10-Q

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2019

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission file number 1-4881

_________________________

AVON PRODUCTS, INC.

(Exact name of registrant as specified in its charter)

_________________________

New York	13-0544597
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

Building 6, Chiswick Park, London W4 5HR

United Kingdom

(Address of principal executive offices)

+44-1604-232425

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x   No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.25 per share	AVP	NYSE

The number of shares of Common Stock (par value $0.25) outstanding at March 31, 2019 was 443,221,115.

TABLE OF CONTENTS

		Page Numbers
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Operations Three Months Ended March 31, 2019 and March 31, 2018	3
	Consolidated Statements of Comprehensive (Loss) Income Three Months Ended March 31, 2019 and March 31, 2018	4
	Consolidated Balance Sheets March 31, 2019 and December 31, 2018	5
	Consolidated Statements of Cash Flows Three Months Ended March 31, 2019 and March 31, 2018	7
	Consolidated Statement of Changes in Shareholders Equity (Deficit) Three Months Ended March 31, 2019 and March 31, 2018	8
	Notes to Consolidated Financial Statements	9 - 33
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32 - 48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
Part II. Other Information
Item 1.	Legal Proceedings	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6.	Exhibits	50
	Signature	51

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
(In millions, except per share data)	March 31, 2019			March 31, 2018
Net sales	$	1,116.2		$	1,309.6
Other revenue	70.7			83.9
Total revenue	1,186.9			1,393.5
Costs, expenses and other:
Cost of sales	517.0			579.7
Selling, general and administrative expenses	673.8			768.9
Operating (loss) profit	(3.9		)	44.9
Interest expense	33.2			36.2
Loss on extinguishment of debt and credit facilities	2.0			—
Interest income	(1.7		)	(4.2		)
Other (income) expense, net	(22.6		)	2.5
Gain on sale of business	(10.3		)	—
Total other expenses	0.6			34.5
(Loss) income from continuing operations, before income taxes	(4.5		)	10.4
Income taxes	(19.5		)	(31.5		)
Loss from continuing operations, net of tax	(24.0		)	(21.1		)
Loss from discontinued operations, net of tax	(9.5		)	—
Net loss	(33.5		)	(21.1		)
Net loss attributable to noncontrolling interests	0.8			0.8
Net loss attributable to Avon	$	(32.7	)	$	(20.3	)
Loss per share
Basic
Basic from continuing operations	$	(0.07	)	$	(0.06	)
Basic from discontinued operations	(0.02		)	—
Basic attributable to Avon	$	(0.09	)	$	(0.06	)
Diluted
Diluted from continuing operations	$	(0.07	)	$	(0.06	)
Diluted from discontinued operations	(0.02		)	—
Diluted attributable to Avon	$	(0.09	)	$	(0.06	)

The accompanying notes are an integral part of these statements.

3

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
(In millions)	March 31, 2019			March 31, 2018
Net loss	$	(33.5	)	$	(21.1	)
Other comprehensive income:
Foreign currency translation adjustments	(2.7		)	(4.2		)
Unrealized (losses) gains on revaluation of long-term intercompany balances, net of taxes of $0.0 and $0.0	(0.6		)	36.9
Change in unrealized gains/losses on cash flow hedges, net of taxes of $0.0 and $0.0	(1.9		)	—
Adjustments of and amortization of net actuarial loss and prior service cost, net of taxes of $0.2 and $0.2	1.3			2.9
Total other comprehensive (loss) income, net of income taxes	(3.9		)	35.6
Comprehensive (loss) income	(37.4		)	14.5
Less: comprehensive loss attributable to noncontrolling interests	(0.6		)	(0.6		)
Comprehensive (loss) income attributable to Avon	$	(36.8	)	$	15.1

The accompanying notes are an integral part of these statements.

4

AVON PRODUCTS, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2018 (Audited) and March 31, 2019 (Unaudited)

(In millions)	March 31, 2019			December 31, 2018
Assets
Current Assets
Cash and cash equivalents	$	406.4		$	532.7
Restricted cash	17.0			—
Accounts receivable, net	340.9			349.7
Inventories	532.3			542.0
Prepaid expenses and other	255.2			272.0
Assets held for sale	15.7			65.6
Total current assets	$	1,567.5		1,762.0
Property, plant and equipment, at cost	1,200.5			1,207.8
Less accumulated depreciation	(657.3		)	(650.2		)
Property, plant and equipment, net	543.2			557.6
Right-of-use assets	180.3			—
Goodwill	88.6			87.4
Deferred tax asset	204.2			212.6
Other assets	413.7			390.4
Total assets	$	2,997.5		$	3,010.0
Liabilities, Series C Convertible Preferred Stock and Shareholders’ Deficit
Current Liabilities
Debt maturing within one year	$	425.4		$	12.0
Accounts payable	706.0			816.5
Accrued compensation	103.9			85.5
Other accrued liabilities	425.2			451.3
Sales taxes and taxes other than income	94.1			103.9
Income taxes	11.0			15.9
Held for sale liabilities	.1			11.4
Current liabilities of discontinued operations	9.5			—
Total current liabilities	1,775.2			1,496.5
Long-term debt	1,196.4			1,581.6
Long-term operating lease liability	150.4			—
Employee benefit plans	128.2			128.3
Long-term income taxes	135.3			136.2
Other liabilities	55.2			72.1
Total liabilities	3,440.7			3,414.7
Series C convertible preferred stock	498.3			492.1
Shareholders’ Deficit
Common stock	190.6			190.3
Additional paid-in capital	2,302.1			2,303.6
Retained earnings	2,195.4			2,234.3
Accumulated other comprehensive loss	(1,034.4		)	(1,030.4		)
Treasury stock, at cost	(4,602.3		)	(4,602.3		)
Total Avon shareholders’ deficit	(948.6		)	(904.5		)
Noncontrolling interests	7.1			7.7
Total shareholders’ deficit	(941.5		)	(896.8		)
Total liabilities, series C convertible preferred stock and shareholders’ deficit	$	2,997.5		$	3,010.0

5

The accompanying notes are an integral part of these statements.

6

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
(In millions)	March 31, 2019			March 31, 2018
Cash Flows from Operating Activities
Net loss	$	(33.5	)	$	(21.1	)
Loss from discontinued operations, net of tax	(9.5		)	—
Loss from continuing operations, net of tax	(24.0		)	(21.1		)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation	20.6			20.8
Amortization	6.6			7.1
Provision for doubtful accounts	29.9			43.1
Provision for obsolescence	6.7			9.7
Share-based compensation	(0.5		)	3.8
Foreign exchange (losses) gains	(19.2		)	4.6
Deferred income taxes	8.2			1.8
Other	(8.6		)	3.2
Changes in assets and liabilities:
Accounts receivable	(24.3		)	(4.4		)
Inventories	4.8			(58.4		)
Prepaid expenses and other	38.4			0.1
Accounts payable and accrued liabilities	(164.2		)	(106.3		)
Income and other taxes	(12.0		)	(0.9		)
Noncurrent assets and liabilities	(5.1		)	0.6
Net cash used by operating activities of continuing operations	(142.7		)	(96.3		)
Cash Flows from Investing Activities
Capital expenditures	(21.2		)	(27.8		)
Disposal of assets	0.4			0.8
Net proceeds from sale of business	46.4			—
Net cash provided (used) by investing activities of continuing operations	25.6			(27.0		)
Cash Flows from Financing Activities
Debt, net (maturities of three months or less)	27.2			3.6
Repurchase of common stock	—			(2.7		)
Other financing activities	(9.2		)	(0.5		)
Net cash provided by financing activities of continuing operations	18.0			0.4
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(6.3		)	13.9
Net decrease in cash and cash equivalents, and restricted cash	(105.4		)	(109.0		)
Cash and cash equivalents, and restricted cash at beginning of year(1)	536.4			881.5
Cash and cash equivalents, and restricted cash at end of period (2)	$	431.0		$	772.5

 

The accompanying notes are an integral part of these statements.

⁽¹⁾  Includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets at the end of the year in 2018

⁽²⁾  Includes restricted cash related to the sale of Avon Manufacturing (Guangzhou), Ltd. at March 31, 2019

7

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In millions, except per	Common Stock			Additional			Retained			Accumulated Other			Treasury Stock				Noncontrolling
share data)	Shares	Amount		Paid-In Capital			Earnings			Comprehensive Loss			Shares	Amount			Interests			Total
Balances at December 31, 2018	761.8	$	190.3	$	2,303.6		$	2,234.3		$	(1,030.4	)	319.4	$	(4,602.3	)	$	7.7		$	(896.8	)
Net loss	—	—		—			(32.7		)	—			—	—			(0.8		)	(33.5		)
Other comprehensive loss	—	—		—						(4.0		)	—	—			0.1			(3.9		)
Dividends accrued - Series C convertible preferred stock	—	—		—			(6.2		)	—			—	—			—			(6.2		)
Exercise/ vesting/ expense of share-based compensation	1.3	0.3		(1.5		)	—			—			—	—			—			(1.2		)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.0	—	—		—			—			—			—	—			0.1			0.1
Balances at March 31, 2019	763.1	$	190.6	$	2,302.1		$	2,195.4		$	(1,034.4	)	319.4	$	(4,602.3	)	$	7.1		$	(941.5	)

(In millions, except per	Common Stock			Additional		Retained			Accumulated Other			Treasury Stock					Noncontrolling
share data)	Shares	Amount		Paid-In Capital		Earnings			Comprehensive Loss			Shares		Amount			Interests			Total
Balances at December 31, 2017	758.7	$	189.7	$	2,291.2	$	2,320.3		$	(926.2	)	318.4		$	(4,600.0	)	$	10.3		$	(714.7	)
Net loss	—	—		—		(20.3		)	—			—		—			(0.8		)	(21.1		)
Revenue Recognition Cumulative catch up	—	—		—		(41.1		)	—			—		—			—			(41.1		)
Other comprehensive income	—	—		—					35.2								0.4			35.6
Dividends accrued - Series C convertible preferred stock	—	—		—		(6.0		)	—			—		—			—			(6.0		)
Exercise/ vesting/ expense of share-based compensation	2.2	0.6		2.5		(0.4		)	—			(0.1	)	0.9			—			3.6
Repurchase of common stock	—	—		—		—			—			0.9		(2.7		)	—			(2.7		)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.0	—	—		—		—						—		—			(0.2		)	(0.2		)
Balances at March 31, 2018	760.9	$	190.3	$	2,293.7	$	2,252.5		$	(891.0	)	319.2		$	(4,601.8	)	$	9.7		$	(746.6	)

The accompanying notes are an integral part of these statements.

8

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

1. 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 2018 Annual Report on Form 10-K ("2018 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. 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 2018 Form 10-K. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc.

For interim Consolidated Financial Statements purposes, we generally provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense, and adjust these accruals as estimates are refined. 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:

• the effects of significant, unusual or extraordinary pretax and income tax items, if any;

• withholding taxes recognized associated with cash repatriations; and

• the impact of loss-making subsidiaries for which we cannot recognize an income tax benefit and subsidiaries for which an effective tax rate cannot be reliably estimated.

Argentina Currency

During the quarter ended June 30, 2018, based on published official exchange rates which indicated that Argentina's three-year cumulative inflation rate had exceeded 100%, we concluded that Argentina had become a highly inflationary economy. From July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiary. As such, the functional currency for Argentina has changed to the U.S. dollar, which is the consolidated group's reporting currency. When an entity operates in a highly inflationary economy, exchange gains and losses associated with monetary assets and liabilities resulting from changes in the exchange rate are recorded in income. Nonmonetary assets and liabilities, which include inventories, property, plant and equipment and contract liabilities, are carried forward at their historical dollar cost, which was calculated using the exchange rate at June 30, 2018.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases, which requires all assets and liabilities arising from leases to be recognized in our Consolidated Balance Sheets. We adopted this new accounting guidance effective January 1, 2019.

In July 2018, the FASB added an optional transition method which we elected upon adoption of the new standard. This allowed us to recognize and measure leases existing at January 1, 2019 without restating comparative information. In addition, we elected to apply the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification.

We determine if an arrangement is a lease at the lease commencement date. In addition to our lease agreements, we review all material new vendor arrangements for potential embedded lease obligations. The asset balance related to operating and finance leases is presented within right-of-use (ROU) asset and property, plant and equipment, respectively, on our Consolidated Balance Sheet. The short-term liability balance related to operating and finance leases is presented within other accrued liabilities on our Consolidated Balance Sheets. The long-term liability balance is presented within long-term operating lease liability and long-term debt on our Consolidated Balance Sheets for operating and finance leases, respectively.  

The lease liability is recognized based on the present value of the remaining fixed or in-substance fixed lease payments discounted using our incremental borrowing rates. We use a specific incremental borrowing rate for our material leases, which is determined based on the geography and term of the lease. These rates are determined based on inputs provided by external banks and updated periodically. The lease liability includes the exercise of a purchase option only if we are reasonably certain to exercise as of the commencement date of the lease. The residual value guarantee amount is only included in the lease liability

9

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

calculation to the extent payment is probable to the lessor as of the commencement of the lease. The ROU asset is calculated based on the lease liability adjusted for any lease payments paid to the lessor at or before the commencement date (i.e. prepaid rent) and initial direct costs incurred by Avon and excluding any lease incentives received from the Lessor.

Variable lease payments are payments to the lessor not included in the lease liability calculation. We define variable lease payments as payments made by Avon to the lessor for the right to use a leased asset that vary because of changes in facts or circumstances (such as changes in an index rate, volume, usage, etc.) occurring after the lease commencement date, other than predetermined contractual changes due to the passage of time (for example, predetermined rent increase amounts that are set out in the contract). Variable lease payments or charges are accounted for as incurred.

The lease term for purposes of lease accounting may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option as of the commencement date of the lease. For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the Company amortizes the ROU asset on a straight-line basis and records interest expense on the lease liability created at lease commencement over the lease term.

We account for our lease and non-lease components as a single component for most of our asset classes, and therefore both are included in the calculation of lease liability recognized on the Consolidated Balance Sheets. However, for certain lease asset classes related to identified embedded leases we account for the lease and non-lease components separately, and therefore, the non-lease component is not included in the lease liability.

Leases with an initial term of twelve months or less are not recorded on the balance sheet; we recognize lease expense for these leases over their lease term. See Note 9, Leases, for further details.

Other Accounting Standards Implemented

ASU 2018-02, Income Statement - Reporting Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which permits entities to reclassify the disproportionate income tax effects of the 2017 enactment of U.S. tax reform legislation (the "Act") on items within accumulated other comprehensive income (loss) to retained earnings. We adopted this new accounting guidance effective January 1, 2019 and elected not to reclassify the disproportionate income tax effects of the Act from accumulated other comprehensive income (loss) to retained earnings.

Accounting Standards to be Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In January 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held. We intend to adopt this new accounting guidance effective January 1, 2020. We are currently assessing the impact on our consolidated financial statements.

2. LOSS PER SHARE AND SHARE REPURCHASES

We compute loss per share ("EPS") using the two-class method, which is a loss allocation formula that determines loss per share for common stock, and 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.

10

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

	Three Months Ended March 31,
(Shares in millions)	2019			2018
Numerator from continuing operations:
Loss from continuing operations, less amounts attributable to noncontrolling interests	$	(23.2	)	$	(20.3	)
Less: Loss allocated to participating securities	(.2		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss from continuing operations allocated to common shareholders	(29.3		)	(26.0		)
Numerator from discontinued operations:
Loss from discontinued operations	$	(9.5	)	$	—
Less: Loss allocated to participating securities	(.1		)	—
Loss allocated to common shareholders	(9.4		)	—
Numerator attributable to Avon:
Net loss attributable to Avon	$	(32.7	)	$	(20.3	)
Less: Loss allocated to participating securities	(.3		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss allocated to common shareholders	(38.7		)	(26.0		)
Denominator:
Basic EPS weighted-average shares outstanding	442.2			440.9
Diluted effect of assumed conversion of stock options	—			—
Diluted effect of assumed conversion of preferred stock	—			—
Diluted EPS adjusted weighted-average shares outstanding	442.2			440.9
Loss per Common Share from continuing operations:
Basic	$	(.07	)	$	(.06	)
Diluted	(.07		)	(.06		)
Loss per Common Share from discontinued operations:
Basic	$	(.02	)	$	—
Diluted	(.02		)	—
Loss per Common Share attributable to Avon:
Basic	$	(.09	)	$	(.06	)
Diluted	(.09		)	(.06		)

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

During the three months ended March 31, 2019 and 2018, we did not include stock options to purchase 17.2 million and 15.3 million shares, respectively, of Avon common stock in the calculation of diluted EPS as we had a net loss and the inclusion of these shares would decrease the net loss per share. Since the inclusion of such shares would be anti-dilutive, these are excluded from the calculation.

For the three months ended March 31, 2019 and 2018, respectively, it is more dilutive to assume the series C convertible preferred stock is not converted into common stock; therefore, the weighted-average shares outstanding were not adjusted by the as-if converted series C convertible preferred stock because the effect would be anti-dilutive. The inclusion of the series C convertible preferred stock would decrease the net loss per share for the three months ended March 31, 2019 and 2018. 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 months ended March 31, 2019 and 2018. See Note 6, Related Party Transactions.

We did not purchase any shares of Avon common stock during the first three months of 2019, as compared to approximately .9 million shares of Avon common stock for $2.7 during the first three months of 2018, through acquisition of stock from employees in connection with tax payments upon the vesting of restricted stock units and performance restricted stock units.

11

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

3. DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

Discontinued Operations

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 $435.0 investment by Cleveland Apple Investor L.P. ("Cerberus Investor") (an affiliate of Cerberus) in the Company through the purchase of perpetual convertible preferred stock (see Note 6, Related Party Transactions) 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 Cerberus NA Investor LLC (an affiliate of Cerberus). These transactions closed on March 1, 2016.

The Company incurred costs during the three months ended March 31, 2019 following the resolution of certain contingent liabilities related to its ownership and operation of the North America business prior to its separation into New Avon. These costs are reported as discontinued operations related to New Avon.

The major classes of financial statement components comprising the loss on discontinued operations, net of tax for New Avon are shown below:

	Three Months Ended March 31, 2019
Selling, general and administrative expenses	9.5
Operating loss	(9.5	)
Loss from discontinued operations, net of tax	(9.5	)

There were no amounts recorded in discontinued operations for the three months ended March 31, 2018. See Note 21, Subsequent Events, for additional information relating to New Avon.

Assets and Liabilities Held for Sale

The major classes of assets and liabilities comprising Held for sale assets and Held for sale liabilities on the Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are shown in the following table.

	March 31, 2019
	Rye Office		Malaysia Maximin		Total
Current Held for sale assets
Property, Plant & Equipment (net)	$	12.5	$	3.1	$	15.6
Other assets	—		.1		.1
	$	12.5	$	3.2	$	15.7
Current Held for sale liabilities
Other liabilities	$	—	$	.1	$	.1
	$	—	$	.1	$	.1

12

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

	December 31, 2018
	Avon Manufacturing (Guangzhou)		Rye Office		Malaysia Maximin		Total
Current held for sale assets
Inventories	$	8.7	$	—	$	—	$	8.7
Property, Plant & Equipment (net)	36.7		12.3		3.0		52.0
Cash and cash equivalents	3.7		—		—		3.7
Other assets	1.1		—		.1		1.2
	$	50.2	$	12.3	$	3.1	$	65.6
Current held for sale liabilities
Accounts payable	8.6		—		—		8.6
Other liabilities	2.6		—		.2		2.8
	$	11.2	$	—	$	.2	$	11.4

Refer to Divestitures section below for sale of Avon Manufacturing (Guangzhou).

Rye Office

In February 2019, we signed an agreement to sell the Rye office. As negotiations progressed, we refined the calculation for the held for sale assets which gave rise to an additional $0.2 in assets.

The due diligence process has been ongoing during the first quarter of 2019 and we expect this transaction to close during the second quarter of 2019.

Malaysia Maximin

In February 2019, we signed an agreement to sell Malaysia Maximin. The Company is finalizing certain due diligence items and expects this transaction to close during the second quarter of 2019.

Divestitures - China manufacturing

On February 15, 2019, we completed the sale to TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd., of all of the equity interests in Avon Manufacturing (Guangzhou), Ltd. for a total purchase price of $71.0, less expenses of approximately $1.1; the purchase price included $23.5 relating to outstanding intercompany loans payable to Avon Manufacturing (Guangzhou), Ltd. from other Avon subsidiaries. As of March 31, 2019, the Company had received the gross cash proceeds of $71.0 (which included $24.6 of restricted cash, refer to Note 4, Restricted Cash) but had not yet settled the loans of $23.5. The net cash proceeds of $46.4, net of loan amounts, are presented as investing activities in the Consolidated Statement of Cash Flows. The proceeds to cover settlement of the loans are presented within debt, net as financing activities in the Consolidated Statement of Cash Flows. The loans were subsequently settled in April 2019. Further, $15.8 of the restricted cash balance of $24.6 was transferred from escrow into the Company's bank account in April 2019.

In the first quarter of 2019, we recorded a gain on sale of $10.3 before tax, which is reported separately in the Consolidated Statements of Operations, and $8.2 after tax, representing the difference between the proceeds, including the settlement of the intercompany loans, and the carrying value of Avon Manufacturing (Guangzhou), Ltd. on the date of sale.

Refer to Note 4, Restricted Cash, for the reporting of the proceeds related to this sale.

4. RESTRICTED CASH

Restricted cash is related to the sale of Avon Manufacturing (Guangzhou), Ltd. as described in Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures.

Restricted cash is subject to legal restrictions imposed by the Equity Purchase Agreement between TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd., Avon Asia Holdings Company and Avon Products (China) Co., Ltd related to the sale of Avon Manufacturing (Guangzhou), Ltd. These deposits are not available for general use by the Company. However, $15.8 of the restricted cash balance of $24.6 was transferred from escrow into the Company's bank accounts in April 2019.

13

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows for the three month period ended March 31, 2019.

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	406.4	$	532.7
Restricted Cash(1)	17.0		—
Long-term restricted cash(2)	7.6		—
Held for sale cash and cash equivalents	—		3.7
Cash and cash equivalents, and restricted cash at end of period per the statement of cash flows	$	431.0	$	536.4

⁽¹⁾ $15.8 of the $17.0 was transferred from escrow into the Company's bank accounts in April 2019. The remainder is expected to be transferred into the Company's bank accounts during the second quarter of 2019.

⁽²⁾ Long-term restricted cash is presented in other assets in our Consolidated Balance Sheets.

5. INVESTMENT IN NEW AVON

In connection with the separation of the Company's North America business, which closed on March 1, 2016, the Company retained a 19.9% ownership interest in New Avon, a privately-held company that is majority-owned and managed by an affiliate of Cerberus.

Our recorded investment balance in New Avon at March 31, 2019 and December 31, 2018 was zero. See Note 21, Subsequent Events, for additional information relating to New Avon.

6. RELATED PARTY TRANSACTIONS

The following tables present the related party transactions with New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. New Avon is majority-owned and managed by Cerberus. See Note 5, Investment in New Avon for further details.

	Three Months Ended March 31,
	2019		2018
Statement of Operations Data
Revenue from sale of product to New Avon(1)	$	4.8	$	5.9
Gross profit from sale of product to New Avon(1)	$	.1	$	.4
Cost of sales for purchases from New Avon(2)	$	.6	$	.5
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases(3)	$	—	$	(3.2	)
Project management team(4)	$	1.4	.5
Net reduction of selling, general and administrative expenses	$	1.4	$	(2.7	)
Interest income from Instituto Avon(5)	$	—	$	—

	March 31, 2019		December 31, 2018
Balance Sheet Data
Inventories(6)	$	.3	$	.3
Receivables due from New Avon(7)	$	4.3	$	7.0
Receivables due from Instituto Avon(5)	$	3.2	$	3.2
Payables due to New Avon(8)	$	1.0	$	.2
Payables due to an affiliate of Cerberus(9)	$	.6	$	.6

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement noted above. The Company purchased $.8 and $.6 from New Avon associated with this agreement during the three months ended March 31, 2019 and 2018, respectively, and recorded $.6 and $.5 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended March 31, 2019 and 2018, respectively.

(3) The Company also entered into a transition services agreement to provide certain services to New Avon, which expired on October 31, 2018, as well as an intellectual property ("IP") license agreement, an agreement for technical support and innovation and sublease for office space. The net amounts recorded within selling, general and administrative expenses generally represent a recovery of the related costs.

(4) 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 implementation of the Company’s strategic initiatives. The Company recorded $1.4 and $.5 in selling, general and administrative expenses associated with these agreements during the three months ended March 31, 2019 and 2018, respectively. See Note 15, Restructuring Initiatives for additional information related to the Company's strategic initiatives.

14

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

(5) During the second quarter of 2018, the Company entered into an agreement to loan the Instituto Avon, an independent non-government charitable organization in Brazil, R$12 million (Brazilian real) for an unsecured 5-year term at a fixed interest rate of 7% per annum, to be paid back in 5 equal annual installments. The Instituto Avon was created by an Avon subsidiary in Brazil, with the board and executive team comprised of Avon Brazil management. The purpose of the loan is to provide the Instituto Avon with the means to donate funds to Fundação Pio XII (a leading cancer prevention and treatment organization in Brazil and owner of the Hospital do Câncer de Barretos), in order to invest in equipment with the objective of expanding breast cancer prevention and treatment.

(6) Inventories relate to purchases from New Avon, associated with the manufacturing and supply agreement, which have not yet been sold, and were classified within inventories in our Consolidated Balance Sheets.

(7) The receivables due from New Avon relate to the agreements for transition services, the IP license agreement, technical support and innovation and subleases for office space, as well as the manufacturing and supply agreement, and were classified within prepaid expenses and other in our Consolidated Balance Sheets.

(8) The payables due to New Avon relate to the manufacturing and supply agreement and were classified within other accrued liabilities in our Consolidated Balance Sheets.

(9) The payables due to an affiliate of Cerberus relate to the agreement for the project management team, and were classified within other accrued liabilities in our Consolidated Balance Sheets.

In addition, 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 March 31, 2019, the Company has a liability of $.8 for the estimated value of such standby letters of credit.

Series C Preferred Stock

On March 1, 2016, the Company issued and sold to Cerberus Investor 435,000 shares of newly issued series C preferred stock for an aggregate purchase price of $435.0. Cumulative preferred dividends accrue daily on the series C preferred stock at a rate of 1.25% per quarter. The series C preferred stock had accrued unpaid dividends of $72.0 as of March 31, 2019. Series C convertible preferred stock and accrued dividends of $498.3 on the Consolidated Balance Sheet at March 31, 2019 is stated net of $8.7 of costs incurred in connection with the issuance of the Series C convertible preferred stock in 2016. There were no dividends declared in the three months ended March 31, 2019 and 2018.

15

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

7. REVENUE

Disaggregation of revenue

In the following table, revenue is disaggregated by product or service type. All revenue is recognized at a point in time, when control of a product is transferred to a customer:

	Three Months Ended March 31, 2019
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	139.1	$	126.7	$	50.3	$	33.2	$	349.3	$	—	$	349.3
Fragrance	133.9		98.3		48.0		17.8		298.0		—		298.0
Color	93.9		60.2		21.9		13.2		189.2		—		189.2
Total Beauty	366.9		285.2		120.2		64.2		836.5		—		836.5
Fashion & Home:
Fashion	60.5		38.8		22.1		42.9		164.3		—		164.3
Home	8.5		60.2		40.3		6.4		115.4		—		115.4
Total Fashion & Home	69.0		99.0		62.4		49.3		279.7		—		279.7
Net sales	435.9		384.2		182.6		113.5		1,116.2		—		1,116.2
Representative fees	22.5		29.5		10.1		1.8		63.9		—		63.9
Other	.3		1.0		—		—		1.3		5.5		6.8
Other revenue	22.8		30.5		10.1		1.8		65.2		5.5		70.7
Total revenue	$	458.7	$	414.7	$	192.7	$	115.3	$	1,181.4	$	5.5	$	1,186.9

	Three months ended March 31, 2018
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	169.2	$	141.8	$	46.7	$	31.4	$	389.1	$	4.7	$	393.8
Fragrance	163.2		118.6		53.6		18.6		354.0		2.2		356.2
Color	120.8		80.9		20.9		13.1		235.7		3.3		239.0
Total Beauty	453.2		341.3		121.2		63.1		978.8		10.2		989.0
Fashion & Home:
Fashion	79.8		46.5		22.6		39.7		188.6		1.9		190.5
Home	9.3		71.9		41.2		7.0		129.4		.7		130.1
Total Fashion & Home	89.1		118.4		63.8		46.7		318.0		2.6		320.6
Net sales	542.3		459.7		185.0		109.8		1,296.8		12.8		1,309.6
Representative fees	25.9		36.4		10.6		1.6		74.5		1.4		75.9
Other	.2		1.0		—		—		1.2		6.8		8.0
Other revenue	26.1		37.4		10.6		1.6		75.7		8.2		83.9
Total revenue	$	568.4	$	497.1	$	195.6	$	111.4	$	1,372.5	$	21.0	$	1,393.5

16

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

Contract balances

The timing of revenue recognition generally is different from the timing of a promise made to a Representative. As a result, we have contract liabilities, which primarily relate to the advance consideration received from Representatives prior to transfer of the related good or service for material rights, such as loyalty points and status programs, and are primarily classified within other accrued liabilities (with the long-term portion in other liabilities) in our Consolidated Balance Sheets.

Generally, we record accounts receivable when we invoice a Representative. In addition, we record an estimate of an allowance for doubtful accounts on receivable balances based on an analysis of historical data and current circumstances, including seasonality and changing trends. The allowance for doubtful accounts is reviewed for adequacy, at a minimum, on a quarterly basis. We generally have no detailed information concerning, or any communication with, any ultimate consumer of our products beyond the Representative. We have no legal recourse against the ultimate consumer for the collection of any accounts receivable balances due from the Representative to us. If the financial condition of the Representatives were to deteriorate, resulting in their inability to make payments, additional allowances may be required.

The following table provides information about receivables and contract liabilities from contracts with customers at March 31, 2019 and December 31, 2018:

	2019				2018
	31 March		1 January		31 March		1 January
Accounts receivable, net of allowances of $79, $93, $128 and $139	$	340.9	$	349.7	$	429.0	$	457.2
Contract liabilities	$	58.3	83.5		$	75.5	$	91.8

At January 1, 2019 and March 31, 2019 we had a contract liability of $83.5 and $58.3, respectively, relating to certain material rights (loyalty points, status program and prospective discounts). During the three months ended March 31, 2019, we recognized $52.1 of revenue related to the contract liability balance at January 1, 2019, as the result of performance obligations satisfied. In addition, we deferred an additional $26.1 related to certain material rights granted during the period, for which the performance obligations are not yet satisfied. Of the amount deferred during the period, substantially all will be recognized within a year, with the significant majority to be captured within a quarter. The remaining movement in the contract liability balance is attributable to foreign exchange differences arising on the translation of the balance as at March 31, 2019 as compared with December 31, 2018.

At January 1, 2018 and March 31, 2018 we had a contract liability of $91.8 and $75.5, respectively. During the three months ended March 31, 2018, we recognized $66.0 of revenue related to the contract liability balance at January 1, 2018, as the result of performance obligations satisfied. In addition, we deferred an additional $47.9 related to certain material rights granted during the quarter, for which the performance obligations are not yet satisfied. Of the amount deferred during the period, substantially all was recognized in 2018.

Contract costs

Incremental costs to obtain contracts, such as bonuses or commissions, are recognized as an asset if the entity expects to recover them. However, ASC 340-40, Other Assets and Deferred Costs, offers a practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. We elected the practical expedient and expense costs to obtain contracts when incurred because our amortization period is one year or less.

Costs to fulfill contracts with Representatives are comprised of shipping and handling (including order processing) and payment processing services, which are expensed as incurred. The fees for these services are included in the transaction price.

8. INVENTORIES

Components of Inventories	March 31, 2019		December 31, 2018
Raw materials	$	143.4	$	157.8
Finished goods	388.9		384.2
Total	$	532.3	$	542.0

17

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

9. LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Some of our leases may include options to extend or terminate the lease. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

18

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8

19

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

10. EMPLOYEE BENEFIT PLANS

	Three Months Ended March 31,
	Pension Benefits
Net Periodic Benefit Costs	U.S. Plans						Non-U.S. Plans						Postretirement Benefits
	2019			2018			2019			2018			2019		2018
Service cost	$	.5		$	.9		$	1.0		$	1.2		$	—	$	.1
Interest cost	.6			.6			3.9			4.2			.3		.3
Expected return on plan assets	(.8		)	(.8		)	(7.9		)	(8.4		)	—		—
Amortization of prior service credit	—			—			—			—			—		(.1		)
Amortization of net actuarial losses	.7			1.3			1.3			1.8			—		—
Settlements/curtailments	—			—			0.1			—			—		—
Net periodic benefit costs(1)	$	1.0		$	2.0		$	(1.6	)	$	(1.2	)	$	.3	$	.3

⁽¹⁾ Service cost is presented in selling, general and administrative expenses in our Consolidated Statements of Operations. The components of net periodic benefit costs other than service cost are presented in other expense, net in our Consolidated Statements of Operations.

During the three months ended March 31, 2019, we made less than $1 of contributions to the U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively. During the remainder of 2019, we anticipate contributing approximately $5 to $10 and approximately $0 to $5 to fund our U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively.

11. CONTINGENCIES

Brazilian Tax Assessments

In December 2012, our Brazilian subsidiary, Avon Industrial LTDA (Avon Brazil Manufacturing) received an excise tax (IPI) assessment for the year 2008. The assessment totals approximately $300, including penalties and accrued interest. As in prior IPI cases that have been resolved in Avon’s favor, this assessment asserts that the establishment in 1995 of separate manufacturing and distribution companies in Brazil was done without a valid business purpose and that Avon Brazil Manufacturing 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 2012 IPI assessment is unfounded.

These matters are being vigorously contested. In July 2013, the 2012 IPI assessment was upheld at the first administrative level and we appealed this decision to the second administrative level. On April 18, 2018, Avon received official notification that the second administrative level has issued a partially favorable and partially unfavorable decision. In this decision, the original assessment was reduced by approximately $62 (including associated penalty and interest), subject to Federal Revenue appeal. The remaining $238 of the assessment was upheld at the second administrative level. On April 20, 2018, we appealed this decision in the third administrative level where the matter remains pending resolution.

On October 3, 2017, Avon Brazil Manufacturing received a new tax assessment notice regarding IPI for 2014 on grounds similar to the 2012 assessment. The 2017 IPI assessment totals approximately $232, including penalties and accrued interest. On April 2, 2018, Avon was notified of an unfavorable decision at the first administrative level. On February 25, 2019 this IPI assessment was upheld at the second administrative level and we are waiting for the formal decision.

In the event that the 2012 and the 2017 IPI assessments are upheld in the third and final administrative level, it may be necessary for us to provide monetary security to pursue further appeals in the judicial levels, which, depending on the circumstances, may result in a charge to earnings and an adverse effect on the Company's Consolidated Statements of Cash Flows. 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). We believe that the 2012 and the 2017 IPI assessments are unfounded, however, based on the likelihood that these will be upheld, we assess the risks as disclosed above as reasonably possible. At March 31, 2019, we have not recognized a liability for the 2012 or 2017 IPI assessments.

20

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

Brazil IPI Tax on Cosmetics

Separate from the tax assessments received by Avon Brazil Manufacturing, Avon Cosmeticos LTDA (Avon Brazil) is involved in litigation related to an executive decree issued in May 2015. This decree increased the amount of IPI taxes that are to be remitted by Avon Brazil to the taxing authority on the sales of cosmetic products. Avon Brazil filed an objection to this IPI tax increase on the basis that it is not constitutional. In December 2016, Avon Brazil received a favorable decision from the Federal District Court regarding this objection. This decision has been appealed by the tax authorities.

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 was no longer required to remit the taxes associated with IPI into a judicial deposit. On June 12, 2018, we received a decision authorizing Avon to withdraw the amount held as a judicial deposit, substituting it by letter of guarantee, which was presented. On June 29, 2018, the tax authorities presented an appeal against that decision. On July 30, 2018, the funds were received in our bank account. As of September 30, 2018, due in part to recent judicial decisions across the industry and other developments, we concluded, supported by the opinion of legal counsel, that the Executive Decree is unconstitutional. We therefore assessed the IPI tax under ASC 450, Contingencies and determined that the risk of loss is reasonably possible but not probable. Accordingly, we released the associated liability as of September 30, 2018 of approximately $195 and ceased accruing the IPI taxes from October 1, 2018. The liability had been classified within long-term sales taxes and taxes other than income in our Consolidated Balance Sheet, and the release was recorded in net sales and other (income) expense, net in the amounts of approximately $168 and approximately $27, respectively, in our Consolidated Income Statements for the quarter ended September 30, 2018.

An unfavorable ruling to our objection of this IPI tax increase would have an adverse effect on the Company's Consolidated Income Statements and Consolidated Statements of Cash Flows as Avon Brazil would have to remit the reasonably possible amount of $227 to the taxing authorities (including the judicial deposit that was returned to us on July 30, 2018). We are not able to reliably predict the timing of the outcome of our objection to this tax increase.

A favorable judicial ruling to our objection of this IPI tax would also have an adverse effect on the Company's Consolidated Statements of Cash Flows as Avon Brazil would have to remit all or a portion of the associated income tax liability to the taxing authorities. The Company is accruing a tax reserve, which amounts to approximately $73 at March 31, 2019. This reserve will be settled on final adjudication of the law through a combination of cash and use of deferred tax assets.

Talc-Related Litigation

The Company has been named a defendant in numerous personal injury lawsuits filed in U.S. courts, alleging that certain talc products the Company sold in the past were contaminated with asbestos. Many of these actions involve a number of co-defendants from a variety of different industries, including manufacturers of cosmetics and manufacturers of other products that, unlike the Company’s products, were designed to contain asbestos. As of March 31, 2019, there were 118 individual cases pending against the Company. During the three months ended 31 March, 2019, 18 new cases were filed and 8 cases were dismissed, settled, or otherwise resolved. The value of our settlements in this area thus far has not been material, either individually or in the aggregate. Additional similar cases arising out of the use of the Company's talc products are reasonably anticipated.

We believe that the claims asserted against us in these cases are without merit. We are defending vigorously against these claims and will continue to do so. To date, none of the cases filed against the Company have proceeded to trial and there have been no findings of liability against the Company. However, nationwide trial results in similar cases filed against other manufacturers of cosmetic talc products have ranged from outright dismissals to very large jury awards of both compensatory and punitive damages. Given the inherent uncertainties of litigation, we cannot predict any overall trends in the outcome of the cases pending against the Company, and we are only able to make a reasonable estimate for a small number of individual cases that have advanced to the later stages of legal proceedings.  Any accruals currently recorded on the Company’s balance sheet with respect to these individual cases are not material.  Other than these accruals, we are at this time unable to estimate our reasonably possible or probable losses.  However, any adverse outcomes, either in an individual case or in the aggregate, could be material. Future costs to litigate these cases, which we expense as incurred, are not known but may be significant, though some costs will be covered by insurance.

Brazilian Labor-Related Litigation

On an ongoing basis, the Company is subject to numerous and diverse labor-related lawsuits filed by employees in Brazil. These cases are assessed on an aggregated and ongoing basis based on historical outcomes of similar cases. The claims made

21

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

are often for significantly larger sums than have historically been paid out by the Company. Our practice continues to be to recognize a liability based on our assessment of historical payments in similar cases. Our best estimate of the probable loss for such current cases at March 31, 2019 is approximately $12 and, accordingly, we have recognized a liability for this amount.

Shareholder Litigation

On February 14, 2019, a purported shareholder’s class action complaint (Bevinal v. Avon Products, Inc., et al., No. 19-cv-1420) was filed in the United States District Court for the Southern District of New York against the Company and certain former officers of the Company.  The complaint is brought on behalf of a purported class consisting of all purchasers of Avon common stock between August 2, 2016 and August 2, 2017, inclusive.  The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange of 1934 (the "Exchange Act") Act based on allegedly false or misleading statements and alleged market manipulation with respect to, among other things, changes made to Avon’s credit terms for Representatives in Brazil.  In light of the early stage of the litigation, we are unable to predict the outcome of this matter and are unable to assess the likelihood of loss or to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome.

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 March 31, 2019, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The tables below present the changes in AOCI by component and the reclassifications out of AOCI for the three months ended March 31, 2019 and 2018:

Three Months Ended March 31, 2019	Foreign Currency Translation Adjustments			Cash Flow Hedges			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2018	$	(936.2	)	$	0.5		$	(4.3	)	$	(93.8	)	$	3.4	$	(1,030.4	)
Other comprehensive loss other than reclassifications	(3.4		)	(2.4		)	—			—			—		(5.8		)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0				0.5											0.5
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			—			1.3			—		1.3
Total reclassifications into earnings	—			0.5			—			1.3			—		1.8
Balance at March 31, 2019	$	(939.6	)	$	(1.4	)	$	(4.3	)	$	(92.5	)	$	3.4	$	(1,034.4	)

Three Months Ended March 31, 2018	Foreign Currency Translation Adjustments			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2017	$	(829.6	)	$	(4.3	)	$	(95.7	)	$	3.4	$	(926.2	)
Other comprehensive income other than reclassifications	32.3			—			—			—		32.3
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			2.9			—		2.9
Total reclassifications into earnings	—			—			2.9			—		2.9
Balance at March 31, 2018	$	(797.3	)	$	(4.3	)	$	(92.8	)	$	3.4	$	(891.0	)

(1) Gross amount reclassified to other expense, net in our Consolidated Statements of Operations, and related taxes reclassified to income taxes in our Consolidated Statements of Operations.

22

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

A foreign exchange net gain of $2.6 and $5.9 for the three months ended March 31, 2019 and 2018, respectively, resulting from the translation of actuarial losses and prior service cost recorded in AOCI, are included in foreign currency translation adjustments in our Consolidated Statements of Comprehensive Loss.

13. SEGMENT INFORMATION

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of global marketing and digital expenses based on actual revenues. Segment profit excludes global expenses other than the allocation of marketing and digital, costs to implement ("CTI") restructuring initiatives (see Note 15, 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:

	Three Months Ended March 31,
Total Revenue	2019		2018
Europe, Middle East & Africa	$	458.7	$	568.4
South Latin America	414.7		497.1
North Latin America	192.7		195.6
Asia Pacific	115.3		111.4
Total revenue from reportable segments	1,181.4		1,372.5
Other operating segments and business activities	5.5		21.0
Total revenue	$	1,186.9	$	1,393.5

	Three Months Ended March 31,
Operating Profit	2019			2018
Segment Profit
Europe, Middle East & Africa	$	59.2		$	74.4
South Latin America	23.8			27.2
North Latin America	16.5			20.8
Asia Pacific	16.7			10.4
Total profit from reportable segments	$	116.2		$	132.8
Other operating segments and business activities	.6			2.2
Unallocated global expenses	(63.1		)	(79.2		)
CTI restructuring initiatives	(53.5		)	(10.9		)
Other items	(4.1		)	—
Operating (loss) profit	$	(3.9	)	$	44.9

Other operating segments and business activities include markets that have been exited. Effective in the first quarter of 2018, given that we exited Australia and New Zealand during 2018, the results of Australia and New Zealand are now reported in Other operating segments and business activities for all periods presented, while previously the results had been reported in the Asia Pacific segment. 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.

23

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

14. SUPPLEMENTAL BALANCE SHEET INFORMATION

At March 31, 2019 and December 31, 2018, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	March 31, 2019		December 31, 2018
Prepaid taxes and tax refunds receivable	$	126.6	$	145.0
Receivables other than trade	56.2		69.2
Prepaid brochure costs, paper and other literature	14.4		14.9
Other	58.0		42.9
Prepaid expenses and other	$	255.2	$	272.0

At March 31, 2019 and December 31, 2018, other assets included the following:

Components of Other Assets	March 31, 2019		December 31, 2018
Net overfunded pension plans	$	95.8	$	88.1
Capitalized software	88.8		89.3
Judicial deposits	72.2		74.1
Long-term receivables	79.4		73.2
Trust assets associated with supplemental benefit plans	37.4		37.0
Tooling (plates and molds associated with our beauty products)	12.0		12.6
Other	28.1		16.1
Other assets	$	413.7	$	390.4

15. RESTRUCTURING INITIATIVES

Transformation Plan and Open Up Avon

Open Up Avon

In September 2018, we initiated a new strategy in order to return Avon to growth ("Open Up Avon"). As one element of this plan, we are targeting annualized cost savings of approximately $400 by 2021, to be generated from efficiencies in manufacturing and sourcing, distribution, general and administrative activities, and back office functions, as well as through revenue management, interest and tax. These savings are expected to be achieved through restructuring actions (that may result in charges related to severance, contract terminations and inventory and other asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges. In January 2019, we announced significant advancements in this strategy, including a structural reset of inventory processes and a reduction in global workforce. The structural reset resulted in an incremental one-off inventory obsolescence expense of $88 recognized at December 31, 2018. As a result of Open Up Avon restructuring actions approved to-date, we have recorded total costs to implement these restructuring initiatives of $188.3 before taxes, of which $45.1 was recorded during the three months ended March 31, 2019, in our Consolidated Statements of Operations.

Transformation Plan

In January 2016, we initiated a transformation plan (the "Transformation Plan"), in order to enable us to achieve our long-term goals of mid-single-digit constant-dollar ("Constant $") revenue growth and low double-digit operating margin. Under this plan, we had targeted pre-tax annualized cost savings of approximately $350 after three years, which we exceeded through restructuring actions, as well as other cost-savings strategies that did not result in restructuring charges.

As a result of these restructuring actions approved to-date, we have recorded total costs to implement these restructuring initiatives of $203.4 before taxes, of which a benefit of $2.0 was recorded during the three months ended March 31, 2019, in our Consolidated Statements of Operations. There are no further restructuring actions to be taken associated with our Transformation Plan, as beginning in the third quarter of 2018, all new restructuring actions approved operate under our new Open Up Avon plan described above.

Costs to Implement Restructuring Initiatives - Three Months Ended March 31, 2019 and 2018

24

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

During the three months ended March 31, 2019, we recorded net costs to implement of $43.2, of which $45.1 related to Open Up Avon, a net benefit of $2 related to the Transformation Plan, and $.1 related to other restructuring initiatives, in our Consolidated Statements of Operations. During the three months ended March 31, 2018, we recorded costs to implement of $10.9 related to the Transformation Plan, in our Consolidated Statements of Operations. The costs during the three months ended March 31, 2019 and 2018 consisted of the following:

	Three Months Ended March 31,
	2019			2018
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	3.8		$	—
Inventory write-off	0.5			0.6
	4.3			0.6
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	35.3			8.3
Implementation costs, primarily related to professional service fees	8.7			1.1
Dual running costs	1.8			—
Contract termination and other net benefits	3.3			0.2
Accelerated depreciation	0.1			0.7
	49.2			10.3
CTI recorded in operating profit	53.5			10.9
CTI recorded in other expenses
Gain on sale of China business (relating mainly to foreign currency translation adjustment gain)	(10.3		)	—
Total CTI	$	43.2		$	10.9
Open Up Avon	$	45.1		$	—
Transformation Plan	$	(2.0	)	$	10.9
Other	$	0.1		$	—

The tables below include restructuring costs such as employee-related costs, inventory and asset write-offs, foreign currency translation write-offs and contract terminations, and do not include other costs to implement restructuring initiatives such as professional services fees, dual running costs, accelerated depreciation and gain on sale of business.

25

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with Open Up Avon at March 31, 2019 is as follows:

	Employee-Related Costs			Inventory/Assets Write-offs			Foreign Currency Translation Adjustment Write-offs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	19.6		$	—		$	—		$	1.1		$	20.7
2019 charges	$	37.6		$	4.3		$	(10.3	)	$	3.0		34.6
Adjustments	(1.3		)	—			—			—			(1.3		)
Cash payments	(9.6		)	—			—			(0.7		)	(10.3		)
Non-cash write-offs	—			(4.3		)	10.3			—			6.0
Foreign exchange	(.8		)	—			—			—			(.8		)
Balance at March 31, 2019	$	45.5		$	—		$	—		$	3.4		$	48.9

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with our Transformation Plan as of March 31, 2019 is as follows:

	Employee-Related Costs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	34.4		$	3.6		$	38.0
2019 charges	—			—			—
Adjustments	(1.1		)	.2			(.9		)
Cash payments	(10.8		)	(2.5		)	(13.3		)
Non-cash write-offs	—			—			—
Foreign exchange	.1			—			.1
Balance at March 31, 2019	$	22.6		$	1.3		$	23.9

The majority of cash payments, if applicable, associated with the year-end liability are expected to be made during 2019.

The following table presents the restructuring charges incurred to date, under Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans:

	Employee- Related Costs		Inventory/ Asset Write-offs		Contract Terminations/Other		Foreign Currency Translation Adjustment Write-offs			Total
Open Up Avon
Charges incurred to-date	$	62.7	$	92.6	$	5.3	$	(10.3	)	$	150.3
Estimated charges to be incurred on approved initiatives	1.0		—		—		—			1.0
Total expected charges on approved initiatives	$	63.7	$	92.6	$	5.3	$	(10.3	)	$	151.3
Transformation Plan
Charges incurred to-date	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5
Estimated charges to be incurred on approved initiatives	—		—		—		—			—
Total expected charges on approved initiatives	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5

26

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

The charges, net of adjustments, of initiatives under the Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans, by reportable segment are as follows:

	Europe, Middle East & Africa			South Latin America		North Latin America			Asia Pacific			Global & Other Operating Segments		Total
Open Up Avon
2018	$	32.2		$	36.4	$	27.9		$	14.4		$	6.2	$	117.1
First quarter 2019	13.5			12.7		2.9			(3.2		)	7.3		33.2
Charges incurred to-date	45.7			49.1		30.8			11.2			13.5		150.3
Estimated charges to be incurred on approved initiatives	.1			—		.4			—			.5		1.0
Total expected charges on approved initiatives	$	45.8		$	49.1	$	31.2		$	11.2		$	14.0	$	151.3
Transformation Plan
2015	$	—		$	—	$	—		$	—		$	21.4	$	21.4
2016	30.9			13.2		4.4			9.1			16.8		74.4
2017	.9			5.6		(.6		)	(.5		)	49.4		54.8
2018	5.0			4.1		.6			.6			13.4		23.7
First quarter 2019	(1.1		)	—		—			—			.3		(.8		)
Charges incurred to-date	35.7			22.9		4.4			9.2			101.3		173.5
Estimated charges to be incurred on approved initiatives	—			—		—			—			—		—
Total expected charges on approved initiatives	$	35.7		$	22.9	$	4.4		$	9.2		$	101.3	$	173.5

The charges above are not included in segment profit, as this excludes costs to implement restructuring initiatives. The amounts shown in the tables above as charges recorded to-date relate to initiatives that have been approved and recorded in the consolidated 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.

27

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

16. GOODWILL

	Europe, Middle East & Africa			South Latin America		Asia Pacific		Total
Net balance at December 31, 2018	$	18.0		$	66.8	$	2.6	$	87.4
Changes during the period ended March 31, 2019:
Foreign exchange	(.3		)	1.5		—		1.2
Net balance at March 31, 2019	$	17.7		$	68.3	$	2.6	$	88.6

17. FAIR VALUE

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 March 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	3.9	$	—	$	3.9
Foreign exchange forward contracts	$	—	$	17.1	$	17.1
Total	$	3.9	$	17.1	$	21.0
Liabilities:					$	—
Foreign exchange forward contracts	$	—	$	1.9	$	1.9
Total	$	—	$	1.9	$	1.9

The assets and liabilities measured at fair value on a recurring basis were immaterial at December 31, 2018.

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, available-for-sale securities, short-term investments, accounts receivable, debt maturing within one year, accounts payable, long-term debt and foreign exchange forward 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 March 31, 2019 and December 31, 2018, respectively, consisted of the following:

	March 31, 2019						December 31, 2018
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Available-for-sale securities	$	3.9		$	3.9		$	3.8		$	3.8
Debt maturing within one year(1)	(425.4		)	(433.4		)	(12.0		)	(12.0		)
Long-term debt(1)	(1,196.4		)	(1,207.1		)	(1,581.6		)	(1,460.2		)
Foreign exchange forward contracts	15.2			15.2			(5.1		)	(5.1		)

(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.

28

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

• 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.

18. 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.

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 in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at March 31, 2019:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	1.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	17.1	Accounts payable	$	.3
Total derivatives		$	17.1		$	1.9

The fair value of derivative instruments outstanding was immaterial at December 31, 2018.

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. As of March 31, 2019, we do not have any interest-rate swap agreements. Approximately 26% and 1% of our debt portfolio, at March 31, 2019 and December 31, 2018, respectively, was exposed to floating interest rates. For the purpose of this calculation, we consider all short-term debt to be exposed to floating interest rates.

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 was amortized as a reduction of interest expense until repayment of the underlying debt obligations in June 2018, at which point the remaining unamortized balance was fully released to the Consolidated Statement of Operations. The net impact of the gain amortization was zero for the three months ended March 31, 2019 and $1.3 for the three months ended March 31, 2018. At March 31, 2019, there was no unamortized deferred gain associated with the March 2012 interest-rate swap termination as the underlying debt obligations have been paid.

Foreign Currency Risk

We may use foreign exchange forward contracts to manage a portion of our foreign currency exchange rate exposures. At March 31, 2019, we had outstanding foreign exchange forward contracts with notional amounts totaling approximately $1,236.2 for various currencies, of which $26.8 were designated as cash flow hedges.

29

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

We may use foreign exchange forward contracts to manage foreign currency exposure of certain intercompany loans. 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 months ended March 31, 2019, we recorded a gain of $25.0 in other expense in our Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. During the three months ended March 31, 2018, we recorded a gain of $.9 in other expense, net in our Consolidated Statements of Operations related to other undesignated foreign exchange forward contracts.

During the first quarter of 2019, we discontinued our program to hedge foreign exchange risk relating to forecasted operational transactions. The last of our designated cash flow hedges will expire during the first quarter of 2020. Our designated hedges did not have a material impact on our Consolidated Financial Statements for the three months ended March 31, 2019.

19. DEBT

Revolving Credit Facility

In June 2015, Avon International Operations, Inc. ("AIO"), a wholly-owned domestic subsidiary of the Company, entered into a five-year $400.0 senior secured revolving credit facility (the "2015 facility").

In February 2019, Avon International Capital, p.l.c. ("AIC"), a wholly-owned foreign subsidiary of the Company, entered into a

three-year €200 million senior secured revolving credit facility (the "2019 facility"). As of March 31, 2019 this amounted to $225. The 2019 facility replaced the 2015 facility and the 2015 facility was terminated at such time. There were no amounts drawn under the 2015 revolving credit facility on the date of termination and no early termination penalties were incurred. In the first quarter of 2019, $2 was recorded for the write-off of unamortized issuance costs related to the 2015 revolving credit facility. As of March 31, 2019, there were no amounts outstanding under the 2019 facility. The 2019 facility will terminate in February 2022; provided, however, that it shall terminate on the 91^st day prior to the maturity of the 4.60% Notes (as defined below), if on such 91^st day, the applicable notes are not redeemed, repaid, discharged, defeased or otherwise refinanced in full. In the first quarter of 2019, the Company capitalized $10 of issue costs relating to the new revolving credit facility; this resulted in a cash outflow presented in other financing activities within the Consolidated Statement of Cash Flows.

As of March 31, 2019, we were in compliance with our interest coverage and total leverage ratios under the 2019 facility, as amended. The amount of the facility available to be drawn down on is reduced by any standby letters of credit granted by an obligor, which, as of March 31, 2019, was approximately $28. As of March 31, 2019, based on then applicable interest rates, the entire amount of the remaining 2019 facility, which is approximately €175 million, could have been drawn down without violating any covenant.

Public Notes

In March 2013, we issued, in a public offering, $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 (the "5.00% Notes") and $250.0 principal amount of 6.95% Notes due March 15, 2043 (the "6.95% Notes") (collectively, the "2013 Notes"). Interest on the 2013 Notes is payable semi-annually on March 15 and September 15 of each year.

The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the long-term credit ratings assigned to the 2013 Notes by 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.

The remaining balance of $386.9 of the 4.60% Notes is due in March 2020. Based upon the Company’s cash on hand and restricted cash of $431.0 as of March 31, 2019 and its 2019 forecasted cash flow, the Company believes that it will maintain sufficient liquidity to meet this obligation. In addition, the Company has access to the unused portion of its revolving credit facility of €175 million.

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.

30

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

20. INCOME TAXES

Our quarterly income tax provision is calculated using an estimated annual effective income tax approach. The quarterly effective tax rate can differ from our estimated annual effective tax rate as the Company cannot apply an effective tax rate approach for all of its operations. For those entities that can apply an effective tax rate approach, as of March 31, 2019, our annual effective tax rate, excluding discrete items, is 24.3% for 2019, as compared to 26.5% as of March 31, 2018. The remaining entities, which are operations that generate pre-tax losses which cannot be tax benefited and/or have an effective tax rate which cannot be reliably estimated, have to account for their income taxes on a discrete year-to-date basis as of the end of each quarter and are excluded from the effective tax rate approach.

The estimated annual effective tax rate for 2019 also excludes the unfavorable impact of withholding taxes associated with certain intercompany payments, including royalties, service charges, interest and dividends, which in the aggregate are relatively consistent each year due to the need to repatriate funds to cover U.S. and U.K.-based costs, such as interest on debt and corporate overhead. Withholding taxes are accounted for discretely and accrued in the provision for income taxes as they become due.

The provision for income taxes for the three months ended March 31, 2019 and 2018 was $19.5 and $31.5, respectively. Our effective tax rates for the three months ended March 31, 2019 and 2018 were (433.3)% and 302.9%, respectively. The effective tax rate in the first quarter of 2019 was also favorably impacted by the accrual of income tax benefits of approximately $3.5 associated with the release of income tax reserves of approximately $3.7 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $0.2. The effective tax rate in the first quarter of 2018 was also unfavorably impacted by one-time income tax reserves of $9.2 associated with our uncertain tax positions net of other miscellaneous income tax benefits of approximately $1.2.

In its final analysis of the impacts of the Tax Cuts and Job Act (the "Act") during the fourth quarter of 2018, the Company elected to treat income taxes associated with Global Intangible Low-Taxed Income ("GILTI"), as a period cost. As a result, the first-quarter 2019 provision for income taxes reflects this treatment. The first-quarter 2018 provision for income taxes has also been calculated treating GILTI as a period cost. For both periods, GILTI did not have a material effect. The Act has significant complexity. The Company has considered the published guidance provided by the various Federal and state regulatory authorities into the calculation of its income tax provisions available as of March 31, 2019 and March 31, 2018 for the respective quarters ended March 31, 2019 and March 31, 2018.

In prior years, we had previously recorded valuation allowances against certain deferred tax assets associated with the U.S. and foreign jurisdictions. We intend to continue maintaining these valuation allowances on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

31

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in millions, except per share data)

21. SUBSEQUENT EVENTS

Sale of New Avon

In April 2019, we signed an agreement with LG Household & Health Care Ltd. to sell our 19.9% ownership interest in New Avon, a privately-held company that is majority-owned and managed by an affiliate of Cerberus. Refer to Note 3, Discontinued Operations, Asset and Liabilities Held for Sale and Divestitures, and Note 5, Investment in New Avon, for more information relating to New Avon.

LG Household & Health Care Ltd. will acquire all of the interests of New Avon for $125 in cash, of which Avon will receive $24.9 in cash for our 19.9% share. The closing is expected to occur on September 30, 2019.

AVON PRODUCTS, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

When used in this report, the terms "Avon," "Company," "we," "our" or "us" mean, unless the context otherwise indicates, Avon Products, Inc. and its majority, wholly owned and controlled subsidiaries.

OVERVIEW

We are a global manufacturer and marketer of beauty and related products. Our business is conducted primarily in the direct-selling channel. During 2018, we had sales operations in 56 countries and territories, and distributed products in 21 more. All of our consolidated revenue is derived from operations of subsidiaries outside of the United States ("U.S."). Our reportable segments are based on geographic operations in four regions: Europe, Middle East & Africa; South Latin America; North Latin America; and Asia Pacific. Our product categories are Beauty and Fashion & Home. Beauty consists of skincare, fragrance and color (cosmetics). Fashion & Home consists of fashion jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children’s products and nutritional products. Sales are made to the ultimate consumer principally through direct selling by Representatives, who are independent contractors and not our employees.

During the three months ended March 31, 2019, revenue decreased 15% compared to the prior-year period, favorably impacted by foreign exchange. Constant $ revenue decreased 4%.

Revenue and Constant $ revenue decline was primarily driven by Russia, which continued to be impacted by lower consumption in the market as well as a decrease in Representative recruitment incentives and weaker sales leader engagement. Constant $ revenue decline was partially offset by revenue improvements in Asia Pacific, North Latin America and South Latin America, particularly in Argentina.

Revenue and Constant $ revenue were impacted by a decrease in Active Representatives of 9%, which was driven primarily in Brazil and Russia due to lower consumption in both markets, as well as strategic initiatives to focus on Representative productivity over recruitment. The decrease in Active Representatives was partially offset by higher average order. Average order decreased 6% and Constant $ average order increased 5%, driven by effective pricing and the focus on Representative productivity via Representative segmentation and training, as well as offering product bundles to support average order growth across the markets. Average order in Constant $ was also favorably impacted by the Brazil IPI tax accrual in the prior-year period. Units sold decreased 12%, driven by declines in Brazil and Russia.

Ending Representatives decreased by 10%. The decrease in Ending Representatives at March 31, 2019 as compared to the prior-year period was driven by Europe, Middle East and Africa, primarily in Russia, and Brazil.

See "Segment Review" in this management's discussion and analysis of financial condition and results of operations ("MD&A") for additional information related to changes in revenue by segment.

Open Up Avon

In September 2018, we initiated a new strategy in order to return Avon to growth ("Open Up Avon"). The Open Up Avon strategy is integral to our ability to return Avon to growth, built around the necessity of incorporating new approaches to various elements of our business, including increased utilization of third-party providers in manufacturing and technology, a more fit for purpose asset base, and a focus on enabling our Representatives to more easily interact with the company and achieve relevant earnings. The commercial elements of the strategy were developed to help increase Representative earnings and thereby retention. Elements of the Representative facing strategy include improvements in service functions, increased training on utilization of digital tools to expand her consumer reach, product bundling and regimens designed to help improve her

32

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

earnings opportunity and sharper more targeted product innovation to drive brand relevancy. Cost savings under this plan are targeted as annualized cost savings of approximately $400 by 2021, and expected to be generated from efficiencies in manufacturing and sourcing, distribution, general and administrative activities, and back office functions, as well as through revenue management, interest and tax. These savings are expected to be achieved through restructuring actions (that may result in charges related to severance, contract terminations and inventory and other asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges. In January 2019, we announced significant advancements in this strategy, including a structural reset of inventory processes and a reduction in global workforce. The structural reset of inventory will result in lower operational and ongoing obsolescence costs. Over the longer term, it will result in a more concentrated focus on high-turn, higher margin products, driving greater earnings for Representatives due to lessened discount pressure and enhanced service levels. The structural reset resulted in an incremental one-off inventory obsolescence expense of $88 recognized at December 31, 2018. In addition, the global workforce will be reduced in 2019 by approximately 10% to align with ongoing operating model changes and to create a leaner organization that is better aligned with Avon’s current and future business focus. This reduction is incremental to an 8% reduction of the global workforce that was completed in 2018. We expect to incur a restructuring charge of approximately $100 in 2019 relating to the global workforce reduction, which was approved by the Board of Directors in January 2019. We initiated the Open Up Avon strategy to enable us to achieve our goals of low-single-digit Constant $ revenue growth and low double-digit operating margin by 2021. We plan to reinvest a portion of these cost savings in commercial initiatives, including training for Representatives, and digital and information technology infrastructure initiatives.

During 2018, we estimate that we achieved total cost savings of $40 attributable to Open Up Avon, primarily related to tax and interest, when compared to our costs in 2017. In addition, during the first quarter of 2019, we estimate that we achieved cost savings of $22. These savings included both run-rate savings from Open Up Avon actions in 2018, along with in-year savings from current year initiatives.

In connection with the actions and associated savings discussed above, we have incurred costs to implement ("CTI") restructuring initiatives of approximately $188 before taxes to-date associated with Open Up Avon, which includes $88 relating to the structural reset of inventory. The costs of approximately $188 before taxes incurred to-date associated with Open Up Avon includes $150 of employee-related costs, inventory and asset write-offs, foreign currency translation write-offs and contract terminations, and $38 related to professional service fees, dual running costs, accelerated depreciation and gain on sale of business. Of these costs, $45 was recorded during the first quarter of 2019. The additional charges not yet incurred associated with the restructuring actions approved as at March 31, 2019 of $20 to $25 before taxes are expected to be recorded primarily in 2019. At March 31, 2019, we have liabilities of approximately $73 associated with our restructuring actions, primarily associated with Open Up Avon. The majority of future cash payments associated with these restructuring liabilities are expected to be made during 2019. For additional details on restructuring initiatives, see Note 15, Restructuring Initiatives, to the Consolidated Financial Statements included herein.

Transformation Plan

In January 2016, we initiated a transformation plan (the "Transformation Plan"), in order to enable us to achieve our long-term goals of mid-single-digit constant-dollar ("Constant $") revenue growth and low double-digit operating margin. There are no further restructuring actions to be taken associated with our Transformation Plan, as beginning in the third quarter of 2018, all new restructuring actions approved operate under our new Open Up Avon plan described above.

NEW ACCOUNTING STANDARDS

Information relating to new accounting standards is included in Note 1, Accounting Policies, to the Consolidated Financial Statements included herein.

RESULTS OF OPERATIONS—THE THREE MONTHS ENDED MARCH 31, 2019 AS COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2018

Non-GAAP Financial Measures

To supplement our financial results presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we disclose operating results that have been adjusted to exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, including changes in: revenue, operating profit, Adjusted operating profit, operating margin and Adjusted operating margin. We also refer to these adjusted financial measures as Constant $ items, which are Non-GAAP financial measures. We believe these measures provide investors an additional perspective on trends and underlying business results. To exclude the impact of changes due to the translation of foreign currencies into U.S. dollars, we calculate current-year results and prior-year results at constant exchange rates, which are updated on an annual basis as part of our

33

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

budgeting process. Foreign currency impact is determined as the difference between actual growth rates and Constant $ growth rates.

We also present gross margin, SG&A as a percentage of revenue, operating profit, operating margin, income (loss) before taxes, income taxes and effective tax rate on a Non-GAAP basis. We refer to these Non-GAAP financial measures as "Adjusted." We also present free cash flow as an additional financial measure for liquidity. We have provided a quantitative reconciliation of the difference between the Non-GAAP financial measures and the financial measures calculated and reported in accordance with GAAP. See "Reconciliation of Non-GAAP Financial Measures" within "Results of Operations" in this MD&A for this quantitative reconciliation.

The Company uses the Non-GAAP financial measures to evaluate its operating performance. These Non-GAAP measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes investors find the Non-GAAP information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the Company's financial results in any particular period. The Company believes that it is meaningful for investors to be made aware of the impacts of 1) CTI restructuring initiatives; 2) transaction fees and 3) one-time tax items that are not associated with recurring, normal operations ("Special tax items").

(1)    CTI restructuring initiatives includes the impact on the Consolidated Statements of Operations for all periods presented of

net charges incurred on approved restructuring initiatives.

(2)    Transaction fees of $4.

(3)    The Special tax items includes the impact on the provision for income taxes in the Consolidated Statements of Operations during the first quarter of 2018 due to one-time tax reserves of approximately $9 associated with our uncertain tax positions.

See Note 15, Restructuring Initiatives and Note 20, Income Taxes, to the Consolidated Financial Statements included herein and "Effective Tax Rate" in this MD&A for more information on these items.

34

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

	Three Months Ended March 31,
	2019			2018			%/Basis Point Change
Select Consolidated Financial Information
Total revenue	$	1,186.9		$	1,393.5		(15	)%
Cost of sales	517.0			579.7			(11	)%
Selling, general and administrative expenses	673.8			768.9			(12	)%
Operating (loss) profit	(3.9		)	44.9			*
Interest expense	33.2			36.2			(8	)%
Interest income	(1.7		)	(4.2		)	(60	)%
Other (income) expense, net	(22.6		)	2.5			*
Loss on extinguishment of debt and credit facilities	2.0			—			*
(Loss) income from continuing operations, before income taxes	(4.5		)	10.4			*
Loss from continuing operations, net of tax	(24.0		)	(21.1		)	*
Net loss attributable to Avon	$	(32.7	)	$	(20.3	)	*
Diluted loss per share attributable to Avon	$	(.09	)	$	(.06	)	*
Advertising expenses(1)	$	(16.1	)	$	(29.1	)	(45	)%
Reconciliation of Non-GAAP Financial Measures
Gross margin	56.4		%	58.4		%	(200	)
CTI restructuring	0.4			—			—
Adjusted gross margin	56.8		%	58.4		%	(160	)
Selling, general and administrative expenses as a % of total revenue	56.8		%	55.2		%	160
CTI restructuring	(4.1		)	(.8		)	(330	)
Other items	(.3		)	—			(.3	)
Adjusted selling, general and administrative expenses as a % of total revenue	52.4		%	54.4		%	(200	)
Operating (loss) profit	$	(3.9	)	$	44.9		*
CTI restructuring	53.5			10.9
Other items	4.1			—
Adjusted operating profit	$	53.7		$	55.8		(4	)%
Operating margin	(.3		)%	3.2		%	(350	)
CTI restructuring	4.5			.8			370
Other items	.3			—			.3
Adjusted operating margin	4.5		%	4.0		%	50
Change in Constant $ Adjusted operating margin(2)							150
Loss (income) before taxes	$	(4.5	)	$	10.4		*
CTI restructuring	43.2			10.9
Other items	4.1			—
Adjusted income before taxes	$	42.8		$	21.3		101	%
Income taxes	$	(19.5	)	$	(31.5	)	(38	)%
CTI restructuring	(3.7		)	(2.1		)
Special tax items	—			9.2
Adjusted income taxes	$	(23.2	)	$	(24.4	)	(5	)%
Effective tax rate	(433.3		)%	302.9		%

35

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

	Three Months Ended March 31,
	2019			2018			%/Basis Point Change
Adjusted effective tax rate	54.2		%	114.6		%
Net cash (used) by operating activities of continuing operations	$	(142.7	)	$	(96.3	)	48	%
Net cash provided by investing activities of continuing operations	25.6			(27.0		)	*
Free cash flow (used) by continuing operations	$	(117.1	)	$	(123.3	)	(5	)%
Performance Metrics
Change in Active Representatives							(9	)%
Change in units sold							(12	)%
Change in Ending Representatives							(10	)%

* Calculation not meaningful

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

(1) Advertising expenses are recorded in SG&A.

(2) Change in Constant $ Adjusted operating margin for all years presented is calculated using the current-year Constant $ rates.

Three Months Ended March 31, 2019

Revenue

During the three months ended March 31, 2019, revenue decreased 15% compared to the prior-year period, favorably impacted by foreign exchange. Constant $ revenue decreased 4%.

Revenue and Constant $ revenue decline was primarily driven by Russia, which continued to be impacted by lower consumption in the market as well as a decrease in Representative recruitment incentives and weaker sales leader engagement. Constant $ revenue decline was partially offset by revenue improvements in Asia Pacific, North Latin America and South Latin America, particularly in Argentina.

Revenue and Constant $ revenue were impacted by a decrease in Active Representatives of 9%, which was driven primarily in Brazil and Russia due to lower consumption in both markets, as well as strategic initiatives to focus on Representative productivity over recruitment. The decrease in Active Representatives was partially offset by higher average order. Average order decreased 6% and Constant $ average order increased 5%, driven by effective pricing and the focus on Representative productivity via Representative segmentation and training, as well as offering product bundles to support average order growth across the markets. Average order in Constant $ was also favorably impacted by the Brazil IPI tax accrual in the prior-year period. Units sold decreased 12%, driven by declines in Brazil and Russia.

Ending Representatives decreased by 10%. The decrease in Ending Representatives at March 31, 2019 as compared to the prior-year period was driven by Europe, Middle East and Africa, primarily in Russia, and Brazil.

36

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

On a category basis, our net sales from reportable segments and associated growth rates were as follows:

	Three Months Ended March 31,				% Change
	2019		2018		US$		Constant $
Beauty:
Skincare	$	349.3	$	389.1	(10	)%	1	%
Fragrance	298.0		354.0		(16	)	(4	)
Color	189.2		235.7		(20	)	(9	)
Total Beauty	836.5		978.8		(15	)	(3	)
Fashion & Home:
Fashion	164.3		188.6		(13	)	(5	)
Home	115.4		129.4		(11	)	1
Total Fashion & Home	279.7		318.0		(12	)	(2	)
Net sales from reportable segments	$	1,116.2	$	1,296.8	(14	)	(3	)
Net sales from Other operating segments and business activities	—		12.8		(100	)	(100	)
Net sales	$	1,116.2	$	1,309.6	(15	)	(4	)

See "Segment Review" in this MD&A for additional information related to changes in revenue by segment.

Operating Margin

Operating margin decreased 350 basis points, and Adjusted operating margin increased 50 basis points, compared to the same period of 2018, as the savings in SG&A more than offset the unfavorable impact of foreign currency on gross margin. The changes in operating margin and Adjusted operating margin include the benefits associated with CTI restructuring initiatives, primarily reductions in headcount, as well as other cost reductions, partially offset by the inflationary impact on costs. The increases in operating margin and Adjusted operating margin are discussed further below in "Gross Margin" and "Selling, General and Administrative Expenses."

Gross Margin

Gross margin decreased 200 basis points, and Adjusted gross margin decreased 160 basis points, compared to the same period of 2018.

Gross margin and Adjusted gross margin were primarily impacted by the following:

• a decrease of 220 basis points due to the net unfavorable impact of foreign currency transaction losses and foreign currency translation largely due to currency devaluations in Brazil, Argentina and Turkey, partially offset by an increase of 150 basis points due to the favorable net impact of mix and pricing. Mix and pricing improvements were driven by inflationary pricing, lower promotional discounts, more effective incentives and more favorable product mix in most markets; and

• a decrease of 90 basis points from the higher cost of incentives.

Selling, General and Administrative Expenses ("SG&A")

SG&A as a percentage of revenue increased 160 basis points, significantly impacted by higher CTI restructuring, and Adjusted SG&A as a percentage of revenue decreased 200 basis points, compared to the same period of 2018.

Savings in SG&A were recorded across most segments as well as in unallocated global expenses, mostly from lower fixed expenses (benefit of 130 basis points), lower advertising expenses (benefit of 60 basis points) and better bad debt management (benefit of 50 basis points). Lower fixed expenses were driven by lower headcount and employee benefit costs, mostly recorded in unallocated global expenses. We optimized our advertising portfolio by concentrating investments in selected channels and focusing on digital advertising, primarily in Europe, Middle East and Africa, particularly in Russia, and in South Latin America, particularly in Brazil. We have further reduced our bad debt expense, primarily in Brazil, from continued focus on credit control and collections processes.

37

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

Other Expenses

Interest expense decreased by approximately $3 and interest income decreased by approximately $2 compared to the prior-year period.

Loss on extinguishment of debt and credit facilities of approximately $2 comprised the write-off of debt issuance costs related to the 2015 revolving credit facility, which was terminated and replaced with a new revolving credit facility in February 2019. Refer to Note 19, Debt, for more information relating to the termination of the 2015 revolving credit facility.

Other income, net, of $23 increased by approximately $26 compared to other expense, net of $3 in the prior-year period. The approximate $26 benefit was primarily attributable to favorable impact of higher foreign exchange net gains.

Gain on sale of business was the result of the sale of Avon Manufacturing (Guangzhou), Ltd. to TheFaceShop Co., Ltd, which closed in February 2019. Refer to Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for more information relating to the sale of Avon Manufacturing (Guangzhou), Ltd.

Effective Tax Rate

The effective tax rates and the Adjusted effective tax rates in 2019 and 2018 continue to be impacted by our inability to recognize additional deferred tax assets in various jurisdictions related to our current-year operating results. In addition, the effective tax rates and the Adjusted effective tax rates in 2019 and 2018 continue to be impacted by withholding taxes associated with certain intercompany payments, including royalties, service charges, interest and dividends, which in the aggregate are relatively consistent each year due to the need to repatriate funds to cover U.S. and U.K.-based costs, such as interest on debt and corporate overhead. These factors resulted in unusually high effective tax rates and Adjusted effective tax rates in 2019 and 2018.

Our effective tax rates for the three months ended March 31, 2019 and 2018 were (433.3)% and 302.9%, respectively. The effective tax rates in 2019 and 2018 were impacted by CTI restructuring charges, country mix of earnings and withholding taxes. The effective tax rate in the first quarter of 2019 was also favorably impacted by the accrual of income tax benefits of approximately $3.5 associated with the release of income tax reserves of approximately $3.7 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $.2. The effective tax rate in the first quarter of 2018 was also unfavorably impacted by one-time income tax reserves of $9.2 associated with our uncertain tax positions net of other miscellaneous income tax benefits of approximately $1.2.

Our Adjusted effective tax rates for the three months ended March 31, 2019 and 2018 were 54.2% and 114.6%, respectively. The Adjusted effective tax rates in 2019 and 2018 were impacted by country mix of earnings and withholding taxes. The Adjusted effective tax rate in the first quarter of 2019 was also favorably impacted by the accrual of income tax benefits of approximately $3.5 associated with the release of income tax reserves of approximately $3.7 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $.2. The Adjusted effective tax rate in the first quarter of 2018 was also favorably impacted by other miscellaneous income tax benefits of approximately $1.2.

As of March 31, 2019, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance will no longer be needed.

See Note 20, Income Taxes, to the Consolidated Financial Statements included herein for more information on the effective tax rate, and Note 15, Restructuring Initiatives, to the Consolidated Financial Statements included herein for more information on CTI restructuring.

Impact of Foreign Currency

As compared to the prior-year period, foreign currency has impacted our consolidated financial results in the form of:

• foreign currency transaction losses (classified within cost of sales, and SG&A in our Consolidated Statements of Operations), which had an unfavorable impact to operating profit and Adjusted operating profit of approximately $25, or approximately 170 basis points to operating margin and Adjusted operating margin;

• foreign currency translation, which had an immaterial and unfavorable impact of approximately $15 to operating profit and Adjusted operating profit, respectively, or a favorable impact of approximately 20 basis points and an unfavorable impact of approximately 40 basis points, respectively, to operating margin and Adjusted operating margin; and

• higher foreign exchange net gains on our working capital (classified within other expense, net in our Consolidated Statements of Operations) as compared to the prior year, resulting in a favorable impact of approximately $20 before tax on both a reported and Adjusted basis.

38

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

Segment Review

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of global marketing and digital expenses based on actual revenues. Segment profit excludes global expenses other than the allocation of marketing and digital, CTI 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. See Note 13, Segment Information, to the Consolidated Financial Statements included herein for a reconciliation of segment profit to operating profit.

Europe, Middle East & Africa

	Three Months Ended March 31,
							%/Basis Point Change
	2019			2018			US$		Constant $
Total revenue	$	458.7		$	568.4		(19	)%	(9	)%
Segment profit	59.2			74.4			(20	)%	(8	)%
Segment margin	12.9		%	13.1		%	(20	)	20
Change in Active Representatives									(12	)%
Change in units sold									(15	)%
Change in Ending Representatives									(12	)%

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

Three Months Ended March 31, 2019

Total revenue decreased 19% compared to the prior-year period, impacted by the unfavorable impact of foreign exchange which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Russian ruble, Turkish lira and the South African rand. On a Constant $ basis, revenue decreased 9%. Revenue and Constant $ revenue were negatively impacted by a decrease in Active Representatives, partially offset by higher average order. The decline in both Active Representatives and Ending Representatives was primarily driven by a decline in Russia.

In Russia, revenue decreased 31%, unfavorably impacted by foreign exchange. On a Constant $ basis, Russia's revenue decreased 19%. Revenue and Constant $ revenue in Russia were negatively impacted by a decrease in Active Representatives. Revenue and Constant $ revenue in Russia continued to be impacted by lower consumption in the market, a decrease in Representative recruitment incentives and weaker sales leader engagement.

In the UK, revenue decreased 16%, unfavorably impacted by foreign exchange. On a Constant $ basis, the UK's revenue decreased 11%. Revenue and Constant $ revenue in the UK were negatively impacted by a decrease in Active Representatives, driven by the continuation of underlying field issues, partially offset by higher average order.

Segment margin decreased 20 basis points, or increased 20 basis points on a Constant $ basis, as the decline of 100 basis points in gross margin was more than offset by a net benefit of 120 basis points from better SG&A control. The gross margin decline of 100 basis was primarily caused by the favorable net impact of mix and pricing not fully offsetting the unfavorable impact of foreign currency net losses (130 basis points benefit compared to a 150 basis points unfavorable impact) and a higher cost of incentives (40 basis points). Savings in SG&A were mainly from lower advertising expense (benefit of 100 basis points), primarily in Russia, following return on investment assessment and higher focus on digital advertising, and reduction of bad debt expense (benefit of 70 basis points) primarily in South Africa, as the year-over-year bad debt expense comparison benefited from stricter credit requirements for the acceptance of new Representatives as compared to the requirements in the prior year. These SG&A savings were partially offset by higher variable distribution cost in most markets (unfavorable impact of 60 basis points), primarily relating to increased flexibility in order processing in the UK, and labor cost increases in Russia.

39

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

South Latin America

	Three Months Ended March 31,
							%/Basis Point Change
	2019			2018			US$		Constant $
Total revenue	$	414.7		$	497.1		(17	)%	1	%
Segment profit	23.8			27.2			(13	)%	33	%
Segment margin	5.7		%	5.5		%	20		150
Change in Active Representatives									(6	)%
Change in units sold									(11	)%
Change in Ending Representatives									(7	)%

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

Three Months Ended March 31, 2019

Total revenue decreased 17% compared to the prior-year period. The unfavorable impact of foreign exchange, which was primarily driven by the strengthening of the U.S. dollar relative to the Brazilian real and the Argentinian peso, offset the increase in total revenue. On a Constant $ basis, revenue increased 1%. Revenue and Constant $ revenue benefited from higher average order, driven by Brazil and Argentina, partially offset by a decrease in Active Representatives. The decline in both Active Representatives and Ending Representatives was primarily driven by a decline in Brazil.

Revenue in Brazil decreased 17%, unfavorably impacted by foreign exchange, while Brazil's Constant $ revenue decreased 2%. On a Constant $ basis, Brazil’s sales from Beauty products declined 3%, while sales from Fashion & Home products increased 4%. Revenue and Constant $ revenue in Brazil were negatively impacted by a decrease in Active Representatives, which continued to be negatively impacted by competitive pressures against a backdrop of a challenging macroeconomic environment and lower consumption in the market, as well as lower appointments due to the application of strict credit requirements for the acceptance of new Representatives. The decrease in Active Representatives was partially offset by higher average order, which was favorably impacted by the Brazil IPI tax accrual in the prior-year period. For additional details on the IPI tax on cosmetics increase in Brazil, see Note 11, Contingencies, to the Consolidated Financial Statements included herein.

Revenue in Argentina declined 27%, unfavorably impacted by foreign exchange. On a Constant $ basis, Argentina's revenue grew 45%. Revenue and Constant $ revenue in Argentina benefited from higher average order, which was impacted by improved revenue growth management including inflationary pricing.

Segment margin increased 20 basis points, or 150 basis points on a Constant $ basis, as the decline of 160 basis points in gross margin was more than offset by a benefit of 310 basis points from better SG&A control. The gross margin decline of 160 basis was primarily caused by pricing not fully offsetting the unfavorable impact of foreign currency net losses (230 basis points benefit compared to a 350 basis points unfavorable impact) and a higher cost of incentives (240 basis points). Savings in SG&A were driven by Brazil, mainly from reduction of bad debt expense due to improved credit control and collections processes (benefit of 160 basis points) and lower advertising expense primarily due to concentrated investment in selected channels (benefit of 90 basis points).

40

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

North Latin America

	Three Months Ended March 31,
							%/Basis Point Change
	2019			2018			US$		Constant $
Total revenue	$	192.7		$	195.6		(1	)%	1	%
Segment profit	16.5			20.8			(21	)%	(18	)%
Segment margin	8.6		%	10.6		%	(200	)	(200	)
Change in Active Representatives									(8	)%
Change in units sold									(3	)%
Change in Ending Representatives									(12	)%

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

Three Months Ended March 31, 2019

North Latin America consists largely of our Mexico business. Total revenue for the segment declined 1% compared to the prior-year period, unfavorably impacted by foreign exchange, which was primarily driven by the strengthening of the U.S. dollar relative to the Mexican peso. On a Constant $ basis, revenue increased 1%. Revenue and Constant $ revenue benefited from higher average order, partially offset by a decrease in Active Representatives. The decline in Ending Representatives was primarily driven by a decline in Mexico.

Revenue in Mexico was relatively unchanged compared to the prior year period, unfavorably impacted by foreign exchange. On a Constant $ basis, Mexico's revenue increased 2%. Constant $ revenue growth in Mexico was primarily due to higher average order, partially offset by a decrease in Active Representatives, both driven by strategic initiatives to focus on Representative productivity via Representative segmentation and training, as well as offering product bundles to support average order growth.

Segment margin decreased 200 basis points on both a reported and Constant $ basis, due to a decline of 130 basis points in gross margin coupled with a decline of 70 basis points from higher SG&A expense. The gross margin decline of 130 basis was primarily caused by the unfavorable impact of foreign currency net losses (unfavorable impact of 230 basis points), partially offset by the favorable contribution of brochures sold (benefit of 70 basis points). Higher SG&A expense was driven by higher bad debt expense (unfavorable impact of 150 basis points), primarily in Mexico. Higher SG&A expense was partially offset by savings from lower box packing variable distribution cost driven by higher Representative productivity (benefit of 30 basis points) and lower representative and sales leader investments linked to the decrease in Active Representatives and investment efficiencies (benefit of 20 basis points).

41

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

Asia Pacific

	Three Months Ended March 31,
							%/Basis Point Change
	2019			2018			US$		Constant $
Total revenue	$	115.3		$	111.4		3	%	7	%
Segment profit	16.7			10.4			61	%	64	%
Segment margin	14.5		%	9.3		%	520		500
Change in Active Representatives									(12	)%
Change in units sold									(1	)%
Change in Ending Representatives									(6	)%

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

Three Months Ended March 31, 2019

Total revenue increased 3% compared to the prior-year period, due to the unfavorable impact of foreign exchange. On a Constant $ basis, revenue increased 7%. Revenue and Constant $ revenue benefited from higher average order, partially offset by a decrease in Active Representatives, most significantly in the Philippines and Malaysia. The decline in Ending Representatives was primarily driven by a decline in Malaysia. Revenue and Constant $ revenue growth was primarily driven by Philippines.

Revenue in the Philippines increased 10%, including the unfavorable impact of foreign exchange. On a Constant $ basis, revenue in the Philippines increased 12%. Revenue and Constant $ revenue in the Philippines benefited from higher average order, which was primarily due to effective pricing, as well as the impact of inventory system implementation issues in the prior-year period. Higher average order was partially offset by a decrease in Active Representatives, impacted by a change in campaign cycle, which negatively impacted the year-on-year performance metric comparison.

Segment margin increased 520 basis points, or 500 basis points on a Constant $ basis, due to both gross margin increase of 100 basis points and lower SG&A expense of 400 basis points. The gross margin benefit of 100 basis was primarily due to effective pricing increases in all markets. Savings in SG&A were mainly from lower fixed expenses on a higher revenue base (benefit of 220 basis points) and lower sales leader and field investments (benefit of 120 basis points). SG&A also included a one-off benefit following the closure of a 2014 tax audit.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of funds historically have been cash flows from operations, public offerings of notes, bank financings, issuance of commercial paper, borrowings under lines of credit and a private placement of notes. The Company has a $387 debt maturity obligation due March 2020. Based upon the Company’s cash on hand and restricted cash of $431 as of March 31, 2019 and its 2019 forecasted cash flow, the Company believes that it will maintain sufficient liquidity to meet this obligation. In addition, the Company has access to the unused portion of its revolving credit facility of €175.

We may seek to repurchase our equity or to retire our outstanding debt in open market purchases, privately negotiated transactions, through derivative instruments, cash tender offers or otherwise. Repurchases of equity and debt may be funded by cash, the incurrence of additional debt or the issuance of equity (including shares of preferred stock) or convertible securities and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material. We may also elect to incur additional debt or issue equity (including shares of preferred stock) or convertible securities to finance ongoing operations or to meet our other liquidity needs. Any issuances of equity (including shares of preferred stock) or convertible securities could have a dilutive effect on the ownership interest of our current shareholders and may adversely impact earnings per share in future periods. Our credit ratings were downgraded during the past several years, which may impact our ability to access such transactions on favorable terms, if at all. For more information, see "Risk Factors - Our credit ratings were downgraded during the past several years, which could limit our access to financing, affect the market price of our financing and increase financing costs. A further downgrade in our credit ratings may adversely affect our access to liquidity," "Risk Factors - Our indebtedness and any future inability to meet any of our obligations under our indebtedness, could adversely affect us by reducing our flexibility to respond to changing business and economic conditions," and "Risk Factors - A general economic downturn, a recession globally or in one or more of our

42

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

geographic regions or markets or sudden disruption in business conditions or other challenges may adversely affect our business, our access to liquidity and capital, and our credit ratings" contained in our 2018 Form 10-K.

Our liquidity could also be negatively impacted by restructuring initiatives, dividends, capital expenditures, acquisitions, and certain contingencies, including any legal or regulatory settlements, described more fully in Note 11, Contingencies, to the Consolidated Financial Statements included herein. See our Cautionary Statement for purposes of the "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 contained in this report. 

Cash Flows

Net Cash (Used) Provided by Continuing Operating Activities

Net cash used by continuing operating activities during the first three months of 2019 was approximately $143 as compared to approximately $96 during the first three months of 2018, a decrease of approximately $47. The year-over-year comparison of net cash used by continuing operating activities was unfavorably impacted by an increase in working capital, most significantly from lower accounts payable and accrued liabilities due to the timing of payments, including payments related to CTI restructuring, partially offset by a reduction in inventory associated with our Open Up Avon strategy. The timing of payments was also impacted by a backlog of payables during the fourth quarter of 2018 due to a vendor processing transition.

Net Cash Provided (Used) by Continuing Investing Activities

Net cash provided by continuing investing activities during the first three months of 2019 was approximately $26, as compared to net cash used by continuing investing activities of approximately $27 during the first three months of 2018. The approximate $53 increase to net cash used by continuing investing activities was primarily due to net proceeds from the sale of Avon Manufacturing (Guangzhou), Ltd, which closed during the first quarter of 2019. Refer to Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for more information relating to the sale of Avon Manufacturing (Guangzhou), Ltd.

Free Cash Flow (Used) by Continuing Operations

We also present free cash flow as an additional financial measure for liquidity, which we believe provides an additional perspective on trends and underlying business results. Free cash flow is the sum of Net Cash (Used) Provided by Continuing Operating Activities and Net Cash Provided (Used) by Continuing Investing Activities, and was a net outflow of $117 and $123, respectively, during the first three months of 2019 and 2018.

Net Cash Provided by Continuing Financing Activities

Net cash provided by continuing financing activities during the first three months of 2019 was approximately $18, as compared to less than a million during the first three months of 2018. The approximate $18 favorable impact to net cash provided by continuing financing activities was primarily due to the portion of the gross proceeds from the sale of Avon Manufacturing (Guangzhou), Ltd that related to intercompany loans totaling $24 between Avon Manufacturing (Guangzhou), Ltd. and other Avon subsidiaries. These loans became third party loans upon the sale of Avon Manufacturing (Guangzhou), Ltd. to TheFaceShop Co., Ltd. The loans were subsequently settled in April 2019. This was partially offset by approximately $10 issue costs relating to the new revolving credit facility entered into in February 2019. Refer to Note 19, Debt, for more information relating to the new revolving credit facility.

Capital Resources

Revolving Credit Facility

In June 2015, Avon International Operations, Inc. ("AIO"), a wholly-owned domestic subsidiary of the Company, entered into a five-year $400.0 senior secured revolving credit facility (the "2015 facility").

In February 2019, Avon International Capital, p.l.c. ("AIC"), a wholly-owned foreign subsidiary of the Company, entered into a

three-year €200.0 million senior secured revolving credit facility (the "2019 facility"). The 2019 facility replaced the 2015 facility and the 2015 facility was terminated at such time. The 2019 facility will terminate in February 2022; provided, however, that it shall terminate on the 91st day prior to the maturity of the 4.60% Notes⁽¹⁾, if on such 91st day, the applicable notes are not redeemed, repaid, discharged, defeased or otherwise refinanced in full.

As of March 31, 2019, we were in compliance with our interest coverage and total leverage ratios under the 2019 facility, as amended. The amount of the facility available to be drawn down on is reduced by any standby letters of credit granted by an

43

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

obligor, which, as of March 31, 2019, was approximately $28. As of March 31, 2019, based on then applicable interest rates, the entire amount of the remaining 2019 facility, which is approximately €175 million, could have been drawn down without violating any covenant. Depending on our business results (including the impact of any adverse foreign exchange movements and significant restructuring charges), it is possible that we may be non-compliant with our interest coverage or total leverage ratio absent the Company undertaking other alternatives to avoid noncompliance, such as obtaining additional amendments to the 2019 facility or repurchasing certain debt. If we were to be non-compliant with our interest coverage or total leverage ratio, we would no longer have access to our 2019 facility and our credit ratings may be downgraded. As of March 31, 2019, there were no amounts outstanding under the 2019 facility.

⁽¹⁾In March 2013, we issued, in a public offering $500.0 principal amount of 4.60% Notes due March 15, 2020, referred above as the "4.60% Notes"

44

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT STRATEGIES

Interest Rate Risk

In the past we have used interest-rate swaps to manage our interest rate exposure. The interest-rate swaps were used to either convert our fixed rate borrowing to a variable interest rate or to unwind an existing variable interest-rate swap on a fixed rate borrowing. As of March 31, 2019, we do not have any interest-rate swap agreements. Approximately 26% and 1% of our debt portfolio at March 31, 2019 and December 31, 2018, respectively, was exposed to floating interest rates. For the purpose of this calculation, we consider all short-term debt to be exposed to floating interest rates.

Foreign Currency Risk

We conduct business globally, with operations in various locations around the world. Over the past three years, all of our consolidated revenue was derived from operations of subsidiaries outside of the U.S. The functional currency for most of our foreign operations is their local currency. We may reduce our exposure to fluctuations in cash flows associated with changes in foreign exchange rates by creating offsetting positions, including through the use of derivative financial instruments.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements in this report (or in the documents it incorporates by reference) that are not historical facts or information may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation," "could," "will," "would" and similar expressions, or the negative of those expressions, may identify forward looking statements. They include, among other things, statements regarding our anticipated or expected results, future financial performance, various strategies and initiatives (including our Transformation Plan, Open Up Avon, stabilization strategies, cost savings initiatives, restructuring and other initiatives and related actions), costs and cost savings, competitive advantages, impairments, the impact of foreign currency, including devaluations, and other laws and regulations, government investigations, results of litigation, contingencies, taxes and tax rates, potential alliances or divestitures, liquidity, cash flow, uses of cash and financing, hedging and risk management strategies, pension, postretirement and incentive compensation plans, supply chain and the legal status of the Representatives. Such forward-looking statements are based on management's reasonable current assumptions, expectations, plans and forecasts regarding the Company's current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management's expectations. Therefore, you should not rely on any of these forward-looking statements as predictors of future events. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

• 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, Open Up Avon, 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 Capital Management, L.P.;

• 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; as well as the designation of Argentina as a highly inflationary economy, and the potential effect of such factors on our business, results of operations and financial condition;

45

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

• the possibility of business disruption in connection with our Transformation Plan, Open Up Avon, stabilization strategies, cost savings initiatives, or restructuring and other initiatives;

• our ability to reverse declining revenue, to improve margins and net income, or to achieve profitable growth, particularly in our largest markets and developing and emerging markets, such as Brazil, 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 or elsewhere, and any potential sanctions, restrictions or responses to such conditions imposed by other markets in which we operate;

• 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 the 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;

• our ability to comply with various data privacy laws affecting the markets in which we do business;

• 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 our business results (including the impact of any adverse foreign exchange movements and significant restructuring charges), on our ability to comply with certain covenants in our revolving credit facility;

• 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;

46

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(U.S. dollars in millions, except per share data)

• 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 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.

Additional information identifying such factors is contained in Item 1A of our 2018 Form 10-K for the year ended December 31, 2018, and other reports and documents we file with the SEC. We undertake no obligation to update any such forward-looking statements.

47

AVON PRODUCTS, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of our 2018 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our principal executive and principal financial officers carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon their evaluation, the principal executive and principal financial officers concluded that our disclosure controls and procedures were effective as of March 31, 2019, at the reasonable assurance level. Disclosure controls and procedures are designed to ensure that information relating to Avon (including our consolidated subsidiaries) required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

Our management has evaluated, with the participation of our principal executive and principal financial officers, whether any changes in our internal control over financial reporting that occurred during our last fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, our management has concluded that no such changes have occurred.

48

AVON PRODUCTS, INC.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 11, Contingencies, to the Consolidated Financial Statements included herein.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Repurchases

The following table provides information about our purchases of our common stock during the quarterly period ended March 31, 2019:

	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
1/1 - 1/31/19	—	$	—	*	*
2/1 - 2/28/19	—	—		*	*
3/1 - 3/31/19	—	—		*	*
Total	—	$	—	*	*

* These amounts are not applicable as the Company does not have a share repurchase program in effect.

49

AVON PRODUCTS, INC.

ITEM 6. EXHIBITS

3.1	Restated Certificate of Incorporation of Avon Products, Inc., filed with the Secretary of State of the State of New York on March 18, 2019 (incorporated by reference to Exhibit 3.1 to Avon’s Current Report on Form 8-K filed on March 19, 2019).
10.1	Equity Purchase Agreement, dated as of January 8, 2019, by and among TheFaceShop Co., Ltd., Avon Asia Holdings Company and Avon Products (China) Co., Ltd.
10.2	Multicurrency Revolving Facility Agreement, dated as of February 12, 2019, by and among Avon International Capital p.l.c., as borrower, Avon Products, Inc., the other obligors party thereto from time to time, the lenders party thereto from time to time, Citibank Europe plc, UK Branch, as agent, Citibank, N.A., London Branch, as common security agent, and the other parties party thereto from time to time (incorporated by reference to Exhibit 10.1 to Avon’s Current Report on Form 8-K filed on February 14, 2019).
10.3	Employment Offer Letter and Contract of Employment Agreement effective September 1, 2017 between Avon Cosmetics Limited and Jonathan Myers.
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 Operations, (ii) Consolidated Statements of Comprehensive Loss, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements

50

AVON PRODUCTS, INC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		AVON PRODUCTS, INC.
		(Registrant)
Date:	May 3, 2019	/s/ Laura Barbrook
		Laura Barbrook
		Vice President and Corporate
		Controller - Principal Accounting Officer
		Signed both on behalf of the
		registrant and as chief
		accounting officer.

51

EX-10.1

Exhibit 10.1

EQUITY PURCHASE AGREEMENT

BY AND AMONG

TheFaceShop Co., Ltd.

AS PURCHASER

AND

AVON ASIA HOLDINGS COMPANY

AND

AVON PRODUCTS (CHINA) CO., LTD.

AS SELLERS

DATED AS OF January 8, 2019

TABLE OF CONTENTS

ARTICLE I DEFINITIONS 2

1.1. Defined Terms.    2

1.2. Construction.    9

ARTICLE II SALE AND PURCHASE 10

2.1. Sale and Purchase.    10

2.2. Purchase Price.    10

ARTICLE III CLOSING 10

3.1 Closing.    10

3.2 Closing Payments.    11

3.3 Post-Closing Payment.    11

3.4 Payment of the Intercompany Loan Balances.    11

3.5 Closing Deliveries.    12

3.6 Avon Asia Withholding Tax.    13

3.7 Escrow.    14

3.8 Late Payment.    15

ARTICLE IV REPRESENTATIONS AND WARRANTIES 15

4.1 Representations and Warranties of Sellers relating to each Seller and the Sale Equity.    15

4.2 Representations and Warranties of each Seller relating to the Company.    16

4.3 Representations and Warranties of Purchaser.    26

ARTICLE V COVENANTS 27

5.1. Conduct of Business.    27

5.2. Best Efforts; Cooperation and Assistance.    29

5.3. Access and Information.    31

5.4. Replacement of Directors.    31

5.5. No Shop.    31

5.6. Confidentiality; Public Announcements.    31

5.7. Employee Retentions.    32

5.8. INTENTIONALLY OMITTED.    32

5.9. Related Party Contracts; Transitional Agreements.    33

5.10. Non-Competition; Non-Solicitation.    33

5.11. Tax Return Filing After Closing.    34

5.12. Manufacturing and Supply Agreement.    34

5.13. Use of Company Name.    34

ARTICLE VI CONDITIONS PRECEDENT 35

6.1. Conditions Precedent to the Obligations of each Seller to Sell the Sale Equity.    35

6.2. Conditions Precedent to the Obligations of Purchaser to Purchase the Sale Equity.    35

ARTICLE VII INDEMNIFICATION 36

7.1. Indemnification.    36

7.2. Survival of Claims.    37

7.3. Limitations on Liability.    37

7.4. Claims for Indemnification.    38

7.5. Indemnification Procedures for Tax Claims    39

7.6. Additional Indemnification.    41

7.7. Sole and Exclusive Remedy.    41

ARTICLE VIII TERMINATION 41

8.1. Termination.    41

8.2. Effect of Termination.    42

ARTICLE IX MISCELLANEOUS 42

9.1. Entire Agreement.    42

9.2. Assignment.    42

9.3. Tax and Expenses.    42

9.4. Governing Law and Dispute Resolution.    42

9.5. Amendments.    43

9.6. Severability.    43

9.7. Notices.    43

9.8. Joint and Several Liability.    44

9.9. Language; Counterparts.    44

9.10. No Third Party Beneficiary.    44

EQUITY PURCHASE AGREEMENT

THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is made and entered into on this 8th day of January 2019 by and among:

(i) TheFaceShop Co., Ltd., a company incorporated and existing under the laws of Korea and having its registered address at 58 Saemunan-ro, Jongno-gu, Seoul, Korea (“Purchaser”);

(ii) Avon Asia Holdings Company, a company incorporated and existing under the laws of Republic of Mauritius and having its registered address at 2nd Floor, 22 Saint Georges Street, Port Louis, Republic of Mauritius (“Avon Asia”); and

(iii) Avon Products (China) Co., Ltd. (“雅Å芳¼༈¨中Ð国ú༉©有Ð限Þ公«司¾” in Chinese), a company incorporated and existing under the laws of the PRC and having its registered address at Unit 03-04, FL 7, No. 18, Hua Cheng Avenue, Tianhe District, Guangzhou, PRC (“Avon China” and together with Avon Asia, collectively, “Sellers” and individually, a “Seller”).

Purchaser and each Seller shall hereinafter be referred to individually as a “Party” and collectively as the “Parties”.

WITNESSETH:

WHEREAS, Sellers collectively own equity interests corresponding to the registered capital in the amount of USD 21,500,000 (the “Sale Equity”), in Avon Manufacturing (Guangzhou), Ltd. (“广ã州Ý雅Å芳¼制Æ造ì有Ð限Þ公«司¾” in Chinese), a company incorporated and existing under the Laws of PRC with its registered office at No.11 Industrial Avenue, Conghua Economic Development Zone, Guangdong Province, PRC (the “Company”), representing 100% of the equity interests in the Company;

WHEREAS, on the same date of this Agreement, the Company and Avon Cosmetics Limited (“ACL”) have entered into a Manufacturing and Supply Agreement; and

WHEREAS, upon the terms and subject to conditions set forth herein, each of Sellers desires to sell and transfer to Purchaser, and Purchaser desires to acquire and purchase from each of Sellers, all of the Sale Equity owned by such Seller, the exact amount of registered capital corresponding to which is listed in Exhibit 1, and consummate the transactions contemplated herein (the “Transaction”).

NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties and covenants herein contained, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Defined Terms.

As used in this Agreement, the following terms have the respective meanings ascribed to such terms below:

“Accounting Standards” means the accounting standards in compliance with applicable generally accepted accounting principles in the PRC and any applicable Laws of PRC.

“ACL” means Avon Cosmetics Limited.

“Acquisition Proposal” is defined in Section 5.5 of this Agreement.

“Affiliate” means, in respect of a Person, any other Person if it directly or indirectly controls, is controlled by, or is under common control with, such Person.

“Agreed USD/RMB Rate” shall be the USD/RMB exchange middle rate published by the People’s Bank of China on its website on November 30, 2018, which is USD 100 = RMB 693.57.

“Agreement” is defined in the preamble of this Agreement.

“AHPM” means Avon Healthcare Products Manufacturing (Guangzhou) LTD. (“广ã州Ý雅Å芳¼保£健¡品·制Æ造ì有Ð限Þ公«司¾” in Chinese).

“Allocation Percentage” of a Seller means the Allocation Percentage set forth next to its name on Exhibit 1.

“AML Laws” means all applicable Laws prohibiting money laundering, including but not limited to attempts to conceal or disguise the identity of proceeds that are obtained in violation of any Law.

“Anti-Corruption Laws” means any applicable Laws concerning or relating to bribery or corruption.

“Asset Realization Account” means the asset realization account (资Ê产ú变ä现Ö账Ë户§) or the RMB equity transfer special account (人Ë民ñ币Ò股É权¨转ª让Ã专¨用Ã存æ款î账Ë户§) to be set up by Avon China in the PRC and in its name pursuant to the applicable Laws of the PRC, for the purpose of receiving its portion of the Purchase Price payable by Purchaser under this Agreement.

“Associated Person” means, with respect to any Person that is not an individual, a Person (including a director, officer, employee, consultant, agent or other representative) who has acted or performed services for or on behalf of such Person, but only with respect to actions or the performance of services for or on behalf of such Person.

“Avon Asia” is defined in the preamble of this Agreement.

“Avon Asia Escrow Account” means an escrow account to be opened and managed in accordance with the terms of the escrow agreement (the “Avon Asia Escrow Agreement”) to be entered into by and among Purchaser, Avon Asia and an escrow agent (which shall be an independent financial institution mutually acceptable to the Parties) (“Escrow Agent”), key terms and conditions of which are set forth on Exhibit 2-1 attached hereto.

“Avon Asia Escrow Agreement” is defined in this Section 1.1 under the definition of “Avon Asia Escrow Account”.

“Avon Asia Escrow Amount” is defined in Section 3.7(a) of this Agreement.

“Avon Asia Holdback Amount” is defined in Section 3.6(a)(ii) of this Agreement.

“Avon China” is defined in the preamble of this Agreement.

“Avon China Escrow Account” means an escrow account to be opened and managed in accordance with the terms of the escrow agreement (the “Avon China Escrow Agreement”) to be entered into by and among Purchaser, Avon China and the Escrow Agent, key terms and conditions of which are set forth on Exhibit 2-2 attached hereto.

“Avon China Escrow Agreement” is defined in this Section 1.1 under the definition of “Avon China Escrow Account”.

“Avon China Escrow Amount” is defined in Section 3.7(a) of this Agreement.

“Balance Sheet Date” means September 30, 2018.

“Business Day” means any day other than (i) any Saturday or Sunday or (ii) any other day on which banks located in Seoul, Korea or Guangzhou, PRC are required or authorized by Law to be closed for business.

“CGT” means all Taxes (including withholding Taxes) imposed by competent PRC Tax Authorities on gains realized by Sellers from the Transaction.

“Closing Date” means the date on which the Closing actually occurs.

“Closing Payments” is defined in Section 3.2 of this Agreement.

“Company” is defined in the recitals of this Agreement.

“Company Assets” is defined in Section 4.2(h) of this Agreement.

“Company Benefits Plans” means all benefit and compensation plans, programs, policies, contracts, agreements, and arrangements covering current or former directors, officers or employees of the Company that are sponsored, maintained or contributed to by the Company or in which the Company is a participating employer or with respect to which the Company could reasonably be expected to otherwise have any material Liability (but excluding any statutory plans or programs maintained pursuant to applicable Law requiring the payment of social insurance Taxes or similar contributions by the Company).

“Company Employees” means any employee of the Company who are employed by the Company immediately prior to the Closing Date.

“Company Intellectual Property” means any and all Intellectual Property (i) owned or co-owned by the Company or (ii) licensed to the Company or (iii) is otherwise used by the Company to conduct its business in the Ordinary Course of Business. For the avoidance of doubt, Company Intellectual Property does not include any Intellectual Property of Seller Parties, including all Intellectual Property in and to any goods manufactured by Company or methods of manufacture therefor, (e.g. formulas, processing standards, finished ingredient standards, raw ingredient standards), except to the extent such Intellectual Property is licensed to the Company pursuant to the Manufacturing and Supply Agreement, and then only for the limited purposes set forth therein.

“Company Lease” means the Contracts under which the Company Leased Real Property is leased.

“Company Leased Real Property” means real property that is leased or subleased by the Company from any Person.

“Company Owned Real Property” means real property that is owned by the Company.

“Contract” means any written or oral contract, agreement, lease, license, sales order, purchase order, mortgage, indenture, bond, note, warrant, instrument or any other legally binding arrangement of any kind (including all amendments, supplements and modifications thereto).

“Control” means (i) the ownership, directly or indirectly, of shares possessing more than fifty percent (50%) of the voting power of a Person or (ii) the ability, either directly or indirectly, to direct or cause the direction of or to influence the direction of that Person or the management of that Person, whether through ownership of voting securities or by contract or otherwise.

“Direct Claim” is defined in Section 7.4(b) of this Agreement.

“Disclosure Schedules” means the disclosure schedules of Sellers attached hereto as Schedule A.

“Encumbrance” means any pledge, mortgage, lien, security interest, claim, easement, encroachment, option, voting agreement, conditional sale or other security arrangement of any nature, right of first refusal or pre-emption, order or charge, or any adverse claim of title, ownership or use, or any license, lease or restriction of any kind, including any restriction on use, voting transfer, receipt of income or exercise of any other attribute of ownership, whether imposed by contract, legal requirement, equity or otherwise.

“Environmental Laws” means all Laws (including the Production Safety Law of PRC) that relate to (i) the protection or cleanup, or prevention of pollution or destruction of, the environment, natural resources or human health or safety, (ii) releases of or exposure to Hazardous Substances, or (iii) the management, manufacture, generation, labeling, registration, use, treatment, storage, burial, disposal, handling, transport or control of Hazardous Substances, and in each case all codes, regulations, decrees or orders issued or promulgated or approved thereunder or in connection therewith but excluding for the avoidance of doubt any Laws relating to products liability.

“Escrow Agent” is defined in this Section 1.1 under the definition of “Avon Asia Escrow Account”.

“Escrow Account” means either the Avon Asia Escrow Account or the Avon China Escrow Account, as the context may require.

“Financial Statements” is defined in Section 4.2(c) of this Agreement.

“Fundamental Representations” is defined in Section 7.2 of this Agreement.

“Governmental Approvals” means any approval, clearance, consent, order, ruling, license, permit, qualification, exemption, waiver or other authorization, issued, granted or otherwise made available by, or filing or registration with, any Governmental Authority.

“Government Official” means any officer, employee or other individual acting in an official capacity for a Governmental Authority.

“Governmental Authority” means any domestic or foreign government, including any national, federal, state, provincial, local, territorial or municipal government, or any governmental, legislative, administrative or regulatory authority, agency, court, tribunal, body or commission, or quasi-governmental entity with competent jurisdiction.

“Hazardous Substances” means any chemicals, wastes, pollutants, contaminants, toxic substances, petroleum and petroleum products, and any other natural or artificial substances or emissions (whether in the form of a solid, liquid, gas or vapor) which are now or hereafter regulated under Environmental Laws or that otherwise have a potential for causing harm or damage to the environment or injury to human health or reproduction.

“Indebtedness” of any Person means (i) all indebtedness of such Person, whether or not contingent, for borrowed money; (ii) all obligations of such Person for the deferred purchase price of property or services; (iii) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments; (iv) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person; (v) all obligations of such Person as lessee under leases that have been or should be, in accordance with Accounting Standards, recorded as capital leases; (vi) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities; (vii) all declared and unpaid dividends or other distributions payable to its shareholders; (viii) all unpaid contribution amount for incentive bonuses, employee pension or severance to the extent that sufficient cash reserve has not been established in relation thereto; (ix) all outstanding tax liabilities to the extent that sufficient cash reserve has not been established in relation thereto; (x) all transaction costs and expenses payable to third parties (including financial and legal advisors) incurred by such Person, which have not been paid; (xi) all indebtedness or obligations of others referred to in clauses (i) through (x) above guaranteed directly or indirectly in any manner by such Person; and (xii) accrued and unpaid interest due on, and prepayment premiums, penalties or similar charges or expenses arising as a result of any of the foregoing obligations.

“Indemnified Parties” means Purchaser Indemnified Parties or each Seller Indemnified Parties, as the context may require.

“Intellectual Property” means all intellectual property and similar proprietary rights, whether registered or unregistered in any and all jurisdiction throughout the world, including such rights in and to any (i) patents and applications therefor (whether utility or design, including any provisional applications, utility models and all continuations, continuations-in-part, divisionals, reissues, reexaminations, renewals and extensions of any of the foregoing; (ii) registered and unregistered trademarks, service marks, trade names, corporate names, business names, logos, slogans, trade dress, designs and other indicia of origin and pending registrations, applications or intent-to-use registrations or similar reservations for the foregoing; (iii) registered and unregistered copyrights; and applications for registration; (iv) internet domain names and social media identifiers; (v) industrial property rights, trade secrets and any other confidential or proprietary information, including unpatented inventions, invention disclosures, know-how, methods, processes, customer lists; (vi) software, firmware and computer programs and applications, including data files, source code, executable or object code, tools, application programming interfaces and libraries and related documentation and specifications; and (vii) data and databases.

“Intercompany Loan Agreements” means (i) that certain Intercompany Loan Agreement, dated August 1, 2017, by and between Avon China and the Company, and (ii) that certain Intercompany Loan Agreement, dated August 1, 2017, by and between AHPM and the Company.

“Intercompany Loan Balances” means the aggregate balance payable by Avon China and AHPM under the Intercompany Loan Agreements in respect of principal, accrued and unpaid interest and any other obligations thereunder, the amount of which, as of November 30, 2018, is set forth in Schedule B.

“Inventory” means, as of any date, all inventory of the Company as recorded on the balance sheet of the Company as of such date, prepared in accordance with the books and records of the Company and in accordance with the Accounting Standards consistently applied.

“IT Systems” means servers, computer hardware, networks, software, databases, telecommunications systems, websites, IP addresses, interfaces and related systems.

“Knowledge of Sellers” means the knowledge, after making reasonable due inquiry, of any members of the board of directors, officers and employees holding a position of Grade 15 or higher of the Company.

“Knowledge of Purchaser” means the knowledge, after making reasonable due inquiry, of any members of the board of directors and officers of the Purchaser.

“Korea” means the Republic of Korea.

“Law” means any law, statute, regulation, ordinance, rule, Order, decree, judgment, consent decree, executive order, compulsory standards, restriction, or sanction, or any interpretation thereof issued, enacted, promulgated or enforced by any Governmental Authority.

“Liability” or “Liabilities” means any liability, obligation or expense of any kind or nature whatsoever, whether accrued or fixed, absolute or contingent, matured or unmatured.

“License Agreement” means that certain corporate name license agreement to be entered into by and between ACL and the Company, substantially in form attached hereto as Exhibit 3.

“Long-Stop Date” means May 31, 2019.

“Losses” means any and all losses, liabilities, obligations, claims, contingencies, judgments, damages, Taxes, fees, costs and expenses (including costs of investigation and attorney’s fees, costs and expenses) and any interest, penalty, fine or other carrying costs incurred thereon.

“Manufacturing and Supply Agreement” means that the Manufacturing and Supply Agreement entered into by and between the Company and ACL on the same date of execution hereof, which is attached hereto as Exhibit 4.

“Material Adverse Effect” means any fact, change, occurrence, event, development or effect that, individually or in the aggregate, is or would reasonably likely to be materially adverse to the business, assets, liabilities, prospects, condition (financial or otherwise), or results of operations of the Company; provided, however,that none of the following shall constitute or be considered to contribute to a Material Adverse Effect: any change in or effect relating to (i) business, economic or regulatory conditions as a whole or in the industries in which the Company operates, (ii) national or international political, regulatory or social conditions, including the engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack, (iii) national or global financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (iv) generally accepted accounting principles, (v) changes in Law, or (vi) any failure by the Company to meet any projections, forecasts or estimates of revenue or earnings; provided, however, that with respect to clauses (i), (ii) and (iii), such matter does not have a materially disproportionately adverse effect on the Company, taken as a whole, relative to other participants operating in the same industries or markets.

“Material Contract” is defined in Section 4.2(k) of this Agreement.

“MOFCOM” means the PRC Ministry of Commerce and/or its local branch (as the context requires).

“MOFCOM Filing” means record-filing by the MOFCOM with respect to the filing made for the purpose of transfer of the Sale Equity under this Agreement.

“New Avon MSA” means the Manufacturing and Supply Agreement, dated March 1, 2016, by and between the Company and New Avon LLC (“New Avon”).

“Notice of Claim” is defined in Section 7.4(b) of this Agreement.

“Order” means any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling or writ of any arbitrator, mediator or Governmental Authority.

“Ordinary Course of Business” means the conduct of the business of the Company, consistent with its normal day-to-day customs, practices and procedures.

“Organizational Documents” means articles of incorporation, bylaws, articles of organization, operating agreement, partnership agreement and any other documents serving a similar function in the creation and government of a Person.

“Party” or “Parties” is defined in the preamble of this Agreement.

“Permit” means any approval, consent, license, permit, concession, recordation or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any legal requirement, including environmental permits.

“Person” means any individual, partnership, limited liability company, corporation, association, joint stock company, trust, entity, joint venture, labor organization, unincorporated organization, or Governmental Authority.

“PRC” or “China” means the People’s Republic of China, excluding for the purposes of this Agreement, Hong Kong, Macau SAR and Taiwan.

“Pre-Closing Tax Period” means any taxable period (or portion thereof) that ends before the Closing Date and the portion of any Straddle Period that ends before the Closing Date.

“Proceedings” means any claim, action, suit (whether civil, criminal or administrative), complaint, hearing, litigation, proceeding, audit, arbitration, investigation, or other similar dispute, in each case, that is by or before any Governmental Authority.

“Purchase Price” is defined in Section 2.2 of this Agreement.

“Purchaser” is defined in the preamble of this Agreement.

“Purchaser Indemnified Parties” is defined in Section 7.1(b) of this Agreement.

“Purchaser Required Approvals” means (i) the completion of the MOFCOM Filing, (ii) the SAMR Registration and any additional Governmental Approval that is necessary to consummate the Transaction hereunder.

“RMB” means the lawful currency of PRC.

“Related Party Contract” is defined in Section 4.2(r) of this Agreement.

“Rules” is defined in Section 9.4 of this Agreement.

“Sale Equity” is defined in the recitals of this Agreement.

“SAMR” means the PRC State Administration for Market Regulation and/or its local branch (as the context requires).

“SAMR Registration” means registration or filing with SAMR for the purpose of the transfer of title to the Sale Equity to Purchaser in accordance with this Agreement.

“Seller” or “Sellers” is defined in the preamble of this Agreement.

“Seller Indemnified Parties” is defined in Section 7.1(a) of this Agreement.

“Seller Parties” means each Seller and its Affiliates, which, for the avoidance of doubt, does not include New Avon.

“Straddle Period” means any taxable period that begins before the Closing Date and ends on or after the Closing Date.

“Subsidiary” means, with respect to any Person, any other Person of which: (a) more than fifty percent of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in each case, is beneficially owned, directly or indirectly, by such Person; or (b) the power to vote or to direct the voting of sufficient securities to elect a majority of the board of directors or similar governing body is held directly or indirectly by such Person.

“Tax” means any tax (including any income tax, franchise tax, capital gains tax, gross receipts tax, value‑added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), imposed, assessed or collected by or under the authority of any Governmental Authority.

“Tax Authority” means any Governmental Authority that is responsible for the imposition of any Tax or is charged with the collection of such Tax.

“Tax Claim” or “Tax Claims” means an audit, examination, claim, inspection or other administrative or judicial proceeding, contest, assessment, notice of deficiency, proposed adjustment, dispute or controversy relating to any Tax imposed on or with respect to the Company, and/or with respect to any of the Company Assets, for any Pre-Closing Tax Period or Straddle Period.

“Tax Return” means any filing, return, report, declaration, claim for refund, or information return or statement required to be filed with respect to any Tax, including any attachment or schedule thereto or amendment thereof.

“Third Party Claim” is defined in Section 7.4(a) of this Agreement.

“Third Party Claim Notice” is defined in Section 7.4(a) of this Agreement.

“Third Party Consent” is defined in Section 5.2(e) of this Agreement.

“Third Party Indemnification Amount” is defined in Section 7.3(c)of this Agreement.

“Transaction” is defined in the recitals of this Agreement.

“USD” shall mean United States Dollars, the lawful currency of the United States of America.

1.2    Construction.

The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine, and neuter. Terms defined in the singular shall have the corresponding meaning in the plural, and vice versa. All references herein to Articles, Sections, Schedules and Exhibits shall refer to articles, sections, schedules and exhibits, respectively, of this Agreement. The use of the terms “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively. Reference to any Law means such Law as amended, modified, codified, replaced or re-enacted, in whole or in part, including rules, regulations, enforcement procedures and any interpretations promulgated thereunder, all as in effect on the date hereof unless otherwise expressly stated herein. Reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by the terms of any applicable agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually. The use of the terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section or clause of or Exhibit or Schedule to this Agreement. References to times of the day are to that time in Korea and references to a day are to a period of twenty-four (24) hours running from midnight to midnight.

ARTICLE II

SALE AND PURCHASE

2.1. Sale and Purchase.

Upon the terms and subject to the conditions contained herein (including the Exhibits and Schedules attached hereto), at the Closing, each of Sellers shall sell and deliver to Purchaser, and Purchaser shall purchase, acquire and receive from the each Seller the Sale Equity, free and clear of all Encumbrances.

2.2.    Purchase Price.

The total purchase price (the “Purchase Price”) to be paid by Purchaser to Sellers for the purchase of Sale Equity under this Agreement shall be USD 71,000,000, of which:

(a) USD 28,400,000, representing Avon Asia’s pro rata portion of the Purchase Price based on its Allocation Percentage (the “Avon Asia Consideration”), shall be paid by Purchaser to Avon Asia; and

(b) RMB 295,460,820, which is the RMB amount equivalent to USD 42,600,000 converted using the Agreed USD/RMB Rate, representing Avon China’s pro rata portion of the Purchase Price based on its Allocation Percentage (the “Avon China Consideration”), shall be paid by Purchaser to Avon China,

in each case subject to the terms and conditions of this Agreement.

ARTICLE III

CLOSING

3.1    Closing.

The closing of the sale and purchase of the Sale Equity and the delivery of all of the other closing deliveries set forth herein (the “Closing”) shall take place at the offices of King & Wood Mallesons in Guangzhou within 3 Business Days from the day of the satisfaction or waiver of the conditions precedent set forth in Article VI (excluding conditions that, by their terms, cannot be satisfied until the Closing but subject to the satisfaction or waiver of those conditions), or (ii) such other date as Purchaser and Sellers may mutually agree.

3.2    Closing Payments.

At the Closing, as consideration for the Sale Equity, Purchaser shall make the following payments (the “Closing Payments”):

(a) to Avon Asia, the Avon Asia Consideration, less the sum of (i) the Avon Asia Escrow Amount, and (ii) the Avon Asia Holdback Amount, by wire transfer of immediately available funds in USD to the bank account of Avon Asia designated and notified to Purchaser in writing by Avon Asia at least five (5) Business Days prior to the Closing Date; and

(b) to Avon China, the Avon China Consideration (the “Avon China Closing Payment”), by wire transfer of immediately available funds in RMB to the Avon China Escrow Account.

3.3    Post-Closing Payment.

(a) Within five (5) Business Days after Purchaser’s receipt of a written notice from Avon China notifying that Avon China has set up the Asset Realization Account for purpose of receiving its portion of the Closing Payments, Purchaser and Avon China shall irrevocably instruct the Escrow Agent to release from the Avon China Escrow Account to Avon China an amount equal to the Intercompany Loan Balances outstanding on the Closing Date (the “Avon China First Release Amount”), by wire transfer of immediately available funds in RMB to the Asset Realization Account; and

(b) Within five (5) Business Days after the completion of the repayment of Intercompany Loan Balances in accordance with Section 3.4, Purchaser and Avon China shall irrevocably instruct the Escrow Agent to release from the Avon China Escrow Account to Avon China, the Avon China Consideration, less the sum of (i) Avon China Escrow Amount and (ii) the Avon China First Release Amount, by wire transfer of immediately available funds in RMB to the Asset Realization Account.

3.4    Payment of the Intercompany Loan Balances.

As soon as practicable after the Closing but no later than 10 Business Days after the receipt in full of the payment made pursuant to Section 3.3(a) (the “Repayment Period”), Avon China shall, and Sellers shall cause AHPM to, repay in full the amounts of Intercompany Loan Balances outstanding under their respective Intercompany Loan Agreements.Notwithstanding the foregoing, in the event that the repayment of the Intercompany Loan Balances fails to complete within the Repayment Period due to delay by Avon China’s bank in approving for or due to the then effective foreign exchange restriction on using the foregoing received payment for the repayment of the Intercompany Loan Balances as provided in this Section 3.4, and in case of delay by the bank, such delay is not attributable to the fault of any of the Sellers, then the Repayment Period shall be reasonably extended and/or the Parties shall reasonably discuss alternative if necessary, and the Sellers shall keep the Purchaser fully informed of the progress of the repayment set forth in this Section 3.4, provided, that, the escrow release pursuant to Section 3.3(b) shall not be made until the completion of the repayment of Intercompany Loan Balances.

3.5    Closing Deliveries.

(a) Purchaser’s Deliverables at the Closing. At the Closing, Purchaser shall deliver (or cause to be delivered) to each Seller the following items:

(i)     a written receipt confirming Purchaser’s receipt of such Seller’s portion of the Sale Equity, duly executed by Purchaser;

(ii) an executed copy of each of the Avon Asia Escrow Agreement and the Avon China Escrow Agreement, duly executed by Purchaser;

(iii)     all other documents or instruments required to be delivered by Purchaser pursuant hereto or reasonably requested by Sellers to consummate the Transaction.

(b) Sellers’ Deliverables at the Closing. At the Closing, each Seller shall deliver (or cause to be delivered) to Purchaser the following items:

(i)     original capital contribution certificate issued by the Company representing Purchaser’s holding of all Sale Equity in the Company;

(ii) copy of the shareholders registry of the Company with the Company’s seal chopped in which Purchaser is recorded as the sole legal and beneficial owner of all of the Sale Equity, free and clear of any and all Encumbrances, as of the Closing Date;

(iii) a written letter confirming the waiver of the right of first refusal and consent to the Transaction by each Seller;

(iv) a copy of the resolutions of the board of directors of the Company approving the Transaction;

(v) a written receipt issued by Avon Asia confirming Avon Asia’s receipt of its portion of the Closing Payment, duly executed by such Seller, provided that the foregoing portion of the Closing Payment is fully received by Avon Asia on the Closing Date;

(vi)     the original letter of resignation, waiver, and release of each of the directors of the Company in the form attached hereto as Exhibit 5.4(a), along with all other documents required for the registration of such resignations with the competent SAMR;

(vii) an executed copy of the Manufacturing and Supply Agreement, duly executed by the Company and ACL;

(viii) an executed copy of each of the Avon Asia Escrow Agreement and the Avon China Escrow Agreement, duly executed by the Seller which is a party thereto;

(ix) a copy of the new business license of the Company and other necessary supporting documents evidencing the completion of the SAMR Registration and showing Purchaser as the sole equity holder of the Company;

(x) a copy of the certificate regarding the MOFCOM Filing and other necessary supporting documents evidencing the completion of the MOFCOM Filing and showing Purchaser as the sole equity holder of the Company; and

(xi)     all other documents or instruments required to be delivered by each Seller pursuant hereto or reasonably requested by Purchaser to consummate the transactions contemplated by this Agreement.

3.6    Avon Asia Withholding Tax.

(a)Avon Asia shall be responsible for and shall complete the process of reporting and/or payment of the CGT payable by Avon Asia in accordance with applicable Law and this Section 3.6, as applicable (the “CGT Reporting and Payment”); provided, however, that Purchaser may complete such process in case Avon Asia fails to provide either a copy of (x) the applicable CGT returns affixed with the official stamp of the competent PRC Tax Authority showing that the CGT payable is zero or no CGT is payable by Avon Asia in connection with the Transaction, or (y) the tax clearance certificate issued by the competent PRC Tax Authority showing the CGT payable has been fully paid by or on behalf of Avon Asia, as soon as practicable but no later than three (3) monthsafter the Closing. Purchaser shall provide Avon Asia with necessary support as reasonably requested by Avon Asia to complete the CGT Reporting and Payment as follows:

(i) Avon Asia shall complete the CGT Reporting and Payment and provide the documents set forth in (x) or (y) above, as applicable, as soon as practicable but no later than three (3) months after the Closing.

(ii) Purchaser shall deduct and withhold USD 1,181,000, which is equivalent to ten percent (10%) of the Avon Asia Estimated Capital Gain (the “Avon Asia Holdback Amount”), from the Avon Asia Consideration. “Avon Asia Estimated Capital Gain” means, for the sole purpose of determining the Avon Asia Holdback Amount, the difference between the Avon Asia Consideration and the aggregate

capital contributed by Avon Asia to the Company and the total acquisition cost paid by Avon Asia to acquire the equity interest in the Company.

(b)Purchaser and Avon Asia shall irrevocably instruct the Escrow Agent to release the Avon Asia Holdback Amount to Avon Asia within five (5) Business Days after Avon Asia has delivered to Purchaser a copy of the CGT returns or the tax clearance certificate specified in Section 3.6(a).

(c)Avon Asia agrees to indemnify, defend and hold harmless the Purchaser Indemnified Parties from and against any and all Losses that are actually incurred by such Purchaser Indemnified Parties as a result of its failure to fully and timely pay the CGT.

3.7    Escrow.

(a) At the Closing, Purchaser shall deposit with the Escrow Agent (i) (x) USD 3,000,000 (the “Avon Asia Escrow Amount”) and (y) the Avon Asia Holdback Amount in USD 1,181,000, to be held in the Avon Asia Escrow Account pursuant to the Avon Asia Escrow Agreement, and (ii) (x) an RMB amount equivalent to USD 4,500,000 converted using the Agreed USD/RMB Rate, which is RMB 31,210,650, to the Avon China Escrow Account (the “Avon China Escrow Amount” and together with the Avon Asia Escrow Amount, the “Escrow Amounts”), and (y) the difference between the Avon China Consideration and Avon China Escrow Amount, which is RMB 264,250,170, in each case to be held in the Avon China Escrow Account pursuant to Avon China Escrow Agreement. The Avon Asia Escrow Amount and the Avon China Escrow Amount shall be available for and used to satisfy any claim arising in relation to Sellers’ indemnities set forth in Section 7.1(a) of this Agreement (but subject to the limitations set forth in Section 7.3); provided, however, that the Avon Asia Escrow Amount shall be available for and used to satisfy any claim arising in relation to Avon Asia’s indemnities set forth in Section 3.6(c). Each Escrow Account shall be maintained for 24 months (the “Escrow Term”) following the Closing.

(b) For the avoidance of doubt, to the extent that any claim which has been notified to Sellers by Purchaser remains unresolved at the expiration of each Escrow Account, the Escrow Amount corresponding to such claim amount shall not be released from such Escrow Account until such claim is resolved in accordance with Section 9.4, and the Parties shall (i) extend the Escrow Term until such claim is resolved so that the Escrow Amount corresponding to such claim shall remain in such Escrow Account in the same manner; and (ii) cause the Escrow Agent to release the undisputed Escrow Amounts remaining in the respective Escrow Accounts upon expiration of the initial Escrow Term pursuant to Section 3.7(d). Purchaser agrees not to abuse its right of claim without any reasonable cause.

(c) In the event that any breach or non-fulfillment of any of Sellers’ representations, warranties, covenants, agreements or obligations under this Agreement is made known to Purchaser prior to the Closing, subject to the limitations as provided in Section 7.3, Purchaser shall prepare and deliver to Seller a statement setting forth in reasonable detail the description of the alleged breaches/non-fulfillments and the amount of Losses incurred by the Company or Purchaser in connection with such breach or non-fulfillment, as applicable. In such event, the Parties shall negotiate in good faith to agree on the amount of Losses arising from such breach or non-fulfillment, which shall be deducted from the Purchase Price, with the Escrow Amount being reduced by the same amount. In the event that the Parties cannot agree on the full amount of such Losses after such good-faith negotiation, the portion of the Losses to which the Parties agree shall be deducted from the Purchase Price (with corresponding reduction of the Escrow Amount), and Purchaser shall have the right to seek indemnification in respect of the excess amount of such Losses after the Closing in accordance with Article VII.

(d) On the expiry date of the Escrow Term, Purchaser and the respective Seller shall, in accordance with the Avon Asia Escrow Agreement and Avon China Escrow Agreement, respectively, irrevocably instruct the Escrow Agent to:

(i) release to Avon Asia the Avon Asia Escrow Amount remaining in the Avon Asia Escrow Account, by wire transfer of immediately available funds in USD to the bank account of Avon Asia designated and notified to Purchaser in writing by Avon Asia at least five (5) Business Days prior to such expiry date; and

(ii) release to Avon China the Avon China Escrow Amount remaining in the Avon China Escrow Account, by wire transfer of immediately available funds in RMB to the bank account of Avon China designated

and notified to Purchaser in writing by Avon China at least five (5) Business Days prior to such expiry date.

3.8    Late Payment.

Without prejudice to Article VII below, in the event of Purchaser’s delay in payment or deposit of all or any portion of the Purchase Price pursuant to this Article III, Sellers acting as one party may require Purchaser to pay liquidated damages on the delayed amount from the date when the relevant payment or deposit is due until the date of the actual payment or deposit thereof at the rate of 0.03% per day (or in the event such rate shall be adjudged for any reasons as unenforceable under applicable Law, the applicable rate shall be based on such maximum rate as may be permitted under applicable Law or otherwise determined by the arbitration administered by the International Chamber of Commerce in Singapore in accordance with Section 9.4); provided, however, that such delay is not due to a cause attributable to any Seller or the Escrow Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1    Representations and Warranties of Sellers relating to each Seller and the Sale Equity.

Except as set forth in the Disclosure Schedules, Sellers hereby, jointly and severally, represent and warrant to Purchaser that the statements contained in this Section 4.1 are true and correct as of the date hereof and as of the Closing Date (or, if made as of a date specified below, as of such date) with respect to each Seller and the Sale Equity owned by it.

(a) Organization and Existence; Authorization. Each Seller is duly organized and validly existing under the Laws of the jurisdiction of its incorporation, and has requisite power and authority required to conduct its business as it is now being conducted. Each Seller has full authority and capacity to execute and deliver this Agreement and to perform its obligations hereunder and the execution and delivery by such Seller of this Agreement, the performance of its obligations hereunder, and the consummation by such Seller of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate proceedings on the part of such Seller. This Agreement has been duly executed and delivered by each Seller, and this Agreement constitutes the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms, except insofar as the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, rehabilitation, special liquidation, fraudulent conveyance, or other similar Laws affecting the enforcement of creditors’ rights generally.

(b) Absence of Conflicts; No Consents. Neither the execution, delivery and performance of this Agreement, nor the Transaction, will contravene, conflict with, or result in a violation of (i) any provision of the Organizational Documents of any Seller or the Company, (ii) any Law applicable to any Seller or the Company or any of the assets owned by the Company, (iii) any of the terms or requirements of, or give any Government Authority the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Approval that is held by the Company, or (iv) any Material Contract. No Governmental Approval or consent or approval by or notification to any Person is required to be obtained by each Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

(c) Sale Equity. Each Seller holds of record and legally and beneficially owns its portion of the Sale Equity set forth next to its name on Exhibit 1, in each case free and clear of any Encumbrances. At the Closing, Purchaser shall acquire all of the Sale Equity free and clear of any Encumbrances. Such Sale Equity to be transferred to Purchaser at the Closing shall (i) have had its corresponding registered capital fully paid-in, (ii) have been issued in compliance with all applicable Laws and (iii) not be subject to any pre-emptive, subscription or other similar rights of any other Person, except for the right of refusal that will be waived pursuant to Section 3.5(b)(iii) below.

(d) Litigation. There are no Proceedings pending or, to the Knowledge of Sellers, threatened against any of Sellers that prohibits or restricts the Transaction.

(e) No Brokers. No Person has acted, directly or indirectly, as a broker, finder or financial advisor for each Seller or any of its Affiliates in connection with the Transaction for which the Company has incurred or will incur any liability.

4.2    Representations and Warranties of each Seller relating to the Company.

Except as set forth in the Disclosure Schedules, Sellers hereby jointly and severally represent and warrant to Purchaser that the statements contained in this Section 4.2 are correct as of the date hereof and as of the Closing Date (or, if made as of a date specified below, as of such date) with respect to the Company.

(a) Organization and Existence. The Company is a company duly organized and validly existing under the Laws of PRC, and has all requisite power and authority required to conduct its business as it is now being conducted and to own, lease and operate all of its properties and assets. Sellers have made available to Purchaser true, correct and complete copies of the Organizational Documents of the Company and such documents are in full force and effect.

(b) Capitalization.

(i) Section 4.2(b) of the Disclosure Schedules sets forth an accurate list as of the date hereof and as of the Closing Date of the registered capital of the Company, the paid-in registered capital of the Company and the legal ownership thereof. The Sale Equity represents one hundred percent (100%) of the equity interests in the Company. There are no outstanding options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other Contracts or commitments that may require the Company to issue any equity interests of the Company.

(ii) There are no obligations, contingent or otherwise, of the Company to repurchase, redeem or otherwise acquire any equity interests of the Company or provide material funds to, or make any material investment in (in the form of a loan, capital contribution or otherwise) or provide any guarantee with respect to the obligations of, any Person. There are no outstanding stock appreciation, phantom stock, profit participation or similar rights with respect to the Company. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote or consent (or, convertible into, or exchangeable for, securities having the right to vote or consent) on any matters on which shareholders (or other equity holders) of the Company may vote.

(iii) The Company does not have any Subsidiaries or branches.

(c) Financial Statements; Internal Controls.

(i) Section 4.2(c) of the Disclosure Schedules sets forth the audited financial statements of the Company as of and for each of the fiscal year ended December 31, 2016 and December 31, 2017, and the reviewed financial statements of the Company as of and for the ten-month period ended September 30, 2018 (collectively, the “Financial Statements”). The Financial Statements (including the notes thereto) have been prepared in accordance with the Accounting Standards and fairly present in all material respects the financial condition and the results of operations of the Company as at and for the relevant period covered in the applicable Financial Statements.

(ii) The Company maintains (i) books, records and accounts that reflect, in reasonable detail, the character and amount of all transactions of the Company, its assets and liabilities and such books, records and accounts are complete and accurate in all material respects and (ii) adequate and effective internal accounting controls which provide commercially reasonable assurance that (A) all assets, liabilities and transactions of the Company are accounted for in accordance with the Accounting Standards and (B) the Company has not established or maintained any unrecorded funds or accounts.

(d) No Undisclosed Liabilities. The Company does not have any Liabilities, except (i) Liabilities that are specifically stated in the Financial Statements, or (ii) Liabilities incurred in the Ordinary Course of Business since the Balance Sheet Date.

(e) Absence of Changes. Since the Balance Sheet Date, except as set forth in Section 4.2(e) of the Disclosure Schedules, (i) the Company has conducted its business in the Ordinary Course of Business, (ii) there has been no Material Adverse Effect and (iii) there has not occurred any matter that would require the consent of Purchaser pursuant to Section 5.1 had such matter occurred after the date hereof.

(f) Litigation. There is no Proceeding pending or, to the Knowledge of Seller, threatened against the Company (or any of its directors, officers or employees with respect to whom the Company may be obligated to indemnify for any Losses incurred as a result of any such Proceeding) or any assets or properties material to the Company.

(g) Compliance with Laws; Governmental Approvals.

(i) The Company has been in all material respects in compliance with all Laws applicable to the Company and its assets, and has not received any written notices or other communications from any Governmental Authority regarding any actual or possible material violation of Law.

(ii) The Company is not a party or subject to any Order and the Company holds all Governmental Approvals that are required for the conduct of its business (including the manufacture and assembly of its products) as now being conducted, and such Governmental Approvals are valid and in full force and effect. The Company has been in compliance with all Governmental Approvals in all material respects. All such Governmental Approvals are renewable in the Ordinary Course of Business, and there is no fact, condition or circumstance that could reasonably be expected to lead to any modification, suspension, revocation or non-renewal of any of such Governmental Approvals.

(iii) Unless otherwise disclosed in the Disclosure Schedules, none of the Company or any Associated Person of the Company, have: (i) violated, or engaged in any activity, practice or conduct which would violate, any applicable Anti-Corruption Law or AML Law; (ii) used corporate funds or assets for any unlawful contribution, gift, entertainment or other unlawful expense, or made any unlawful bribe, rebate, payoff, influence payment, facilitation payment, kickback or other unlawful payment; or (iii) directly, or indirectly through its agents, representatives or any other Associated Person, offered, promised, paid, given or authorized payment or the giving of money or anything else of value to any Government Official or Governmental Entity for the purpose of (A) influencing any act or decision of such Government Official or Governmental Entity in his, her or its official capacity, including a decision to do or omit to do any act in violation of his, her or its lawful duties, or (B) inducing such Government Official or Governmental Entity to use his, her or its influence or position to influence any act or decision of any Governmental Entity, in either case in order to obtain or retain business for, direct business to, or secure an improper advantage for, any of Sellers or the Company.

(iv) The Company has adopted and maintains in effect adequate policies, procedures and controls to ensure that the Company has complied and is in compliance with applicable Anti-Corruption Laws and AML Laws.

(h) Title to Assets. The Company has good, valid and marketable title to, or has a valid leasehold, license or other similar interest in, all of its material tangible and intangible assets owned, leased or otherwise used by the Company (including, for the avoidance of doubt, the Company Owned Real Property, the Company Leased Real Property and the Company Intellectual Property, the “Company Assets”), free and clear of all Encumbrances. Such Company Assets comprise all of the material assets required by the Company to conduct its business as now being conducted and are sufficient, in all material respects, for the continued conduct of its business after the Closing in substantially the same manner as conducted prior to the Closing. There is no claim or right entitling any Governmental Authority, or other Person, to use, have access to, possess or control any of the Company Assets or any part thereof or otherwise to limit the right of the Company to use or possess any of the Company Assets in any form. The Company has obtained all requisite Governmental Approvals entitling the Company to construct, purchase, own, operate, use and dispose of the Company Assets as they are being presently used. All Company Assets are in good working order and repair (normal wear and tear excepted) and have been regularly and appropriately maintained according to appropriate technical specification, environmental, occupational health and safety rules and the terms and conditions of any applicable Contract and Law.

(i) Real Property.

(i) Section 4.2(i)(i) of the Disclosure Schedules sets forth an accurate and complete list of the Company Owned Real Property.

(ii) Section 4.2(i)(ii) of the Disclosure Schedules sets forth an accurate and complete list of the Company Leased Real Property.

(iii) With regard to each Company Lease, except as disclosed in Section 4.2(i)(iii) of the Disclosure Schedules, (i) such Company Lease is valid and effective in accordance with the terms thereof, (ii) neither the Company nor to the Knowledge of each Seller, any other party to a Company Lease is in breach thereof, (iii) to the Knowledge of each Seller, no event or circumstance has occurred or currently exists which, with notice, lapse of time or both, would become a material default by the Company or any other party thereto, and (iv) to the Knowledge of each Seller, no events or circumstances exist which may prevent or hinder (A) the renewal of such Company Lease in the Ordinary Course of Business or (B) the refund of any key money deposit upon expiration of the Company Lease.

(iv) With regard to the land parcel located at Industrial district C3-1, C3-2, Taiping Village, Conghua City, PRC, (i) the Company has complied with the relevant procedures for the grant of the land-use right as required by applicable Laws, (ii) has complied, and is in compliance, with the relevant land-use right grant agreement (“Land-Use Right Grant Agreement”) (“国ú有Ð建¨设è用Ã地Ø使¹用Ã权¨出ö让Ã合

Ï同¬” in Chinese), including without limitation, the payment of all necessary fees relating to the land-use right (including land-use grant premiums and all applicable Taxes and expenses, if applicable) and (iii) has obtained the land-use right as well as state-owned land-use right certificate (“Land-Use Right Certificate”) (“国ú有Ð土Á地Ø使¹用Ã证¤” in Chinese) issued by the competent Governmental Authority. The Company has performed and discharged its obligations or liabilities (and there are not outstanding payments due) under or in connection with the Land Use Right Grant Agreement.

(v) The Company has not entered into any sublease, license, option, right concession or other agreement or arrangement granting to any person the right to use or occupy any Company Owned Real Property or Company Leased Real Property or any portion thereof and the Company has not received notice from any Governmental Authority or other Person that the use and occupancy of any of the Company Owned Real Property or the Company Leased Real Property, and the conduct of its business thereon, violates in any material respects any applicable Law applicable to the construction, maintenance and use of the Company Owned Real Property or Company Leased Real Property, including, without limitation, the building codes, zoning, subdivision or other land use or similar Laws.

(vi) There is no pending or, to the Knowledge of Sellers, threatened condemnation or eminent domain proceeding with respect to any Company Owned Real Property or Company Leased Real Property or any part thereof.

(j) Permits.

(i) The Company holds all material Permits which are required for the conduct of the business of the Company (including the manufacture and assembly of its products and acting as a foreign trade dealer) as it is being conducted as of the date hereof. Except as set forth in Section 4.2(j)(i) of the Disclosure Schedules, all requirements, conditions and provisions ordered by any Governmental Authority or contained in a Permit were complied with and have been fulfilled in material respects.

(ii) No revocation relating to any Permit has been announced or to the Knowledge of Sellers threatened in writing by a Governmental Authority; and

(iii) The Company conducts its business in compliance with all material provisions of the Permits. No capital expenditures will be required to ensure compliance by the Company with such Permits, as in force at the Closing Date.

(k) Material Contracts. Except for the Contracts set forth in Section 4.2(k) of the Disclosure Schedules (each such Contract, a “Material Contract”), the Company is not a party to any of the following types of Contracts which are valid and effective:

(i) Non-Competes. Any Contract containing covenants limiting or purporting to limit (or that following the Closing could limit) the freedom of the Company to compete or operate in any line of business or geographical area;

(ii) Indebtedness; Guarantees. Any Contract with any other Person which relates to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in any single transaction or series of related transactions in excess of RMB 1 million, or the guarantee by the Company of any such obligation;

(iii) Capital Expenditures. Any Contract (together with related Contracts) containing covenants requiring capital expenditures by the Company in any single transaction or series of related transactions in excess of RMB 1 million in any twelve (12)-month period;

(iv) Joint Ventures. Any partnership, consortium, profit (loss) sharing or joint venture agreement;

(v) Employment-related Contracts. Any collective bargaining agreement, trade union agreements, any other Contract with any other representatives of workers, or any indemnification agreement with any director or officer of the Company;

(vi) Governmental Authorities. Any Contract with a Governmental Authority to which the Company is a party;

(vii) Outsourcing Agreements. Any Contract entered into for purposes of outsourcing of the functions of the Company;

(viii) Lease Agreements. Any Contract for lease of the Company Leased Real Property under which the security deposit exceeds RMB 1 million;

(ix) Related Party Agreements. Any Related Party Contracts;

(x) Consequential. Any Contract under the terms of which, as a direct result of the entry into and performance of this Agreement, (A) any other Person will be entitled to exercise any material right (including any

termination or pre-emption right or other option), or (B) the Company will be in material default, where such relief, exercise or default is likely to have a material adverse effect on the Company as a whole;

(xi) Expenditure. Any Contract (together with related Contracts) which involves, or is reasonably likely to involve, aggregate expenditure by the Company (or by the Company) in excess of RMB 5 million in any twelve (12)-month period or which obliges the Company to make any minimum purchase;

(xii) Revenue. Any Contract (together with related Contracts) which involves, or is reasonably likely to involve, aggregate revenue for the Company in excess of RMB 5 million in any twelve (12)-month period;

(xiii) Tax Sharing. Any tax-sharing agreement; or

(xiv) Other Contracts. Any Contract which has an annual contract value in excess of RMB 1 million which was entered into otherwise than in the Ordinary Course of Business or which is not on arm’s-length terms.

Sellers have made available to Purchaser a true, correct and complete copy of each of the Material Contracts. Each Material Contract is valid, binding on and in full force and effect, and is enforceable against the Company and the other party thereto in accordance with its respective terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable Law. Neither the Company nor, to the Knowledge of each Seller, any other party to any Material Contract is in material breach of, or default under, any Material Contract and no event has occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a default, violation or breach under any such Material Contract by the Company. No Third Party Consent (as defined in Section 5.2(e)) is required with respect to any Material Contract in connection with the Transaction.

(l) Insurance.

(i) Sellers have made available to Purchaser copies of all insurance certificates and coverage maintained by or otherwise relating to the Company and its properties and assets and business. All insurance policies are in full force and effect, all premiums due and payable thereunder have been paid in full, and neither the Company nor its Affiliate is in default with respect to the obligations under any such policies or has otherwise failed to comply in all respects with the terms and conditions of such policies in all material respects.

(ii) Since the Balance Sheet Date, the Company has not received any notice of cancellation or termination or denial of coverage with respect to any insurance policies referred to in sub-paragraph (i) of this Section 4.2(l) except to the extent such policy has expired and been replaced in the Ordinary Course of Business.

(iii) No claim has been made by, or in relation to, the Company under any such insurance policy in the last three (3) years and there are no outstanding claims related to the Company under any insurance policy or default with respect to the provisions in any such policy.

(m) Company Benefits Plan Matters.

(i) With respect to each Company Benefits Plan, the Company has made available to Purchaser true, complete and correct copies of each of the following, as applicable: (i) the Company Benefits Plan document, together with all amendments thereto, and (ii) all relevant regulatory approvals received from any Governmental Authority.

(ii) With respect to each Company Benefits Plan, it has been, in all material respects, established, operated and maintained in accordance with its terms and in compliance with applicable Laws. With respect to each Company Benefits Plan that is intended to be, or required by applicable Law to be, funded and/or book-reserved, such plan is funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions, and to the extent no funding is required under applicable Law, adequate accruals under applicable accounting principles are reflected in the Financial Statements.

(iii) The Company provides each Company Employee with all compensation and benefits, the key aspects of which are set out in Schedule E.

(iv) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated thereunder will (either alone or together with any other event, contingent or otherwise, including a termination of employment or service) (i) entitle any current or former employee, director, officer or independent contractor of the Company to any payment (other than severance pay required by any applicable Law or severance pay pursuant to the internal regulations of the Company), or (ii)

accelerate the time of funding, payment or vesting, or increase the amount of, any compensation or benefits due to any such employee, director, officer or independent contractor.

(n) Employee Matters.

(i) The Company is not a party to any collective bargaining agreements. For the last three (3) years, the Company has not experienced any strikes, slowdowns, work stoppages, lockouts, or threats thereof, by or with respect to any employees of the Company.

(ii) The Transaction will not give rise to any obligations to obtain consent from any labor union, works council or other employee representative bodies representing all or any category of employees of the Company.

(iii) The Company is, and for the last three (3) years has been, in compliance in all material respects with all applicable Laws respecting labor, employment and employment practices, terms and conditions of employment, wages and hours, employee classification, reduction in force, dispatched employment, unemployment compensation benefits and occupational safety and health. Except as disclosed in Section 4.2(n) of the Disclosure Schedules, no Proceedings relating to non-compliance with the foregoing have been brought in the last three (3) or are pending or, to the Knowledge of each Seller, are threatened.

(iv) There is no amount that is past due and owing by the Company to any of the current or former directors, officers, employees or independent contractors of the Company (including, without limitation, any salary, bonus, overtime allowance, severance pay, unused leave compensation, social insurance, housing fund or any other compensation or benefit).

(o) Intellectual Property. Each Company Intellectual Property is subsisting, valid and enforceable. The Company (i) owns all right, title and interest in and to each item of or otherwise have valid right to use all Company Intellectual Property, free and clear of all Encumbrances or (ii) has the valid right, free and clear of any Encumbrances, to use all the Intellectual Property used in, or otherwise necessary for, the conduct of the business of the Company. Neither the Company nor its operation of its business infringes, misappropriates, dilutes or otherwise violates, nor has it infringed, misappropriated, diluted or otherwise violated, any Intellectual Property of any third party. The Company has taken all commercially reasonable measures to protect the secrecy, confidentiality and value of all trade secrets, and there has not been any material unauthorized disclosure of any such trade secrets. There has been no material failure or other material substandard performance of any Company’s IT Systems that has caused any material disruption to its business. There has been no material unauthorized intrusion or breach of the security of the Company’s IT Systems, nor any material loss of data.

(p) Taxes.

(i) (A) All Tax Returns of the Company that are required to be filed on or before the Closing Date have been or will be timely filed on or before the Closing Date with the appropriate Tax Authorities in the manner required by applicable Laws, (B) all such Tax Returns are or will be true and complete when filed, (C) all Taxes due (whether or not shown or required to be shown on a Tax Return) have been or will be timely paid when due, (D) all deficiencies asserted or assessments made prior to the Closing Date by the relevant Tax Authority in connection with any Taxes have been or will be timely paid on or before the Closing Date (except for Taxes that are being contested in good faith);

(ii) No issue that has been raised by the relevant Tax Authority in connection with any such Tax Return is currently pending, and there is no Proceeding or audit now in progress or pending against the Company with respect to any Tax;

(iii) The Company is not party to or bound by any Tax indemnity agreement, Tax allocation agreement or Tax sharing agreement (except, in each case, any agreement entered into in the Ordinary Course of Business and not primarily related to Taxes);

(iv) The Company has properly withheld and paid to the relevant Tax Authority all Taxes required to have been withheld and paid with respect to third parties; and

(v) No agreement or document extending the period of assessment or collection of any Tax payable by the Company is currently in effect, and the Company has not consented to any such extension.

(q) Environmental Matters and Production Safety. The Company has obtained and holds all Permits in respect of the design, construction and operation of its environment protection facilities and production safety. The Company is currently in compliance with, and has complied with, all such Permits and applicable Environmental Laws in all material respects. There is no pending or, to the Knowledge of Sellers, threatened Proceedings, notice of noncompliance or information request, in each case seeking to impose, or that would result in the imposition of, any material liability on the Company arising under any Environmental Law or arising from the release or presence of or exposure to Hazardous Substances. There has been no release or presence of or exposure to any Hazardous Substance, whether on or off the property currently or formerly owned or operated by the

Company, that would reasonably be expected to result in material liability or a requirement for notification, investigation or remediation by the Company under any Environmental Law. No capital expenditures will be required to ensure compliance by the Company with any requirements under any Environmental Law, as in force at the Closing Date.

(r) Related Party Transactions. Except as disclosed in Section 4.2(r) of the Disclosure Schedules and the Intercompany Loan Agreements, no Seller Party (a) owns any asset, properties or rights, tangible or intangible, used in its business of the Company, (b) initiated or, to the Knowledge of Sellers, threatened to bring any Proceedings against the Company, (c) provides goods or services to, or receives goods or services from, the Company, (d) owes any Indebtedness to, is owed any Indebtedness by, has guaranteed or provided other credit support in respect of any Indebtedness of, or owes any Indebtedness guaranteed by the Company or secured by any assets of the Company, or (e) is engaged in any other transaction with the Company. All Contracts entered into between the Company, on the one hand, and any Seller Party, on the other hand (each of the foregoing, a “Related Party Contract”) were entered into in the Ordinary Course of Business and upon terms no less favorable to the Company than would reasonably be expected to be obtainable in a comparable arm’s-length transaction with a Person that is not a Seller Party in accordance with the relevant transfer pricing policies. A true, correct and complete copy of each Related Party Contract has been made available to Purchaser.

(s) Suppliers. Section 4.2(s)(i) of the Disclosure Schedules sets forth a list of the top twenty (20) suppliers (each, a “Material Supplier”) of the Company during the last full fiscal year. Except as disclosed in Section 4.2(s)(ii) of the Disclosure Schedules, no Material Supplier has notified the Company or each Seller that it intends to discontinue or materially decrease the rate of, or materially and adversely change the terms (whether related to payment, price or otherwise) with respect to, its business relationship with its business or the Company. To the Knowledge of each Seller, no events or circumstances exist which may reasonably cause any Material Supplier to discontinue or materially decrease the rate of, or materially and adversely change the terms (whether with respect to payment, price or otherwise) with respect to, its business relationship with the Company or its business.

(t) Inventory. All inventory material for the business conducted by the Company is of a quality and quantity usable and salable in the Ordinary Course of Business as of the Closing Date, except for obsolete or slow-moving inventory and items of below-standard quality, all of which have been written off or written down to net realizable value to the extent required by the policy of the Company described in Section 4.2(t) of the Disclosure Schedules.

(u) Insolvency. There has been no petition in bankruptcy, insolvency or reorganization filed against the Company or the Company’s going into receivership or otherwise becoming insolvent, or any analogous event. The Company is not in liquidation and no order has been made or effective resolution passed for the liquidation or winding up of the Company.     

(v) Accuracy of Information. To the Knowledge of Sellers, all written information which was disclosed to Purchaser or its advisors in the Disclosure Schedules and the due diligence materials have been, taken as a whole, correct and complete and there are no circumstances that were not disclosed in the Disclosure Schedules and the due diligence materials that would make the information as disclosed as at the date of this Agreement and as of the Closing Date false or misleading.

4.1 Representations and Warranties of Purchaser.

Purchaser hereby represents and warrants to each Seller that the statements contained in this Section 4.3 are correct as of the date hereof and as of the Closing Date (or, if made as of a date specified below, as of such date).

(a) Organization and Existence; Authorization. Purchaser is duly organized and validly existing under the Laws of the jurisdiction of its organization, and has requisite power and authority required to conduct its business as it is now being conducted. Purchaser has full authority and capacity to execute and deliver this Agreement and to perform its obligations hereunder and the execution and delivery by Purchaser of this Agreement, the performance of its obligations hereunder, and the consummation by Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate proceedings on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser, and this Agreement constitutes the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, except insofar as the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, rehabilitation, special liquidation, fraudulent conveyance, or other similar Laws affecting the enforcement of creditors’ rights generally.

(b) Absence of Conflicts; No Consents. Neither the execution, delivery and performance of this Agreement, nor the Transaction, will contravene, conflict with, or result in a violation of (i) any provision of the Organizational Documents of Purchaser, or (ii) any Law applicable to Purchaser. Other than the Purchaser Required Approvals, no Governmental Approval or consent or approval by or notification to any Person is required to be obtained by each Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

(c) Litigation. As of the date hereof, there is no Proceeding pending or, to the Knowledge of Purchaser, threatened against Purchaser that prohibits or restricts the Transaction.

(d) No Brokers. No Person has acted, directly or indirectly, as a broker, finder or financial advisor for Purchaser or any of its Affiliates in connection with the Transaction for which the Company will incur any liability.

(e) Sufficiency and Legitimacy of Funds. As of the Closing Date, Purchaser will have sufficient and legitimate immediately available funds to make all payments required to be made under or in connection with this Agreement, including the payment of the Purchase Price, in each case when such payments become due.

ARTICLE V

COVENANTS

5.1. Conduct of Business.

From and after the date of this Agreement until the earlier of the Closing Date or termination of this Agreement, except for actions permitted or contemplated herein or as required by Law, each Seller shall cause the Company to conduct its business in the Ordinary Course of Business and shall cause the Company not to take any of the following actions in connection with the operation of the business of the Company without the consent of Purchaser, such consent not to be unreasonably delayed, withheld, or conditioned:

(a) amend any Organizational Documents of the Company;

(b) merge or consolidate with or into any other Person, dissolve or liquidate;

(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock or property, with respect to any capital stock or other equity or ownership interest in the Company or enter into any agreement with respect to the voting of the capital stock of the Company;

(d) take any action that would require unanimous approval by all directors of the Company, except for those resolutions that may be required to effectuate and carry out the terms and conditions of this Agreement;

(e) make any change in accounting methods, policies, principles or procedures, other than as required by Law, as then in effect;

(f) (A) accelerate, terminate, cancel, renew, amend, grant a waiver under or otherwise modify any Material Contract or (B) enter into any Contract that would constitute a Material Contract if in effect as of the date hereof, in each case other than in the Ordinary Course of Business;

(g) make any loans, advances or capital contributions to or investments in any Person in excess of RMB 1 million, other than in the Ordinary Course of Business;

(h) incur, assume or guarantee any Indebtedness or liability of any Person, other than in the Ordinary Course of Business;

(i) authorize for issuance, issue, sell, grant, pledge, deliver or agree or commit to issue, sell, grant, pledge or deliver (whether through the issuance or granting of options, warrants, convertible or exchangeable securities, commitments, subscriptions, rights to purchase or otherwise) any registered capital or any other securities convertible or exchangeable into or exercisable for any registered capital of the Company, or amend any of the terms of any such securities;

(j) sell or lease, transfer or otherwise dispose of any of assets having a value exceeding RMB 1 million, other than in the Ordinary Course of Business;

(k) make any capital expenditures in any single transaction in excess of RMB 1 million, or series of related transactions in excess of RMB 2 million in the aggregate, other than in the Ordinary Course of Business;

(l) commence, dismiss or settle, pay or discharge, consent to any non-monetary relief in connection with of any material Proceeding;

(m) hire, engage, transfer, terminate the employment or services of (except for cause as determined by the Company in good faith consistent with past practice) or promote any (A) employee at the director level or above or individual who has an annual compensation greater than RMB 1 million, or (B) other than in the Ordinary Course of Business, any independent contractor or employee not described in clause (A) above;

(n) increase salary, bonus or other compensation or benefit of employees or other equivalent change of employment terms, or grant or commit to severance pay, special bonus, special employee benefits or other similar or equivalent amount or consideration, except for (i) as required by Law or the Company Benefits Plan, or (ii) payment of retention bonus to certain employees prior to the Closing provided that the Sellers shall fully indemnify and reimburse, or cause to be indemnified and reimbursed, the Company prior to the Closing such retention bonus made by the Company;

(o) acquire any corporation, partnership or other business organization or division or business unit or material asset thereof or any equity interest therein;

(p) make, change, or rescind any material election relating to Taxes unless otherwise required by Law, amend any Tax Return, surrender any material right or claim to a refund of Taxes, consent to any extension or waiver of the statute of limitations period applicable to any Taxes, Tax Returns or claims for taxes; or

(q) enter into any Contract or arrangement to do any of the foregoing.

5.2. Best Efforts; Cooperation and Assistance.

The Parties agree as set forth below with respect to the period between the date hereof through the Closing Date.

(a) Each Seller and Purchaser shall use their reasonable best efforts to take all actions and do all things necessary, proper or advisable to consummate and make effective, in compliance with all of the terms of this Agreement, the transactions contemplated hereby (including satisfaction, but not waiver, of the conditions precedent which it is responsible for or otherwise in control of, as set forth in Article VI below) as soon as possible but no later than the Long-Stop Date.

(b) Subject to Section 5.2(c), Purchaser shall use its reasonable best efforts to give any notices to, make any filings with, and obtain, as soon as practicable, any Governmental Approvals for which it is solely responsible and, to the extent necessary, each Seller shall use its reasonable best efforts to assist Purchaser in respect of the foregoing. Subject to and conditional upon the execution of the Avon Asia Escrow Agreement and the Avon China Escrow Agreement in accordance with Section 5.2(d), each Seller shall use its reasonable best efforts to give any notices to, make any filings with, and obtain, as soon as practicable, any Governmental Approval for which it is solely responsible or jointly responsible with Purchaser and, to the extent necessary, Purchaser shall use its reasonable best efforts to assist each Seller in respect of the foregoing. Without limiting the generality of the foregoing, each Party shall (i) cooperate with each other and file an application for obtaining the Purchaser Required Approvals as soon as practicable after the date hereof, (ii) respond promptly to inquiries from any applicable Governmental Authority in connection with such filings, including providing any supplemental information that may be requested by such Governmental Authority and (iii) reasonably update each other of the status of progress of such filing.

(c) Subject to and conditional upon the execution of the Avon Asia Escrow Agreement and the Avon China Escrow Agreement in accordance with Section 5.2(d), each Seller shall immediately and cause the Company to immediately, and, with respect to the procedures, applications and filings that need to be undertaken by Purchaser, Purchaser shall, immediately proceed with any and all procedures, applications and filings for the SAMR Registration (which shall be made as one single filing to effectuate the transfer of Sale Equity, and for which

Sellers and Purchaser shall enter into a separate standard form Equity Purchase Agreement substantially in the form attached hereto as Exhibit 5 (the “Local EPA”)), and MOFCOM Filing, and update the foreign exchange registration of the Company and, if applicable, and set up the Asset Realization Account at bank with authorization from such competent foreign exchange authority, and to execute and deliver agreements, instruments and certificates as necessary to accomplish such procedures. In the event of any conflict between the provisions under this Agreement and the Local EPA, the provisions hereunder shall prevail. Each Party shall, and Sellers shall cause the Company to, promptly provide such documents, duly executed on behalf of the respective Party and/or the Company, as applicable, as well as other business information and data that is necessarily required from such Party and/or the Company, as applicable, to complete the transfer procedures, including obtaining the Governmental Approvals as required for the consummation of this Transaction.

(d) As soon as practicable after the date of this Agreement but no later than one (1) month after the date hereof, the Parties shall negotiate in good faith and enter into the Avon Asia Escrow Agreement and the Avon China Escrow Agreement.

(e) From and after the date of this Agreement until the earlier of the Closing Date or termination of this Agreement, each Seller shall, and shall cause the Company to, use its and their commercially reasonable efforts, obtain, prior to the Closing, all consents and approvals from any Person other than a Governmental Authority that may be required in connection with the Transaction (including any counterparty to a Material Contract under which such counterparty will become entitled to terminate it as a result of the Transaction or which require the consent of such counterparty in connection with the Transaction) (the “Third Party Consent”).

(f) Each of Sellers shall use its reasonable best efforts for the Company to renew the New Avon MSA and shall provide full cooperation in connection therewith as reasonably requested by Purchaser.

(g) From and after the date of this Agreement until the earlier of the Closing Date or termination of this Agreement, each Seller shall give prompt notice to Purchaser and Purchaser shall give prompt notice to each Seller of (i) any representation or warranty made by it contained in this Agreement becoming inaccurate and (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement within the time contemplated hereby.

5.3. Access and Information.

From the date of this Agreement until the Closing, each Seller shall, upon reasonable advance notice from Purchaser to Sellers, cause the Company to provide Purchaser and its advisors with reasonable access during normal business hours in a manner not detrimental to the Company’s business to all information, properties and assets and personnel of the Company relevant to the Company, its business and the Transaction, and shall cause the Company to provide to Purchaser such information and data in respect thereof as Buyer may reasonably request.

5.4    Replacement of Directors.

On or prior to the Closing, each Seller shall procure that each of the directors of the Company listed in Schedule D resign from their respective positions, effective as of the Closing Date by executing the resignation letter in the form attached hereto as Exhibit 5.4(a), which duly executed form shall be delivered to Purchaser on or prior to the Closing.

5.5    No Shop.

Until the earlier of the termination of this Agreement and the Closing, each Seller shall not, and shall cause its Affiliates (including, prior to the Closing, the Company) not to, directly or indirectly, (i) solicit any inquiries or proposals, or enter into any discussions, negotiations, understandings, arrangements or agreement, relating to the direct or indirect disposition, whether by sale, merger or otherwise, of all or any portion of the Sale Equity or the material assets or business of the Company to any Person other than Purchaser or its Affiliates (any such inquiry, proposal, discussion, negotiation, understanding, arrangement or agreement, an “Acquisition Proposal”) or (ii) furnish to any Person any information or access to the books and records in connection with, or otherwise cooperate with, facilitate or encourage any effort or attempt by any Person to effectuate or propose an Acquisition Proposal.

5.6    Confidentiality; Public Announcements.

(a)     For three (3) years after the date hereof, each of the Parties shall maintain in confidence, and shall cause their respective directors, officers, employees, agents, and Affiliates to maintain in confidence, and not use for any purpose other than the consummation of the Transaction or the exercise of rights or performance of obligations hereunder, any information obtained in confidence from the other Party pursuant to this Agreement, except to

the extent that (i) such information was already known to the receiving Party at the time of disclosure, (ii) such information was disclosed to the receiving Party by others not bound by a duty of confidentiality, (iii) such information was already publicly available at the time of the disclosure or subsequently becomes publicly available through no fault of the receiving Party, (iv) the use of such information is necessary or appropriate in order for such Party to comply with this Agreement, (v) the use or disclosure to New Avon of such information is necessary or appropriate in order for Purchaser to conduct discussions or negotiations with New Avon in connection with the renewal of the New Avon MSA or execution of a new manufacturing and supply agreement with New Avon, or (vi) the furnishing or use of such information is required by Laws (including reporting obligations under U.S. and Korean securities Laws) or in connection with a Proceeding, provided that, for the purpose of the Form 10-K disclosure with the U.S. Securities and Exchange Commission, Sellers shall cause a confidentiality treatment request to be filed if requested by Purchaser and Avon’s legal counsel can reasonably show that disclosure would present a business harm. Notwithstanding the foregoing, after the Closing, Purchaser shall not owe any confidentiality obligation set forth in this Section 5.6(a) in respect of information relating to the Company, and each Seller shall maintain in confidence, and shall cause its respective directors, officers, employees, agents, and Affiliates to maintain in confidence, and not use for any purpose other than the exercise of rights or performance of obligations under this Agreement, any information relating to the Company until the date that is the three (3) year anniversary of the date hereof.

(b) Each Party shall also maintain the terms of this Agreement and the Transaction in confidence, and shall cause its directors, officers, employees, agents and Affiliates to maintain the same in confidence, except for any press releases agreed by the Parties in writing, and except to the extent that (i) the Parties otherwise agree so in writing, or (ii) the furnishing or use of such information is required by Law (including reporting obligations under U.S. and Korean securities laws) or in connection with a Proceeding applicable to or involving such Party or its Affiliates.

(c) Notwithstanding Section 5.6(a) and (b), the Parties shall consult with each other before issuing any press releases or otherwise making any public statements with respect to this Agreement or the Transaction, and neither Party shall issue any press release or make any public statement prior to obtaining the other Party’s written approval, except that no such approval shall be necessary to the extent disclosure may be required by applicable Laws on the condition that prior to such disclosure the disclosing Party provides the other Party with the draft of such press release or public statement reasonably in advance, consults with the other Party about their content, and endeavors to obtain the other Party’s consent for such disclosure.

(d) For the avoidance of doubt, the Confidentiality and Non-Disclosure Agreement, dated August 16, 2018, between Avon Products Inc. and Purchasershall be terminated as of the date hereof, and neither party thereto shall have any liability or further obligation to the other party thereunder.

5.7    Employee Retentions.

Purchaser shall cause the Company to continue the employment of all Company Employees, effective immediately upon the Closing and for a period of at least one (1) year from the Closing Date, except where the employment of a Company Employee is terminated by such Company Employee, or by the Company for gross misconduct of such Company Employee in accordance with the applicable labor Laws and any applicable labor contract with such Company Employee. As of the Closing Date and for a period of at least one (1) year thereafter, Purchaser shall cause the Company to provide each Company Employee with compensation and employee benefits (including but not limited to the social security, the housing provident fund, and health insurance) that are no less favorable than the compensation and benefits provided to each such Company Employee immediately prior to the Closing, the key aspects of which are set out in Schedule E, except where the change of compensation and employee benefits is made in accordance with the applicable labor Laws or is agreed upon by the Company Employee.

5.8    INTENTIONALLY OMITTED.

5.9    Related Party Contracts; Transitional Agreements.

On or prior to the Closing, each Seller shall, and shall cause the relevant Seller Parties to:

(a) terminate each of the Related Party Contracts (which, for the avoidance of doubt, does not include the New Avon MSA and the Manufacturing and Supply Agreement), except for those otherwise specifically provided in this Agreement, as of the Closing Date, on terms and conditions that release the Company from all past or future Liabilities or obligations from and after the Closing Date and deliver to Purchaser written evidence of such termination reasonably satisfactory to Purchaser; provided, however, that each Seller shall and shall cause the relevant Seller Party to extend the contract term of each of the Related Party Contracts otherwise agreed upon

among the Parties prior to the Closing which are necessary for the Company to conduct its business as currently being conducted (including, for the avoidance of doubt, performance of its obligations under the Manufacturing and Supply Agreement) (the “Surviving Contracts”) with the same terms and conditions contained therein so that such agreements will expire (subject to renewal based on mutual agreement of the parties thereto) six (6)months after the Closing Date; and

(b) if requested by Purchaser, enter into, or cause to be entered into, a transitional services agreement in form and substance reasonably requested by Purchaser and acceptable to Sellers, that is necessary for the stand-alone operations of the Company on and after the Closing.

5.4. Non-Competition; Non-Solicitation.

(a) From the Closing Date until the date that is five (5) years after the Closing Date, each Seller shall not, and shall cause its Affiliates not to, without the prior written consent of Purchaser, directly or indirectly, (i) hire or solicit for employment any officer or employee of the Company or (ii) induce or encourage any such officer or employee to no longer be employed by the Company; provided, however, that nothing in this ýSection 5.10(a) shall prohibit each Seller or any of its Affiliates from engaging in general solicitations to the public or general advertising not targeted at employees of the Company.

(b) From the Closing Date until the date that is five (5) years after the Closing Date, Purchaser shall not, and shall cause its Affiliates not to, without the prior written consent of Sellers, directly or indirectly, (i) hire or solicit for employment any officer or employee of any of Sellers or Avon Beauty & Cosmetics Research and Development (Shanghai) Co., Ltd. (“Avon R&D”) or (ii) induce or encourage any such officer or employee to no longer be employed by any of Sellers or Avon R&D; provided, however, that nothing in this ýSection 5.10(b) shall prohibit Purchaser or any of its Affiliates from engaging in general solicitations to the public or general advertising not targeted at employees of any of Sellers or Avon R&D.

(c) From the Closing Date until the date that is five (5) years after the Closing Date, each Seller shall not, and shall cause its Affiliates not to,without the prior written consent of Purchaser, directly or indirectly, (i) engage in the Competing Business anywhere in the Restricted Territory, or (ii) control (including as a joint venture partner, agent, representative, consultant or lender) any Person that engages directly or indirectly in the Competing Business in the Restricted Territory. For purposes of this Agreement, (A) “Competing Business” means the manufacturing of cosmetic products and (B) “Restricted Territory” means PRC. For the avoidance of doubt, any of Sellers or its Affiliates’ engagement with any contract manufacturer in the PRC for the manufacture and supply of cosmetic products shall not be restricted by this Section 5.10(c).

(d) The Parties accept and agree that the provisions of this Section 5.10 are necessary to protect the legitimate business and proprietary interests of the Company and of Purchaser after the Closing Date and that their terms and conditions (including the scope, duration and geographical areas of restriction) are fair and reasonable. It is the intention of the Parties that if any restriction or covenant contained in this Section 5.10 is held to cover a geographic area or to be for a length of time which is not permitted by applicable Laws, or in any way construed to be too broad or to any extent invalid, such restriction or covenant shall not be construed to be null, void and of no effect, but valid and enforceable to the maximum extent permitted under the applicable Laws, and a court of competent jurisdiction or the arbitral tribunal shall construe and interpret or reform this ýSection 5.10 to provide for a covenant having the maximum enforceable geographic area, time period and other provisions that would be valid and enforceable under such applicable Laws.

5.11    Return Filing After Closing.

At least ten (10) Business Days prior to the filing by the Company of the annual Tax Return for Company’s corporate income tax for the fiscal year ended on December 31, 2018 (the “2018 Annual Return”), Purchaser shall provide the draft 2018 Annual Return to Sellers and Sellers shall be entitled to review and provide their comments on the 2018 Annual Return prior to the filing thereof. Purchaser shall use its commercially reasonable efforts to reflect such comments from Sellers in the 2018 Annual Return.

5.12    Manufacturing and Supply Agreement.

Purchaser hereby undertakes to use its commercially reasonable efforts to procure the due performance by the Company of any and all its obligations under the Manufacturing and Supply Agreement after the Closing.

5.13    Use of Company Name.

From the Closing Date until the date that is five (5) years after the Closing Date, each Seller shall grant or cause to be granted to the Company a limited non-exclusive, non-transferable, non-sublicenseable, fully paid up and royalty free license to maintain and use the current name of the Company (i.e., Avon Manufacturing (Guangzhou), Ltd. in English and “广ã州Ý雅Å芳¼制Æ造ì有Ð限Þ公«司¾” in Chinese) (the “Company Name”) solely to the extent necessary for the Company (i) to use by the Company as its corporate name for purposes of identifying the Company, (e.g. as letterhead in written correspondence, in contact information included in email signatures or directories, as signage in and around the Facility, etc.), provided that such identification does not serve as an advertisement or promotion for any product or service; and (ii) solely with respect to beauty and personal care products manufactured by the Company for Seller Parties or New Avon, or for Purchaser (a subsidiary of LG Household & Health Care) or its Affiliates, where required by Law (e.g. the statement “Manufactured by Avon Manufacturing (Guangzhou), Ltd.”, and the like). Without prejudice to the foregoing, Purchaser undertakes to and shall procure the Company to refrain from using the Company Name on any beauty, personal care, or cosmetic products or packaging therefor manufactured, directly or indirectly, for any entity other than Seller Parties, New Avon, Purchaser or its Affiliates. For the purpose of the arrangement set forth in this Section 5.13, the License Agreement shall be granted or cause to be granted by Seller to the Company before Closing.

ARTICLE VI

CONDITIONS PRECEDENT

6.1. Conditions Precedent to the Obligations of each Seller to Sell the Sale Equity.

The obligation of each Seller to sell the Sale Equity at the Closing is subject to the fulfillment to the satisfaction of each Seller, on or prior to the Closing Date, of each of the following conditions, any of which may be waived in writing by each Seller:

(a) No Injunction. No Law or Order shall have been enacted, entered, promulgated or endorsed by any Governmental Authority of competent jurisdiction that prohibits the consummation of the Transaction or any part thereof.

(b) Governmental Approvals. All requisite Governmental Approvals (including the Purchaser Required Approvals) required to have been obtained prior to the Closing shall have been obtained without any condition (through the expiration of any applicable waiting period or otherwise).

(c) Representations and Warranties. The representations and warranties of Purchaser in Section 4.3 shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as of the Closing Date as though made on and as of such date (other than representations and warranties which address matters only as of a certain date, which shall be as of such date).

(d) Performance. Purchaser shall have performed, satisfied and complied with, in all material respects, all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing Date.

(e) Escrow Agreement. Each of the Avon Asia Escrow Agreement and Avon China Escrow Agreement shall have been entered into by and among the parties thereto.

6.2. Conditions Precedent to the Obligations of Purchaser to Purchase the Sale Equity.

Purchaser’s obligation to purchase the Sale Equity at the Closing from each Seller is subject to the fulfillment to the satisfaction of Purchaser on or prior to the Closing Date of the following conditions, any of which may be waived in writing by Purchaser:

(a) No Injunction. No Law or Order shall have been enacted, entered, promulgated or endorsed by any Governmental Authority of competent jurisdiction that prohibits the consummation of the Transaction or any part thereof.

(b) Governmental Approvals. All requisite Governmental Approvals (including the Purchaser Required Approvals) required to have been obtained prior to the Closing shall have been obtained without any condition (through the expiration of any applicable waiting period or otherwise).

(c) Representations and Warranties. The representations and warranties of each Seller in Sections 4.1 and 4.2 shall be true and correct in all material respects (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects) as

of the Closing Date as though made on and as of such date (other than representations and warranties which address matters only as of a certain date, which shall be as of such date).

(d) Performance. Each Seller shall have performed, satisfied and complied with, in all material respects, all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by each Seller at or prior to the Closing Date.

(e) Escrow Agreement. Each of the Avon Asia Escrow Agreement and Avon China Escrow Agreement shall have been entered into by and among the parties thereto.

(f) Manufacturing and Supply Agreement. The Manufacturing and Supply Agreement shall be in full force and effect as from the Closing Date without being amended or terminated as of the Closing Date.

(g) License Agreement. The License Agreement shall have been entered into by and between the parties thereto.

(h) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect.

(i) Reimbursement of Retention Bonus. The Company shall have been fully reimbursed of any retention bonus paid in accordance with Section 5.1(n).

ARTICLE VII

INDEMNIFICATION

7.1. Indemnification.

(a)     From and after the Closing, Purchaser agrees to indemnify, defend and hold harmless each Seller and its Affiliates, shareholders, directors, officers, employees, agents and advisors (the “Seller Indemnified Parties”) from and against any and all Losses that are actually incurred by such Seller Indemnified Parties as a result of or in connection with any inaccuracy in or breach of any of the representations and warranties made by Purchaser in Section 4.3 of this Agreement or any breach of, or failure by Purchaser to perform any of Purchaser’s covenants, agreements or other obligations contained in this Agreement.

(b)     From and after the Closing, Sellers agree to, jointly and severally, indemnify, defend and hold harmless Purchaser and its Affiliates, shareholders, directors, officers, employees, agents and advisors (including, for the avoidance of doubt, the Company after the Closing) (the “Purchaser Indemnified Parties”) from and against any and all Losses that are actually incurred by such Purchaser Indemnified Parties as a result of or in connection with any inaccuracy in or breach of any of the representations or warranties made by any Seller in Sections 4.1 or 4.2 in this Agreement or any breach of, or failure by any Seller to perform any of Sellers’ covenants, agreements or other obligations contained in this Agreement.

7.2. Survival of Claims.

Any claims pursuant to Section 7.1(a) or (b) with respect to any inaccuracy in or breach of any of the representations or warranties made by each Seller or Purchaser, as applicable, shall survive for a period of 24 months from the Closing Date, provided, however, that, any claims pursuant to Section 7.1(a) or (b) as a result of or in connection with (i) any inaccuracy in or breach of any of the representations or warranties contained in Section 4.2(m) (Company Benefits Plan Matters), Section 4.2(n) (Employee Matters), Section 4.2(p) (Taxes) and Section 4.2(q) (Environmental Matters) shall survive until the expiration of the relevant statute of limitations, (iii) any inaccuracy in or breach of any of the representations or warranties contained in Sections 4.1(a), (b), (c), (d) or (e), 4.2(a) or (b), 4.3(a), (b), (c) or (d) (the “Fundamental Representations”) shall survive until the expiration of the relevant statute of limitations, and (iv) any breach of any covenants or other agreements contained in this Agreement shall survive the Closing for a period of 24 months after the expiration of the period during which such covenants or agreements are to be performed.

7.3. Limitations on Liability.

(a)     Sellers shall not be exempted from liability for breach of their representations and warranties or any covenants, agreements or other obligations under this Agreement by reason of Purchaser’s knowledge of such breach, whether through the access to information under Section 5.3 or otherwise.

(b) For any claims against Sellers or Purchaser from whom indemnification is sought (the “Indemnifying Party”), as the case may be, pursuant to Section 7.1(a) or Section 7.1(b), other than any claims arising out of or based on (i) any breach of the Fundamental Representations or any of the representations or warranties contained in Section 4.2(p)(Taxes), (ii) any breach or failure to perform any of the covenants, agreements or obligations contained in this Agreement (including the Purchaser’s obligation to pay the Purchase Price) or (iii) fraud or willful misconduct, by such Indemnifying Party, the indemnification obligations of the Indemnifying Party in the aggregate shall not exceed fifteen percent (15%) of the Purchase Price; notwithstanding the foregoing, in no event shall the aggregate indemnification obligation of Sellers in relation to all claims exceed the Purchase Price. With respect to any claims against any Indemnifying Party for breach of any of its representations and warranties hereunder other than the Fundamental Representations or any of the representations or warranties contained in Section 4.2(p)(Taxes), such Indemnifying Party shall not be liable (x) for any individual occurrence, event, circumstance, act or omission where the Loss resulting therefrom is less than RMB 1 million (the “De Minimis”) and (y) for any Losses unless the aggregate amount of all Losses (it being understood that any such individual claims for amounts less than the De Minimis shall be ignored in determining whether the Aggregate Basket Amount has been exceeded) of the Indemnifying Party exceeds three percent (3%) of the Purchase Price (the “Aggregate Basket Amount”), in which case the Indemnifying Party shall be liable for all such Losses including the amount constituting the Aggregate Basket Amount.

(c) In calculating the amount of any Losses payable to an Indemnified Party hereunder, the amount of the Losses (i) shall not be duplicative of any other Loss for which an indemnification claim has been made, (ii) shall be computed net of any amounts actually recovered by such Indemnified Party (the “Third Party Indemnification Amount”) under any other indemnification agreements, understanding or similar arrangements other than this Agreement with respect to such Losses, and (iii) shall be computed net of any amounts actually recovered by such Indemnified Party under any insurance policy with respect to such Losses and (iv) shall be computed net of any tax benefit actually realized by the Indemnified Party (or any of its Affiliates) with respect to such Loss for the taxable year of such Loss, as calculated on a with and without basis.

(d)     Notwithstanding anything in this Agreement to the contrary, neither Party shall be liable to the other Party for any consequential, indirect, special, punitive or incidental damages.

7.4. Claims for Indemnification.

(a) Third-Party Claims. All claims for indemnification made under this Agreement resulting from, related to or arising out of a third-party claim against an Indemnified Party (a “Third Party Claim”) shall be made in accordance with this Section 7.4(a). An Indemnified Party shall give prompt written notification (not more than thirty (30) calendar days after becoming aware of any third party claim) (a “Third Party Claim Notice”) to the Indemnifying Party of the commencement of any action, suit or proceeding relating to a Third Party Claim for which indemnification may be sought or, if earlier, upon the assertion of any such claim by a third party; provided, however, that if the Indemnified Party fails to provide the Indemnifying Party with such notice in a timely manner, or in reasonable detail to apprise the Indemnifying Party of the nature of such Third Party Claim, in each case taking into account the facts and circumstances with respect to such Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party to the extent that the Indemnifying Party's position is prejudiced as a result thereof, but for the avoidance of doubt then only to the extent of such prejudice.. Such Third Party Claim Notice shall include a description in reasonable detail, to the extent known or on hand at the time, of the facts constituting the basis for such third-party claim, documents reasonably evidencing the existence and material contents of the Third Party Claim and the amount of the Losses claimed. At any time after delivery of such Third Party Claim Notice, the Indemnifying Party may, upon written notice thereof to the Indemnified Party within 14 calendar days of its receipt of the Third Party Claim Notice, assume control of the defense of such action, suit, proceeding or claim by acknowledging its indemnification obligations as provided in this Article VII in writing to the Indemnified Party; provided, however, that the Indemnifying Party shall not be permitted to assume control of the defense if the Third Party Claim involves a claim for non-monetary relief against the Indemnified Party. If the Indemnifying Party does not assume control of such defense or fails to give a written notice to assume control of such defense within the 14-day period, then the Indemnified Party shall have the right to defend or prosecute such Third Party Claim on its own and settle, compromise or discharge such Third Party Claim at its sole direction, and the Indemnifying Party shall remain liable for any Losses resulting therefrom to the extent that such Losses are subject to indemnification in accordance with this Article 7. Neither any Seller nor Purchaser shall take any action the purpose of which is to prejudice the defense of any claim subject to indemnification hereunder or to induce a third party to assert a claim subject to indemnification hereunder.

(b) Procedure for Claims. In the event an Indemnified Party claims a right to payment pursuant hereto with respect to any matter not involving a Third-Party Claim (a “Direct Claim”), such Indemnified Party shall send written notice of such claim to the Indemnifying Party (a “Notice of Claim”). Such Notice of Claim shall specify in detail the legal basis for and the underlying facts of such Direct Claim. For the avoidance of doubt, the Parties agree and understand that Notices of Claim in respect of a breach of a representation or warranty must be delivered prior to the expiration of the survival period for such representation or warranty under Section 7.2. In case the Indemnifying Party disputes the liability asserted under such Direct Claim, the Indemnifying Party shall send a notice of such dispute to the Indemnified Party within thirty (30) days following its receipt of such Notice of Claim. In the event the Indemnifying Party disputes its liability with respect to such Direct Claim as provided above, as promptly as possible, such Indemnified Party and the Indemnifying Party shall establish the merits and amount of such Direct Claim (by mutual agreement or otherwise pursuant to an enforceable decision or award rendered in accordance with Section 9.4 in respect of such dispute) and, within ten (10) Business Days following the final agreement between the Parties or the date of an enforceable decision or award rendered in accordance with Section 9.4 with respect to the merits and amount of such Direct Claim, the Indemnifying Party shall pay to the Indemnified Party immediately available funds in an amount equal to such Direct Claim as determined hereunder.

7.5. Indemnification Procedures for Tax Claims

(a) If a Tax Claim shall be made by any Taxing Authority, which, if successful, might result in an indemnity payment to any Indemnified Party pursuant to Section 7.1, the Indemnified Party shall promptly notify the Indemnifying Party in writing of such Tax Claim. If the Indemnified Party fails to provide the Indemnifying Party with notice of a Tax Claim for which the Indemnifying Party may be liable under Section 7.1 within a sufficient period of time to allow the Indemnifying Party to effectively contest such Tax Claim, or in reasonable detail to apprise the Indemnifying Party of the nature of the Tax Claim, in each case taking into account the facts and circumstances with respect to such Tax Claim, the Indemnifying Party shall not be liable to any Indemnified Party to the extent that the Indemnifying Party's position is prejudiced as a result thereof, but for the avoidance of doubt then only to the extent of such prejudice.

(b) Sellers shall control all proceedings taken in connection with any Tax Claim (including selection of counsel).

(c) All written communications pertaining to any Tax Claim relating to Taxes of the Company for a Pre-Closing Tax Period or a Straddle Period which are transmitted to or received from the relevant Tax Authority by Purchaser shall be copied to Sellers as soon as reasonably practicable after such communications have been so transmitted to or received by Purchaser.

(d) Notwithstanding the above Section 7.5(b) and (c), for any Tax Claim relating to Taxes of the Company for a Pre-Closing Tax Period or a Straddle Period, Sellers shall have the right to control all proceedings taken in connection with any such Tax Claim (including in respect of the selection of counsel) and, in furtherance thereto, Purchaser shall take such action and procure that the Company shall, at Sellers’ sole cost and expense (such cost and expense to only include reasonable third party costs and expenses properly incurred by the Company) take such action as Seller may promptly by written notice to Purchaser request to dispute, resist or compromise such liabilities, costs, damages, Taxes, Losses or expenses; provided, however, that Purchaser (and counsel of its own choosing) shall have the right to participate fully in all aspects of the prosecution or defense of any Tax Claim relating to a Straddle Period, at Purchaser's sole expense and Seller shall not be entitled to settle, either administratively or after the commencement of litigation, any Tax Claim which would adversely affect the liability for Taxes of Purchaser or the Company for any period after the Closing Date to any extent (including, but not limited to, the imposition of income tax deficiencies, the reduction of asset basis or cost adjustments, the lengthening of any amortization or depreciation periods, the denial of amortization or depreciation, or the reduction of loss or credit carryforwards) without the prior consent of Purchaser, which shall not be unreasonably withheld or delayed.

(e) Purchaser shall (and will be entitled to procure that the Company shall) be at liberty without reference to Seller to admit, compromise or otherwise deal with any Tax Claim after the service of a notice in writing on Purchaser by Sellers stating that Sellers consider that the Tax Claim should no longer be resisted.

(f) Purchaser shall and shall procure that the Company shall cooperate with Sellers in contesting any Tax Claim, which cooperation shall include the retention (and upon Sellers' reasonable request) of records and information which are reasonably relevant to such Tax Claim, and making employees available on a mutually convenient basis to provide additional information or explanation of any material provided hereunder or to testify at proceedings relating to such Tax Claim, in each case at Sellers’ sole expense.

(g) Notwithstanding anything to the contrary in this Section, Purchaser shall not be obliged to: (i) appeal or procure that the Company appeal against any Tax Claim in any forum beyond the first relevant appellate body; or (ii) take or procure that the Company takes any action the effect of which is likely to affect the future conduct of the business of Purchaser, the Company, and/or any member of Purchaser's group or affect the rights or reputations of any of them; in each case of the foregoing the Parties shall discuss in good faith any reasonable alternative measure to mitigate such risks.

7.6. Additional Indemnification.

Separate from the indemnification obligations stipulated in Section 7.1, Sellers agree to, jointly and severally, indemnify, defend and hold harmless the Purchaser Indemnified Parties from and against any and all Losses that are actually incurred by such Purchaser Indemnified Parties as a result of or in connection with any of the matters set forth in Schedule F, in each case if applicable.

7.7. Sole and Exclusive Remedy.

From and after the Closing, except in the case of any claims arising out of any fraud or willful misconduct and except for the Purchaser’s obligations to pay the Purchase Price, the rights provided to the Parties under this Article VII shall be the sole and exclusive remedies of the Indemnified Party with respect to claims under this Agreement.

ARTICLE VIII

TERMINATION

8.1. Termination.

This Agreement may be terminated at any time prior to the Closing:

(a)     by mutual written agreement of Sellers and Purchaser;

(b)     by either Sellers acting as one party or Purchaser, in the event that the Closing has not occurred by the Long-Stop Date by reason of failure of any conditions set forth in Section 6.1 (in the case of termination by Sellers) or Section 6.2 (in the case of termination by Purchaser), provided, however, that a Party to which failure of any conditions applicable to it under Article VI is attributable may not terminate this Agreement pursuant to this Section 8.1(b);

(c)     by either Sellers acting as one party or Purchaser with a written notice to the other Party if the other Party has materially breached any of its covenants or obligations under this Agreement and has failed to cure such breach within twenty (20) days following such written notice;

(d)     by either Sellers acting as one party or Purchaser with immediate effect upon the filing of a petition in bankruptcy, insolvency or reorganization against or by the other Party, or such other Party becoming subject to a composition for creditors, whether by law or agreement, or such other Party going into receivership or otherwise becoming insolvent, or any analogous event occurring under the laws of the jurisdiction in which a Party is incorporated; or

(e) by Sellers acting as one party, in case of failure to complete the MOFCOM Filing within fifteen (15) Business Days after the application therefor is submitted.

8.2. Effect of Termination.

In the event of termination of this Agreement, such termination will not affect the right of any Party to seek any and all remedies for any Losses incurred as a result of any breach by the other Party under this Agreement, and Section 8.2 and Article IX shall remain in full force and effect and survive any termination. Without prejudice to the foregoing, (i) if this Agreement is terminated after the completion of the SAMR Registration, Sellers may at its sole discretion elect to require the Purchaser, and the Purchaser is obliged to fully cooperate with Sellers, to mutually apply with the SAMR for the rewind of the transfer of the Sale Equity (the “Rewind Transaction”), including without limitation, if Sellers deem necessary, executing a separate standard form Equity Purchase Agreement with respect to the Rewind Transaction; each Party shall be responsible for and bear its own Taxes, fees, costs and expenses imposed, levied, assessed or incurred in connection with the Rewind Transaction; provided that if the termination is made due to any Party’s material breach of its covenants or obligations under the Agreement, such breaching Party shall be solely responsible for and bear all of the foregoing Taxes, fees costs and expenses; and (ii) the Local EPA shall be terminated upon the termination of this Agreement.

ARTICLE IX

MISCELLANEOUS

9.1. Entire Agreement.

This Agreement (which includes the Exhibits and Schedules attached hereto) constitute the entire agreement of the Parties in respect of the subject matter hereof and supersedes any prior expressions of intent or understandings with respect thereto.

9.2. Assignment.

This Agreement and each and every covenant, term and condition hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without obtaining the prior written consent of the other Party;provided, however, that Purchaser may assign this Agreement to its Affiliate upon prior written notice to each Seller.

9.3. Tax and Expenses.

Except as otherwise expressly provided in this Agreement, each Party shall be responsible for and bear its own Taxes, fees, costs and expenses imposed, levied, assessed or incurred on or by the Party for or in connection with the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby, including, without limitation, fees and disbursements of legal counsel.

9.4. Governing Law and Dispute Resolution.

This Agreement and the rights and obligations of the Parties hereunder shall be governed by, construed and enforceable in accordance with the Laws of Singapore without giving effect to the conflict of laws provisions thereof. Any disputes, controversies, differences or disagreements arising under, out of or in connection with this Agreement shall be finally settled by arbitration administered by the International Chamber of Commerce in Singapore, in accordance with the Rules of Arbitration of the International Chamber of Commerce for the time being in force (the “Rules”) which rules are deemed to be incorporated by reference in this Section. The seat of the arbitration shall be Singapore and the language of the arbitration shall be English. The number of arbitrators shall be three (3) appointed in accordance with the Rules, with Sellers, on the one hand, and Purchaser, on the other hand, each being entitled to designate one arbitrator, while the third arbitrator, who shall act as the presiding arbitrator, will be selected by agreement between the two designated arbitrators. The arbitration shall be the sole and exclusive forum for resolution of any such dispute, controversy or claim and a decision rendered by the arbitral tribunal in such proceedings shall be final and binding on the Parties, without right of appeal. Each Party hereto consents to the enforcement of any such arbitration award by any court having jurisdiction by any means including judgment being entered in respect of such arbitration award. Notwithstanding the foregoing, each Party hereto shall have the right to seek interim relief from any court of competent jurisdiction, and this shall not be deemed or construed as incompatible with, or operate as a waiver of, the foregoing agreement to arbitrate.

9.5. Amendments.

Except as otherwise set forth herein, this Agreement may be amended or modified only by an instrument in writing duly executed by the Parties. No delay or omission to exercise any right, power or remedy accruing to either Party upon any breach or default of the other Party under this Agreement impairs any such right, power or remedy of such non-defaulting Party.

9.6. Severability.

If any one or more of the provisions contained in this Agreement or any document executed in connection herewith shall be invalid, illegal or unenforceable in any respect under any applicable Law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. In such event, the Parties shall use their respective best efforts to negotiate in good faith, a substitute, valid and enforceable provision or agreement which most nearly affects the Parties’ intent in entering into this Agreement.

9.7. Notices.

Each notice, demand or other communication to be given or made under this Agreement shall be in writing in English and delivered by hand or internationally recognized overnight air courier or transmitted by email to the relevant Party at its address or email address set out below (in the case of Purchaser) or in Exhibit 1 (in the case of each Seller) (or such other address or email address as the addressee has by seven (7) days’ prior written notice specified to the other Party):

If to Avon Asia:

Avon Asia Holdings Company

c/o Avon Cosmetics Limited

Building 6

Chiswick Park

London W4 5HR

United Kingdom

Attention:     General Counsel

Tel:         +44-1604-232425

E-mail:     james.thompson@avon.com

If to Avon China:

Avon Products (China) Co., Ltd.

Unit 03-04,

FL 7, No. 18,

Hua Cheng Avenue, Tianhe District

Guangzhou, PRC

Attention:     Head of Legal

Tel:        +86-21-5203-6158

E-mail:     xiaoping.zhu@avon.com

If to Purchaser:

TheFaceShop Co., Ltd.

58 Saemunan-ro, Jongno-gu, Seoul 03184 Korea

Attention: Junsik Han

Tel:    +82-2-6924-6062

Email: legalteam@lghnh.com

Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been duly given (i) if delivered by hand or internationally recognized overnight air courier, when actually delivered to the relevant address, and (ii) if transmitted by email, when dispatched with a simultaneous confirmation of transmission, provided, however, that if such day is not a working day in the place to which it is sent, such notice, demand or other communication shall be deemed delivered on the next following working day at such place.

9.8    Joint and Several Liability.

The obligations and liabilities of Sellers hereunder shall be on a joint and several basis (and not on a joint only or several only basis).

9.8. Language; Counterparts.

This Agreement shall be executed in the English language. This Agreement may be executed in counterparts, each of which shall be deemed to constitute an original but all of which shall constitute one and the same instrument. If there is a translation of this Agreement, the English version shall prevail.

9.9. No Third Party Beneficiary.

This Agreement is solely for the benefit of the Parties and permitted assigns, and this Agreement shall not otherwise be deemed to confer upon or give to any other third party any remedy, claim, liability reimbursement, cause of action or other right. No provision of this Agreement is enforceable by virtue of the Contracts (Rights of Third Parties) Act (Chapter 53B) of Singapore by any person who is not a Party to this Agreement.

[Signature page follows]

[EXECUTION VERSION]

Signature Page to Equity Purchase Agreement

1/69

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first above written.

PURCHASER

TheFaceShop Co., Ltd.

By: /s/ Jae Sun Lee___    

Name: Jae Sun Lee

Title: Representative Director

[Signature page follows]

SELLERS

Avon Asia Holdings Company

By: /s/ Lisa Siders_

Name: Lisa Siders

Title: Director

[Signature page follows]

SELLERS

AVON PRODUCTS (CHINA) CO., LTD.

雅Å芳¼༈¨中Ð国ú༉©有Ð限Þ公«司¾

By: /s/ Asson Chang____

Name: Asson Chang

Title: Legal Representative of Avon Products (China) Co. Ltd.

[EXECUTION VERSION]

Exhibit pg. 1

EXHIBIT 1

SELLERS

Record Owner	Amount of Registered Capital Corresponding to Sale Equity (USD)	Allocation Percentage
Avon Asia	8,600,000	40%
Avon China	12,900,000	60%

Exhibit pg. 2

EXHIBIT 2-1

TERMS OF AVON ASIA ESCROW AGREEMENT

This Term Sheet for Avon Asia Escrow Agreement (this “Term Sheet”) outlines certain key terms and conditions of the Avon Asia Escrow Agreement (the “Agreement”) to be entered into by and among TheFaceShop Co., Ltd. (“Purchaser”), Avon Asia Holdings Company (“Avon Asia”) and the escrow agent as defined under that certain Equity Purchase Agreement, dated January 4, 2019, by and among Purchaser, Avon Asia and Avon Products (China) Co., Ltd. (the “EPA”) (the “Escrow Agent”, and together with Purchaser and Avon Asia, the “Parties”, and each, a “Party”) in connection with the proposed acquisition by Purchaser of all equity interest in Avon Products Company Limited (the “Company”) in accordance with the EPA. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the EPA.

Parties	Purchaser, Avon Asia and Escrow Agent
Signing Date	No later than one (1) month after the date of the EPA
Appointment of Escrow Agent	-The Purchaser and Sellers appoint the Escrow Agent as their escrow agent to receive, hold, safeguard and disburse the Total Escrow Amount. -The Escrow Agent undertakes the responsibility in good faith to receive, hold, safeguard and disburse the Total Escrow Amount, upon the terms and subject to the conditions of the Agreement. -B4Any fee payable to the Escrow Agent shall be borne equally by Purchaser and Avon Asia.
Total Escrow Amount	-Avon Asia Escrow Amount in USD 3,000,000 and Avon Asia Holdback Amount in USD 1,181,000 (collectively, the “Total Escrow Amount”). -Any interest generated from the Escrow Account, less any tax payable on such interest, shall be retained in the Escrow Account for the benefit of the -B5Party that is the payee of the respective Total Escrow Amount proportionately in accordance with the provisions in the Agreement.
Escrow Account	-A bank account opened at the Escrow Agent shall be used as the Escrow Account. -At the Closing, Purchaser shall deposit with the Escrow Agent (i) the Avon Asia Escrow Amount and (ii) the Avon Asia Holdback Amount pursuant to Section 3.7 in the EPA to be held in the Avon Asia Escrow Account pursuant to the Agreement.
Release of Escrow Amount	-The Escrow Agent shall be authorized to distribute all or a portion of the Total Escrow Amount only upon the receipt of joint written instructions (in form and substance agreed upon by the Parties) signed by Purchaser and Avon Asia authorizing the release of all or such portion of the Total Escrow Amount. -The Escrow Agent shall also be authorized to distribute all or a portion of the Total Escrow Amount to the extent the Escrow Agent is directed to make such payment by a final order issued by an arbitral tribunal.
Escrow Term	The Agreement shall be terminated upon release of the full amount of the Total Escrow Amount in accordance with the Agreement.

* * * * * * * * * * *

[EXECUTION VERSION]

Exhibit pg. 4

EXHIBIT 2-2

TERMS OF AVON CHINA ESCROW AGREEMENT

This Term Sheet for Avon China Escrow Agreement (this “Term Sheet”) outlines certain key terms and conditions of the Avon China Escrow Agreement (the “Agreement”) to be entered into by and among TheFaceShop Co., Ltd. (“Purchaser”), Avon Products (China) Co., Ltd. (“Avon China”) and the escrow agent as defined under that certain Equity Purchase Agreement, dated January 8, 2019, by and among Purchaser, Avon China and Avon Asia Holdings Company (the “EPA”) (the “Escrow Agent”, and together with Purchaser and Avon China, the “Parties”, and each, a “Party”) in connection with the proposed acquisition by Purchaser of all equity interest in Avon Products Company Limited (the “Company”) in accordance with the EPA. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the EPA.

Parties	Purchaser, Avon China and Escrow Agent
Signing Date	No later than one (1) month after the date of the EPA
Appointment of Escrow Agent	-The Purchaser and Sellers appoint the Escrow Agent as their escrow agent to receive, hold, safeguard and disburse the Total Escrow Amount. -The Escrow Agent undertakes the responsibility in good faith to receive, hold, safeguard and disburse the Total Escrow Amount, upon the terms and subject to the conditions of the Agreement. -Any fee payable to the Escrow Agent shall be borne equally by Purchaser and Avon China.
Total Escrow Amount	-Avon China Consideration in RMB 295,460,820, which includes (i) Avon China Escrow Amount in RMB 31,210,650 and (ii) the difference between Avon China Consideration and Avon China Escrow Amount in RMB 264,250,170 (collectively, the “Total Escrow Amount”). -Any interest generated from the Escrow Account, less any tax payable on such interest, shall be retained in the Escrow Account for the benefit of the Party that is the payee of the respective Total Escrow Amount proportionately in accordance with the provisions in the Agreement.
Escrow Account	-A bank account opened at the Escrow Agent shall be used as the Escrow Account. -At the Closing, Purchaser shall deposit with the Escrow Agent the Total Escrow Amount to be held in the Avon China Escrow Account pursuant to the Agreement.
Release of Escrow Amount	-The Escrow Agent shall be authorized to distribute all or a portion of the Total Escrow Amount only upon the receipt of joint written instructions (in form and substance agreed upon by the Parties) signed by Purchaser and Avon China authorizing the release of all or such portion of the Total Escrow Amount. -The Escrow Agent shall also be authorized to distribute all or a portion of the Total Escrow Amount to the extent the Escrow Agent is directed to make such payment by a final order issued by an arbitral tribunal.
Escrow Term	The Agreement shall be terminated upon release of the full amount of the Total Escrow Amount in accordance with the Agreement.

* * * * * * * * * * *

EXHIBIT 3

FORM OF LICENSE AGREEMENT

Please see attached.Exhibit pg. 7

EXHIBIT 4

MANUFACTURING AND SUPPLY AGREEMENT

Please see attached.

Exhibit pg. 8

EXHIBIT 5

FORM OF LOCAL EPA

Please see attached.

Exhibit pg. 9

EXHIBIT 5.4(A)

FORM RESIGNATION, RELEASE AND WAIVER LETTER

I, [name of director], a Director of Avon Manufacturing (Guangzhou), Ltd. (the “Company”) do hereby voluntarily resign from the office of Director of the Company with effect from [date].

I further hereby waive any claims I may have against the Company arising out of my service with, and resignation from, the Company, and I covenant that I shall not institute any action of any nature, in any administrative or judicial forum, against the Company, its officers or employees, shareholder, or any other party with an interest in the Company in connection with my service to or resignation from the Company.

____________, 201[•]

By ___________________

Name: [ ]

Schedule pg. 1

SCHEDULE A

DISCLOSURE SCHEDULES

Please see attached.

[EXECUTION VERSION]

Schedule pg. 2

SCHEDULE B

INTERCOMPANY LOAN BALANCES AS OF NOVEMBER 30, 2018

Borrower	Principal (RMB)	Interest (RMB)	Total Amount (RMB)
Avon China	50,000,000	633,783	50,633,783
AHPM	104,350,000	1,668,681	106,018,681

Schedule pg. 3

SCHEDULE C

INTENTIONALLY OMITTED

Schedule pg. 4

SCHEDULE D

LIST OF OFFICERS TO RESIGN

Ronald Chua Tamayo

Wolfram Braun

Jojo Chen (陈Â红ì慧Û)

Schedule pg. 7

Exhibit 5.12(C)-1

SCHEDULE E

KEY ASPECTS OF EMPLOYEE COMPENSATION AND BENEFITS

PRIOR TO CLOSING

1	Base Salary	Local Pay Structure
2	Merit Increase cycle	Review and adjust every April based on merit increase budget for 2019 at 6% and performance rating of employee
3	13 month pay	Paid in April of next year (Except G8 and G8 below in the Company). For detail, pls refer to Avon Employee Handbook.
4	Management Incentive Plan (Annual Bonus Plan)	Annual Bonus plan for G13 and above (Manager and above level)- G13 at 13%, G14 - 15 at 13% to 20% , following Global guideline. MIP is based on company and individual performance.
5	SSIP (Annual Bonus Plan)	Annual Bonus Plan - G10 and below (except the LPIP entitled) at 10%, G11 - G12 (Management level) at 12%; SSIP is based on company and individual performance.
6	Lean Productivity Incentive Program	Monthly Lean Productivity Incentive Program(LPIP) for the Company. G8 and below associates of Production Workshops and Warehouse, who are not entitled to SSIP.
7	Social Insurance	Following local rule/ legal requirement to provide funding for pension, medical, unemployment, accident and  birth based on their payout standard.
8	Housing Fund	Following local rule/ legal requirement to payout, based on their payout standard.
9	Annual Health Check	Covering Avon employees and dispatched labors. The associates working at powder positions are provided with special annual health check to comply with local regulation besides normal annual health check for normal employees.
10	On-board Health Check	Covering Avon employees and dispatched labors.
11	Medical Benefit/ Health Insurance	For employee and eligible dependents, also flexible for their parents to join with bargain price.
12	Single Child Health Subsidy	RMB 5 per month for eligible employee.
13	June 1st cash	RMB 30 per child for Children's Day
14	Meal Allowance	RMB 15 standard per day for normal shifts. There is additional meal for overtime. For the standards of normal meal and overtime meal, Pls refer to Avon Employee Handbook.
15	Telephone Allowance	For the Company, RMB100 for G13 and above level and for approved positions.
16	Annual Public Holiday (Paid)	Pls refer to Avon Employee Handbook.
17	Annual Company Holiday (Paid)	2 days (Spring Festival and Christmas). Pls refer to Avon Employee Handbook.
18	Annual Leave (Paid), , , Miscarriage Leave (Paid), Paternity Leave (Paid)	Please refer to Avon Employee Handbook.
19	Sick leave (Paid)	Please refer to Avon Employee Handbook.
20	Marriage leave (Paid)	Please refer to Avon Employee Handbook.
21	Maternity Leave(Paid)	Please refer to Avon Employee Handbook.
22	Prenatal Care Leave (Paid)	Please refer to Avon Employee Handbook.
23	Family Planning Leave (Paid)	Please refer to Avon Employee Handbook.
24	Miscarriage Leave (Paid)	Please refer to Avon Employee Handbook.
25	Paternity Leave (Paid)	Please refer to Avon Employee Handbook.
26	Lactation Allowance	Please refer to Avon Employee Handbook.RMB200 per month for the Company as open option.
27	Bereavement Leave (Paid)	Please refer to Avon Employee Handbook.
28	Family Care Leave	Following each province's rule - GuangZhou: 15 days. For single child to take care of parents in hospital.
29	Personal Leave (Unpaid)	Can be used after paid annual leave been used up. For details pls refer to Avon Employee Handbook.
30	Perfect Attendance Bonus	RMB 50 per quarter - Usually for G10 and below level employees
31	Employee purchase discount	Pls refer to Avon Employee Handbook.
32	Wedding Cash	RMB 100 for newly married.
33	Child Birth Cash	RMB 100 for new born who are single child.
34	Condolence Money	RMB 150 to the death of an associate's immediate families
35	Women's Day Cash	RMB 50 to women
36	Working Hours	8 hours per day, 40 hours per week
37	Overtime Pay	Following National rule - 1.5 ~ 3.0 times of salary.
38	Shift Allowance	RMB15 ~ 20 each time, depends on the shift - for manufacturing employees; besides this, RMB100/day for Company Supervisors.

39	Severance	Follow National Rule - except CTI got 15% additional. Service Years  Before January 1, 2008: the calculation strictly follows old national labor law and regulations.    2008年N1月Ž1日ú之V前O支x付t经济补偿金÷的º工u龄计算â༌A按ö照Ó当时༈]即Y2008年N1月Ž1日ú之V前O༉j的I有L关规定w执行æ。C  After January 1, 2008: the calculation strictly follows new national labor law and regulations. Average Salary According to government policy, the average salary separates into two parts: l Before January 1, 2008: Actual average salary in previous 12 months l After January 1, 2008: Actual average salary in previous 12 months , capped at 3 times local social average salary Notice payment The notice payment is an equivalent one month base salary payment in lieu of notice. Notice period: 1 month. Additional 15% severance for associates who are willing to sign on the mutual agreement of contract termination due to Company’s restructuring/redundancy in order to reduce legal risks and legal cost (Only for Global CTI list)
40	Transportation Allowance	Local Policy - RMB 3K/ 5K/ 10K per month for JG15 and above
41	NSP Allowance	To compensate Company associates who live out of Conghua. For details pls refer to the company policy.
42	Union	Employee is free to join Union which follow national rule to set up and run. - Benefits from union is not included in this list. Pls consult union.
43	Sign on bonus	Depends, case by case (Normally 1 ~ 2 months base pay)
44	High Temperature Subsidy	Follow local regulations.
45	Powder Workshop Subsidy	RMB250/person/month for packaging workshop, RMB400/person/month for processing workshop
46	Child Kindergarten Fee	RMB50/year, for associate's child
47	Spring Festival Red Pocket Cash	RMB100/person
48	Moon Festival Mooncakes	Five star hotel products
49	Women's Day holiday(Paid)	0.5 day for women
50	Birthday Gift	In 2018, standard cost RMB55 per person for company products
51	Annual Meeting Gift	Company products, around 8 pieces products.
52	Free shuttle buses for commuting	Multiple lines between GZ downtown and the plant, Conghua downtown and the plant. For day shift, night shift and overtime.
53	Business Travelling Insurance	Please refer to Avon Employee Handbook.
54	Company products Discount activities	Please refer to company policy.
55	Others - employee handbook	Please refer to Avon Employee Handbook.
56	Others - mandatory	Government mandatory benefits.
		Please note: 1) Company will comply with national/local labor laws and regulations if the above standards are lower than the mandatory requirements.
		2) Company will comply with national/local labor laws and regulations if any mandatory requirements are not included in this list above.
57	Medical Benefits

Category A: Employee (premium paid by employer)

Benefit Items	Coverage	Sum assured
Term life	Death caused by disease	36*monthly salary (Min. RMB100,000)
AD&D	Accidental death and Dismemberment	36*monthly salary (Min. RMB100,000)
Critical Illness	The insured can directly submit the claim to insurance provider if suffered from any kind of the 29 critical illness listed in the contract for the first time. ICBC-AXA should strictly keep it confidential	RMB100,000
Medial	Annual limit of inpatient & outpatient treatment	RMB20,000
	Outpatient reimbursement ratio	90%
	Inpatient reimbursement ratio	100%
	Inpatient daily room and board limit	RMB80
maternity	Annual limit	RMB10,000
	Reimbursement ratio	100%
Hospital Income	Inpatient treatment is required according to physician’s opinion due to illness	RMB50 per day
Public Fund	For Inpatient and outpatient treatment only	RMB1,000,000

Category B: Employee with child below age 18 (premium paid by employer)

Benefit Items	Coverage	Sum assured
Medial	Annual limit of inpatient & outpatient treatment	RMB20,000
	Outpatient reimbursement ratio	50%
	Inpatient reimbursement ratio	50%
Public Fund	Shared by employee & dependent, for inpatient and outpatient only	RMB1,000,000 with 60% reimburse

Category C: Employee with child below age 18 (premium paid by employer)

Benefit Items	Coverage	Sum assured
Supplementary Inpatient Insurance	Annual limit	RMB144,000
	Deductible	RMB20,000
	Reimbursement ratio	80%

Schedule pg. 8

SCHEDULE F

SPECIAL INDEMNITY ITEMS

Separate from the indemnification obligations stipulated in Section 7.1, Sellers agree to, jointly and severally, indemnify, defend and hold harmless the Purchaser Indemnified Parties from and against any and all Losses that are actually incurred by such Purchaser Indemnified Parties as a result of or in connection with any of the following matters taking place prior to the Closing Date:

1. any inconsistency among the total area on the real estate certificate, the environmental protection facility acceptance approval and approval for fire control acceptance on construction which were issued or granted to the Company prior to the Closing Date;

2. any expired Permits relating to cosmetics that the Company is still operating prior to the Closing Date;

3. the Company’s having not obtained all Governmental Approvals required for the Company to implement the flexible working-hour system prior to the Closing Date;

4. the Company’s any noncompliance with applicable Law relating to social insurance and housing fund by the Company or any labor dispute agency with respect to labor dispatch employees prior to the Closing Date;

5. the Company’s failure, as of the Closing Date, (i) to pay overtime allowances under the standard working hour system or (ii) to ensure that the corresponding proportion of the overall dispatched employees against the total number of the employees currently working in the Company does not exceed the maximum rate as permitted by applicable Law;

6. the Company’s failure to file the renewal of the registration of the quality standards (whether national, industrial or corporate) and the certificate thereof prior to the Closing Date;

7. the Company’s failure to complete the update or recordation of the current name of the Company’s legal representative (i.e. Ronald Chua Tamayo) in all of the Company’s licenses, certificates and Permits (including but not limited to the Certificate of Registration of Customs Declaration Entity, the Recordation of Inspection Declaration Entity, the Opening Bank Account Permit and the Pollution Discharge Permission); or

8. the Company’s failure to duly obtain any and all Governmental Approvals required for special purpose’s cosmetics and non-special purpose’s cosmetics required in connection with its business as currently conducted on the Closing Date.

EX-10.3

Exhibit 10.3

Exhibit 10.3

[Avon Letterhead]

20^th June 2017

Private and Confidential

Jonathan Myers

[Address]

Dear Jonathan,

It is with great pleasure that I am able to offer you on behalf of Avon Cosmetics Limited ("the Company"), a wholly-owned subsidiary of Avon Products, Inc. ("Avon") the permanent position of Executive Vice President, Chief Operating Officer of Avon. The Company is part of the Avon group of companies (“the Avon Group”). You will report to Sheri McCoy, Chief Executive Officer of Avon, and your expected commencement date will be 1 September, 2017.

The terms and conditions of your employment are set forth herein and in your contract of employment, attached hereto and incorporated in all respects.

Your annual base salary will be £470,000 payable in accordance with the Company's remuneration practices described in your contract of employment. Although this salary is quoted on an annual basis, it does not imply a specific period of employment.

You will be eligible to participate in the annual incentive program available to similarly situated Executive Vice President-level Associates. Your annual target award in 2017 will be 80% of your earned eligible base salary, provided that your employment commences on or before 1 October, 2017. Annual awards are contingent on relevant individual and business performance goals being achieved and the terms and conditions of the applicable annual incentive program. Annual incentive program payments, if any, are generally made early in the year following the performance period. For the 2017 year, the value of your annual incentive award shall be reduced pro-rata based on your employment commencement date (subject to applicable performance measures being achieved). Please note that if your employment commences after 1 October, 2017 for any reason, you will not be eligible for a 2017 annual incentive program award.

You will be eligible to participate in the long-term incentive program (“LTIP”) available to similarly situated Executive Vice President-level Associates. Your first such LTIP award is expected to be granted on your start date, with an expected recommended target value of 180% of your eligible, annual base salary, subject to approval of the Compensation and Management Development Committee of Avon’s Board of Directors.  This assumes your employment commences no later than October 1, 2017. Should your start date be after October 1, 2017, then you will not be eligible to receive a 2017 LTIP award and then your first award would be the regular 2018 award, planned to be granted in March, pursuant to the terms and conditions of the 2018 LTIP program available for similarly situated associates.

Subsequent LTIP awards, if any, generally will be granted in March of each year, in the same form and subject to the same terms and conditions as LTIP awards for similarly situated Executive Vice President-level Associates. Long-term incentive awards for your level are currently delivered 1/3 in time-based Restricted Stock Units (RSUs), 1/3 in performance RSUs (PRSUs) and 1/3 in premium-priced Stock Options.  Avon reviews the annual and long-term incentive programs from time to time and reserves the right to change the applicable award mix and the design of the programs at its discretion.

Exhibit 10.3

For the avoidance of doubt, the definition of ‘cause’ in both the LTIP and the annual incentive program rules are substantially the same as the definition in your contract of employment (attached).

The Company understands that you and your family may move from your current home to enable you to work in Chiswick, and so the Company will provide you with the following relocation support: (a) a housing allowance solely for the initial eighteen (18) months of your employment in the amount of GBP 4,000 per month (net of tax), to be incurred and paid monthly provided you are still actively employed with the Company on the date of payment; (b) reimbursement for broker’s fees and other costs associated with the sale of your current primary home, not to exceed GBP 100,000 (net of tax), (c) support on the shipment of your household goods to the London area, within limits and terms defined in Avon’s Permanent Transfer Policy, and (d) temporary living and storage of your household goods, if needed, (not to exceed ninety (90) days). Amounts under items (b), (c) and (d) above must be incurred within the first forty-eight (48) months of your employment, and while you are actively employed with the Company. “Actively employed” means that you are still employed by the Company and are not working out your notice or on garden leave. If you resign from your employment with the Company for any reason or your employment is terminated for cause (as defined in your contract of employment) before the later of 24 months of your employment commencement date or 12 months following the date you last incur any such expense, you agree to repay any relocation support provided by the Company in full. The Company reserves the right to deduct any amount owed from your salary or other payments made under this letter or your contract of employment.

The Company believes strongly in a culture of ethics and compliance and you will be covered by and must comply with Avon's Code of Conduct and other policies. In particular, the Company expects all staff to respect the privacy of other individuals and protection of their personal data. This offer is subject to you agreeing and signing up to our data privacy terms, which are set out separately.

As a senior executive of Avon, you will also need to adhere to stock ownership guidelines, which encourage executive share ownership and align executive interests with those of shareholders. You will have an ownership target equal in value to three times base salary and will be expected to hold 50% of net shares acquired upon vesting of equity awards until this target has been satisfied. Additionally, you will be covered by Avon's Compensation Recoupment Policy and Avon’s Change in Control Policy.

You represent and agree that your acceptance and execution of this offer does not conflict with or violate any of the terms, conditions or provisions of any existing contractual relations to which you are bound, and does not conflict with any duties owed or owing to your current employer.

Your employment is contingent upon you passing a satisfactory background investigation, reference checks and compliance with immigration law. As you may be aware, government regulations requires that the Company verify the employment authorisation status of all new employees.

Once you sign your new contract we will send you some additional forms to complete:

• Pension entitlement and enrolment

• Bank details

• Avon’s data privacy agreement

• When you join Avon you will be required to access our HR system and update both your contact information and personal information.

• You will also be required to bring a copy of your right to work documents on your first day at Avon

Please contact Gina Fitzsimons if you have any queries.

In the meantime we look forward to you joining the Company.

Exhibit 10.3

Yours sincerely,

/s/ Sheri McCoy

Sheri McCoy

Chief Executive Officer

cc: Susan Ormiston, Senior Vice President, Human Resources and Chief Human Resources Officer

cc: Gina Fitzsimons, Group Vice President, Human Resources, Global Compensation & Benefits & Global Functions,

Accepted and Agreed to:

/s/ Jonathan Myers____________                    __20^thJune 2017___________

Jonathan Myers

Date

Contract of Employment

This statement contains the main terms and conditions of your employment with Avon Cosmetics Limited (“The Company”), for the position of Executive Vice President, Chief Operating Officer of Avon.

Please ensure you read and understand this document. If you have any queries relating to your employment please contact the Human Resources Department.

Surname:	Myers
Forename:	Jonathan
Address of Employee:
Post code:
Job Title:	Executive Vice President, Chief Operating Officer of Avon Products, Inc.
Reporting to:	Chief Executive Officer
Grade:	E02 (Executive Vice President)
Effective Date: Continuity of Employment: Salary:	1 September 2017 No previous service counts towards your continuity of employment. £470,000 per annum

Exhibit 10.3

Annual Incentive Programme:	As stated in your offer letter, you are eligible for the annual incentive programme available to similarly situated Executive Vice President-level associates, with a target level of 80% of earned eligible base salary. The actual amount of bonus awarded is contingent on relevant individual and business performance goals being achieved and the terms and conditions of the applicable annual incentive program. The payment of bonus and the rules of the scheme are at Avon’s discretion and are subject to change. Details of the bonus scheme will be supplied annually.
Long Term Incentive Plan:	As stated in your offer letter, you are eligible to participate in the long-term incentive plan available for similarly situated associates at your level. Further details of the scheme are available on request. Please note the terms of the scheme are subject to change.
Working hours:	Weekly hours: 37.5 plus such additional hours as are necessary for the proper performance of your duties. You acknowledge that you shall not receive further remuneration in respect of such additional hours.
Location:	You will be based at Avon’s corporate headquarters in Chiswick. You may be required to work at other Avon sites from time to time.
Remuneration:	Method of Payment You will be paid monthly in arrears by or on the last working day of each month by direct credit transfer to your bank or building society account. Basic Pay Review Your basic pay will be reviewed annually based on performance. Deductions The Company reserves the right to make deductions from your pay in the event of any monies owing to the Company but attributable to you.
Normal Working Pattern:	The Company operates in accordance with the Working Time Regulations 1998. If you require further information please refer to the Company Working Hours Policy held electronically on the HR website.

Exhibit 10.3

Flexibility:	Avon will expect you to perform all reasonable tasks assigned to you during the course of your employment which it believes you are competent to perform; you will be required to be flexible in your job responsibilities and to react to the needs of the business. This means that you may be required to: vary your working hours to travel on the Company's business (both within the United Kingdom or abroad) as may be required for the proper performance of your duties under the appointment carry out duties which may be outside the scope of your normal responsibilities but which you are competent to perform. The Company will give reasonable notice for any changes with regard to occasional travel that might affect you and will always strive at a very minimum to provide 48 hours’ notice. During your employment, you will not be required to work outside the United Kingdom for any continuous period of more than one month.
Private Medical Insurance:	You will be eligible for private medical cover for yourself and up to family cover, depending on your personal circumstances If you wish to join the scheme you can do so by using our Flexible Benefits system, UP2U. You will receive confirmation of the website and access details shortly after joining the Company. Further changes to your PMI subscription can only be made once a year when the UP2U ‘window’ is opened to all eligible employees or if a ‘lifestyle event’ (marriage/divorce/birth of child) occurs. Please note PMI is a benefit which is taxable at source.
Life Assurance:	4 times annual salary is paid on death in service (subject to a cap of £1.8 Million).
Company Sick Pay:	The Company operates a Company Sick Pay Scheme for the benefit of its employees which is in addition to Statutory Sick Pay entitlement. All payments made under this company scheme are at the sole discretion of the Company. Please refer to the Company Sickness Absence Policy which outlines the circumstances in which Company sick pay may be withheld. Service with AvonEntitlement 0-1 year 4 weeks 1-2 years 8 weeks 2-5 years 16 weeks 5+ years 26 weeks

Exhibit 10.3

Pension Scheme:	Avon operates an employee contributory pension scheme which is open to all permanent and fixed term employees. Under current Auto Enrolment legislation Avon is required to automatically enroll employees who meet certain criteria into a qualifying scheme. Full details of the current Avon Pension Scheme, the enrolment criteria and how Auto Enrolment is applied can be found in the enclosed pension documents. For tax purposes, the Pension Input Period in the Avon Cosmetics Pension Plan ends on 31st March each year.
Company Car:	You are eligible for a Company Car at the benchmark level for your grade or an annual cash equivalent of £15,252, subject to normal deductions. You will be provided separately with a copy of the Company Car policy. Further details can be obtained from the Car Fleet department on 01604 618986.
Holiday Entitlement:	The Company’s holiday year runs from 1 January to 31 December. You are entitled to 28 days holiday per year plus 8 public holidays. An employee will accrue holiday from the day their employment with Avon starts. At the conclusion of your employment, you will be paid for any accrued but untaken holiday. Holiday entitlement on termination will be calculated according to the percentage of the year worked i.e. as the number of days worked divided by 365 (366 for a leap year). Should you have taken in excess of your accrued entitlement the company may deduct the cash equivalent from your final salary. At the Company’s discretion you may be required to reserve several days of your holiday entitlement. You will be notified of any such requirement in advance on an annual basis.
Flexible Benefits:	The Company operates a self-service electronic flexible benefits scheme called UP2U. Shortly after joining the Company you will be sent details of Avon’s UP2U scheme which will allow you to opt into the Private Medical Scheme and to purchase childcare vouchers at that time. Following this there are annual enrolments for the flexible benefits scheme. Enrolment details will be sent to you at this time.

Exhibit 10.3

Notice Period: In the event of involuntary termination (other than for cause) the Company agrees to pay you the equivalent of 24 months’ base salary (inclusive of a payment in lieu of statutory notice), on the basis that you enter into an appropriate settlement agreement with the Company which shall include for example a general release of claims, together with reasonable and appropriate non-competition and non-solicitation provisions and other covenants. Such payment will be made as soon as reasonably practicable following termination. In all other circumstances, you are entitled to receive and are obliged to give the Company 6 months’ notice to terminate your employment. The Company reserves the right to pay salary in lieu of notice.  Alternatively the Company reserves the right to terminate your employment without notice or salary in lieu of notice in accordance with the Disciplinary Procedure.   Should you wish to resign from the Company, a letter of your intended resignation should be sent to the Company. The Company requires you to work your notice period unless otherwise mutually agreed.  If you fail to give notice to the Company or give the incorrect notice, the Company shall be entitled to withhold a sum from any monies due to you equivalent to the value of the salary you would have been entitled to during the un-worked notice period.  For the purposes of this clause, a termination “for cause” shall mean a termination by the Company because of your (a) continued failure (after formal written notification of the failure requiring you to remedy the same) to perform substantially your duties; (b) your wilful failure to perform substantially your duties or other wilful conduct that is materially detrimental to the Company; (c) your personal dishonesty in the performance of your duties; (d) your breach of fiduciary duty involving personal profit; (e) your commission or conviction of a felony or misdemeanour or pleading guilty to a felony or misdemeanour (excluding a motoring offence which does not lead to a custodial sentence); (f) your wilful or significant violation of any Avon rule or procedure, including without limitation, absenteeism, violation of safety rules or insubordination; or (g) violation of the Code of Conduct. All determinations of whether any of the events above have occurred and/or whether cause shall have occurred will be determined by the Company in its sole discretion (acting reasonably and in good faith).

Exhibit 10.3

Garden Leave:	The Company reserves the right to require you not to  attend your place of work for all or part of your notice  period, in its absolute discretion. This period is referred to as “Garden Leave”. During Garden Leave: (a) the Company shall be under no obligation to provide any work to you and may revoke any powers you hold on behalf of the Company (or any group company); (b) the Company (acting reasonably) may require you to carry out alternative duties or to only perform such specific duties as are expressly assigned to you, at such location (including your home) as the Company may decide; (c) you will be continue to receive your basic salary and normal contractual benefits in the usual way and subject to the terms of any benefit arrangement; (d) you shall remain an employee of the Company and bound by the terms of this agreement (including any implied duties of good faith and fidelity); and (e) the Company may exclude you from any premises of the Company (or any group company).  Any accrued but unused holiday entitlement shall be deemed to be taken during any period of Garden Leave.
Company Equipment:	If you are allocated any Company equipment and your employment is terminated for whatever reason, unless otherwise agreed in writing, you must immediately return all company equipment in good working order as received by you. Deductions may be made from any final payments for any associated loss or damage.
Code of Conduct:	Some examples are outlined below, however this is not exhaustive and you should refer to the Code of Conduct on the Avon Global Website for further guidance.
Code of Conduct - Gifts:	The exchange of gifts is often used as a way to enhance business relationships, and within the guidelines stated in Avon’s Code of Conduct and Ethics, this is an acceptable practice. Avon permits gifts only of “nominal value,” such as meals, fruit baskets, and bottles of wine, flowers, chocolates/candies, tickets to occasional sporting events or concerts, and other routine gifts. Any gifts of greater than nominal value or that otherwise exceed the common courtesies associated with ethical business practices could give the appearance of impropriety and must not be accepted. Examples of gifts that are not permitted include vendor-sponsored trips, vacations, luxury leather accessories, electronics or sporting equipment. Cash and/or loans of any amount are strictly prohibited at all times. These same standards apply to associates of all levels within the company. If there is any question as to whether or not the value of an offered gift is more than nominal, consult with your Manager or HR.

Exhibit 10.3

Code of Conduct - Conflict of Interest:	In line with Avon’s Code of Conduct and Ethics, employees have an obligation to act in the best interest of Avon. Conflicts of interest are prohibited, which means that no employee should place himself or herself in a situation in which personal interest might conflict with the interest of Avon. A breach of these rules may lead to disciplinary action. A “conflict of interest” occurs when an associate’s private or family interest interferes in any way, or even appears to interfere, with the interest of Avon. A conflict of interest can arise when an associate takes an action or has an interest that may make it difficult for him or her to perform his or her work objectively and effectively.
Code of Conduct - Other Interests:	You should not engage directly or indirectly in any business or employment if, in the reasonable opinion of the Company, this work may have an adverse effect upon the performance of your duties for the Avon Group.
Inventions and Improvements:	Any invention, design or improvement upon any existing invention, product or work during the course of your employment will belong to the Company. This includes any computer programme or design whether or not it is capable of patent registered design, design right, database, copyright or any other similar protection, and whether you made or discovered it alone or in conjunction with anybody else. You must immediately tell your Line Manager of any such invention or improvement. If the Company asks you to do so, you must comply with any requests that it makes in order to ensure that the invention or improvement becomes or remains the property of the Company or its nominee.

Exhibit 10.3

Confidential Information:	You must not (at any time) either during or at any time after the termination of your employment: divulge, disclose or communicate any confidential Information to any person or persons, firm or company other than duly authorised employees of the Company or use any confidential information for your own purposes or for any purposes other than those of the Company. You must at all times exercise utmost care, attention and discretion in handling any confidential information relating to the Avon Group or personal information relating to an individual of which you are aware. For the purposes of this clause, confidential information includes any of the below: information in whatever form relating to the organisation business plans finances transactions terms of business marketing strategies sales customers and prospective customers suppliers design and manufacturing process technical specifications private affairs of the Company personal information relating to an individual other information of a confidential nature For these purposes, "confidential information" shall not include information that comes into the public domain (otherwise than by reason of a breach by you of your obligations under this Contract). For the avoidance of doubt, you are not prohibited from disclosing any information where you are required to make such disclosure by law or a relevant regulatory authority.
Data Protection and Privacy:	All information within the Avon Group is processed in accordance with the requirements of the Data Protection Act. The Company expects all staff to respect the privacy of other individuals and protection of their personal data. Your offer of employment is subject to you agreeing and signing up to our data privacy terms.
Directorships	The Company (or its affiliates, as applicable) will maintain appropriate director's and officer's liability insurance for your benefit and maintain such cover whilst you are a director and for so long after you have ceased to be a director as any claim may lawfully be brought against you. In relation to any directorships you hold which arise out of or are connected to your employment, the Company shall provide you (both during and after your employment has terminated) with copies of non-privileged Board Minutes (and documents referred to therein) which you reasonably require to defend yourself in any legal, regulatory or quasi-judicial proceedings.

Exhibit 10.3

Right to Search:	To help the Company provide a safe environment and to deter criminal, obscene, pornographic or defamatory acts. While on Company premises or while using company equipment, the Company has the right to carry out: Searches of your person, personal               belongings and vehicle without notice in               accordance with Company guidelines. Drug, drink and substance checks without               notice, in line with the Misuse of Drugs               and Alcohol policy. Video surveillance. Monitoring of electronic communications               on private or public lines, such as email. Failure to comply will lead to disciplinary action and may lead to dismissal.
Key Company Policies:	The following policies are available on the HR website: Grievance Policy Performance Capability Policy Misconduct Policy Sickness Absence Policy
Medical Examinations:	The Company may require a medical report to enable it to make decisions regarding your employment, e.g. in cases of ill-health. The Company may require you to undergo a medical examination by its medical advisor. In addition, you will be expected to provide the Company’s health professional with information about your medical condition as it may reasonably require. This is in order to ensure your state of health enables the Company to act within both yours and the Company’s best interest.   You may be asked in specific circumstances to consent   to the Company contacting your doctor and to his or   her discussing your medical condition and history with   us or a doctor nominated by the Company.
Collective Agreement:	There is no collective agreement which directly affects  your employment.
Variations to Terms and Conditions:	The Company reserves the right to change the terms and conditions of your employment from time to time to take into account Company policy, the needs of the business and/or new legislation. This may include implementation of new policies and procedures as they become necessary to meet the needs of the business. Reasonable notice will be given when this occurs.

Exhibit 10.3

Entire Agreement	This agreement and the offer letter constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. Each party acknowledges that in entering into this agreement it does not rely on and shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement.
Governing Law	This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
Jurisdiction	Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this agreement or its subject matter or formation.

I confirm that I agree with the terms and conditions set out in this Contract of Employment and agree to be bound by the rules of the Company and Avon policies:

Name: Jonathan Myers

Signed: _/s/ Jonathan Myers_____________

Date: ____20^thJune 2017________________

Signed on Behalf of the Company

Name: _Susan Ormiston__________________

Signed: /s/ Susan Ormiston_______________

Date: __20/6/17_________________________

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Jan Zijderveld, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avon Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019

/s/ Jan Zijderveld

Jan Zijderveld

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Gustavo Arnal, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Avon Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019

/s/ Gustavo Arnal

Gustavo Arnal

Executive Vice President and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avon Products, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan Zijderveld, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jan Zijderveld

Jan Zijderveld

Chief Executive Officer

May 3, 2019

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avon Products, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gustavo Arnal, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gustavo Arnal

Gustavo Arnal

Executive Vice President and

Chief Financial Officer

May 3, 2019

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Document and Entity Information	3 Months Ended
	Mar. 31, 2019 shares
DEI [Abstract]
Entity Registrant Name	AVON PRODUCTS INC
Entity Central Index Key	0000008868
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding	443,221,115

XML

Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue	$ 1,186.9	$ 1,393.5
Costs, expenses and other:
Cost of sales	517.0	579.7
Selling, general and administrative expenses	673.8	768.9
Operating (loss) profit	(3.9)	44.9
Interest expense	33.2	36.2
Loss on extinguishment of debt and credit facilities	2.0	0.0
Interest income	(1.7)	(4.2)
Other (income) expense, net	(22.6)	2.5
Gain on sale of business	(10.3)	0.0
Total other expenses	0.6	34.5
(Loss) income from continuing operations, before income taxes	(4.5)	10.4
Income taxes	(19.5)	(31.5)
Loss from continuing operations, net of tax	(24.0)	(21.1)
Loss from discontinued operations, net of tax	(9.5)	0.0
Net loss	(33.5)	(21.1)
Net loss attributable to noncontrolling interests	0.8	0.8
Net loss attributable to Avon	$ (32.7)	$ (20.3)
Loss per share
Basic from continuing operations (in dollars per share)	$ (0.07)	$ (0.06)
Basic from discontinued operations (in dollars per share)	(0.02)	0
Basic attributable to Avon (in dollars per share)	(0.09)	(0.06)
Diluted from continuing operations (in dollars per share)	(0.07)	(0.06)
Diluted from discontinued operations (in dollars per share)	(0.02)	0
Diluted attributable to Avon (in dollars per share)	$ (0.09)	$ (0.06)
Net sales
Revenue	$ 1,116.2	$ 1,309.6
Other revenue
Revenue	$ 70.7	$ 83.9

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (33.5)	$ (21.1)
Other comprehensive income:
Foreign currency translation adjustments	(2.7)	(4.2)
Unrealized (losses) gains on revaluation of long-term intercompany balances, net of taxes of $0.0 and $0.0	(0.6)	36.9
Change in unrealized gains/losses on cash flow hedges, net of taxes of $0.0 and $0.0	(1.9)	0.0
Adjustments of and amortization of net actuarial loss and prior service cost, net of taxes of $0.2 and $0.2	1.3	2.9
Total other comprehensive (loss) income, net of income taxes	(3.9)	35.6
Comprehensive (loss) income	(37.4)	14.5
Less: comprehensive loss attributable to noncontrolling interests	(0.6)	(0.6)
Comprehensive (loss) income attributable to Avon	$ (36.8)	$ 15.1

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Unrealized (losses) gains on revaluation of long-term intercompany balances, tax	$ 0.0	$ 0.0
Change in unrealized gain/losses on cash flow hedges, tax	0.0	0.0
Adjustments of and amortization of net actuarial loss and prior service cost, tax	$ 0.2	$ 0.2

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Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 406.4	$ 532.7
Restricted cash	17.0	0.0
Accounts receivable, net	340.9	349.7
Inventories	532.3	542.0
Prepaid expenses and other	255.2	272.0
Assets held for sale	15.7	65.6
Total current assets	1,567.5	1,762.0
Property, plant and equipment, at cost	1,200.5	1,207.8
Less accumulated depreciation	(657.3)	(650.2)
Property, plant and equipment, net	543.2	557.6
Right-of-use assets	180.3
Goodwill	88.6	87.4
Deferred tax asset	204.2	212.6
Other assets	413.7	390.4
Total assets	2,997.5	3,010.0
Current Liabilities
Debt maturing within one year	425.4	12.0
Accounts payable	706.0	816.5
Accrued compensation	103.9	85.5
Other accrued liabilities	425.2	451.3
Sales taxes and taxes other than income	94.1	103.9
Income taxes	11.0	15.9
Total current liabilities	1,775.2	1,496.5
Long-term debt	1,196.4	1,581.6
Long-term operating lease liability	150.4
Employee benefit plans	128.2	128.3
Long-term income taxes	135.3	136.2
Other liabilities	55.2	72.1
Total liabilities	3,440.7	3,414.7
Series C convertible preferred stock	498.3	492.1
Shareholders’ Deficit
Common stock	190.6	190.3
Additional paid-in capital	2,302.1	2,303.6
Retained earnings	2,195.4	2,234.3
Accumulated other comprehensive loss	(1,034.4)	(1,030.4)
Treasury stock, at cost	(4,602.3)	(4,602.3)
Total Avon shareholders’ deficit	(948.6)	(904.5)
Noncontrolling interests	7.1	7.7
Total shareholders’ deficit	(941.5)	(896.8)
Total liabilities, series C convertible preferred stock and shareholders’ deficit	2,997.5	3,010.0
Held for sale liabilities
Current Liabilities
Held for sale liabilities	0.1	11.4
Discontinued operations
Current Liabilities
Held for sale liabilities	$ 9.5	$ 0.0

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Consolidated Statements of Cash Flows - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2019		Mar. 31, 2018
Cash Flows from Operating Activities
Net loss		$ (33.5)		$ (21.1)
Loss from discontinued operations, net of tax		(9.5)		0.0
Loss from continuing operations, net of tax		(24.0)		(21.1)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		20.6		20.8
Amortization		6.6		7.1
Provision for doubtful accounts		29.9		43.1
Provision for obsolescence		6.7		9.7
Share-based compensation		(0.5)		3.8
Foreign exchange (losses) gains		(19.2)		4.6
Deferred income taxes		8.2		1.8
Other		(8.6)		3.2
Changes in assets and liabilities:
Accounts receivable		(24.3)		(4.4)
Inventories		4.8		(58.4)
Prepaid expenses and other		38.4		0.1
Accounts payable and accrued liabilities		(164.2)		(106.3)
Income and other taxes		(12.0)		(0.9)
Noncurrent assets and liabilities		(5.1)		0.6
Net cash used by operating activities of continuing operations		(142.7)		(96.3)
Cash Flows from Investing Activities
Capital expenditures		(21.2)		(27.8)
Disposal of assets		0.4		0.8
Net proceeds from sale of business		46.4		0.0
Net cash provided (used) by investing activities of continuing operations		25.6		(27.0)
Cash Flows from Financing Activities
Debt, net (maturities of three months or less)		27.2		3.6
Repurchase of common stock		0.0		(2.7)
Other financing activities		(9.2)		(0.5)
Net cash provided by financing activities of continuing operations		18.0		0.4
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		(6.3)		13.9
Net decrease in cash and cash equivalents, and restricted cash		(105.4)		(109.0)
Cash and cash equivalents, and restricted cash at beginning of year	[1]	536.4		881.5
Cash and cash equivalents, and restricted cash at end of period	[2]	$ 431.0	[1]	$ 772.5

[1] Includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets at the end of the year in 2018

[2] Includes restricted cash related to the sale of Avon Manufacturing (Guangzhou), Ltd. at March 31, 2019

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Consolidated Statements of Cash Flows - Parenthetical - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Statement of Cash Flows [Abstract]
Cash and cash equivalents classified as Held for sale assets	$ 0.0	$ 3.7

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Consolidated Statements of Changes in Shareholders' Equity (Deficit) Statement - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	AOCI Attributable to Parent	Treasury Stock	Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2017		758,700,000				318,400,000
Beginning balance at Dec. 31, 2017	$ (714.7)	$ 189.7	$ 2,291.2	$ 2,320.3	$ (926.2)	$ (4,600.0)	$ 10.3
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(21.1)			(20.3)			(0.8)
Other comprehensive income (loss)	35.6				35.2		0.4
Dividends accrued - Series C convertible preferred stock	(6.0)			(6.0)
Exercise/ vesting/ expense of share-based compensation (in shares)		2,200,000				(100,000)
Exercise/ vesting/ expense of share-based compensation	$ 3.6	$ 0.6	2.5	(0.4)		$ 0.9
Repurchase of common stock (in shares)	900,000					900,000
Repurchase of common stock	$ (2.7)					$ (2.7)
Purchases and sales of noncontrolling interests, net of dividends paid	(0.2)						(0.2)
Ending balance (in shares) at Mar. 31, 2018		760,900,000				319,200,000
Ending balance at Mar. 31, 2018	(746.6)	$ 190.3	2,293.7	2,252.5	(891.0)	$ (4,601.8)	9.7
Beginning balance (in shares) at Dec. 31, 2018		761,800,000				319,400,000
Beginning balance at Dec. 31, 2018	(896.8)	$ 190.3	2,303.6	2,234.3	(1,030.4)	$ (4,602.3)	7.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(33.5)			(32.7)			(0.8)
Other comprehensive income (loss)	(3.9)				(4.0)		0.1
Dividends accrued - Series C convertible preferred stock	(6.2)			(6.2)
Exercise/ vesting/ expense of share-based compensation (in shares)		1,300,000
Exercise/ vesting/ expense of share-based compensation	$ (1.2)	$ 0.3	(1.5)
Repurchase of common stock (in shares)	0
Purchases and sales of noncontrolling interests, net of dividends paid	$ 0.1						0.1
Ending balance (in shares) at Mar. 31, 2019		763,100,000				319,400,000
Ending balance at Mar. 31, 2019	$ (941.5)	$ 190.6	$ 2,302.1	$ 2,195.4	$ (1,034.4)	$ (4,602.3)	$ 7.1

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Consolidated Statements of Changes in Shareholders' Equity (Deficit) - Parenthetical - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Dividends	$ 0.0	$ 0.0

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ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

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 2018 Annual Report on Form 10-K ("2018 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. 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 2018 Form 10-K. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc.

For interim Consolidated Financial Statements purposes, we generally provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense, and adjust these accruals as estimates are refined. 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:

• the effects of significant, unusual or extraordinary pretax and income tax items, if any;

• withholding taxes recognized associated with cash repatriations; and

• the impact of loss-making subsidiaries for which we cannot recognize an income tax benefit and subsidiaries for which an effective tax rate cannot be reliably estimated.

Argentina Currency

During the quarter ended June 30, 2018, based on published official exchange rates which indicated that Argentina's three-year cumulative inflation rate had exceeded 100%, we concluded that Argentina had become a highly inflationary economy. From July 1, 2018, we have applied highly inflationary accounting for our Argentinian subsidiary. As such, the functional currency for Argentina has changed to the U.S. dollar, which is the consolidated group's reporting currency. When an entity operates in a highly inflationary economy, exchange gains and losses associated with monetary assets and liabilities resulting from changes in the exchange rate are recorded in income. Nonmonetary assets and liabilities, which include inventories, property, plant and equipment and contract liabilities, are carried forward at their historical dollar cost, which was calculated using the exchange rate at June 30, 2018.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases, which requires all assets and liabilities arising from leases to be recognized in our Consolidated Balance Sheets. We adopted this new accounting guidance effective January 1, 2019.

In July 2018, the FASB added an optional transition method which we elected upon adoption of the new standard. This allowed us to recognize and measure leases existing at January 1, 2019 without restating comparative information. In addition, we elected to apply the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification.

We determine if an arrangement is a lease at the lease commencement date. In addition to our lease agreements, we review all material new vendor arrangements for potential embedded lease obligations. The asset balance related to operating and finance leases is presented within right-of-use (ROU) asset and property, plant and equipment, respectively, on our Consolidated Balance Sheet. The short-term liability balance related to operating and finance leases is presented within other accrued liabilities on our Consolidated Balance Sheets. The long-term liability balance is presented within long-term operating lease liability and long-term debt on our Consolidated Balance Sheets for operating and finance leases, respectively.  

The lease liability is recognized based on the present value of the remaining fixed or in-substance fixed lease payments discounted using our incremental borrowing rates. We use a specific incremental borrowing rate for our material leases, which is determined based on the geography and term of the lease. These rates are determined based on inputs provided by external banks and updated periodically. The lease liability includes the exercise of a purchase option only if we are reasonably certain to exercise as of the commencement date of the lease. The residual value guarantee amount is only included in the lease liability

calculation to the extent payment is probable to the lessor as of the commencement of the lease. The ROU asset is calculated based on the lease liability adjusted for any lease payments paid to the lessor at or before the commencement date (i.e. prepaid rent) and initial direct costs incurred by Avon and excluding any lease incentives received from the Lessor.

Variable lease payments are payments to the lessor not included in the lease liability calculation. We define variable lease payments as payments made by Avon to the lessor for the right to use a leased asset that vary because of changes in facts or circumstances (such as changes in an index rate, volume, usage, etc.) occurring after the lease commencement date, other than predetermined contractual changes due to the passage of time (for example, predetermined rent increase amounts that are set out in the contract). Variable lease payments or charges are accounted for as incurred.

The lease term for purposes of lease accounting may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option as of the commencement date of the lease. For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the Company amortizes the ROU asset on a straight-line basis and records interest expense on the lease liability created at lease commencement over the lease term.

We account for our lease and non-lease components as a single component for most of our asset classes, and therefore both are included in the calculation of lease liability recognized on the Consolidated Balance Sheets. However, for certain lease asset classes related to identified embedded leases we account for the lease and non-lease components separately, and therefore, the non-lease component is not included in the lease liability.

Leases with an initial term of twelve months or less are not recorded on the balance sheet; we recognize lease expense for these leases over their lease term. See Note 9, Leases, for further details.

Other Accounting Standards Implemented

ASU 2018-02, Income Statement - Reporting Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which permits entities to reclassify the disproportionate income tax effects of the 2017 enactment of U.S. tax reform legislation (the "Act") on items within accumulated other comprehensive income (loss) to retained earnings. We adopted this new accounting guidance effective January 1, 2019 and elected not to reclassify the disproportionate income tax effects of the Act from accumulated other comprehensive income (loss) to retained earnings.

Accounting Standards to be Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In January 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held. We intend to adopt this new accounting guidance effective January 1, 2020. We are currently assessing the impact on our consolidated financial statements.

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LOSS PER SHARE AND SHARE REPURCHASES

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

LOSS PER SHARE AND SHARE REPURCHASES

LOSS PER SHARE AND SHARE REPURCHASES

We compute loss per share ("EPS") using the two-class method, which is a loss allocation formula that determines loss per share for common stock, and 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.

	Three Months Ended March 31,
(Shares in millions)	2019			2018
Numerator from continuing operations:
Loss from continuing operations, less amounts attributable to noncontrolling interests	$	(23.2	)	$	(20.3	)
Less: Loss allocated to participating securities	(.2		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss from continuing operations allocated to common shareholders	(29.3		)	(26.0		)
Numerator from discontinued operations:
Loss from discontinued operations	$	(9.5	)	$	—
Less: Loss allocated to participating securities	(.1		)	—
Loss allocated to common shareholders	(9.4		)	—
Numerator attributable to Avon:
Net loss attributable to Avon	$	(32.7	)	$	(20.3	)
Less: Loss allocated to participating securities	(.3		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss allocated to common shareholders	(38.7		)	(26.0		)
Denominator:
Basic EPS weighted-average shares outstanding	442.2			440.9
Diluted effect of assumed conversion of stock options	—			—
Diluted effect of assumed conversion of preferred stock	—			—
Diluted EPS adjusted weighted-average shares outstanding	442.2			440.9
Loss per Common Share from continuing operations:
Basic	$	(.07	)	$	(.06	)
Diluted	(.07		)	(.06		)
Loss per Common Share from discontinued operations:
Basic	$	(.02	)	$	—
Diluted	(.02		)	—
Loss per Common Share attributable to Avon:
Basic	$	(.09	)	$	(.06	)
Diluted	(.09		)	(.06		)

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

During the three months ended March 31, 2019 and 2018, we did not include stock options to purchase 17.2 million and 15.3 million shares, respectively, of Avon common stock in the calculation of diluted EPS as we had a net loss and the inclusion of these shares would decrease the net loss per share. Since the inclusion of such shares would be anti-dilutive, these are excluded from the calculation.

For the three months ended March 31, 2019 and 2018, respectively, it is more dilutive to assume the series C convertible preferred stock is not converted into common stock; therefore, the weighted-average shares outstanding were not adjusted by the as-if converted series C convertible preferred stock because the effect would be anti-dilutive. The inclusion of the series C convertible preferred stock would decrease the net loss per share for the three months ended March 31, 2019 and 2018. 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 months ended March 31, 2019 and 2018. See Note 6, Related Party Transactions.

We did not purchase any shares of Avon common stock during the first three months of 2019, as compared to approximately .9 million shares of Avon common stock for $2.7 during the first three months of 2018, through acquisition of stock from employees in connection with tax payments upon the vesting of restricted stock units and performance restricted stock units.

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

Discontinued Operations

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 $435.0 investment by Cleveland Apple Investor L.P. ("Cerberus Investor") (an affiliate of Cerberus) in the Company through the purchase of perpetual convertible preferred stock (see Note 6, Related Party Transactions) 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 Cerberus NA Investor LLC (an affiliate of Cerberus). These transactions closed on March 1, 2016.

The Company incurred costs during the three months ended March 31, 2019 following the resolution of certain contingent liabilities related to its ownership and operation of the North America business prior to its separation into New Avon. These costs are reported as discontinued operations related to New Avon.

The major classes of financial statement components comprising the loss on discontinued operations, net of tax for New Avon are shown below:

	Three Months Ended March 31, 2019
Selling, general and administrative expenses	9.5
Operating loss	(9.5	)
Loss from discontinued operations, net of tax	(9.5	)

There were no amounts recorded in discontinued operations for the three months ended March 31, 2018. See Note 21, Subsequent Events, for additional information relating to New Avon.

Assets and Liabilities Held for Sale

The major classes of assets and liabilities comprising Held for sale assets and Held for sale liabilities on the Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are shown in the following table.

	March 31, 2019
	Rye Office		Malaysia Maximin		Total
Current Held for sale assets
Property, Plant & Equipment (net)	$	12.5	$	3.1	$	15.6
Other assets	—		.1		.1
	$	12.5	$	3.2	$	15.7
Current Held for sale liabilities
Other liabilities	$	—	$	.1	$	.1
	$	—	$	.1	$	.1

	December 31, 2018
	Avon Manufacturing (Guangzhou)		Rye Office		Malaysia Maximin		Total
Current held for sale assets
Inventories	$	8.7	$	—	$	—	$	8.7
Property, Plant & Equipment (net)	36.7		12.3		3.0		52.0
Cash and cash equivalents	3.7		—		—		3.7
Other assets	1.1		—		.1		1.2
	$	50.2	$	12.3	$	3.1	$	65.6
Current held for sale liabilities
Accounts payable	8.6		—		—		8.6
Other liabilities	2.6		—		.2		2.8
	$	11.2	$	—	$	.2	$	11.4

Refer to Divestitures section below for sale of Avon Manufacturing (Guangzhou).

Rye Office

In February 2019, we signed an agreement to sell the Rye office. As negotiations progressed, we refined the calculation for the held for sale assets which gave rise to an additional $0.2 in assets.

The due diligence process has been ongoing during the first quarter of 2019 and we expect this transaction to close during the second quarter of 2019.

Malaysia Maximin

In February 2019, we signed an agreement to sell Malaysia Maximin. The Company is finalizing certain due diligence items and expects this transaction to close during the second quarter of 2019.

Divestitures - China manufacturing

On February 15, 2019, we completed the sale to TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd., of all of the equity interests in Avon Manufacturing (Guangzhou), Ltd. for a total purchase price of $71.0, less expenses of approximately $1.1; the purchase price included $23.5 relating to outstanding intercompany loans payable to Avon Manufacturing (Guangzhou), Ltd. from other Avon subsidiaries. As of March 31, 2019, the Company had received the gross cash proceeds of $71.0 (which included $24.6 of restricted cash, refer to Note 4, Restricted Cash) but had not yet settled the loans of $23.5. The net cash proceeds of $46.4, net of loan amounts, are presented as investing activities in the Consolidated Statement of Cash Flows. The proceeds to cover settlement of the loans are presented within debt, net as financing activities in the Consolidated Statement of Cash Flows. The loans were subsequently settled in April 2019. Further, $15.8 of the restricted cash balance of $24.6 was transferred from escrow into the Company's bank account in April 2019.

In the first quarter of 2019, we recorded a gain on sale of $10.3 before tax, which is reported separately in the Consolidated Statements of Operations, and $8.2 after tax, representing the difference between the proceeds, including the settlement of the intercompany loans, and the carrying value of Avon Manufacturing (Guangzhou), Ltd. on the date of sale.

Refer to Note 4, Restricted Cash, for the reporting of the proceeds related to this sale.

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RESTRICTED CASH

3 Months Ended

Mar. 31, 2019

Restricted Cash and Cash Equivalents [Abstract]

Restricted Cash

RESTRICTED CASH

Restricted cash is related to the sale of Avon Manufacturing (Guangzhou), Ltd. as described in Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures.

Restricted cash is subject to legal restrictions imposed by the Equity Purchase Agreement between TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd., Avon Asia Holdings Company and Avon Products (China) Co., Ltd related to the sale of Avon Manufacturing (Guangzhou), Ltd. These deposits are not available for general use by the Company. However, $15.8 of the restricted cash balance of $24.6 was transferred from escrow into the Company's bank accounts in April 2019.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows for the three month period ended March 31, 2019.

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	406.4	$	532.7
Restricted Cash(1)	17.0		—
Long-term restricted cash(2)	7.6		—
Held for sale cash and cash equivalents	—		3.7
Cash and cash equivalents, and restricted cash at end of period per the statement of cash flows	$	431.0	$	536.4

⁽¹⁾ $15.8 of the $17.0 was transferred from escrow into the Company's bank accounts in April 2019. The remainder is expected to be transferred into the Company's bank accounts during the second quarter of 2019.

⁽²⁾ Long-term restricted cash is presented in other assets in our Consolidated Balance Sheets.

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INVESTMENT IN NEW AVON

3 Months Ended

Mar. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN NEW AVON

INVESTMENT IN NEW AVON

In connection with the separation of the Company's North America business, which closed on March 1, 2016, the Company retained a 19.9% ownership interest in New Avon, a privately-held company that is majority-owned and managed by an affiliate of Cerberus.

Our recorded investment balance in New Avon at March 31, 2019 and December 31, 2018 was zero. See Note 21, Subsequent Events, for additional information relating to New Avon.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

The following tables present the related party transactions with New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. New Avon is majority-owned and managed by Cerberus. See Note 5, Investment in New Avon for further details.

	Three Months Ended March 31,
	2019		2018
Statement of Operations Data
Revenue from sale of product to New Avon(1)	$	4.8	$	5.9
Gross profit from sale of product to New Avon(1)	$	.1	$	.4
Cost of sales for purchases from New Avon(2)	$	.6	$	.5
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases(3)	$	—	$	(3.2	)
Project management team(4)	$	1.4	.5
Net reduction of selling, general and administrative expenses	$	1.4	$	(2.7	)
Interest income from Instituto Avon(5)	$	—	$	—

	March 31, 2019		December 31, 2018
Balance Sheet Data
Inventories(6)	$	.3	$	.3
Receivables due from New Avon(7)	$	4.3	$	7.0
Receivables due from Instituto Avon(5)	$	3.2	$	3.2
Payables due to New Avon(8)	$	1.0	$	.2
Payables due to an affiliate of Cerberus(9)	$	.6	$	.6

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement noted above. The Company purchased $.8 and $.6 from New Avon associated with this agreement during the three months ended March 31, 2019 and 2018, respectively, and recorded $.6 and $.5 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended March 31, 2019 and 2018, respectively.

(3) The Company also entered into a transition services agreement to provide certain services to New Avon, which expired on October 31, 2018, as well as an intellectual property ("IP") license agreement, an agreement for technical support and innovation and sublease for office space. The net amounts recorded within selling, general and administrative expenses generally represent a recovery of the related costs.

(4) 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 implementation of the Company’s strategic initiatives. The Company recorded $1.4 and $.5 in selling, general and administrative expenses associated with these agreements during the three months ended March 31, 2019 and 2018, respectively. See Note 15, Restructuring Initiatives for additional information related to the Company's strategic initiatives.

(5) During the second quarter of 2018, the Company entered into an agreement to loan the Instituto Avon, an independent non-government charitable organization in Brazil, R$12 million (Brazilian real) for an unsecured 5-year term at a fixed interest rate of 7% per annum, to be paid back in 5 equal annual installments. The Instituto Avon was created by an Avon subsidiary in Brazil, with the board and executive team comprised of Avon Brazil management. The purpose of the loan is to provide the Instituto Avon with the means to donate funds to Fundação Pio XII (a leading cancer prevention and treatment organization in Brazil and owner of the Hospital do Câncer de Barretos), in order to invest in equipment with the objective of expanding breast cancer prevention and treatment.

(6) Inventories relate to purchases from New Avon, associated with the manufacturing and supply agreement, which have not yet been sold, and were classified within inventories in our Consolidated Balance Sheets.

(7) The receivables due from New Avon relate to the agreements for transition services, the IP license agreement, technical support and innovation and subleases for office space, as well as the manufacturing and supply agreement, and were classified within prepaid expenses and other in our Consolidated Balance Sheets.

(8) The payables due to New Avon relate to the manufacturing and supply agreement and were classified within other accrued liabilities in our Consolidated Balance Sheets.

(9) The payables due to an affiliate of Cerberus relate to the agreement for the project management team, and were classified within other accrued liabilities in our Consolidated Balance Sheets.

In addition, 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 March 31, 2019, the Company has a liability of $.8 for the estimated value of such standby letters of credit.

Series C Preferred Stock

On March 1, 2016, the Company issued and sold to Cerberus Investor 435,000 shares of newly issued series C preferred stock for an aggregate purchase price of $435.0. Cumulative preferred dividends accrue daily on the series C preferred stock at a rate of 1.25% per quarter. The series C preferred stock had accrued unpaid dividends of $72.0 as of March 31, 2019. Series C convertible preferred stock and accrued dividends of $498.3 on the Consolidated Balance Sheet at March 31, 2019 is stated net of $8.7 of costs incurred in connection with the issuance of the Series C convertible preferred stock in 2016. There were no dividends declared in the three months ended March 31, 2019 and 2018.

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REVENUE

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Disaggregation of revenue

In the following table, revenue is disaggregated by product or service type. All revenue is recognized at a point in time, when control of a product is transferred to a customer:

	Three Months Ended March 31, 2019
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	139.1	$	126.7	$	50.3	$	33.2	$	349.3	$	—	$	349.3
Fragrance	133.9		98.3		48.0		17.8		298.0		—		298.0
Color	93.9		60.2		21.9		13.2		189.2		—		189.2
Total Beauty	366.9		285.2		120.2		64.2		836.5		—		836.5
Fashion & Home:
Fashion	60.5		38.8		22.1		42.9		164.3		—		164.3
Home	8.5		60.2		40.3		6.4		115.4		—		115.4
Total Fashion & Home	69.0		99.0		62.4		49.3		279.7		—		279.7
Net sales	435.9		384.2		182.6		113.5		1,116.2		—		1,116.2
Representative fees	22.5		29.5		10.1		1.8		63.9		—		63.9
Other	.3		1.0		—		—		1.3		5.5		6.8
Other revenue	22.8		30.5		10.1		1.8		65.2		5.5		70.7
Total revenue	$	458.7	$	414.7	$	192.7	$	115.3	$	1,181.4	$	5.5	$	1,186.9

	Three months ended March 31, 2018
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	169.2	$	141.8	$	46.7	$	31.4	$	389.1	$	4.7	$	393.8
Fragrance	163.2		118.6		53.6		18.6		354.0		2.2		356.2
Color	120.8		80.9		20.9		13.1		235.7		3.3		239.0
Total Beauty	453.2		341.3		121.2		63.1		978.8		10.2		989.0
Fashion & Home:
Fashion	79.8		46.5		22.6		39.7		188.6		1.9		190.5
Home	9.3		71.9		41.2		7.0		129.4		.7		130.1
Total Fashion & Home	89.1		118.4		63.8		46.7		318.0		2.6		320.6
Net sales	542.3		459.7		185.0		109.8		1,296.8		12.8		1,309.6
Representative fees	25.9		36.4		10.6		1.6		74.5		1.4		75.9
Other	.2		1.0		—		—		1.2		6.8		8.0
Other revenue	26.1		37.4		10.6		1.6		75.7		8.2		83.9
Total revenue	$	568.4	$	497.1	$	195.6	$	111.4	$	1,372.5	$	21.0	$	1,393.5

Contract balances

The timing of revenue recognition generally is different from the timing of a promise made to a Representative. As a result, we have contract liabilities, which primarily relate to the advance consideration received from Representatives prior to transfer of the related good or service for material rights, such as loyalty points and status programs, and are primarily classified within other accrued liabilities (with the long-term portion in other liabilities) in our Consolidated Balance Sheets.

Generally, we record accounts receivable when we invoice a Representative. In addition, we record an estimate of an allowance for doubtful accounts on receivable balances based on an analysis of historical data and current circumstances, including seasonality and changing trends. The allowance for doubtful accounts is reviewed for adequacy, at a minimum, on a quarterly basis. We generally have no detailed information concerning, or any communication with, any ultimate consumer of our products beyond the Representative. We have no legal recourse against the ultimate consumer for the collection of any accounts receivable balances due from the Representative to us. If the financial condition of the Representatives were to deteriorate, resulting in their inability to make payments, additional allowances may be required.

The following table provides information about receivables and contract liabilities from contracts with customers at March 31, 2019 and December 31, 2018:

	2019				2018
	31 March		1 January		31 March		1 January
Accounts receivable, net of allowances of $79, $93, $128 and $139	$	340.9	$	349.7	$	429.0	$	457.2
Contract liabilities	$	58.3	83.5		$	75.5	$	91.8

At January 1, 2019 and March 31, 2019 we had a contract liability of $83.5 and $58.3, respectively, relating to certain material rights (loyalty points, status program and prospective discounts). During the three months ended March 31, 2019, we recognized $52.1 of revenue related to the contract liability balance at January 1, 2019, as the result of performance obligations satisfied. In addition, we deferred an additional $26.1 related to certain material rights granted during the period, for which the performance obligations are not yet satisfied. Of the amount deferred during the period, substantially all will be recognized within a year, with the significant majority to be captured within a quarter. The remaining movement in the contract liability balance is attributable to foreign exchange differences arising on the translation of the balance as at March 31, 2019 as compared with December 31, 2018.

At January 1, 2018 and March 31, 2018 we had a contract liability of $91.8 and $75.5, respectively. During the three months ended March 31, 2018, we recognized $66.0 of revenue related to the contract liability balance at January 1, 2018, as the result of performance obligations satisfied. In addition, we deferred an additional $47.9 related to certain material rights granted during the quarter, for which the performance obligations are not yet satisfied. Of the amount deferred during the period, substantially all was recognized in 2018.

Contract costs

Incremental costs to obtain contracts, such as bonuses or commissions, are recognized as an asset if the entity expects to recover them. However, ASC 340-40, Other Assets and Deferred Costs, offers a practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. We elected the practical expedient and expense costs to obtain contracts when incurred because our amortization period is one year or less.

Costs to fulfill contracts with Representatives are comprised of shipping and handling (including order processing) and payment processing services, which are expensed as incurred. The fees for these services are included in the transaction price.

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INVENTORIES

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Components of Inventories	March 31, 2019		December 31, 2018
Raw materials	$	143.4	$	157.8
Finished goods	388.9		384.2
Total	$	532.3	$	542.0

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LEASES

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Some of our leases may include options to extend or terminate the lease. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8

Lessee, Finance Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Some of our leases may include options to extend or terminate the lease. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8

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EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2019

Retirement Benefits, Description [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

	Three Months Ended March 31,
	Pension Benefits
Net Periodic Benefit Costs	U.S. Plans						Non-U.S. Plans						Postretirement Benefits
	2019			2018			2019			2018			2019		2018
Service cost	$	.5		$	.9		$	1.0		$	1.2		$	—	$	.1
Interest cost	.6			.6			3.9			4.2			.3		.3
Expected return on plan assets	(.8		)	(.8		)	(7.9		)	(8.4		)	—		—
Amortization of prior service credit	—			—			—			—			—		(.1		)
Amortization of net actuarial losses	.7			1.3			1.3			1.8			—		—
Settlements/curtailments	—			—			0.1			—			—		—
Net periodic benefit costs(1)	$	1.0		$	2.0		$	(1.6	)	$	(1.2	)	$	.3	$	.3

⁽¹⁾ Service cost is presented in selling, general and administrative expenses in our Consolidated Statements of Operations. The components of net periodic benefit costs other than service cost are presented in other expense, net in our Consolidated Statements of Operations.

During the three months ended March 31, 2019, we made less than $1 of contributions to the U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively. During the remainder of 2019, we anticipate contributing approximately $5 to $10 and approximately $0 to $5 to fund our U.S. and non-U.S. defined benefit pension and postretirement benefit plans, respectively.

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CONTINGENCIES

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

Brazilian Tax Assessments

In December 2012, our Brazilian subsidiary, Avon Industrial LTDA (Avon Brazil Manufacturing) received an excise tax (IPI) assessment for the year 2008. The assessment totals approximately $300, including penalties and accrued interest. As in prior IPI cases that have been resolved in Avon’s favor, this assessment asserts that the establishment in 1995 of separate manufacturing and distribution companies in Brazil was done without a valid business purpose and that Avon Brazil Manufacturing 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 2012 IPI assessment is unfounded.

These matters are being vigorously contested. In July 2013, the 2012 IPI assessment was upheld at the first administrative level and we appealed this decision to the second administrative level. On April 18, 2018, Avon received official notification that the second administrative level has issued a partially favorable and partially unfavorable decision. In this decision, the original assessment was reduced by approximately $62 (including associated penalty and interest), subject to Federal Revenue appeal. The remaining $238 of the assessment was upheld at the second administrative level. On April 20, 2018, we appealed this decision in the third administrative level where the matter remains pending resolution.

On October 3, 2017, Avon Brazil Manufacturing received a new tax assessment notice regarding IPI for 2014 on grounds similar to the 2012 assessment. The 2017 IPI assessment totals approximately $232, including penalties and accrued interest. On April 2, 2018, Avon was notified of an unfavorable decision at the first administrative level. On February 25, 2019 this IPI assessment was upheld at the second administrative level and we are waiting for the formal decision.

In the event that the 2012 and the 2017 IPI assessments are upheld in the third and final administrative level, it may be necessary for us to provide monetary security to pursue further appeals in the judicial levels, which, depending on the circumstances, may result in a charge to earnings and an adverse effect on the Company's Consolidated Statements of Cash Flows. 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). We believe that the 2012 and the 2017 IPI assessments are unfounded, however, based on the likelihood that these will be upheld, we assess the risks as disclosed above as reasonably possible. At March 31, 2019, we have not recognized a liability for the 2012 or 2017 IPI assessments.

Brazil IPI Tax on Cosmetics

Separate from the tax assessments received by Avon Brazil Manufacturing, Avon Cosmeticos LTDA (Avon Brazil) is involved in litigation related to an executive decree issued in May 2015. This decree increased the amount of IPI taxes that are to be remitted by Avon Brazil to the taxing authority on the sales of cosmetic products. Avon Brazil filed an objection to this IPI tax increase on the basis that it is not constitutional. In December 2016, Avon Brazil received a favorable decision from the Federal District Court regarding this objection. This decision has been appealed by the tax authorities.

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 was no longer required to remit the taxes associated with IPI into a judicial deposit. On June 12, 2018, we received a decision authorizing Avon to withdraw the amount held as a judicial deposit, substituting it by letter of guarantee, which was presented. On June 29, 2018, the tax authorities presented an appeal against that decision. On July 30, 2018, the funds were received in our bank account. As of September 30, 2018, due in part to recent judicial decisions across the industry and other developments, we concluded, supported by the opinion of legal counsel, that the Executive Decree is unconstitutional. We therefore assessed the IPI tax under ASC 450, Contingencies and determined that the risk of loss is reasonably possible but not probable. Accordingly, we released the associated liability as of September 30, 2018 of approximately $195 and ceased accruing the IPI taxes from October 1, 2018. The liability had been classified within long-term sales taxes and taxes other than income in our Consolidated Balance Sheet, and the release was recorded in net sales and other (income) expense, net in the amounts of approximately $168 and approximately $27, respectively, in our Consolidated Income Statements for the quarter ended September 30, 2018.

An unfavorable ruling to our objection of this IPI tax increase would have an adverse effect on the Company's Consolidated Income Statements and Consolidated Statements of Cash Flows as Avon Brazil would have to remit the reasonably possible amount of $227 to the taxing authorities (including the judicial deposit that was returned to us on July 30, 2018). We are not able to reliably predict the timing of the outcome of our objection to this tax increase.

A favorable judicial ruling to our objection of this IPI tax would also have an adverse effect on the Company's Consolidated Statements of Cash Flows as Avon Brazil would have to remit all or a portion of the associated income tax liability to the taxing authorities. The Company is accruing a tax reserve, which amounts to approximately $73 at March 31, 2019. This reserve will be settled on final adjudication of the law through a combination of cash and use of deferred tax assets.

Talc-Related Litigation

The Company has been named a defendant in numerous personal injury lawsuits filed in U.S. courts, alleging that certain talc products the Company sold in the past were contaminated with asbestos. Many of these actions involve a number of co-defendants from a variety of different industries, including manufacturers of cosmetics and manufacturers of other products that, unlike the Company’s products, were designed to contain asbestos. As of March 31, 2019, there were 118 individual cases pending against the Company. During the three months ended 31 March, 2019, 18 new cases were filed and 8 cases were dismissed, settled, or otherwise resolved. The value of our settlements in this area thus far has not been material, either individually or in the aggregate. Additional similar cases arising out of the use of the Company's talc products are reasonably anticipated.

We believe that the claims asserted against us in these cases are without merit. We are defending vigorously against these claims and will continue to do so. To date, none of the cases filed against the Company have proceeded to trial and there have been no findings of liability against the Company. However, nationwide trial results in similar cases filed against other manufacturers of cosmetic talc products have ranged from outright dismissals to very large jury awards of both compensatory and punitive damages. Given the inherent uncertainties of litigation, we cannot predict any overall trends in the outcome of the cases pending against the Company, and we are only able to make a reasonable estimate for a small number of individual cases that have advanced to the later stages of legal proceedings.  Any accruals currently recorded on the Company’s balance sheet with respect to these individual cases are not material.  Other than these accruals, we are at this time unable to estimate our reasonably possible or probable losses.  However, any adverse outcomes, either in an individual case or in the aggregate, could be material. Future costs to litigate these cases, which we expense as incurred, are not known but may be significant, though some costs will be covered by insurance.

Brazilian Labor-Related Litigation

On an ongoing basis, the Company is subject to numerous and diverse labor-related lawsuits filed by employees in Brazil. These cases are assessed on an aggregated and ongoing basis based on historical outcomes of similar cases. The claims made

are often for significantly larger sums than have historically been paid out by the Company. Our practice continues to be to recognize a liability based on our assessment of historical payments in similar cases. Our best estimate of the probable loss for such current cases at March 31, 2019 is approximately $12 and, accordingly, we have recognized a liability for this amount.

Shareholder Litigation

On February 14, 2019, a purported shareholder’s class action complaint (Bevinal v. Avon Products, Inc., et al., No. 19-cv-1420) was filed in the United States District Court for the Southern District of New York against the Company and certain former officers of the Company.  The complaint is brought on behalf of a purported class consisting of all purchasers of Avon common stock between August 2, 2016 and August 2, 2017, inclusive.  The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange of 1934 (the "Exchange Act") Act based on allegedly false or misleading statements and alleged market manipulation with respect to, among other things, changes made to Avon’s credit terms for Representatives in Brazil.  In light of the early stage of the litigation, we are unable to predict the outcome of this matter and are unable to assess the likelihood of loss or to make a reasonable estimate of the amount or range of loss that could result from an unfavorable outcome.

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 March 31, 2019, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

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 months ended March 31, 2019 and 2018:

Three Months Ended March 31, 2019	Foreign Currency Translation Adjustments			Cash Flow Hedges			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2018	$	(936.2	)	$	0.5		$	(4.3	)	$	(93.8	)	$	3.4	$	(1,030.4	)
Other comprehensive loss other than reclassifications	(3.4		)	(2.4		)	—			—			—		(5.8		)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0				0.5											0.5
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			—			1.3			—		1.3
Total reclassifications into earnings	—			0.5			—			1.3			—		1.8
Balance at March 31, 2019	$	(939.6	)	$	(1.4	)	$	(4.3	)	$	(92.5	)	$	3.4	$	(1,034.4	)

Three Months Ended March 31, 2018	Foreign Currency Translation Adjustments			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2017	$	(829.6	)	$	(4.3	)	$	(95.7	)	$	3.4	$	(926.2	)
Other comprehensive income other than reclassifications	32.3			—			—			—		32.3
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			2.9			—		2.9
Total reclassifications into earnings	—			—			2.9			—		2.9
Balance at March 31, 2018	$	(797.3	)	$	(4.3	)	$	(92.8	)	$	3.4	$	(891.0	)

(1) Gross amount reclassified to other expense, net in our Consolidated Statements of Operations, and related taxes reclassified to income taxes in our Consolidated Statements of Operations.

A foreign exchange net gain of $2.6 and $5.9 for the three months ended March 31, 2019 and 2018, respectively, resulting from the translation of actuarial losses and prior service cost recorded in AOCI, are included in foreign currency translation adjustments in our Consolidated Statements of Comprehensive Loss.

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of global marketing and digital expenses based on actual revenues. Segment profit excludes global expenses other than the allocation of marketing and digital, costs to implement ("CTI") restructuring initiatives (see Note 15, 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:

	Three Months Ended March 31,
Total Revenue	2019		2018
Europe, Middle East & Africa	$	458.7	$	568.4
South Latin America	414.7		497.1
North Latin America	192.7		195.6
Asia Pacific	115.3		111.4
Total revenue from reportable segments	1,181.4		1,372.5
Other operating segments and business activities	5.5		21.0
Total revenue	$	1,186.9	$	1,393.5

	Three Months Ended March 31,
Operating Profit	2019			2018
Segment Profit
Europe, Middle East & Africa	$	59.2		$	74.4
South Latin America	23.8			27.2
North Latin America	16.5			20.8
Asia Pacific	16.7			10.4
Total profit from reportable segments	$	116.2		$	132.8
Other operating segments and business activities	.6			2.2
Unallocated global expenses	(63.1		)	(79.2		)
CTI restructuring initiatives	(53.5		)	(10.9		)
Other items	(4.1		)	—
Operating (loss) profit	$	(3.9	)	$	44.9

Other operating segments and business activities include markets that have been exited. Effective in the first quarter of 2018, given that we exited Australia and New Zealand during 2018, the results of Australia and New Zealand are now reported in Other operating segments and business activities for all periods presented, while previously the results had been reported in the Asia Pacific segment. 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.

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SUPPLEMENTAL BALANCE SHEET INFORMATION

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTAL BALANCE SHEET INFORMATION

SUPPLEMENTAL BALANCE SHEET INFORMATION

At March 31, 2019 and December 31, 2018, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	March 31, 2019		December 31, 2018
Prepaid taxes and tax refunds receivable	$	126.6	$	145.0
Receivables other than trade	56.2		69.2
Prepaid brochure costs, paper and other literature	14.4		14.9
Other	58.0		42.9
Prepaid expenses and other	$	255.2	$	272.0

At March 31, 2019 and December 31, 2018, other assets included the following:

Components of Other Assets	March 31, 2019		December 31, 2018
Net overfunded pension plans	$	95.8	$	88.1
Capitalized software	88.8		89.3
Judicial deposits	72.2		74.1
Long-term receivables	79.4		73.2
Trust assets associated with supplemental benefit plans	37.4		37.0
Tooling (plates and molds associated with our beauty products)	12.0		12.6
Other	28.1		16.1
Other assets	$	413.7	$	390.4

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RESTRUCTURING INITIATIVES

3 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

RESTRUCTURING INITIATIVES

RESTRUCTURING INITIATIVES

Transformation Plan and Open Up Avon

Open Up Avon

In September 2018, we initiated a new strategy in order to return Avon to growth ("Open Up Avon"). As one element of this plan, we are targeting annualized cost savings of approximately $400 by 2021, to be generated from efficiencies in manufacturing and sourcing, distribution, general and administrative activities, and back office functions, as well as through revenue management, interest and tax. These savings are expected to be achieved through restructuring actions (that may result in charges related to severance, contract terminations and inventory and other asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges. In January 2019, we announced significant advancements in this strategy, including a structural reset of inventory processes and a reduction in global workforce. The structural reset resulted in an incremental one-off inventory obsolescence expense of $88 recognized at December 31, 2018. As a result of Open Up Avon restructuring actions approved to-date, we have recorded total costs to implement these restructuring initiatives of $188.3 before taxes, of which $45.1 was recorded during the three months ended March 31, 2019, in our Consolidated Statements of Operations.

Transformation Plan

In January 2016, we initiated a transformation plan (the "Transformation Plan"), in order to enable us to achieve our long-term goals of mid-single-digit constant-dollar ("Constant $") revenue growth and low double-digit operating margin. Under this plan, we had targeted pre-tax annualized cost savings of approximately $350 after three years, which we exceeded through restructuring actions, as well as other cost-savings strategies that did not result in restructuring charges.

As a result of these restructuring actions approved to-date, we have recorded total costs to implement these restructuring initiatives of $203.4 before taxes, of which a benefit of $2.0 was recorded during the three months ended March 31, 2019, in our Consolidated Statements of Operations. There are no further restructuring actions to be taken associated with our Transformation Plan, as beginning in the third quarter of 2018, all new restructuring actions approved operate under our new Open Up Avon plan described above.

Costs to Implement Restructuring Initiatives - Three Months Ended March 31, 2019 and 2018

During the three months ended March 31, 2019, we recorded net costs to implement of $43.2, of which $45.1 related to Open Up Avon, a net benefit of $2 related to the Transformation Plan, and $.1 related to other restructuring initiatives, in our Consolidated Statements of Operations. During the three months ended March 31, 2018, we recorded costs to implement of $10.9 related to the Transformation Plan, in our Consolidated Statements of Operations. The costs during the three months ended March 31, 2019 and 2018 consisted of the following:

	Three Months Ended March 31,
	2019			2018
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	3.8		$	—
Inventory write-off	0.5			0.6
	4.3			0.6
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	35.3			8.3
Implementation costs, primarily related to professional service fees	8.7			1.1
Dual running costs	1.8			—
Contract termination and other net benefits	3.3			0.2
Accelerated depreciation	0.1			0.7
	49.2			10.3
CTI recorded in operating profit	53.5			10.9
CTI recorded in other expenses
Gain on sale of China business (relating mainly to foreign currency translation adjustment gain)	(10.3		)	—
Total CTI	$	43.2		$	10.9
Open Up Avon	$	45.1		$	—
Transformation Plan	$	(2.0	)	$	10.9
Other	$	0.1		$	—

The tables below include restructuring costs such as employee-related costs, inventory and asset write-offs, foreign currency translation write-offs and contract terminations, and do not include other costs to implement restructuring initiatives such as professional services fees, dual running costs, accelerated depreciation and gain on sale of business.

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with Open Up Avon at March 31, 2019 is as follows:

	Employee-Related Costs			Inventory/Assets Write-offs			Foreign Currency Translation Adjustment Write-offs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	19.6		$	—		$	—		$	1.1		$	20.7
2019 charges	$	37.6		$	4.3		$	(10.3	)	$	3.0		34.6
Adjustments	(1.3		)	—			—			—			(1.3		)
Cash payments	(9.6		)	—			—			(0.7		)	(10.3		)
Non-cash write-offs	—			(4.3		)	10.3			—			6.0
Foreign exchange	(.8		)	—			—			—			(.8		)
Balance at March 31, 2019	$	45.5		$	—		$	—		$	3.4		$	48.9

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with our Transformation Plan as of March 31, 2019 is as follows:

	Employee-Related Costs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	34.4		$	3.6		$	38.0
2019 charges	—			—			—
Adjustments	(1.1		)	.2			(.9		)
Cash payments	(10.8		)	(2.5		)	(13.3		)
Non-cash write-offs	—			—			—
Foreign exchange	.1			—			.1
Balance at March 31, 2019	$	22.6		$	1.3		$	23.9

The majority of cash payments, if applicable, associated with the year-end liability are expected to be made during 2019.

The following table presents the restructuring charges incurred to date, under Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans:

	Employee- Related Costs		Inventory/ Asset Write-offs		Contract Terminations/Other		Foreign Currency Translation Adjustment Write-offs			Total
Open Up Avon
Charges incurred to-date	$	62.7	$	92.6	$	5.3	$	(10.3	)	$	150.3
Estimated charges to be incurred on approved initiatives	1.0		—		—		—			1.0
Total expected charges on approved initiatives	$	63.7	$	92.6	$	5.3	$	(10.3	)	$	151.3
Transformation Plan
Charges incurred to-date	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5
Estimated charges to be incurred on approved initiatives	—		—		—		—			—
Total expected charges on approved initiatives	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5

The charges, net of adjustments, of initiatives under the Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans, by reportable segment are as follows:

	Europe, Middle East & Africa			South Latin America		North Latin America			Asia Pacific			Global & Other Operating Segments		Total
Open Up Avon
2018	$	32.2		$	36.4	$	27.9		$	14.4		$	6.2	$	117.1
First quarter 2019	13.5			12.7		2.9			(3.2		)	7.3		33.2
Charges incurred to-date	45.7			49.1		30.8			11.2			13.5		150.3
Estimated charges to be incurred on approved initiatives	.1			—		.4			—			.5		1.0
Total expected charges on approved initiatives	$	45.8		$	49.1	$	31.2		$	11.2		$	14.0	$	151.3
Transformation Plan
2015	$	—		$	—	$	—		$	—		$	21.4	$	21.4
2016	30.9			13.2		4.4			9.1			16.8		74.4
2017	.9			5.6		(.6		)	(.5		)	49.4		54.8
2018	5.0			4.1		.6			.6			13.4		23.7
First quarter 2019	(1.1		)	—		—			—			.3		(.8		)
Charges incurred to-date	35.7			22.9		4.4			9.2			101.3		173.5
Estimated charges to be incurred on approved initiatives	—			—		—			—			—		—
Total expected charges on approved initiatives	$	35.7		$	22.9	$	4.4		$	9.2		$	101.3	$	173.5

The charges above are not included in segment profit, as this excludes costs to implement restructuring initiatives. The amounts shown in the tables above as charges recorded to-date relate to initiatives that have been approved and recorded in the consolidated 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.

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GOODWILL

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

	Europe, Middle East & Africa			South Latin America		Asia Pacific		Total
Net balance at December 31, 2018	$	18.0		$	66.8	$	2.6	$	87.4
Changes during the period ended March 31, 2019:
Foreign exchange	(.3		)	1.5		—		1.2
Net balance at March 31, 2019	$	17.7		$	68.3	$	2.6	$	88.6

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FAIR VALUE

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

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 March 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	3.9	$	—	$	3.9
Foreign exchange forward contracts	$	—	$	17.1	$	17.1
Total	$	3.9	$	17.1	$	21.0
Liabilities:					$	—
Foreign exchange forward contracts	$	—	$	1.9	$	1.9
Total	$	—	$	1.9	$	1.9

The assets and liabilities measured at fair value on a recurring basis were immaterial at December 31, 2018.

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, available-for-sale securities, short-term investments, accounts receivable, debt maturing within one year, accounts payable, long-term debt and foreign exchange forward 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 March 31, 2019 and December 31, 2018, respectively, consisted of the following:

	March 31, 2019						December 31, 2018
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Available-for-sale securities	$	3.9		$	3.9		$	3.8		$	3.8
Debt maturing within one year(1)	(425.4		)	(433.4		)	(12.0		)	(12.0		)
Long-term debt(1)	(1,196.4		)	(1,207.1		)	(1,581.6		)	(1,460.2		)
Foreign exchange forward contracts	15.2			15.2			(5.1		)	(5.1		)

(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.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [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.

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 in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at March 31, 2019:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	1.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	17.1	Accounts payable	$	.3
Total derivatives		$	17.1		$	1.9

The fair value of derivative instruments outstanding was immaterial at December 31, 2018.

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. As of March 31, 2019, we do not have any interest-rate swap agreements. Approximately 26% and 1% of our debt portfolio, at March 31, 2019 and December 31, 2018, respectively, was exposed to floating interest rates. For the purpose of this calculation, we consider all short-term debt to be exposed to floating interest rates.

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 was amortized as a reduction of interest expense until repayment of the underlying debt obligations in June 2018, at which point the remaining unamortized balance was fully released to the Consolidated Statement of Operations. The net impact of the gain amortization was zero for the three months ended March 31, 2019 and $1.3 for the three months ended March 31, 2018. At March 31, 2019, there was no unamortized deferred gain associated with the March 2012 interest-rate swap termination as the underlying debt obligations have been paid.

Foreign Currency Risk

We may use foreign exchange forward contracts to manage a portion of our foreign currency exchange rate exposures. At March 31, 2019, we had outstanding foreign exchange forward contracts with notional amounts totaling approximately $1,236.2 for various currencies, of which $26.8 were designated as cash flow hedges.

We may use foreign exchange forward contracts to manage foreign currency exposure of certain intercompany loans. 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 months ended March 31, 2019, we recorded a gain of $25.0 in other expense in our Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. During the three months ended March 31, 2018, we recorded a gain of $.9 in other expense, net in our Consolidated Statements of Operations related to other undesignated foreign exchange forward contracts.

During the first quarter of 2019, we discontinued our program to hedge foreign exchange risk relating to forecasted operational transactions. The last of our designated cash flow hedges will expire during the first quarter of 2020. Our designated hedges did not have a material impact on our Consolidated Financial Statements for the three months ended March 31, 2019.

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DEBT

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

DEBT

DEBT

Revolving Credit Facility

In June 2015, Avon International Operations, Inc. ("AIO"), a wholly-owned domestic subsidiary of the Company, entered into a five-year $400.0 senior secured revolving credit facility (the "2015 facility").

In February 2019, Avon International Capital, p.l.c. ("AIC"), a wholly-owned foreign subsidiary of the Company, entered into a

three-year €200 million senior secured revolving credit facility (the "2019 facility"). As of March 31, 2019 this amounted to $225. The 2019 facility replaced the 2015 facility and the 2015 facility was terminated at such time. There were no amounts drawn under the 2015 revolving credit facility on the date of termination and no early termination penalties were incurred. In the first quarter of 2019, $2 was recorded for the write-off of unamortized issuance costs related to the 2015 revolving credit facility. As of March 31, 2019, there were no amounts outstanding under the 2019 facility. The 2019 facility will terminate in February 2022; provided, however, that it shall terminate on the 91^st day prior to the maturity of the 4.60% Notes (as defined below), if on such 91^st day, the applicable notes are not redeemed, repaid, discharged, defeased or otherwise refinanced in full. In the first quarter of 2019, the Company capitalized $10 of issue costs relating to the new revolving credit facility; this resulted in a cash outflow presented in other financing activities within the Consolidated Statement of Cash Flows.

As of March 31, 2019, we were in compliance with our interest coverage and total leverage ratios under the 2019 facility, as amended. The amount of the facility available to be drawn down on is reduced by any standby letters of credit granted by an obligor, which, as of March 31, 2019, was approximately $28. As of March 31, 2019, based on then applicable interest rates, the entire amount of the remaining 2019 facility, which is approximately €175 million, could have been drawn down without violating any covenant.

Public Notes

In March 2013, we issued, in a public offering, $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 (the "5.00% Notes") and $250.0 principal amount of 6.95% Notes due March 15, 2043 (the "6.95% Notes") (collectively, the "2013 Notes"). Interest on the 2013 Notes is payable semi-annually on March 15 and September 15 of each year.

The indenture governing the 2013 Notes contains interest rate adjustment provisions depending on the long-term credit ratings assigned to the 2013 Notes by 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.

The remaining balance of $386.9 of the 4.60% Notes is due in March 2020. Based upon the Company’s cash on hand and restricted cash of $431.0 as of March 31, 2019 and its 2019 forecasted cash flow, the Company believes that it will maintain sufficient liquidity to meet this obligation. In addition, the Company has access to the unused portion of its revolving credit facility of €175 million.

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.

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INCOME TAXES

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our quarterly income tax provision is calculated using an estimated annual effective income tax approach. The quarterly effective tax rate can differ from our estimated annual effective tax rate as the Company cannot apply an effective tax rate approach for all of its operations. For those entities that can apply an effective tax rate approach, as of March 31, 2019, our annual effective tax rate, excluding discrete items, is 24.3% for 2019, as compared to 26.5% as of March 31, 2018. The remaining entities, which are operations that generate pre-tax losses which cannot be tax benefited and/or have an effective tax rate which cannot be reliably estimated, have to account for their income taxes on a discrete year-to-date basis as of the end of each quarter and are excluded from the effective tax rate approach.

The estimated annual effective tax rate for 2019 also excludes the unfavorable impact of withholding taxes associated with certain intercompany payments, including royalties, service charges, interest and dividends, which in the aggregate are relatively consistent each year due to the need to repatriate funds to cover U.S. and U.K.-based costs, such as interest on debt and corporate overhead. Withholding taxes are accounted for discretely and accrued in the provision for income taxes as they become due.

The provision for income taxes for the three months ended March 31, 2019 and 2018 was $19.5 and $31.5, respectively. Our effective tax rates for the three months ended March 31, 2019 and 2018 were (433.3)% and 302.9%, respectively. The effective tax rate in the first quarter of 2019 was also favorably impacted by the accrual of income tax benefits of approximately $3.5 associated with the release of income tax reserves of approximately $3.7 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $0.2. The effective tax rate in the first quarter of 2018 was also unfavorably impacted by one-time income tax reserves of $9.2 associated with our uncertain tax positions net of other miscellaneous income tax benefits of approximately $1.2.

In its final analysis of the impacts of the Tax Cuts and Job Act (the "Act") during the fourth quarter of 2018, the Company elected to treat income taxes associated with Global Intangible Low-Taxed Income ("GILTI"), as a period cost. As a result, the first-quarter 2019 provision for income taxes reflects this treatment. The first-quarter 2018 provision for income taxes has also been calculated treating GILTI as a period cost. For both periods, GILTI did not have a material effect. The Act has significant complexity. The Company has considered the published guidance provided by the various Federal and state regulatory authorities into the calculation of its income tax provisions available as of March 31, 2019 and March 31, 2018 for the respective quarters ended March 31, 2019 and March 31, 2018.

In prior years, we had previously recorded valuation allowances against certain deferred tax assets associated with the U.S. and foreign jurisdictions. We intend to continue maintaining these valuation allowances on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Sale of New Avon

In April 2019, we signed an agreement with LG Household & Health Care Ltd. to sell our 19.9% ownership interest in New Avon, a privately-held company that is majority-owned and managed by an affiliate of Cerberus. Refer to Note 3, Discontinued Operations, Asset and Liabilities Held for Sale and Divestitures, and Note 5, Investment in New Avon, for more information relating to New Avon.

LG Household & Health Care Ltd. will acquire all of the interests of New Avon for $125 in cash, of which Avon will receive $24.9 in cash for our 19.9% share. The closing is expected to occur on September 30, 2019.

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ACCOUNTING POLICIES (Policy)

3 Months Ended

Mar. 31, 2019

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 2018 Annual Report on Form 10-K ("2018 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. 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 2018 Form 10-K. When used in this report, the terms "Avon," "Company," "we" or "us" mean Avon Products, Inc.

For interim Consolidated Financial Statements purposes, we generally provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense, and adjust these accruals as estimates are refined. 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:

• the effects of significant, unusual or extraordinary pretax and income tax items, if any;

• withholding taxes recognized associated with cash repatriations; and

•

the impact of loss-making subsidiaries for which we cannot recognize an income tax benefit and subsidiaries for which an effective tax rate cannot be reliably estimated.

Leases

Leases

In February 2016, the FASB issued ASU 2016-02, Leases, which requires all assets and liabilities arising from leases to be recognized in our Consolidated Balance Sheets. We adopted this new accounting guidance effective January 1, 2019.

In July 2018, the FASB added an optional transition method which we elected upon adoption of the new standard. This allowed us to recognize and measure leases existing at January 1, 2019 without restating comparative information. In addition, we elected to apply the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification.

We determine if an arrangement is a lease at the lease commencement date. In addition to our lease agreements, we review all material new vendor arrangements for potential embedded lease obligations. The asset balance related to operating and finance leases is presented within right-of-use (ROU) asset and property, plant and equipment, respectively, on our Consolidated Balance Sheet. The short-term liability balance related to operating and finance leases is presented within other accrued liabilities on our Consolidated Balance Sheets. The long-term liability balance is presented within long-term operating lease liability and long-term debt on our Consolidated Balance Sheets for operating and finance leases, respectively.  

The lease liability is recognized based on the present value of the remaining fixed or in-substance fixed lease payments discounted using our incremental borrowing rates. We use a specific incremental borrowing rate for our material leases, which is determined based on the geography and term of the lease. These rates are determined based on inputs provided by external banks and updated periodically. The lease liability includes the exercise of a purchase option only if we are reasonably certain to exercise as of the commencement date of the lease. The residual value guarantee amount is only included in the lease liability

calculation to the extent payment is probable to the lessor as of the commencement of the lease. The ROU asset is calculated based on the lease liability adjusted for any lease payments paid to the lessor at or before the commencement date (i.e. prepaid rent) and initial direct costs incurred by Avon and excluding any lease incentives received from the Lessor.

Variable lease payments are payments to the lessor not included in the lease liability calculation. We define variable lease payments as payments made by Avon to the lessor for the right to use a leased asset that vary because of changes in facts or circumstances (such as changes in an index rate, volume, usage, etc.) occurring after the lease commencement date, other than predetermined contractual changes due to the passage of time (for example, predetermined rent increase amounts that are set out in the contract). Variable lease payments or charges are accounted for as incurred.

The lease term for purposes of lease accounting may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option as of the commencement date of the lease. For operating leases, the lease expense is recognized on a straight-line basis over the lease term. For finance leases, the Company amortizes the ROU asset on a straight-line basis and records interest expense on the lease liability created at lease commencement over the lease term.

We account for our lease and non-lease components as a single component for most of our asset classes, and therefore both are included in the calculation of lease liability recognized on the Consolidated Balance Sheets. However, for certain lease asset classes related to identified embedded leases we account for the lease and non-lease components separately, and therefore, the non-lease component is not included in the lease liability.

Leases with an initial term of twelve months or less are not recorded on the balance sheet; we recognize lease expense for these leases over their lease term. See Note 9, Leases, for further details.

Other Accounting Standards Implemented

Other Accounting Standards Implemented

ASU 2018-02, Income Statement - Reporting Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which permits entities to reclassify the disproportionate income tax effects of the 2017 enactment of U.S. tax reform legislation (the "Act") on items within accumulated other comprehensive income (loss) to retained earnings. We adopted this new accounting guidance effective January 1, 2019 and elected not to reclassify the disproportionate income tax effects of the Act from accumulated other comprehensive income (loss) to retained earnings.

Accounting Standards to be Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In January 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held. We intend to adopt this new accounting guidance effective January 1, 2020. We are currently assessing the impact on our consolidated financial statements.

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LOSS PER SHARE AND SHARE REPURCHASES (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Components of Basic and Diluted Earnings per Share

	Three Months Ended March 31,
(Shares in millions)	2019			2018
Numerator from continuing operations:
Loss from continuing operations, less amounts attributable to noncontrolling interests	$	(23.2	)	$	(20.3	)
Less: Loss allocated to participating securities	(.2		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss from continuing operations allocated to common shareholders	(29.3		)	(26.0		)
Numerator from discontinued operations:
Loss from discontinued operations	$	(9.5	)	$	—
Less: Loss allocated to participating securities	(.1		)	—
Loss allocated to common shareholders	(9.4		)	—
Numerator attributable to Avon:
Net loss attributable to Avon	$	(32.7	)	$	(20.3	)
Less: Loss allocated to participating securities	(.3		)	(.2		)
Less: Cumulative dividends on preferred stock	6.3			5.9
Loss allocated to common shareholders	(38.7		)	(26.0		)
Denominator:
Basic EPS weighted-average shares outstanding	442.2			440.9
Diluted effect of assumed conversion of stock options	—			—
Diluted effect of assumed conversion of preferred stock	—			—
Diluted EPS adjusted weighted-average shares outstanding	442.2			440.9
Loss per Common Share from continuing operations:
Basic	$	(.07	)	$	(.06	)
Diluted	(.07		)	(.06		)
Loss per Common Share from discontinued operations:
Basic	$	(.02	)	$	—
Diluted	(.02		)	—
Loss per Common Share attributable to Avon:
Basic	$	(.09	)	$	(.06	)
Diluted	(.09		)	(.06		)

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

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES (Tables)

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Major Classes of Financial Statement Components Comprising the Loss on Discontinued Operations

The major classes of assets and liabilities comprising Held for sale assets and Held for sale liabilities on the Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are shown in the following table.

	March 31, 2019
	Rye Office		Malaysia Maximin		Total
Current Held for sale assets
Property, Plant & Equipment (net)	$	12.5	$	3.1	$	15.6
Other assets	—		.1		.1
	$	12.5	$	3.2	$	15.7
Current Held for sale liabilities
Other liabilities	$	—	$	.1	$	.1
	$	—	$	.1	$	.1

	December 31, 2018
	Avon Manufacturing (Guangzhou)		Rye Office		Malaysia Maximin		Total
Current held for sale assets
Inventories	$	8.7	$	—	$	—	$	8.7
Property, Plant & Equipment (net)	36.7		12.3		3.0		52.0
Cash and cash equivalents	3.7		—		—		3.7
Other assets	1.1		—		.1		1.2
	$	50.2	$	12.3	$	3.1	$	65.6
Current held for sale liabilities
Accounts payable	8.6		—		—		8.6
Other liabilities	2.6		—		.2		2.8
	$	11.2	$	—	$	.2	$	11.4

The major classes of financial statement components comprising the loss on discontinued operations, net of tax for New Avon are shown below:

	Three Months Ended March 31, 2019
Selling, general and administrative expenses	9.5
Operating loss	(9.5	)
Loss from discontinued operations, net of tax	(9.5	)

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RESTRICTED CASH (Tables)

3 Months Ended

Mar. 31, 2019

Restricted Cash and Cash Equivalents [Abstract]

Schedule of Restrictions on Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows for the three month period ended March 31, 2019.

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	406.4	$	532.7
Restricted Cash(1)	17.0		—
Long-term restricted cash(2)	7.6		—
Held for sale cash and cash equivalents	—		3.7
Cash and cash equivalents, and restricted cash at end of period per the statement of cash flows	$	431.0	$	536.4

⁽¹⁾ $15.8 of the $17.0 was transferred from escrow into the Company's bank accounts in April 2019. The remainder is expected to be transferred into the Company's bank accounts during the second quarter of 2019.

⁽²⁾ Long-term restricted cash is presented in other assets in our Consolidated Balance Sheets.

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows for the three month period ended March 31, 2019.

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	406.4	$	532.7
Restricted Cash(1)	17.0		—
Long-term restricted cash(2)	7.6		—
Held for sale cash and cash equivalents	—		3.7
Cash and cash equivalents, and restricted cash at end of period per the statement of cash flows	$	431.0	$	536.4

⁽¹⁾ $15.8 of the $17.0 was transferred from escrow into the Company's bank accounts in April 2019. The remainder is expected to be transferred into the Company's bank accounts during the second quarter of 2019.

⁽²⁾ Long-term restricted cash is presented in other assets in our Consolidated Balance Sheets.

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following tables present the related party transactions with New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. New Avon is majority-owned and managed by Cerberus. See Note 5, Investment in New Avon for further details.

	Three Months Ended March 31,
	2019		2018
Statement of Operations Data
Revenue from sale of product to New Avon(1)	$	4.8	$	5.9
Gross profit from sale of product to New Avon(1)	$	.1	$	.4
Cost of sales for purchases from New Avon(2)	$	.6	$	.5
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases(3)	$	—	$	(3.2	)
Project management team(4)	$	1.4	.5
Net reduction of selling, general and administrative expenses	$	1.4	$	(2.7	)
Interest income from Instituto Avon(5)	$	—	$	—

	March 31, 2019		December 31, 2018
Balance Sheet Data
Inventories(6)	$	.3	$	.3
Receivables due from New Avon(7)	$	4.3	$	7.0
Receivables due from Instituto Avon(5)	$	3.2	$	3.2
Payables due to New Avon(8)	$	1.0	$	.2
Payables due to an affiliate of Cerberus(9)	$	.6	$	.6

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement noted above. The Company purchased $.8 and $.6 from New Avon associated with this agreement during the three months ended March 31, 2019 and 2018, respectively, and recorded $.6 and $.5 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended March 31, 2019 and 2018, respectively.

(3) The Company also entered into a transition services agreement to provide certain services to New Avon, which expired on October 31, 2018, as well as an intellectual property ("IP") license agreement, an agreement for technical support and innovation and sublease for office space. The net amounts recorded within selling, general and administrative expenses generally represent a recovery of the related costs.

(4) 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 implementation of the Company’s strategic initiatives. The Company recorded $1.4 and $.5 in selling, general and administrative expenses associated with these agreements during the three months ended March 31, 2019 and 2018, respectively. See Note 15, Restructuring Initiatives for additional information related to the Company's strategic initiatives.

(5) During the second quarter of 2018, the Company entered into an agreement to loan the Instituto Avon, an independent non-government charitable organization in Brazil, R$12 million (Brazilian real) for an unsecured 5-year term at a fixed interest rate of 7% per annum, to be paid back in 5 equal annual installments. The Instituto Avon was created by an Avon subsidiary in Brazil, with the board and executive team comprised of Avon Brazil management. The purpose of the loan is to provide the Instituto Avon with the means to donate funds to Fundação Pio XII (a leading cancer prevention and treatment organization in Brazil and owner of the Hospital do Câncer de Barretos), in order to invest in equipment with the objective of expanding breast cancer prevention and treatment.

(6) Inventories relate to purchases from New Avon, associated with the manufacturing and supply agreement, which have not yet been sold, and were classified within inventories in our Consolidated Balance Sheets.

(7) The receivables due from New Avon relate to the agreements for transition services, the IP license agreement, technical support and innovation and subleases for office space, as well as the manufacturing and supply agreement, and were classified within prepaid expenses and other in our Consolidated Balance Sheets.

(8) The payables due to New Avon relate to the manufacturing and supply agreement and were classified within other accrued liabilities in our Consolidated Balance Sheets.

(9) The payables due to an affiliate of Cerberus relate to the agreement for the project management team, and were classified within other accrued liabilities in our Consolidated Balance Sheets.

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

In the following table, revenue is disaggregated by product or service type. All revenue is recognized at a point in time, when control of a product is transferred to a customer:

	Three Months Ended March 31, 2019
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	139.1	$	126.7	$	50.3	$	33.2	$	349.3	$	—	$	349.3
Fragrance	133.9		98.3		48.0		17.8		298.0		—		298.0
Color	93.9		60.2		21.9		13.2		189.2		—		189.2
Total Beauty	366.9		285.2		120.2		64.2		836.5		—		836.5
Fashion & Home:
Fashion	60.5		38.8		22.1		42.9		164.3		—		164.3
Home	8.5		60.2		40.3		6.4		115.4		—		115.4
Total Fashion & Home	69.0		99.0		62.4		49.3		279.7		—		279.7
Net sales	435.9		384.2		182.6		113.5		1,116.2		—		1,116.2
Representative fees	22.5		29.5		10.1		1.8		63.9		—		63.9
Other	.3		1.0		—		—		1.3		5.5		6.8
Other revenue	22.8		30.5		10.1		1.8		65.2		5.5		70.7
Total revenue	$	458.7	$	414.7	$	192.7	$	115.3	$	1,181.4	$	5.5	$	1,186.9

	Three months ended March 31, 2018
	Reportable segments
	Europe, Middle East & Africa		South Latin America		North Latin America		Asia Pacific		Total reportable segments		Other operating segments and business activities		Total
Beauty:
Skincare	$	169.2	$	141.8	$	46.7	$	31.4	$	389.1	$	4.7	$	393.8
Fragrance	163.2		118.6		53.6		18.6		354.0		2.2		356.2
Color	120.8		80.9		20.9		13.1		235.7		3.3		239.0
Total Beauty	453.2		341.3		121.2		63.1		978.8		10.2		989.0
Fashion & Home:
Fashion	79.8		46.5		22.6		39.7		188.6		1.9		190.5
Home	9.3		71.9		41.2		7.0		129.4		.7		130.1
Total Fashion & Home	89.1		118.4		63.8		46.7		318.0		2.6		320.6
Net sales	542.3		459.7		185.0		109.8		1,296.8		12.8		1,309.6
Representative fees	25.9		36.4		10.6		1.6		74.5		1.4		75.9
Other	.2		1.0		—		—		1.2		6.8		8.0
Other revenue	26.1		37.4		10.6		1.6		75.7		8.2		83.9
Total revenue	$	568.4	$	497.1	$	195.6	$	111.4	$	1,372.5	$	21.0	$	1,393.5

Contract with Customer, Asset and Liability

The following table provides information about receivables and contract liabilities from contracts with customers at March 31, 2019 and December 31, 2018:

	2019				2018
	31 March		1 January		31 March		1 January
Accounts receivable, net of allowances of $79, $93, $128 and $139	$	340.9	$	349.7	$	429.0	$	457.2
Contract liabilities	$	58.3	83.5		$	75.5	$	91.8

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

Components of Inventories	March 31, 2019		December 31, 2018
Raw materials	$	143.4	$	157.8
Finished goods	388.9		384.2
Total	$	532.3	$	542.0

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LEASES (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Assets and Liabilities, Lessee

	Classification	January 1, 2019		March 31, 2019
Assets
Operating right-of-use assets	Right-of-use asset	$	187.5	$	180.3
Finance right-of-use assets	Property, Plant and Equipment	3.2		3.2
Total right-of-use assets		190.7		183.5
Liabilities
Current
Operating lease liabilities	Other accrued liabilities	$	45.4	$	43.9
Finance lease liabilities	Other accrued liabilities	1.1		1.2
Total current lease liabilities		46.5		45.1
Noncurrent
Operating lease liabilities	Long-term operating lease liability	$	155.9	$	150.4
Finance lease liabilities	Long-term debt	1.9		2.0
Total noncurrent lease liabilities		$	157.8	$	152.4
Total lease liability		$	204.3	$	197.5

Lease Cost

The table below shows the lease income and expenses recorded in the Consolidated Statement of Operations incurred during the three months ended March 31, 2019.

Lease Cost	Classification	Three months ended March 31, 2019
Operating lease cost (1)	Selling, general and administrative expenses	$	16.8
Finance lease cost
Amortization of right-of-use assets	Selling, general and administrative expenses	0.4
Interest on lease liabilities	Interest Expense	0.1
Short-term leases costs	Selling, general and administrative expenses	1.1
Sublease income (2)	Selling, general and administrative expenses	(3.2		)
Net lease cost		$	15.2

⁽¹⁾ Includes variable lease costs which are immaterial. These are presented in selling, general and administrative expenses in our Consolidated Statements of Operations.

⁽²⁾ Sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

Operating Lease Maturity Analysis

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

Finance Lease Maturity Analysis

The maturity analysis of the finance and operating lease liabilities is reflected below. This table also reflects the reconciliation of the undiscounted cash flows to the discounted finance and operating lease liabilities as recognized in the March 31, 2019 Consolidated Balance Sheet:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	44.8	$	1.1	$	45.9
2020	49.6		1.2		50.8
2021	40.4		0.8		41.2
2022	34.7		0.6		35.3
2023	24.6		0.1		24.7
2024	17.7		—		17.7
Thereafter	29.3		—		29.3
Total lease payments	$	241.1	$	3.8	$	244.9
Less: Interest	46.8		0.6		47.4
Present value of lease liabilities	$	194.3	$	3.2	$	197.5

Operating Lease by Due Dates

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

Financing Lease by Due Dates

At December 31, 2018 our operating and finance lease obligations by due dates were as follows:

Maturity of Lease Liabilities	Operating Leases		Finance Leases		Total
2019	$	56.4	$	1.1	$	57.5
2020	42.0		0.6		42.6
2021	35.3		0.4		35.7
2022	31.1		0.2		31.3
2023	22.4		0.1		22.5
Thereafter	46.9		0.1		47.0
Total lease payments(1)	$	234.1	$	2.5	$	236.6

⁽¹⁾ Total lease payments of $236.6 represent undiscounted cash flows and therefore do not reconcile to the total discounted lease liability of $204.3 at January 1, 2019 shown above.

Lease Terms

The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for our operating and finance lease population. As noted in our lease accounting policy (See Note 1, Accounting Policies), the Company uses the incremental borrowing rate as the lease discount rate.

Lease Term and Discount Rate	March 31, 2019
Weighted-average remaining lease term (years)
Operating leases	5.3
Finance leases	3.0
Weighted-average discount rate
Operating leases	8.3	%
Finance leases	11.6	%

Cash Flow Classification

The table below sets out the classification of lease payments in the Consolidated Statement of Cash Flows. The right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the three months ended March 31, 2019.

Other Information	Three Months Ended March 31, 2019
- Operating Cash Flows From Operating Leases	16.4
- Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	$	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	$	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$	12.8

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EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2019

Retirement Benefits, Description [Abstract]

Schedule of Components of Net Periodic Benefit Cost

	Three Months Ended March 31,
	Pension Benefits
Net Periodic Benefit Costs	U.S. Plans						Non-U.S. Plans						Postretirement Benefits
	2019			2018			2019			2018			2019		2018
Service cost	$	.5		$	.9		$	1.0		$	1.2		$	—	$	.1
Interest cost	.6			.6			3.9			4.2			.3		.3
Expected return on plan assets	(.8		)	(.8		)	(7.9		)	(8.4		)	—		—
Amortization of prior service credit	—			—			—			—			—		(.1		)
Amortization of net actuarial losses	.7			1.3			1.3			1.8			—		—
Settlements/curtailments	—			—			0.1			—			—		—
Net periodic benefit costs(1)	$	1.0		$	2.0		$	(1.6	)	$	(1.2	)	$	.3	$	.3

⁽¹⁾ Service cost is presented in selling, general and administrative expenses in our Consolidated Statements of Operations. The components of net periodic benefit costs other than service cost are presented in other expense, net in our Consolidated Statements of Operations.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2019

Equity [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 months ended March 31, 2019 and 2018:

Three Months Ended March 31, 2019	Foreign Currency Translation Adjustments			Cash Flow Hedges			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2018	$	(936.2	)	$	0.5		$	(4.3	)	$	(93.8	)	$	3.4	$	(1,030.4	)
Other comprehensive loss other than reclassifications	(3.4		)	(2.4		)	—			—			—		(5.8		)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0				0.5											0.5
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			—			1.3			—		1.3
Total reclassifications into earnings	—			0.5			—			1.3			—		1.8
Balance at March 31, 2019	$	(939.6	)	$	(1.4	)	$	(4.3	)	$	(92.5	)	$	3.4	$	(1,034.4	)

Three Months Ended March 31, 2018	Foreign Currency Translation Adjustments			Net Investment Hedges			Pension and Postretirement Benefits			Investment in New Avon		Total
Balance at December 31, 2017	$	(829.6	)	$	(4.3	)	$	(95.7	)	$	3.4	$	(926.2	)
Other comprehensive income other than reclassifications	32.3			—			—			—		32.3
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2(1)	—			—			2.9			—		2.9
Total reclassifications into earnings	—			—			2.9			—		2.9
Balance at March 31, 2018	$	(797.3	)	$	(4.3	)	$	(92.8	)	$	3.4	$	(891.0	)

(1) Gross amount reclassified to other expense, net in our Consolidated Statements of Operations, and related taxes reclassified to income taxes in our Consolidated Statements of Operations.

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Summarized Financial Information of Reportable Segments

Summarized financial information concerning our reportable segments was as follows:

	Three Months Ended March 31,
Total Revenue	2019		2018
Europe, Middle East & Africa	$	458.7	$	568.4
South Latin America	414.7		497.1
North Latin America	192.7		195.6
Asia Pacific	115.3		111.4
Total revenue from reportable segments	1,181.4		1,372.5
Other operating segments and business activities	5.5		21.0
Total revenue	$	1,186.9	$	1,393.5

	Three Months Ended March 31,
Operating Profit	2019			2018
Segment Profit
Europe, Middle East & Africa	$	59.2		$	74.4
South Latin America	23.8			27.2
North Latin America	16.5			20.8
Asia Pacific	16.7			10.4
Total profit from reportable segments	$	116.2		$	132.8
Other operating segments and business activities	.6			2.2
Unallocated global expenses	(63.1		)	(79.2		)
CTI restructuring initiatives	(53.5		)	(10.9		)
Other items	(4.1		)	—
Operating (loss) profit	$	(3.9	)	$	44.9

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Components of Prepaid Expenses and Other

At March 31, 2019 and December 31, 2018, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	March 31, 2019		December 31, 2018
Prepaid taxes and tax refunds receivable	$	126.6	$	145.0
Receivables other than trade	56.2		69.2
Prepaid brochure costs, paper and other literature	14.4		14.9
Other	58.0		42.9
Prepaid expenses and other	$	255.2	$	272.0

Schedule of Components of Other Assets

At March 31, 2019 and December 31, 2018, other assets included the following:

Components of Other Assets	March 31, 2019		December 31, 2018
Net overfunded pension plans	$	95.8	$	88.1
Capitalized software	88.8		89.3
Judicial deposits	72.2		74.1
Long-term receivables	79.4		73.2
Trust assets associated with supplemental benefit plans	37.4		37.0
Tooling (plates and molds associated with our beauty products)	12.0		12.6
Other	28.1		16.1
Other assets	$	413.7	$	390.4

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RESTRUCTURING INITIATIVES (Tables)

3 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

Summary of Restructuring and Related Costs

The following table presents the restructuring charges incurred to date, under Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans:

	Employee- Related Costs		Inventory/ Asset Write-offs		Contract Terminations/Other		Foreign Currency Translation Adjustment Write-offs			Total
Open Up Avon
Charges incurred to-date	$	62.7	$	92.6	$	5.3	$	(10.3	)	$	150.3
Estimated charges to be incurred on approved initiatives	1.0		—		—		—			1.0
Total expected charges on approved initiatives	$	63.7	$	92.6	$	5.3	$	(10.3	)	$	151.3
Transformation Plan
Charges incurred to-date	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5
Estimated charges to be incurred on approved initiatives	—		—		—		—			—
Total expected charges on approved initiatives	$	126.9	$	2.3	$	40.9	$	3.4		$	173.5

The costs during the three months ended March 31, 2019 and 2018 consisted of the following:

	Three Months Ended March 31,
	2019			2018
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	3.8		$	—
Inventory write-off	0.5			0.6
	4.3			0.6
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	35.3			8.3
Implementation costs, primarily related to professional service fees	8.7			1.1
Dual running costs	1.8			—
Contract termination and other net benefits	3.3			0.2
Accelerated depreciation	0.1			0.7
	49.2			10.3
CTI recorded in operating profit	53.5			10.9
CTI recorded in other expenses
Gain on sale of China business (relating mainly to foreign currency translation adjustment gain)	(10.3		)	—
Total CTI	$	43.2		$	10.9
Open Up Avon	$	45.1		$	—
Transformation Plan	$	(2.0	)	$	10.9
Other	$	0.1		$	—

Schedule of Restructuring Reserve

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with Open Up Avon at March 31, 2019 is as follows:

	Employee-Related Costs			Inventory/Assets Write-offs			Foreign Currency Translation Adjustment Write-offs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	19.6		$	—		$	—		$	1.1		$	20.7
2019 charges	$	37.6		$	4.3		$	(10.3	)	$	3.0		34.6
Adjustments	(1.3		)	—			—			—			(1.3		)
Cash payments	(9.6		)	—			—			(0.7		)	(10.3		)
Non-cash write-offs	—			(4.3		)	10.3			—			6.0
Foreign exchange	(.8		)	—			—			—			(.8		)
Balance at March 31, 2019	$	45.5		$	—		$	—		$	3.4		$	48.9

The liability balance included in other accrued liabilities in our Consolidated Statements of Operations for the restructuring actions associated with our Transformation Plan as of March 31, 2019 is as follows:

	Employee-Related Costs			Contract Terminations/Other			Total
Balance at December 31, 2018	$	34.4		$	3.6		$	38.0
2019 charges	—			—			—
Adjustments	(1.1		)	.2			(.9		)
Cash payments	(10.8		)	(2.5		)	(13.3		)
Non-cash write-offs	—			—			—
Foreign exchange	.1			—			.1
Balance at March 31, 2019	$	22.6		$	1.3		$	23.9

Schedule of Restructuring Charges Reportable by Business Segment

The charges, net of adjustments, of initiatives under the Open Up Avon and the Transformation Plan, along with the estimated charges expected to be incurred on approved initiatives under the plans, by reportable segment are as follows:

	Europe, Middle East & Africa			South Latin America		North Latin America			Asia Pacific			Global & Other Operating Segments		Total
Open Up Avon
2018	$	32.2		$	36.4	$	27.9		$	14.4		$	6.2	$	117.1
First quarter 2019	13.5			12.7		2.9			(3.2		)	7.3		33.2
Charges incurred to-date	45.7			49.1		30.8			11.2			13.5		150.3
Estimated charges to be incurred on approved initiatives	.1			—		.4			—			.5		1.0
Total expected charges on approved initiatives	$	45.8		$	49.1	$	31.2		$	11.2		$	14.0	$	151.3
Transformation Plan
2015	$	—		$	—	$	—		$	—		$	21.4	$	21.4
2016	30.9			13.2		4.4			9.1			16.8		74.4
2017	.9			5.6		(.6		)	(.5		)	49.4		54.8
2018	5.0			4.1		.6			.6			13.4		23.7
First quarter 2019	(1.1		)	—		—			—			.3		(.8		)
Charges incurred to-date	35.7			22.9		4.4			9.2			101.3		173.5
Estimated charges to be incurred on approved initiatives	—			—		—			—			—		—
Total expected charges on approved initiatives	$	35.7		$	22.9	$	4.4		$	9.2		$	101.3	$	173.5

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GOODWILL (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

	Europe, Middle East & Africa			South Latin America		Asia Pacific		Total
Net balance at December 31, 2018	$	18.0		$	66.8	$	2.6	$	87.4
Changes during the period ended March 31, 2019:
Foreign exchange	(.3		)	1.5		—		1.2
Net balance at March 31, 2019	$	17.7		$	68.3	$	2.6	$	88.6

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FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities Measured 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 March 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	3.9	$	—	$	3.9
Foreign exchange forward contracts	$	—	$	17.1	$	17.1
Total	$	3.9	$	17.1	$	21.0
Liabilities:					$	—
Foreign exchange forward contracts	$	—	$	1.9	$	1.9
Total	$	—	$	1.9	$	1.9

Summary of Carrying Value and 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 March 31, 2019 and December 31, 2018, respectively, consisted of the following:

	March 31, 2019						December 31, 2018
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Available-for-sale securities	$	3.9		$	3.9		$	3.8		$	3.8
Debt maturing within one year(1)	(425.4		)	(433.4		)	(12.0		)	(12.0		)
Long-term debt(1)	(1,196.4		)	(1,207.1		)	(1,581.6		)	(1,460.2		)
Foreign exchange forward contracts	15.2			15.2			(5.1		)	(5.1		)

(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.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The following table presents the fair value of derivative instruments at March 31, 2019:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	1.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	17.1	Accounts payable	$	.3
Total derivatives		$	17.1		$	1.9

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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
	Mar. 31, 2019	Mar. 31, 2018
Numerator from continuing operations:
Loss from continuing operations, less amounts attributable to noncontrolling interests	$ (23.2)	$ (20.3)
Less: Loss allocated to participating securities	(0.2)	(0.2)
Less: Cumulative dividends on preferred stock	6.3	5.9
Loss from continuing operations allocated to common shareholders	(29.3)	(26.0)
Numerator from discontinued operations:
Loss from discontinued operations	(9.5)	0.0
Less: Loss allocated to participating securities	(0.1)	0.0
Loss allocated to common shareholders	(9.4)	0.0
Numerator attributable to Avon:
Net loss attributable to Avon	(32.7)	(20.3)
Less: Loss allocated to participating securities	(0.3)	(0.2)
Less: Cumulative dividends on preferred stock	6.3	5.9
Loss allocated to common shareholders	$ (38.7)	$ (26.0)
Denominator:
Basic EPS weighted-average shares outstanding (in shares)	442.2	440.9
Diluted effect of assumed conversion of stock options (in shares)	0.0	0.0
Diluted effect of assumed conversion of preferred stock (in shares)	0.0	0.0
Diluted EPS adjusted weighted-average shares outstanding (in shares)	442.2	440.9
Loss per Common Share from continuing operations:
Basic (in dollars per share)	$ (0.07)	$ (0.06)
Diluted (in dollars per share)	(0.07)	(0.06)
Loss per Common Share from discontinued operations:
Basic (in dollars per share)	(0.02)	0
Diluted (in dollars per share)	(0.02)	0
Loss per Common Share attributable to Avon:
Basic (in dollars per share)	(0.09)	(0.06)
Diluted (in dollars per share)	$ (0.09)	$ (0.06)

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LOSS PER SHARE AND SHARE REPURCHASES (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Stock options excluded from computation of earnings per share (in shares)	17,200,000	15,300,000
Converted Series C Convertible Preferred Stock (in shares)	87,100,000	87,100,000
Stock repurchased during the period (in shares)	0	900,000
Stock repurchased during the period		$ 2.7

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES - Additional Information (Details) - USD ($) $ in Millions			1 Months Ended		3 Months Ended
	Feb. 15, 2019	Dec. 17, 2015	Apr. 30, 2019	Feb. 28, 2019	Mar. 31, 2019	Mar. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal group, asset adjustments				$ 0.2
Loans assumed	$ 23.5
Restricted cash					$ 24.6
Net proceeds from sale of business					46.4	$ 0.0
Gain on sale					10.3	$ 0.0
Gain on sale, net of tax					8.2
North America Segment | Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from issuance of convertible preferred stock		$ 435.0
Avon Manufacturing (Guangzhou), Ltd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash	24.6				$ 24.6
Net proceeds from sale of business	46.4
Avon Manufacturing (Guangzhou), Ltd. | TheFaceShop Co., LTd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale purchase price	71.0
Acquisition expenses	$ 1.1
Subsequent Event
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash transferred from escrow			$ 15.8
Subsequent Event | Avon Manufacturing (Guangzhou), Ltd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash transferred from escrow			$ 15.8

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES - 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
	Mar. 31, 2019	Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents	$ 0.0	$ 3.7
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Liabilities	9.5	0.0
Held for Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories		8.7
Property, Plant & Equipment (net)	15.6	52.0
Cash and cash equivalents		3.7
Other assets	0.1	1.2
Assets	15.7	65.6
Accounts payable		8.6
Other liabilities	0.1	2.8
Liabilities	0.1	11.4
North America Segment | Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Selling, general and administrative expenses	9.5
Operating loss	(9.5)
Loss from discontinued operations, net of tax	(9.5)
Avon Manufacturing Guangzhou | Held for Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories		8.7
Property, Plant & Equipment (net)		36.7
Cash and cash equivalents		3.7
Other assets		1.1
Assets		50.2
Accounts payable		8.6
Other liabilities		2.6
Liabilities		11.2
Rye Office | Held for Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories		0.0
Property, Plant & Equipment (net)	12.5	12.3
Cash and cash equivalents		0.0
Other assets	0.0	0.0
Assets	12.5	12.3
Accounts payable		0.0
Other liabilities	0.0	0.0
Liabilities	0.0	0.0
Malaysia Maximin | Held for Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories		0.0
Property, Plant & Equipment (net)	3.1	3.0
Cash and cash equivalents		0.0
Other assets	0.1	0.1
Assets	3.2	3.1
Accounts payable		0.0
Other liabilities	0.1	0.2
Liabilities	$ 0.1	$ 0.2

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RESTRICTED CASH (Details) - USD ($) $ in Millions	1 Months Ended
	Apr. 30, 2019	Mar. 31, 2019		Dec. 31, 2018		Mar. 31, 2018	[2]	Dec. 31, 2017	[1]
Cash and Cash Equivalents [Line Items]
Restricted cash		$ 24.6
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Cash and cash equivalents		406.4		$ 532.7
Restricted cash		17.0		0.0
Long-term restricted cash		7.6		0.0
Held for sale cash and cash equivalents		0.0		3.7
Cash and cash equivalents, and restricted cash at end of period per the statement of cash flows		$ 431.0	[1],[2]	$ 536.4	[1]	$ 772.5		$ 881.5
Subsequent Event
Cash and Cash Equivalents [Line Items]
Restricted cash transferred from escrow	$ 15.8

[1] Includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets at the end of the year in 2018

[2] Includes restricted cash related to the sale of Avon Manufacturing (Guangzhou), Ltd. at March 31, 2019

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INVESTMENT IN NEW AVON (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Investment balance	$ 0	$ 0
New Avon
Schedule of Equity Method Investments [Line Items]
Percentage of ownership	19.90%

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RELATED PARTY TRANSACTIONS (Summary of Related Parties) (Details) R$ in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)	Jun. 30, 2018 BRL (R$) installment	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Related Party Transaction [Line Items]
Inventories	$ 0.3			$ 0.3
Equity Method Investee
Related Party Transaction [Line Items]
Project management team	1.4		$ (2.7)
Equity Method Investee | Manufacturing and Supply Agreement
Related Party Transaction [Line Items]
Revenue from sale of product to New Avon	4.8		5.9
Gross profit from sale of product to New Avon	0.1		0.4
Cost of sales for purchases from New Avon	0.6		0.5
Purchases from related party	0.8		0.6
Equity Method Investee | Transition Services Agreement
Related Party Transaction [Line Items]
Project management team	0.0		(3.2)
Equity Method Investee | Project Management Agreement
Related Party Transaction [Line Items]
Project management team	1.4		0.5
New Avon
Related Party Transaction [Line Items]
Receivables due from related party	4.3			7.0
Payables to related parties	1.0			0.2
Affiliate of Cerberus
Related Party Transaction [Line Items]
Payables to related parties	0.6			0.6
Transformation Plan
Related Party Transaction [Line Items]
Project management team			0.5
Instituto Avon | Affiliated Entity
Related Party Transaction [Line Items]
Interest income from Instituto Avon	0.0		$ 0.0
Receivables due from related party	$ 3.2			$ 3.2
Instituto Avon | Affiliated Entity | Loan to Related Party
Related Party Transaction [Line Items]
Loan amount | R$		R$ 12
Loan term		5 years
Loan interest rate		7.00%
Loan annual installments | installment		5

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RELATED PARTY TRANSACTIONS (Details) - USD ($)		3 Months Ended
	Mar. 01, 2016	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Dividend rate	1.25%
Dividends		$ 0	$ 0
Series C convertible preferred stock		498,300,000		$ 492,100,000
Equity Method Investee
Related Party Transaction [Line Items]
Standby letters of credit, recorded liability		800,000
Series C Preferred Stock
Related Party Transaction [Line Items]
Shares issued (in shares)	435,000
Shares issued	$ 435,000,000.0
Dividends payable		$ 72,000,000.0
Private Placement
Related Party Transaction [Line Items]
Preferred stock, discount on shares	$ 8,700,000

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REVENUE Disaggregation of Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 1,186.9	$ 1,393.5
Beauty
Disaggregation of Revenue [Line Items]
Revenue	836.5	989.0
Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	349.3	393.8
Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	298.0	356.2
Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	189.2	239.0
Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	279.7	320.6
Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	164.3	190.5
Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	115.4	130.1
Net Sales
Disaggregation of Revenue [Line Items]
Revenue	1,116.2	1,309.6
Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	63.9	75.9
Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	6.8	8.0
Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	70.7	83.9
Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	1,181.4	1,372.5
Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	836.5	978.8
Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	349.3	389.1
Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	298.0	354.0
Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	189.2	235.7
Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	279.7	318.0
Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	164.3	188.6
Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	115.4	129.4
Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	1,116.2	1,296.8
Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	63.9	74.5
Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	1.3	1.2
Operating Segments | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	65.2	75.7
Other Operating Segments and Business Activities
Disaggregation of Revenue [Line Items]
Revenue	5.5	21.0
Other Operating Segments and Business Activities | Beauty
Disaggregation of Revenue [Line Items]
Revenue	0.0	10.2
Other Operating Segments and Business Activities | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	0.0	4.7
Other Operating Segments and Business Activities | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	0.0	2.2
Other Operating Segments and Business Activities | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	0.0	3.3
Other Operating Segments and Business Activities | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	0.0	2.6
Other Operating Segments and Business Activities | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	0.0	1.9
Other Operating Segments and Business Activities | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.7
Other Operating Segments and Business Activities | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	0.0	12.8
Other Operating Segments and Business Activities | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	0.0	1.4
Other Operating Segments and Business Activities | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	5.5	6.8
Other Operating Segments and Business Activities | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	5.5	8.2
Europe, Middle East & Africa | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	458.7	568.4
Europe, Middle East & Africa | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	366.9	453.2
Europe, Middle East & Africa | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	139.1	169.2
Europe, Middle East & Africa | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	133.9	163.2
Europe, Middle East & Africa | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	93.9	120.8
Europe, Middle East & Africa | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	69.0	89.1
Europe, Middle East & Africa | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	60.5	79.8
Europe, Middle East & Africa | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	8.5	9.3
Europe, Middle East & Africa | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	435.9	542.3
Europe, Middle East & Africa | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	22.5	25.9
Europe, Middle East & Africa | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	0.3	0.2
Europe, Middle East & Africa | Operating Segments | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	22.8	26.1
South Latin America | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	414.7	497.1
South Latin America | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	285.2	341.3
South Latin America | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	126.7	141.8
South Latin America | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	98.3	118.6
South Latin America | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	60.2	80.9
South Latin America | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	99.0	118.4
South Latin America | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	38.8	46.5
South Latin America | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	60.2	71.9
South Latin America | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	384.2	459.7
South Latin America | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	29.5	36.4
South Latin America | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	1.0	1.0
South Latin America | Operating Segments | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	30.5	37.4
North Latin America | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	192.7	195.6
North Latin America | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	120.2	121.2
North Latin America | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	50.3	46.7
North Latin America | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	48.0	53.6
North Latin America | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	21.9	20.9
North Latin America | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	62.4	63.8
North Latin America | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	22.1	22.6
North Latin America | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	40.3	41.2
North Latin America | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	182.6	185.0
North Latin America | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	10.1	10.6
North Latin America | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
North Latin America | Operating Segments | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	10.1	10.6
Asia Pacific | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	115.3	111.4
Asia Pacific | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	64.2	63.1
Asia Pacific | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	33.2	31.4
Asia Pacific | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	17.8	18.6
Asia Pacific | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	13.2	13.1
Asia Pacific | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	49.3	46.7
Asia Pacific | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	42.9	39.7
Asia Pacific | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	6.4	7.0
Asia Pacific | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	113.5	109.8
Asia Pacific | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	1.8	1.6
Asia Pacific | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Asia Pacific | Operating Segments | Other Revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 1.8	$ 1.6

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REVENUE Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Mar. 31, 2018	Jan. 01, 2018
Revenue from Contract with Customer [Abstract]
Accounts receivable, net of allowances of $79 and $128	$ 340.9	$ 349.7	$ 349.7	$ 429.0	$ 457.2
Receivables allowance	79.0	93.0		128.0	139.0
Contract liabilities	$ 58.3	$ 83.5		$ 75.5	$ 91.8

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REVENUE Narrative (Details) - USD ($) $ in Millions		3 Months Ended
	Jan. 01, 2019	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2018
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 83.5	$ 58.3	$ 75.5	$ 91.8
Performance obligations satisfied		$ 52.1	66.0
Material rights	$ 26.1		$ 47.9

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INVENTORIES (Components of Inventories) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 143.4	$ 157.8
Finished goods	388.9	384.2
Inventories	$ 532.3	$ 542.0

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LEASES - Balance Sheet Implication (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jan. 01, 2019
Leases [Abstract]
Operating right-of-use assets	$ 180.3	$ 187.5
Finance right-of-use assets	3.2	3.2
Total right-of-use assets	183.5	190.7
Operating lease liabilities	43.9	45.4
Finance lease liabilities	1.2	1.1
Total current lease liabilities	45.1	46.5
Operating lease liabilities	150.4	155.9
Finance lease liabilities	2.0	1.9
Total noncurrent lease liabilities	152.4	157.8
Total lease liability	$ 197.5	$ 204.3

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LEASES - Income and Expenses (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 16.8
Amortization of right-of-use assets	0.4
Interest on lease liabilities	0.1
Short-term leases costs	1.1
Sublease income	(3.2)
Net lease cost	$ 15.2

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LEASES - Maturity of Lease Liability (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jan. 01, 2019
Operating Leases
2019	$ 44.8
2020	49.6
2021	40.4
2022	34.7
2023	24.6
2024	17.7
Thereafter	29.3
Total lease payments	241.1
Less: Interest	46.8
Present value of lease liabilities	194.3
Finance Leases
2022	0.6
2019	1.1
2020	1.2
2021	0.8
2023	0.1
2024	0.0
Thereafter	0.0
Total lease payments	3.8
Less: Interest	0.6
Present value of lease liabilities	3.2
Total
2019	45.9
2020	50.8
2021	41.2
2022	35.3
2023	24.7
2024	17.7
Thereafter	29.3
Total lease payments	244.9
Less: Interest	47.4
Present value of lease liabilities	$ 197.5	$ 204.3

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LEASES - Lease by Due Date (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2019			$ 56.4
2020			42.0
2021			35.3
2022			31.1
2023			22.4
Thereafter			46.9
Total lease payments			234.1
Finance Leases
2019			1.1
2020			0.6
2023			0.4
2024			0.2
2025			0.1
Thereafter			0.1
Total lease payments			2.5
Total
2019			57.5
2020			42.6
2021			35.7
2022			31.3
2023			22.5
Thereafter			47.0
Total lease payments			$ 236.6
Total lease liability	$ 197.5	$ 204.3

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LEASES - Lease Term and Discount Rate (Details)	Mar. 31, 2019
Leases [Abstract]
Weighted-average remaining lease term, operating leases	5 years 3 months 18 days
Weighted-average remaining lease term, finance leases	3 years
Weighted-average discount rate, operating leases	8.30%
Weighted-average discount rate, financing leases	11.60%

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LEASES - Other Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating Cash Flows From Operating Leases	$ 16.4
Financing Cash Flows From Finance Leases	0.3
Cash Paid For Amounts Included In Measurement of Liabilities	16.7
Right-of-use Assets Obtained In Exchange For New Finance Liabilities	0.7
Right-of-use Assets Obtained In Exchange For New Operating Liabilities	$ 12.8

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EMPLOYEE BENEFIT PLANS (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0.0	$ 0.1
Interest cost	0.3	0.3
Expected return on plan assets	0.0	0.0
Amortization of prior service credit	0.0	(0.1)
Amortization of net actuarial losses	0.0	0.0
Settlements/curtailments	0.0	0.0
Net periodic benefit costs	0.3	0.3
United States | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	0.5	0.9
Interest cost	0.6	0.6
Expected return on plan assets	(0.8)	(0.8)
Amortization of prior service credit	0.0	0.0
Amortization of net actuarial losses	0.7	1.3
Settlements/curtailments	0.0	0.0
Net periodic benefit costs	1.0	2.0
Foreign Plan | Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	1.0	1.2
Interest cost	3.9	4.2
Expected return on plan assets	(7.9)	(8.4)
Amortization of prior service credit	0.0	0.0
Amortization of net actuarial losses	1.3	1.8
Settlements/curtailments	0.1	0.0
Net periodic benefit costs	$ (1.6)	$ (1.2)

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EMPLOYEE BENEFIT PLANS (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
United States
Defined Benefit Plan Disclosure [Line Items]
Employer contribution, approximately	$ 1
United States | Minimum
Defined Benefit Plan Disclosure [Line Items]
Estimated contributions for the remainder of fiscal year	5
United States | Maximum
Defined Benefit Plan Disclosure [Line Items]
Estimated contributions for the remainder of fiscal year	10
Foreign Plan | Minimum
Defined Benefit Plan Disclosure [Line Items]
Estimated contributions for the remainder of fiscal year	0
Foreign Plan | Maximum
Defined Benefit Plan Disclosure [Line Items]
Estimated contributions for the remainder of fiscal year	$ 5

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CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2018	Jun. 30, 2018	Apr. 18, 2018	Oct. 03, 2017	Jul. 31, 2013
Loss Contingencies [Line Items]
Revenue	$ 1,186.9		$ 1,393.5
Other expense, net	22.6		$ (2.5)
Assessment for 2012
Loss Contingencies [Line Items]
Assessment of contingencies, including penalties and accruing interest					$ 238.0		$ 300.0
Assessment of contingencies, including penalties and accruing interest, adjustment					$ (62.0)
Assessment for 2017
Loss Contingencies [Line Items]
Assessment of contingencies, including penalties and accruing interest						$ 232.0
IPI Tax on Cosmetics
Loss Contingencies [Line Items]
Estimated litigation liability				$ 195.0
Revenue		$ 168.0
Other expense, net		$ 27.0
Possible loss	227.0
Tax reserve	73.0
Brazil labor-related
Loss Contingencies [Line Items]
Estimated litigation liability	$ 12.0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	$ (904.5)
Other comprehensive loss other than reclassifications	(5.8)	$ 32.3
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0	0.5
Amortization of net actuarial loss and prior service cost, net of tax of $.2	1.3	2.9
Total reclassifications into earnings	1.8	2.9
Accumulated other comprehensive income, ending balance	(948.6)
Derivative losses on cash flow hedges, tax	0.0
Amortization of net actuarial loss and prior service cost, tax	0.2	0.2
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(936.2)	(829.6)
Other comprehensive loss other than reclassifications	(3.4)	32.3
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2	0.0	0.0
Total reclassifications into earnings	0.0	0.0
Accumulated other comprehensive income, ending balance	(939.6)	(797.3)
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	0.5
Other comprehensive loss other than reclassifications	(2.4)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0	0.5
Amortization of net actuarial loss and prior service cost, net of tax of $.2	0.0
Total reclassifications into earnings	0.5
Accumulated other comprehensive income, ending balance	(1.4)
Net Investment Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(4.3)	(4.3)
Other comprehensive loss other than reclassifications	0.0	0.0
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2	0.0	0.0
Total reclassifications into earnings	0.0	0.0
Accumulated other comprehensive income, ending balance	(4.3)	(4.3)
Pension and Postretirement Benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(93.8)	(95.7)
Other comprehensive loss other than reclassifications	0.0	0.0
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2	1.3	2.9
Total reclassifications into earnings	1.3	2.9
Accumulated other comprehensive income, ending balance	(92.5)	(92.8)
Investment in New Avon
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	3.4	3.4
Other comprehensive loss other than reclassifications	0.0	0.0
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $.2	0.0	0.0
Total reclassifications into earnings	0.0	0.0
Accumulated other comprehensive income, ending balance	3.4	3.4
AOCI Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(1,030.4)	(926.2)
Reclassifications into earnings:
Accumulated other comprehensive income, ending balance	$ (1,034.4)	$ (891.0)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Equity [Abstract]
Foreign exchange gains (losses)	$ 2.6	$ 5.9

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SEGMENT INFORMATION (Total Revenue and Operating Profit by Reporting Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total revenue	$ 1,186.9	$ 1,393.5
Operating (loss) profit	(3.9)	44.9
CTI restructuring initiatives	(43.2)	(10.9)
Other expense, net	22.6	(2.5)
Reportable segments
Segment Reporting Information [Line Items]
Total revenue	1,181.4	1,372.5
Operating (loss) profit	116.2	132.8
Other Operating Segments and Business Activities
Segment Reporting Information [Line Items]
Total revenue	5.5	21.0
Operating (loss) profit	0.6	2.2
All other
Segment Reporting Information [Line Items]
Unallocated global expenses	(63.1)	(79.2)
CTI restructuring initiatives	(53.5)	(10.9)
Other expense, net	(4.1)	0.0
Europe, Middle East & Africa | Reportable segments
Segment Reporting Information [Line Items]
Total revenue	458.7	568.4
Operating (loss) profit	59.2	74.4
South Latin America | Reportable segments
Segment Reporting Information [Line Items]
Total revenue	414.7	497.1
Operating (loss) profit	23.8	27.2
North Latin America | Reportable segments
Segment Reporting Information [Line Items]
Total revenue	192.7	195.6
Operating (loss) profit	16.5	20.8
Asia Pacific | Reportable segments
Segment Reporting Information [Line Items]
Total revenue	115.3	111.4
Operating (loss) profit	$ 16.7	$ 10.4

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Components of Prepaid Expenses and Other) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid taxes and tax refunds receivable	$ 126.6	$ 145.0
Receivables other than trade	56.2	69.2
Prepaid brochure costs, paper and other literature	14.4	14.9
Other	58.0	42.9
Prepaid expenses and other	$ 255.2	$ 272.0

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Components of Other Assets) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net overfunded pension plans	$ 95.8	$ 88.1
Capitalized software	88.8	89.3
Judicial deposits	72.2	74.1
Long-term receivables	79.4	73.2
Trust assets associated with supplemental benefit plans	37.4	37.0
Tooling (plates and molds associated with our beauty products)	12.0	12.6
Other	28.1	16.1
Other assets	$ 413.7	$ 390.4

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RESTRUCTURING INITIATIVES (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended		12 Months Ended
	Sep. 30, 2018	Jan. 31, 2016	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs			$ 43.2	$ 10.9
Open Up Avon
Restructuring Cost and Reserve [Line Items]
Expected annualized savings before taxes	$ 400.0
Restructuring charges and other costs			45.1	0.0
Recorded total costs to implement restructuring initiatives			188.3
Open Up Avon | Inventory/ Asset Write-offs
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs					$ 88.0
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Expected annualized savings before taxes		$ 350.0
Restructuring charges and other costs			(2.0)	10.9
Recorded total costs to implement restructuring initiatives			203.4
Other Restructuring Initiatives
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs			$ 0.1	$ 0.0

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RESTRUCTURING INITIATIVES RESTRUCTURING INITIATIVES - Summary (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	$ 43.2	$ 10.9
Open Up Avon
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	45.1	0.0
Transformation Plan
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	(2.0)	10.9
Other Restructuring Initiatives
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.1	0.0
Inventory write-off | Open Up Avon
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives			$ 88.0
Cost of Goods Sold
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	4.3	0.6
Cost of Goods Sold | Manufacturing asset write-offs
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	3.8	0.0
Cost of Goods Sold | Inventory write-off
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.5	0.6
Selling, General and Administrative Expense
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	49.2	10.3
Selling, General and Administrative Expense | Net charges for employee-related costs, including severance benefits
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	35.3	8.3
Selling, General and Administrative Expense | Implementation costs, primarily related to professional service fees
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	8.7	1.1
Selling, General and Administrative Expense | Dual running costs
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	1.8	0.0
Selling, General and Administrative Expense | Contract termination and other net benefits
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	3.3	0.2
Selling, General and Administrative Expense | Accelerated depreciation
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.1	0.7
Operating Profit
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	53.5	10.9
Other Expenses
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	$ (10.3)	$ 0.0

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RESTRUCTURING INITIATIVES RESTRUCTURING INITIATIVES - OPEN UP AVON (Details) - Open Up Avon $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	$ 20.7
2019 charges	34.6
Adjustments	(1.3)
Cash payments	(10.3)
Non-cash write-offs	6.0
Foreign exchange	(0.8)
Balance at March 31, 2019	48.9
Net charges for employee-related costs, including severance benefits
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	19.6
2019 charges	37.6
Adjustments	(1.3)
Cash payments	(9.6)
Non-cash write-offs	0.0
Foreign exchange	(0.8)
Balance at March 31, 2019	45.5
Inventory write-off
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	0.0
2019 charges	4.3
Adjustments	0.0
Cash payments	0.0
Non-cash write-offs	(4.3)
Foreign exchange	0.0
Balance at March 31, 2019	0.0
Foreign Currency Translation Adjustment
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	0.0
2019 charges	(10.3)
Adjustments	0.0
Cash payments	0.0
Non-cash write-offs	10.3
Foreign exchange	0.0
Balance at March 31, 2019	0.0
Contract Termination
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	1.1
2019 charges	3.0
Adjustments	0.0
Cash payments	(0.7)
Non-cash write-offs	0.0
Foreign exchange	0.0
Balance at March 31, 2019	$ 3.4

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RESTRUCTURING INITIATIVES - TRANSFORMATION PLAN (Liability Balances) (Details) - Transformation Plan $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	$ 38.0
2019 charges	0.0
Adjustments	(0.9)
Cash payments	(13.3)
Non-cash write-offs	0.0
Foreign exchange	0.1
Balance at March 31, 2019	23.9
Employee-Related Costs
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	34.4
2019 charges	0.0
Adjustments	(1.1)
Cash payments	(10.8)
Non-cash write-offs	0.0
Foreign exchange	0.1
Balance at March 31, 2019	22.6
Contract termination and other net benefits
Restructuring Reserve [Roll Forward]
Balance at December 31, 2018	3.6
2019 charges	0.0
Adjustments	0.2
Cash payments	(2.5)
Non-cash write-offs	0.0
Foreign exchange	0.0
Balance at March 31, 2019	$ 1.3

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RESTRUCTURING INITIATIVES (Restructuring Initiatives by Charge Type) (Details) $ in Millions	Mar. 31, 2019 USD ($)
Open Up Avon
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	$ 150.3
Estimated charges to be incurred on approved initiatives	1.0
Total expected charges on approved initiatives	151.3
Open Up Avon | Employee-Related Costs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	62.7
Estimated charges to be incurred on approved initiatives	1.0
Total expected charges on approved initiatives	63.7
Open Up Avon | Inventory/ Asset Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	92.6
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	92.6
Open Up Avon | Contract termination and other net benefits
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	5.3
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	5.3
Open Up Avon | Foreign Currency Translation Adjustments
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	(10.3)
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	(10.3)
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	173.5
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	173.5
Transformation Plan | Employee-Related Costs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	126.9
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	126.9
Transformation Plan | Inventory/ Asset Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	2.3
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	2.3
Transformation Plan | Contract termination and other net benefits
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	40.9
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	40.9
Transformation Plan | Foreign Currency Translation Adjustments
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	3.4
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	$ 3.4

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RESTRUCTURING INITIATIVES (Charges Reportable by Business Segment) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Open Up Avon
Restructuring Cost and Reserve [Line Items]
Charges incurred	$ 33.2	$ 117.1
Charges incurred to-date	150.3
Estimated charges to be incurred on approved initiatives	1.0
Total expected charges on approved initiatives	151.3
Open Up Avon | Europe, Middle East & Africa
Restructuring Cost and Reserve [Line Items]
Charges incurred	13.5	32.2
Charges incurred to-date	45.7
Estimated charges to be incurred on approved initiatives	0.1
Total expected charges on approved initiatives	45.8
Open Up Avon | South Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	12.7	36.4
Charges incurred to-date	49.1
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	49.1
Open Up Avon | North Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	2.9	27.9
Charges incurred to-date	30.8
Estimated charges to be incurred on approved initiatives	0.4
Total expected charges on approved initiatives	31.2
Open Up Avon | Asia Pacific
Restructuring Cost and Reserve [Line Items]
Charges incurred	(3.2)	14.4
Charges incurred to-date	11.2
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	11.2
Open Up Avon | Global & Other Operating Segments
Restructuring Cost and Reserve [Line Items]
Charges incurred	7.3	6.2
Charges incurred to-date	13.5
Estimated charges to be incurred on approved initiatives	0.5
Total expected charges on approved initiatives	14.0
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Charges incurred	(0.8)	23.7	$ 54.8	$ 74.4	$ 21.4
Charges incurred to-date	173.5
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	173.5
Transformation Plan | Europe, Middle East & Africa
Restructuring Cost and Reserve [Line Items]
Charges incurred	(1.1)	5.0	0.9	30.9	0.0
Charges incurred to-date	35.7
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	35.7
Transformation Plan | South Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	0.0	4.1	5.6	13.2	0.0
Charges incurred to-date	22.9
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	22.9
Transformation Plan | North Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	0.0	0.6	(0.6)	4.4	0.0
Charges incurred to-date	4.4
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	4.4
Transformation Plan | Asia Pacific
Restructuring Cost and Reserve [Line Items]
Charges incurred	0.0	0.6	(0.5)	9.1	0.0
Charges incurred to-date	9.2
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	9.2
Transformation Plan | Global & Other Operating Segments
Restructuring Cost and Reserve [Line Items]
Charges incurred	0.3	$ 13.4	$ 49.4	$ 16.8	$ 21.4
Charges incurred to-date	101.3
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	$ 101.3

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GOODWILL (Schedule of Goodwill) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill [Roll Forward]
Net balance at beginning	$ 87.4
Foreign exchange	1.2
Net balance at ending	88.6
Europe, Middle East & Africa
Goodwill [Roll Forward]
Net balance at beginning	18.0
Foreign exchange	(0.3)
Net balance at ending	17.7
South Latin America
Goodwill [Roll Forward]
Net balance at beginning	66.8
Foreign exchange	1.5
Net balance at ending	68.3
Asia Pacific
Goodwill [Roll Forward]
Net balance at beginning	2.6
Foreign exchange	0.0
Net balance at ending	$ 2.6

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FAIR VALUE FAIR VALUE ASSETS AND LIABILITIES (Details) - Fair Value, Measurements, Recurring $ in Millions	Mar. 31, 2019 USD ($)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	$ 3.9
Foreign exchange forward contracts	17.1
Total Assets	21.0
Foreign exchange forward contracts	1.9
Total Liabilities	1.9
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	3.9
Foreign exchange forward contracts	0.0
Total Assets	3.9
Foreign exchange forward contracts	0.0
Total Liabilities	0.0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	0.0
Foreign exchange forward contracts	17.1
Total Assets	17.1
Foreign exchange forward contracts	1.9
Total Liabilities	$ 1.9

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FAIR VALUE (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	$ 3.9	$ 3.8
Debt maturing within one year	(425.4)	(12.0)
Long-term debt	(1,196.4)	(1,581.6)
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	3.9	3.8
Debt maturing within one year	(433.4)	(12.0)
Long-term debt	(1,207.1)	(1,460.2)
Foreign exchange forward contracts | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign exchange forward contracts	15.2	(5.1)
Foreign exchange forward contracts | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign exchange forward contracts	$ 15.2	$ (5.1)

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS FAIR VALUE (Details) - Fair Value, Measurements, Recurring $ in Millions	Mar. 31, 2019 USD ($)
Derivative [Line Items]
Foreign exchange forward contracts, asset	$ 17.1
Foreign exchange forward contracts, liability	1.9
Prepaid expenses and other | Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, asset	0.0
Prepaid expenses and other | Not Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, asset	17.1
Accounts payable | Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, liability	1.6
Accounts payable | Not Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, liability	$ 0.3

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018	Mar. 31, 2012 USD ($) derivative_instrument
Derivative [Line Items]
Total exposure to floating rate interest rates	26.00%		1.00%
Foreign Exchange Contract
Derivative [Line Items]
Notional amounts of foreign currency exchange contracts	$ 1,236,200,000
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments	25,000,000.0	$ 900,000
March 2012 Interest-Rate Swap Termination
Derivative [Line Items]
Number of interest-rate swap agreements terminated | derivative_instrument				2
Notional amount				$ 350,000,000
Deferred gain (loss) on discontinuation of interest rate fair value hedge				$ 46,100,000
Amortization of interest rate swap gains	0	$ 1,300,000
Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Notional amounts of foreign currency exchange contracts	$ 26,800,000

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DEBT (Details)	1 Months Ended		3 Months Ended
	Feb. 28, 2019 EUR (€)	Jun. 30, 2015 USD ($)	Mar. 31, 2019 USD ($)		Mar. 31, 2019 EUR (€)	Dec. 31, 2018 USD ($)	[1]	Mar. 31, 2018 USD ($)	[2]	Dec. 31, 2017 USD ($)	[1]	Aug. 31, 2016 USD ($)	Mar. 31, 2013 USD ($)
Debt Instrument [Line Items]
Cash and restricted cash on hand			$ 431,000,000.0	[1],[2]		$ 536,400,000		$ 772,500,000		$ 881,500,000
2015 Facility
Debt Instrument [Line Items]
Term of facility		5 years
Line of credit facility		$ 400,000,000.0
Write off debt issuance costs			$ 2,000,000
2013 Notes
Debt Instrument [Line Items]
Increase in interest rate for every one-notch downgrade of long-term credit ratings below investment grade			0.25%
Maximum aggregate increase in interest rate related to downgrade of long-term credit ratings below investment grade			2.00%
Four Point Six Zero Percent Notes, Due February Two Thousand Twenty Two [Member] | 2019 Facility
Debt Instrument [Line Items]
Term of facility	3 years
Line of credit facility	€ 200,000,000		$ 225,000,000
Interest rate	4.60%
Issuance costs			10,000,000
Remaining borrowing capacity | €					€ 175,000,000
Four Point Six Zero Percent Notes, Due March Two Thousand Twenty
Debt Instrument [Line Items]
Interest rate													4.60%
Remaining borrowing capacity | €					€ 175,000,000
Principal amount													$ 500,000,000.0
Amount outstanding under revolving credit facility			386,900,000
Five Point Zero Percent Notes, Due March Two Thousand Twenty-Three
Debt Instrument [Line Items]
Interest rate													5.00%
Principal amount													$ 500,000,000.0
Six Point Nine Five Percent Notes, Due March Two Thousand Forty-Three
Debt Instrument [Line Items]
Interest rate													6.95%
Principal amount													$ 250,000,000.0
Seven Point Eight Seven Five Percent Notes, Due August Two Thousand Twenty Two
Debt Instrument [Line Items]
Interest rate												7.875%
Principal amount												$ 500,000,000.0
AIO
Debt Instrument [Line Items]
Standby letters of credit, recorded liability			$ 28,000,000

[1] Includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets at the end of the year in 2018

[2] Includes restricted cash related to the sale of Avon Manufacturing (Guangzhou), Ltd. at March 31, 2019

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate, excluding discrete items	24.30%	26.50%
Income taxes	$ 19.5	$ 31.5
Effective income tax rate	(433.30%)	302.90%
Accrual of income tax benefits	$ (3.5)
Change in income tax reserve	(3.7)	$ 9.2
Other net expense (benefits)	$ (0.2)	$ 1.2

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SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions		3 Months Ended
	Sep. 30, 2019	Mar. 31, 2019	Mar. 31, 2018
Subsequent Event [Line Items]
Cash to be received		$ 46.4	$ 0.0
New Avon
Subsequent Event [Line Items]
Percentage of ownership		19.90%
Scenario, Forecast
Subsequent Event [Line Items]
Cash to be received	$ 24.9
Scenario, Forecast | New Avon
Subsequent Event [Line Items]
Cash to be received	$ 125.0

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Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (41,100,000)
Retained Earnings, Appropriated [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (41,100,000)