Results of Operations by Quarter (Unaudited)



2017	First			Second			Third		Fourth		Year
Total revenue	$	1,333.1		$	1,395.9		$	1,417.8	$	1,568.8	$	5,715.6
Gross profit	816.0			870.9			867.8		957.6		3,512.3
Operating profit⁽¹⁾	28.7			31.6			83.0		130.0		273.3
(Loss) income from continuing operations, before taxes	(6.7		)	(12.2		)	48.0		91.6		120.7
(Loss) income from continuing operations, net of tax⁽³⁾	(36.5		)	(45.8		)	11.9		90.4		20.0
Net loss attributable to noncontrolling interests	—			.3			.6		1.1		2.0
Net (loss) income attributable to Avon	$	(36.5	)	$	(45.5	)	$	12.5	$	91.5	$	22.0

(Loss) earnings per common share from continuing operations
Basic	$	(.10	)	$	(.12	)	$	.01	$	.17	$	(.00	)	(4)
Diluted	(.10		)	(.12		)	.01		.17		(.00		)	(4)



2016	First			Second			Third			Fourth			Year
Total revenue	$	1,306.5		$	1,434.3		$	1,408.8		$	1,568.1		$	5,717.7
Gross profit	787.7			869.3			857.9			945.8			3,460.7
Operating profit⁽¹⁾	7.8			95.1			112.0			107.0			321.9
(Loss) income from continuing operations, before taxes⁽²⁾	(158.1		)	71.9			74.6			42.8			31.2
(Loss) income from continuing operations, net of tax⁽³⁾	(155.8		)	35.8			36.3			(9.7		)	(93.4		)
(Loss) income from discontinued operations, net of tax	(9.6		)	(2.6		)	(.7		)	(1.1		)	(14.0		)
Net (income) loss attributable to noncontrolling interests	(.5		)	(.2		)	.4			.1			(.2		)
Net (loss) income attributable to Avon	$	(165.9	)	$	33.0		$	36.0		$	(10.7	)	$	(107.6	)

(Loss) earnings per common share from continuing operations
Basic	$	(.38	)	$	.07		$	.07		$	(.03	)	$	(.25	)	(4)
Diluted	(.38		)	.07			.07			(.03		)	(.25		)	(4)

(1) Operating profit (loss) was impacted by the following:



2017	First			Second		Third			Fourth		Year
Costs to implement restructuring initiatives:
Cost of sales	$	(.1	)	$	—	$	—		$	.7	$	.6
Selling, general and administrative expenses	10.1			20.3		6.2			23.0		59.6
Total costs to implement restructuring initiatives	$	10.0		$	20.3	$	6.2		$	23.7	$	60.2
Loss contingency	$	—		$	18.2	$	—		$	—	$	18.2

2016	First			Second		Third			Fourth		Year
Costs to implement restructuring initiatives:
Cost of sales	$	—		$	.3	$	—		$	.3	$	.6
Selling, general and administrative expenses	46.8			9.1		14.0			6.9		76.8
Total costs to implement restructuring initiatives	$	46.8		$	9.4	$	14.0		$	7.2	$	77.4
Legal settlement	$	—		$	—	$	(27.2	)	$	—	$	(27.2	)

In addition to the items impacting operating profit (loss) above:


(2)	(Loss) income from continuing operations, before taxes during 2016 was impacted by:

•

the deconsolidation of our Venezuelan operations. As a result of the change to the cost method of accounting, in the first quarter of 2016 we recorded a loss of $120.5 in other expense, net. The loss was comprised of $39.2 in net assets of the Venezuelan business and $81.3 in accumulated foreign currency translation adjustments within AOCI associated with foreign currency movements before Venezuela was accounted for as a highly inflationary economy;

•

a gain on extinguishment of debt of $3.9 before and after tax in the third quarter caused by the deferred gain associated with interest-rate swap agreement terminations, partially offset by the early tender premium paid, the deferred loss associated with treasury lock agreements, deal costs and the write-off of debt issuance costs and discounts associated with the cash tender offers in August 2016;


•	a loss on extinguishment of debt of $1.0 before and after tax in the fourth quarter caused by the premium paid for the repurchases, the write-off of debt issuance costs and discounts and the deferred loss associated with treasury lock agreements, partially offset by the deferred gain associated with interest-rate swap agreement terminations associated with the debt repurchases in October 2016;

•

a loss on extinguishment of debt of $2.9 before and after tax in the fourth quarter caused by the make-whole premium, the deferred loss associated with treasury lock agreements and the write-off of debt issuance costs and discounts and partially offset by the deferred gain associated with interest-rate swap agreement terminations associated with the prepayment of the remaining principal amount of the 4.20% Notes (as defined in Note 7, Debt and Other Financing) and 5.75% Notes (as defined in Note 7, Debt and Other Financing); and


•	a gain on extinguishment of debt of $1.1 before and after tax in the fourth quarter consisting of the discount received for the repurchases, partially offset by the write-off of debt issuance costs and discounts associated with the debt repurchases in December 2016.

(3)

(Loss) income from continuing operations, net of tax during 2017 was impacted by a $29.9 net income tax benefit recognized in the fourth quarter as a result of the enactment of the Tax Cuts and Jobs Act in the U.S., a release of valuation allowances of $25.5 associated with a number of markets in Europe, Middle East & Africa as a result of a business model change related to the move of the Company's headquarters from the U.S. to the UK, and a $10.4 benefit as a result of a favorable court decision in Brazil, partially offset by a charge of $16.0 associated with valuation allowances to adjust deferred tax assets in Mexico.

(Loss) income from continuing operations, net of tax during 2016 was impacted by a charge for valuation allowances for deferred tax assets outside of the U.S of $8.6, which was recorded in the fourth quarter, the release of a valuation allowance associated with Russia of $7.1 which was recorded in the second quarter, and an income tax benefit of $29.3 recognized as the result of the implementation of foreign tax planning strategies which was recorded in the first quarter.


(4)	The sum of per share amounts for the quarters does not necessarily equal that for the year because the computations were made independently.

See Note 16, Restructuring Initiatives, "Results Of Operations - Consolidated" within MD&A on pages 36 through 45, Note 14, Segment Information, "Venezuela Discussion" within MD&A on pages 40 through 41, Note 1, Description of the Business and Summary of Significant Accounting Policies, Note 13, Employee Benefit Plans, Note 18, Contingencies, Note 7, Debt and Other Financing and Note 8, Income Taxes, for more information on these items.