FORM 8-K |
Avon Products, Inc. | ||||
(Exact name of registrant as specified in charter) | ||||
New York | 1-4881 | 13-0544597 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
AVON PRODUCTS, INC. | |||||||||||||||
(Registrant) | |||||||||||||||
By | /s/ Robert Loughran | ||||||||||||||
Name: Robert Loughran | |||||||||||||||
Title: Group Vice President and Corporate Controller |
Exhibit | ||
No. | Description | |
99.1 | Press Release of Avon Products, Inc. dated February 11, 2016 |
Avon Reports Fourth-Quarter and Full-Year 2015 Results |
• | Fourth-Quarter Revenue declined 20% to $1.6 Billion; Increased 3% in Constant Dollars excluding the divestiture of Liz Earle1,2 |
• | Fourth-Quarter Operating Profit $63 Million; Adjusted1 Operating Profit $97 Million |
• | Fourth-Quarter Operating Margin declined 480 bps to 3.9%; Adjusted1 Operating Margin declined 420 bps to 6.0% |
• | Full-Year Revenue declined 19% to $6.2 Billion; Increased 3% in Constant Dollars excluding the divestiture of Liz Earle |
• | Full-Year Operating Profit $165 Million; Adjusted Operating Profit $352 Million |
• | Full-Year Operating Margin declined 300 bps to 2.7%; Adjusted Operating Margin declined 360 bps to 5.7% |
• | Total revenue for Avon Products, Inc. declined 20% to $1.6 billion, but increased 3% in constant dollars excluding the divestiture of Liz Earle. In addition, the year-over-year comparison is impacted by certain tax items in Brazil discussed further in the Latin America section of the regional highlights. Excluding the impacts of Liz Earle and certain Brazil tax items, constant-dollar revenue would have grown approximately 6%2. The Company’s Latin America markets experiencing high inflation (Venezuela and Argentina) contributed approximately 3 points to this constant-dollar revenue growth. |
◦ | Active Representatives were up 2% year over year, as increases in Europe, Middle East & Africa were partially offset by declines in the Latin America markets experiencing high inflation. Average order decreased 1%, negatively impacted by approximately 3 points due to the Brazil value added tax (“VAT”) credits in 2014 that did not recur in 2015 and the Brazil Industrial Production Tax (“IPI”) in 2015, as well as by approximately 1 point from the divestiture of Liz Earle. These negative impacts on average order were partially offset by the benefit from price increases, most significantly in Russia and Brazil, as well as in the Latin America markets experiencing high inflation. |
◦ | Total units decreased 2%, driven by declines in Latin America and Asia Pacific. Price/mix was up 3% during the quarter, driven by price increases. |
◦ | Beauty sales declined 21%, but increased 2% in constant dollars, negatively impacted by the IPI tax in 2015 discussed below as well as the divestiture of Liz Earle. Fashion & Home sales declined 14%, but increased 5% in constant dollars. |
• | Gross margin was 58.7%, down 280 basis points. Adjusted gross margin was 58.8%, down 270 basis points. These year-over-year comparisons were negatively impacted by approximately 70 basis points due to the combined impact of the VAT credits in 2014 and the IPI tax in 2015 discussed below. Excluding the impacts of these items, Adjusted gross margin would have declined 200 basis points2 primarily driven by an approximate 350 basis points of unfavorable impact of foreign exchange, partially offset by the favorable net impact of price/mix and lower supply chain costs. |
• | Operating margin was 3.9% in the quarter, down 480 basis points. Adjusted operating margin was 6.0%, down 420 basis points. These year-over-year comparisons were negatively impacted by approximately 210 basis points due to the combined impact of the VAT credits in 2014 and the IPI tax in 2015 discussed below. Excluding the impacts of these items, Adjusted operating margin would have decreased 210 basis points2, which was primarily driven by an estimated 530 basis points of unfavorable impact of foreign exchange. The foreign exchange impact was partially offset by the favorable net impact of price/mix as well as continued benefits from cost savings initiatives. |
• | The effective tax rate from continuing operations was negatively impacted primarily by costs to implement restructuring associated with U.S.-based costs for which there was no net tax benefit recognized as we record valuation allowances on the tax benefits of our U.S.-based losses. This negative impact to our effective tax rate was partially offset by the recognition of a benefit associated with the implementation of foreign tax planning strategies. The Adjusted effective tax rate in 2015 was negatively impacted by the country mix of earnings and the inability to recognize additional deferred tax assets in various jurisdictions related to our current-year operating results. The year-over-year difference in the Adjusted effective tax rate caused an estimated $0.06 per share |
• | Loss from continuing operations, net of tax was $15 million, or a loss of $0.04 per diluted share, compared with a loss of $305 million, or a loss of $0.70 per diluted share, for the fourth quarter of 2014. Adjusted income from continuing operations, net of tax was $1 million, or $0.00 per diluted share, compared with Adjusted income from continuing operations, net of tax of $94 million, or $0.21 per diluted share, for the fourth quarter of 2014. |
• | Loss from discontinued operations, net of tax was $317 million, or a loss of $0.72 per diluted share, compared with a loss of $24 million, or $0.06 per diluted share, for the fourth quarter of 2014. During the fourth quarter of 2015, we recorded a charge of $340 million ($340 million after tax) associated with the estimated loss on the sale of the North America business that is expected to be completed in 2016. In addition, the North America operations achieved higher operating income in 2015 as compared to 2014 despite lower revenues as a result of significant cost savings. |
• | As a result of the above, Net loss attributable to Avon was $333 million, or a loss of $0.76 per diluted share, as compared to a loss of $331 million, or a loss of $0.75 per diluted share for the fourth quarter of the prior year. |
• | Foreign currency has impacted the Company’s financial results of continuing operations as shown in the table below: |
Estimated Impact of Foreign Currency on Continuing Operations | |||||||||||||||
Fourth-Quarter 2015 | Full-Year 2015 | ||||||||||||||
Estimated impact ($ in millions) | Estimated impact on diluted EPS | Estimated impact ($ in millions) | Estimated impact on diluted EPS | ||||||||||||
Total revenue | (21) pts | (21) pts | |||||||||||||
Adjusted operating profit - transaction | $ | (75 | ) | $ | (0.11 | ) | $ | (210 | ) | $ | (0.31 | ) | |||
Adjusted operating profit - translation | (60 | ) | (0.09 | ) | (265 | ) | (0.38 | ) | |||||||
Total Adjusted operating profit | $ | (135 | ) | $ | (0.20 | ) | $ | (475 | ) | $ | (0.69 | ) | |||
Adjusted operating margin | (530) bps | (480) bps | |||||||||||||
Revaluation of working capital | $ | 25 | $ | 0.04 | $ | 10 | $ | 0.01 | |||||||
Adjusted diluted EPS from Continuing Operations | $ | (0.16 | ) | $ | (0.68 | ) | |||||||||
• | The Company recorded costs to implement restructuring within operating profit of approximately $21 million before tax, primarily related to the previously announced IT infrastructure outsourcing initiative. |
• | Effective February 12, 2015, the Company began utilizing the SIMADI rate to remeasure its Venezuelan operations. The change to the SIMADI rate resulted in an approximate $2 million negative impact on operating profit. |
• | As a result of the lump-sum payments made in the fourth quarter of 2015 to former employees who were vested and participated in the U.S. pension plan, the Company recorded a settlement charge within operating profit of approximately $1 million before tax. |
• | Our analysis of the Egypt business indicated an impairment as the carrying value of the business exceeded the estimated fair value, driven by a reduction of the long-term revenue and earnings projections due to currency restrictions in the country. As a result, the Company recorded a non-cash impairment charge of approximately $7 million before tax. |
• | The Company recorded approximately $3 million of transaction-related costs associated with the planned separation of North America that were included in Continuing Operations. |
• | The Company recorded an income tax benefit of approximately $19 million, which was recognized as a result of the implementation of foreign tax planning strategies. |
THREE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||
REGIONAL RESULTS | |||||||||||||||
($ in millions) | Revenue | Active Reps | Average Order C$ | Units Sold | Price/Mix C$ | ||||||||||
US $ | C$ | ||||||||||||||
Revenue & Drivers | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | |||||||||
Latin America | $ | 779.2 | (26)% | —% | (1)% | 1% | (6)% | 6% | |||||||
Europe, Middle East & Africa | 669.5 | (13) | 6 | 8 | (2) | 7 | (1) | ||||||||
Asia Pacific | 158.6 | (16) | (8) | — | (8) | (7) | (1) | ||||||||
Total from operations | $ | 1,607.3 | (20) | 1 | 2 | (1) | (2) | 3 | |||||||
Global and other | — | — | — | — | — | — | — | ||||||||
Total | $ | 1,607.3 | (20)% | 1% | 2% | (1)% | (2)% | 3% |
2015 GAAP | Adjusted Operating Profit (Loss) in US$ | Adjusted Operating Margin | |||||||||||||||||||
Operating Profit/Margin | Operating Profit (Loss) US$ | Operating Margin US$ | 2015 | 2014 | 2015 | 2014 | Change in US$ | Change in C$ | |||||||||||||
Latin America | $ | 47.5 | 6.1% | $ | 49.0 | $ | 93.0 | 6.3% | 8.8% | (250) bps | (80) bps | ||||||||||
Europe, Middle East & Africa | 77.5 | 11.6 | 83.7 | 107.2 | 12.5 | 13.9 | (140) | (70) | |||||||||||||
Asia Pacific | 8.5 | 5.4 | 8.9 | 11.7 | 5.6 | 6.2 | (60) | 10 | |||||||||||||
Total from operations | 133.5 | 8.3 | 141.6 | 211.9 | 8.8 | 10.5 | (170) | (450) | |||||||||||||
Global and other* | (70.6 | ) | — | (44.8 | ) | (6.6 | ) | — | — | — | — | ||||||||||
Total | $ | 62.9 | 3.9% | $ | 96.8 | $ | 205.3 | 6.0% | 10.2% | (420) bps | (260) bps | ||||||||||
• | Latin America revenue was down 26%, but relatively unchanged in constant dollars. Constant-dollar revenue was negatively impacted by certain tax items in Brazil. Specifically, in 2015, the government levied a new IPI tax on cosmetics while in 2014, the Company recognized VAT credits, which did not recur in 2015. Excluding the combined impacts of these items, constant-dollar revenue would have grown approximately 6%2. Venezuela and Argentina contributed approximately 5 points to this constant-dollar revenue growth. Active Representatives declined, primarily due to declines in Venezuela and Argentina. |
◦ | Brazil revenue was down 44%, or down 14% in constant dollars. Constant-dollar revenue growth was negatively impacted by approximately 12 points due to the combined impact of the VAT credits in 2014 and the IPI tax in 2015. Excluding the impacts of these items, constant-dollar revenue would have declined approximately 2%2, driven primarily by lower average order, which |
◦ | Mexico revenue was down 13%, but up 6% in constant dollars, primarily driven by higher average order, partially offset by a modest decline in Active Representatives. |
• | Europe, Middle East & Africa revenue was down 13%, but up 6% in constant dollars. Constant-dollar revenue was negatively impacted by approximately 4 points due to the divestiture of Liz Earle discussed above. Excluding the impact of this item, constant-dollar revenue would have grown approximately 10%2, and was driven by an increase in Active Representatives, led by strength in a number of markets, most significantly Russia. |
◦ | Russia revenue was down 8%, but up 29% in constant dollars, primarily driven by an increase in Active Representatives from sustained momentum in recruiting and retention, along with higher average order benefiting from favorable pricing. |
◦ | U.K. revenue was down 12%, or down 7% in constant dollars, primarily driven by a decline in Active Representatives. |
• | Asia Pacific revenue was down 16%, or down 8% in constant dollars. The Philippines revenue was relatively unchanged, but up 5% in constant dollars, which was more than offset by declines in other Asia Pacific markets, led by China. |
• | Total revenue for Avon Products, Inc. declined 19% to $6.2 billion, but increased 3% in constant dollars excluding the divestiture of Liz Earle. In addition, the year-over-year comparison is impacted by certain tax items in Brazil. Excluding the impacts of these items, constant-dollar revenue would have grown approximately 5%2. The Company’s Latin America markets experiencing high inflation (Venezuela and Argentina) contributed approximately 3 points to this constant-dollar revenue growth. |
◦ | Active Representatives and average order were both up 1% year over year. |
◦ | Price/mix was up 4%, while total units decreased 2%. |
◦ | Beauty sales declined 20%, but increased 3% in constant dollars. Fashion & Home sales declined 15%, but increased 5% in constant dollars. |
• | Gross margin was 60.3%, down 40 basis points. Adjusted gross margin was 60.8%, down 150 basis points. These year-over-year comparisons were negatively impacted by approximately 60 basis points due to the combined impact of the VAT credits in 2014 and the IPI tax in 2015. Excluding the impacts of these items, Adjusted gross margin would have decreased 90 basis points2 primarily driven by an approximate 270 basis points of unfavorable impact of foreign exchange, partially offset by the favorable net impact of price/mix and lower supply chain costs. |
• | Operating margin was 2.7% for the year, down 300 basis points. Adjusted operating margin was 5.7%, down 360 basis points. These year-over-year comparisons were negatively impacted by approximately 180 basis points due to the combined impact of the VAT credits in 2014 and the IPI tax in 2015. Excluding the impacts of these items, Adjusted operating margin would have decreased 180 basis points2, which was primarily driven by an estimated 480 basis points of unfavorable impact of foreign exchange. The foreign exchange impact was partially offset by the favorable net impact of |
• | The effective tax rate was negatively impacted by additional valuation allowances for deferred tax assets of approximately $670 million, which caused income tax expense to be significantly in excess of income from continuing operations, before taxes. The effective tax rate was also impacted by the Venezuela special items, costs to implement restructuring and other nonrecurring items. The Adjusted effective tax rate in 2015 was negatively impacted by the country mix of earnings and the inability to recognize additional deferred tax assets in various jurisdictions related to our current-year operating results. The year-over-year difference in the Adjusted effective tax rate caused an estimated $0.22 per share negative impact on Adjusted loss per share. The Adjusted effective tax rate is expected to be volatile on a quarterly basis due to the country mix of quarterly earnings. |
• | Loss from continuing operations, net of tax was $797 million, or a loss of $1.81 per diluted share, compared with a loss of $344 million, or a loss of $0.79 per diluted share, for the full year of 2014. Adjusted income from continuing operations, net of tax was $7 million, or $0.01 per diluted share, compared with Adjusted income of $328 million, or $0.74 per diluted share, for the full year of 2014. |
• | Loss from discontinued operations, net of tax was $349 million, or a loss of $0.79 per diluted share, compared with a loss of $40 million, or $0.09 per diluted share, for 2014. During 2015, we recorded a charge of $340 million ($340 million after tax) associated with the estimated loss on the sale of the North America business that is expected to be completed in 2016. In addition, the North America operations achieved higher operating income in 2015 as compared with 2014 despite lower revenues as a result of significant cost savings, as well as lower costs to implement restructuring initiatives. |
• | As a result of the above, Net loss attributable to Avon for the full year of 2015 was $1.1 billion, or a loss of $2.60 per diluted share, as compared to a loss of $389 million, or a loss of $0.88 per diluted share in the prior year. |
• | Net cash provided by operating activities of continuing operations was $91 million for the twelve months ended December 31, 2015, compared with $289 million for the same period in 2014. Operating cash flow during 2015 was unfavorably impacted by lower cash-related earnings (including the unfavorable impact of foreign currency translation). These items were partially offset by lower operating tax payments (such as VAT) and lower payments for employee incentive compensation. |
• | For the twelve months ended December 31, 2015, there was $143 million of net cash provided by investing activities of continuing operations, a $243 million improvement over the prior year primarily due to the Company’s sale of the Liz Earle business. |
• | Net cash used by financing activities of continuing operations was $431 million for the twelve months ended December 31, 2015, or $222 million higher than the prior year primarily due to the prepayment of $250 million principal amount of notes that were due in 2016. |
• | The Company recorded costs to implement restructuring within operating profit of approximately $49 million before tax, primarily related to cost savings initiatives. |
• | Effective February 12, 2015, the Company began utilizing the SIMADI rate to remeasure its Venezuelan operations. The change to the SIMADI rate resulted in an approximate $120 million negative impact on operating profit, a benefit of approximately $4 million in other expense, net, and an approximate $1 million negative impact in income taxes. The negative impact on operating profit includes an impairment charge of approximately $90 million to reflect the write-down of the Venezuela long-lived assets. |
• | As a result of the lump-sum payments made in 2015 to former employees who were vested and participated in the U.S. pension plan, the Company recorded settlement charges within operating profit of approximately $7 million before tax. |
• | Our analysis of the Egypt business indicated an impairment as the carrying value of the business exceeded the estimated fair value, driven by a reduction of the long-term revenue and earnings projections due to currency restrictions in the country. As a result, the Company recorded a non-cash impairment charge of approximately $7 million before tax. |
• | The Company also recorded various other items in 2015 associated with the sale of Liz Earle, the planned separation of North America and debt-related charges: |
◦ | In July 2015, the Company sold Liz Earle. As a result, the Company recorded a gain on sale of approximately $45 million before tax, and approximately $52 million after tax. |
◦ | The Company recorded nonrecurring costs of approximately $3 million of transaction-related costs associated with the planned separation of North America that were included in Continuing Operations. |
◦ | The Company incurred a loss on extinguishment of debt of approximately $6 million before tax related to the prepayment of its notes that were due in 2016, and recorded costs of approximately $3 million in other expense, net related to the write-off of issuance costs related to the Company’s previous $1 billion revolving credit facility. |
• | The Company recorded non-cash income tax charges of approximately $670 million as a result of establishing a valuation allowance for the full amount of the Company’s U.S. deferred tax assets, due to the impact of the continued strengthening of the U.S. dollar against currencies of some of its key markets and the associated effect on its tax planning strategies. In addition, the Company also recorded a non-cash income tax charge of approximately $15 million associated with valuation allowances for deferred tax assets outside of the U.S. The Company also recorded an income tax benefit of approximately $19 million, which was recognized as a result of the implementation of foreign tax planning strategies. |
Contacts: | |
INVESTORS: | MEDIA: |
Adam Zerfass | Brunswick Group |
(212) 282-5320 | Radina Russell |
investor.relations@avon.com | (212) 333-3810 |
rrussell@brunswickgroup.com |
Three Months Ended | Percent Change | Twelve Months Ended | Percent Change | |||||||||||||||||||
December 31 | December 31 | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Net sales | $ | 1,585.8 | $ | 1,963.7 | (19 | )% | $ | 6,076.5 | $ | 7,472.5 | (19 | )% | ||||||||||
Other revenue | 21.5 | 50.4 | 84.0 | 175.5 | ||||||||||||||||||
Total revenue | 1,607.3 | 2,014.1 | (20 | )% | 6,160.5 | 7,648.0 | (19 | )% | ||||||||||||||
Cost of sales | 663.7 | 776.3 | 2,445.4 | 3,006.9 | ||||||||||||||||||
Selling, general and administrative expenses | 873.8 | 1,063.0 | 3,543.2 | 4,206.8 | ||||||||||||||||||
Impairment of goodwill and intangible assets | 6.9 | — | 6.9 | — | ||||||||||||||||||
Operating profit | 62.9 | 174.8 | (64 | )% | 165.0 | 434.3 | (62 | )% | ||||||||||||||
Interest expense | 32.3 | 26.9 | 120.5 | 108.8 | ||||||||||||||||||
Loss on extinguishment of debt | — | — | 5.5 | — | ||||||||||||||||||
Interest income | (2.8 | ) | (3.4 | ) | (12.5 | ) | (14.8 | ) | ||||||||||||||
Other expense, net | 26.2 | 50.4 | 73.7 | 139.5 | ||||||||||||||||||
Gain on sale of business | — | — | (44.9 | ) | — | |||||||||||||||||
Total other expenses | 55.7 | 73.9 | 142.3 | 233.5 | ||||||||||||||||||
Income from continuing operations, before taxes | 7.2 | 100.9 | (93)% | 22.7 | 200.8 | (89)% | ||||||||||||||||
Income taxes | (22.0 | ) | (406.3 | ) | (819.2 | ) | (545.3 | ) | ||||||||||||||
Loss from continuing operations, net of tax | (14.8 | ) | (305.4 | ) | 95% | (796.5 | ) | (344.5 | ) | * | ||||||||||||
Loss from discontinued operations, net of tax | (317.1 | ) | (24.2 | ) | (349.1 | ) | (40.4 | ) | ||||||||||||||
Net loss | (331.9 | ) | (329.6 | ) | (1,145.6 | ) | (384.9 | ) | ||||||||||||||
Net income attributable to noncontrolling interests | (1.5 | ) | (1.1 | ) | (3.3 | ) | (3.7 | ) | ||||||||||||||
Net loss attributable to Avon | $ | (333.4 | ) | $ | (330.7 | ) | (1)% | $ | (1,148.9 | ) | $ | (388.6 | ) | * | ||||||||
Loss per share:(1) | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Basic loss per share from continuing operations | $ | (0.04 | ) | $ | (0.70 | ) | 94% | $ | (1.81 | ) | $ | (0.79 | ) | * | ||||||||
Basic loss per share from discontinued operations | (0.72 | ) | (0.06 | ) | (0.79 | ) | (0.09 | ) | ||||||||||||||
Basic loss per share attributable to Avon | (0.76 | ) | (0.75 | ) | (1)% | (2.60 | ) | (0.88 | ) | * | ||||||||||||
Diluted | ||||||||||||||||||||||
Diluted loss per share from continuing operations | $ | (0.04 | ) | $ | (0.70 | ) | 94% | $ | (1.81 | ) | $ | (0.79 | ) | * | ||||||||
Diluted loss per share from discontinued operations | (0.72 | ) | (0.06 | ) | (0.79 | ) | (0.09 | ) | ||||||||||||||
Diluted loss per share attributable to Avon | (0.76 | ) | (0.75 | ) | (1)% | (2.60 | ) | (0.88 | ) | * | ||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||||
Basic | 435.4 | 434.7 | 435.2 | 434.5 | ||||||||||||||||||
Diluted | 435.4 | 434.7 | 435.2 | 434.5 | ||||||||||||||||||
*Calculation not meaningful | ||||||||||||||||||||||
(1) Under the two-class method, loss per share is calculated using net loss allocable to common shares, which is derived by reducing net loss by the loss allocable to participating securities. Net loss allocable to common shares used in the basic and diluted loss per share calculation was ($329.8) and $327.6 for the three months ended December 31, 2015 and 2014, respectively. Net loss allocable to common shares used in the basic and diluted loss per share calculation was ($1,133.2) and ($383.9) for the twelve months ended December 31, 2015 and 2014, respectively. |
December 31 | December 31 | |||||||
2015 | 2014 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 686.9 | $ | 936.4 | ||||
Accounts receivable, net | 443.0 | 515.6 | ||||||
Inventories | 624.0 | 707.7 | ||||||
Prepaid expenses and other | 296.1 | 590.7 | ||||||
Current assets of discontinued operations | 291.1 | 314.1 | ||||||
Total current assets | 2,341.1 | 3,064.5 | ||||||
Property, plant and equipment, at cost | 1,495.7 | 1,867.9 | ||||||
Less accumulated depreciation | (728.8 | ) | (831.1 | ) | ||||
Property, plant and equipment, net | 766.9 | 1,036.8 | ||||||
Goodwill | 92.3 | 249.3 | ||||||
Other assets | 499.1 | 1,034.3 | ||||||
Noncurrent assets of discontinued operations | 180.1 | 211.9 | ||||||
Total assets | $ | 3,879.5 | $ | 5,596.8 | ||||
Liabilities and Shareholders’ (Deficit) Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 55.2 | $ | 121.7 | ||||
Accounts payable | 774.2 | 806.3 | ||||||
Accrued compensation | 157.6 | 174.9 | ||||||
Other accrued liabilities | 419.6 | 539.1 | ||||||
Sales and taxes other than income | 174.9 | 160.8 | ||||||
Income taxes | 23.9 | 36.8 | ||||||
Payable to discontinued operations | 100.0 | 100.0 | ||||||
Current liabilities of discontinued operations | 489.7 | 207.6 | ||||||
Total current liabilities | 2,195.1 | 2,147.2 | ||||||
Long-term debt | 2,159.6 | 2,428.7 | ||||||
Employee benefit plans | 177.5 | 249.6 | ||||||
Long-term income taxes | 65.1 | 75.2 | ||||||
Other liabilities | 78.4 | 93.8 | ||||||
Noncurrent liabilities of discontinued operations | 260.2 | 297.0 | ||||||
Total liabilities | 4,935.9 | 5,291.5 | ||||||
Shareholders’ (Deficit) Equity | ||||||||
Common stock | 187.9 | 187.6 | ||||||
Additional paid-in-capital | 2,254.0 | 2,207.9 | ||||||
Retained earnings | 2,448.1 | 3,702.9 | ||||||
Accumulated other comprehensive loss | (1,366.2 | ) | (1,217.6 | ) | ||||
Treasury stock, at cost | (4,594.1 | ) | (4,591.0 | ) | ||||
Total Avon shareholders’ (deficit) equity | (1,070.3 | ) | 289.8 | |||||
Noncontrolling interests | 13.9 | 15.5 | ||||||
Total shareholders’ (deficit) equity | (1,056.4 | ) | 305.3 | |||||
Total liabilities and shareholders’ (deficit) equity | $ | 3,879.5 | $ | 5,596.8 | ||||
Twelve Months Ended | ||||||||
December 31 | ||||||||
2015 | 2014 | |||||||
Cash Flows from Operating Activities of Continuing Operations | ||||||||
Net loss | $ | (1,145.6 | ) | $ | (384.9 | ) | ||
Loss from discontinued operations, net of tax | 349.1 | 40.4 | ||||||
Loss from continuing operations, net of tax | $ | (796.5 | ) | $ | (344.5 | ) | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
Depreciation | 94.0 | 121.7 | ||||||
Amortization | 32.1 | 47.7 | ||||||
Provision for doubtful accounts | 144.1 | 171.1 | ||||||
Provision for obsolescence | 45.4 | 78.4 | ||||||
Share-based compensation | 51.2 | 38.9 | ||||||
Foreign exchange losses | 44.3 | 41.4 | ||||||
Deferred income taxes | 644.6 | 236.4 | ||||||
Charge for Venezuelan monetary assets and liabilities | (4.2 | ) | 53.7 | |||||
Charge for Venezuelan non-monetary assets | 101.7 | 115.7 | ||||||
Pre-tax gain on sale of business | (44.9 | ) | — | |||||
Impairment of goodwill and intangible assets | 6.9 | — | ||||||
Other | 11.6 | 10.8 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (184.7 | ) | (179.0 | ) | ||||
Inventories | (106.6 | ) | (170.5 | ) | ||||
Prepaid expenses and other | 8.7 | (77.0 | ) | |||||
Accounts payable and accrued liabilities | 80.4 | 142.6 | ||||||
Income and other taxes | 50.7 | 57.5 | ||||||
Noncurrent assets and liabilities | (87.4 | ) | (56.0 | ) | ||||
Net cash provided by operating activities of continuing operations | 91.4 | 288.9 | ||||||
Cash Flows from Investing Activities of Continuing Operations | ||||||||
Capital expenditures | (92.4 | ) | (126.3 | ) | ||||
Disposal of assets | 8.2 | 15.7 | ||||||
Net proceeds from sale of business | 208.3 | — | ||||||
Purchases of investments | (35.3 | ) | (26.8 | ) | ||||
Proceeds from sale of investments | 53.7 | 36.9 | ||||||
Net cash provided (used) by investing activities of continuing operations | 142.5 | (100.5 | ) | |||||
Cash Flows from Financing Activities of Continuing Operations | ||||||||
Cash dividends | (108.8 | ) | (110.2 | ) | ||||
Debt, net (maturities of three months or less) | (59.1 | ) | (22.4 | ) | ||||
Proceeds from debt | 7.6 | — | ||||||
Repayment of debt | (261.2 | ) | (66.5 | ) | ||||
Net proceeds from exercise of stock options | — | 0.2 | ||||||
Repurchase of common stock | (3.1 | ) | (9.8 | ) | ||||
Other financing activities | (5.9 | ) | — | |||||
Net cash used by financing activities of continuing operations | (430.5 | ) | (208.7 | ) | ||||
Cash Flows from Discontinued Operations | ||||||||
Net cash provided by operating activities of discontinued operations | 20.7 | 70.9 | ||||||
Net cash used by investing activities of discontinued operations | (4.2 | ) | (4.6 | ) | ||||
Net cash used by financing activities of discontinued operations | (15.0 | ) | (10.1 | ) | ||||
Net cash provided by discontinued operations | 1.5 | 56.2 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (80.7 | ) | (183.3 | ) | ||||
Net decrease in cash and cash equivalents | (275.8 | ) | (147.4 | ) | ||||
Cash and cash equivalents at beginning of year (1) | 960.5 | 1,107.9 | ||||||
Cash and cash equivalents at end of year (2) | $ | 684.7 | $ | 960.5 | ||||
(1) | Includes cash and cash equivalents of discontinued operations of $24.1 and $17.9 at the beginning of the year in 2015 and 2014. |
(2) | Includes cash and cash equivalents of discontinued operations of $(2.2) and $ 24.1 at the end of the year in 2015 and 2014. |
THREE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||
REGIONAL RESULTS | |||||||||||||||
Revenue | Active Reps | Average Order C$ | Units Sold | Price/Mix C$ | |||||||||||
US $ | C$ | ||||||||||||||
Revenue & Drivers | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | % var. vs 4Q14 | |||||||||
Latin America | $ | 779.2 | (26)% | —% | (1)% | 1% | (6)% | 6% | |||||||
Europe, Middle East & Africa | 669.5 | (13) | 6 | 8 | (2) | 7 | (1) | ||||||||
Asia Pacific | 158.6 | (16) | (8) | — | (8) | (7) | (1) | ||||||||
Total from operations | $ | 1,607.3 | (20) | 1 | 2 | (1) | (2) | 3 | |||||||
Global and other | — | — | — | — | — | — | — | ||||||||
Total | $ | 1,607.3 | (20)% | 1% | 2% | (1)% | (2)% | 3% |
2015 GAAP | Adjusted Operating Profit (Loss) in US$ | Adjusted Operating Margin | |||||||||||||||||||
Operating Profit/Margin | Operating Profit (Loss) US$ | Operating Margin US$ | 2015 | 2014 | 2015 | 2014 | Change in US$ | Change in C$ | |||||||||||||
Latin America | $ | 47.5 | 6.1% | $ | 49.0 | $ | 93.0 | 6.3% | 8.8% | (250) bps | (80) bps | ||||||||||
Europe, Middle East & Africa | 77.5 | 11.6 | 83.7 | 107.2 | 12.5 | 13.9 | (140) | (70) | |||||||||||||
Asia Pacific | 8.5 | 5.4 | 8.9 | 11.7 | 5.6 | 6.2 | (60) | 10 | |||||||||||||
Total from operations | 133.5 | 8.3 | 141.6 | 211.9 | 8.8 | 10.5 | (170) | (450) | |||||||||||||
Global and other | (70.6 | ) | — | (44.8 | ) | (6.6 | ) | — | — | — | — | ||||||||||
Total | $ | 62.9 | 3.9% | $ | 96.8 | $ | 205.3 | 6.0% | 10.2% | (420) bps | (260) bps |
TWELVE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||
REGIONAL RESULTS | |||||||||||||||
Revenue | Active Reps | Average Order C$ | Units Sold | Price/Mix C$ | |||||||||||
US $ | C$ | ||||||||||||||
Revenue & Performance Drivers | % var. vs FY14 | % var. vs FY14 | % var. vs FY14 | % var. vs FY14 | % var. vs FY14 | % var. vs FY14 | |||||||||
Latin America | $ | 3,260.4 | (23)% | 1% | (2)% | 3% | (5)% | 6% | |||||||
Europe, Middle East & Africa | 2,272.3 | (16) | 6 | 7 | (1) | 5 | 1 | ||||||||
Asia Pacific | 627.8 | (11) | (5) | (2) | (3) | (7) | 2 | ||||||||
Total from operations | $ | 6,160.5 | (19) | 2 | 1 | 1 | (2) | 4 | |||||||
Global and other | — | — | — | — | — | — | — | ||||||||
Total | $ | 6,160.5 | (19)% | 2% | 1% | 1% | (2)% | 4% |
2015 GAAP | Adjusted Operating Profit (Loss) in US$ | Adjusted Operating Margin | |||||||||||||||||||
Operating Profit/Margin | Operating Profit (Loss) US$ | Operating Margin US$ | 2015 | 2014 | 2015 | 2014 | Change in US$ | Change in C$ | |||||||||||||
Latin America | $ | 103.1 | 3.2% | $ | 224.9 | $ | 443.6 | 6.9% | 10.5% | (360) bps | (180) bps | ||||||||||
Europe, Middle East & Africa | 217.1 | 9.6 | 227.5 | 324.1 | 10.0 | 12.0 | (200) | (70) | |||||||||||||
Asia Pacific | 35.3 | 5.6 | 45.9 | 30.2 | 7.3 | 4.3 | 300 | 330 | |||||||||||||
Total from operations | 355.5 | 5.8 | 498.3 | 797.9 | 8.1 | 10.4 | (230) | (270) | |||||||||||||
Global and other | (190.5 | ) | — | (146.7 | ) | (84.4 | ) | — | — | — | — | ||||||||||
Total | $ | 165.0 | 2.7% | $ | 351.6 | $ | 713.5 | 5.7% | 9.3% | (360) bps | (180) bps |
Consolidated | ||||||||||||
Three Months Ended December 31 | US$ | C$ | ||||||||||
2015 | 2014 | % var. vs 4Q14 | % var. vs 4Q14 | |||||||||
Beauty: | ||||||||||||
Skincare | $ | 435.6 | $ | 568.7 | (23)% | (1)% | ||||||
Fragrance | 459.2 | 551.8 | (17) | 6 | ||||||||
Color | 262.1 | 342.2 | (23) | (2) | ||||||||
Total Beauty | 1,156.9 | 1,462.7 | (21) | 2 | ||||||||
Fashion & Home: | ||||||||||||
Fashion (jewelry/watches/apparel/footwear/accessories/children's) | 250.9 | 278.7 | (10) | 9 | ||||||||
Home (gift & decorative products/housewares/entertainment & leisure/children's/nutrition) | 178.0 | 222.3 | (20) | 1 | ||||||||
Total Fashion & Home | 428.9 | 501.0 | (14) | 5 | ||||||||
Net sales | 1,585.8 | 1,963.7 | (19) | 2 | ||||||||
Other revenue | 21.5 | 50.4 | (57) | (46) | ||||||||
Total revenue | $ | 1,607.3 | $ | 2,014.1 | (20) | 1 | ||||||
Consolidated | ||||||||||||
Twelve Months Ended December 31 | US$ | C$ | ||||||||||
2015 | 2014 | % var. vs FY14 | % var. vs FY14 | |||||||||
Beauty: | ||||||||||||
Skincare | $ | 1,791.2 | $ | 2,281.0 | (21)% | —% | ||||||
Fragrance | 1,632.8 | 1,966.3 | (17) | 7 | ||||||||
Color | 1,078.1 | 1,365.1 | (21) | 1 | ||||||||
Total Beauty | 4,502.1 | 5,612.4 | (20) | 3 | ||||||||
Fashion & Home: | ||||||||||||
Fashion (jewelry/watches/apparel/footwear/accessories/children's) | 907.8 | 1,040.4 | (13) | 6 | ||||||||
Home (gift & decorative products/housewares/entertainment & leisure/children's/nutrition) | 666.6 | 819.7 | (19) | 4 | ||||||||
Total Fashion & Home | 1,574.4 | 1,860.1 | (15) | 5 | ||||||||
Net sales | 6,076.5 | 7,472.5 | (19) | 3 | ||||||||
Other revenue | 84.0 | 175.5 | (52) | (40) | ||||||||
Total revenue | $ | 6,160.5 | $ | 7,648.0 | (19) | 2 | ||||||
THREE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||||||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Venezuelan special items | Pension settlement charge | Asset impairment and other charges | Other items | Special tax items | Adjusted (Non-GAAP) | |||||||||||||||||||||||||
Total revenue | $ | 1,607.3 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,607.3 | ||||||||||||||||
Cost of sales | 663.7 | — | 1.9 | — | — | — | — | 661.8 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 873.8 | 20.9 | — | 1.1 | — | 3.1 | — | 848.7 | ||||||||||||||||||||||||
Impairment of goodwill and intangible assets | 6.9 | — | — | — | 6.9 | — | — | — | ||||||||||||||||||||||||
Operating profit | 62.9 | 20.9 | 1.9 | 1.1 | 6.9 | 3.1 | — | 96.8 | ||||||||||||||||||||||||
Income from continuing operations, before taxes | 7.2 | 20.9 | 1.9 | 1.1 | 6.9 | 3.1 | — | 41.1 | ||||||||||||||||||||||||
Income taxes | (22.0 | ) | 0.3 | — | — | — | — | (18.7 | ) | (40.4 | ) | |||||||||||||||||||||
(Loss) income from continuing operations, net of tax | $ | (14.8 | ) | $ | 21.2 | $ | 1.9 | $ | 1.1 | $ | 6.9 | $ | 3.1 | $ | (18.7 | ) | $ | 0.7 | ||||||||||||||
Diluted EPS from continuing operations | $ | (0.04 | ) | $ | 0.05 | $ | — | $ | — | $ | 0.01 | $ | — | $ | (0.04 | ) | $ | — | ||||||||||||||
Gross margin | 58.7 | % | — | 0.1 | — | — | — | — | 58.8 | % | ||||||||||||||||||||||
SG&A as a % of revenues | 54.4 | % | (1.3 | ) | — | (0.1 | ) | — | (0.2 | ) | — | 52.8 | % | |||||||||||||||||||
Operating margin | 3.9 | % | 1.3 | 0.1 | 0.1 | 0.4 | 0.2 | — | 6.0 | % | ||||||||||||||||||||||
Effective tax rate | * | 98.3 | % | |||||||||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) | ||||||||||||||||||||||||||||||||
Latin America | $ | 47.5 | $ | (0.4 | ) | $ | 1.9 | $ | — | $ | — | $ | — | $ | — | $ | 49.0 | |||||||||||||||
Europe, Middle East & Africa | 77.5 | (0.7 | ) | — | — | 6.9 | — | — | 83.7 | |||||||||||||||||||||||
Asia Pacific | 8.5 | 0.4 | — | — | — | — | — | 8.9 | ||||||||||||||||||||||||
Global and other | (70.6 | ) | 21.6 | — | 1.1 | — | 3.1 | — | (44.8 | ) | ||||||||||||||||||||||
Total | $ | 62.9 | $ | 20.9 | $ | 1.9 | $ | 1.1 | $ | 6.9 | $ | 3.1 | $ | — | $ | 96.8 | ||||||||||||||||
SEGMENT OPERATING MARGIN | ||||||||||||||||||||||||||||||||
Latin America | 6.1 | % | (0.1 | ) | 0.2 | — | — | — | — | 6.3 | % | |||||||||||||||||||||
Europe, Middle East & Africa | 11.6 | % | (0.1 | ) | — | — | 1.0 | — | — | 12.5 | % | |||||||||||||||||||||
Asia Pacific | 5.4 | % | 0.3 | — | — | — | — | — | 5.6 | % | ||||||||||||||||||||||
Global and other | — | % | — | — | — | — | — | — | — | % | ||||||||||||||||||||||
Total | 3.9 | % | 1.3 | 0.1 | 0.1 | — | — | — | 6.0 | % |
TWELVE MONTHS ENDED DECEMBER 31, 2015 | ||||||||||||||||||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Venezuelan special items | Pension settlement charge | Asset Impairment and other Charges | Other Items | Special tax items | Adjusted (Non-GAAP) | |||||||||||||||||||||||||
Total revenue | $ | 6,160.5 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 6,160.5 | ||||||||||||||||
Cost of sales | 2,445.4 | — | 28.5 | — | — | — | — | 2,416.9 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 3,543.2 | 49.1 | 91.7 | 7.3 | — | 3.1 | — | 3,392.0 | ||||||||||||||||||||||||
Impairment of goodwill and intangible assets | 6.9 | — | — | — | 6.9 | — | — | |||||||||||||||||||||||||
Operating profit | 165.0 | 49.1 | 120.2 | 7.3 | 6.9 | 3.1 | — | 351.6 | ||||||||||||||||||||||||
Income from continuing operations, before taxes | 22.7 | 49.1 | 116.0 | 7.3 | 6.9 | (33.8 | ) | — | 168.2 | |||||||||||||||||||||||
Income taxes | (819.2 | ) | (2.4 | ) | 0.8 | — | — | (6.7 | ) | 666.4 | (161.1 | ) | ||||||||||||||||||||
(Loss) income from continuing operations, net of tax | $ | (796.5 | ) | $ | 46.7 | $ | 116.8 | $ | 7.3 | $ | 6.9 | $ | (40.5 | ) | $ | 666.4 | $ | 7.1 | ||||||||||||||
Diluted EPS from continuing operations | $ | (1.81 | ) | $ | 0.11 | $ | 0.26 | $ | 0.02 | $ | 0.02 | $ | (0.09 | ) | $ | 1.51 | $ | 0.01 | ||||||||||||||
Gross margin | 60.3 | % | — | 0.5 | — | — | — | — | 60.8 | % | ||||||||||||||||||||||
SG&A as a % of revenues | 57.5 | % | (0.8 | ) | (1.5 | ) | (0.1 | ) | — | (0.1 | ) | — | 55.1 | % | ||||||||||||||||||
Operating margin | 2.7 | % | 0.8 | 2.0 | 0.1 | 0.1 | 0.1 | — | 5.7 | % | ||||||||||||||||||||||
Effective tax rate | * | 95.8 | % | |||||||||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) | ||||||||||||||||||||||||||||||||
Latin America | $ | 103.1 | $ | 1.6 | $ | 120.2 | $ | — | $ | — | $ | — | $ | — | $ | 224.9 | ||||||||||||||||
Europe, Middle East & Africa | 217.1 | 3.5 | — | — | 6.9 | — | — | 227.5 | ||||||||||||||||||||||||
Asia Pacific | 35.3 | 10.6 | — | — | — | — | — | 45.9 | ||||||||||||||||||||||||
Global and other | (190.5 | ) | 33.4 | — | 7.3 | — | 3.1 | — | (146.7 | ) | ||||||||||||||||||||||
Total | $ | 165.0 | $ | 49.1 | $ | 120.2 | $ | 7.3 | $ | 6.9 | $ | 3.1 | $ | — | $ | 351.6 | ||||||||||||||||
SEGMENT OPERATING MARGIN | ||||||||||||||||||||||||||||||||
Latin America | 3.2 | % | — | 3.7 | — | — | — | — | 6.9 | % | ||||||||||||||||||||||
Europe, Middle East & Africa | 9.6 | % | 0.2 | — | — | 0.3 | — | — | 10.0 | % | ||||||||||||||||||||||
Asia Pacific | 5.6 | % | 1.7 | — | — | — | — | — | 7.3 | % | ||||||||||||||||||||||
Global and other | — | % | — | — | — | — | — | — | — | % | ||||||||||||||||||||||
Total | 2.7 | % | 0.8 | 2.0 | 0.1 | 0.1 | — | — | 5.7 | % |
THREE MONTHS ENDED DECEMBER 31, 2014 | ||||||||||||||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Venezuelan special items | FCPA accrual | Pension settlement charge | Special tax items | Adjusted (Non-GAAP) | ||||||||||||||||||||||
Total revenue | $ | 2,014.1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,014.1 | ||||||||||||||
Cost of sales | 776.3 | — | 1.4 | — | — | — | 774.9 | |||||||||||||||||||||
Selling, general and administrative expenses | 1,063.0 | 27.1 | — | — | 2.0 | — | 1,033.9 | |||||||||||||||||||||
Operating profit | 174.8 | 27.1 | 1.4 | — | 2.0 | — | 205.3 | |||||||||||||||||||||
Income from continuing operations, before taxes | 100.9 | 27.1 | 1.4 | — | 2.0 | — | 131.4 | |||||||||||||||||||||
Income taxes | (406.3 | ) | (7.6 | ) | — | (18.5 | ) | (0.7 | ) | 395.7 | (37.4 | ) | ||||||||||||||||
(Loss) income from continuing operations, net of tax | $ | (305.4 | ) | $ | 19.5 | $ | 1.4 | $ | (18.5 | ) | $ | 1.3 | $ | 395.7 | $ | 94.0 | ||||||||||||
Diluted EPS from continuing operations | $ | (0.70 | ) | $ | 0.04 | $ | — | $ | (0.04 | ) | $ | — | $ | 0.90 | $ | 0.21 | ||||||||||||
Gross margin | 61.5 | % | — | 0.1 | — | — | — | 61.5 | % | |||||||||||||||||||
SG&A as a % of revenues | 52.8 | % | (1.3 | ) | — | — | (0.1 | ) | — | 51.3 | % | |||||||||||||||||
Operating margin | 8.7 | % | 1.3 | 0.1 | — | 0.1 | — | 10.2 | % | |||||||||||||||||||
Effective tax rate | * | 28.5 | % | |||||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) | ||||||||||||||||||||||||||||
Latin America | $ | 82.9 | $ | 8.7 | $ | 1.4 | $ | — | $ | — | $ | — | $ | 93.0 | ||||||||||||||
Europe, Middle East & Africa | 101.2 | 6.0 | — | — | — | — | 107.2 | |||||||||||||||||||||
Asia Pacific | 5.3 | 6.4 | — | — | — | — | 11.7 | |||||||||||||||||||||
Global and other | (14.6 | ) | 6.0 | — | — | 2.0 | — | (6.6 | ) | |||||||||||||||||||
Total | $ | 174.8 | $ | 27.1 | $ | 1.4 | $ | — | $ | 2.0 | $ | — | $ | 205.3 | ||||||||||||||
SEGMENT OPERATING MARGIN | ||||||||||||||||||||||||||||
Latin America | 7.9 | % | 0.8 | 0.1 | — | — | — | 8.8 | % | |||||||||||||||||||
Europe, Middle East & Africa | 13.1 | % | 0.8 | — | — | — | — | 13.9 | % | |||||||||||||||||||
Asia Pacific | 2.8 | % | 3.4 | — | — | — | — | 6.2 | % | |||||||||||||||||||
Global and other | — | % | — | — | — | — | — | — | % | |||||||||||||||||||
Total | 8.7 | % | 1.3 | 0.1 | — | 0.1 | — | 10.2 | % |
TWELVE MONTHS ENDED DECEMBER 31, 2014 | ||||||||||||||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Venezuelan special items | FCPA accrual | Pension settlement charge | Special tax items | Adjusted (Non-GAAP) | ||||||||||||||||||||||
Total revenue | $ | 7,648.0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 7,648.0 | ||||||||||||||
Cost of sales | 3,006.9 | — | 121.1 | — | — | — | 2,885.8 | |||||||||||||||||||||
Selling, general and administrative expenses | 4,206.8 | 86.6 | 16.0 | 46.0 | 9.5 | — | 4,048.7 | |||||||||||||||||||||
Operating profit | 434.3 | 86.6 | 137.1 | 46.0 | 9.5 | — | 713.5 | |||||||||||||||||||||
Income from continuing operations, before taxes | 200.8 | 86.6 | 190.8 | 46.0 | 9.5 | — | 533.7 | |||||||||||||||||||||
Income taxes | (545.3 | ) | (22.2 | ) | (11.9 | ) | (18.5 | ) | (3.4 | ) | 395.7 | (205.6 | ) | |||||||||||||||
(Loss) income from continuing operations, net of tax | $ | (344.5 | ) | $ | 64.4 | $ | 178.9 | $ | 27.5 | $ | 6.1 | $ | 395.7 | $ | 328.1 | |||||||||||||
Diluted EPS from continuing operations | $ | (0.79 | ) | $ | 0.15 | $ | 0.41 | $ | 0.06 | $ | 0.01 | $ | 0.90 | $ | 0.74 | |||||||||||||
Gross margin | 60.7 | % | — | 1.6 | — | — | — | 62.3 | % | |||||||||||||||||||
SG&A as a % of revenues | 55.0 | % | (1.1 | ) | (0.2 | ) | (0.6 | ) | (0.1 | ) | — | 52.9 | % | |||||||||||||||
Operating margin | 5.7 | % | 1.1 | 1.8 | 0.6 | 0.1 | — | 9.3 | % | |||||||||||||||||||
Effective tax rate | * | 38.5 | % | |||||||||||||||||||||||||
SEGMENT OPERATING PROFIT (LOSS) | ||||||||||||||||||||||||||||
Latin America | $ | 279.8 | $ | 26.7 | $ | 137.1 | $ | — | $ | — | $ | — | $ | 443.6 | ||||||||||||||
Europe, Middle East & Africa | 300.9 | 23.2 | — | — | — | — | 324.1 | |||||||||||||||||||||
Asia Pacific | 20.9 | 9.3 | — | — | — | — | 30.2 | |||||||||||||||||||||
Global and other | (167.3 | ) | 27.4 | — | 46.0 | 9.5 | — | (84.4 | ) | |||||||||||||||||||
Total | $ | 434.3 | $ | 86.6 | $ | 137.1 | $ | 46.0 | $ | 9.5 | $ | — | $ | 713.5 | ||||||||||||||
SEGMENT OPERATING MARGIN | ||||||||||||||||||||||||||||
Latin America | 6.6 | % | 0.6 | 3.2 | — | — | — | 10.5 | % | |||||||||||||||||||
Europe, Middle East & Africa | 11.1 | % | 0.9 | — | — | — | — | 12.0 | % | |||||||||||||||||||
Asia Pacific | 3.0 | % | 1.3 | — | — | — | — | 4.3 | % | |||||||||||||||||||
Global and other | — | % | — | — | — | — | — | — | % | |||||||||||||||||||
Total | 5.7 | % | 1.1 | 1.8 | 0.6 | 0.1 | — | 9.3 | % |
THREE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||||||||
Constant $ revenue | |||||||||||||||||||||
Year-over-Year Impacts of: | |||||||||||||||||||||
Revenue % change | C$ revenue % change | 2014 Brazil VAT credits | 2015 Brazil IPI tax | Liz Earle divestiture | C$ revenue % change, excluding special revenue items | C$ revenue % change, excluding Liz Earle divestiture | |||||||||||||||
Total Avon | (20 | )% | 1 | % | 1 pt | 2 pts | 2 pts | 6 | % | 3 | % | ||||||||||
Latin America | (26 | )% | — | % | 2 pts | 4 pts | — | 6 | % | ||||||||||||
Brazil | (44 | )% | (14 | )% | 4 pts | 8 pts | — | (2 | )% | ||||||||||||
Europe, Middle East & Africa | (13 | )% | 6 | % | — | — | 4 pts | 10 | % | 10 | % | ||||||||||
Gross Margin | Operating Margin | ||||||||||||||||||||
Total Avon | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||
Reported (GAAP) | 58.7 | % | 61.5 | % | (280) bps | 3.9 | % | 8.7 | % | (480) bps | |||||||||||
Adjusted (Non-GAAP) | 58.8 | % | 61.5 | % | (270) bps | 6 | % | 10.2 | % | (420) bps | |||||||||||
Impacts of: | |||||||||||||||||||||
2015 Brazil IPI tax | 20 bps | — | 100 bps | — | |||||||||||||||||
2014 Brazil VAT credits | — | (50) bps | — | (110) bps | |||||||||||||||||
Adjusted, excluding special revenue items | 59.0 | % | 61.0 | % | (200) bps | 7.0 | % | 9.1 | % | (210) bps | |||||||||||
Operating Margin | |||||||||||||||||||||
Latin America | 2015 | 2014 | Change | ||||||||||||||||||
Reported (GAAP) | 6.1 | % | 7.9 | % | (180) bps | ||||||||||||||||
Adjusted (Non-GAAP) | 6.3 | % | 8.8 | % | (250) bps | ||||||||||||||||
Impacts of: | |||||||||||||||||||||
2015 Brazil IPI tax | 190 bps | — | |||||||||||||||||||
2014 Brazil VAT credits | — | (220) bps | |||||||||||||||||||
Adjusted, excluding special revenue items | 8.2 | % | 6.6 | % | 160 bps | ||||||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||||||||||||
Constant $ revenue | |||||||||||||||||||||
Year-over-Year Impacts of: | |||||||||||||||||||||
Revenue % change | C$ revenue % change | 2014 Brazil VAT credits | 2015 Brazil IPI tax | Liz Earle divestiture | C$ revenue % change, excluding special revenue items | C$ revenue % change, excluding Liz Earle divestiture | |||||||||||||||
Total Avon | (19 | )% | 2 | % | 1 pt | 1 pt | 1 pt | 5 | % | 3 | % | ||||||||||
Latin America | (23 | )% | 1 | % | 2 pts | 3 pts | — | 6 | % | ||||||||||||
Brazil | (34 | )% | (8 | )% | 5 pts | 5 pts | — | 2 | % | ||||||||||||
Europe, Middle East & Africa | (16 | )% | 6 | % | — | — | 2 pts | 8 | % | 8 | % | ||||||||||
Gross Margin | Operating Margin | ||||||||||||||||||||
Total Avon | 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||
Reported (GAAP) | 60.3 | % | 60.7 | % | (40) bps | 2.7 | % | 5.7 | % | (300) bps | |||||||||||
Adjusted (Non-GAAP) | 60.8 | % | 62.3 | % | (150) bps | 5.7 | % | 9.3 | % | (360) bps | |||||||||||
Impacts of: | |||||||||||||||||||||
2015 Brazil IPI tax | 20 bps | — | 80 bps | — | |||||||||||||||||
2014 Brazil VAT credits | — | (40) bps | — | (100) bps | |||||||||||||||||
Adjusted, excluding special revenue items | 61.0 | % | 61.9 | % | (90) bps | 6.5 | % | 8.3 | % | (180) bps | |||||||||||
Operating Margin | |||||||||||||||||||||
Latin America | 2015 | 2014 | Change | ||||||||||||||||||
Reported (GAAP) | 3.2 | % | 6.6 | % | (340) bps | ||||||||||||||||
Adjusted (Non-GAAP) | 6.9 | % | 10.5 | % | (360) bps | ||||||||||||||||
Impacts of: | |||||||||||||||||||||
2015 Brazil IPI tax | 140 bps | — | |||||||||||||||||||
2014 Brazil VAT credits | — | (190) bps | |||||||||||||||||||
Adjusted, excluding special revenue items | 8.3 | % | 8.6 | % | (30) bps | ||||||||||||||||
TWELVE MONTHS ENDED DECEMBER 31, 2015 | |||||||||||
Constant $ revenue | |||||||||||
Revenue % change | C$ revenue % change | Year-over-Year impact of North America | C$ revenue %, including North America | ||||||||
Total Avon | (19 | )% | 2 | % | (2) pts | — | % | ||||
Operating Margin | |||||||||||
Total Avon | 2015 | 2014 | Change | ||||||||
Reported (GAAP) | 2.7 | % | 5.7 | % | (300) bps | ||||||
Adjusted (Non-GAAP) | 5.7 | % | 9.3 | % | (360) bps | ||||||
Impacts of: | |||||||||||
2015 North America Adjusted operating margin | (30) bps | — | |||||||||
2014 North America Adjusted operating margin | — | (100) bps | |||||||||
Adjusted, including North America | 5.4 | % | 8.3 | % | (290) bps | ||||||
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