EARNINGS PER SHARE AND SHARE REPURCHASES

We compute earnings (loss) per share ("EPS") using the two-class method, which is an earnings (loss) allocation formula that determines earnings (loss) 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 (loss) allocated to common shareholders by the weighted-average number of shares outstanding during the period. Diluted EPS is calculated to give effect to all potentially dilutive common shares that were outstanding during the period.



	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Shares in millions)	2014		2013			2014			2013
Numerator from continuing operations:
Income (loss) from continuing operations, less amounts attributable to noncontrolling interests	$	19.0	$	82.3		$	(149.3	)	$	69.7
Less: Loss (income) allocated to participating securities	.1		(.7		)	2.3			(.6		)
Income (loss) from continuing operations allocated to common shareholders	19.1		81.6			(147.0		)	69.1
Numerator from discontinued operations:
Loss from discontinued operations	$	—	$	(50.4	)	$	—		$	(51.5	)
Less: Loss allocated to participating securities	—		.4			—			.5
Loss allocated to common shareholders	—		(50.0		)	—			(51.0		)
Numerator attributable to Avon:
Net income (loss) attributable to Avon	$	19.0	$	31.9		$	(149.3	)	$	18.2
Less: Loss (income) allocated to participating securities	.1		(.3		)	2.3			(.2		)
Income (loss) allocated to common shareholders	19.1		31.6			(147.0		)	18.0
Denominator:
Basic EPS weighted-average shares outstanding	434.6		433.5			434.4			433.0
Diluted effect of assumed conversion of stock options	—		1.1			—			.9
Diluted EPS adjusted weighted-average shares outstanding	434.6		434.6			434.4			433.9
Income (Loss) per Common Share from continuing operations:
Basic	$	.04	$	.19		$	(.34	)	$	.16
Diluted	.04		.19			(.34		)	.16
Loss per Common Share from discontinued operations:
Basic	$	—	$	(.12	)	$	—		$	(.12	)
Diluted	—		(.11		)	—			(.12		)
Income (Loss) per Common Share attributable to Avon:
Basic	$	.04	$	.07		$	(.34	)	$	.04
Diluted	.04		.07			(.34		)	.04

Amounts in the table above may not necessarily sum due to rounding.

During the three and six months ended June 30, 2014, we did not include stock options to purchase 17.7 million shares and 19.0 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. During the three and six months ended June 30, 2013, we did not include stock options to purchase 17.3 million shares and 18.2 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. Since the inclusion of such shares would be anti-dilutive, these are excluded from the calculation.

We purchased approximately .6 million shares of Avon common stock for $9.0 during the first six months of 2014, as compared to approximately .4 million shares of Avon common stock for $7.6 during the first six months of 2013, 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.