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 | x | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Three Months Ended | |||||||
(In millions, except per share data) | September 30, 2016 | September 30, 2015 | |||||
Net sales | $ | 1,367.5 | $ | 1,413.3 | |||
Other revenue | 41.3 | 22.9 | |||||
Total revenue | 1,408.8 | 1,436.2 | |||||
Costs, expenses and other: | |||||||
Cost of sales | 550.9 | 559.0 | |||||
Selling, general and administrative expenses | 745.9 | 831.9 | |||||
Operating profit | 112.0 | 45.3 | |||||
Interest expense | 34.4 | 29.6 | |||||
(Gain) loss on extinguishment of debt | (3.9 | ) | 5.5 | ||||
Interest income | (3.5 | ) | (3.6 | ) | |||
Other expense, net | 10.4 | 29.0 | |||||
Gain on sale of business | — | (46.2 | ) | ||||
Total other expenses | 37.4 | 14.3 | |||||
Income before taxes | 74.6 | 31.0 | |||||
Income taxes | (38.3 | ) | (699.0 | ) | |||
Income (loss) from continuing operations, net of tax | 36.3 | (668.0 | ) | ||||
Loss from discontinued operations, net of tax | (0.7 | ) | (29.0 | ) | |||
Net income (loss) | 35.6 | (697.0 | ) | ||||
Net loss attributable to noncontrolling interests | 0.4 | — | |||||
Net income (loss) attributable to Avon | $ | 36.0 | $ | (697.0 | ) | ||
Earnings (loss) per share: | |||||||
Basic from continuing operations | $ | 0.07 | $ | (1.51 | ) | ||
Basic from discontinued operations | — | (0.06 | ) | ||||
Basic attributable to Avon | 0.07 | (1.58 | ) | ||||
Diluted from continuing operations | $ | 0.07 | $ | (1.51 | ) | ||
Diluted from discontinued operations | — | (0.06 | ) | ||||
Diluted attributable to Avon | 0.07 | (1.58 | ) | ||||
Cash dividends per common share | $ | — | $ | 0.06 |
Nine Months Ended | |||||||
(In millions, except per share data) | September 30, 2016 | September 30, 2015 | |||||
Net sales | $ | 4,047.0 | $ | 4,490.7 | |||
Other revenue | 102.6 | 62.5 | |||||
Total revenue | 4,149.6 | 4,553.2 | |||||
Costs, expenses and other: | |||||||
Cost of sales | 1,634.7 | 1,781.7 | |||||
Selling, general and administrative expenses | 2,300.0 | 2,669.4 | |||||
Operating profit | 214.9 | 102.1 | |||||
Interest expense | 100.3 | 88.2 | |||||
(Gain) loss on extinguishment of debt | (3.9 | ) | 5.5 | ||||
Interest income | (12.8 | ) | (9.7 | ) | |||
Other expense, net | 142.9 | 47.5 | |||||
Gain on sale of business | — | (44.9 | ) | ||||
Total other expenses | 226.5 | 86.6 | |||||
(Loss) income before taxes | (11.6 | ) | 15.5 | ||||
Income taxes | (72.1 | ) | (797.2 | ) | |||
Loss from continuing operations, net of tax | (83.7 | ) | (781.7 | ) | |||
Loss from discontinued operations, net of tax | (12.9 | ) | (32.0 | ) | |||
Net loss | (96.6 | ) | (813.7 | ) | |||
Net income attributable to noncontrolling interests | (0.3 | ) | (1.8 | ) | |||
Net loss attributable to Avon | $ | (96.9 | ) | $ | (815.5 | ) | |
Loss per share: | |||||||
Basic from continuing operations | $ | (0.22 | ) | $ | (1.77 | ) | |
Basic from discontinued operations | (0.03 | ) | (0.07 | ) | |||
Basic attributable to Avon | (0.25 | ) | (1.84 | ) | |||
Diluted from continuing operations | $ | (0.22 | ) | $ | (1.77 | ) | |
Diluted from discontinued operations | (0.03 | ) | (0.07 | ) | |||
Diluted attributable to Avon | (0.25 | ) | (1.84 | ) | |||
Cash dividends per common share | $ | — | $ | 0.18 |
Three Months Ended | |||||||
(In millions) | September 30, 2016 | September 30, 2015 | |||||
Net income (loss) | $ | 35.6 | $ | (697.0 | ) | ||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | 15.2 | (150.9 | ) | ||||
Change in derivative losses on cash flow hedges, net of taxes of $0.0 and $0.0 | 1.8 | 0.5 | |||||
Adjustments of and amortization of net actuarial loss and prior service cost, net of taxes of $0.2 and $0.3 | 3.6 | 30.0 | |||||
Total other comprehensive income (loss), net of taxes | 20.6 | (120.4 | ) | ||||
Comprehensive income (loss) | 56.2 | (817.4 | ) | ||||
Less: comprehensive loss attributable to noncontrolling interests | (0.6 | ) | (2.3 | ) | |||
Comprehensive income (loss) attributable to Avon | $ | 56.8 | $ | (815.1 | ) |
Nine Months Ended | |||||||
(In millions) | September 30, 2016 | September 30, 2015 | |||||
Net loss | $ | (96.6 | ) | $ | (813.7 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | 103.0 | (256.4 | ) | ||||
Change in derivative losses on cash flow hedges, net of taxes of $0.0 and $0.0 | 2.7 | 1.4 | |||||
Adjustments of and amortization of net actuarial loss and prior service cost, net of taxes of $10.8 and $0.9 | 271.8 | 53.0 | |||||
Total other comprehensive income (loss), net of taxes | 377.5 | (202.0 | ) | ||||
Comprehensive income (loss) | 280.9 | (1,015.7 | ) | ||||
Less: comprehensive loss attributable to noncontrolling interests | (0.4 | ) | (2.4 | ) | |||
Comprehensive income (loss) attributable to Avon | $ | 281.3 | $ | (1,013.3 | ) |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 901.7 | $ | 686.9 | |||
Accounts receivable, net | 505.2 | 443.0 | |||||
Inventories | 706.4 | 624.0 | |||||
Prepaid expenses and other | 323.5 | 296.1 | |||||
Current assets of discontinued operations | 4.7 | 291.1 | |||||
Total current assets | 2,441.5 | 2,341.1 | |||||
Property, plant and equipment, at cost | 1,529.4 | 1,495.7 | |||||
Less accumulated depreciation | (782.7 | ) | (728.8 | ) | |||
Property, plant and equipment, net | 746.7 | 766.9 | |||||
Goodwill | 98.1 | 92.3 | |||||
Other assets | 619.2 | 490.0 | |||||
Noncurrent assets of discontinued operations | — | 180.1 | |||||
Total assets | $ | 3,905.5 | $ | 3,870.4 | |||
Liabilities and Shareholders’ Deficit | |||||||
Current Liabilities | |||||||
Debt maturing within one year | $ | 111.3 | $ | 55.2 | |||
Accounts payable | 760.1 | 774.2 | |||||
Accrued compensation | 156.0 | 157.6 | |||||
Other accrued liabilities | 399.7 | 419.6 | |||||
Sales and taxes other than income | 144.0 | 174.9 | |||||
Income taxes | 4.4 | 23.9 | |||||
Payable to discontinued operations | — | 100.0 | |||||
Current liabilities of discontinued operations | 12.9 | 489.7 | |||||
Total current liabilities | 1,588.4 | 2,195.1 | |||||
Long-term debt | 2,226.8 | 2,150.5 | |||||
Employee benefit plans | 162.5 | 177.5 | |||||
Long-term income taxes | 77.1 | 65.1 | |||||
Other liabilities | 187.1 | 78.4 | |||||
Noncurrent liabilities of discontinued operations | — | 260.2 | |||||
Total liabilities | 4,241.9 | 4,926.8 | |||||
Commitments and contingencies (Note 8) | |||||||
Series C convertible preferred stock | 439.1 | — | |||||
Shareholders’ Deficit | |||||||
Common stock | 188.7 | 187.9 | |||||
Additional paid-in capital | 2,272.2 | 2,254.0 | |||||
Retained earnings | 2,338.5 | 2,448.1 | |||||
Accumulated other comprehensive loss | (989.0 | ) | (1,366.2 | ) | |||
Treasury stock, at cost | (4,599.4 | ) | (4,594.1 | ) | |||
Total Avon shareholders’ deficit | (789.0 | ) | (1,070.3 | ) | |||
Noncontrolling interests | 13.5 | 13.9 | |||||
Total shareholders’ deficit | (775.5 | ) | (1,056.4 | ) | |||
Total liabilities, series C convertible preferred stock and shareholders’ deficit | $ | 3,905.5 | $ | 3,870.4 |
Nine Months Ended | |||||||
(In millions) | September 30, 2016 | September 30, 2015 | |||||
Cash Flows from Operating Activities | |||||||
Net loss | $ | (96.6 | ) | $ | (813.7 | ) | |
Loss from discontinued operations, net of tax | 12.9 | 32.0 | |||||
Loss from continuing operations, net of tax | $ | (83.7 | ) | $ | (781.7 | ) | |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||
Depreciation | 62.5 | 72.0 | |||||
Amortization | 22.4 | 25.0 | |||||
Provision for doubtful accounts | 114.6 | 105.9 | |||||
Provision for obsolescence | 26.6 | 35.2 | |||||
Share-based compensation | 23.1 | 28.9 | |||||
Foreign exchange (gains) losses | (0.3 | ) | 27.5 | ||||
Deferred income taxes | (16.3 | ) | 667.1 | ||||
Charge for Venezuelan monetary assets and liabilities | — | (4.2 | ) | ||||
Charge for Venezuelan non-monetary assets | — | 101.7 | |||||
Loss on deconsolidation of Venezuela | 120.5 | — | |||||
Pre-tax gain on sale of business | — | (44.9 | ) | ||||
Other | 3.0 | 10.2 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (167.1 | ) | (117.4 | ) | |||
Inventories | (109.5 | ) | (153.5 | ) | |||
Prepaid expenses and other | (16.8 | ) | 1.2 | ||||
Accounts payable and accrued liabilities | (41.7 | ) | (34.5 | ) | |||
Income and other taxes | (15.3 | ) | 18.8 | ||||
Noncurrent assets and liabilities | (26.3 | ) | (47.2 | ) | |||
Net cash used by operating activities of continuing operations | (104.3 | ) | (89.9 | ) | |||
Cash Flows from Investing Activities | |||||||
Capital expenditures | (68.2 | ) | (58.4 | ) | |||
Disposal of assets | 3.3 | 5.7 | |||||
Net proceeds from sale of business | — | 208.3 | |||||
Purchases of investments | — | (25.0 | ) | ||||
Net proceeds from sale of investments | — | 9.0 | |||||
Reduction of cash due to Venezuela deconsolidation | (4.5 | ) | — | ||||
Other investing activities | 1.6 | — | |||||
Net cash (used) provided by investing activities of continuing operations | (67.8 | ) | 139.6 | ||||
Cash Flows from Financing Activities | |||||||
Cash dividends | — | (80.7 | ) | ||||
Debt, net (maturities of three months or less) | (31.4 | ) | (4.6 | ) | |||
Proceeds from debt | 508.7 | 7.6 | |||||
Repayment of debt | (311.9 | ) | (258.7 | ) | |||
Repurchase of common stock | (5.3 | ) | (3.0 | ) | |||
Net proceeds from the sale of series C convertible preferred stock | 426.3 | — | |||||
Other financing activities | (17.2 | ) | (5.9 | ) | |||
Net cash provided (used) by financing activities of continuing operations | 569.2 | (345.3 | ) | ||||
Cash Flows from Discontinued Operations | |||||||
Net cash used by operating activities of discontinued operations | (67.6 | ) | (6.8 | ) | |||
Net cash used by investing activities of discontinued operations | (94.6 | ) | (3.4 | ) | |||
Net cash used by financing activities of discontinued operations | — | (12.6 | ) | ||||
Net cash used by discontinued operations | (162.2 | ) | (22.8 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (17.9 | ) | (54.7 | ) | |||
Net increase (decrease) in cash and cash equivalents | 217.0 | (373.1 | ) | ||||
Cash and cash equivalents at beginning of year(1) | 684.7 | 960.5 | |||||
Cash and cash equivalents at end of period(2) | $ | 901.7 | $ | 587.4 |
• | the effects of significant, unusual or extraordinary pretax and income tax items, if any; |
• | withholding taxes associated with cash repatriations; and |
• | the impact of loss-making subsidiaries for which we cannot recognize an income tax benefit and subsidiaries that reduce the reliability of the estimated annual consolidated effective tax rate. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Shares in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator from continuing operations: | ||||||||||||||||
Income (loss) from continuing operations, less amounts attributable to noncontrolling interests | $ | 36.7 | $ | (668.0 | ) | $ | (84.0 | ) | $ | (783.5 | ) | |||||
Less: (Earnings) loss allocated to participating securities | (.5 | ) | 10.7 | 1.1 | 12.3 | |||||||||||
Less: Earnings allocated to convertible preferred stock | (6.1 | ) | — | (12.8 | ) | — | ||||||||||
Earnings (loss) from continuing operations allocated to common shareholders | 30.1 | (657.3 | ) | (95.7 | ) | (771.2 | ) | |||||||||
Numerator from discontinued operations: | ||||||||||||||||
Loss from discontinued operations | $ | (.7 | ) | $ | (29.0 | ) | $ | (12.9 | ) | $ | (32.0 | ) | ||||
Less: Loss allocated to participating securities | — | .8 | .2 | 1.5 | ||||||||||||
Loss allocated to common shareholders | (.7 | ) | (28.2 | ) | (12.7 | ) | (30.5 | ) | ||||||||
Numerator attributable to Avon: | ||||||||||||||||
Net income (loss) attributable to Avon | $ | 36.0 | $ | (697.0 | ) | $ | (96.9 | ) | $ | (815.5 | ) | |||||
Less: (Earnings) loss allocated to participating securities | (.5 | ) | 11.1 | 1.3 | 12.8 | |||||||||||
Less: Earnings allocated to convertible preferred stock | (6.1 | ) | — | (12.8 | ) | — | ||||||||||
Earnings (loss) allocated to common shareholders | 29.4 | (685.9 | ) | (108.4 | ) | (802.7 | ) | |||||||||
Denominator: | ||||||||||||||||
Basic EPS weighted-average shares outstanding | 437.4 | 435.4 | 436.7 | 435.1 | ||||||||||||
Diluted effect of assumed conversion of stock options | — | — | — | — | ||||||||||||
Diluted effect of assumed conversion of preferred stock | — | — | — | — | ||||||||||||
Diluted EPS adjusted weighted-average shares outstanding | 437.4 | 435.4 | 436.7 | 435.1 | ||||||||||||
Earnings (Loss) per Common Share from continuing operations: | ||||||||||||||||
Basic | $ | .07 | $ | (1.51 | ) | $ | (.22 | ) | $ | (1.77 | ) | |||||
Diluted | .07 | (1.51 | ) | (.22 | ) | (1.77 | ) | |||||||||
Loss per Common Share from discontinued operations: | ||||||||||||||||
Basic | $ | — | $ | (.06 | ) | $ | (.03 | ) | $ | (.07 | ) | |||||
Diluted | — | (.06 | ) | (.03 | ) | (.07 | ) | |||||||||
Earnings (Loss) per Common Share attributable to Avon: | ||||||||||||||||
Basic | $ | .07 | $ | (1.58 | ) | $ | (.25 | ) | $ | (1.84 | ) | |||||
Diluted | .07 | (1.58 | ) | (.25 | ) | (1.84 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Total revenue | $ | — | $ | 230.7 | $ | 135.2 | $ | 731.3 | ||||||||
Cost of sales | — | 93.7 | 53.2 | 291.6 | ||||||||||||
Selling, general and administrative expenses | 1.0 | 155.9 | 90.0 | 461.2 | ||||||||||||
Operating loss | (1.0 | ) | (18.9 | ) | (8.0 | ) | (21.5 | ) | ||||||||
Other (expense) income items | — | (4.3 | ) | .6 | (5.7 | ) | ||||||||||
Gain (loss) on sale of discontinued operations, before tax | .3 | — | (16.0 | ) | — | |||||||||||
Loss from discontinued operations, before tax | (.7 | ) | (23.2 | ) | (23.4 | ) | (27.2 | ) | ||||||||
Income taxes | — | (5.8 | ) | 10.5 | (4.8 | ) | ||||||||||
Loss from discontinued operations, net of tax | $ | (.7 | ) | $ | (29.0 | ) | $ | (12.9 | ) | $ | (32.0 | ) |
Components of Inventories | September 30, 2016 | December 31, 2015 | ||||||
Raw materials | $ | 208.1 | $ | 180.5 | ||||
Finished goods | 498.3 | 443.5 | ||||||
Total | $ | 706.4 | $ | 624.0 |
Three Months Ended September 30, | ||||||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||||||
Net Periodic Benefit Costs | U.S. Plans | Non-U.S. Plans | Postretirement Benefits | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Service cost | $ | 1.3 | $ | 3.3 | $ | 1.2 | $ | 1.2 | $ | — | $ | .2 | ||||||||||||
Interest cost | .8 | 6.2 | 4.9 | 5.9 | .3 | .9 | ||||||||||||||||||
Expected return on plan assets | (1.0 | ) | (8.3 | ) | (7.5 | ) | (9.2 | ) | — | — | ||||||||||||||
Amortization of prior service credit | — | (.2 | ) | — | — | (.2 | ) | (1.0 | ) | |||||||||||||||
Amortization of net actuarial losses | 1.5 | 11.6 | 1.5 | 2.1 | .1 | .4 | ||||||||||||||||||
Settlements/curtailments | — | 23.8 | — | — | — | — | ||||||||||||||||||
Net periodic benefit costs(1) | $ | 2.6 | $ | 36.4 | $ | .1 | $ | — | $ | .2 | $ | .5 |
Nine Months Ended September 30, | ||||||||||||||||||||||||
Pension Benefits | ||||||||||||||||||||||||
Net Periodic Benefit Costs | U.S. Plans | Non-U.S. Plans | Postretirement Benefits | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Service cost | $ | 4.9 | $ | 9.8 | $ | 3.8 | $ | 4.1 | $ | .1 | $ | .5 | ||||||||||||
Interest cost | 5.9 | 18.7 | 16.6 | 17.5 | 1.2 | 2.7 | ||||||||||||||||||
Expected return on plan assets | (7.2 | ) | (24.9 | ) | (25.0 | ) | (27.4 | ) | — | — | ||||||||||||||
Amortization of prior service credit | (.1 | ) | (.6 | ) | — | — | (1.1 | ) | (3.0 | ) | ||||||||||||||
Amortization of net actuarial losses | 9.2 | 34.7 | 4.9 | 6.3 | .2 | 1.4 | ||||||||||||||||||
Settlements/curtailments | .1 | 23.8 | — | — | — | — | ||||||||||||||||||
Net periodic benefit costs(1) | $ | 12.8 | $ | 61.5 | $ | .3 | $ | .5 | $ | .4 | $ | 1.6 |
Three Months Ended September 30, 2016: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at June 30, 2016 | $ | (862.7 | ) | $ | (.4 | ) | $ | (4.3 | ) | $ | (142.4 | ) | $ | (1,009.8 | ) | |||||
Other comprehensive income other than reclassifications | 15.4 | — | — | .7 | 16.1 | |||||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $0.0(1) | — | 1.8 | — | — | 1.8 | |||||||||||||||
Amortization of net actuarial loss and prior service cost, net of tax of $.2(2) | — | — | — | 2.9 | 2.9 | |||||||||||||||
Total reclassifications into earnings | — | 1.8 | — | 2.9 | 4.7 | |||||||||||||||
Balance at September 30, 2016 | $ | (847.3 | ) | $ | 1.4 | $ | (4.3 | ) | $ | (138.8 | ) | $ | (989.0 | ) |
Three Months Ended September 30, 2015: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at June 30, 2015 | $ | (781.7 | ) | $ | (2.3 | ) | $ | (4.3 | ) | $ | (510.1 | ) | $ | (1,298.4 | ) | |||||
Other comprehensive loss other than reclassifications | (149.5 | ) | — | — | (9.4 | ) | (158.9 | ) | ||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $0.0(1) | — | .5 | — | — | .5 | |||||||||||||||
Amortization of net actuarial loss and prior service cost, net of tax of $.3(2) | — | — | — | 39.4 | 39.4 | |||||||||||||||
Total reclassifications into earnings | — | .5 | — | 39.4 | 39.9 | |||||||||||||||
Balance at September 30, 2015 | $ | (931.2 | ) | $ | (1.8 | ) | $ | (4.3 | ) | $ | (480.1 | ) | $ | (1,417.4 | ) |
Nine Months Ended September 30, 2016: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at December 31, 2015 | $ | (950.0 | ) | $ | (1.3 | ) | $ | (4.3 | ) | $ | (410.6 | ) | $ | (1,366.2 | ) | |||||
Other comprehensive income (loss) other than reclassifications | 31.4 | — | — | (10.6 | ) | 20.8 | ||||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $0.0(1) | — | 2.7 | — | — | 2.7 | |||||||||||||||
Amortization of net actuarial loss and prior service cost, net of tax of $.6(2) | — | — | — | 12.4 | 12.4 | |||||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 81.3 | — | — | .8 | 82.1 | |||||||||||||||
Separation of North America, net of tax of $10.2 | (10.0 | ) | — | — | 269.2 | 259.2 | ||||||||||||||
Total reclassifications into earnings | 71.3 | 2.7 | — | 282.4 | 356.4 | |||||||||||||||
Balance at September 30, 2016 | $ | (847.3 | ) | $ | 1.4 | $ | (4.3 | ) | $ | (138.8 | ) | $ | (989.0 | ) |
Nine Months Ended September 30, 2015: | Foreign Currency Translation Adjustments | Cash Flow Hedges | Net Investment Hedges | Pension and Postretirement Benefits | Total | |||||||||||||||
Balance at December 31, 2014 | $ | (677.0 | ) | $ | (3.2 | ) | $ | (4.3 | ) | $ | (533.1 | ) | $ | (1,217.6 | ) | |||||
Other comprehensive loss other than reclassifications | (254.2 | ) | — | — | (13.0 | ) | (267.2 | ) | ||||||||||||
Reclassifications into earnings: | ||||||||||||||||||||
Derivative losses on cash flow hedges, net of tax of $0.0(1) | — | 1.4 | — | — | 1.4 | |||||||||||||||
Amortization of net actuarial loss and prior service cost, net of tax of $.9(2) | — | — | — | 66.0 | 66.0 | |||||||||||||||
Total reclassifications into earnings | — | 1.4 | — | 66.0 | 67.4 | |||||||||||||||
Balance at September 30, 2015 | $ | (931.2 | ) | $ | (1.8 | ) | $ | (4.3 | ) | $ | (480.1 | ) | $ | (1,417.4 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Total Revenue | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Europe, Middle East & Africa | $ | 476.4 | $ | 497.5 | $ | 1,517.7 | $ | 1,559.8 | ||||||||
South Latin America | 594.8 | 570.8 | 1,556.9 | 1,769.2 | ||||||||||||
North Latin America | 196.8 | 209.7 | 625.9 | 675.0 | ||||||||||||
Asia Pacific | 132.8 | 145.8 | 411.4 | 467.9 | ||||||||||||
Total revenue from reportable segments | 1,400.8 | 1,423.8 | 4,111.9 | 4,471.9 | ||||||||||||
Other operating segments and business activities | 8.0 | 12.4 | 37.7 | 81.3 | ||||||||||||
Total revenue | $ | 1,408.8 | $ | 1,436.2 | $ | 4,149.6 | $ | 4,553.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Operating Profit | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Segment Profit | ||||||||||||||||
Europe, Middle East & Africa | $ | 66.2 | $ | 69.5 | $ | 218.3 | $ | 206.6 | ||||||||
South Latin America | 73.8 | 52.8 | 157.9 | 189.7 | ||||||||||||
North Latin America | 24.4 | 17.9 | 85.0 | 78.1 | ||||||||||||
Asia Pacific | 12.7 | 15.5 | 42.2 | 54.2 | ||||||||||||
Total profit from reportable segments | $ | 177.1 | $ | 155.7 | $ | 503.4 | $ | 528.6 | ||||||||
Other operating segments and business activities | (.8 | ) | 3.3 | 4.1 | 13.3 | |||||||||||
Unallocated global expenses | (77.5 | ) | (103.7 | ) | (249.6 | ) | (287.1 | ) | ||||||||
CTI restructuring initiatives | (14.0 | ) | 1.9 | (70.2 | ) | (28.2 | ) | |||||||||
Legal settlement | 27.2 | — | 27.2 | — | ||||||||||||
Venezuelan special items | — | (5.7 | ) | — | (118.3 | ) | ||||||||||
Pension settlement charge | — | (6.2 | ) | — | (6.2 | ) | ||||||||||
Operating profit | $ | 112.0 | $ | 45.3 | $ | 214.9 | $ | 102.1 |
Components of Prepaid Expenses and Other | September 30, 2016 | December 31, 2015 | ||||||
Prepaid taxes and tax refunds receivable | $ | 89.7 | $ | 96.3 | ||||
Prepaid brochure costs, paper, and other literature | 78.5 | 64.5 | ||||||
Receivables other than trade | 73.2 | 69.6 | ||||||
Legal settlement(1) | 27.2 | — | ||||||
Other | 54.9 | 65.7 | ||||||
Prepaid expenses and other | $ | 323.5 | $ | 296.1 |
Components of Other Assets | September 30, 2016 | December 31, 2015 | ||||||
Deferred tax assets | $ | 191.3 | $ | 172.8 | ||||
Long-term receivables | 159.1 | 128.8 | ||||||
Capitalized software | 83.5 | 82.4 | ||||||
Judicial deposit for Brazil IPI tax on cosmetics (Note 8) | 68.3 | 33.3 | ||||||
Investments | 37.5 | 36.3 | ||||||
Investment in New Avon (Note 3) | 33.5 | — | ||||||
Tooling (plates and molds associated with our beauty products) | 15.1 | 15.3 | ||||||
Other | 30.9 | 21.1 | ||||||
Other assets | $ | 619.2 | $ | 490.0 |
• | net charges of $11.8 and $61.7, respectively, primarily for employee-related costs, including severance benefits; |
• | contract termination and other net charges of $1.0 and $5.6, respectively; |
• | implementation costs of $1.1 and $2.6, respectively, primarily related to professional service fees; |
• | accelerated depreciation of $.1 and $1.3, respectively; and |
• | inventory write-off of $.3 for the nine months ended September 30, 2016. |
Employee-Related Costs | Contract Terminations/Other | Total | ||||||||||
Balance at December 31, 2015 | $ | 21.4 | $ | — | $ | 21.4 | ||||||
2016 charges | 70.6 | 5.6 | 76.2 | |||||||||
Adjustments | (8.9 | ) | — | (8.9 | ) | |||||||
Cash payments | (24.3 | ) | (1.1 | ) | (25.4 | ) | ||||||
Foreign exchange | .2 | — | .2 | |||||||||
Balance at September 30, 2016 | $ | 59.0 | $ | 4.5 | $ | 63.5 |
Employee- Related Costs | Contract Terminations/Other | Foreign Currency Translation Adjustment Write-offs | Total | |||||||||||||
Charges incurred to date | $ | 83.1 | $ | 5.6 | $ | — | $ | 88.7 | ||||||||
Estimated charges to be incurred on approved initiatives | 6.3 | 2.3 | 2.0 | 10.6 | ||||||||||||
Total expected charges on approved initiatives | $ | 89.4 | $ | 7.9 | $ | 2.0 | $ | 99.3 |
Europe, Middle East & Africa | South Latin America | North Latin America | Asia Pacific | Global & Other Operating Segments | Total | |||||||||||||||||||
2015 | $ | — | $ | — | $ | — | $ | — | $ | 21.4 | $ | 21.4 | ||||||||||||
First quarter 2016 | 21.9 | 12.1 | 3.3 | 4.7 | 5.1 | 47.1 | ||||||||||||||||||
Second quarter 2016 | (.1 | ) | 1.0 | (.4 | ) | 2.9 | 4.0 | 7.4 | ||||||||||||||||
Third quarter 2016 | 9.4 | .3 | 1.6 | .9 | .6 | 12.8 | ||||||||||||||||||
Charges incurred to date | 31.2 | 13.4 | 4.5 | 8.5 | 31.1 | 88.7 | ||||||||||||||||||
Estimated charges to be incurred on approved initiatives | 1.9 | .1 | — | 2.4 | 6.2 | 10.6 | ||||||||||||||||||
Total expected charges on approved initiatives | $ | 33.1 | $ | 13.5 | $ | 4.5 | $ | 10.9 | $ | 37.3 | $ | 99.3 |
• | a benefit of $2.0 and a charge of $22.7, respectively, for employee-related costs due to severance benefits; and |
• | implementation costs of $1.4 and $6.8, respectively, primarily for professional service fees associated with Corporate and Asia Pacific. |
Total | ||||
Balance at December 31, 2015 | $ | 4.0 | ||
2016 charges | — | |||
Adjustments | (.8 | ) | ||
Cash payments | (1.9 | ) | ||
Foreign exchange | — | |||
Balance at September 30, 2016 | $ | 1.3 |
Europe, Middle East & Africa | South Latin America | North Latin America | Asia Pacific | Global & Other Operating Segments | Total | |||||||||||||||||||
2015 | $ | 4.2 | $ | 2.7 | $ | .2 | $ | 5.8 | $ | 9.2 | $ | 22.1 | ||||||||||||
First Quarter 2016 | — | — | — | (.1 | ) | (.4 | ) | (.5 | ) | |||||||||||||||
Second Quarter 2016 | — | — | — | — | (.2 | ) | (.2 | ) | ||||||||||||||||
Third Quarter 2016 | (.1 | ) | — | — | — | — | (.1 | ) | ||||||||||||||||
Charges incurred to date | $ | 4.1 | $ | 2.7 | $ | .2 | $ | 5.7 | $ | 8.6 | $ | 21.3 |
Europe, Middle East & Africa | South Latin America | Asia Pacific | Total | |||||||||||||
Gross balance at December 31, 2015 | $ | 27.7 | $ | 68.9 | $ | 85.0 | $ | 181.6 | ||||||||
Accumulated impairments | (6.9 | ) | — | (82.4 | ) | (89.3 | ) | |||||||||
Net balance at December 31, 2015 | $ | 20.8 | $ | 68.9 | $ | 2.6 | $ | 92.3 | ||||||||
Changes during the period ended September 30, 2016: | ||||||||||||||||
Foreign exchange | .2 | 5.6 | — | 5.8 | ||||||||||||
Gross balance at September 30, 2016 | $ | 27.9 | $ | 74.5 | $ | 85.0 | $ | 187.4 | ||||||||
Accumulated impairments | (6.9 | ) | — | (82.4 | ) | (89.3 | ) | |||||||||
Net balance at September 30, 2016 | $ | 21.0 | $ | 74.5 | $ | 2.6 | $ | 98.1 |
• | 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: | |||||||||||
Available-for-sale securities | $ | 2.8 | $ | — | $ | 2.8 | |||||
Foreign exchange forward contracts | — | .1 | .1 | ||||||||
Total | $ | 2.8 | $ | .1 | $ | 2.9 | |||||
Liabilities: | |||||||||||
Foreign exchange forward contracts | $ | — | $ | 6.6 | $ | 6.6 | |||||
Total | $ | — | $ | 6.6 | $ | 6.6 |
Level 1 | Level 2 | Total | |||||||||
Assets: | |||||||||||
Available-for-sale securities | $ | 2.8 | $ | — | $ | 2.8 | |||||
Foreign exchange forward contracts | — | 1.2 | 1.2 | ||||||||
Total | $ | 2.8 | $ | 1.2 | $ | 4.0 | |||||
Liabilities: | |||||||||||
Foreign exchange forward contracts | $ | — | $ | 1.1 | $ | 1.1 | |||||
Total | $ | — | $ | 1.1 | $ | 1.1 |
September 30, 2016 | December 31, 2015 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Available-for-sale securities | $ | 2.8 | $ | 2.8 | $ | 2.8 | $ | 2.8 | |||||||
Debt maturing within one year(1) | (111.3 | ) | (111.3 | ) | (55.2 | ) | (55.2 | ) | |||||||
Long-term debt(1) | (2,226.8 | ) | (2,167.0 | ) | (2,150.5 | ) | (1,622.7 | ) | |||||||
Foreign exchange forward contracts | (6.5 | ) | (6.5 | ) | .1 | .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 | $ | .1 | Accounts payable | $ | 6.6 | |||||
Total derivatives not designated as hedges | $ | .1 | $ | 6.6 | |||||||
Total derivatives | $ | .1 | $ | 6.6 |
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 | $ | 1.2 | Accounts payable | $ | 1.1 | |||||
Total derivatives not designated as hedges | $ | 1.2 | $ | 1.1 | |||||||
Total derivatives | $ | 1.2 | $ | 1.1 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2016 | 2015 | %/Point Change | 2016 | 2015 | %/Point Change | |||||||||||||||||
Select Financial Information | ||||||||||||||||||||||
Total revenue | $ | 1,408.8 | $ | 1,436.2 | (2 | )% | $ | 4,149.6 | $ | 4,553.2 | (9 | )% | ||||||||||
Cost of sales | 550.9 | 559.0 | (1 | )% | 1,634.7 | 1,781.7 | (8 | )% | ||||||||||||||
Selling, general and administrative expenses | 745.9 | 831.9 | (10 | )% | 2,300.0 | 2,669.4 | (14 | )% | ||||||||||||||
Operating profit | 112.0 | 45.3 | * | 214.9 | 102.1 | * | ||||||||||||||||
Interest expense | 34.4 | 29.6 | 16 | % | 100.3 | 88.2 | 14 | % | ||||||||||||||
(Gain) loss on extinguishment of debt | (3.9 | ) | 5.5 | * | (3.9 | ) | 5.5 | * | ||||||||||||||
Interest income | (3.5 | ) | (3.6 | ) | (3 | )% | (12.8 | ) | (9.7 | ) | 32 | % | ||||||||||
Other expense, net | 10.4 | 29.0 | (64 | )% | 142.9 | 47.5 | * | |||||||||||||||
Gain on sale of business | — | (46.2 | ) | * | — | (44.9 | ) | * | ||||||||||||||
Income (loss) from continuing operations, net of tax | 36.3 | (668.0 | ) | * | (83.7 | ) | (781.7 | ) | 89 | % | ||||||||||||
Net income (loss) attributable to Avon | $ | 36.0 | $ | (697.0 | ) | * | $ | (96.9 | ) | $ | (815.5 | ) | 88 | % | ||||||||
Diluted earnings (loss) per share from continuing operations | $ | .07 | $ | (1.51 | ) | * | $ | (.22 | ) | $ | (1.77 | ) | 88 | % | ||||||||
Diluted earnings (loss) per share attributable to Avon | $ | .07 | $ | (1.58 | ) | * | $ | (.25 | ) | $ | (1.84 | ) | 86 | % | ||||||||
Advertising expenses(1) | $ | 30.3 | $ | 29.9 | 1 | % | $ | 78.6 | $ | 96.6 | (19 | )% | ||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||
Gross margin | 60.9 | % | 61.1 | % | (.2 | ) | 60.6 | % | 60.9 | % | (.3 | ) | ||||||||||
Venezuelan special items | — | .4 | (.4 | ) | — | .6 | (.6 | ) | ||||||||||||||
Adjusted gross margin | 60.9 | % | 61.5 | % | (.6 | ) | 60.6 | % | 61.5 | % | (.9 | ) | ||||||||||
Selling, general and administrative expenses as a % of total revenue | 52.9 | % | 57.9 | % | (5.0 | ) | 55.4 | % | 58.6 | % | (3.2 | ) | ||||||||||
CTI restructuring | (1.0 | ) | .1 | (1.1 | ) | (1.7 | ) | (.6 | ) | (1.1 | ) | |||||||||||
Legal settlement | 1.9 | — | 1.9 | .7 | — | .7 | ||||||||||||||||
Venezuelan special items | — | — | — | — | (2.0 | ) | 2.0 | |||||||||||||||
Pension settlement charge | — | (.4 | ) | .4 | — | (.1 | ) | .1 | ||||||||||||||
Adjusted selling, general and administrative expenses as a % of total revenue | 53.9 | % | 57.6 | % | (3.7 | ) | 54.4 | % | 55.9 | % | (1.5 | ) | ||||||||||
Operating profit | $ | 112.0 | $ | 45.3 | * | $ | 214.9 | $ | 102.1 | * | ||||||||||||
CTI restructuring | 14.0 | (1.9 | ) | 70.2 | 28.2 | |||||||||||||||||
Legal settlement | (27.2 | ) | — | (27.2 | ) | — | ||||||||||||||||
Venezuelan special items | — | 5.7 | — | 118.3 | ||||||||||||||||||
Pension settlement charge | — | 6.2 | — | 6.2 | ||||||||||||||||||
Adjusted operating profit | $ | 98.8 | $ | 55.3 | 79 | % | $ | 257.9 | $ | 254.8 | 1.2 | % | ||||||||||
Operating margin | 8.0 | % | 3.2 | % | 4.8 | 5.2 | % | 2.2 | % | 3.0 | ||||||||||||
CTI restructuring | 1.0 | (.1 | ) | 1.1 | 1.7 | .6 | 1.1 | |||||||||||||||
Legal settlement | (1.9 | ) | — | (1.9 | ) | (.7 | ) | — | (.7 | ) | ||||||||||||
Venezuelan special items | — | .4 | (.4 | ) | — | 2.6 | (2.6 | ) | ||||||||||||||
Pension settlement charge | — | .4 | (.4 | ) | — | .1 | (.1 | ) | ||||||||||||||
Adjusted operating margin | 7.0 | % | 3.9 | % | 3.1 | 6.2 | % | 5.6 | % | .6 | ||||||||||||
Change in Constant $ Adjusted operating margin(2) | 3.5 | 1.6 | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2016 | 2015 | %/Point Change | 2016 | 2015 | %/Point Change | |||||||||||||||||
Performance Metrics | ||||||||||||||||||||||
Change in Active Representatives | (2 | )% | (2 | )% | ||||||||||||||||||
Change in units sold | (2 | )% | (3 | )% | ||||||||||||||||||
Change in Ending Representatives | (1 | )% | (1 | )% |
(1) | Advertising expenses are classified within selling, general and administrative expenses. |
(2) | Change in Constant $ Adjusted operating margin for all years presented is calculated using the current-year Constant $ rates. |
Three Months Ended September 30, | %/Point Change | ||||||||||||
2016 | 2015 | US$ | Constant $ | ||||||||||
Beauty: | |||||||||||||
Skincare | $ | 397.3 | $ | 405.4 | (2 | )% | 2 | % | |||||
Fragrance | 373.6 | 379.1 | (1 | ) | 5 | ||||||||
Color | 244.0 | 249.1 | (2 | ) | 3 | ||||||||
Total Beauty | 1,014.9 | 1,033.6 | (2 | ) | 3 | ||||||||
Fashion & Home: | |||||||||||||
Fashion | 202.2 | 214.8 | (6 | ) | (1 | ) | |||||||
Home | 150.4 | 152.7 | (2 | ) | 7 | ||||||||
Total Fashion & Home | 352.6 | 367.5 | (4 | ) | 2 | ||||||||
Net sales from reportable segments | $ | 1,367.5 | $ | 1,401.1 | (2 | ) | 3 | ||||||
Net sales from Other operating segments and business activities | — | 12.2 | (100 | ) | (100 | ) | |||||||
Net sales | $ | 1,367.5 | $ | 1,413.3 | (3 | ) | 2 |
• | a decrease of approximately 250 basis points due to the unfavorable impact of foreign currency transaction losses and foreign currency translation; and |
• | a decrease of 30 basis points due to sales of products to New Avon since the separation of the Company's North America business into New Avon on March 1, 2016. |
• | an increase of 160 basis points due to the favorable net impact of mix and pricing, primarily due to inflationary and strategic pricing in South Latin America, North Latin America and Europe, Middle East & Africa; and |
• | an increase of 70 basis points due to lower supply chain costs, primarily from cost savings initiatives in South Latin America and Europe, Middle East & Africa. |
• | a decrease of 260 basis points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses. In addition, lower fixed expenses, primarily resulting from our costs savings initiatives, mainly reductions in headcount, were largely offset by the inflationary impact on our expenses; |
• | a decrease of 140 basis points due to lower expenses associated with employee incentive compensation plans; and |
• | a decrease of 60 basis points primarily due to the net impact of the Constant $ revenue growth with respect to our Representative, sales leader and field expense, driven by South Latin America. |
• | an increase of approximately 20 basis points due to the unfavorable impact of foreign currency translation and foreign currency transaction losses; and |
• | an increase of 40 basis points from higher net brochure costs, primarily in South Latin America. |
• | foreign currency transaction losses (classified within cost of sales, and selling, general and administrative expenses), which had an unfavorable impact to operating profit and Adjusted operating profit of an estimated $35, or approximately 260 basis points to operating margin and Adjusted operating margin; |
• | foreign currency translation, which had an unfavorable impact to operating profit and Adjusted operating profit of approximately $10, or an immaterial amount to operating margin and approximately 10 basis points to Adjusted operating margin; and |
• | lower foreign exchange losses on our working capital (classified within other expense, net), which had a favorable impact of approximately $25 before tax. |
Nine Months Ended September 30, | %/Point Change | ||||||||||||
2016 | 2015 | US$ | Constant $ | ||||||||||
Beauty: | |||||||||||||
Skincare | $ | 1,177.5 | $ | 1,302.3 | (10 | )% | 1 | % | |||||
Fragrance | 1,066.8 | 1,161.4 | (8 | ) | 5 | ||||||||
Color | 744.3 | 809.6 | (8 | ) | 4 | ||||||||
Total Beauty | 2,988.6 | 3,273.3 | (9 | ) | 3 | ||||||||
Fashion & Home: | |||||||||||||
Fashion | 615.9 | 654.2 | (6 | ) | 4 | ||||||||
Home | 428.9 | 483.0 | (11 | ) | 3 | ||||||||
Total Fashion & Home | 1,044.8 | 1,137.2 | (8 | ) | 4 | ||||||||
Net sales from reportable segments | $ | 4,033.4 | $ | 4,410.5 | (9 | ) | 3 | ||||||
Net sales from Other operating segments and business activities | 13.6 | 80.2 | (83 | ) | (85 | ) | |||||||
Net sales | $ | 4,047.0 | $ | 4,490.7 | (10 | ) | 2 |
• | a decrease of approximately 320 basis points due to the unfavorable impact of foreign currency transaction losses and foreign currency translation; and |
• | a decrease of 30 basis points due to sales of products to New Avon since the separation of the Company's North America business into New Avon on March 1, 2016. |
• | an increase of 150 basis points due to the favorable net impact of mix and pricing, primarily due to inflationary and strategic pricing in South Latin America, Europe, Middle East & Africa and North Latin America; and |
• | an increase of 120 basis points due to lower supply chain costs, primarily from cost savings initiatives and lower material costs in Europe, Middle East & Africa and South Latin America. |
• | a decrease of 220 basis points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses. In addition, lower fixed expenses, primarily resulting from our costs savings initiatives, mainly reductions in headcount, were largely offset by the inflationary impact on our expenses; and |
• | a decrease of 30 basis points from lower advertising expense, primarily in Europe, Middle East & Africa. |
• | an increase of approximately 70 basis points due to the unfavorable impact of foreign currency translation and foreign currency transaction losses; |
• | an increase of 40 basis points as a result of the IPI tax law on cosmetics in Brazil, which reduced revenue as we did not raise the prices paid by Representatives to the same extent as the IPI tax; and |
• | an increase of 30 basis points from higher bad debt expense, primarily in Brazil. |
• | foreign currency transaction losses (classified within cost of sales, and selling, general and administrative expenses), which had an unfavorable impact to operating profit and Adjusted operating profit of an estimated $150, or approximately 330 basis points to operating margin and Adjusted operating margin; |
• | foreign currency translation, which had an unfavorable impact to operating profit of approximately $60 and Adjusted operating profit of approximately $65, or approximately 60 basis points to operating margin and Adjusted operating margin; and |
• | lower foreign exchange losses on our working capital (classified within other expense, net), which had a favorable impact of approximately $33 before tax and $38 before tax on an Adjusted basis. |
Three Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Total revenue | Segment profit | Total revenue | Segment profit | ||||||||||||
Europe, Middle East & Africa | $ | 476.4 | $ | 66.2 | $ | 497.5 | $ | 69.5 | |||||||
South Latin America | 594.8 | 73.8 | 570.8 | 52.8 | |||||||||||
North Latin America | 196.8 | 24.4 | 209.7 | 17.9 | |||||||||||
Asia Pacific | 132.8 | 12.7 | 145.8 | 15.5 | |||||||||||
Total from reportable segments | $ | 1,400.8 | $ | 177.1 | $ | 1,423.8 | $ | 155.7 |
Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Total revenue | Segment profit | Total revenue | Segment profit | ||||||||||||
Europe, Middle East & Africa | $ | 1,517.7 | $ | 218.3 | $ | 1,559.8 | $ | 206.6 | |||||||
South Latin America | 1,556.9 | 157.9 | 1,769.2 | 189.7 | |||||||||||
North Latin America | 625.9 | 85.0 | 675.0 | 78.1 | |||||||||||
Asia Pacific | 411.4 | 42.2 | 467.9 | 54.2 | |||||||||||
Total from reportable segments | $ | 4,111.9 | $ | 503.4 | $ | 4,471.9 | $ | 528.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2016 | 2015 | US$ | Constant $ | 2016 | 2015 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 476.4 | $ | 497.5 | (4 | )% | 2 | % | $ | 1,517.7 | $ | 1,559.8 | (3 | )% | 7 | % | |||||||||||
Segment profit | 66.2 | 69.5 | (5 | )% | (2 | )% | 218.3 | 206.6 | 6 | % | 18 | % | |||||||||||||||
Segment margin | 13.9 | % | 14.0 | % | (.1 | ) | (.6 | ) | 14.4 | % | 13.2 | % | 1.2 | 1.3 | |||||||||||||
Change in Active Representatives | 1 | % | 4 | % | |||||||||||||||||||||||
Change in units sold | (1 | )% | 3 | % | |||||||||||||||||||||||
Change in Ending Representatives | 5 | % | 5 | % |
• | a decline of 1.4 points due to lower gross margin caused primarily by an estimated 4 points from the unfavorable impact of foreign currency transaction losses. This was partially offset by 1.4 points from the favorable net impact of mix and pricing which was primarily driven by inflationary and strategic pricing in Russia, and .9 points due to lower supply chain costs, including benefits from lower material costs and cost savings initiatives; |
• | a net benefit of .4 points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses; and |
• | a benefit of .4 points from lower field expense. |
• | a net benefit of 1.4 points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses; |
• | a benefit of .7 points due to lower advertising expense, primarily in Russia; and |
• | a decline of .9 points due to lower gross margin caused primarily by an estimated 4 points from the unfavorable impact of foreign currency transaction losses. This was partially offset by a benefit of 1.4 points due to lower supply chain costs, including benefits from lower material costs and cost savings initiatives, and 1.3 points from the favorable net impact of mix and pricing which was primarily driven by inflationary and strategic pricing in Russia. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2016 | 2015 | US$ | Constant $ | 2016 | 2015 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 594.8 | $ | 570.8 | 4 | % | 9 | % | $ | 1,556.9 | $ | 1,769.2 | (12 | )% | 4 | % | |||||||||||
Segment profit | 73.8 | 52.8 | 40 | % | 45 | % | 157.9 | 189.7 | (17 | )% | (2 | )% | |||||||||||||||
Segment margin | 12.4 | % | 9.3 | % | 3.1 | 3.0 | 10.1 | % | 10.7 | % | (.6 | ) | (.6 | ) | |||||||||||||
Change in Active Representatives | 2 | % | (1 | )% | |||||||||||||||||||||||
Change in units sold | 2 | % | (4 | )% | |||||||||||||||||||||||
Change in Ending Representatives | 3 | % | 3 | % |
• | a benefit of 1.6 points primarily due to the net impact of the Constant $ revenue growth with respect to our Representative, sales leader and field expense, partially attributable to lower Representative, sales leader and field expense in Brazil which was driven by a shift towards advertising; |
• | a benefit of .8 points due to higher gross margin caused by 1.8 points from the favorable net impact of mix and pricing, primarily due to inflationary and strategic pricing, and 1.4 points from lower supply chain costs, including benefits from cost savings initiatives. These items were partially offset by an estimated 2 points from the unfavorable impact of foreign currency transaction losses; |
• | a benefit of .7 points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses; |
• | a decline of .4 points from higher net brochure costs, primarily in Argentina and Brazil; and |
• | a decline of .3 points from advertising expense, primarily in Brazil. |
• | a decline of .8 points as a result of the IPI tax law on cosmetics in Brazil, which are a reduction of revenue and we have not raised the prices paid by Representatives to the same extent as the IPI tax; |
• | a decline of .8 points from higher bad debt expense, primarily due to the macroeconomic environment in Brazil; |
• | a decline of .7 points due to lower gross margin caused by an estimated 4 points from the unfavorable impact of foreign currency transaction losses, partially offset by 1.8 points from the favorable net impact of mix and pricing, primarily due to inflationary and strategic pricing, and 1.3 points from lower supply chain costs. Supply chain costs benefited primarily as a result of lower material costs; |
• | a benefit of .5 points primarily due to the impact of the Constant $ revenue growth with respect to our fixed expenses; |
• | a benefit of .4 points due to the net impact of the Constant $ revenue growth with respect to our Representative, sales leader and field expense; and |
• | various other insignificant items that partially offset the decline in segment margin. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2016 | 2015 | US$ | Constant $ | 2016 | 2015 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 196.8 | $ | 209.7 | (6 | )% | 3 | % | $ | 625.9 | $ | 675.0 | (7 | )% | 4 | % | |||||||||||
Segment profit | 24.4 | 17.9 | 36 | % | 53 | % | 85.0 | 78.1 | 9 | % | 25 | % | |||||||||||||||
Segment margin | 12.4 | % | 8.5 | % | 3.9 | 4.1 | 13.6 | % | 11.6 | % | 2.0 | 2.3 | |||||||||||||||
Change in Active Representatives | — | % | — | % | |||||||||||||||||||||||
Change in units sold | (6 | )% | (5 | )% | |||||||||||||||||||||||
Change in Ending Representatives | (1 | )% | (1 | )% |
• | a benefit of 3.8 points primarily from lower fixed expenses, which includes 2.5 points as a result of an out-of-period adjustment which negatively impacted the prior-year period, as well as due to the impact of the Constant $ revenue growth with respect to our fixed expenses; |
• | a benefit of .8 points due to higher gross margin caused primarily by a benefit of 3.1 points from the favorable impact of mix and pricing, primarily due to inflationary and strategic pricing, partially offset by 2.1 points from the unfavorable impact of foreign currency transaction losses; |
• | a benefit of .4 points due to lower advertising expense, primarily in Mexico; |
• | a benefit of .4 points from lower field expense; |
• | a decline of 1.0 point from higher bad debt expense, primarily in Mexico; and |
• | a decline of .6 points from higher net brochure costs, primarily in Mexico. |
• | a benefit of 1.3 points due to higher gross margin caused primarily by a benefit of 2.6 points from the favorable impact of mix and pricing, primarily due to inflationary and strategic pricing, and 1.0 point from lower supply chain costs, partially offset by 1.8 points from the unfavorable impact of foreign currency transaction losses; and |
• | a benefit of 1.0 point primarily from lower fixed expenses, which includes .8 points as a result of an out-of-period adjustment which negatively impacted the prior-year period, as well as due to the impact of the Constant $ revenue growth with respect to our fixed expenses. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
%/Point Change | %/Point Change | ||||||||||||||||||||||||||
2016 | 2015 | US$ | Constant $ | 2016 | 2015 | US$ | Constant $ | ||||||||||||||||||||
Total revenue | $ | 132.8 | $ | 145.8 | (9 | )% | (7 | )% | $ | 411.4 | $ | 467.9 | (12 | )% | (7 | )% | |||||||||||
Segment profit | 12.7 | 15.5 | (18 | )% | (15 | )% | 42.2 | 54.2 | (22 | )% | (15 | )% | |||||||||||||||
Segment margin | 9.6 | % | 10.6 | % | (1.0 | ) | (.9 | ) | 10.3 | % | 11.6 | % | (1.3 | ) | (1.0 | ) | |||||||||||
Change in Active Representatives | (12 | )% | (10 | )% | |||||||||||||||||||||||
Change in units sold | (8 | )% | (7 | )% | |||||||||||||||||||||||
Change in Ending Representatives | (7 | )% | (7 | )% |
• | a decline of 2.0 points due to lower gross margin caused primarily by 1.1 points from higher supply chain costs and .7 points from the unfavorable impact of mix and pricing. Supply chain costs were negatively impacted by higher overhead costs which were attributable to lower productivity; and |
• | a net benefit of .9 points from lower fixed expenses, partially offset by the unfavorable impact of the declining revenue with respect to our fixed expenses. |
• | 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/or realize the projected benefits (in the amounts and time schedules we expect) from, our transformation plan, stabilization strategies, cost savings initiatives, restructuring 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 including e-commerce, marketing and advertising 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; |
• | our ability to achieve the anticipated benefits of our strategic partnership with Cerberus (as defined herein); |
• | our broad-based geographic portfolio, which is heavily weighted towards emerging markets, a general economic downturn, a recession globally or in one or more of our geographic regions or markets, such as Brazil, Mexico or Russia, or sudden disruption in business conditions, and the ability to withstand an economic downturn, recession, cost inflation, commodity cost pressures, economic or political instability (including fluctuations in foreign exchange rates), competitive or other market pressures or conditions; |
• | the effect of economic factors, including inflation and fluctuations in interest rates and foreign currency exchange rates; |
• | the possibility of business disruption in connection with our transformation plan, stabilization strategies, cost savings initiatives, or restructuring and other initiatives; |
• | our ability to reverse declining revenue, margins and net income, and to achieve profitable growth, particularly in our largest markets, such as Brazil, and developing and emerging markets, such as Mexico and Russia; |
• | 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 enhance our sales Leadership programs, to generate Representative activity, to increase the number of consumers served per Representative and their engagement online, to enhance branding and the Representative and consumer experience and increase Representative productivity through field activation and segmentation programs and technology tools and enablers, to invest in the direct-selling channel, to offer a more social selling experience, and to compete with other direct-selling organizations to recruit, retain and service Representatives and to continue to innovate the direct-selling model; |
• | general economic and business conditions in our markets, including social, economic and political uncertainties, such as in Russia and Ukraine, and any potential sanctions, restrictions or responses to such conditions imposed by other markets in which we operate; |
• | developments in or consequences of any investigations and compliance reviews, and any litigation related thereto, including the investigations and compliance reviews of Foreign Corrupt Practices Act ("FCPA") and related United States ("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 the retention of a compliance monitor as required by the deferred prosecution agreement with the U.S. Department of Justice and a consent to settlement with the Securities and Exchange Commission ("SEC"), any changes in Company policy or procedure suggested by the compliance monitor or undertaken by the Company, the duration of the compliance monitor and whether and when the Company will be permitted to undertake self-reporting, the Company’s compliance with the deferred prosecution agreement and whether and when the charges against the Company are dismissed with prejudice; |
• | the effect of political, legal, tax, including changes in tax rates, and other regulatory risks imposed on us abroad and in the U.S., our operations or our Representatives, including foreign exchange, pricing, data privacy or other restrictions, the adoption, interpretation and enforcement of foreign laws, including in jurisdictions such as Brazil and Russia, 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; |
• | competitive uncertainties in our markets, including competition from companies in the consumer packaged goods industry, some of which are larger than we are and have greater resources; |
• | the impact of the adverse effect of volatile energy, commodity and raw material prices, changes in market trends, purchasing habits of our consumers and changes in consumer preferences, particularly given the global nature of our business and the conduct of our business in primarily one channel; |
• | our ability to attract and retain key personnel; |
• | 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, and any cyber security breaches, including any security breach of our systems or those of a third-party provider that results in the theft, transfer or unauthorized disclosure of Representative, customer, employee or Company information or compliance with information security and privacy laws and regulations in the event of such an incident which could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations, and related costs to address such malicious intentional acts and to implement adequate preventative measures against cyber security breaches; |
• | the risk of product or ingredient shortages resulting from our concentration of sourcing in fewer suppliers; |
• | any changes to our credit ratings and the impact of such changes on our financing costs, rates, terms, debt service obligations, access to lending sources and working capital needs; |
• | the impact of our indebtedness, our access to cash and financing, and our ability to secure financing or financing at attractive rates and terms and conditions; |
• | the impact of a continued decline in our business results, which includes the impact of any adverse foreign exchange movements, significant restructuring charges and significant legal settlements or judgments, on our ability to comply with certain covenants in our revolving credit facility; |
• | the impact of the transfer of certain pension obligations in connection with the separation of the North America business into New Avon and the impact of possible pension funding obligations, increased pension expense and any changes in pension standards and regulations or interpretations thereof on our cash flow and results of operations; |
• | our ability to successfully identify new business opportunities, strategic alliances and strategic alternatives and identify and analyze alliance candidates, secure financing on favorable terms and negotiate and consummate alliances; |
• | 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, including in connection with the separation of the North America business; |
• | our ability to repurchase the Series C Preferred Stock (as defined herein) in connection with a change of control; and |
• | the risk of an adverse outcome in any material pending and future litigation 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 | ||||||||
7/1 - 7/31/16 | 79,883 | (1) | $ | 4.03 | * | * | |||||
8/1 - 8/31/16 | 251,772 | (1) | 5.09 | * | * | ||||||
9/1 - 9/30/16 | 19,881 | (1) | 4.15 | * | * | ||||||
Total | 351,536 | $ | 4.80 | * | * |
* | 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 and performance restricted stock units. |
AVON PRODUCTS, INC. | ||
(Registrant) | ||
Date: | November 3, 2016 | /s/ Robert Loughran |
Robert Loughran | ||
Group Vice President and | ||
Chief Accounting Officer | ||
Signed both on behalf of the | ||
registrant and as chief | ||
accounting officer. |
3.1 | Restated Certificate of Incorporation of Avon Products, Inc., as amended with the Secretary of State of the State of New York on October 12, 2016 (incorporated by reference to Exhibit 3.1 to Avon's Current Report on Form 8-K filed on October 13, 2016). |
3.2 | By-Laws of Avon Products, Inc., effective October 6, 2016 (incorporated by reference to Exhibit 3.2 to Avon's Current Report on Form 8-K filed on October 13, 2016). |
4.1 | Indenture, dated August 15, 2016, among Avon International Operations, Inc., the guarantors party thereto and Deustche Bank Trust Company Americas, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to Avon's Current Report on Form 8-K filed on August 16, 2016). |
10.1 | Second Amendment to Credit Agreement and General Security Agreement and First Amendment to API Limited Recourse Guaranty, dated August 1, 2016 (incorporated by reference to Exhibit 10.1 to Avon's Current Report on Form 8-K filed on August 2, 2016). |
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/ James S. Scully |
James S. Scully |
Executive Vice President, Chief Operating |
Officer and Chief Financial Officer |
/s/ Sherilyn S. McCoy |
Sherilyn S. McCoy |
Chief Executive Officer |
November 3, 2016 |
/s/ James S. Scully |
James S. Scully |
Executive Vice President, Chief Operating |
Officer and Chief Financial Officer |
November 3, 2016 |
Document And Entity Information |
9 Months Ended |
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Sep. 30, 2016
shares
| |
DEI [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | AVON PRODUCTS INC |
Entity Central Index Key | 0000008868 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 437,517,018 |
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ 35.6 | $ (697.0) | $ (96.6) | $ (813.7) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | 15.2 | (150.9) | 103.0 | (256.4) |
Change in derivative losses on cash flow hedges, net of taxes | 1.8 | 0.5 | 2.7 | 1.4 |
Adjustments of and amortization of net actuarial loss and prior service cost, net of taxes | 3.6 | 30.0 | 271.8 | 53.0 |
Total other comprehensive loss, net of taxes | 20.6 | (120.4) | 377.5 | (202.0) |
Comprehensive loss | 56.2 | (817.4) | 280.9 | (1,015.7) |
Less: comprehensive loss attributable to noncontrolling interest | (0.6) | (2.3) | (0.4) | (2.4) |
Comprehensive loss attributable to Avon | $ 56.8 | $ (815.1) | $ 281.3 | $ (1,013.3) |
Consolidated Statements Of Comprehensive Income (Loss) Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Change in derivative losses on cash flow hedges, tax | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Adjustment of and amortization of net actuarial loss and prior service cost, taxes | $ 0.2 | $ 0.3 | $ 10.8 | $ 0.9 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2015 |
Sep. 30, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Statement of Cash Flows [Abstract] | |||
Cash and cash equivalents of discontinued operations and held for sale | $ (2.2) | $ 1.1 | $ 24.1 |
ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||
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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 2015 Annual Report on Form 10-K ("2015 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 2015 Form 10-K, portions of which (including Part I, Item 1. Business, and the following items from Part II of the Annual Report: Item 6. Selected Financial Data, Item 7. Management’s Discussion and Analysis and Item 8. Financial Statements and Supplementary Data) were recast in the Company's Current Report on Form 8-K filed with the SEC on October 11, 2016. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc. For interim consolidated financial statement purposes we provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense. In addition, our income tax provision is determined using an estimate of our consolidated annual effective tax rate, adjusted in the current period for discrete income tax items including:
Venezuela Venezuela's restrictive foreign exchange control regulations and our Venezuelan operations' increasingly limited access to U.S. dollars resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and the U.S. dollar, and restricted our Venezuelan operations' ability to pay dividends and settle intercompany obligations. The severe currency controls imposed by the Venezuelan government significantly limited our ability to realize the benefits from earnings of our Venezuelan operations and access the resulting liquidity provided by those earnings. We expected that this other-than-temporary lack of exchangeability would continue for the foreseeable future, and as a result, we concluded that, effective March 31, 2016, we did not meet the accounting criteria of control in order to continue consolidating our Venezuelan operations and, as a result, account for our Venezuelan operations using the cost method of accounting. Our Consolidated Balance Sheets no longer includes the assets and liabilities of our Venezuelan operations, and we no longer include the results of our Venezuelan operations in our Consolidated Financial Statements. As a result of the change to the cost method of accounting, in the first quarter of 2016, we recorded a loss of approximately $120 in other expense, net. The loss was comprised of approximately $39 in net assets of the Venezuelan business and approximately $81 in accumulated foreign currency translation adjustments within AOCI (shareholders' deficit) associated with foreign currency changes before Venezuela was accounted for as a highly inflationary economy. The net assets of the Venezuelan business were comprised of inventories of approximately $24, property, plant and equipment, net of approximately $15, other assets of approximately $11, cash of approximately $5, accounts receivable of approximately $4, and accounts payable and accrued liabilities of approximately $20. In February 2015, the Venezuelan government announced the creation of a new foreign exchange system referred to as the SIMADI exchange ("SIMADI"). SIMADI began operating on February 12, 2015. There were multiple legal mechanisms in Venezuela to exchange currency. As SIMADI represented the rate which better reflected the economics of Avon Venezuela's business activity, in comparison to the other available exchange rates, we concluded that we should utilize the SIMADI exchange rate to remeasure our Venezuelan operations effective February 12, 2015. As a result of the change to the SIMADI rate, which caused the recognition of a devaluation of approximately 70% as compared to the exchange rate we had used previously, we recorded an after-tax benefit of approximately $3 (a benefit of approximately $4 in other expense, net, and a loss of approximately $1 in income taxes) in the first quarter of 2015, primarily reflecting the write-down of net monetary assets. In addition, as a result of using the historical U.S. dollar cost basis of non-monetary assets, such as inventories, these assets continued to be remeasured, following the change to the SIMADI rate, at the applicable rate at the time of their acquisition. The remeasurement of non-monetary assets at the historical U.S. dollar cost basis caused a disproportionate expense as these assets were consumed in operations, negatively impacting operating profit and net income by approximately $6 and approximately $17 during the three and nine months ended September 30, 2015, respectively. Also as a result of the change to the SIMADI rate, we determined that an adjustment of approximately $11 to cost of sales was needed to reflect certain non-monetary assets, primarily inventories, at their net realizable value, which was recorded in the first quarter of 2015. In addition, at February 12, 2015, we reviewed Avon Venezuela's long-lived assets to determine whether the carrying amount of the assets was recoverable. Based on our expected cash flows associated with the asset group, we determined that the carrying amount of the assets, carried at their historical U.S. dollar cost basis, was not recoverable. As such, an impairment charge of approximately $90 to selling, general and administrative expenses was needed to reflect the write-down of the long-lived assets to their estimated fair value of $15.7, which was recorded in the first quarter of 2015. The fair value of Avon Venezuela's long-lived assets was determined using both market and cost valuation approaches. The valuation analysis performed required several estimates, including market conditions and inflation rates. Accounting Standards to be Implemented In February 2016, the FASB issued ASU 2016-02, Leases, which requires all assets and liabilities arising from leases to be recognized in the statement of financial position. This standard is effective as of January 1, 2019. We are currently evaluating the effect that adopting this new accounting guidance will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The core principle of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which resulted in the standard being effective beginning in 2018, with early adoption permitted in the beginning of 2017. This standard has been amended, and as amended, can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the effect that adopting this new accounting guidance will have on our consolidated financial statements. |
EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES |
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Earnings Per Share Reconciliation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES | EARNINGS (LOSS) 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 earnings (loss) allocated to convertible preferred stock and participating securities, as appropriate. The earnings allocated to convertible preferred stock are the larger of 1) the preferred dividends accrued in the period or 2) the percentage of earnings from continuing operations allocable to the preferred stock as if they had been converted to common stock. Our participating securities are our grants of restricted stock and restricted stock units, which contain non-forfeitable rights to dividend equivalents to the extent any dividends are declared and paid on our common stock. 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.
Amounts in the table above may not necessarily sum due to rounding. During the three months ended September 30, 2016, we did not include stock options to purchase 15.0 million shares of Avon common stock in the calculation of diluted EPS because the exercise prices of those options were greater than the average market price, and therefore, their inclusion would be anti-dilutive. During the nine months ended September 30, 2016, we did not include stock options to purchase 14.2 million shares of Avon common stock in the calculation of diluted EPS as we had a loss from continuing operations, net of tax. During the three and nine months ended September 30, 2015, we did not include stock options to purchase 11.9 million shares and 13.2 million shares, respectively, of Avon common stock in the calculation of diluted EPS as we had a loss from continuing operations, net of tax. For the nine months ended September 30, 2016 and the three and nine months ended September 30, 2015, when we had a loss from continuing operations, net of tax, the inclusion of these shares would decrease the net loss per share, and therefore, their inclusion would be anti-dilutive. For the three and nine months ended September 30, 2016, it is more dilutive to assume the Series C Convertible Preferred Stock is not converted into common stock and therefore the weighted-average outstanding shares outstanding was not adjusted by the as-if converted Series C Convertible Preferred Stock because the effect would decrease the net loss per share, and therefore, their inclusion would be anti-dilutive. If the as-if converted Series C Convertible Preferred Stock had been dilutive, approximately 87.1 million additional shares would have been included in the diluted weighted average number of shares outstanding for the three and nine months ended September 30, 2016. See Note 7, Series C Convertible Preferred Stock. We purchased approximately 1.3 million shares of Avon common stock for $5.3 during the first nine months of 2016, as compared to approximately .4 million shares of Avon common stock for $3.0 during the first nine months of 2015, through acquisition of stock from employees in connection with tax payments upon vesting of restricted stock units in 2016 and 2015 and performance restricted stock units in 2016. |
DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS AND DIVESTITURES Discontinued Operations North America On December 17, 2015, the Company entered into definitive agreements with affiliates controlled by Cerberus Capital Management, L.P. ("Cerberus"). The agreements include an investment agreement providing for a $435 investment by Cleveland Apple Investor L.P. (f/k/a Cleveland Apple Investor LLC) (“Cerberus Investor”) (an affiliate of Cerberus) in the Company through the purchase of perpetual convertible preferred stock (see Note 7, Series C Convertible Preferred Stock) and a separation and investment agreement providing for the separation of the Company's North America business, which represented the Company's operations in the United States, Canada and Puerto Rico, from the Company into New Avon LLC ("New Avon") a privately-held company that is majority-owned and managed by Cleveland NA Investor LLC (“Cerberus NA”) (an affiliate of Cerberus). These transactions closed on March 1, 2016. Cerberus NA contributed $170 of cash into New Avon in exchange for 80.1% of its ownership interests. The Company contributed the North America business, certain pension and postretirement liabilities and $100 of cash into New Avon in exchange for a 19.9% ownership interest of New Avon. The Company received $6 of cash from New Avon at closing as part of a customary working capital adjustment. During the fourth quarter of 2015, the Company recorded an estimated loss on sale of discontinued operations of approximately $340 before tax (approximately $340 after tax) as the carrying value exceeded the estimated fair value less costs to sell. During the three and nine months ended September 30, 2016, the Company recognized a reduction to the loss on sale of less than $1 before tax (less than $1 after tax) and an additional loss on sale of approximately $16 before tax (approximately $6 after tax), respectively. The cumulative loss on sale of approximately $356 before tax (approximately $346 after tax) represents the net assets contributed into New Avon, including certain pension and postretirement benefit plan liabilities and amounts in AOCI associated with the North America business, which were primarily unrecognized losses associated with our U.S. defined benefit pension plan, and costs to sell, as compared to the implied value of our ownership interests in New Avon, at closing, which was approximately $43. New Avon entered into a perpetual, irrevocable royalty-free licensing agreement with the Company for the use of the Avon brand and certain other intellectual property. Avon and New Avon also entered into a transition services agreement which covers, among other things, information technology, financial services and human resources, as well as other commercial agreements, including for research and development and product supply. In addition, the Company subleases office space to New Avon. See Note 4, Related Party Transactions. The Company accounts for its ownership interests in New Avon using the equity method of accounting, which results in the Company recognizing its proportionate share of New Avon's income or loss. The Company's proportionate share of the post-separation losses of New Avon was $4.5 and $9.0 during the three and nine months ended September 30, 2016, respectively, and was recorded within other expense, net. The major classes of financial statement components comprising the loss on discontinued operations, net of tax for North America are shown below:
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RELATED PARTY TRANSACTIONS |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As discussed in Note 3, Discontinued Operations and Divestitures, the Company has entered into a transition services agreement to provide certain services to New Avon, as well as an agreement for research and development and subleases for office space. In addition, New Avon is performing certain services for the Company under a similar transition services agreement. The Company recorded a net $10.2 and $25.1 reduction of selling, general and administrative expenses associated with these agreements during the three and nine months ended September 30, 2016, respectively. The Company also supplies product to New Avon as part of these transition services. The Company recorded revenues of $6.9 and $20.4 and gross profit of $.5 and $1.4 associated with this supply arrangement during the three and nine months ended September 30, 2016, respectively. In addition, New Avon also supplies product to the Company as part of these transition services. The Company purchased $1.0 and $4.6 from New Avon associated with this supply arrangement during the three and nine months ended September 30, 2016, respectively. The Company also entered into agreements with an affiliate of Cerberus, which provide for the secondment of Cerberus affiliate personnel to the Company's project management team responsible for assisting with the execution of the transformation plan (the "Transformation Plan") announced in January 2016. The Company recorded $.8 and $1.8 in selling, general and administrative expenses associated with these agreements during the three and nine months ended September 30, 2016, respectively. See Note 12, Restructuring Initiatives for additional information related to the Transformation Plan. The Company also issued standby letters of credit to the lessors of certain equipment, a lease for which was transferred to New Avon in connection with the separation of the Company's North America business. As of September 30, 2016 the Company has a liability $2.1 for the estimated value of such standby letters of credit. The recognition of the liability was included in the estimated loss on sale of the North America business in loss from discontinued operations, net of tax. See Note 7, Series C Convertible Preferred Stock, for discussion of preferred shares issued to Cerberus Investor. |
INVENTORIES |
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Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES
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EMPLOYEE BENEFIT PLANS |
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General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS
(1) Includes $26.3 of U.S. pension for the three months ended September 30, 2015 and $4.4 and $43.5 of U.S. pension for the nine months ended September 30, 2016 and 2015, respectively. Immaterial amounts of the postretirement benefit plans (related to the U.S.) are included in discontinued operations for the three months ended September 30, 2015 and for the nine months ended September 30, 2016 and 2015. Amounts associated with the pension and postretirement benefit plans in Canada and the postretirement benefit plan in Puerto Rico, which are included in discontinued operations, have been excluded from all amounts in the tables above. As part of the separation of the North America business, we transferred $499.6 of pension liabilities under the U.S. defined benefit pension plan associated with current and former employees of the North America business and certain other former Avon employees, along with $355.9 of assets held by the U.S. defined benefit pension plan, to a defined benefit pension plan sponsored by New Avon. We also transferred $60.4 of other postretirement liabilities (namely, retiree medical and supplemental pension liabilities) in respect of such employees and former employees. See Note 3, Discontinued Operations and Divestitures. We continue to retain certain U.S. pension and other postretirement liabilities primarily associated with employees who are actively employed by Avon outside of the North America business. As a result of lump-sum payments made to former employees that were vested and participated in the U.S. defined benefit pension plan, in the third quarter of 2015, we recorded a settlement charge of $23.8. These lump sum payments were made from our plan assets and were not the result of a specific offer to participants of the U.S. defined benefit pension plan. Such payments fully settled our pension plan obligation to those participants who elected to receive such payment. This settlement charge was allocated between Global and Discontinued Operations. During the nine months ended September 30, 2016, we made approximately $26 and approximately $14 of contributions to the U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively. During the remainder of 2016, we anticipate contributing approximately $1 and approximately $6 to $11 to fund our U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively. |
SERIES C CONVERTIBLE PREFERRED STOCK |
9 Months Ended |
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Sep. 30, 2016 | |
Equity [Abstract] | |
SERIES C CONVERTIBLE PREFERRED STOCK | SERIES C CONVERTIBLE PREFERRED STOCK On March 1, 2016, we issued and sold to Cerberus Investor 435,000 shares of newly issued Series C Preferred Stock for an aggregate purchase price of $435.0 pursuant to an Investment Agreement, dated as of December 17, 2015, between the Company and Cerberus Investor. In connection with the issuance of the Series C Preferred Stock, the Company incurred direct and incremental expenses of $8.7, comprised of financial advisory fees and legal expenses, which reduced the carrying value of the Series C Preferred Stock. The Series C Preferred Stock has accrued dividends daily since March 1, 2016 at a rate of 1.25% per quarter, and as of September 30, 2016, had accrued unpaid dividends of $12.8. There were no cash dividends declared in the nine months ended September 30, 2016. Dividend Rights. The Series C Preferred Stock ranks senior to the shares of our common stock with respect to dividend rights and rights on the distribution of assets on any liquidation, dissolution or winding up of our affairs. The Series C Preferred Stock has a liquidation preference of $1,000 per share, representing an aggregate liquidation preference of $435.0 upon issuance. Holders of Series C Preferred Stock are entitled to participate on an as-converted basis in any cash dividends paid to the holders of shares of the Company’s common stock. In addition, cumulative preferred dividends accrue daily on the Series C Preferred Stock and are payable at a rate of 1.25% per quarter (net of any dividends on the Company’s common stock and subject to increase up to a maximum rate of 5.00% per quarter if the Company breaches certain obligations). Except to the extent not otherwise previously paid by the Company, preferred dividends are payable on the seventh anniversary of the issuance date of the Series C Preferred Stock as and when declared by the Board of Directors and at the end of each quarter thereafter. Accrued and unpaid preferred dividends may be paid, at the Company’s option, (i) in cash, (ii) subject to certain conditions, in shares of the Company’s common stock or (iii) upon conversion of shares of Series C Preferred Stock, in shares of the Company’s non-voting, non-convertible Series D Preferred Stock. Any such shares of Series D Preferred Stock issued would have similar preferential rights. Conversion Features. Series C Preferred Stock is convertible at the option of the holders at any time into shares of the Company’s common stock at an initial conversion price of $5.00 per share, subject to certain anti-dilution adjustments. Prior to receipt of applicable shareholder approval, shares of Series C Preferred Stock are not convertible into more than 19.99% of the number of shares of common stock outstanding immediately prior to the issuance of the Series C Preferred Stock, subject to certain anti-dilution adjustments. As of September 30, 2016, Series C Preferred Stock was convertible into 87,051,524 shares of common stock. If at any time the volume weighted average price of the common stock exceeds $10.00 per share (subject to certain anti-dilution adjustments) for a period of 30 consecutive trading days, the Company may cause all of the Series C Preferred Stock to be converted into shares of common stock based on the then applicable conversion price. Voting Rights. Holders of Series C Preferred Stock are entitled to vote generally with the holders of common stock on an as-converted basis. Holders of Series C Preferred Stock are also entitled to a separate class vote with respect to (i) the election of up to three directors to the Board of Directors, subject to maintaining certain levels of beneficial ownership of Series C Preferred Stock and/or common stock, (ii) amendments to the Company’s organizational documents that have an adverse effect on the Series C Preferred Stock, (iii) issuances by the Company of securities that are senior to, or equal in priority with, the Series C Preferred Stock or (iv) the delisting of the Company’s common stock, other than in connection with a change of control event. Change of Control Put. Upon certain change of control events involving the Company, holders of Series C Preferred Stock can require the Company to repurchase the Series C Preferred Stock for an amount equal to the greater of (i) an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends or (ii) the consideration the holders would have received if they had converted their shares of Series C Preferred Stock into common stock immediately prior to the change of control event. |
CONTINGENCIES |
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Sep. 30, 2016 | |
Loss Contingency [Abstract] | |
Contingencies | CONTINGENCIES Settlements of FCPA Investigations As previously reported, we engaged outside counsel to conduct an internal investigation and compliance reviews focused on compliance with the Foreign Corrupt Practices Act ("FCPA") and related U.S. and foreign laws in China and additional countries. The internal investigation, which was conducted under the oversight of our Audit Committee, began in June 2008 and along with the compliance reviews, was completed in 2014. Following our voluntary reporting of the internal investigation to both the U.S. Department of Justice (the “DOJ”) and the U.S. Securities and Exchange Commission (the “SEC”) and our subsequent cooperation with those agencies, the United States District Court for the Southern District of New York (the "USDC") approved in December 2014 a deferred prosecution agreement (“DPA”) entered into between the Company and the DOJ related to charges of violations of the books and records and internal controls provisions of the FCPA. In addition, Avon Products (China) Co. Ltd., a subsidiary of the Company operating in China, pleaded guilty to conspiring to violate the books and records provision of the FCPA and was sentenced by the USDC to pay a $68 fine. The SEC also filed a complaint against the Company charging violations of the books and records and internal controls provisions of the FCPA and the Consent which was approved in a judgment entered by the USDC in January 2015, and included $67 in disgorgement and prejudgment interest. The DPA, the above-mentioned guilty plea and the Consent resolved the SEC’s and the DOJ’s investigations of the Company’s compliance with the FCPA and related U.S. laws in China and additional countries. The fine was paid in December 2014 and the payment to the SEC was made in January 2015. Under the DPA, the DOJ will defer criminal prosecution of the Company for a term of three years. If the Company remains in compliance with the DPA during its term, the charges against the Company will be dismissed with prejudice. Under the DPA, the Company also represented that it has implemented and agreed that it will continue to implement a compliance and ethics program designed to prevent and detect violations of the FCPA and other applicable anti-corruption laws throughout its operations. Under the DPA and the Consent, among other things, the Company agreed to have a compliance monitor (the "monitor"). During July 2015, the Company engaged a monitor, who had been approved by the DOJ and SEC. With the approval of the DOJ and the SEC, the monitor can be replaced by the Company no earlier than 18 months after their engagement, if the Company agrees to undertake self-reporting obligations for the remainder of the monitoring period. The monitoring period is scheduled to expire in July 2018. There can be no assurance as to whether or when the DOJ and the SEC will approve replacing the monitor with the Company’s self-reporting. If the DOJ determines that the Company has knowingly violated the DPA, the DOJ may commence prosecution or extend the term of the DPA, including the monitoring provisions described above, for up to one year. The monitor is assessing and monitoring the Company's compliance with the terms of the DPA and the Consent by evaluating, among other things, the Company's internal accounting controls, recordkeeping and financial reporting policies and procedures. The monitor has recommended some changes to our policies and procedures that we are in the process of adopting, and may make additional recommendations that we must adopt unless they are unduly burdensome or otherwise inadvisable, in which case we may propose alternatives, which the DOJ and the SEC may or may not accept. In addition, operating under the oversight of the monitor may result in additional time and attention on these matters by members of our management, which may divert their time from the operation of our business. Assuming the monitor is replaced by a self-reporting period, the Company’s self-reporting obligations may be costly or time-consuming. The costs incurred in connection with ongoing compliance with the DPA and the Consent, including the monitorship, have not been material to date and we do not anticipate material costs going forward. We currently cannot estimate the costs that we are likely to incur in connection with self-reporting, if applicable, and any additional costs of implementing the changes, if any, to our policies and procedures required by the monitor. Litigation Matters In July and August 2010, derivative actions were filed in state court against certain present or former officers and/or directors of the Company (Carol J. Parker, derivatively on behalf of Avon Products, Inc. v. W. Don Cornwell, et al. and Avon Products, Inc. as nominal defendant (filed in the New York Supreme Court, Nassau County, Index No. 600570/2010); Lynne Schwartz, derivatively on behalf of Avon Products, Inc. v. Andrea Jung, et al. and Avon Products, Inc. as nominal defendant (filed in the New York Supreme Court, New York County, Index No. 651304/2010)). On November 22, 2013, a derivative action was filed in federal court against certain present or former officers and/or directors of the Company and following the federal court's dismissal, an additional action was subsequently filed in New York state court on May 1, 2015 (Sylvia Pritika, derivatively on behalf of Avon Products, Inc. v. Andrea Jung, et al. and Avon Products, Inc. as nominal defendant (filed in the New York Supreme Court, New York County, Index No. 651479/2015)). The claims asserted in one or more of these actions include alleged breach of fiduciary duty, abuse of control, waste of corporate assets, and unjust enrichment, relating to the Company's compliance with the FCPA, including the adequacy of the Company's internal controls. The relief sought against the individual defendants in one or more of these derivative actions include certain declaratory and equitable relief, restitution, damages, exemplary damages and interest. The Company is a nominal defendant, and no relief is sought against the Company itself. On April 28, 2015, an action was filed to seek enforcement of demands for the inspection of certain of the Company’s books and records (Belle Cohen v. Avon Products, Inc. (filed in the New York Supreme Court, New York County, Index No. 651418/2015)). The parties reached agreements to settle the derivative and books and records actions. The terms of settlement include certain corporate governance measures as well as releases of claims and payment of plaintiffs' attorneys' fees in the amount of $4. On March 30, 2016, the court granted preliminary approval of the settlement, and on August 1, 2016, the court entered an order and judgment granting final approval of the settlement. The $4 was paid by the Company's insurers. The order and judgment approving the settlement has become final and Avon has until November 1, 2016 to implement the agreed corporate governance measures. In light of the settlement, stipulations voluntarily dismissing or discontinuing the actions with prejudice have been filed in the Pritika and Parker actions. On July 6, 2011, a purported shareholder's class action complaint (City of Brockton Retirement System v. Avon Products, Inc., et al., No. 11-CIV-4665) was filed in the United States District Court for the Southern District of New York against the Company and certain present or former officers and/or directors of the Company. On September 29, 2011, the Court appointed LBBW Asset Management Investmentgesellschaft mbH and SGSS Deutschland Kapitalanlagegesellschaft mbH as lead plaintiffs and Motley Rice LLC as lead counsel. Lead plaintiffs filed an amended complaint, and the defendants moved to dismiss the amended complaint on June 14, 2012. On September 29, 2014, the Court granted the defendants' motion to dismiss and also granted the plaintiffs leave to amend their complaint. On October 24, 2014, plaintiffs filed their second amended complaint on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of Avon's common stock from July 31, 2006 through and including October 26, 2011. The second amended complaint names as defendants the Company and two individuals and asserts violations of Sections 10(b) and 20(a) of the Exchange Act based on allegedly false or misleading statements and omissions with respect to, among other things, the Company's compliance with the FCPA, including the adequacy of the Company's internal controls. Plaintiffs seek compensatory damages and declaratory, injunctive, and other equitable relief. Defendants moved to dismiss the Second Amended Complaint on November 21, 2014. The parties reached an agreement on a settlement of this class action. The terms of settlement include releases by members of the class of claims against the Company and the individual defendants and payment of $62. Approximately $60 of the settlement was paid by the Company's insurers and approximately $2 was paid by the Company (which represented the remaining deductible under the Company’s applicable insurance policy). On August 21, 2015, the court granted preliminary approval of the settlement, and on August 24, 2016, the court entered an order and judgment granting final approval of the settlement. There has been an appeal of the court's separate order relating to plaintiffs' attorneys' fees, dated August 25, 2016. However, no appeal was filed from the court's August 24, 2016 order and judgment approving the settlement and thus that judgment has now become final. Between December 23, 2014 and March 12, 2015, two purported class actions were filed in the United States District Court for the Southern District of New York -- Poovathur v. Avon Products, Inc., et al. (No. 14-CV-10083) and McCoy et al. v. Avon Products, Inc., et al. (No. 15-CV-01828) asserting claims under the Employee Retirement Income Security Act ("ERISA") against the Company, the Plan's administrator, benefits board and investment committee, and certain individuals alleged to have served as Plan fiduciaries. On April 8, 2015, the Court consolidated the two actions and recaptioned the consolidated case as In re 2014 Avon Products, Inc. ERISA Litigation, (No. 14-CV-10083). On May 8, 2015, plaintiffs filed a consolidated complaint, asserting claims for alleged breach of fiduciary duty and failure to monitor under ERISA on behalf of a purported class of participants in and beneficiaries of the Plan who invested in and/or held shares of the Avon Common Stock Fund between July 31, 2006 and May 1, 2014 and between December 14, 2011 and the present. Plaintiffs seek, inter alia, certain monetary relief, damages, and declaratory, injunctive and other equitable relief. On July 9, 2015, Defendants moved to dismiss the consolidated complaint. The parties reached an agreement on a settlement of this class action. The terms of settlement include releases by members of the class of claims against the Company and the individual defendants and payment of approximately $6. Approximately $5 of the settlement was paid by the Company’s insurer and approximately $1 was paid by the Company (which represented the remaining deductible under the Company’s applicable insurance policy). On June 7, 2016, the court granted preliminary approval of the settlement, and on October 11, 2016, the court held a hearing to consider final approval of the settlement and ordered the parties to submit additional documentation in support of the settlement by November 4, 2016. If the settlement is not approved by the court, or is otherwise terminated before it is finalized, the Company will be unable to predict the outcome of this matter. Furthermore, in that event, it is reasonably possible that the Company may incur a loss in connection with this matter, which the Company is unable to reasonably estimate. Under some circumstances, any losses incurred in connection with adverse outcomes in the litigation matters described above could be material. Brazilian Tax Assessments In 2002, our Brazilian subsidiary received an excise tax (IPI) assessment from the Brazilian tax authorities for alleged tax deficiencies during the years 1997-1998. In December 2012, additional assessments were received for the year 2008 with respect to excise tax (IPI) and taxes charged on gross receipts (PIS and COFINS). In the second quarter of 2014, the PIS and COFINS assessments were officially closed in favor of Avon Brazil. The 2002 and the 2012 IPI assessments assert that the establishment in 1995 of separate manufacturing and distribution companies in Brazil was done without a valid business purpose and that Avon Brazil did not observe minimum pricing rules to define the taxable basis of excise tax. The structure adopted in 1995 is comparable to that used by many other companies in Brazil. We believe that our Brazilian corporate structure is appropriate, both operationally and legally, and that the 2002 and 2012 IPI assessments are unfounded. These matters are being vigorously contested. In January 2013, we filed a protest seeking a first administrative level review with respect to the 2012 IPI assessment. In July 2013, the 2012 IPI assessment was upheld at the first administrative level and we have appealed this decision to the second administrative level. The 2012 IPI assessment totals approximately $331, including penalties and accrued interest. In October 2010, the 2002 IPI assessment was upheld at the first administrative level at an amount reduced to approximately $29 from approximately $68, including penalties and accrued interest. We appealed this decision to the second administrative level, which ruled in favor of Avon in March 2015 and canceled the 2002 IPI assessment. The Brazilian tax authorities' appeal to this favorable decision regarding the 2002 IPI assessment is still pending. In the event that the 2002 or 2012 IPI assessments are upheld at the last administrative level, it may be necessary for us to provide security to pursue further appeals, which, depending on the circumstances, may result in a charge to earnings. It is not possible to reasonably estimate the likelihood or potential amount of assessments that may be issued for subsequent periods (tax years up through 2010 are closed by statute). However, other similar IPI assessments involving different periods (1998-2001) have been canceled and officially closed in our favor by the second administrative level. We believe that the likelihood that the 2002 IPI assessment will be upheld on any further appeal is remote and the likelihood that the 2012 IPI assessment will be upheld is reasonably possible. As stated above, we believe that the 2002 and 2012 IPI assessments are unfounded. Brazil IPI Tax on Cosmetics In May 2015, an Executive Decree on certain cosmetics went into effect in Brazil which increased the amount of IPI taxes that are to be remitted by Avon Brazil to the taxing authority on the sales of cosmetic products subject to IPI. Avon Brazil filed an objection to this IPI tax increase on the basis that it is not constitutional. From May 2015 through April 2016 Avon Brazil remitted the taxes associated with this IPI tax increase into a judicial deposit which would be remitted to the taxing authorities in the event that we are not successful in our objection to the tax increase. In May 2016, Avon Brazil received a favorable preliminary decision on its objection to the tax and was granted a preliminary injunction. As a result, beginning in May 2016 Avon Brazil is no longer required to remit the taxes associated with IPI into a judicial deposit. As the IPI tax increase remains in effect, Avon Brazil is continuing to recognize the IPI taxes associated with the May 2015 Executive Decree as a liability. At September 30, 2016, the liability to the taxing authorities for this IPI tax increase was approximately $105 and was classified within other liabilities in the Consolidated Balance Sheets, and the judicial deposit was approximately $68 and was classified within other assets in the Consolidated Balance Sheets. The net liability that does not have a corresponding judicial deposit was $37 at September 30, 2016, and the accretion expense associated with this net liability will be recognized in other expense, net. An unfavorable ruling to our objection of this IPI tax increase would have an adverse effect on our consolidated cash flows as Avon Brazil would have to remit the liability owed to the taxing authorities. This amount would be partially offset by the amount of the judicial deposit held by Avon Brazil. We are not able to reliably predict the timing of the outcome of our objection to this tax increase. Other Matters Various other lawsuits and claims, arising in the ordinary course of business or related to businesses previously sold, are pending or threatened against Avon. In management's opinion, based on its review of the information available at this time, the total cost of resolving such other contingencies at September 30, 2016, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The tables below present the changes in AOCI by component and the reclassifications out of AOCI for the three and nine months ended September 30, 2016 and 2015:
(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. Foreign exchange net losses of $1.9 and of $7.3 for the three months ended September 30, 2016 and 2015, respectively, and foreign exchange net losses of $12.8 and of $15.6 for the nine months ended September 30, 2016 and 2015, respectively, resulting from the translation of actuarial losses and prior service cost recorded in AOCI are included in changes in foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income (Loss). |
SEGMENT INFORMATION |
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SEGMENT INFORMATION | SEGMENT INFORMATION We determine segment profit by deducting the related costs and expenses from segment revenue. In order to ensure comparability between periods, segment profit includes an allocation of global marketing expenses based on actual revenues. Segment profit excludes global expenses other than the allocation of marketing, costs to implement ("CTI") restructuring initiatives (see Note 12, Restructuring Initiatives), certain significant asset impairment charges, and other items, which are not allocated to a particular segment, if applicable. This is consistent with the manner in which we assess our performance and allocate resources. Summarized financial information concerning our reportable segments was as follows:
Other operating segments and business activities include the business results for Liz Earle, which was sold in July 2015, and Venezuela, which was deconsolidated effective March 31, 2016. Other operating segments and business activities also include revenue from the sale of products to New Avon since the separation of the Company's North America business into New Avon on March 1, 2016 and ongoing royalties from the licensing of our name and products. |
SUPPLEMENTAL BALANCE SHEET INFORMATION |
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SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION At September 30, 2016 and December 31, 2015, prepaid expenses and other included the following:
(1) In the third quarter of 2016, we settled claims relating to professional services that had been provided to the Company prior to 2013 in connection with a previously disclosed legal matter. The proceeds, net of legal fees, of $27.2 before tax ($27.2 after tax) were recognized as a reduction of selling, general and administrative expenses in the third quarter of 2016 and were received by the Company in the fourth quarter of 2016. At September 30, 2016 and December 31, 2015, other assets included the following:
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING INITIATIVES | RESTRUCTURING INITIATIVES Transformation Plan In January 2016, we announced the Transformation Plan, which includes cost reduction efforts to continue to improve our cost structure and to enable us to reinvest in growth. As a result of this plan, we have targeted pre-tax annualized cost savings of approximately $350 after three years, with an estimated $200 from supply chain reductions and an estimated $150 from other cost reductions, which are expected to be achieved through restructuring actions, as well as other cost-savings strategies that will not result in restructuring charges. We plan to reinvest a portion of these cost savings in growth initiatives, including media, social selling and information technology systems that will help us modernize our business. We initiated the Transformation Plan in order to enable us to achieve our long-term goals of double-digit operating margin and mid single-digit Constant $ revenue growth. As part of the Transformation Plan, we identified certain actions, that we believe will reduce ongoing costs, primarily consisting of global headcount reductions relating to operating model changes, as well as the closure of Thailand, a smaller, under-performing market. These operating model changes include the streamlining of our corporate functions to align with the current and future needs of the business and an information technology infrastructure outsourcing initiative. As a result of these restructuring actions approved-to-date, we have recorded total costs to implement these restructuring initiatives of $93.9 before taxes, of which $71.5 was recorded in the first nine months of 2016, in the Consolidated Statements of Operations. The additional charges not yet incurred associated with the restructuring actions approved to-date of approximately $20 to $30 before taxes are expected to be recorded primarily in 2017. At this time we are unable to quantify the total costs to implement these restructuring initiatives that will be incurred through the time the Transformation Plan is fully implemented. In connection with the restructuring actions approved to-date associated with the Transformation Plan, we expect to realize annualized savings of approximately $95 to $105 before taxes. We expect to realize approximately $25 before taxes of savings associated with the restructuring actions in 2016 and are expected to achieve the significant majority of the annualized savings beginning in 2017. For the market closure, the expected annualized savings represented the foregone selling, general and administrative expenses as a result of no longer operating in the respective market. 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 market closures, which is not material. Restructuring Charges - Three and Nine Months Ended September 30, 2016 During the three and nine months ended September 30, 2016, we recorded costs to implement of $14.0 and $71.5, respectively, related to the Transformation Plan, in the Consolidated Statement of Operations. The costs consisted of the following:
Of the total costs to implement during the three months ended September 30, 2016, all $14.0 was recorded in selling, general and administrative expenses. Of the total costs to implement during the nine months ended September 30, 2016, $71.2 was recorded in selling, general and administrative expenses and $.3 was recorded in cost of sales. The majority of cash payments, if applicable, associated with these charges are expected to be made during the remainder of 2016 and 2017. The liability balance for the Transformation Plan as of September 30, 2016 is as follows:
The following table presents the restructuring charges incurred to date, under the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plan:
The charges, net of adjustments, of initiatives under the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plan, by reportable segment were as follows:
We expect our total costs to implement restructuring on approved initiatives to be approximately $95 to $105 before taxes under the Transformation Plan. 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 continue to incur other costs to implement restructuring initiatives such as professional services fees and accelerated depreciation. Additional Restructuring Charges 2015 As a result of the then-current economic environment, including the impact of foreign currency movements and inflation on our expenses, and in an effort to continue to improve our cost structure, we identified certain actions during 2015 that we believe would reduce ongoing costs. These actions primarily consisted of global headcount reductions. As a result of these restructuring actions, we recorded a net benefit of $.8 before taxes, during the nine months ended September 30, 2016 in selling, general and administrative expenses, in the Consolidated Statements of Operations. There are no material remaining costs for restructuring actions approved-to-date. In connection with these restructuring actions, we realized annualized savings of approximately $30 before taxes. We began to realize savings in the second quarter of 2015 and achieved the annualized savings beginning in the third quarter of 2015. The annualized savings represent the net reduction of expenses that will no longer be incurred by Avon. Restructuring Charges – Three and Nine Months Ended September 30, 2016 The costs to implement recorded during the three and nine months ended September 30, 2016 consisted of net benefits of $.1 and $.8, respectively, primarily for employee-related costs due to severance benefits. Restructuring Charges – Three and Nine Months Ended September 30, 2015 The costs to implement recorded during the three and nine months ended September 30, 2015 consisted of the following:
The liability balance, which consists of employee-related costs, for these various restructuring initiatives as of September 30, 2016 is as follows:
The majority of cash payments associated with this liability are expected to be made during 2016. The charges, net of adjustments, of these various restructuring initiatives, by reportable segment were as follows:
In addition to the charges included in the tables above, we have incurred other costs to implement restructuring initiatives such as professional services fees. Other Restructuring Initiatives During the three and nine months ended September 30, 2016, we recorded a net charge of $.1 and a net benefit of $.5, respectively, in selling, general and administrative expenses, in the Consolidated Statements of Operations, associated with the restructuring programs launched in 2005 and 2009, and the restructuring initiatives launched in 2012 (the "$400M Cost Savings Initiative") (collectively, the "Other Restructuring Initiatives"), which are substantially complete. During the three and nine months ended September 30, 2015, we recorded net benefits of $1.3 and $1.3, respectively, in selling, general and administrative expenses, in the Consolidated Statements of Operations, associated with the Other Restructuring Initiatives. The liability balance associated with the Other Restructuring Initiatives, which primarily consists of employee-related costs and contract termination costs, as of September 30, 2016 is not material. |
GOODWILL |
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GOODWILL | GOODWILL Goodwill
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Assets and Liabilities Recorded at Fair Value The fair value measurement provisions required by GAAP establish a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016:
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2015:
Fair Value of Financial Instruments Our financial instruments include cash and cash equivalents, available-for-sale securities, short-term investments, accounts receivable, loans receivable, debt maturing within one year, accounts payable, long-term debt and foreign exchange forwards contracts. The carrying value for cash and cash equivalents, accounts receivable, accounts payable and short-term investments approximate fair value because of the short-term nature of these instruments. The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of our remaining financial instruments at September 30, 2016 and December 31, 2015, respectively, consisted of the following:
(1) The carrying value of debt maturing within one year and long-term debt is presented net of debt issuance costs and includes any related discount or premium and unamortized deferred gains on terminated interest-rate swap agreements, as applicable. The methods and assumptions used to estimate fair value are as follows: Available-for-sale securities - The fair values of these investments were the quoted market prices for issues listed on securities exchanges. Debt maturing within one year and long-term debt - The fair values of our debt and other financing were determined using Level 2 inputs based on indicative market prices. Foreign exchange forward contracts - The fair values of forward contracts were estimated based on quoted forward foreign exchange prices at the reporting date. |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We operate globally, with manufacturing and distribution facilities in various countries around the world. We may reduce our exposure to fluctuations in the fair value and cash flows associated with changes in interest rates and foreign exchange rates by creating offsetting positions, including through the use of derivative financial instruments. If we use foreign currency-rate sensitive and interest-rate sensitive instruments to hedge a certain portion of our existing and forecasted transactions, we would expect that any gain or loss in value of the hedge instruments generally would be offset by decreases or increases in the value of the underlying forecasted transactions. As of September 30, 2016, we do not have any interest-rate swap agreements. We do not enter into derivative financial instruments for trading or speculative purposes, nor are we a party to leveraged derivatives. The master agreements governing our derivative contracts generally contain standard provisions that could trigger early termination of the contracts in certain circumstances, including if we were to merge with another entity and the creditworthiness of the surviving entity were to be "materially weaker" than that of Avon prior to the merger. Derivatives are recognized on the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments outstanding at September 30, 2016:
The following table presents the fair value of derivative instruments outstanding at December 31, 2015:
Interest Rate Risk A portion of our borrowings is subject to interest rate risk. In the past we have used interest-rate swap agreements, which effectively converted the fixed rate on long-term debt to a floating interest rate, to manage our interest rate exposure. The agreements were designated as fair value hedges. At times, we may de-designate the hedging relationship of a receive-fixed/pay-variable interest-rate swap agreement. In these cases, we enter into receive-variable/pay-fixed interest-rate swap agreements that are designated to offset the gain or loss on the de-designated contract. As of September 30, 2016, we do not have any interest-rate swap agreements. Approximately 5% and 2% of our debt portfolio at September 30, 2016 and December 31, 2015, respectively, was exposed to floating interest rates. In January 2013, we terminated eight of our interest-rate swap agreements previously designated as fair value hedges, with notional amounts totaling $1,000. As of the interest-rate swap agreements’ termination date, the aggregate favorable adjustment to the carrying value (deferred gain) of our debt was $90.4, which is being amortized as a reduction to interest expense over the remaining term of the underlying debt obligations. The net impact of the gain amortization was $11.7 and $19.1, respectively, for the three and nine months ended September 30, 2016, both of which included $9.2 related to the extinguishment of debt (see Note 16, Debt), and $3.6 and $10.9, respectively, for the three and nine months ended September 30, 2015. The interest-rate swap agreements were terminated in order to improve our capital structure, including increasing our ratio of fixed-rate debt. At September 30, 2016, the unamortized deferred gain associated with the January 2013 interest-rate swap termination was $15.6, of which $2.3 was classified within debt maturing within one year and $13.3 was classified within long-term debt in the Consolidated Balance Sheets. In March 2012, we terminated two of our interest-rate swap agreements previously designated as fair value hedges, with notional amounts totaling $350. As of the interest-rate swap agreements’ termination date, the aggregate favorable adjustment to the carrying value (deferred gain) of our debt was $46.1, which is being amortized as a reduction to interest expense over the remaining term of the underlying debt obligations through March 2019. The net impact of the gain amortization was $5.1 and $8.5, respectively, for the three and nine months ended September 30, 2016, both of which included $3.6 related to the extinguishment of debt (see Note 16, Debt), and $1.6 and $4.9, respectively, for the three and nine months ended September 30, 2015. The interest-rate swap agreements were terminated in order to increase our ratio of fixed-rate debt. At September 30, 2016, the unamortized deferred gain associated with the March 2012 interest-rate swap termination was $14.3, and was classified within long-term debt in the Consolidated Balance Sheets. Foreign Currency Risk We may use foreign exchange forward contracts to manage a portion of our foreign currency exchange rate exposures. At September 30, 2016, we had outstanding foreign exchange forward contracts with notional amounts totaling approximately $82.1 for various currencies. We may use foreign exchange forward contracts to manage foreign currency exposure of certain intercompany loans. These contracts are not designated as hedges. The change in fair value of these contracts is immediately recognized in earnings and substantially offsets the foreign currency impact recognized in earnings relating to the associated intercompany loans. During the three and nine months ended September 30, 2016, we recorded losses of $1.2 and $8.7, respectively, in other expense, net in the Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. Also during the three and nine months ended September 30, 2016, we recorded gains of $.1 and $5.5, respectively, related to the associated intercompany loans, caused by changes in foreign currency exchange rates. During the three and nine months ended September 30, 2015, we recorded a gain of $4.2 and a loss of $4.7, respectively, in other expense, net in the Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. During the three and nine months ended September 30, 2015, we recorded a loss of $7.3 and a gain of $.8, respectively, related to the associated intercompany loans, caused by changes in foreign currency exchange rates. |
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Debt Disclosure [Abstract] | |
Debt | DEBT Revolving Credit Facility In June 2015, the Company and Avon International Operations, Inc., a wholly-owned domestic subsidiary of the Company (“AIO”), entered into a five-year $400.0 senior secured revolving credit facility (the “2015 facility”). Borrowings under the 2015 facility bear interest, at our option, at a rate per annum equal to LIBOR plus 250 basis points or a floating base rate plus 150 basis points, in each case subject to adjustment based upon a leverage-based pricing grid. As of September 30, 2016, there were no amounts outstanding under the 2015 facility. The 2015 facility replaced the Company's previous $1 billion unsecured revolving credit facility (the "2013 facility"). In the second quarter of 2015, $2.5 was recorded for the write-off of issuance costs related to the 2013 facility. All obligations of AIO under the 2015 facility are (i) unconditionally guaranteed by each material domestic restricted subsidiary of the Company (other than AIO, the borrower), in each case, subject to certain exceptions and (ii) fully guaranteed on an unsecured basis by the Company. The obligations of AIO and the subsidiary guarantors are secured by first priority liens on and security interest in substantially all of the assets of AIO and the subsidiary guarantors, in each case, subject to certain exceptions. The 2015 facility will terminate in June 2020; provided, however, that it shall terminate on the 91st day prior to the maturity of the 5.75% Notes (as defined below), the 4.20% Notes (as defined below), the 6.50% Notes (as defined below) and the 4.60% Notes (as defined below), if on such 91st day, the applicable notes are not redeemed, repaid, discharged, defeased or otherwise refinanced in full. The 2015 facility contains affirmative and negative covenants, which are customary for secured financings of this type, as well as financial covenants (interest coverage and total leverage ratios). As of September 30, 2016, we were in compliance with our interest coverage and total leverage ratios under the 2015 facility. The amount of the facility available to be drawn down on is reduced by any standby letters of credit granted by AIO, which, as of September 30, 2016, was approximately $34. As of September 30, 2016, based on then applicable interest rates, the entire amount of the remaining 2015 facility, which is approximately $366, could have been drawn down without violating any covenant. Public Notes In March 2013, we issued, in a public offering, $250.0 principal amount of 2.375% Notes due March 15, 2016 (the "2.375% Notes"), $500.0 principal amount of 4.60% Notes due March 15, 2020 (the "4.60% Notes"), $500.0 principal amount of 5.00% Notes due March 15, 2023, and $250.0 principal amount of 6.95% Notes due March 15, 2043 (collectively, the "2013 Notes"). Interest on the 2013 Notes is payable semi-annually on March 15 and September 15 of each year. On August 10, 2015, we prepaid our 2.375% Notes at a prepayment price equal to 100% of the principal amount of $250.0, plus accrued interest of $3.1 and a make-whole premium of $5.0. In connection with the prepayment of our 2.375% Notes, we incurred a loss on extinguishment of debt of $5.5 in the third quarter of 2015 consisting of the $5.0 make-whole premium for the 2.375% Notes and the write-off of $.5 of debt issuance costs and discounts related to the initial issuance of the 2.375% Notes. The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the long-term credit ratings assigned to the 2013 Notes with S&P and Moody's. As described in the indenture, the interest rates on the 2013 Notes increase by .25% for each one-notch downgrade below investment grade on each of our long-term credit ratings assigned to the 2013 Notes by S&P or Moody's. These adjustments are limited to a total increase of 2% above the respective interest rates in effect on the date of issuance of the 2013 Notes. As a result of the long-term credit rating downgrades by S&P and Moody's since issuance of the 2013 Notes, the interest rates on these notes have increased by the maximum allowable increase. In August 2016, we completed cash tender offers which resulted in a reduction of principal of $108.6 of our 5.75% Notes due March 1, 2018 (the "5.75% Notes"), $73.8 of our 4.20% Notes due July 15, 2018 (the "4.20% Notes"), $68.1 of our 6.50% Notes due March 1, 2019 (the "6.50% Notes") and $50.1 of our 4.60% Notes. In connection with the cash tender offers, we incurred a gain on extinguishment of debt of $3.9 in the third quarter of 2016, consisting of a deferred gain of $12.8 associated with the March 2012 and January 2013 interest-rate swap agreement terminations (see Note 15, Derivative Instruments and Hedging Activities), partially offset by the $5.8 of early tender premium paid for the cash tender offers, $1.2 of a deferred loss associated with treasury lock agreements designated as cash flow hedges of the anticipated interest payments on the 5.75% Notes, $1.0 of deal costs and the write-off of $.9 of debt issuance costs and discounts related to the initial issuances of the notes that were the subject of the cash tender offers. The indentures governing our outstanding notes described above contain certain customary covenants and customary events of default and cross-default provisions. Further, we would be required to make an offer to repurchase all of our outstanding notes described above, with the exception of our 4.20% Notes, at a price equal to 101% of their aggregate principal amount plus accrued and unpaid interest in the event Avon undergoes a change of control and, at such time, the outstanding notes are rated below investment grade. Senior Secured Notes In August 2016, AIO issued, in a private placement exempt from registration under the Securities Act of 1933, as amended, $500.0 in aggregate principal amount of 7.875% Senior Secured Notes, which will mature on August 15, 2022 (the "Senior Secured Notes"). Interest on the Senior Secured Notes is payable semi-annually on February 15 and August 15 of each year. All obligations of AIO under the Senior Secured Notes are unconditionally guaranteed by each current and future wholly-owned domestic restricted subsidiary of the Company that is a guarantor under the 2015 facility and fully guaranteed on an unsecured basis by the Company. The obligations of AIO and the subsidiary guarantors are secured by first priority liens on and security interest in substantially all of the assets of AIO and the subsidiary guarantors, in each case, subject to certain exceptions. The indenture governing our Senior Secured Notes contains certain customary covenants and restrictions as well as customary events of default and cross-default provisions. Further, we would be required to make an offer to repurchase all of our Senior Secured Notes, at a price equal to 101% of their aggregate principal amount plus accrued and unpaid interest, in the event Avon undergoes a change of control. Long-Term Credit Ratings Our long-term credit ratings are: Moody’s ratings of Negative Outlook with Ba3 for corporate family debt, B1 for senior unsecured debt, and Ba1 for the Senior Secured Notes; S&P ratings of Stable Outlook with B for corporate family debt and BB- for the Senior Secured Notes; and Fitch rating of Negative Outlook with B+, each of which are below investment grade. We do not believe these long-term credit ratings will have a material impact on our near-term liquidity. However, any rating agency reviews could result in a change in outlook or downgrade, which could further limit our access to new financing, particularly short-term financing, reduce our flexibility with respect to working capital needs, affect the market price of some or all of our outstanding debt securities, and likely result in an increase in financing costs, and less favorable covenants and financial terms under our financing arrangements. |
Subsequent Events |
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Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS In October 2016, we repurchased $44.0 of our 6.50% Notes, $44.0 of our 4.20% Notes, $40.0 of our 4.60% Notes and $35.2 of our 5.75% Notes. The aggregate repurchase price was equal to the principal amount of the notes, plus a premium of approximately $6 and accrued interest of approximately $1. In connection with these repurchases of debt, we expect to incur a loss on extinguishment of debt of approximately $1 in the fourth quarter of 2016 consisting of the approximate $6 premium paid for the repurchases, approximately $1 for a deferred loss associated with treasury lock agreements designated as cash flow hedges of the anticipated interest payments on the 5.75% Notes and the write-off of debt issuance costs and discounts related to the initial issuance of the notes that were repurchased, partially offset by a deferred gain of approximately $6 associated with the January 2013 interest-rate swap agreement termination (see Note 15, Derivative Instruments and Hedging Activities). Also in October 2016, we issued notices of prepayment for the remaining principal amount of our 4.20% Notes and 5.75% Notes, and we will prepay our 4.20% Notes and 5.75% Notes in November 2016. The prepayment price will be equal to the remaining principal amount of $132.2 for our 4.20% Notes and $106.2 for our 5.75% Notes, plus a make-whole premium of approximately $13 for both series of notes and accrued interest of approximately $4 for both series of notes. In connection with the prepayment of our 4.20% Notes and 5.75% Notes, we expect to incur a loss on extinguishment of debt of approximately $3 in the fourth quarter of 2016 consisting of the $13 make-whole premium, the write-off of less than $1 of debt issuance costs and discounts related to the initial issuances of the notes that were prepaid and approximately $1 of a deferred loss associated with treasury lock agreements designated as cash flow hedges of the anticipated interest payments on the 5.75% Notes, partially offset by a deferred gain of approximately $11 associated with the January 2013 interest-rate swap agreement termination (see Note 15, Derivative Instruments and Hedging Activities). |
ACCOUNTING POLICIES (Policy) |
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Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | 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 2015 Annual Report on Form 10-K ("2015 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 2015 Form 10-K, portions of which (including Part I, Item 1. Business, and the following items from Part II of the Annual Report: Item 6. Selected Financial Data, Item 7. Management’s Discussion and Analysis and Item 8. Financial Statements and Supplementary Data) were recast in the Company's Current Report on Form 8-K filed with the SEC on October 11, 2016. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc. For interim consolidated financial statement purposes we provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense. In addition, our income tax provision is determined using an estimate of our consolidated annual effective tax rate, adjusted in the current period for discrete income tax items including:
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Venezuela | Venezuela Venezuela's restrictive foreign exchange control regulations and our Venezuelan operations' increasingly limited access to U.S. dollars resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and the U.S. dollar, and restricted our Venezuelan operations' ability to pay dividends and settle intercompany obligations. The severe currency controls imposed by the Venezuelan government significantly limited our ability to realize the benefits from earnings of our Venezuelan operations and access the resulting liquidity provided by those earnings. We expected that this other-than-temporary lack of exchangeability would continue for the foreseeable future, and as a result, we concluded that, effective March 31, 2016, we did not meet the accounting criteria of control in order to continue consolidating our Venezuelan operations and, as a result, account for our Venezuelan operations using the cost method of accounting. Our Consolidated Balance Sheets no longer includes the assets and liabilities of our Venezuelan operations, and we no longer include the results of our Venezuelan operations in our Consolidated Financial Statements. As a result of the change to the cost method of accounting, in the first quarter of 2016, we recorded a loss of approximately $120 in other expense, net. The loss was comprised of approximately $39 in net assets of the Venezuelan business and approximately $81 in accumulated foreign currency translation adjustments within AOCI (shareholders' deficit) associated with foreign currency changes before Venezuela was accounted for as a highly inflationary economy. The net assets of the Venezuelan business were comprised of inventories of approximately $24, property, plant and equipment, net of approximately $15, other assets of approximately $11, cash of approximately $5, accounts receivable of approximately $4, and accounts payable and accrued liabilities of approximately $20. In February 2015, the Venezuelan government announced the creation of a new foreign exchange system referred to as the SIMADI exchange ("SIMADI"). SIMADI began operating on February 12, 2015. There were multiple legal mechanisms in Venezuela to exchange currency. As SIMADI represented the rate which better reflected the economics of Avon Venezuela's business activity, in comparison to the other available exchange rates, we concluded that we should utilize the SIMADI exchange rate to remeasure our Venezuelan operations effective February 12, 2015. As a result of the change to the SIMADI rate, which caused the recognition of a devaluation of approximately 70% as compared to the exchange rate we had used previously, we recorded an after-tax benefit of approximately $3 (a benefit of approximately $4 in other expense, net, and a loss of approximately $1 in income taxes) in the first quarter of 2015, primarily reflecting the write-down of net monetary assets. In addition, as a result of using the historical U.S. dollar cost basis of non-monetary assets, such as inventories, these assets continued to be remeasured, following the change to the SIMADI rate, at the applicable rate at the time of their acquisition. The remeasurement of non-monetary assets at the historical U.S. dollar cost basis caused a disproportionate expense as these assets were consumed in operations, negatively impacting operating profit and net income by approximately $6 and approximately $17 during the three and nine months ended September 30, 2015, respectively. Also as a result of the change to the SIMADI rate, we determined that an adjustment of approximately $11 to cost of sales was needed to reflect certain non-monetary assets, primarily inventories, at their net realizable value, which was recorded in the first quarter of 2015. In addition, at February 12, 2015, we reviewed Avon Venezuela's long-lived assets to determine whether the carrying amount of the assets was recoverable. Based on our expected cash flows associated with the asset group, we determined that the carrying amount of the assets, carried at their historical U.S. dollar cost basis, was not recoverable. As such, an impairment charge of approximately $90 to selling, general and administrative expenses was needed to reflect the write-down of the long-lived assets to their estimated fair value of $15.7, which was recorded in the first quarter of 2015. The fair value of Avon Venezuela's long-lived assets was determined using both market and cost valuation approaches. The valuation analysis performed required several estimates, including market conditions and inflation rates. |
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New Accounting Standards | Accounting Standards to be Implemented In February 2016, the FASB issued ASU 2016-02, Leases, which requires all assets and liabilities arising from leases to be recognized in the statement of financial position. This standard is effective as of January 1, 2019. We are currently evaluating the effect that adopting this new accounting guidance will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, issued as a new Topic, Accounting Standards Codification Topic 606. The core principle of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which resulted in the standard being effective beginning in 2018, with early adoption permitted in the beginning of 2017. This standard has been amended, and as amended, can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently evaluating the effect that adopting this new accounting guidance will have on our consolidated financial statements. |
EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES (Tables) |
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Earnings Per Share Reconciliation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Basic and Diluted Earnings per Share |
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DISCONTINUED OPERATIONS (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major Classes of Financial Statement Components Comprising the Loss on Discontinued Operations | The major classes of financial statement components comprising the loss on discontinued operations, net of tax for North America are shown below:
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INVENTORIES (Tables) |
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Components of Inventories |
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EMPLOYEE BENEFIT PLANS (Tables) |
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General Discussion of Pension and Other Postretirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost |
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) | The tables below present the changes in AOCI by component and the reclassifications out of AOCI for the three and nine months ended September 30, 2016 and 2015:
(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. |
SEGMENT INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Measurement Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue and Operating Profit by Reporting Segment | Summarized financial information concerning our reportable segments was as follows:
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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Prepaid Expenses and Other | At September 30, 2016 and December 31, 2015, prepaid expenses and other included the following:
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Components of Other Assets | At September 30, 2016 and December 31, 2015, other assets included the following:
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RESTRUCTURING INITIATIVES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transformation Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The liability balance for the Transformation Plan as of September 30, 2016 is as follows:
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Restructuring and Related Costs | The following table presents the restructuring charges incurred to date, under the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plan:
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Schedule of Restructuring Charges Reportable by Business Segment | of initiatives under the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plan, by reportable segment were as follows:
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Other Restructuring Initiatives 2015 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The liability balance, which consists of employee-related costs, for these various restructuring initiatives as of September 30, 2016 is as follows:
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Schedule of Restructuring Charges Reportable by Business Segment |
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GOODWILL (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill
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FAIR VALUE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016:
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2015:
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Fair Value of Financial Instruments | The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of our remaining financial instruments at September 30, 2016 and December 31, 2015, respectively, consisted of the following:
(1) The carrying value of debt maturing within one year and long-term debt is presented net of debt issuance costs and includes any related discount or premium and unamortized deferred gains on terminated interest-rate swap agreements, as applicable. |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments Outstanding | Derivatives are recognized on the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments outstanding at September 30, 2016:
The following table presents the fair value of derivative instruments outstanding at December 31, 2015:
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ACCOUNTING POLICIES (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
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Mar. 31, 2016 |
Sep. 30, 2015 |
Mar. 31, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
Feb. 12, 2015 |
|
Accounting Policies [Line Items] | |||||||
Loss from deconsolidation of Venezuela | $ 120.5 | $ 0.0 | |||||
Venezuela foreign currency devaluation | 70.00% | ||||||
Exchange rate net charges, total | $ (3.0) | ||||||
Exchange rate net charges on other expense, net | (4.0) | ||||||
Exchange rate net charges on income taxes | 1.0 | ||||||
Venezuelan non-monetary assets remeasurement in operating profit | $ 6.0 | $ 17.0 | |||||
Charge for Venezuelan non-monetary assets to their net realizable value | 11.0 | ||||||
Property, plant and equipment at carrying value | $ 746.7 | $ 766.9 | |||||
Avon Venezuela [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | $ 39.0 | ||||||
Loss from foreign currency translation adjustments | 81.0 | ||||||
Impairment of Venezuela long-lived assets | 90.0 | ||||||
Property, plant and equipment at carrying value | $ 15.7 | ||||||
Avon Venezuela [Member] | Property, Plant and Equipment [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 24.0 | ||||||
Avon Venezuela [Member] | Other Assets [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 15.0 | ||||||
Avon Venezuela [Member] | Cash [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 11.0 | ||||||
Avon Venezuela [Member] | Accounts Receivable [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 5.0 | ||||||
Avon Venezuela [Member] | Accounts Payable [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 4.0 | ||||||
Avon Venezuela [Member] | Accrued Liabilities [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Net assets of the Venezuelan business | 20.0 | ||||||
Avon Venezuela [Member] | Other Expense, Net [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Loss from deconsolidation of Venezuela | $ 120.0 |
EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share Reconciliation [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 15,000,000 | |||
Stock options excluded from computation of earnings per share due to net loss, including options with higher exercise prices than average market price | 11,900,000 | 14,200,000 | 13,200,000 | |
Converted Series C Convertible Preferred Stock (in shares) | 87,100,000 | 87,051,524 | ||
Stock repurchased during the period, shares | 1,300,000 | 400,000 | ||
Stock repurchased during the period, value | $ 5.3 | $ 3.0 |
EARNINGS (LOSS) PER SHARE AND SHARE REPURCHASES (Components of Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Numerator from continuing operations: [Abstract] | ||||
Income (loss) from continuing operations, less amounts attributable to noncontrolling interests | $ 36.7 | $ (668.0) | $ (84.0) | $ (783.5) |
Less: (Earnings) loss allocated to participating securities | (0.5) | 10.7 | 1.1 | 12.3 |
Less: Earnings allocated to convertible preferred stock | (6.1) | 0.0 | (12.8) | 0.0 |
Earnings (loss) from continuing operations allocated to common shareholders | 30.1 | (657.3) | (95.7) | (771.2) |
Numerator from discontinued operations: | ||||
Loss from discontinued operations | (0.7) | (29.0) | (12.9) | (32.0) |
Less: Loss allocated to participating securities | 0.0 | 0.8 | 0.2 | 1.5 |
Loss allocated to common shareholders | (0.7) | (28.2) | (12.7) | (30.5) |
Numerator attributable to Avon: | ||||
Net income (loss) attributable to Avon | 36.0 | (697.0) | (96.9) | (815.5) |
Less: (Earnings) loss allocated to participating securities | (0.5) | 11.1 | 1.3 | 12.8 |
Less: Earnings allocated to convertible preferred stock | (6.1) | 0.0 | (12.8) | 0.0 |
Earnings (loss) allocated to common shareholders | $ 29.4 | $ (685.9) | $ (108.4) | $ (802.7) |
Denominator: | ||||
Basic EPS weighted-average shares outstanding | 437.4 | 435.4 | 436.7 | 435.1 |
Diluted effect of assumed conversion of stock options (in shares) | 0.0 | 0.0 | 0.0 | 0.0 |
Diluted effect of assumed conversion of preferred stock (in shares) | 0.0 | 0.0 | 0.0 | 0.0 |
Diluted EPS adjusted weighted-average shares outstanding | 437.4 | 435.4 | 436.7 | 435.1 |
Earnings (Loss) per Common Share from continuing operations: | ||||
Basic (in usd per share) | $ 0.07 | $ (1.51) | $ (0.22) | $ (1.77) |
Diluted (in usd per share) | 0.07 | (1.51) | (0.22) | (1.77) |
Loss per Common Share from discontinued operations: | ||||
Basic (in usd per share) | 0.00 | (0.06) | (0.03) | (0.07) |
Diluted (in usd per share) | 0.00 | (0.06) | (0.03) | (0.07) |
Earnings (Loss) per Common Share attributable to Avon: | ||||
Basic (in usd per share) | 0.07 | (1.51) | (0.22) | (1.77) |
Diluted (in usd per share) | $ 0.07 | $ (1.51) | $ (0.22) | $ (1.77) |
DISCONTINUED OPERATIONS - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Dec. 17, 2015 |
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Mar. 31, 2013 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Sale of business, expenses | $ 5.0 | |||||||
Gain on sale of business, before tax | $ 0.0 | $ 46.2 | $ 0.0 | 44.9 | ||||
New Avon [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Implied value of ownership interests | $ 43.0 | |||||||
Other Expense, Net [Member] | New Avon [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Loss from equity method investment | 4.5 | 9.0 | ||||||
North America Segment [Member] | Discontinued Operations [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from issuance of convertible preferred stock | $ 435.0 | |||||||
Proceeds for issuance of membership interests | $ 170.0 | |||||||
Ownership interest not retained | 80.10% | |||||||
Cash contributed for ownership interest | $ 100.0 | |||||||
Percentage of ownership interest retained | 19.90% | |||||||
Cash received as part of an estimate of working capital adjustment | $ 6.0 | |||||||
Additional loss on sale of discontinued operations, before tax (approximately) | 1.0 | 16.0 | ||||||
Estimated loss on sale of discontinued operations, net of tax | (0.3) | 340.0 | $ 0.0 | 16.0 | 0.0 | $ 356.0 | ||
Estimated loss on sale of discontinued operations, before tax | $ 340.0 | $ 346.0 | ||||||
Additional loss on sale of discontinued operations, net of tax (approximately) | $ 1.0 | $ 6.0 | ||||||
Liz Earle [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from sale of business | 215.0 | |||||||
Gain on sale of business, before tax | 44.9 | |||||||
Gain on sale of business, after tax | $ 51.6 | |||||||
Two Point Three Seven Five Percent Notes, Due March Two Thousand Sixteen [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 250.0 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.375% |
DISCONTINUED OPERATIONS - Major Classes of Financial Statement Components Comprising the Loss on Discontinued Operations, Net of Tax in North America (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss from discontinued operations, net of tax | $ (0.7) | $ (29.0) | $ (12.9) | $ (32.0) | ||
North America Segment [Member] | Discontinued Operations [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total revenue | 0.0 | 230.7 | 135.2 | 731.3 | ||
Cost of sales | 0.0 | 93.7 | 53.2 | 291.6 | ||
Selling, general and administrative expenses | 1.0 | 155.9 | 90.0 | 461.2 | ||
Operating loss | (1.0) | (18.9) | (8.0) | (21.5) | ||
Other income | 0.0 | 0.6 | ||||
Other (expense) items | (4.3) | (5.7) | ||||
Gain (loss) on sale of discontinued operations, before tax | 0.3 | $ (340.0) | 0.0 | (16.0) | 0.0 | $ (356.0) |
Loss from discontinued operations, before tax | (0.7) | (23.2) | (23.4) | (27.2) | ||
Income taxes | 0.0 | (5.8) | 10.5 | (4.8) | ||
Loss from discontinued operations, net of tax | $ (0.7) | $ (29.0) | $ (12.9) | $ (32.0) |
RELATED PARTY TRANSACTIONS (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
Related Party Transaction [Line Items] | ||
Standby letters of credit, recorded liability | $ 34.0 | $ 34.0 |
Equity Method Investee [Member] | ||
Related Party Transaction [Line Items] | ||
Standby letters of credit, recorded liability | 2.1 | 2.1 |
Equity Method Investee [Member] | Transition Services Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Selling, general and administrative expenses | 10.2 | 25.1 |
Revenue from related party supply agreement | 6.9 | 20.4 |
Gross profit from related party supply agreement | 0.5 | 1.4 |
Purchases from related party supply agreement | 1.0 | 4.6 |
Transformation Plan [Member] | ||
Related Party Transaction [Line Items] | ||
Selling, general and administrative expenses | $ (0.8) | $ (1.8) |
INVENTORIES (Components of Inventories) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory [Line Items] | ||
Raw materials | $ 208.1 | $ 180.5 |
Finished goods | 498.3 | 443.5 |
Total | $ 706.4 | $ 624.0 |
EMPLOYEE BENEFIT PLANS (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Pension Benefits U.S. Plans [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Service cost | $ 1.3 | $ 3.3 | $ 4.9 | $ 9.8 | |||
Interest cost | 0.8 | 6.2 | 5.9 | 18.7 | |||
Expected return on plan assets | (1.0) | (8.3) | (7.2) | (24.9) | |||
Amortization of prior service credit | 0.0 | (0.2) | (0.1) | (0.6) | |||
Amortization of net actuarial losses | 1.5 | 11.6 | 9.2 | 34.7 | |||
Settlements/curtailments | 0.0 | 23.8 | 0.1 | 23.8 | |||
Net periodic benefit costs | [1] | 2.6 | 36.4 | 12.8 | 61.5 | ||
Pension Benefits Non-U.S. Plans [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Service cost | 1.2 | 1.2 | 3.8 | 4.1 | |||
Interest cost | 4.9 | 5.9 | 16.6 | 17.5 | |||
Expected return on plan assets | (7.5) | (9.2) | (25.0) | (27.4) | |||
Amortization of prior service credit | 0.0 | 0.0 | 0.0 | 0.0 | |||
Amortization of net actuarial losses | 1.5 | 2.1 | 4.9 | 6.3 | |||
Settlements/curtailments | 0.0 | 0.0 | 0.0 | 0.0 | |||
Net periodic benefit costs | [1] | 0.1 | 0.0 | 0.3 | 0.5 | ||
Postretirement Benefits [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Service cost | 0.0 | 0.2 | 0.1 | 0.5 | |||
Interest cost | 0.3 | 0.9 | 1.2 | 2.7 | |||
Expected return on plan assets | 0.0 | 0.0 | 0.0 | 0.0 | |||
Amortization of prior service credit | (0.2) | (1.0) | (1.1) | (3.0) | |||
Amortization of net actuarial losses | 0.1 | 0.4 | 0.2 | 1.4 | |||
Settlements/curtailments | 0.0 | 0.0 | 0.0 | 0.0 | |||
Net periodic benefit costs | [1] | $ 0.2 | 0.5 | 0.4 | 1.6 | ||
Discontinued Operations [Member] | Pension Benefits U.S. Plans [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net periodic benefit costs | $ 26.3 | $ 4.4 | $ 43.5 | ||||
|
EMPLOYEE BENEFIT PLANS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Mar. 01, 2016 |
||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Pension settlement charge | $ 23.8 | |||||||
United States Pension Plan of US Entity, Defined Benefit [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Net periodic benefit costs | [1] | $ 2.6 | 36.4 | $ 12.8 | $ 61.5 | |||
Postretirement Benefits [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Net periodic benefit costs | [1] | $ 0.2 | 0.5 | 0.4 | 1.6 | |||
Discontinued Operations [Member] | United States Pension Plan of US Entity, Defined Benefit [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Net periodic benefit costs | $ 26.3 | 4.4 | $ 43.5 | |||||
Pension liabilities | $ 499.6 | |||||||
Assets held by the U.S. defined pension plan | 355.9 | |||||||
Other postretirement liabilities | $ 60.4 | |||||||
UNITED STATES | Postretirement Benefits [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Employer contribution | 26.0 | |||||||
Estimated contributions for the remainder of fiscal year | 1.0 | |||||||
Non-US [Member] | Postretirement Benefits [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Employer contribution | 14.0 | |||||||
Non-US [Member] | Minimum [Member] | Postretirement Benefits [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Estimated contributions for the remainder of fiscal year | 6.0 | |||||||
Non-US [Member] | Maximum [Member] | Postretirement Benefits [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Estimated contributions for the remainder of fiscal year | $ 11.0 | |||||||
|
SERIES C CONVERTIBLE PREFERRED STOCK (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 01, 2016
USD ($)
shares
|
Sep. 30, 2016
USD ($)
$ / shares
shares
|
Sep. 30, 2016
USD ($)
director
$ / shares
shares
|
|
Class of Stock [Line Items] | |||
Dividend rate | 1.25% | ||
Dividends, Preferred Stock | $ 0.0 | ||
Converted Series C Convertible Preferred Stock (in shares) | shares | 87,100,000 | 87,051,524 | |
Liquidation preference (usd per share) | $ / shares | $ 1,000 | $ 1,000 | |
Aggregate liquidation preference | $ 435.0 | $ 435.0 | |
Initial conversion price (usd per share) | $ / shares | $ 5.00 | $ 5.00 | |
Convertible stock, percentage of shares of common stock outstanding | 19.99% | 19.99% | |
Conversion of stock, stock price trigger | $ / shares | $ 10.00 | ||
Calculation of share repurchase price in the event of default, percentage of liquidation preference | 100.00% | 100.00% | |
Minimum [Member] | |||
Class of Stock [Line Items] | |||
Dividend rate | 1.25% | ||
Maximum [Member] | |||
Class of Stock [Line Items] | |||
Dividend rate | 5.00% | ||
Voting rights on director elections, number of directors | director | 3 | ||
Private Placement [Member] | |||
Class of Stock [Line Items] | |||
Financial advisory fees and legal expenses | $ 8.7 | $ 8.7 | |
Series C Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Shares issued | shares | 435,000 | ||
Shares issued, value | $ 435.0 | ||
Dividends Payable | $ 12.8 | $ 12.8 |
CONTINGENCIES (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loss Contingencies [Line Items] | ||||
Judicial Deposit | $ 68.3 | $ 68.3 | $ 33.3 | |
Assessment for 2012 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Assessment of contingencies, including penalties and accruing interest | 331.0 | 331.0 | ||
Assessment for 2002 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Assessment of contingencies, including penalties and accruing interest, reduced | 29.0 | 29.0 | ||
Assessment of contingencies, prior to reductions | 68.0 | 68.0 | ||
IPI Tax on Cosmetics [Member] | ||||
Loss Contingencies [Line Items] | ||||
Estimated Litigation Liability | 105.0 | 105.0 | ||
Judicial Deposit | 68.0 | 68.0 | ||
Net IPI liability | 37.0 | 37.0 | ||
Derivative actions [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | (4.0) | |||
Litigation settlement amount, paid by insurance | 4.0 | |||
Brockton [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | 62.0 | |||
Litigation settlement amount, paid by insurance | 60.0 | |||
Payments for legal settlements | $ 2.0 | |||
ERISA [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | 6.0 | |||
Estimated Litigation Liability | 1.0 | 1.0 | ||
Insurance Settlements Receivable, Current | $ 5.0 | $ 5.0 | ||
DOJ [Member] | FCPA [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | $ 68.0 | |||
SEC [Member] | FCPA [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | $ 67.0 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Tables (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Dec. 31, 2014 |
||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | $ 120.5 | $ 0.0 | |||||||||||
Change in derivative losses on cash flow hedges, tax | $ 0.0 | $ 0.0 | 0.0 | 0.0 | |||||||||
Amortization of net actuarial loss and prior service cost, tax | 0.2 | 0.3 | 0.6 | 0.9 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (775.5) | (775.5) | $ (1,056.4) | ||||||||||
Foreign Currency Gain (Loss) [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Other comprehensive (loss) income other than reclassifications | 15.4 | (149.5) | 31.4 | (254.2) | |||||||||
Reclassifications into earnings: | |||||||||||||
Derivative losses on cash flow hedges, net of tax | [1] | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Amortization of net actuarial loss and prior service cost, net of tax | [2] | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Total reclassifications into earnings | 0.0 | 0.0 | 71.3 | 0.0 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (847.3) | (931.2) | (847.3) | (931.2) | $ (862.7) | (950.0) | $ (781.7) | $ (677.0) | |||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Other comprehensive (loss) income other than reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Reclassifications into earnings: | |||||||||||||
Derivative losses on cash flow hedges, net of tax | [1] | 1.8 | 0.5 | 2.7 | 1.4 | ||||||||
Amortization of net actuarial loss and prior service cost, net of tax | [2] | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Total reclassifications into earnings | 1.8 | 0.5 | 2.7 | 1.4 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1.4 | (1.8) | 1.4 | (1.8) | (0.4) | (1.3) | (2.3) | (3.2) | |||||
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Other comprehensive (loss) income other than reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Reclassifications into earnings: | |||||||||||||
Derivative losses on cash flow hedges, net of tax | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Amortization of net actuarial loss and prior service cost, net of tax | [2] | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Total reclassifications into earnings | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (4.3) | (4.3) | (4.3) | (4.3) | (4.3) | (4.3) | (4.3) | (4.3) | |||||
Accumulated Defined Benefit Plans Adjustment [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Other comprehensive (loss) income other than reclassifications | 0.7 | (9.4) | (10.6) | (13.0) | |||||||||
Reclassifications into earnings: | |||||||||||||
Derivative losses on cash flow hedges, net of tax | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||
Amortization of net actuarial loss and prior service cost, net of tax | [2] | 2.9 | 39.4 | 12.4 | 66.0 | ||||||||
Total reclassifications into earnings | 2.9 | 39.4 | 282.4 | 66.0 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (138.8) | (480.1) | (138.8) | (480.1) | (142.4) | (410.6) | (510.1) | (533.1) | |||||
AOCI Including Portion Attributable to Noncontrolling Interest [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Other comprehensive (loss) income other than reclassifications | 16.1 | (158.9) | 20.8 | (267.2) | |||||||||
Reclassifications into earnings: | |||||||||||||
Derivative losses on cash flow hedges, net of tax | 1.8 | 0.5 | 2.7 | 1.4 | |||||||||
Amortization of net actuarial loss and prior service cost, net of tax | [2] | 2.9 | 39.4 | 12.4 | 66.0 | ||||||||
Total reclassifications into earnings | 4.7 | 39.9 | 356.4 | 67.4 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (989.0) | $ (1,417.4) | (989.0) | $ (1,417.4) | $ (1,009.8) | $ (1,366.2) | $ (1,298.4) | $ (1,217.6) | |||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign Currency Gain (Loss) [Member] | |||||||||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 81.3 | ||||||||||||
Separation of North America, net of tax of $10.2 | (10.0) | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | |||||||||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 0.0 | ||||||||||||
Separation of North America, net of tax of $10.2 | 0.0 | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||||||||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 0.0 | ||||||||||||
Separation of North America, net of tax of $10.2 | 0.0 | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | |||||||||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 0.8 | ||||||||||||
Separation of North America, net of tax of $10.2 | 269.2 | ||||||||||||
Separation of North America, tax | 10.2 | ||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | AOCI Including Portion Attributable to Noncontrolling Interest [Member] | |||||||||||||
Reclassifications into earnings: | |||||||||||||
Deconsolidation of Venezuela, net of tax of $0.0 | 82.1 | ||||||||||||
Separation of North America, net of tax of $10.2 | $ 259.2 | ||||||||||||
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Foreign Exchange Gains (Losses) From Translation Of Actuarial Losses Prior Service Credit And Transition Obligation | $ (1.9) | $ (7.3) | $ (12.8) | $ (15.6) |
SEGMENT INFORMATION (Total Revenue and Operating Profit by Reporting Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,408.8 | $ 1,436.2 | $ 4,149.6 | $ 4,553.2 |
Operating Profit | 112.0 | 45.3 | 214.9 | 102.1 |
Proceeds from Legal Settlements | 27.2 | 0.0 | 27.2 | 0.0 |
Pension settlement charge | 0.0 | (6.2) | 0.0 | (6.2) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,400.8 | 1,423.8 | 4,111.9 | 4,471.9 |
Operating Profit | 177.1 | 155.7 | 503.4 | 528.6 |
Other Operating Segments and Business Activities [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 8.0 | 12.4 | 37.7 | 81.3 |
Operating Profit | (0.8) | 3.3 | 4.1 | 13.3 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated global expenses | (77.5) | (103.7) | (249.6) | (287.1) |
CTI restructuring initiatives | (14.0) | 1.9 | (70.2) | (28.2) |
Venezuelan special items | 0.0 | (5.7) | 0.0 | (118.3) |
Europe Middle East & Africa [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 476.4 | 497.5 | 1,517.7 | 1,559.8 |
Operating Profit | 66.2 | 69.5 | 218.3 | 206.6 |
South Latin America [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 594.8 | 570.8 | 1,556.9 | 1,769.2 |
Operating Profit | 73.8 | 52.8 | 157.9 | 189.7 |
North Latin America [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 196.8 | 209.7 | 625.9 | 675.0 |
Operating Profit | 24.4 | 17.9 | 85.0 | 78.1 |
Asia Pacific [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 132.8 | 145.8 | 411.4 | 467.9 |
Operating Profit | $ 12.7 | $ 15.5 | $ 42.2 | $ 54.2 |
SUPPLEMENTAL BALANCE SHEET INFORMATION (Components of Prepaid Expenses and Other) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | |||||
Prepaid taxes and tax refunds receivable | $ 89.7 | $ 96.3 | |||
Receivables other than trade | 73.2 | 69.6 | |||
Legal settlement | 27.2 | [1] | 0.0 | ||
Prepaid brochure costs, paper and other literature | 78.5 | 64.5 | |||
Other | 54.9 | 65.7 | |||
Prepaid expenses and other | $ 323.5 | $ 296.1 | |||
|
SUPPLEMENTAL BALANCE SHEET INFORMATION (Components of Other Assets) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Assets, Noncurrent [Abstract] | ||
Long-term receivables | $ 159.1 | $ 128.8 |
Deferred tax assets | 191.3 | 172.8 |
Capitalized software | 83.5 | 82.4 |
Judicial deposit for Brazil IPI tax on cosmetics (Note 8) | 68.3 | 33.3 |
Investment in New Avon | 33.5 | 0.0 |
Investments | 37.5 | 36.3 |
Tooling (plates and molds associated with our beauty products) | 15.1 | 15.3 |
Other | 30.9 | 21.1 |
Other assets | $ 619.2 | $ 490.0 |
SUPPLEMENTAL BALANCE SHEET INFORMATION (Narrative) (Details) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
SUPPLEMENTAL BALANCE SHEET INFORMATION [Abstract] | |
Gain (Loss) Related to Litigation Settlement | $ 27.2 |
Gain (Loss) Related to Litigation Settlement, After Tax | $ 27.2 |
RESTRUCTURING INITIATIVES (Narrative) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Jan. 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2016 |
|
Transformation Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected annualized savings before taxes | $ 350.0 | |||||
Number of years to realized cost savings | 3 years | |||||
Recorded total costs to implement restructuring initiatives | $ 93.9 | $ 93.9 | ||||
Restructuring charges and other costs | 14.0 | 71.5 | ||||
Estimated charges to be incurred on approved initiatives | 10.6 | 10.6 | ||||
Accelerated depreciation | 0.1 | 1.3 | ||||
Expected total restructuring charges and other costs | 99.3 | 99.3 | ||||
Transformation Plan [Member] | Employee-Related Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 11.8 | 61.7 | ||||
Estimated charges to be incurred on approved initiatives | 6.3 | 6.3 | ||||
Expected total restructuring charges and other costs | 89.4 | 89.4 | ||||
Transformation Plan [Member] | Contract Terminations/ Other [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 1.0 | 5.6 | ||||
Estimated charges to be incurred on approved initiatives | 2.3 | 2.3 | ||||
Expected total restructuring charges and other costs | 7.9 | 7.9 | ||||
Transformation Plan [Member] | Professional Service Fees [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 1.1 | 2.6 | ||||
Transformation Plan [Member] | Inventory Write Offs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 0.3 | |||||
Transformation Plan [Member] | Forecast [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected annualized savings before taxes | $ 25.0 | |||||
Transformation Plan [Member] | Minimum [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated charges to be incurred on approved initiatives | 20.0 | 20.0 | ||||
Effect on future earnings for restructuring initiatives approved to-date | 95.0 | |||||
Expected total restructuring charges and other costs | 95.0 | 95.0 | ||||
Transformation Plan [Member] | Maximum [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Estimated charges to be incurred on approved initiatives | 30.0 | 30.0 | ||||
Effect on future earnings for restructuring initiatives approved to-date | 105.0 | |||||
Expected total restructuring charges and other costs | 105.0 | 105.0 | ||||
Transformation Plan [Member] | Supply Chain [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected annualized savings before taxes | $ 200.0 | |||||
Transformation Plan [Member] | Other Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected annualized savings before taxes | $ 150.0 | |||||
Other Restructuring Initiatives 2015 [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected annualized savings before taxes | 30.0 | |||||
Restructuring charges and other costs | (0.8) | |||||
Other Restructuring Initiatives 2015 [Member] | Employee-Related Costs [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | (0.1) | $ (2.0) | (0.8) | $ 22.7 | ||
Other Restructuring Initiatives 2015 [Member] | Professional Service Fees [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 1.4 | 6.8 | ||||
Other Restructuring Initiatives [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | 0.1 | $ (1.3) | (0.5) | $ (1.3) | ||
Selling, General and Administrative Expenses [Member] | Transformation Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | $ 14.0 | 71.2 | ||||
Cost of Sales [Member] | Transformation Plan [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges and other costs | $ 0.3 |
RESTRUCTURING INITIATIVES RESTRUCTURING INITIATIVES (Liability Balances) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Transformation Plan [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | $ 21.4 |
2016 charges | 76.2 |
Adjustments | (8.9) |
Cash payments | (25.4) |
Foreign exchange | 0.2 |
Balance at September 30, 2016 | 63.5 |
Employee-Related Costs [Member] | Transformation Plan [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 21.4 |
2016 charges | 70.6 |
Adjustments | (8.9) |
Cash payments | (24.3) |
Foreign exchange | 0.2 |
Balance at September 30, 2016 | 59.0 |
Employee-Related Costs [Member] | Other Restructuring Initiatives 2015 [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 4.0 |
2016 charges | 0.0 |
Adjustments | (0.8) |
Cash payments | (1.9) |
Foreign exchange | 0.0 |
Balance at September 30, 2016 | 1.3 |
Contract Terminations/ Other [Member] | Transformation Plan [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2015 | 0.0 |
2016 charges | 5.6 |
Adjustments | 0.0 |
Cash payments | (1.1) |
Foreign exchange | 0.0 |
Balance at September 30, 2016 | $ 4.5 |
RESTRUCTURING INITIATIVES Restructuring Initiatives by Charge Type (Details) - Transformation Plan [Member] $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges and other costs incurred to-date | $ 88.7 |
Estimated charges to be incurred on approved initiatives | 10.6 |
Expected total restructuring charges and other costs | 99.3 |
Employee-Related Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges and other costs incurred to-date | 83.1 |
Estimated charges to be incurred on approved initiatives | 6.3 |
Expected total restructuring charges and other costs | 89.4 |
Contract Terminations/ Other [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges and other costs incurred to-date | 5.6 |
Estimated charges to be incurred on approved initiatives | 2.3 |
Expected total restructuring charges and other costs | 7.9 |
Accumulated Foreign Currency Adjustment Write-offs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges and other costs incurred to-date | 0.0 |
Estimated charges to be incurred on approved initiatives | 2.0 |
Expected total restructuring charges and other costs | $ 2.0 |
RESTRUCTURING INITIATIVES RESTRUCTURING INITIATIVES (Charges Reportable by Business Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Transformation Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | $ 12.8 | $ 7.4 | $ 47.1 | $ 21.4 |
Restructuring charges and other costs incurred to-date | 88.7 | |||
Estimated charges to be incurred on approved initiatives | 10.6 | |||
Expected total restructuring charges and other costs | 99.3 | |||
Transformation Plan [Member] | South Latin America [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.3 | 1.0 | 12.1 | 0.0 |
Restructuring charges and other costs incurred to-date | 13.4 | |||
Estimated charges to be incurred on approved initiatives | 0.1 | |||
Expected total restructuring charges and other costs | 13.5 | |||
Transformation Plan [Member] | North Latin America [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 1.6 | (0.4) | 3.3 | 0.0 |
Restructuring charges and other costs incurred to-date | 4.5 | |||
Estimated charges to be incurred on approved initiatives | 0.0 | |||
Expected total restructuring charges and other costs | 4.5 | |||
Transformation Plan [Member] | Europe Middle East & Africa [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 9.4 | (0.1) | 21.9 | 0.0 |
Restructuring charges and other costs incurred to-date | 31.2 | |||
Estimated charges to be incurred on approved initiatives | 1.9 | |||
Expected total restructuring charges and other costs | 33.1 | |||
Transformation Plan [Member] | Asia Pacific [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.9 | 2.9 | 4.7 | 0.0 |
Restructuring charges and other costs incurred to-date | 8.5 | |||
Estimated charges to be incurred on approved initiatives | 2.4 | |||
Expected total restructuring charges and other costs | 10.9 | |||
Transformation Plan [Member] | Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.6 | 4.0 | 5.1 | 21.4 |
Restructuring charges and other costs incurred to-date | 31.1 | |||
Estimated charges to be incurred on approved initiatives | 6.2 | |||
Expected total restructuring charges and other costs | 37.3 | |||
Other Restructuring Initiatives 2015 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | (0.1) | (0.2) | (0.5) | 22.1 |
Restructuring charges and other costs incurred to-date | 21.3 | |||
Other Restructuring Initiatives 2015 [Member] | South Latin America [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.0 | 0.0 | 0.0 | 2.7 |
Restructuring charges and other costs incurred to-date | 2.7 | |||
Other Restructuring Initiatives 2015 [Member] | North Latin America [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.0 | 0.0 | 0.0 | 0.2 |
Restructuring charges and other costs incurred to-date | 0.2 | |||
Other Restructuring Initiatives 2015 [Member] | Europe Middle East & Africa [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | (0.1) | 0.0 | 0.0 | 4.2 |
Restructuring charges and other costs incurred to-date | 4.1 | |||
Other Restructuring Initiatives 2015 [Member] | Asia Pacific [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.0 | 0.0 | (0.1) | 5.8 |
Restructuring charges and other costs incurred to-date | 5.7 | |||
Other Restructuring Initiatives 2015 [Member] | Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges and other costs | 0.0 | $ (0.2) | $ (0.4) | $ 9.2 |
Restructuring charges and other costs incurred to-date | $ 8.6 |
GOODWILL (Schedule of Goodwill) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Goodwill [Line Items] | |
Gross balance at Period Start | $ 181.6 |
Accumulated impairments | (89.3) |
Net balance at Period Start | 92.3 |
Foreign exchange | 5.8 |
Gross balance at Period End | 187.4 |
Accumulated impairments | (89.3) |
Net balance at Period End | 98.1 |
Europe Middle East & Africa [Member] | |
Goodwill [Line Items] | |
Gross balance at Period Start | 27.7 |
Accumulated impairments | (6.9) |
Net balance at Period Start | 20.8 |
Foreign exchange | 0.2 |
Gross balance at Period End | 27.9 |
Accumulated impairments | (6.9) |
Net balance at Period End | 21.0 |
South Latin America [Member] | |
Goodwill [Line Items] | |
Gross balance at Period Start | 68.9 |
Accumulated impairments | 0.0 |
Net balance at Period Start | 68.9 |
Foreign exchange | 5.6 |
Gross balance at Period End | 74.5 |
Accumulated impairments | 0.0 |
Net balance at Period End | 74.5 |
Asia Pacific [Member] | |
Goodwill [Line Items] | |
Gross balance at Period Start | 85.0 |
Accumulated impairments | (82.4) |
Net balance at Period Start | 2.6 |
Foreign exchange | 0.0 |
Gross balance at Period End | 85.0 |
Accumulated impairments | (82.4) |
Net balance at Period End | $ 2.6 |
FAIR VALUE (Fair Value Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 2.8 | $ 2.8 |
Total Assets | 2.9 | 4.0 |
Total Liabilities | 6.6 | 1.1 |
Foreign Exchange Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forward contracts | 0.1 | 1.2 |
Foreign exchange forward contracts | 6.6 | 1.1 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 2.8 | 2.8 |
Total Assets | 2.8 | 2.8 |
Total Liabilities | 0.0 | 0.0 |
Level 1 [Member] | Foreign Exchange Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forward contracts | 0.0 | 0.0 |
Foreign exchange forward contracts | 0.0 | 0.0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0.0 | 0.0 |
Total Assets | 0.1 | 1.2 |
Total Liabilities | 6.6 | 1.1 |
Level 2 [Member] | Foreign Exchange Forward Contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forward contracts | 0.1 | 1.2 |
Foreign exchange forward contracts | $ 6.6 | $ 1.1 |
FAIR VALUE (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Available-for-sale securities | $ 2.8 | $ 2.8 | |||
Carrying Amount [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Available-for-sale securities | 2.8 | 2.8 | |||
Debt maturing within one year | [1] | (111.3) | (55.2) | ||
Long-term debt | [1] | (2,226.8) | (2,150.5) | ||
Fair Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Available-for-sale securities | 2.8 | 2.8 | |||
Debt maturing within one year | [1] | (111.3) | (55.2) | ||
Long-term debt | [1] | (2,167.0) | (1,622.7) | ||
Foreign Exchange Forward [Member] | Carrying Amount [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value, net asset (liability) | (6.5) | 0.1 | |||
Foreign Exchange Forward [Member] | Fair Value [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value, net asset (liability) | $ (6.5) | $ 0.1 | |||
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015 |
Jan. 31, 2013
USD ($)
derivative_instrument
|
Mar. 31, 2012
USD ($)
derivative_instrument
|
|
Derivative [Line Items] | |||||||
Total exposure to floating rate interest rates | 5.00% | 5.00% | 2.00% | ||||
Number of interest-rate swap agreements terminated | derivative_instrument | 8 | 2 | |||||
Loss on extinguishment, amortization of deferred hedge gain | $ 12.8 | ||||||
Foreign Exchange Contract [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amounts of foreign currency exchange contracts | 82.1 | $ 82.1 | |||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | (1.2) | $ 4.2 | (8.7) | $ (4.7) | |||
Intercompany Loans [Member] | |||||||
Derivative [Line Items] | |||||||
Gain (loss) due to the effect of foreign currency exchange rates on intercompany loans | 0.1 | (7.3) | 5.5 | 0.8 | |||
January 2013 Interest-Rate Swap Termination [Member] | |||||||
Derivative [Line Items] | |||||||
Notional Amount Related to Discontinuation of Interest Rate Fair Value Hedge | $ 1,000.0 | ||||||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | 15.6 | 15.6 | $ 90.4 | ||||
Amortization of Interest Rate Swap Gains | 11.7 | 3.6 | 19.1 | 10.9 | |||
Loss on extinguishment, amortization of deferred hedge gain | 9.2 | 9.2 | |||||
March 2012 Interest-Rate Swap Termination [Member] | |||||||
Derivative [Line Items] | |||||||
Notional Amount Related to Discontinuation of Interest Rate Fair Value Hedge | $ 350.0 | ||||||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | 14.3 | 14.3 | $ 46.1 | ||||
Amortization of Interest Rate Swap Gains | 5.1 | $ 1.6 | 8.5 | $ 4.9 | |||
Loss on extinguishment, amortization of deferred hedge gain | 3.6 | 3.6 | |||||
Short-term Debt [Member] | January 2013 Interest-Rate Swap Termination [Member] | |||||||
Derivative [Line Items] | |||||||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | 2.3 | 2.3 | |||||
Long-term Debt [Member] | January 2013 Interest-Rate Swap Termination [Member] | |||||||
Derivative [Line Items] | |||||||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | $ 13.3 | $ 13.3 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Fair Value of Derivative Instruments Outstanding) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivatives not designated as hedges, asset | $ 0.1 | $ 1.2 |
Derivatives not designated as hedges, liability | 6.6 | 1.1 |
Total derivatives, asset | 0.1 | 1.2 |
Total derivatives, liability | 6.6 | 1.1 |
Foreign Exchange Forward Contracts [Member] | Prepaid expenses and other [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives not designated as hedges, asset | 0.1 | 1.2 |
Foreign Exchange Forward Contracts [Member] | Accounts payable [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives not designated as hedges, liability | $ 6.6 | $ 1.1 |
Debt (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Aug. 01, 2016 |
Mar. 31, 2015 |
Mar. 31, 2013 |
Jun. 30, 2009 |
Mar. 31, 2008 |
Jun. 30, 2003 |
|
Debt Instrument [Line Items] | ||||||||||||
Amount outstanding under revolving credit facility | $ 0.0 | $ 0.0 | ||||||||||
Standby letters of credit, recorded liability | 34.0 | 34.0 | ||||||||||
Revolving credit facility draw down amount without violating covenant | 366.0 | 366.0 | ||||||||||
Gain (Loss) on Extinguishment of Debt | 3.9 | $ (5.5) | $ 3.9 | $ (5.5) | ||||||||
Loss on extinguishment, amortization of deferred hedge gain | 12.8 | |||||||||||
Debt repurchase, premium paid | 5.8 | |||||||||||
Deferred loss - treasury lock agreements | 1.2 | |||||||||||
Write off of Deferred Debt Issuance Cost | $ 2.5 | |||||||||||
Credit ratings | Our long-term credit ratings are: Moody’s ratings of Negative Outlook with Ba3 for corporate family debt, B1 for senior unsecured debt, and Ba1 for the Senior Secured Notes; S&P ratings of Stable Outlook with B for corporate family debt and BB- for the Senior Secured Notes; and Fitch rating of Negative Outlook with B+, each of which are below investment grade. | |||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility | 400.0 | $ 400.0 | ||||||||||
Debt Instrument, Interest Rate Terms | Borrowings under the 2015 facility bear interest, at our option, at a rate per annum equal to LIBOR plus 250 basis points or a floating base rate plus 150 basis points, in each case subject to adjustment based upon a leverage-based pricing grid. | |||||||||||
2013 Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Interest Rate Terms | The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the long-term credit ratings assigned to the 2013 Notes with S&P and Moody's. As described in the indenture, the interest rates on the 2013 Notes increase by .25% for each one-notch downgrade below investment grade on each of our long-term credit ratings assigned to the 2013 Notes by S&P or Moody's. These adjustments are limited to a total increase of 2% above the respective interest rates in effect on the date of issuance of the 2013 Notes. | |||||||||||
2013 Revolving Credit Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility | $ 1,000.0 | |||||||||||
Six Point Five Percent Notes Due March Two Thousand Nineteen [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||||||||||
Repayments of Other Long-term Debt | $ 68.1 | |||||||||||
Five Point Seven Five Percent Notes, Due March Two Thousand Eighteen [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Cash tender offer, deal costs [Line Items] | 1.0 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | |||||||||||
Repayments of Other Long-term Debt | 108.6 | |||||||||||
Write off of Deferred Debt Issuance Cost | $ 0.9 | |||||||||||
Four Point Two Percent Notes, Due July Two Thousand Eighteen [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% | |||||||||||
Repayments of Other Long-term Debt | 73.8 | |||||||||||
Two Point Three Seven Five Percent Notes, Due March Two Thousand Sixteen [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 250.0 | |||||||||||
Gain (Loss) on Extinguishment of Debt | $ 5.5 | |||||||||||
Notes Make Whole Premium | 5.0 | $ 5.0 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.375% | |||||||||||
Write off of Deferred Debt Issuance Cost | $ 0.5 | |||||||||||
Prepayment percent | 100.00% | |||||||||||
Accrued Interest Paid on Extinguishment of 2.375% Notes | $ 3.1 | |||||||||||
Four Point Six Zero Percent Notes, Due March Two Thousand Twenty [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 500.0 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.60% | |||||||||||
Repayments of Other Long-term Debt | $ 50.1 | |||||||||||
Five Point Zero Percent Notes, Due March Two Thousand Twenty-Three [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 500.0 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||||||||||
Six Point Nine Five Percent Notes, Due March Two Thousand Forty-Three [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 250.0 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.95% | |||||||||||
Seven Point Eight Seven Five Percent Notes, Due August Two Thousand Twenty Two [Domain] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 500.0 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% |
Subsequent Events (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2016 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Mar. 31, 2013 |
Jun. 30, 2009 |
Mar. 31, 2008 |
Jun. 30, 2003 |
|
Subsequent Event [Line Items] | |||||||||||
Debt repurchase, premium paid | $ 5.8 | ||||||||||
Gain (Loss) on Extinguishment of Debt | 3.9 | $ (5.5) | $ 3.9 | $ (5.5) | |||||||
Write off of Deferred Debt Issuance Cost (Less than) | $ 2.5 | ||||||||||
Deferred loss - treasury lock agreements | 1.2 | ||||||||||
Loss on extinguishment, amortization of deferred hedge gain | 12.8 | ||||||||||
Six Point Five Percent Notes Due March Two Thousand Nineteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||||||||
Four Point Six Zero Percent Notes, Due March Two Thousand Twenty [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.60% | ||||||||||
Five Point Seven Five Percent Notes, Due March Two Thousand Eighteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | ||||||||||
Write off of Deferred Debt Issuance Cost (Less than) | $ 0.9 | ||||||||||
Four Point Two Percent Notes, Due July Two Thousand Eighteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% | ||||||||||
Subsequent Event [Member] | Six Point Five Percent Notes Due March Two Thousand Nineteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Repurchase Amount | $ 44.0 | ||||||||||
Subsequent Event [Member] | Four Point Six Zero Percent Notes, Due March Two Thousand Twenty [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Repurchase Amount | 40.0 | ||||||||||
Subsequent Event [Member] | Five Point Seven Five Percent Notes, Due March Two Thousand Eighteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Repurchase Amount | 35.2 | ||||||||||
Remaining principal amount of long-term debt, to be prepaid | 106.2 | ||||||||||
Subsequent Event [Member] | Four Point Two Percent Notes, Due July Two Thousand Eighteen [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt Instrument, Repurchase Amount | 44.0 | ||||||||||
Remaining principal amount of long-term debt, to be prepaid | 132.2 | ||||||||||
Subsequent Event [Member] | Debt repurchase [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Debt repurchase, premium paid | 6.0 | ||||||||||
Accrued interest to be paid | 1.0 | ||||||||||
Gain (Loss) on Extinguishment of Debt | (1.0) | ||||||||||
Loss on extinguishment, amortization of deferred hedge gain | 6.0 | ||||||||||
Subsequent Event [Member] | Debt prepayment [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Notes Make Whole Premium | $ 13.0 | ||||||||||
Forecast [Member] | Debt repurchase [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Deferred loss treasury lock agreements and write-off of debt issuance costs and discount/ premium | $ 1.0 | ||||||||||
Forecast [Member] | Debt prepayment [Member] | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Accrued interest to be paid | 4.0 | ||||||||||
Gain (Loss) on Extinguishment of Debt | (3.0) | ||||||||||
Write off of Deferred Debt Issuance Cost (Less than) | 1.0 | ||||||||||
Deferred loss - treasury lock agreements | 1.0 | ||||||||||
Loss on extinguishment, amortization of deferred hedge gain | $ 11.0 |
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