FORM 8-K |
Avon Products, Inc. | ||||
(Exact name of registrant as specified in charter) | ||||
New York | 1-4881 | 13-0544597 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
AVON PRODUCTS, INC. | |||||||||||||||
(Registrant) | |||||||||||||||
By | /s/ Laura Barbrook | ||||||||||||||
Name: Laura Barbrook | |||||||||||||||
Title: Vice President and Corporate Controller - Principal Accounting Officer |
Exhibit | ||
No. | Description | |
99.1 | ||
Avon Reports First-Quarter 2018 Results |
• | Total Revenue increased 5% to $1.4 billion, or 2% in constant dollars1, both including a 6% reporting benefit due to the impact of adopting the new revenue recognition standard required by generally accepted accounting principles in the United States ("GAAP") |
• | Active Representatives and Ending Representatives declined 4% and 1%, respectively, largely due to declines in Brazil |
• | Operating Margin increased 100 bps to 3.2% and Adjusted1 Operating Margin increased 100 bps to 4.0%, both including a benefit of 120 bps due to the impact of the new revenue recognition standard |
• | Diluted Loss Per Share From Continuing Operations of $0.06 and Adjusted Diluted Loss Per Share From Continuing Operations of $0.02, both including a $0.03 benefit due to the impact of the new revenue recognition standard |
• | Total revenue for Avon Products, Inc. increased 5% to $1.4 billion, or 2% in constant dollars, both including a benefit of approximately 6% due to the impact of adopting the new revenue recognition standard. |
• | Active Representatives declined 4% primarily due to decreases in South Latin America and North Latin America. |
• | Average order in constant dollars increased 6%, including a benefit of approximately 6% due to the impact of adopting the new revenue recognition standard. Growth in South Latin America was offset by a declines in the other segments, primarily Europe, Middle East & Africa. |
• | Ending Representatives declined 1% primarily due to declines in South Latin America and North Latin America that were partially offset by growth in Europe, Middle East & Africa. |
• | Gross margin and Adjusted gross margin each decreased 280 basis points to 58.4%, including a decline of approximately 310 basis points due to the impact of adopting the new revenue recognition standard. The change in gross margin was primarily due to the favorable net impact of price/mix partially offset by higher supply chain costs. |
• | Operating margin was 3.2% in the quarter, up 100 basis points, while Adjusted operating margin was 4.0%, up 100 basis points, both including a benefit of approximately 120 basis points due to the implementation of the new revenue recognition standard. The operating margin and Adjusted operating margin year-over-year comparisons were both unfavorably impacted by higher Representative, sales leader and field expense, partially offset by lower bad debt expense, primarily in Brazil. |
• | The provision for income taxes was $32 million, compared with $30 million for first-quarter 2017. On an Adjusted basis, the provision for income taxes was $24 million, compared with $31 million for first-quarter 2017. |
• | Net loss was $21 million, or $0.06 per diluted share, including a benefit of $0.03 per diluted share due to the impact of the new revenue recognition standard, compared with a loss of $37 million, or $0.10 per diluted share, for first-quarter 2017. Adjusted net loss was $3 million, or $0.02 per diluted share, including a benefit of $0.03 per diluted share due to the impact of the new revenue recognition standard, compared with a loss of $28 million, or $0.07 per diluted share, for first-quarter 2017. |
• | The Company recorded costs to implement ("CTI") restructuring within operating profit of approximately $11 million before tax (approximately $9 million after tax), primarily related to the Transformation Plan. |
• | The Company recorded one-time tax reserves of approximately $9 million associated with its uncertain tax positions. |
THREE MONTHS ENDED MARCH 31, 2018 | ||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||
Revenue | Active Representatives | Average Order C$ | Units Sold | Price/ Mix C$ | Ending Representatives | |||||||||||||||||||
US$ | C$ | |||||||||||||||||||||||
Revenue & Drivers | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | |||||||||||||||||
Europe, Middle East & Africa | $ | 568.4 | 12 | % | 2 | % | (1 | )% | 3 | % | 1 | % | 1 | % | 3 | % | ||||||||
South Latin America | 497.1 | — | 4 | (6 | ) | 10 | (5 | ) | 9 | (3 | ) | |||||||||||||
North Latin America | 195.6 | 1 | (3 | ) | (6 | ) | 3 | (10 | ) | 7 | (5 | ) | ||||||||||||
Asia Pacific | 111.4 | (2 | ) | (3 | ) | (1 | ) | (2 | ) | (5 | ) | 2 | (2 | ) | ||||||||||
Total from reportable segments | 1,372.5 | 5 | 2 | (4 | ) | 6 | (3 | ) | 5 | (1 | ) | |||||||||||||
Other operating segments and business activities | 21.0 | 6 | 4 | (5 | ) | 9 | 41 | (37 | ) | (5 | ) | |||||||||||||
Total Avon | $ | 1,393.5 | 5 | % | 2 | % | (4 | )% | 6 | % | (3 | )% | 5 | % | (1 | )% |
Operating Profit/Margin | 2018 Operating Profit US$ | 2018 Operating Margin US$ | Change in US$ vs 1Q17 | Change in C$ vs 1Q17 | |||||||
Segment profit/margin | |||||||||||
Europe, Middle East & Africa | $ | 74.4 | 13.1 | % | (140) bps | (170) bps | |||||
South Latin America | 27.2 | 5.5 | 280 | 290 | |||||||
North Latin America | 20.8 | 10.6 | (50) | (60) | |||||||
Asia Pacific | 10.4 | 9.3 | (240) | (170) | |||||||
Total from reportable segments | 132.8 | 9.7 | 40 | 10 | |||||||
Other operating segments and business activities | 2.2 | ||||||||||
Unallocated global expenses | (79.2 | ) | |||||||||
CTI restructuring initiatives | (10.9 | ) | |||||||||
Total Avon | $ | 44.9 | 3.2 | % | 100 bps | 60 bps | |||||
• | Europe, Middle East & Africa revenue was up 12%, or 2% in constant dollars, both including a benefit of approximately 5% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives and lower average order. |
◦ | Russia revenue was up 9%, or 4% in constant dollars, both including a benefit of approximately 8% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by lower average order and a decrease in Active Representatives. |
◦ | U.K. revenue was up 1%, or down 9% in constant dollars, both including a benefit of approximately 5% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives. |
• | South Latin America revenue was relatively unchanged, or up 4% in constant dollars, both including a benefit of approximately 9% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives. Revenue and constant-dollar revenue were primarily impacted by a decline in Brazil, partially offset by growth in Argentina, driven by inflationary pricing. |
◦ | Brazil revenue was down 4%, or 1% in constant dollars, both including a benefit of approximately 11% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives, as well as lower average order. |
• | North Latin America revenue was up 1%, or down 3% in constant dollars, both including a benefit of approximately 5% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives and, to a lesser extent, by lower average order. |
◦ | Mexico revenue was up 6%, or down 1% in constant dollars, both including a benefit of approximately 5% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives. |
• | Asia Pacific revenue was down 2%, or 3% in constant dollars, both including a decline of 1% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by a decrease in Active Representatives, most significantly in Malaysia, as well as lower average order. |
◦ | Philippines revenue was down 5%, or 2% in constant dollars, both including a benefit of approximately 1% due to the impact of adopting the new revenue recognition standard. Revenue and constant-dollar revenue were negatively impacted by lower average order, partially offset by an increase in Active Representatives. |
• | Net cash used by operating activities of continuing operations was $96 million for the three months ended March 31, 2018, compared with $80 million in the same period in 2017. The approximate $16 million increase to net cash used by continuing operating activities was primarily due to an increase in working capital, most significantly from higher inventory levels. |
• | Net cash used by investing activities of continuing operations was $27 million for the three months ended March 31, 2018, compared with $22 million in the same period in 2017. The approximate $5 increase to net cash used by continuing investing activities was primarily due to higher capital expenditures. |
• | Net cash provided by financing activities of continuing operations was less than $1 million for the three months ended March 31, 2018, compared with net cash used by financing activities of continuing operations of $5 million in the same period in 2017. The approximate $6 million benefit to net cash provided (used) by continuing financing activities was primarily due to lower repurchases of common stock relating to employee stock compensation. |
Contacts: | |
INVESTORS: | MEDIA: |
Avon Investor Relations | Brunswick Group |
Gina Grant | Katherine Kim |
or | (212) 333-3810 |
ICR, Inc. | or |
Allison Malkin/Caitlin Morahan | Laura Buchanan |
(203) 682-8200 | +44 207 404 5959 |
Three Months Ended | Percent Change | ||||||||||
March 31 | |||||||||||
2018 | 2017 | ||||||||||
Net sales | $ | 1,309.6 | $ | 1,298.1 | 1 | % | |||||
Other revenue | 83.9 | 35.0 | |||||||||
Total revenue | 1,393.5 | 1,333.1 | 5 | % | |||||||
Cost of sales | 579.7 | 517.1 | |||||||||
Selling, general and administrative expenses | 768.9 | 786.2 | |||||||||
Operating profit | 44.9 | 29.8 | 51 | % | |||||||
Interest expense | 36.2 | 35.1 | |||||||||
Interest income | (4.2 | ) | (4.7 | ) | |||||||
Other expense, net | 2.5 | 6.1 | |||||||||
Total other expenses | 34.5 | 36.5 | |||||||||
Income (loss), before income taxes | 10.4 | (6.7 | ) | * | |||||||
Income taxes | (31.5 | ) | (29.8 | ) | |||||||
Net loss | (21.1 | ) | (36.5 | ) | 42 | % | |||||
Net loss attributable to noncontrolling interests | 0.8 | — | |||||||||
Net loss attributable to Avon | $ | (20.3 | ) | $ | (36.5 | ) | 44 | % | |||
Loss per share:(1) | |||||||||||
Basic EPS attributable to Avon | $ | (0.06 | ) | $ | (0.10 | ) | 40 | % | |||
Diluted EPS attributable to Avon | (0.06 | ) | (0.10 | ) | 40 | % | |||||
Weighted-average shares outstanding: | |||||||||||
Basic | 440.9 | 438.6 | |||||||||
Diluted | 440.9 | 438.6 | |||||||||
* Calculation not meaningful | |||||||||||
(1) Under the two-class method, loss per share is calculated using net loss allocable to common shares, which is derived by reducing net loss by the loss allocable to participating securities and earnings allocated to convertible preferred stock. Net loss allocable to common shares used in the basic and diluted loss per share calculation was ($26.0) and ($41.7) for the three months ended March 31, 2018 and 2017, respectively. |
March 31, | December 31, | |||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 772.5 | $ | 881.5 | ||||
Accounts receivable, net | 429.0 | 457.2 | ||||||
Inventories | 697.0 | 598.2 | ||||||
Prepaid expenses and other | 251.0 | 296.4 | ||||||
Total current assets | 2,149.5 | 2,233.3 | ||||||
Property, plant and equipment, at cost | 1,514.8 | 1,481.9 | ||||||
Less accumulated depreciation | (812.1 | ) | (779.2 | ) | ||||
Property, plant and equipment, net | 702.7 | 702.7 | ||||||
Goodwill | 100.9 | 95.7 | ||||||
Other assets | 687.3 | 666.2 | ||||||
Total assets | $ | 3,640.4 | $ | 3,697.9 | ||||
Liabilities, Series C Convertible Preferred Stock and Shareholders’ Deficit | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 270.8 | $ | 25.7 | ||||
Accounts payable | 803.0 | 832.2 | ||||||
Accrued compensation | 121.4 | 130.3 | ||||||
Other accrued liabilities | 401.1 | 405.6 | ||||||
Sales taxes and taxes other than income | 146.3 | 153.0 | ||||||
Income taxes | 8.2 | 12.8 | ||||||
Total current liabilities | 1,750.8 | 1,559.6 | ||||||
Long-term debt | 1,629.6 | 1,872.2 | ||||||
Employee benefit plans | 151.4 | 150.6 | ||||||
Long-term income taxes | 96.6 | 84.9 | ||||||
Long-term sales taxes and taxes other than income | 204.6 | 193.1 | ||||||
Other liabilities | 80.2 | 84.4 | ||||||
Total liabilities | 3,913.2 | 3,944.8 | ||||||
Series C convertible preferred stock | 473.8 | 467.8 | ||||||
Shareholders’ Deficit | ||||||||
Common stock | 190.3 | 189.7 | ||||||
Additional paid-in capital | 2,293.7 | 2,291.2 | ||||||
Retained earnings | 2,252.5 | 2,320.3 | ||||||
Accumulated other comprehensive loss | (891.0 | ) | (926.2 | ) | ||||
Treasury stock, at cost | (4,601.8 | ) | (4,600.0 | ) | ||||
Total Avon shareholders’ deficit | (756.3 | ) | (725.0 | ) | ||||
Noncontrolling interests | 9.7 | 10.3 | ||||||
Total shareholders’ deficit | (746.6 | ) | (714.7 | ) | ||||
Total liabilities, series C convertible preferred stock and shareholders’ deficit | $ | 3,640.4 | $ | 3,697.9 | ||||
Three Months Ended | ||||||||
March 31 | ||||||||
2018 | 2017 | |||||||
Cash Flows from Operating Activities | ||||||||
Net loss | $ | (21.1 | ) | $ | (36.5 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
Depreciation | 20.8 | 20.5 | ||||||
Amortization | 7.1 | 7.1 | ||||||
Provision for doubtful accounts | 43.1 | 60.8 | ||||||
Provision for obsolescence | 9.7 | 10.2 | ||||||
Share-based compensation | 3.8 | 9.7 | ||||||
Foreign exchange losses (gains) | 4.6 | (0.9 | ) | |||||
Deferred income taxes | 1.8 | 12.3 | ||||||
Other | 3.2 | 6.0 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (4.4 | ) | (42.3 | ) | ||||
Inventories | (58.4 | ) | (23.5 | ) | ||||
Prepaid expenses and other | 0.1 | 10.0 | ||||||
Accounts payable and accrued liabilities | (106.3 | ) | (107.3 | ) | ||||
Income and other taxes | (0.9 | ) | 1.7 | |||||
Noncurrent assets and liabilities | 0.6 | (8.0 | ) | |||||
Net cash used by operating activities of continuing operations | (96.3 | ) | (80.2 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Capital expenditures | (27.8 | ) | (23.9 | ) | ||||
Disposal of assets | 0.8 | 1.6 | ||||||
Net cash used by investing activities of continuing operations | (27.0 | ) | (22.3 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Debt, net (maturities of three months or less) | 3.6 | 1.9 | ||||||
Repayment of debt | (0.5 | ) | (1.0 | ) | ||||
Repurchase of common stock | (2.7 | ) | (6.2 | ) | ||||
Net cash provided (used) by financing activities of continuing operations | 0.4 | (5.3 | ) | |||||
Cash Flows from Discontinued Operations | ||||||||
Net cash used by operating activities of discontinued operations | — | (3.5 | ) | |||||
Net cash used by discontinued operations | — | (3.5 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 13.9 | 16.9 | ||||||
Net decrease in cash and cash equivalents | (109.0 | ) | (94.4 | ) | ||||
Cash and cash equivalents at beginning of year | 881.5 | 654.4 | ||||||
Cash and cash equivalents at end of period | $ | 772.5 | $ | 560.0 |
CATEGORY SALES FROM REPORTABLE SEGMENTS (US$) | ||||||||||||||||
Consolidated | ||||||||||||||||
Reported | Excluding the impact of adopting ASC 606 | |||||||||||||||
Three Months Ended March 31 | US$ | C$ | US$ | C$ | ||||||||||||
2018 | 2017 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | % var. vs 1Q17 | |||||||||||
Beauty: | ||||||||||||||||
Skincare | $ | 389.1 | $ | 381.7 | 2% | (1)% | —% | (3)% | ||||||||
Fragrance | 354.0 | 342.0 | 4 | 1 | 1 | (1) | ||||||||||
Color | 235.7 | 239.2 | (1) | (5) | (3) | (7) | ||||||||||
Total Beauty | 978.8 | 962.9 | 2 | (1) | — | (3) | ||||||||||
Fashion & Home: | ||||||||||||||||
Fashion (jewelry/watches/apparel/ footwear/accessories/children's) | 188.6 | 191.9 | (2) | (5) | (3) | (6) | ||||||||||
Home (gift & decorative products/housewares/ entertainment & leisure/children's/nutrition) | 129.4 | 133.1 | (3) | (3) | (5) | (6) | ||||||||||
Total Fashion & Home | 318.0 | 325.0 | (2) | (4) | (4) | (6) | ||||||||||
Net sales from reportable segments | 1,296.8 | 1,287.9 | 1 | (2) | (1) | (4) | ||||||||||
Other revenue from reportable segments | 75.7 | 25.4 | * | * | * | * | ||||||||||
Total revenue from reportable segments | 1,372.5 | 1,313.3 | 5 | 2 | (1) | (4) | ||||||||||
Total revenue from Other operating segments and business activities | 21.0 | 19.8 | 6 | 4 | (1) | (3) | ||||||||||
Total revenue | $ | 1,393.5 | $ | 1,333.1 | 5 | 2 | (1) | (4) | ||||||||
THREE MONTHS ENDED MARCH 31, 2018 | ||||||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Special tax items | Adjusted (Non-GAAP) | |||||||||||||
Total revenue | $ | 1,393.5 | $ | — | $ | — | $ | 1,393.5 | ||||||||
Cost of sales | 579.7 | 0.6 | — | 579.1 | ||||||||||||
Selling, general and administrative expenses | 768.9 | 10.3 | — | 758.6 | ||||||||||||
Operating profit | 44.9 | 10.9 | — | 55.8 | ||||||||||||
Income before income taxes | 10.4 | 10.9 | — | 21.3 | ||||||||||||
Income taxes | (31.5 | ) | (2.1 | ) | 9.2 | (24.4 | ) | |||||||||
Net loss | $ | (21.1 | ) | $ | 8.8 | $ | 9.2 | $ | (3.1 | ) | ||||||
Diluted EPS | $ | (0.06 | ) | $ | (0.02 | ) | ||||||||||
Gross margin | 58.4 | % | — | — | 58.4 | % | ||||||||||
SG&A as a % of revenues | 55.2 | % | (0.8 | ) | — | 54.4 | % | |||||||||
Operating margin | 3.2 | % | 0.8 | — | 4.0 | % | ||||||||||
Effective tax rate | * | * | ||||||||||||||
THREE MONTHS ENDED MARCH 31, 2017 | ||||||||||||
Reported (GAAP) | CTI restructuring initiatives | Adjusted (Non-GAAP) | ||||||||||
Total revenue | $ | 1,333.1 | $ | — | $ | 1,333.1 | ||||||
Cost of sales | 517.1 | (0.1 | ) | 517.2 | ||||||||
Selling, general and administrative expenses | 786.2 | 10.1 | 776.1 | |||||||||
Operating profit | 29.8 | 10.0 | 39.8 | |||||||||
(Loss) income before income taxes | (6.7 | ) | 10.0 | 3.3 | ||||||||
Income taxes | (29.8 | ) | (1.0 | ) | (30.8 | ) | ||||||
Net loss | $ | (36.5 | ) | $ | 9.0 | $ | (27.5 | ) | ||||
Diluted EPS | $ | (0.10 | ) | $ | (0.07 | ) | ||||||
Gross margin | 61.2 | % | — | 61.2 | % | |||||||
SG&A as a % of revenues | 59.0 | % | (0.8 | ) | 58.2 | % | ||||||
Operating margin | 2.2 | % | 0.8 | 3.0 | % | |||||||
Effective tax rate | * | * | ||||||||||
Approximate Impact of Foreign Currency | |||||||
First-Quarter 2018 | |||||||
Estimated impact ($ in millions) | Estimated impact on diluted EPS | ||||||
Year-on-Year impact on Reported (GAAP) results: | |||||||
Total revenue | 3 pts | ||||||
Operating profit - transaction | $ | (5 | ) | $ | — | ||
Operating profit - translation | 5 | 0.01 | |||||
Total operating profit | $ | — | $ | — | |||
Operating margin | 0 bps | ||||||
Revaluation of working capital | $ | — | $ | — | |||
Diluted EPS | $ | — | |||||
Year-on-Year impact on Adjusted (Non-GAAP) results: | |||||||
Adjusted operating profit - transaction | $ | (5 | ) | $ | — | ||
Adjusted operating profit - translation | 5 | 0.01 | |||||
Total Adjusted operating profit | $ | — | $ | — | |||
Adjusted operating margin | 0 bps | ||||||
Revaluation of working capital | $ | — | $ | — | |||
Adjusted diluted EPS | $ | — | |||||
Amounts in the table above may not necessarily sum because the computations are made independently. |
• | a reduction to retained earnings of $52.7 before taxes ($41.1 after tax), with a corresponding impact to deferred income taxes of $11.6; |
• | a reduction to prepaid expenses and other of $54.9; |
• | an increase to inventories of $39.3; and |
• | an increase to other accrued liabilities of $37.1 due to the net impact of the establishment of a contract liability of $91.8 for deferred revenue where our performance obligations are not yet satisfied, which is partially offset by a reduction in the sales incentive accrual of $54.7. |
Impact of change in revenue recognition standard | |||||||||||
Line items impacted within the Consolidated Statements of Operations | Per consolidated financial statements | Adjustments | Balances excluding the impact of adopting ASC 606 | ||||||||
Revenue | |||||||||||
Net sales | $ | 1,309.6 | $ | (25.4 | ) | (1) | $ | 1,284.2 | |||
Other revenue | 83.9 | (54.9 | ) | (2) | 29.0 | ||||||
Total revenue | 1,393.5 | (80.3 | ) | 1,313.2 | |||||||
Costs and expenses | |||||||||||
Cost of sales | 579.7 | (73.0 | ) | (3) | 506.7 | ||||||
Selling, general and administrative expenses | 768.9 | 11.8 | (4) | 780.7 | |||||||
Operating profit | 44.9 | (19.1 | ) | 25.8 | |||||||
Income (loss) before income taxes | 10.4 | (19.1 | ) | (8.7 | ) | ||||||
Income taxes | (31.5 | ) | 3.8 | (27.7 | ) | ||||||
Net loss | (21.1 | ) | (15.3 | ) | (36.4 | ) | |||||
Net loss attributable to Avon | (20.3 | ) | (15.3 | ) | (35.6 | ) |
Impact of change in revenue recognition standard | |||||||||||
Line items impacted within the Consolidated Balance Sheets | Per consolidated financial statements | Adjustments | Balances excluding the impact of adopting ASC 606 | ||||||||
Assets | |||||||||||
Accounts receivable, net | $ | 429.0 | $ | (6.3 | ) | (1) | $ | 422.7 | |||
Inventories | 697.0 | (41.2 | ) | (2) | 655.8 | ||||||
Prepaid expenses and other | 251.0 | 50.6 | (2) | 301.6 | |||||||
Total current assets | 2,149.5 | 3.1 | 2,152.6 | ||||||||
Other assets | 687.3 | (11.6 | ) | (3) | 675.7 | ||||||
Total assets | 3,640.4 | (8.5 | ) | 3,631.9 | |||||||
Liabilities, Series C Convertible Preferred Stock and Shareholders’ Deficit | |||||||||||
Other accrued liabilities | 401.1 | (29.6 | ) | (4) | 371.5 | ||||||
Income taxes | 8.2 | (3.8 | ) | 4.4 | |||||||
Total current liabilities | 1,750.8 | (33.4 | ) | 1,717.4 | |||||||
Other liabilities | 80.2 | (1.6 | ) | 78.6 | |||||||
Total liabilities | 3,913.2 | (35.0 | ) | 3,878.2 | |||||||
Retained earnings | 2,252.5 | 25.8 | (5) | 2,278.3 | |||||||
Accumulated other comprehensive loss | (891.0 | ) | .7 | (890.3 | ) | ||||||
Total Avon shareholders’ deficit | (756.3 | ) | 26.5 | (729.8 | ) | ||||||
Total shareholders’ deficit | (746.6 | ) | 26.5 | (720.1 | ) | ||||||
Total liabilities, series C convertible preferred stock and shareholders’ deficit | 3,640.4 | (8.5 | ) | 3,631.9 |
Impact of change in revenue recognition standard | |||||||||||
Line items impacted within the Consolidated Statements of Cash Flows | Per consolidated financial statements | Adjustments | Balances excluding the impact of adopting ASC 606 | ||||||||
Net loss | $ | (21.1 | ) | $ | (15.3 | ) | $ | (36.4 | ) | ||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (4.4 | ) | (2.3 | ) | (6.7 | ) | |||||
Inventories | (58.4 | ) | 1.9 | (56.5 | ) | ||||||
Prepaid expenses and other | .1 | 1.1 | 1.2 | ||||||||
Accounts payable and accrued liabilities | (106.3 | ) | 18.9 | (87.4 | ) | ||||||
Income and other taxes | (.9 | ) | (3.8 | ) | (4.7 | ) | |||||
Noncurrent assets and liabilities | .6 | (.5 | ) | .1 |
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