DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

3 Months Ended

Mar. 31, 2020

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. The agreements resulted in 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 Company, formerly New Avon, a privately-held company majority-owned and managed by Cerberus NA Investor LLC (an affiliate of Cerberus). The Company retained an investment of 19.9% ownership interest in New Avon. These transactions closed on March 1, 2016; from that date, resolution of contingent liabilities relating to Avon's ownership and operation of the North America business prior to its separation from the Company into New Avon have been treated as discontinued operations. Refer to the Divestitures section below for information relating to the subsequent sale of New Avon.

The Company incurred costs during the three months ended March 31, 2020 and 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. 

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,
	2020		2019
Selling, general and administrative expenses	$	4.7	$	9.5
Operating loss	$	(4.7)	$	(9.5)
Loss from discontinued operations, net of tax	$	(4.7)	$	(9.5)

Assets Held for Sale

The major classes of assets comprising held for sale assets on the Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 are shown in the following table.

	March 31, 2020	December 31, 2019
Current held for sale assets
Property, Plant and Equipment (net)	12.5	22.6

At December 31, 2019, in line with the Open Up Avon strategy the Company classified five properties which met the held for sale criteria under ASC 360 as 'held for sale'. During the first quarter of 2020, the Company decided not to proceed with the sale of one property in the Avon International segment and one property in the Avon Latin America segment with a carrying value of $9.1. As a result, the Company reclassified such properties from held for sale to property, plant and equipment during the first quarter of 2020. At the time of reclassification, we recorded a true up on depreciation resulting in an immaterial impact on our Consolidated Statements of Operations. At March 31, 2020, assets held for sale include three properties in Avon International segment.

Divestitures

China Wellness Plant

In March 2020, we signed an agreement to sell the China Wellness Plant for a total selling price of $6.6 before expenses. Negotiations have been ongoing during the first quarter of 2020 and we expect this transaction to close during the third quarter of 2020. In the first quarter of 2020 we received a deposit of $1.3, presented as investing activities in the Consolidated Statement of Cash Flows.

China manufacturing

On February 15, 2019, we completed the sale to TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd. ("TheFaceShop"), of all of the equity interests in Avon Manufacturing (Guangzhou), Ltd. for a total selling price of $71.0, less expenses of approximately $1.1. The selling price included $23.5 relating to outstanding intercompany loans payable to Avon Manufacturing (Guangzhou), Ltd. from other Avon subsidiaries that was presented as financing activities in the Consolidated Statement of Cash Flows, this was subsequently settled in April 2019. The cash proceeds of $46.4, net of loan amounts, are

presented as investing activities in the Consolidated Statement of Cash Flows, which includes $7.6 of restricted cash as of December 31, 2019, which has been reclassified to short term restricted cash in the three month period ended March 31, 2020. 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.