||||||||
Gross balance at June 30, 2013 | $ | 112.6 | $ | 157.9 | $ | 84.8 | $ | 355.3 | |||||||
Accumulated impairments | — | — | (44.0 | ) | (44.0 | ) | |||||||||
Net balance at June 30, 2013 | $ | 112.6 | $ | 157.9 | $ | 40.8 | $ | 311.3 |
June 30, 2013 | December 31, 2012 | ||||||||||||||
Gross Amount | Accumulated Amortization | Gross Amount | Accumulated Amortization | ||||||||||||
Finite-Lived Intangible Assets | |||||||||||||||
Customer relationships | $ | 49.4 | $ | (44.2 | ) | $ | 52.7 | $ | (46.0 | ) | |||||
Licensing agreements | 58.6 | (50.6 | ) | 62.8 | (53.6 | ) | |||||||||
Noncompete agreements | 8.1 | (8.1 | ) | 8.6 | (8.6 | ) | |||||||||
Trademarks | 6.6 | (6.6 | ) | 6.6 | (6.3 | ) | |||||||||
Indefinite-Lived Trademarks | 23.2 | — | 24.4 | — | |||||||||||
Total | $ | 145.9 | $ | (109.5 | ) | $ | 155.1 | $ | (114.5 | ) |
Estimated Amortization Expense: | |||
Remainder of 2013 | $ | 2.0 | |
2014 | 3.3 | ||
2015 | 2.7 | ||
2016 | 1.9 | ||
2017 | 1.5 |
• | Level 1 - Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. |
• | Level 3 - Unobservable inputs based on our own assumptions. |
Level 1 | Level 2 | Total | |||||||||
Assets: | |||||||||||
Money market funds | $ | 14.7 | $ | — | $ | 14.7 | |||||
Available-for-sale securities | 2.1 | — | 2.1 | ||||||||
Foreign exchange forward contracts | — | .3 | .3 | ||||||||
Total | $ | 16.8 | $ | .3 | $ | 17.1 | |||||
Liabilities: | |||||||||||
Foreign exchange forward contracts | $ | — | $ | 5.3 | $ | 5.3 | |||||
Total | $ | — | $ | 5.3 | $ | 5.3 |
Level 1 | Level 2 | Total | |||||||||
Assets: | |||||||||||
Money market funds | $ | 26.9 | $ | — | $ | 26.9 | |||||
Available-for-sale securities | 1.9 | — | 1.9 | ||||||||
Interest-rate swap agreements | — | 94.8 | 94.8 | ||||||||
Foreign exchange forward contracts | — | 4.9 | 4.9 | ||||||||
Total | $ | 28.8 | $ | 99.7 | $ | 128.5 | |||||
Liabilities: | |||||||||||
Interest-rate swap agreements | $ | — | $ | 1.7 | $ | 1.7 | |||||
Foreign exchange forward contracts | — | 1.5 | 1.5 | ||||||||
Total | $ | — | $ | 3.2 | $ | 3.2 |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
China goodwill | $ | — | $ | — | $ | 37.3 | $ | 37.3 | |||||||
Total | $ | — | $ | — | $ | 37.3 | $ | 37.3 |
June 30, 2013 | December 31, 2012 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Available-for-sale securities | $ | 2.1 | $ | 2.1 | $ | 1.9 | $ | 1.9 | |||||||
Money market funds | 14.7 | 14.7 | 26.9 | 26.9 | |||||||||||
Debt maturing within one year(1) | (263.2 | ) | (263.2 | ) | (572.0 | ) | (572.2 | ) | |||||||
Long-term debt(1) | (2,634.8 | ) | (2,620.6 | ) | (2,623.8 | ) | (2,547.7 | ) | |||||||
Foreign exchange forward contracts | (5.0 | ) | (5.0 | ) | 3.4 | 3.4 | |||||||||
Interest-rate swap agreements | — | — | 93.1 | 93.1 |
Asset | Liability | ||||||||||
Balance Sheet Classification | Fair Value | Balance Sheet Classification | Fair Value | ||||||||
Derivatives not designated as hedges: | |||||||||||
Foreign exchange forward contracts | Prepaid expenses and other | $ | .3 | Accounts payable | $ | 5.3 | |||||
Total derivatives not designated as hedges | $ | .3 | $ | 5.3 | |||||||
Total derivatives | $ | .3 | $ | 5.3 |
Asset | Liability | ||||||||||
Balance Sheet Classification | Fair Value | Balance Sheet Classification | Fair Value | ||||||||
Derivatives designated as hedges: | |||||||||||
Interest-rate swap agreements | Other assets/ Prepaid expenses and other | $ | 93.1 | Other liabilities | $ | — | |||||
Total derivatives designated as hedges | $ | 93.1 | $ | — | |||||||
Derivatives not designated as hedges: | |||||||||||
Interest-rate swap agreements | Prepaid expenses and other | $ | 1.7 | Accounts payable | $ | 1.7 | |||||
Foreign exchange forward contracts | Prepaid expenses and other | 4.9 | Accounts payable | 1.5 | |||||||
Total derivatives not designated as hedges | $ | 6.6 | $ | 3.2 | |||||||
Total derivatives | $ | 99.7 | $ | 3.2 |
• | Changes in the fair value of a derivative that is designated as a fair value hedge, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk are recorded in earnings. |
• | Changes in the fair value of a derivative that is designated as a cash flow hedge are recorded in AOCI to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. |
• | Changes in the fair value of a derivative that is designated as a hedge of a net investment in a foreign operation are recorded in foreign currency translation adjustments within AOCI to the extent effective as a hedge. |
• | Changes in the fair value of a derivative not designated as a hedging instrument are recognized in earnings in other expense, net in the Consolidated Statements of Income. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2013 | 2012 | %/Point Change | 2013 | 2012 | %/Point Change | ||||||||||||||||
Total revenue | $ | 2,508.9 | $ | 2,558.2 | (2 | )% | $ | 4,964.9 | $ | 5,098.6 | (3 | )% | |||||||||
Cost of sales | 935.4 | 949.7 | (2 | )% | 1,860.8 | 1,944.4 | (4 | )% | |||||||||||||
Selling, general and administrative expenses | 1,371.3 | 1,479.6 | (7 | )% | 2,727.9 | 2,952.6 | (8 | )% | |||||||||||||
Operating profit | 202.2 | 128.9 | 57 | % | 376.2 | 201.6 | 87 | % | |||||||||||||
Interest expense | 31.1 | 24.9 | 25 | % | 60.5 | 49.5 | 22 | % | |||||||||||||
Loss on extinguishment of debt | 13.0 | — | * | 86.0 | — | * | |||||||||||||||
Interest income | (2.8 | ) | (2.8 | ) | — | % | (4.8 | ) | (6.7 | ) | (28 | )% | |||||||||
Other expense, net | 15.6 | 13.8 | 13 | % | 59.9 | 23.8 | 152 | % | |||||||||||||
Income from continuing operations, net of tax | 84.6 | 65.1 | 30 | % | 73.1 | 93.3 | (22 | )% | |||||||||||||
Net income attributable to Avon | 31.9 | 61.6 | (48 | )% | 18.2 | 88.1 | (79 | )% | |||||||||||||
Diluted earnings per share from continuing operations | .19 | .15 | 27 | % | .16 | .21 | (24 | )% | |||||||||||||
Diluted earnings per share attributable to Avon | .07 | .14 | (50 | )% | .04 | .20 | (80 | )% | |||||||||||||
Advertising expenses(1) | $ | 41.8 | $ | 58.0 | (28 | )% | 87.7 | 132.1 | (34 | )% | |||||||||||
Gross margin | 62.7 | % | 62.9 | % | (.2 | ) | 62.5 | % | 61.9 | % | .6 | ||||||||||
CTI restructuring | — | — | — | — | .1 | (.1 | ) | ||||||||||||||
Venezuelan special items | .6 | — | .6 | .5 | — | .5 | |||||||||||||||
Adjusted gross margin | 63.3 | % | 62.9 | % | .4 | 63.0 | % | 61.9 | % | 1.1 | |||||||||||
Selling, general and administrative expenses as a % of total revenue | 54.7 | % | 57.8 | % | (3.1 | ) | 54.9 | % | 57.9 | % | (3.0 | ) | |||||||||
CTI restructuring | (.3 | ) | (1.5 | ) | 1.2 | (.6 | ) | (1.2 | ) | .6 | |||||||||||
Venezuelan special items | (.1 | ) | — | (.1 | ) | (.1 | ) | — | (.1 | ) | |||||||||||
FCPA accrual | (.5 | ) | — | (.5 | ) | (.2 | ) | — | (.2 | ) | |||||||||||
Adjusted selling, general and administrative expenses as a % of total revenue | 53.8 | % | 56.4 | % | (2.6 | ) | 54.0 | % | 56.7 | % | (2.7 | ) | |||||||||
Operating profit | $ | 202.2 | $ | 128.9 | 57 | % | $ | 376.2 | $ | 201.6 | 87 | % | |||||||||
CTI restructuring | 8.4 | 38.2 | 28.7 | 65.5 | |||||||||||||||||
Venezuelan special items | 16.5 | — | 29.8 | — | |||||||||||||||||
FCPA accrual | 12.0 | — | 12.0 | — | |||||||||||||||||
Adjusted operating profit | $ | 239.1 | $ | 167.1 | 43 | % | $ | 446.7 | $ | 267.1 | 67 | % | |||||||||
Operating margin | 8.1 | % | 5.0 | % | 3.1 | 7.6 | % | 4.0 | % | 3.6 | |||||||||||
CTI restructuring | .3 | 1.5 | (1.2 | ) | .6 | 1.3 | (.7 | ) | |||||||||||||
Venezuelan special items | .7 | — | .7 | .6 | — | .6 | |||||||||||||||
FCPA accrual | .5 | — | .5 | .2 | — | .2 | |||||||||||||||
Adjusted operating margin | 9.5 | % | 6.5 | % | 3.0 | 9.0 | % | 5.2 | % | 3.8 | |||||||||||
Effective tax rate | 41.8 | % | 30.0 | % | 11.8 | 58.1 | % | 30.9 | % | 27.2 | |||||||||||
CTI restructuring | (.1 | ) | .5 | (.6 | ) | (.2 | ) | .6 | (.8 | ) | |||||||||||
Venezuelan special items | (4.3 | ) | — | (4.3 | ) | (22.6 | ) | — | (22.6 | ) | |||||||||||
FCPA accrual | (2.6 | ) | — | (2.6 | ) | (1.7 | ) | — | (1.7 | ) | |||||||||||
Loss on extinguishment of debt | .1 | — | .1 | .7 | — | .7 |
Adjusted effective tax rate | 34.9 | % | 30.6 | % | 4.3 | 34.4 | % | 31.5 | % | 2.9 | |||||||||||
Change in Active Representatives | — | % | 1 | % | |||||||||||||||||
Change in units sold | — | % | (2 | )% |
(1) | Advertising expenses are included within selling, general and administrative expenses. |
%/Point Change | ||||
US$ | Constant $ | |||
Beauty | (4)% | —% | ||
Beauty Category: | ||||
Fragrance | (1) | 4 | ||
Color | (3) | — | ||
Skincare | (9) | (6) | ||
Personal care | (3) | 1 | ||
Fashion | (4) | (1) | ||
Home | 13 | 17 |
• | an increase of 50 basis points due to lower supply chain costs, largely due to 70 points from lower freight costs, primarily in Latin America due to reduced usage of air freight; |
• | an increase of 20 basis points due to the favorable net impact of mix and pricing, primarily in Latin America; |
• | a decrease of 70 basis points due to the negative impact of foreign exchange; and |
• | various other insignificant items that contributed to the increase in Adjusted gross margin. |
• | a decrease of 130 basis points from lower administrative expenses, primarily due to lower professional and related fees associated with the FCPA investigation and compliance reviews, as well as lower compensation costs and a benefit from higher revenues while incurring administrative expenses that do not vary directly with revenue; |
• | a decrease of 60 basis points from lower advertising costs, driven by Latin America; and |
• | a decrease of 50 basis points from lower net brochure costs primarily in Europe. |
%/Point Change | ||||
US$ | Constant $ | |||
Beauty | (4)% | —% | ||
Beauty Category: | ||||
Fragrance | — | 5 | ||
Color | (5) | (1) | ||
Skincare | (11) | (7) | ||
Personal care | (3) | — | ||
Fashion | (3) | (1) | ||
Home | 9 | 13 |
• | an increase of 120 basis points due to lower supply chain costs, largely due to 80 points from lower freight costs, primarily in Latin America due to reduced usage of air freight. In addition, supply chain costs benefited by 30 basis points from lower material costs, which also includes the benefits from productivity initiatives, including facility rationalization, primarily in Europe; |
• | a decrease of 50 basis points due to the negative impact of foreign exchange; and |
• | various other insignificant items that contributed to the increase in Adjusted gross margin. |
• | a decrease of 110 basis points from lower administrative expenses, primarily due to lower professional and related fees associated with the FCPA investigation and compliance reviews, as well as lower compensation costs; |
• | a decrease of 80 basis points from lower advertising cost, driven by Latin America; |
• | a decrease of 40 basis points from lower net brochure costs primarily in Europe; and |
• | a decrease of 40 basis points from lower bad debt expense, primarily due to a higher provision during the prior-year period to increase reserves for bad debts in South Africa. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2013 | 2012 | US$ | Constant $ | 2013 | 2012 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 1,252.1 | $ | 1,242.8 | 1 | % | 7 | % | $ | 2,396.5 | $ | 2,392.3 | — | % | 7 | % | |||||||||||
Operating profit | 147.8 | 114.9 | 29 | % | 51 | % | 249.2 | 165.7 | 50 | % | 77 | % | |||||||||||||||
CTI restructuring | 3.9 | 7.1 | 2.1 | 11.8 | |||||||||||||||||||||||
Venezuelan special items | 16.5 | — | 29.8 | — | |||||||||||||||||||||||
Adjusted operating profit | $ | 168.3 | $ | 122.0 | 38 | % | 47 | % | $ | 281.1 | $ | 177.5 | 58 | % | 68 | % | |||||||||||
Operating margin | 11.8 | % | 9.2 | % | 2.6 | 3.8 | 10.4 | % | 6.9 | % | 3.5 | 4.6 | |||||||||||||||
CTI restructuring | .3 | .6 | .1 | .5 | |||||||||||||||||||||||
Venezuelan special items | 1.3 | — | 1.2 | — | |||||||||||||||||||||||
Adjusted operating margin | 13.4 | % | 9.8 | % | 3.6 | 3.7 | 11.7 | % | 7.4 | % | 4.3 | 4.3 | |||||||||||||||
Change in Active Representatives | 2 | % | 3 | % | |||||||||||||||||||||||
Change in units sold | 1 | % | — | % |
• | a benefit of 1.5 points from lower advertising costs, primarily due to higher spending on product launches in the prior-year period; |
• | a benefit of 1.3 points due to higher gross margin caused primarily by .9 points from the favorable net impact of mix and pricing. Benefits from pricing include the realization of price increases in advance of costs in markets experiencing relatively high inflation (Venezuela and Argentina), while mix negatively impacted gross margin due to higher growth in Fashion and Home. Gross margin also benefited by .6 points from lower supply chain costs driven by lower freight, primarily due to reduced usage of air freight. These items were partially offset by a decline of .8 points |
• | a benefit of .4 points driven by the impact of higher revenues while incurring administrative expenses that do not vary directly with revenue. |
• | a benefit of 2.0 points from lower advertising costs, primarily due to higher spending on product launches in the prior-year period; |
• | a benefit of .9 points driven by the impact of higher revenues while incurring administrative expenses that do not vary directly with revenue; |
• | a benefit of .9 points due to higher gross margin caused primarily by .6 points from the favorable net impact of mix and pricing. Benefits from pricing include the realization of price increases in advance of costs in markets experiencing relatively high inflation (Venezuela and Argentina), while mix negatively impacted gross margin due to higher growth in Fashion and Home. Gross margin also benefited by .6 points from lower supply chain costs driven by lower freight, primarily due to reduced usage of air freight. These items were partially offset by .8 points from the negative impact of foreign exchange. In addition, there were various other insignificant items that benefited gross margin; and |
• | a benefit of .4 points due to the government incentive in Brazil recognized in the first quarter of 2013, discussed above. |
• | As a result of the use of a further devalued exchange rate for the remeasurement of Avon Venezuela's revenues and profits, Avon's annualized consolidated revenues would likely be negatively impacted by approximately 2% and annualized consolidated operating profit would likely be negatively impacted by approximately 3% prospectively, assuming no operational improvements occurred to offset the negative impact of a further devaluation. |
• | Avon's consolidated operating profit during the first twelve months following the devaluation, in this example, would likely be negatively impacted by approximately 11%, assuming no offsetting operational improvements. The larger negative impact on operating profit during the first twelve months as compared to the prospective impact is caused by costs of non-monetary assets being carried at historical dollar cost in accordance with the requirement to account for Venezuela as a highly inflationary economy while revenue would be remeasured at the further devalued rate. |
• | We would likely incur an immediate charge of approximately $57 (approximately $43 in other expense, net and approximately $14 in income taxes) associated with the $131 of Bolívar-denominated monetary net assets and deferred income taxes. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2013 | 2012 | US$ | Constant $ | 2013 | 2012 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 678.4 | $ | 663.1 | 2 | % | 5 | % | $ | 1,411.5 | $ | 1,387.7 | 2 | % | 4 | % | |||||||||||
Operating profit | 104.1 | 71.3 | 46 | % | 52 | % | 215.5 | 127.8 | 69 | % | 78 | % | |||||||||||||||
CTI restructuring | 3.7 | 8.1 | 12.9 | 12.7 | |||||||||||||||||||||||
Adjusted operating profit | $ | 107.7 | $ | 79.4 | 36 | % | 41 | % | $ | 228.4 | $ | 140.5 | 63 | % | 70 | % | |||||||||||
Operating margin | 15.3 | % | 10.8 | % | 4.5 | 4.7 | 15.3 | % | 9.2 | % | 6.1 | 6.3 | |||||||||||||||
CTI restructuring | .5 | 1.2 | .9 | .9 | |||||||||||||||||||||||
Adjusted operating margin | 15.9 | % | 12.0 | % | 3.9 | 4.0 | 16.2 | % | 10.1 | % | 6.1 | 6.2 | |||||||||||||||
Change in Active Representatives | 3 | % | 3 | % | |||||||||||||||||||||||
Change in units sold | 6 | % | 5 | % |
• | a benefit of 1.2 points from lower bad debt expense largely due to the change in estimate of the collection of our receivables in the prior-year period; |
• | a benefit of 1.2 points driven by the impact of higher revenues while incurring administrative expenses that do not vary directly with revenue; |
• | a benefit of 1.1 points from a curtailment gain due to the freeze of the United Kingdom pension plan; |
• | a benefit of 1.1 points from lower net brochure costs, of which .7 points attributable to an adjustment associated with prior periods in Poland in the second quarter of 2012, and was also impacted by initiatives to reduce the cost of our brochures in various European markets; and |
• | a decline of .9 points from an impairment of a facility in the United Kingdom. |
• | a benefit of 2.9 points due to higher gross margin caused primarily by 4.0 points from lower supply chain costs, largely due to lower material and overhead costs including the benefits from productivity initiatives, including facility rationalization, as well as the favorable impact of foreign exchange. These items were partially offset by the unfavorable net impact of mix and pricing of .8 points as a result of discounts that contributed to unit growth; |
• | a benefit of 1.8 points from lower bad debt expense primarily due to a higher provision in the first quarter of 2012 to increase reserves for bad debts in South Africa as a result of growth in new territories, of which 1.0 point was an adjustment associated with prior periods. Bad debt expense was also favorably impacted by the change in estimate of the collection of our receivables in the prior-year period; |
• | a benefit of .8 points from lower net brochure costs, impacted by initiatives to reduce the cost of our brochures in various European markets as well as .3 points attributable to an adjustment associated with prior periods in Poland in the second quarter of 2012; |
• | a benefit of .6 points from a curtailment gain due to the freeze of the United Kingdom pension plan; |
• | a decline of .5 points from higher field compensation primarily driven by increased incentives; and |
• | a decline of .4 points from an impairment of a facility in the United Kingdom. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2013 | 2012 | US$ | Constant $ | 2013 | 2012 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 380.3 | $ | 433.9 | (12 | )% | (12 | )% | $ | 758.8 | $ | 878.5 | (14 | )% | (13 | )% | |||||||||||
Operating (loss) profit | (11.5 | ) | (1.6 | ) | * | * | (20.8 | ) | 3.4 | * | * | ||||||||||||||||
CTI restructuring | 5.3 | 5.8 | 11.1 | 10.2 | |||||||||||||||||||||||
Adjusted operating (loss) profit | $ | (6.2 | ) | $ | 4.2 | * | * | $ | (9.7 | ) | $ | 13.6 | * | * | |||||||||||||
Operating margin | (3.0 | )% | (.4 | )% | (2.6 | ) | (2.7 | ) | (2.7 | )% | .4 | % | (3.1 | ) | (3.1 | ) | |||||||||||
CTI restructuring | 1.4 | 1.3 | 1.5 | 1.2 | |||||||||||||||||||||||
Adjusted operating margin | (1.6 | )% | 1.0 | % | (2.6 | ) | (2.6 | ) | (1.3 | )% | 1.5 | % | (2.8 | ) | (2.8 | ) | |||||||||||
Change in Active Representatives | (13 | )% | (13 | )% | |||||||||||||||||||||||
Change in units sold | (10 | )% | (12 | )% |
• | a decline of 2.4 points due to the net impact of revenue deleverage with respect to our fixed expenses. This was partially offset by lower expenses primarily resulting from our cost savings initiatives, mainly reductions in headcount, brochure costs, and field investment that were primarily associated with the $400M Cost Savings Initiative; and |
• | a decline of .5 points due to lower gross margin caused primarily by .5 points from higher supply chain costs, primarily as a result of 1.2 points that benefited the prior-year period for an adjustment associated with prior periods related to vendor liabilities, as well as higher freight costs. These items were partially offset by manufacturing productivity savings. |
• | a decline of 2.3 points due to the net impact of revenue deleverage with respect to our fixed expenses. This was partially offset by lower expenses primarily resulting from our cost savings initiatives, mainly reductions in headcount, brochure costs, and field investment that were primarily associated with the $400M Cost Savings Initiative; and |
• | a decline of .5 points due to lower gross margin caused primarily by .5 points from higher supply chain costs, primarily as a result of .6 points that benefited the prior-year period for an adjustment associated with prior periods related to vendor liabilities, as well as higher obsolescence and freight costs. These items were partially offset by manufacturing productivity savings. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2013 | 2012 | US$ | Constant $ | 2013 | 2012 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 198.1 | $ | 218.4 | (9 | )% | (10 | )% | $ | 398.1 | $ | 440.1 | (10 | )% | (11 | )% | |||||||||||
Operating profit | 16.4 | 11.1 | 48 | % | 43 | % | 27.5 | 26.5 | 3 | % | (1 | )% | |||||||||||||||
CTI restructuring | (3.9 | ) | 4.1 | .9 | 4.8 | ||||||||||||||||||||||
Adjusted operating profit | $ | 12.5 | $ | 15.2 | (18 | )% | (20 | )% | $ | 28.4 | $ | 31.3 | (9 | )% | (13 | )% | |||||||||||
Operating margin | 8.3 | % | 5.1 | % | 3.2 | 3.1 | 6.9 | % | 6.0 | % | .9 | .7 | |||||||||||||||
CTI restructuring | (2.0 | ) | 1.9 | .2 | 1.1 | ||||||||||||||||||||||
Adjusted operating margin | 6.3 | % | 7.0 | % | (.7 | ) | (.8 | ) | 7.1 | % | 7.1 | % | — | (.2 | ) | ||||||||||||
Change in Active Representatives(1) | (11 | )% | (7 | )% | |||||||||||||||||||||||
Change in units sold | (12 | )% | (11 | )% |
• | a decline of 2.0 points from higher bad debt expense primarily due to the Philippines, of which 2.3 points was an adjustment associated with prior periods; |
• | a decline of .4 points due to lower gross margin caused primarily by .9 points from higher supply chain costs primarily due to higher obsolescence largely in China, attributable to lower unit sales. This was partially offset by .7 points from the favorable net impact of mix and pricing primarily in the Philippines, partly due to less product discounting; |
• | a benefit of .6 points from lower administrative expenses, primarily due to benefits from restructuring savings associated with the $400M Cost Savings Initiative, largely due to the exit from the South Korea and Vietnam markets as well as in China due to a reduction in distribution centers and headcount. These items were partially offset by the impact of revenue deleverage with respect to our fixed administrative expenses; |
• | a benefit of .5 points from lower representative and sales leader investment, primarily due to China reflecting the transition to a retail compensation model in that market; and |
• | various other insignificant items that partially offset the decline in operating margin and Adjusted operating margin. |
• | a decline of 1.0 point from higher bad debt expense primarily due to the Philippines, of which 1.1 points was an adjustment associated with prior periods; |
• | a decline of .9 points due to lower gross margin caused primarily by .8 points from higher supply chain costs primarily due to higher obsolescence largely in China, attributable to lower unit sales; |
• | a benefit of .9 points from lower administrative expenses, primarily due to benefits from restructuring savings associated with the $400M Cost Savings Initiative, largely due to the exit from the South Korea and Vietnam markets as well as in China due to a reduction in distribution centers and headcount. These items were partially offset by the impact of revenue deleverage with respect to our fixed administrative expenses; |
• | a benefit of .4 points from lower fixed selling expenses, partly due to China reflecting the transition to a retail compensation model in that market. This was partially offset by the impact of revenue deleverage; and |
• | various other insignificant items that partially offset the decline in operating margin and Adjusted operating margin. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||
Total global expenses | $ | 163.3 | $ | 188.1 | (13 | )% | $ | 304.0 | $ | 353.6 | (14 | )% | |||||||||
Allocated to segments | (108.7 | ) | (121.3 | ) | (10 | )% | (208.8 | ) | (231.8 | ) | (10 | )% | |||||||||
Net global expenses | $ | 54.6 | $ | 66.8 | (18 | )% | $ | 95.2 | $ | 121.8 | (22 | )% | |||||||||
CTI restructuring | (.6 | ) | 13.1 | 1.7 | 26.0 | ||||||||||||||||
FCPA accrual | 12.0 | — | 12.0 | — | |||||||||||||||||
Adjusted net global expenses | $ | 43.2 | $ | 53.7 | (20 | )% | $ | 81.5 | $ | 95.8 | (15 | )% |
• | our ability to improve our financial and operational performance and execute fully our global business strategy, including our ability to implement the key initiatives of, and realize the projected benefits (in the amounts and time schedules we expect) from, our stabilization strategies, cost savings initiative, multi-year restructuring programs and other initiatives, 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, and any plans to invest these projected benefits ahead of future growth; |
• | the possibility of business disruption in connection with our stabilization strategies, cost savings initiative, multi-year restructuring programs or other initiatives; |
• | our ability to improve our business in North America, including with respect to the field and the overall consumer proposition; |
• | our ability to improve working capital and effectively manage doubtful accounts and inventory and implement initiatives to reduce inventory levels, including the potential impact on cash flows and obsolescence; |
• | our ability to reverse declines in Active Representatives, 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 and technology tools and enablers, 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; |
• | our ability to reverse declining margins and net income; |
• | general economic and business conditions in our markets, including social, economic and political uncertainties in the international markets in our portfolio; |
• | our ability to achieve profitable growth, particularly in our largest markets, such as Brazil and the United States ("U.S."), and developing and emerging markets, such as Mexico and Russia, and our ability to realize sustainable growth from our investments in our brand and the direct-selling channel; |
• | 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 devaluation of its currency, foreign exchange restrictions and the potential effect of such factors on our business, results of operations and financial condition; |
• | any developments in or consequences of investigations and compliance reviews, and any litigation related thereto, including the ongoing investigations and compliance reviews of FCPA 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, including our ability to reach a settlement with the SEC and the DOJ with regard to the ongoing FCPA investigations or, if a settlement is reached, the timing of any such settlement or the terms of such settlement; |
• | 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 U.S. and abroad, our operations or our Representatives, including foreign exchange or other restrictions, adoption, interpretation and enforcement of foreign laws, including in jurisdictions such as Brazil, Russia, Venezuela and Argentina, and 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 impact of changes in tax rates on the value of our deferred tax assets and declining earnings on our ability to realize foreign tax credits in the U.S.; |
• | our access to cash and short-term financing, and our ability to secure financing or financing at attractive rates; |
• | any changes to our credit ratings and the impact of such changes on our financing costs, rates, terms, debt service obligations and access to lending sources; |
• | the impact of any significant restructuring charges or significant legal or regulatory settlements on our ability to comply with certain covenants in our debt instruments; |
• | 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; |
• | 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; |
• | 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; |
• | key information technology systems, process or site outages and disruptions; |
• | the risk of product or ingredient shortages resulting from our concentration of sourcing in fewer suppliers; |
• | 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; |
• | our ability to successfully identify new business opportunities and strategic alternatives 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 China business, including the effects 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, among other things, the estimated fair value of the recorded goodwill and intangible assets; |
• | disruption in our supply chain or manufacturing and distribution operations; |
• | the quality, safety and efficacy of our products; |
• | the success of our research and development activities; |
• | our ability to protect our intellectual property rights; and |
• | the risk of an adverse outcome in any material pending and future litigations or with respect to the legal status of Representatives. |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||
4/1 - 4/30/13 | 7,538 | (1) | $ | 19.87 | * | * | |||||
5/1 - 5/31/13 | 33,269 | (1) | 21.36 | * | * | ||||||
6/1 - 6/30/13 | 8,783 | (1) | 23.00 | * | * | ||||||
Total | 49,590 | $ | 21.43 | * | * |
* | These amounts are not applicable as the Company does not have a share repurchase program in effect. |
(1) | All shares were repurchased by the Company in connection with employee elections to use shares to pay withholding taxes upon the vesting of their restricted stock units. |
AVON PRODUCTS, INC. | ||
(Registrant) | ||
Date: | August 1, 2013 | /s/ Robert Loughran |
Robert Loughran | ||
Vice President and | ||
Corporate Controller | ||
Signed both on behalf of the | ||
registrant and as chief | ||
accounting officer. |
10.1 | Avon Products, Inc. 2013 Stock Incentive Plan (incorporated by reference to Appendix A to the Company's Proxy Statement on Schedule 14 A as filed with the Commission on April 2, 2013) |
10.2 | Avon Products, Inc. 2013-2017 Executive Incentive Plan (incorporated by reference to Appendix B to the Company's Proxy Statement on Schedule 14 A as filed with the Commission on April 2, 2013) |
10.3 | Form of Avon Products, Inc. 2013 Stock Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed with the Securities and Exchange Commission on May 7, 2013) |
10.4 | Form of Avon Products, Inc. 2013 Stock Incentive Plan Retention Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed with the Securities and Exchange Commission on May 7, 2013) |
10.5 | Form of Avon Products, Inc. 2013 Stock Incentive Plan Performance Contingent Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed with the Securities and Exchange Commission on May 7, 2013) |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101 | The following materials formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements. |
/s/ Sherilyn S. McCoy |
Sherilyn S. McCoy |
Chief Executive Officer |
/s/ Kimberly Ross |
Kimberly Ross |
Executive Vice President and Chief Financial Officer |
/s/ Sherilyn S. McCoy |
Sherilyn S. McCoy |
Chief Executive Officer |
August 1, 2013 |
/s/ Kimberly Ross |
Kimberly Ross |
Executive Vice President and Chief Financial Officer |
August 1, 2013 |
Restructuring Initiatives
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Initiatives | RESTRUCTURING INITIATIVES $400M Cost Savings Initiative In 2012, we announced a cost savings initiative (the "$400M Cost Savings Initiative") in an effort to stabilize the business and return Avon to sustainable growth, which is expected to be achieved through restructuring actions as well as other cost-savings strategies that will not result in restructuring charges. The $400M Cost Savings Initiative is designed to reduce our operating expenses as a percentage of total revenue to help us achieve a targeted low double-digit operating margin by 2016. The restructuring actions under the $400M Cost Savings Initiative primarily consist of global headcount reductions and related actions, as well as the restructuring or closure of certain smaller, under-performing markets, including our exit from the South Korea, Vietnam and Republic of Ireland markets. As a result of the actions approved to-date, we have recorded total costs to implement these restructuring initiatives of $79.5 before taxes, of which $28.8 before taxes was recorded in the first half of 2013. For the actions approved to-date, we expect our total costs to implement to be in the range of $105 to $115 before taxes. The additional charges not yet incurred associated with the actions approved to-date of approximately $26 to $36 before taxes are expected to be recorded primarily in 2013. At this time we are unable to quantify the total costs that will be incurred through the time the initiative is fully implemented. In connection with the restructuring actions approved to-date associated with the $400M Cost Savings Initiative, we expect to realize annualized savings of approximately $125 before taxes. For market closures, the annualized savings represent the foregone selling, general and administrative expenses as a result of no longer operating in the respective markets. For actions that did not result in the closure of a market, the annualized savings represent the net reduction of expenses that will no longer be incurred by Avon. The annualized savings do not incorporate the impact of the decline in revenue associated with these actions (including market closures), which is not expected to be material. During the three and six months ended June 30, 2013, we recorded costs to implement of $8.5 and $28.8, respectively, related to the $400M Cost Savings Initiative, and the costs consisted of the following:
For the three months ended June 30, 2013, $8.9 of the total costs to implement was recorded in selling, general and administrative expenses and a net benefit of $.4 was recorded in cost of sales. For the six months ended June 30, 2013, $29.5 of the total costs to implement was recorded in selling, general and administrative expenses and a net benefit of $.7 was recorded in cost of sales. The majority of cash payments associated with these charges are expected to be made during 2013. The liability balance for the $400M Cost Savings Initiative as of June 30, 2013 is as follows:
The following table presents the restructuring charges incurred to-date, net of adjustments, under our $400M Cost Savings Initiative, along with the estimated charges expected to be incurred on approved initiatives under the plan:
The charges, net of adjustments, of initiatives under the $400M Cost Savings Initiative by reportable business segment were as follows:
As noted previously, for the initiatives approved to date, we expect to record total costs to implement in the range of $105 to $115 before taxes under the $400M Cost Savings Initiative. The amounts shown in the tables above as charges recorded to date relate to initiatives that have been approved and recorded in the financial statements as the costs are probable and estimable. The amounts shown in the tables above as total expected charges on approved initiatives represent charges recorded to date plus charges yet to be recorded for approved initiatives as the relevant accounting criteria for recording an expense have not yet been met. In addition to the charges included in the tables above, we have incurred and will incur other costs to implement restructuring initiatives such as other professional services and accelerated depreciation. Additional Restructuring Charges In an effort to improve operating performance, we identified certain actions in 2012 that we believe will enhance our operating model, reduce costs, and improve efficiencies. In addition, management approved the relocation of our corporate headquarters in New York City. Restructuring Charges – First and Second Quarter 2013 As a result of the analysis and the actions taken, during the three and six months ended June 30, 2013, we recorded benefits of $.4 and $.2, respectively, in selling, general and administrative expenses. Restructuring Charges – First and Second Quarter 2012 During the three and six months ended June 30, 2012, we recorded total costs to implement of $39.2 and $61.0, respectively, associated with previously approved initiatives, and the costs consisted of the following:
Total costs to implement were recorded in selling, general and administrative expenses for the three and six months ended June 30, 2012. The liability balance for these various restructuring initiatives as of June 30, 2013 is as follows:
The actions associated with these various restructuring initiatives are substantially complete. 2005 and 2009 Restructuring Programs We launched restructuring programs in 2005 and 2009 (collectively, the "2005 and 2009 Restructuring Programs") with initiatives designed to enhance our organizational effectiveness, implement a global manufacturing strategy and additional supply chain efficiencies in distribution, restructure our global supply chain operations, realign certain local business support functions to a more regional base, and streamline transactional and other services. Restructuring Charges – First and Second Quarter 2013 During the three and six months ended June 30, 2013, we have recorded total costs to implement these restructuring initiatives of $.4 and $.2, respectively, primarily in selling, general and administrative expenses, associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs. Restructuring Charges – First and Second Quarter 2012 During the three and six months ended June 30, 2012, we recorded a net benefit of $1.0 and total costs to implement of $4.5, respectively, associated with previously approved initiatives that are part of our 2005 and 2009 Restructuring Programs, and the costs consisted of the following:
For the three months ended June 30, 2012, a net benefit of $1.7 was recorded in selling, general and administrative expenses and total costs to implement of $.7 were recorded in cost of sales. For the six months ended June 30, 2012, total costs to implement of $1.1 were recorded in selling, general and administrative expenses and $3.4 were recorded in cost of sales. The liability balances, which primarily consist of employee-related costs, for the initiatives under the 2005 and 2009 Restructuring Programs are shown below:
The 2005 and 2009 Restructuring Programs are substantially complete. |
Restructuring Initiatives (Liability Balances for 2005 and 2009 Restructuring Programs) (Details) (2005 And 2009 Restructuring Programs [Member], USD $)
In Millions, unless otherwise specified |
6 Months Ended |
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Jun. 30, 2013
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2005 And 2009 Restructuring Programs [Member]
|
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Balance December 31, 2012 | $ 21.0 |
Restructuring Charges | 0.7 |
Adjustments | (0.9) |
Cash payments | (14.2) |
Foreign exchange | (0.1) |
Balance March 31, 2013 | $ 6.5 |
Consolidated Statements Of Comprehensive Income paranthetical (Parentheticals) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Change in derivative losses on cash flow hedges, taxes | $ 0.2 | $ 0.6 | $ 0.6 | $ 1.1 |
Adjustments of and amortization of net actuarial loss, prior service costs, and transition obligation, taxes | $ 7.1 | $ (1.3) | $ 12.1 | $ 3.1 |
Discontinued Operations Discontinued Operations
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Jun. 30, 2013
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | DISCONTINUED OPERATIONS On June 30, 2013, the Company entered into an agreement to sell its Silpada jewelry business (“Silpada”) for $85, plus an earn-out of up to $15 if Silpada achieves specific earnings targets over two years. Earlier this year, the Company disclosed that it was reviewing strategic alternatives for Silpada. The Company determined as part of this process to divest Silpada because of the timeline and investment required to return the business to historical levels of profitability. Silpada was previously reported within our North America segment and was classified within discontinued operations for all periods presented. The transaction closed on July 3, 2013. The Company expects that the proceeds from the sale will be used for general corporate purposes, including the repayment of outstanding debt. The benefit associated with the earn-out will be recorded in discontinued operations only when it becomes realizable by Avon. In the second quarter of 2013, the Company recorded a pre-tax charge of $79 ($50 net of tax), reflecting the expected loss on sale, which represents the difference between the carrying value of the Silpada business and the expected proceeds. Summarized financial information for discontinued operations is shown below:
(1) Operating loss for the three and six months ended June 30, 2013 includes a pre-tax charge of $79, reflecting the expected loss on sale. 2012 Impairment Assessment Silpada was acquired in July 2010. Silpada had historically generated positive cash flows and was expected to continue to generate positive cash flows; however, the expected cash flows of the business as of the date of our impairment analysis were not at a level sufficient to support the carrying value of the business. Since the acquisition in 2010, the Silpada business did not achieve our revenue, earnings and cash flows expectations primarily due to lower consumer spending, higher silver prices and increased competition. When compared to our initial projections for the business at the time of the acquisition, the future expectations for Silpada utilized in the 2011 and 2012 impairment analyses represented a significant decrease in the future cash flows that were expected to be generated by Silpada. This reduction in future expectations led to material impairments of $263 and $209 being recorded during the fourth quarters of 2011 and 2012, respectively. Throughout the first nine months of 2012, Silpada continued to perform generally in line with our revenue and earnings forecast and there were no significant changes to our long-term outlook for the business, which was utilized in determining the estimated fair value in our 2011 impairment analysis. Our revenue and earnings forecast for 2012 had projected improvements to the trends (i.e., a reduction of the year-over-year revenue declines) in the latter portion of 2012. In 2012, in an effort to promote sales and grow the business, we made changes to certain members of the Silpada management team, including bringing in personnel who had previously managed other Avon businesses. Among the initiatives implemented by the new Silpada management team was a recruiting incentive program which we had believed would benefit our Representative counts and Representative productivity primarily in the latter portion of 2012, and in turn improve the performance of the business. While we saw improvement in our Representative additions, the recruiting incentive program did not result in the expected Representative productivity. In the fourth quarter of 2012, which is generally the quarter with the largest dollar value of revenue for the Silpada business, it became apparent that we would not achieve our forecasted revenue and earnings for 2012, partially due to the recruiting incentive program not driving the expected Representative productivity, and as a result, Silpada experienced weaker than expected performance in the fourth quarter of 2012. The revenue performance in the fourth quarter of 2012 was approximately 19% less than the estimates utilized in our 2011 impairment analysis. Based on these continued trends, in the latter part of the fourth quarter of 2012, in conjunction with the 2013 planning process and the early stages of our evaluation of strategic alternatives for the business, we lowered our long-term revenue and earnings projections for Silpada in our discounted cash flow (“DCF”) model to reflect a more moderate recovery of the business. The more moderate recovery of the business was believed to be appropriate due to the lack of sales momentum in the business and the continued inability of Silpada to achieve our financial performance expectations. The decline in the fair values of the Silpada reporting unit, the trademark, and the customer relationships was primarily driven by the reduction in the forecasted long-term growth rates and cash flows used to estimate fair value. The lower than expected results for fiscal year 2012 served as the baseline for the long-term projections of the business. Fiscal year 2012 revenue for Silpada was approximately 10% less than the estimates utilized in our 2011 impairment analysis and 19% less than fiscal year 2011 results. We forecasted revenue and the resulting cash flows over ten years using a DCF model which included a terminal value at the end of the projection period. |
Earnings per Share and Share Repurchases (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share Reconciliation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Basic and Diluted Earnings per Share |
Amounts in the table above may not necessarily sum due to rounding. |
Goodwill and Intangible Assets (Schedule of Intangible Assets) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Gross Amount | $ 145.9 | $ 155.1 |
Accumulated Amortization | (109.5) | (114.5) |
Indefinite Lived Trademarks | 23.2 | 24.4 |
Customer Relationships [Member]
|
||
Gross Amount | 49.4 | 52.7 |
Accumulated Amortization | (44.2) | (46.0) |
Licensing Agreements [Member]
|
||
Gross Amount | 58.6 | 62.8 |
Accumulated Amortization | (50.6) | (53.6) |
Noncompete Agreements [Member]
|
||
Gross Amount | 8.1 | 8.6 |
Accumulated Amortization | (8.1) | (8.6) |
Trademarks [Member]
|
||
Gross Amount | 6.6 | 6.6 |
Accumulated Amortization | $ (6.6) | $ (6.3) |
Goodwill and Intangible Assets
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS In the second quarter of 2013, Silpada was classified within discontinued operations. See Note 3, Discontinued Operations for further details. Accordingly, all amounts exclude the results of Silpada for all periods presented. Goodwill
(1) Other is primarily comprised of foreign currency translation. Other intangible assets
Aggregate amortization expense was $1.1 and $.8 for the three months ended June 30, 2013 and 2012, respectively, and $2.2 and $1.9 for the six months ended June 30, 2013 and 2012, respectively.
Actual amortization expense may differ from the amounts above due to, among other things, future acquisitions, disposals, impairments, accelerated amortization or fluctuations in foreign currency exchange rates. |
Restructuring Initiatives (Narrative) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||||
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Jun. 30, 2013
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2013
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Professional Service Fees [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Professional Service Fees [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2012
2005 And 2009 Restructuring Programs [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Inventory Write-offs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Inventory Write-offs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Contract Terminations / Other [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Contract Terminations / Other [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Contract Terminations / Other [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Professional Service Fees [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Professional Service Fees [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Currency Translation Adjustment Write Offs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Currency Translation Adjustment Write Offs [Member]
|
Jun. 30, 2013
$400M Cost Savings Initiative [Member]
Currency Translation Adjustment Write Offs [Member]
|
Jun. 30, 2013
Other Restructuring Initiatives [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
|
Jun. 30, 2013
Other Restructuring Initiatives [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2013
Other Restructuring Initiatives [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Employee-Related Costs [Member]
|
Jun. 30, 2013
Other Restructuring Initiatives [Member]
Contract Terminations / Other [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Professional Service Fees [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Professional Service Fees [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2012
Other Restructuring Initiatives [Member]
Accelerated Depreciation [Member]
|
Jun. 30, 2012
Selling, General and Administrative Expenses [Member]
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2012
Selling, General and Administrative Expenses [Member]
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2013
Selling, General and Administrative Expenses [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Selling, General and Administrative Expenses [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2012
Cost of Sales [Member]
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2012
Cost of Sales [Member]
2005 And 2009 Restructuring Programs [Member]
|
Jun. 30, 2013
Cost of Sales [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Cost of Sales [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Latin America [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Europe Middle East & Africa [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
North America [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Asia Pacific [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Corporate [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Minimum [Member]
$400M Cost Savings Initiative [Member]
|
Jun. 30, 2013
Maximum [Member]
$400M Cost Savings Initiative [Member]
|
|
Expected total restructuring charges and other costs | $ 84,000,000 | $ 66,700,000 | $ 14,100,000 | $ 2,500,000 | $ 20,600,000 | $ 27,700,000 | $ 19,400,000 | $ 10,600,000 | $ 5,700,000 | $ 105,000,000 | $ 115,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Estimated charges to be incurred on approved initiatives | 19,300,000 | 5,000,000 | 8,300,000 | 6,000,000 | 5,000,000 | 14,200,000 | 0 | 100,000 | 0 | 26,000,000 | 36,000,000 | ||||||||||||||||||||||||||||||||||||||||||||
Expected annualized savings before taxes | 125,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges and other costs recorded in period | 400,000 | (1,000,000) | 200,000 | 4,500,000 | (4,700,000) | (5,800,000) | 2,900,000 | 7,300,000 | 800,000 | 3,000,000 | 8,500,000 | 28,800,000 | 79,500,000 | (400,000) | (700,000) | 3,200,000 | 16,500,000 | 3,900,000 | 3,900,000 | 400,000 | 800,000 | 4,900,000 | 11,800,000 | (3.5) | (3,500,000) | (400,000) | 39,200,000 | (200,000) | 61,000,000 | 37,200,000 | 56,000,000 | 900,000 | 3,900,000 | 0 | 1,100,000 | (1,700,000) | 1,100,000 | 700,000 | 3,400,000 | ||||||||||||||||
2013 Charges | $ 700,000 | $ 18,600,000 | $ 200,000 | $ 17,500,000 | $ 4,400,000 | $ (3,500,000) | $ 600,000 | $ 300,000 | $ 300,000 | $ 8,900,000 | $ 29,500,000 | $ (400,000) | $ (700,000) |
Goodwill and Intangible Assets (Estimated Amortization Expense) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2013 | $ 2.0 |
2014 | 3.3 |
2015 | 2.7 |
2016 | 1.9 |
2017 | $ 1.5 |
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2012
Silpada [Member]
|
Dec. 31, 2011
Silpada [Member]
|
|||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Silpada proceeds | $ 85 | |||||||||||
Silpada potential earn-out | 15 | |||||||||||
Silpada potential earn-out description | if Silpada achieves specific earnings targets over two years | |||||||||||
Silpada expected loss on sale, pre-tax | 79 | 79 | ||||||||||
Silpada expected loss on sale, net of tax | 50 | 0 | ||||||||||
Total revenue | 24.7 | 33.5 | 52.3 | 68.5 | ||||||||
Operating loss(1) | (80.0) | [1] | (2.3) | (81.9) | [1] | (3.5) | ||||||
Goodwill and Intangible Asset Impairment | $ 209.0 | $ 263.0 | ||||||||||
Silpada lower revenue than estimates utilized | 19.00% | 10.00% | ||||||||||
Silpada lower revenue than prior year results | 19.00% | |||||||||||
|
Employee Benefit Plans (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost |
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Inventories (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories |
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Supplemental Balance Sheet Information (Components of Prepaid Expenses and Other) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Components Of Prepaid Expenses And Other Current Assets [Line Items] | ||
Deferred tax assets | $ 233.1 | $ 273.5 |
Prepaid taxes and tax refunds receivable | 135.2 | 141.1 |
Prepaid brochure costs, paper and other literature | 101.0 | 111.8 |
Receivables other than trade | 80.0 | 131.6 |
Short-term investments | 30.7 | 16.5 |
Healthcare trust assets | 14.7 | 26.9 |
Interest-rate swap agreements (Notes 12 and 13) | 0 | 19.5 |
Other | 112.9 | 106.1 |
Prepaid expenses and other | $ 707.6 | $ 827.0 |
Derivative Instruments and Hedging Activities (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments Outstanding | Derivatives are recognized on the balance sheet at their fair values. The following table presents the fair value of derivative instruments outstanding at June 30, 2013:
The following table presents the fair value of derivative instruments outstanding at December 31, 2012:
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Employee Benefit Plans (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended |
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Jun. 30, 2013
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Pension contribution made to United Kingdom trust | $ 25 |
U.S. Pension and Postretirement Plans [Member]
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Employer contribution | 12 |
Estimated future employer contributions in next fiscal year minimum remaining | 43 |
Estimated future employer contributions in next fiscal year maximum remaining | 48 |
International Pension and Postretirement Plans [Member]
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Employer contribution | 47 |
Estimated future employer contributions in next fiscal year minimum remaining | 18 |
Estimated future employer contributions in next fiscal year maximum remaining | $ 23 |
Restructuring Initiatives Restructuring Initiatives (Liability Balances for $400M Cost Savings Initiative) (Details) ($400M Cost Savings Initiative [Member], USD $)
In Millions, unless otherwise specified |
6 Months Ended |
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Jun. 30, 2013
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Balance December 31, 2012 | $ 43.0 |
2013 Charges | 18.6 |
Adjustments | (2.4) |
Cash payments | (36.2) |
Non-cash Write-offs | 4.2 |
Balance March 31, 2013 | 27.2 |
Employee-Related Costs [Member]
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Balance December 31, 2012 | 41.3 |
2013 Charges | 17.5 |
Adjustments | (1.0) |
Cash payments | (31.9) |
Non-cash Write-offs | 0 |
Balance March 31, 2013 | 25.9 |
Inventory Write-offs [Member]
|
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Balance December 31, 2012 | 0 |
2013 Charges | 0.2 |
Adjustments | (0.9) |
Cash payments | 0 |
Non-cash Write-offs | 0.7 |
Balance March 31, 2013 | 0 |
Currency Translation Adjustment Write Offs [Member]
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Balance December 31, 2012 | 0 |
2013 Charges | (3.5) |
Adjustments | 0 |
Cash payments | 0 |
Non-cash Write-offs | 3.5 |
Balance March 31, 2013 | 0 |
Contract Terminations / Other [Member]
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Balance December 31, 2012 | 1.7 |
2013 Charges | 4.4 |
Adjustments | (0.5) |
Cash payments | (4.3) |
Non-cash Write-offs | 0 |
Balance March 31, 2013 | $ 1.3 |
Restructuring Initiatives (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Restructuring Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability for $400M Cost Savings Initiative [Table Text Block] | The liability balance for the $400M Cost Savings Initiative as of June 30, 2013 is as follows:
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Schedule of Restructuring and Related Costs Related to $400M Cost Savings Initiative [Table Text Block] | The following table presents the restructuring charges incurred to-date, net of adjustments, under our $400M Cost Savings Initiative, along with the estimated charges expected to be incurred on approved initiatives under the plan:
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Schedule of Charges Reportable by Business Segment Under $400M Cost Savings Initiative [Table Text Block] | The charges, net of adjustments, of initiatives under the $400M Cost Savings Initiative by reportable business segment were as follows:
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Liability Balances For Other Restructuring Initiatives | The liability balance for these various restructuring initiatives as of June 30, 2013 is as follows:
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Liability Balances for 2005 and 2009 Restructuring Programs | The liability balances, which primarily consist of employee-related costs, for the initiatives under the 2005 and 2009 Restructuring Programs are shown below:
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Debt (Details) (USD $)
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3 Months Ended | 6 Months Ended | 6 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||||||||
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Jun. 30, 2013
|
Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
|
Dec. 31, 2012
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Jun. 30, 2013
Revolving Credit Facility [Member]
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Jun. 30, 2013
Private Placement [Member]
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Nov. 23, 2010
Private Placement [Member]
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Jul. 31, 2013
Term Loan [Member]
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Jun. 30, 2013
Term Loan [Member]
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Jun. 30, 2013
Term Loan [Member]
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Jun. 30, 2013
Revolving credit facility and term loan agreement [Member]
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Nov. 23, 2010
Two Point Six Percent Notes, Due November Two Thousand Fifteen [Member]
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Nov. 23, 2010
Four Point Zero Three Percent Notes, Due November Two Thousand Twenty [Member]
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Nov. 23, 2010
Four Point One Eight Percent Notes, Due November Two Thousand Twenty Two [Member]
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Jun. 30, 2009
Five Point Six Two Five Percent Notes, Due March Two Thousand Fourteen [Member]
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Jun. 30, 2009
Six Point Five Percent Notes Due March Two Thousand Nineteen [Member]
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Mar. 31, 2008
Four Point Eight Percent Notes Due March Two Thousand Thirteen [Member]
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Mar. 31, 2008
Five Point Seven Five Percent Notes, Due March Two Thousand Eighteen [Member]
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Jun. 30, 2003
Four Point Two Percent Notes, Due July Two Thousand Eighteen [Member]
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May 31, 2003
Four Point Six Two Five Percent Notes, Due May Two Thousand Thirteen [Member]
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Jun. 30, 2013
Two Point Three Seven Five Percent Notes, Due March Two Thousand Sixteen [Member]
|
Jun. 30, 2013
Four Point Six Zero Percent Notes, Due March Two Thousand Twenty [Member]
|
Jun. 30, 2013
Five Point Zero Percent Notes, Due March Two Thousand Twenty-Three [Member]
|
Jun. 30, 2013
Six Point Nine Five Percent Notes, Due March Two Thousand Forty-Three [Member]
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Debt Instrument [Line Items] | |||||||||||||||||||||||||
Revolving credit facility draw down amount without violating covenant | $ 1,000,000,000 | $ 1,000,000,000 | |||||||||||||||||||||||
2014 Notes acceleration of interest-rate swap gain, expected | 9,800,000 | ||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 | 1,000,000,000 | 500,000,000 | 500,000,000 | |||||||||||||||||||||
2010 Revolving Credit Facility | 1,000,000,000 | ||||||||||||||||||||||||
Term loan incremental draw down | 50,000,000 | 50,000,000 | |||||||||||||||||||||||
Minimum Compliance Of Interest Coverage Ratio Numerator | 4 | ||||||||||||||||||||||||
Minimum Compliance Interest Coverage Ratio Denominator | 1 | ||||||||||||||||||||||||
Revolving credit facility draw down amount without violating covenant | 1,000,000,000 | 1,000,000,000 | |||||||||||||||||||||||
Long-term Line of Credit, Noncurrent | 170,000,000 | 170,000,000 | |||||||||||||||||||||||
Maximum leverage ratio numerator Dec 2013 | 4 | ||||||||||||||||||||||||
Maximum leverage ratio denominator Dec 2013 | 1 | ||||||||||||||||||||||||
Maximum leverage ratio numerator March 2014 | 3.75 | ||||||||||||||||||||||||
Maximum leverage ratio denominator March 2014 | 1 | ||||||||||||||||||||||||
Maximum leverage ratio numerator Dec 2014 | 3.5 | ||||||||||||||||||||||||
Long-term Debt, Maturities, Repayment Terms | Pursuant to the term loan agreement, we are required to repay an amount equal to 25% of the aggregate remaining principal amount of the term loan on June 29, 2014, and the remaining outstanding principal amount of the term loan on June 29, 2015. | ||||||||||||||||||||||||
Term Loan prepayment percentage of proceeds received from incurrence of debt | 50.00% | 50.00% | |||||||||||||||||||||||
Amount in excess requiring prepayment of Term Loan | 0 | 0 | |||||||||||||||||||||||
Limits of subsidiary debt plus existing at February 28, 2013 | 500,000,000 | ||||||||||||||||||||||||
Private Placement Notes | 535,000,000 | ||||||||||||||||||||||||
Debt Instrument, Face Amount | 142,000,000 | 290,000,000 | 103,000,000 | 500,000,000 | 350,000,000 | 0 | 0 | 0 | 0 | 250,000,000 | 500,000,000 | 500,000,000 | 250,000,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.60% | 4.03% | 4.18% | 5.625% | 6.50% | 480.00% | 575.00% | 420.00% | 462.50% | 2.375% | 4.60% | 5.00% | 6.95% | ||||||||||||
Private Notes prepayment percent | 100.00% | 100.00% | |||||||||||||||||||||||
2014 Notes prepayment percent | 100.00% | 100.00% | |||||||||||||||||||||||
2014 Notes accrued interest to be paid April 2013 | 3,400,000 | 3,400,000 | |||||||||||||||||||||||
2014 Notes Make Whole Premium | 21,700,000 | 21,700,000 | |||||||||||||||||||||||
2014 Notes loss on debt extinguishment, expected | 13,000,000 | ||||||||||||||||||||||||
2014 Notes write-off debt issuance costs, expected | 1,100,000 | ||||||||||||||||||||||||
Commercial Paper Program | 1,000,000,000 | 1,000,000,000 | |||||||||||||||||||||||
Commercial Paper | 4,900,000 | 4,900,000 | |||||||||||||||||||||||
Debt Instrument, Credit Rating | Our long-term credit ratings are Baa2 (Stable Outlook) with Moody's and BBB- (Negative Outlook) with S&P, which are on the low end of investment grade, and BB+ (Stable Outlook) with Fitch, which is below investment grade. In February 2013, Fitch lowered their long-term credit rating from BBB- (Negative Outlook) to BB+ (Stable Outlook) and Moody's lowered their long-term credit rating from Baa1 (Negative Outlook) to Baa2 (Stable Outlook). | ||||||||||||||||||||||||
Line of Credit Facility, Amount Outstanding | 0 | 0 | |||||||||||||||||||||||
Maximum leverage ratio denominator Dec 2014 | 1 | ||||||||||||||||||||||||
Interest coverage ratio add back maximum of restructuring or legal or regulatory action | 400,000,000 | ||||||||||||||||||||||||
Private Notes accrued interest paid March 2013 | 6,900,000 | ||||||||||||||||||||||||
Private Notes Make Whole Premium | 68,000,000 | 68,000,000 | |||||||||||||||||||||||
Repayments of Long-term Debt | 117,500,000 | 380,000,000 | |||||||||||||||||||||||
Loss on extinguishment of debt | 13,000,000 | 0 | 86,000,000 | 0 | 71,400,000 | 1,600,000 | |||||||||||||||||||
Write off of Deferred Debt Issuance Cost | $ 1,200,000 | $ 3,400,000 |
Derivative Instruments and Hedging Activities (Fair Value of Derivative Instruments Outstanding) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Derivatives designated as hedges, asset | $ 93.1 | |
Derivatives designated as hedges, liability | 0 | |
Derivatives not designated as hedges, asset | 0.3 | 6.6 |
Derivatives not designated as hedges, liability | 5.3 | 3.2 |
Total derivatives, asset | 0.3 | 99.7 |
Total derivatives, liability | 5.3 | 3.2 |
Interest-Rate Swap Agreements [Member] | Prepaid Expenses and Other [Member]
|
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Derivatives not designated as hedges, asset | 1.7 | |
Interest-Rate Swap Agreements [Member] | Other Assets [Member]
|
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Derivatives designated as hedges, asset | 93.1 | |
Interest-Rate Swap Agreements [Member] | Other Liabilities [Member]
|
||
Derivatives designated as hedges, liability | 0 | |
Interest-Rate Swap Agreements [Member] | Accounts Payable [Member]
|
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Derivatives not designated as hedges, liability | 1.7 | |
Foreign Exchange Forward Contracts [Member] | Prepaid Expenses and Other [Member]
|
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Derivatives not designated as hedges, asset | 0.3 | 4.9 |
Foreign Exchange Forward Contracts [Member] | Accounts Payable [Member]
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Derivatives not designated as hedges, liability | $ 5.3 | $ 1.5 |
Discontinued Operations (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | Summarized financial information for discontinued operations is shown below:
(1) Operating loss for the three and six months ended June 30, 2013 includes a pre-tax charge of $79 |
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations | $ 878.3 | [1] | $ 1,276.4 | [1] | ||||
Cash Flows from Operating Activities | ||||||||
Net (loss) income | 21.6 | 90.3 | ||||||
Discontinued operations, net of tax | 51.5 | 3.0 | ||||||
Income from continuing operations, net of tax | 73.1 | 93.3 | ||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 119.8 | 109.1 | ||||||
Provision for doubtful accounts | 113.4 | 134.5 | ||||||
Provision for obsolescence | 53.7 | 59.7 | ||||||
Share-based compensation | 26.2 | 23.2 | ||||||
Deferred income taxes | (27.4) | (72.0) | ||||||
Charge for Venezuelan monetary assets and liabilities | (34.1) | 0 | ||||||
Other | 30.1 | 20.9 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (103.3) | (94.4) | ||||||
Inventories | (154.3) | (170.4) | ||||||
Prepaid expenses and other | 67.6 | 45.6 | ||||||
Accounts payable and accrued liabilities | (65.8) | 1.0 | ||||||
Income and other taxes | (28.6) | (70.8) | ||||||
Noncurrent assets and liabilities | (68.9) | (43.0) | ||||||
Net cash provided by operating activities | 69.7 | 36.7 | ||||||
Cash Flows from Investing Activities | ||||||||
Capital expenditures | (75.8) | (87.5) | ||||||
Disposal of assets | 12.8 | 9.5 | ||||||
Purchases of investments | (14.2) | (0.8) | ||||||
Proceeds from sale of investments | 0.2 | 0 | ||||||
Net cash used by investing activities | (77.0) | (78.8) | ||||||
Cash Flows from Financing Activities | ||||||||
Cash dividends | (53.9) | [2] | (199.2) | [2] | ||||
Debt, net (maturities of three months or less) | 31.6 | [2] | (343.1) | [2] | ||||
Proceeds from debt | 1,478.8 | [2] | 638.4 | [2] | ||||
Repayment of debt | (1,796.2) | [2] | (71.2) | [2] | ||||
Interest rate swap termination | 88.1 | [2] | 43.6 | [2] | ||||
Proceeds from exercise of stock options | 16.8 | [2] | 7.6 | [2] | ||||
Excess tax benefit realized from share-based compensation | 0.1 | [2] | (2.6) | [2] | ||||
Repurchase of common stock | (7.6) | [2] | (8.1) | [2] | ||||
Net cash (used) provided by financing activities | (242.3) | [2] | 65.4 | [2] | ||||
Cash Flows from Discontinued Operations | ||||||||
Net cash (used) provided by operating activities of discontinued operations | (0.5) | 4.4 | ||||||
Net cash used by investing activities of discontinued operations | (0.2) | (0.1) | ||||||
Net cash (used) provided by Discontinued Operations | (0.7) | 4.3 | ||||||
Effect of exchange rate changes on cash and equivalents | (81.0) | 3.7 | ||||||
Net increase (decrease) in cash and equivalents | (331.3) | 31.3 | ||||||
Cash and equivalents at beginning of year | 1,206.9 | |||||||
Cash and equivalents at end of period | $ 873.2 | |||||||
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Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Accounting Policies [Abstract] | |
Accounting Policies | ACCOUNTING POLICIES Basis of Presentation We prepare our unaudited interim consolidated financial statements in conformity with accounting principles generally accepted in the United States ("GAAP"). We consistently applied the accounting policies described in our 2012 Annual Report on Form 10-K, as amended ("2012 Form 10-K") in preparing these unaudited financial statements. In our opinion, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results for a full year. You should read these unaudited interim consolidated financial statements in conjunction with our consolidated financial statements contained in our 2012 Form 10-K. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc. For interim consolidated financial statement purposes, our tax provision is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. We also provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense. Venezuela Currency Effective February 13, 2013, the Venezuelan government devalued its currency by approximately 32% and as such we recorded a one-time, after-tax loss of $51 ($34 in other expense, net and $17 in income taxes) in the first quarter of 2013, primarily reflecting the write-down of monetary assets and liabilities and deferred tax benefits. In addition, as a result of using the U.S. historic dollar cost basis of non-monetary assets, such as inventory, acquired prior to the devaluation, operating profit and net income during the six months ending June 30, 2013 were negatively impacted. New Accounting Standard Implemented In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires entities to report, either on the face of the income statement or in the notes, the effect of significant reclassifications out of accumulated other comprehensive income ("AOCI") on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety from AOCI to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. See Note 7, Accumulated Other Comprehensive Income, for the required disclosures. ASU 2013-02 is effective as of January 1, 2013 for Avon and did not have a significant impact on our financial statements, other than presentation. |
Inventories
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Jun. 30, 2013
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES
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Earnings per Share and Share Repurchases
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Jun. 30, 2013
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Earnings Per Share Reconciliation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share and Share Repurchases | EARNINGS PER SHARE AND SHARE REPURCHASES We compute earnings (loss) per share ("EPS") using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Our participating securities are our grants of restricted stock and restricted stock units, which contain non-forfeitable rights to dividend equivalents. We compute basic EPS by dividing net income allocated to common shareholders by the weighted-average number of shares outstanding during the year. Diluted EPS is calculated to give effect to all potentially dilutive common shares that were outstanding during the period.
Amounts in the table above may not necessarily sum due to rounding. At June 30, 2013 and 2012, we did not include stock options to purchase 18.2 million shares and 22.2 million shares of Avon common stock, respectively, in the calculations of diluted EPS because the exercise prices of those options were greater than the average market price, and therefore, their inclusion would have been anti-dilutive. We purchased approximately .4 million shares of Avon common stock for $7.6 during the first six months of 2013, as compared to approximately .4 million shares of Avon common stock for $8.1 during the first six months of 2012, primarily through acquisition of stock from employees in connection with tax payments upon vesting of restricted stock units and private transactions with a broker in connection with stock based obligations under our Deferred Compensation Plan. During the first three months of 2012, shares were also purchased under our previously announced share repurchase program, which expired in the fourth quarter of 2012. |
Employee Benefit Plans (Components of Net Periodic Benefit Cost) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Pension Benefits U.S. Plans [Member]
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Service cost | $ 3.4 | $ 3.7 | $ 8.4 | $ 7.5 |
Interest cost | 7.0 | 7.4 | 13.6 | 14.8 |
Expected return on plan assets | (9.4) | (8.8) | (18.8) | (18.0) |
Amortization of prior service credit | (0.1) | 0 | (0.2) | (0.1) |
Amortization of actuarial losses | 12.0 | 10.1 | 23.3 | 21.9 |
Curtailments | 0 | 0 | 0 | 0 |
Net periodic benefit costs | 12.9 | 12.4 | 26.3 | 26.1 |
Pension Benefits Non-U.S. Plans [Member]
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Service cost | 2.8 | 4.5 | 7.6 | 9.0 |
Interest cost | 9.0 | 9.7 | 18.1 | 19.5 |
Expected return on plan assets | (10.1) | (9.8) | (19.9) | (19.6) |
Amortization of prior service credit | 0 | (0.4) | (0.3) | (0.8) |
Amortization of actuarial losses | 2.7 | 4.4 | 7.3 | 8.8 |
Curtailments | (7.5) | 0 | (7.5) | 0 |
Net periodic benefit costs | (3.1) | 8.4 | 5.3 | 16.9 |
Postretirement Benefits [Member]
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Service cost | 0.5 | 0.5 | 1.0 | 1.0 |
Interest cost | 1.1 | 1.4 | 2.5 | 2.9 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service credit | (1.2) | (3.3) | (2.4) | (6.6) |
Amortization of actuarial losses | 0.6 | 1.0 | 1.4 | 2.0 |
Curtailments | 0 | (1.0) | 0 | (1.0) |
Net periodic benefit costs | $ 1.0 | $ (1.4) | $ 2.5 | $ (1.7) |
Accumulated Other Comprehensive Income (Tables)
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Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year [Table Text Block] | The tables below present the changes in AOCI by component and the reclassifications out of AOCI for the three and six months ended June 30, 2013:
(1) Gross amount reclassified to interest expense, and related taxes reclassified to income taxes. (2) Gross amount reclassified to pension and postretirement expense, within selling, general & administrative expenses, and related taxes reclassified to income taxes. |
Goodwill and Intangible Assets (Tables)
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill
(1) Other is primarily comprised of foreign currency translation. |
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Schedule of Intangible Assets | Other intangible assets
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Estimated Amortization Expense |
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Earnings per Share and Share Repurchases (Components of Basic and Diluted Earnings per Share) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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ScheduleOfEarningsPerShareBasicandDilutedByCommonClass [Line Items] | ||||
Net (loss) income attributable to Avon | $ 82.3 | $ 64.0 | $ 69.7 | $ 91.1 |
Less: Earnings allocated to participating securities | (0.7) | (1.1) | (0.6) | (1.9) |
Income from continuing operations allocated to common shareholders | 81.6 | 62.9 | 69.1 | 89.2 |
Loss from discontinued operations plus/less amounts attributable to noncontrolling interests | (50.4) | (2.4) | (51.5) | (3.0) |
Less: Earnings allocated to participating securities | 0.4 | (0.6) | 0.5 | (1.1) |
Loss allocated to common shareholders | (50.0) | (3.0) | (51.0) | (4.1) |
Net (loss) income attributable to Avon | 31.9 | 61.6 | 18.2 | 88.1 |
Less: (Loss) earnings allocated to participating securities | (0.3) | (1.1) | (0.2) | (1.9) |
(Loss) income allocated to common shareholders | $ 31.6 | $ 60.5 | $ 18.0 | $ 86.2 |
Basic EPS weighted-average shares outstanding | 433.5 | 432.0 | 433.0 | 431.6 |
Diluted effect of assumed conversion of stock options | 1.1 | 0.8 | 0.9 | 0.8 |
Diluted EPS adjusted weighted-average shares outstanding | 434.6 | 432.8 | 433.9 | 432.4 |
Earnings Per Common Share from continuing operations, Basic | $ 0.19 | $ 0.15 | $ 0.16 | $ 0.21 |
Earnings Per Common Share from continuing operations, Diluted | $ 0.19 | $ 0.15 | $ 0.16 | $ 0.21 |
Loss per Common Share from discontinued operations, Basic | $ (0.12) | $ (0.01) | $ (0.12) | $ (0.01) |
Loss Per Common Share from discontinued operations, Diluted | $ (0.11) | $ (0.01) | $ (0.12) | $ (0.01) |
(Loss) Earnings per Common Share attributable to Avon, Basic | $ 0.07 | $ 0.14 | $ 0.04 | $ 0.20 |
(Loss) Earnings per Common Share attributable to Avon, Diluted | $ 0.07 | $ 0.14 | $ 0.04 | $ 0.20 |
Goodwill and Intangible Assets (Schedule of Goodwill) (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||
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Jun. 30, 2013
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Gross balance at December 31, 2012 | $ 374.3 | |||
Accumulated impairments | (44.0) | |||
Net balance at December 31, 2012 | 330.3 | |||
Other | (19.0) | [1] | ||
Gross balance at March 31, 2013 | 355.3 | |||
Accumulated impairments | (44.0) | |||
Net balance at March 31, 2013 | 311.3 | |||
Latin America [Member]
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Gross balance at December 31, 2012 | 122.8 | |||
Accumulated impairments | 0 | |||
Net balance at December 31, 2012 | 122.8 | |||
Other | (10.2) | [1] | ||
Gross balance at March 31, 2013 | 112.6 | |||
Accumulated impairments | 0 | |||
Net balance at March 31, 2013 | 112.6 | |||
Europe Middle East & Africa [Member]
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Gross balance at December 31, 2012 | 167.3 | |||
Accumulated impairments | 0 | |||
Net balance at December 31, 2012 | 167.3 | |||
Other | (9.4) | [1] | ||
Gross balance at March 31, 2013 | 157.9 | |||
Accumulated impairments | 0 | |||
Net balance at March 31, 2013 | 157.9 | |||
Asia Pacific [Member]
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Gross balance at December 31, 2012 | 84.2 | |||
Accumulated impairments | (44.0) | |||
Net balance at December 31, 2012 | 40.2 | |||
Other | 0.6 | [1] | ||
Gross balance at March 31, 2013 | 84.8 | |||
Accumulated impairments | (44.0) | |||
Net balance at March 31, 2013 | $ 40.8 | |||
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