10-Q

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

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

For the quarterly period ended September 30, 2020

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)

+44-1904-232425

(Registrant’s telephone number, including area code)

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
None	None	None

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  ☒   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  ☒    No  ☐

Note: The registrant is a voluntary filer of reports required to be filed by certain companies under Sections 13 or 15(d) of the Securities Exchange Act of 1934.

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	☐	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  ☒

The number of shares of Common Stock (par value $0.01) outstanding at September 30, 2020 was 101.34.

The registrant meets the conditions sets forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

TABLE OF CONTENTS

		Page Numbers
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Operations Three Months Ended September 30, 2020 and September 30, 2019	3
	Consolidated Statements of Operations Nine Months Ended September 30, 2020 and September 30, 2019	4
	Consolidated Statements of Comprehensive Income (Loss) Three & Nine Months Ended September 30, 2020 and September 30, 2019	5
	Consolidated Balance Sheets September 30, 2020 and December 31, 2019	7
	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2020 and September 30, 2019	8
	Consolidated Statement of Changes in Shareholders’ Deficit Three & Nine Months Ended September 30, 2020 and September 30, 2019	10
	Notes to Consolidated Financial Statements	12 - 38
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39 - 55
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	56
Part II. Other Information
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 5.	Other Information	60
Item 6.	Exhibits	60
	Signature	61

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
(In millions)	September 30, 2020		September 30, 2019
Product sales	$	950.1	$	1,117.2
Other revenue	47.0		70.8
Revenue from affiliates of Natura &Co	.9		—
Total revenue	998.0		1,188.0
Costs, expenses and other:
Cost of sales	(440.0)		(468.2)
Selling, general and administrative expenses	(534.2)		(622.1)
Operating income	23.8		97.7
Interest expense	(37.4)		(32.0)
Loss on extinguishment of debt and credit facilities	(4.1)		(8.1)
Interest income	.1		2.1
Other (expense) income, net	(1.0)		57.9
Gain on sale of business/assets	1.4		26.8
Total other (expenses) income	(41.0)		46.7
(Loss) income from continuing operations, before income taxes	(17.2)		144.4
Income taxes	(11.8)		(31.5)
(Loss) income from continuing operations, net of tax	(29.0)		112.9
Loss from discontinued operations, net of tax	(4.5)		(6.3)
Net (loss) income	(33.5)		106.6
Net loss attributable to noncontrolling interests	.7		.3
Net (loss) income attributable to Avon	$	(32.8)	$	106.9

The accompanying notes are an integral part of these statements.

3

AVON PRODUCTS, INC.

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Nine Months Ended
(In millions)	September 30, 2020		September 30, 2019
Product sales	$	2,423.0	$	3,342.2
Other revenue	136.1		207.5
Revenue from affiliates of Natura &Co	2.7		—
Total revenue	2,561.8		3,549.7
Costs, expenses and other:
Cost of sales	(1,111.5)		(1,482.7)
Selling, general and administrative expenses	(1,578.4)		(1,942.7)
Operating (loss) income	(128.1)		124.3
Interest expense	(100.9)		(95.9)
Loss on extinguishment of debt and credit facilities	(11.9)		(10.1)
Interest income	1.6		5.3
Other (expense) income, net	(20.1)		87.3
Gain on sale of business/assets	1.5		50.3
Total other (expenses) income	(129.8)		36.9
(Loss) income from continuing operations, before income taxes	(257.9)		161.2
Income taxes	(26.7)		(78.2)
(Loss) income from continuing operations, net of tax	(284.6)		83.0
Loss from discontinued operations, net of tax	(14.3)		(29.0)
Net (loss) income	(298.9)		54.0
Net loss attributable to noncontrolling interests	2.3		.7
Net (loss) income attributable to Avon	$	(296.6)	$	54.7

The accompanying notes are an integral part of these statements.

4

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended
(In millions)	September 30, 2020		September 30, 2019
Net (loss) income	$	(33.5)	$	106.6
Other comprehensive loss:
Foreign currency translation adjustments	(65.7)		—
Unrealized gain (loss) on revaluation of long-term intercompany balances	40.4		(19.1)
Change in unrealized loss on cash flow hedges, net of taxes of $0.0 and $0.0	—		.1
Adjustments and amortization of net actuarial loss and prior service cost, net of taxes of $0.2 and $0.2	4.4		1.6
Sale of New Avon	—		(3.4)
Total other comprehensive loss, net of income taxes	(20.9)		(20.8)
Comprehensive (loss) income	(54.4)		85.8
Less: comprehensive loss attributable to noncontrolling interests	.5		.3
Comprehensive (loss) income attributable to Avon	$	(53.9)	$	86.1

The accompanying notes are an integral part of these statements.

5

	Nine Months Ended
(In millions)	September 30, 2020		September 30, 2019
Net (loss) income	$	(298.9)	$	54.0
Other comprehensive loss:
Foreign currency translation adjustments	(149.7)		1.3
Unrealized gain (loss) on revaluation of long-term intercompany balances	13.8		(19.4)
Change in unrealized gain (loss) on cash flow hedges, net of taxes of $0.0 and $0.0	.6		(2.5)
Adjustments and amortization of net actuarial loss and prior service cost, net of taxes of $0.6 and $0.5	8.4		4.7
Sale of New Avon	—		(3.4)
Total other comprehensive loss, net of income taxes	(126.9)		(19.3)
Comprehensive (loss) income	(425.8)		34.7
Less: comprehensive loss attributable to noncontrolling interests	2.3		.8
Comprehensive (loss) income attributable to Avon	$	(423.5)	$	35.5

The accompanying notes are an integral part of these statements.

6

AVON PRODUCTS, INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2019 and September 30, 2020 (Unaudited)

(In millions)	September 30, 2020		December 31, 2019
Assets
Current Assets
Cash and cash equivalents	$	321.1	$	650.6
Restricted cash	7.6		2.9
Accounts receivable, net	261.2		280.2
Receivables from affiliates of Natura &Co	3.3		—
Inventories	461.1		452.3
Prepaid expenses and other	210.2		252.1
Assets held for sale	8.5		22.6
Total current assets	1,273.0		1,660.7
Property, plant and equipment, at cost	1,089.9		1,203.0
Less accumulated depreciation	(677.0)		(715.0)
Property, plant and equipment, net	412.9		488.0
Right-of-use assets	153.8		175.4
Goodwill	75.0		86.2
Deferred tax asset	120.2		161.2
Other assets	417.4		514.8
Total assets	$	2,452.3	$	3,086.3
Liabilities, Series C Convertible Preferred Stock and Shareholders’ Deficit
Current Liabilities
Debt maturing within one year	$	30.2	$	1.8
Loans from affiliates of Natura &Co	47.2		—
Accounts payable	660.9		723.3
Payables to affiliates of Natura &Co	92.8		—
Dividends payable	—		8.7
Accrued compensation	92.3		114.5
Other accrued liabilities	314.6		410.7
Sales taxes and taxes other than income	104.2		118.7
Income taxes	1.1		7.4
Current liabilities of discontinued operations	19.2		16.0
Total current liabilities	1,362.5		1,401.1
Long-term debt	1,566.5		1,590.4
Long-term operating lease liability	123.4		143.3
Employee benefit plans	127.6		137.6
Long-term income taxes	104.6		128.7
Other liabilities	96.7		90.5
Total liabilities	3,381.3		3,491.6
Series C convertible preferred stock	—		578.5
Shareholders’ Deficit
Common stock	—		192.6
Additional paid-in capital	527.7		2,321.2
Retained earnings	(294.3)		2,138.9
Accumulated other comprehensive loss	(1,166.9)		(1,040.0)
Treasury stock, at cost	—		(4,603.3)
Total Avon shareholders’ deficit	(933.5)		(990.6)
Noncontrolling interests	4.5		6.8
Total shareholders’ deficit	(929.0)		(983.8)
Total liabilities, series C convertible preferred stock and shareholders’ deficit	$	2,452.3	$	3,086.3

The accompanying notes are an integral part of these statements.

7

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
(In millions)	September 30, 2020		September 30, 2019
Cash Flows from Operating Activities
Net (loss) income	$	(298.9)	$	54.0
Loss from discontinued operations, net of tax	(14.3)		(29.0)
(Loss) income from continuing operations, net of tax	(284.6)		83.0
Adjustments to reconcile net (loss) income from continuing operations to net cash used by operating activities:
Depreciation	43.4		54.6
Amortization	19.3		18.7
Provision for doubtful accounts	64.2		86.9
Provision for obsolescence	28.2		22.2
Share-based compensation	21.8		8.9
Foreign exchange losses (gains)	3.0		(42.8)
Deferred income taxes	21.8		21.7
Impairment loss on assets	1.8		15.4
Gain on sale of business / assets	(1.5)		(50.3)
Certain Brazil indirect taxes	—		(118.3)
Other	22.1		16.7
Changes in assets and liabilities:
Accounts receivable	(84.0)		(56.1)
Inventories	(84.1)		10.1
Prepaid expenses and other	(9.0)		34.1
Accounts payable and accrued liabilities	(85.7)		(232.8)
Income and other taxes	2.8		5.5
Noncurrent assets and liabilities	13.9		(18.9)
Net cash used by operating activities of continuing operations	(306.6)		(141.4)
Cash Flows from Investing Activities
Capital expenditures	(30.0)		(42.8)
Disposal of assets	1.8		1.8
Net proceeds from sale of business / assets	11.3		99.9
Other investing activities	.4		1.0
Net cash (used) provided by investing activities of continuing operations	(16.5)		59.9
Cash Flows from Financing Activities
Cash dividends	(8.6)		—
Debt, net (maturities of three months or less)	12.5		(6.9)
Proceeds from debt	80.8		400.0
Repayment of debt	(48.3)		(275.8)
Repurchase of common stock	(.4)		(1.0)
Costs associated with debt issue / repayment	(3.8)		(25.4)
Settlement of stock options	(25.8)		—
Settlement of derivative contracts	19.5		36.1
Proceeds from sale of PIS/COFINS tax credits	—		19.4
Other financing activities	—		.5
Net cash provided by financing activities of continuing operations	25.9		146.9
Cash Flows from Discontinued Operations
Net cash used by operating activities of discontinued operations	(11.2)		(14.8)
Net cash used by discontinued operations	(11.2)		(14.8)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(23.9)		(15.2)

8

	Nine Months Ended
(In millions)	September 30, 2020		September 30, 2019
Net decrease in cash and cash equivalents, and restricted cash	(332.3)		35.4
Cash and cash equivalents, and restricted cash at beginning of period(1)	661.0		536.4
Cash and cash equivalents, and restricted cash at end of period (1)	$	328.7	$	571.8

The accompanying notes are an integral part of these statements.

(1) The balance at the beginning of the nine month period ended September 30, 2019 includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets.The balance at the end of the nine month period ended Sept 30, 2019 and the balance at the beginning of the nine month period ended September 30, 2020 includes Long-term restricted cash of $7.5 which is presented in other assets in our Consolidated

9

AVON PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(Unaudited)

(In millions)	Common Stock			Additional		Retained		Accumulated Other		Treasury Stock			Noncontrolling
	Shares	Amount		Paid-In Capital		Earnings		Comprehensive Loss		Shares	Amount		Interests		Total
Balances at December 31, 2019	770.0	$	192.6	$	2,321.2	$	2,138.9	$	(1,040.0)	319.9	$	(4,603.3)	$	6.8	$	(983.8)
Credit Losses Cumulative catch up	—	—		—		(2.0)		—		—	—		—		(2.0)
Net loss	—	—		—		(171.0)		—		—	—		(.9)		(171.9)
Other comprehensive loss	—	—		—		—		(104.3)		—	—		(.2)		(104.5)
Conversion of Series C convertible preferred stock (1)	—	—		—		(710.8)		—		(87.0)	1,197.6		—		486.8
Exercise/ vesting/ expense of share-based compensation	—	(.2)		(9.7)		—		—		—	—		—		(9.9)
Exchange of common stock (2)	(770.0)	(192.4)		(1,788.1)		(1,425.2)		—		(232.9)	3,405.7		—		—
Balances at March 31, 2020	—	$	—	$	523.4	$	(170.1)	$	(1,144.3)	—	$	—	$	5.7	$	(785.3)
Net loss	—	—		—		(92.8)		—		—	—		(.7)		(93.5)
Other comprehensive loss	—	—		—		—		(1.5)		—	—		—		(1.5)
Exercise/ vesting/ expense of share-based compensation	—	—		.8		—		—		—	—		—		.8
Balances at June 30, 2020	—	$	—	$	524.2	$	(262.9)	$	(1,145.8)	—	$	—	$	5.0	$	(879.5)
Net loss	—	—		—		(32.8)		—		—	—		(.7)		(33.5)
Gain on common control transaction	—	—		—		1.4		—		—	—		—		1.4
Other comprehensive income	—	—		—		—		(21.1)		—	—		.2		(20.9)
Exercise/ vesting/ expense of share-based compensation	—	—		3.5		—		—		—	—		—		3.5
Balances at September 30, 2020 (3)	—	$	—	$	527.7	$	(294.3)	$	(1,166.9)	—	$	—	$	4.5	$	(929.0)

(1) On December 30, 2019, an affiliate of Cerberus Capital Management, L.P. ("Cerberus") elected to convert 435,000 shares of Series C Preferred Stock into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, conditioned on the Conversion Condition (as defined below). See Note 12, Series C Convertible Preferred Stock.

(2) In January 2020, subsequent to the Transaction, the Company restated its certificate of incorporation to effect a change in capitalization of the Company by changing the number of authorized shares of stock from 1,525,000,000 shares (of which (i) 1,500,000,000 shares, par value $0.25 per share, were common stock and (ii) 25,000,000 shares, par value $1.00 per share, were preferred stock) to 1,000 shares of common stock, par value $0.01 per share. As a result of the Merger, all of the issued and outstanding common stock of the Company, being 550,890,788, were canceled and converted. See Note 18, Mergers     with Natura Cosméticos S.A.,.

(3) The number of shares of Common Stock (par value $0.01 per share) outstanding at September 30, 2020 was 101.34.

10

(In millions)	Common Stock			Additional		Retained		Accumulated Other		Treasury Stock			Noncontrolling
	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)		—		—	—		(.8)		(33.5)
Other comprehensive loss	—	—		—		—		(4.0)		—	—		.1		(3.9)
Dividends accrued - Series C convertible preferred stock	—	—		—		(6.2)		—		—	—		—		(6.2)
Exercise/ vesting/ expense of share-based compensation	1.3	.3		(1.5)		—		—		—	—		—		(1.2)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.0	—	—		—		—		—		—	—		.1		.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)
Net (loss) income	—	—		—		(19.5)		—		—	—		.4		(19.1)
Other comprehensive income	—	—		—		—		5.5		—	—		—		5.5
Dividends accrued - Series C convertible preferred stock	—	—		—		(6.4)		—		—	—		—		(6.4)
Exercise/ vesting/ expense of share-based compensation	—	—		5.4		—		—		—	—		—		5.4
Repurchase of common stock	.1	.1		—		—		—		.5	(1.0)		—		(1.0)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.1	—	—		—		—		—		—	—		(.3)		(.3)
Balances at June 30, 2019	763.2	$	190.7	$	2,307.5	$	2,169.5	$	(1,028.9)	319.9	$	(4,603.3)	$	7.2	$	(957.3)
Net income (loss)	—	—		—		106.9		—		—	—		(.3)		106.6
Other comprehensive loss	—	—		—		—		(20.8)		—	—		—		(20.8)
Dividends accrued - Series C convertible preferred stock	—	—		—		(6.4)		—		—	—		—		(6.4)
Exercise/ vesting/ expense of share-based compensation	.3	.3		3.0		—		—		—	—		—		3.3
Repurchase of common stock	(.1)	(.6)		—		—		—		—	—		—		(.6)
Balances at September 30, 2019	763.4	190.4		2,310.5		2,270.0		(1,049.7)		319.9	(4,603.3)		6.9		(875.2)

The accompanying notes are an integral part of these statements.

11

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 2019 Annual Report on Form 10-K ("2019 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. On January 3, 2019, we completed the Agreement and Plan of Mergers with Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) ("Natura Cosméticos"), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima) ("Natura &Co Holding"), and two subsidiaries of Natura &Co Holding S.A. ("Natura &Co") pursuant to which, in a series of transactions (the "Transaction"). Upon the consummation of the Transaction, the Company became a wholly owned subsidiary of Natura &Co Holding and Avon common stock ceased to be traded on the NYSE. As a result, we have excluded disclosures of Earnings per Share from our consolidated financial statements. For additional information, see Note 18, Agreement and Plan of Mergers with Natura Cosméticos S.A.

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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 2019 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;

•the impact of changes in tax legislation, 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.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation in the Consolidated Balance Sheets. As of September 30, 2020 and December 31, 2019, the Company had tooling, net of amortization of $8.0 and $12.9, respectively. The tooling balance as of December 31, 2019, representing cost of $94.4 and accumulated depreciation of $81.5, previously included in other long-term assets has been reclassified to property, plant and equipment to conform to the current year presentation.

As of September 30, 2020, we identified an immaterial classification error in the Consolidated Statement of Cash Flows relating to the nine month period ended September 30, 2019 with respect to cash flows from the settlement of derivative contracts. Our accounting policy is to classify derivative cash flows as operating, investing or financing consistent with the nature of the underlying hedged item. However, we have identified that cash flows relating to derivative contracts that economically hedge foreign exchange gains and losses on intercompany loans have been incorrectly classified as operating activities rather than financing activities. We have corrected this reclassification error through a revision to the nine month period ended September 30, 2019 to reclassify cash inflows of $36.1 from the settlement of derivative contracts from operating activities to financing activities.

12

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

COVID-19 pandemic

A novel strain of coronavirus (COVID-19) was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. Due to the uncertain and rapidly evolving nature of current conditions around the world, the impacts of COVID-19 most of which are beyond the Company’s control, continue to evolve, and the outcome is uncertain. We are therefore unable to predict accurately the impact that COVID-19 will have on our business going forward.

During the second quarter of 2020, COVID-19 had a significant impact on our operations as many markets were subject to lockdown restrictions which limited our ability to recruit and enroll Representatives, operate manufacturing facilities and distribution centers and to process and deliver orders. Most markets showed signs of recovery in the third quarter of 2020 but it is unclear whether this recovery will continue in the remaining of 2020 or if new lockdown measures currently being imposed in parts of Europe will dampen the recovery. We continue to closely monitor the evolution of the COVID-19 pandemic, deciding on actions to minimize impacts, ensure the continuity of operations and promote the safety and health of all the people involved. Since the beginning of the virus spread and the consequent restrictive measures imposed by governments, such as closing non-essential trade and restricting the movement of people across borders, the Company has implemented some measures in all its operations, in line with the official measures:

•Incentives to remote working and adoption of essentiality criteria to limit industrial and logistical operations;

•Adoption of new safety measures for operational workers, such as the use of masks and procedures to distance people between processes;

•Re-planning of sales cycles, prioritizing personal care items;

•Speeding up the digitization of sales channels;

•We communicated social distancing protocols to our Representatives around the world;

•Change in the minimum order criteria, start kit and increased deadline for payment of Representatives - original practices are being restored as the markets are recovering from pandemic; and

•Daily monitoring of suppliers to ensure supply.

As of the date of this report, we are unable to estimate the long term impact of the economic paralysis arising from efforts to curb the spread of the COVID-19 virus and the expected reduction in activity on our business, results of operations and financial condition. We will continue to review our revenue, investments, expenses and cash outflows, as well as adjusting our relationships with suppliers. Furthermore, the actions outlined above are continuously being re-evaluated in light of global developments relating to COVID-19.

Cyber incident

In June 2020, the Company became aware that it was exposed to a cyber incident in its Information Technology ("IT") environment which interrupted some systems and partially affected the Company's operations. We engaged leading external cyber security and IT general controls specialists, launched a comprehensive containment and remediation effort, and started a forensic investigation. By mid-August, the Company had re-established all of its core business processes and resumed operations in all of its markets, including all of its distribution centers.

The cyber incident had a significant impact on our revenue performance for the second quarter of 2020, with the majority of the impact (approximately $87 million in sales) being shifted to the third quarter of 2020 as the Company fulfilled the order backlog created. The incremental expense incurred as a result of the cyber incident was not material.

Although we have no indication that the accuracy and completeness of any financial information was impacted as a result of the incident and the Company has performed extensive procedures to validate such accuracy and completeness, we believe that, if the incident had gone differently, it could have potentially resulted in a material impact to the Company’s financial statements.

Going concern

Considering the uncertain nature of any possible future COVID-19 impacts which are beyond the Company’s control, we might expect some negative impact on revenue from COVID-19 to continue for the remainder of 2020 and into 2021, which will, in turn, result in lower cash generation from activities. If the downturn is deeper or for longer than we anticipate, the Company could take certain further actions to ease the pressure of certain cash outflows, such as reducing discretionary expenditure, selling non-core assets, accessing government pandemic initiatives or arranging borrowing facilities with third-party banks and affiliate companies. Our projections indicate that we should have sufficient liquidity to meet our obligations to parties other than Natura &Co and its affiliates for a period of not less than 12 months from the issuance date of the Consolidated Financial Statements. The Company has received an irrevocable commitment from Natura &Co Holding that it will provide sufficient financial support if and when needed to enable the Company to meet its obligations as they come due in the normal course of business for a period of not less than 12 months from the date issuance of the Consolidated Financial Statements.

13

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Accounting Standards Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In June 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 adopted this new accounting guidance effective January 1, 2020, using a modified retrospective transition approach. The adoption did not have a material impact on our condensed consolidated financial statements and disclosures and did not significantly impact the Company’s accounting policies or estimation methods related to the allowance for doubtful accounts. The adoption resulted in a cumulative effect decrease to retained earnings of approximately $2 to reflect a change in the allowance for doubtful accounts.

Accounting Standards to be Implemented

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes, which is intended to simplify the accounting standard and improve the usefulness of information provided in the financial statements. We intend to implement this new accounting guidance effective January 1, 2021, however early adoption is permitted. We are currently assessing the impact this new accounting guidance will have on our financial statements.

ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU 2018-14 are effective for public business entities for annual periods ending after December 15, 2020. Early adoption is permitted. An entity should apply the amendments in ASU 2018-14 on a retrospective basis to all periods presented. We do not expect this new accounting guidance to have a material impact on the disclosures in our financial statements.

2. 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, LLC ("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. In April 2019, we signed an agreement with LG Household & Health Care Ltd. to sell our 19.9% ownership interest in New Avon, which was completed during August 2019.

The Company incurred costs during the three and nine months ended September 30, 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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Selling, general and administrative expenses	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Operating loss	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Loss from discontinued operations, net of tax	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)

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AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Assets Held for Sale

The major classes of assets comprising held for sale assets on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 are shown in the following table.

	September 30, 2020	December 31, 2019
Current held for sale assets
Property, Plant and Equipment (net)	8.5	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.

During the second quarter of 2020, the Company decided to proceed with the sale of the one property in the Avon Latin America segment with a carrying value of $3.0. As a result, the Company reclassified the property from property, plant and equipment to held for sale and depreciation has ceased.

At September 30, 2020, assets held for sale include one property in Avon International segment and one property in the Avon Latin America Segment.

Divestitures

Avon Shanghai

In August 2020, we signed an agreement to sell Avon Management Shanghai ("Avon Shanghai") to an affiliate of Natura &Co for a selling price of $2.9. In August 2020, we completed the sale of the entity and received proceeds of $2.9. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows. As the sale was to an affiliate under common control of Natura &Co, the gain on sale of $1.4 was recorded directly to Retained earnings.

Hungary Distribution Center in Gödöllő

In April 2020, we signed an agreement to sell the Hungary Distribution Center in Gödöllő for a selling price of $3.4, and received a deposit of $.3. In June 2020, we completed the sale of the asset and the remaining proceeds of $3.1 were received. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows.

In the second quarter of 2020, we recorded a gain of $.1 before and after tax, which is reported separately in the Consolidated Statements of Operations. The gain represents the difference between the proceeds and the carrying value of the Hungary Distribution Center on the date of sale.

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. In the six-month period ended June 30, 2020 we received a cash deposit for the selling price of $6.6, which included $3.3 of restricted cash held in escrow.

In August 2020, we completed the sale of the China Wellness Plant and $3.3 of restricted cash in escrow was transferred to Avon. In the third quarter of 2020, we recorded a gain of $1.4 before tax, which is reported separately in the Consolidated Statements of Operations. The gain represents the difference between the net proceeds (after associated expenses) and the carrying value of the China Wellness Plant on the date of sale.

Rye Office

On June 26, 2019, we completed the sale of the Rye office for a selling price of $23.2, less expenses of approximately $.8, resulting in proceeds of $22.4. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows.

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AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

In the second quarter of 2019, we recorded a gain on sale of $9.9 before and after tax, which is reported separately in the Consolidated Statements of Operations. The gain recorded represents the difference between the proceeds and the carrying value of the Rye office on the date of sale.

Malaysia Maximin

On May 9, 2019, we completed the sale of all of the equity interests in Maximin Corporation Sdn Bhd ("Malaysia Maximin") for a total purchase price of $7.8. The cash proceeds of $7.6, net of expenses, are presented within investing activities in the Consolidated Statement of Cash Flows.

In the second quarter of 2019, we recorded a gain on sale of $3.3 before tax, which is reported separately in the Consolidated Statements of Operations, and $3.0 after tax. The gain recorded represents the difference between the proceeds and the carrying value of Malaysia Maximin on the date of sale.

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 $7.5 of restricted cash as of December 31, 2019. This was subsequently 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.

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. During August, 2019, we completed the sale of New Avon for a selling price of $24.5. Expenses were approximately $1.1, resulting in cash proceeds of $23.4. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows.

In the third quarter of 2019, we recorded a gain on sale of $26.8 before and after tax, which is reported in the Consolidated Statements of Operations as Gain on sale of business/asset. The gain recorded represents the total proceeds and the release of accumulated other comprehensive income of $3.4.

16

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

3. RELATED PARTY TRANSACTIONS

On January 3, 2020, the Company became a wholly owned subsidiary of Natura &Co Holding. From this point Natura &Co Holding, its subsidiaries and affiliates became related parties of the Company.

The following tables present the related party transactions with Natura &Co and its affiliates, New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. On August 14, 2019, we sold our investment in New Avon to LG Household & Health Care Ltd. Upon completion of the sale, New Avon was no longer a related party. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Statement of Operations Data
Revenue from sale of product to New Avon(1)	N/A		$	3.5	N/A		$	12.0
Gross profit from sale of product to New Avon(1)	N/A		$	.1	N/A		$	.2
Cost of sales for purchases from New Avon(2)	N/A		$	.7	N/A		$	2.1
Revenue from affiliates of Natura &Co(8)	$	.9	$	—	$	2.7	$	—
Gross profit from affiliates of Natura &Co(8)	$	.1	$	—	$	.5	$	—
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases	N/A		$	—	N/A		$	(.2)
Project management team(3)	N/A		$	.6	N/A		$	4.0
Interest income from Instituto Avon(4)	$	—	$	—	$	.1	$	.1
Interest expense on Loan from affiliates of Natura &Co(7)	$	1.3	$	—	$	1.6	$	—

	September 30, 2020		December 31, 2019
Balance Sheet Data
Receivables due from Instituto Avon(4)	$	1.1	$	2.1
Receivables due from affiliates of Natura &Co(8)	$	3.3	$	—
Payables due to an affiliate of Cerberus(5)	N/A		$	2.1
Payables due to affiliates of Natura &Co(6)	$	92.8	$	—
Loans from affiliates of Natura &Co(7)	$	47.2	$	—

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd, from that point New Avon was no longer a related party. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement discussed in footnote (1) above. The Company purchased $.5 from New Avon associated with this agreement during the three months ended September 30, 2019, and recorded $.7 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended September 30, 2019. The Company purchased $1.6 from New Avon associated with this agreement during the nine months ended September 30, 2019, and recorded $2.1 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the nine months ended September 30, 2019. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd; from that point New Avon was no longer a related party.

(3) The Company also entered into agreements with an affiliate of Cerberus, which provided for the secondment of Cerberus affiliate personnel to the Company's project management team responsible for assisting with the execution of the

17

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

implementation of the Company’s strategic initiatives. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party. During the three and nine months ended September 30, 2019 the Company recorded net costs of $.6 and $4.0, respectively, in selling, general and administrative expenses associated with these agreements.

(4) 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 reais) for an unsecured five-year term at a fixed interest rate of 7% per annum, to be paid back in five 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 was 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.

(5) Payables due to an affiliate of Cerberus related to the agreement for the project management team, classified within other accrued liabilities in our Consolidated Balance Sheets. Upon the consummation of Transaction with Natura in January 2020, Cerberus ceased their involvement in Company operations and is no longer a related party.

(6) Upon consummation of the Transaction on January 3, 2020, the Company was acquired by Natura &Co Holding and became a wholly owned direct subsidiary of Natura &Co Holding. Payables due to affiliates of Natura &Co Holding of $92.8 at September 30, 2020 include $91.5 due to Natura &Co Holding related to the amount of accrued dividend paid by Natura &Co Holding in relation to Series C preferred stock. On December 30, 2019, Cerberus elected to convert 435,000 shares of series C preferred stock, representing all shares of series C preferred stock outstanding, into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, pursuant to the holder of the Company’s series C preferred stock’s rights under the Company’s certificate of incorporation. The foregoing election was conditioned upon the filing of the certificates of merger with respect to the First Merger (the "Conversion Condition"). Upon consummation of the Transaction in January 2020, the Company’s common stock was converted to Natura &Co Holding common stock. In January 2020 Natura &Co Holding paid the accrued unpaid dividends on the shares of series C preferred stock in an amount equal to U.S. $91.5 to Cerberus. See Note 12, Series C Convertible Preferred Stock, for discussion of preferred shares issued to Cleveland Apple Investor L.P. (“Cerberus Investor”). Payables due to affiliates of Natura &Co Holding at September 30, 2020 also include $1.3 of payables from normal operations, primarily previously intercompany balances that became related party balances on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(7) Loans from affiliates of Natura &Co Holding at September 30, 2020 of $47.2 include $40.8 outstanding under the Revolving Credit Facility between Avon Luxembourg Holdings S.à r.l and Natura &Co International S.à r.l., a subsidiary of Natura &Co Holding. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include $4.5 (300 Argentinian Pesos) pursuant to an agreement to receive funding from Natura &Co Holding with respect to our Argentina operations during the second quarter of 2020. See Note 18, Debt for further details of the terms of these loans. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include a $1.9 previously intercompany balance that became a related party balance on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(8) During the second quarter of 2020, the Company entered into manufacturing agreements with affiliates of Natura &Co Holding. The Company recorded revenue from related party of $.9 and $2.7 associated with these agreements during the three and nine months ended September 30, 2020 respectively. The Company recorded gross profit from related party of $.1 and $.5 associated with these agreements during the three and nine months ended September 30, 2020 respectively. Receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

18

AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

4. 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 September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	156.1	$	159.0	$	315.1	$	—	$	315.1
Fragrance	137.2		112.6		249.8		—		249.8
Color	64.5		60.9		125.4		—		125.4
Total Beauty	357.8		332.5		690.3		—		690.3
Fashion & Home:
Fashion	67.6		54.7		122.3		—		122.3
Home	13.9		123.6		137.5		—		137.5
Total Fashion & Home	81.5		178.3		259.8		—		259.8
Product sales	439.3		510.8		950.1		—		950.1
Representative fees	16.7		29.6		46.3		—		46.3
Other	1.1		(.4)		.7		.9		1.6
Other revenue	17.8		29.2		47.0		.9		47.9
Total revenue	$	457.1	$	540.0	$	997.1	$	.9	$	998.0

	Three Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	153.0	$	173.2	$	326.2
Fragrance	148.3		147.3		295.6
Color	82.0		89.6		171.6
Total Beauty	383.3		410.1		793.4
Fashion & Home:
Fashion	86.9		57.0		143.9
Home	12.4		99.8		112.2
Total Fashion & Home	99.3		156.8		256.1
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	482.6		634.6		1,117.2
Representative fees	21.7		38.9		60.6
Other	1.3		8.9		10.2
Other revenue	23.0		47.8		70.8
Total revenue	$	505.6	$	682.4	$	1,188.0

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AVON PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

	Nine Months Ended September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	429.3	$	398.6	$	827.9	$	—	$	827.9
Fragrance	348.2		299.4		647.6		—		647.6
Color	194.9		154.5		349.4		—		349.4
Total Beauty	972.4		852.5		1,824.9		—		1,824.9
Fashion & Home:
Fashion	178.8		124.9		303.7		—		303.7
Home	34.8		259.6		294.4		—		294.4
Total Fashion & Home	213.6		384.5		598.1		—		598.1
Product sales	1,186.0		1,237.0		2,423.0		—		2,423.0
Representative fees	48.0		78.4		126.4		—		126.4
Other	5.2		4.5		9.7		2.7		12.4
Other revenue	53.2		82.9		136.1		2.7		138.8
Total revenue	$	1,239.2	$	1,319.9	$	2,559.1	$	2.7	$	2,561.8

	Nine Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	491.2	$	530.2	$	1,021.4
Fragrance	443.0		453.7		896.7
Color	282.0		259.6		541.6
Total Beauty	1,216.2		1,243.5		2,459.7
Fashion & Home:
Fashion	285.3		179.1		464.4
Home	41.1		309.3		350.4
Total Fashion & Home	326.4		488.4		814.8
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	1,542.6		1,799.6		3,342.2
Representative fees	68.7		117.5		186.2
Other	3.1		18.2		21.3
Other revenue	71.8		135.7		207.5
Total revenue	$	1,614.4	$	1,935.3	$	3,549.7

In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

20

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, changing trends and the impact of COVID-19. 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 September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
Accounts receivable, net of allowances of $50.6 and $66.6	$	261.2	$	280.2
Contract liabilities	$	41.1	$	51.0

The contract liability balances relate to certain material rights (loyalty points, status program and prospective discounts). During the nine months ended September 30, 2020, we recognized $38.0 of revenue related to the contract liability balance at the beginning of the nine month period ended September 30, 2020, as the result of performance obligations satisfied. In addition, we deferred an additional $32.1 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 September 30, 2020 as compared with December 31, 2019.

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 composed 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.

5. INVENTORIES

Components of Inventories	September 30, 2020		December 31, 2019
Raw materials	$	136.6	$	130.6
Finished goods	324.5		321.7
Total	$	461.1	$	452.3

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AVON PRODUCTS, INC.

6. LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Our sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The table below shows the sublease income recorded in the Consolidated Statement of Operations incurred during the three and nine months ended September 30, 2020 and 2019:

		Three months ended September 30,		Nine months ended September 30,
Lease Costs	Classification	2020	2019	2020	2019
Sublease income	Selling, general and administrative expenses	3.1	2.5	11.7	8.3

7. 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 $174, 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. In April 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 $46 (including associated penalty and interest). In December 2019, we received an unfavorable decision in the third administrative level. In October 2020, Avon was formally notified about the December unfavorable decision that rejected the Motion for Clarification. Avon will appeal to the administrative decision that denied the motion for clarification in court.

In October 2017, Avon Brazil Manufacturing received a new tax assessment notice regarding IPI for the year 2014 on grounds similar to the 2012 assessment. The 2017 IPI assessment totals approximately $173, including penalties and accrued interest. In April 2018, Avon was notified of an unfavorable decision at the first administrative level. In February, 2019, this IPI assessment was upheld at the second administrative level and in April 2019 we appealed this decision to the third administrative level. In December 2019, Avon received an unfavorable decision and presented an appeal.

In the event that the 2012 and the 2017 IPI assessments are upheld in the third and final administrative level, it may be necessary to provide a guarantee letter or a deposit in the total amount of the debt to move the discussion in the judicial sphere. Depending on the circumstances, this may result in 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 through 2014 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. As of September 30, 2020, we have not recognized a liability for the 2012 or 2017 IPI assessments.

Brazil IPI Tax on Cosmetics

In May 2015, an executive decree established the levy of IPI on the sales of cosmetic products by Avon Brazil. Avon Brazil filed an objection to this levy on the basis that it is not constitutional since this tax is already paid by Avon Brazil Manufacturing. 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 federal authority.

From May 2015 through April 2016, Avon Brazil deposited in Court the amount relating to the IPI being discussed. In May 2016, Avon Brazil obtained an injunction authorizing the Company not to pay the IPI. As a result, in June 2018, Avon Brazil received a decision authorizing the Company to withdraw the amount deposited in Court and replace it with a letter of guarantee. In June 2018, the tax authorities presented an appeal against that decision. In July 2018, the amount deposited was withdrawn. In September 2018, due in part to contemporaneous judicial decisions in favor of taxpayers in the cosmetics

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industry and other developments, and supported by our legal counsel’s opinion, we assessed the IPI according to ASC 450, Contingencies and determined that the risk of loss was reasonably possible but not probable. Accordingly, we released the associated liability as of September 30, 2018 of approximately $195 and stopped accruing the IPI 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 product 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 $203 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 $69 at September 30, 2020. This reserve would 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 September 30, 2020, there were 143 individual cases pending against the Company. During the three months ended September 30, 2020, 17 new cases were filed and thirteen 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, the Company has not proceeded to trial in any case filed against it and there have been no findings of liability enforceable 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 the outcome of all individual 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. For the remaining cases, we provide an estimate of exposure on an aggregated and ongoing basis, which takes into account the historical outcomes of all cases we have resolved to date. Any accruals currently recorded on the Company’s balance sheet with respect to these 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 September 30, 2020 is approximately $8 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 was subsequently amended and recaptioned "In re Avon Products, Inc. Securities Litigation". The amended complaint is brought on behalf of a purported class consisting of all purchasers or acquirers of Avon common stock between January 21, 2016 and November 1, 2017, inclusive. The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange 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. Avon and the individual defendants filed a motion to dismiss which the court denied. The parties have reached an agreement on a settlement of this class action. The terms of settlement include releases by members of the class of claims against the Company and the individual defendants and payment of $14.5 million. Approximately $2 million of the settlement

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will be paid by the Company (which represents the remaining deductible under the Company’s applicable insurance policies) and the remainder of the settlement will be paid by the Company’s insurers. On August 31, 2020, the court granted preliminary approval of the settlement and scheduled a hearing on January 20, 2021 to consider final approval. In the event the settlement is not approved by the court, or is otherwise terminated before it is finalized, the Company will be unable to predict the outcome of this matter. Furthermore, in that event, it is reasonably possible that the Company may incur a loss in connection with this matter, which the Company is unable to reasonably estimate.

Other Matters

Various other lawsuits and claims, arising in the ordinary course of business or related to businesses previously sold, are pending or threatened against Avon. In management’s opinion, based on its review of the information available at this time, the total cost of resolving such other contingencies at September 30, 2020, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The tables below present the changes in AOCI by component and the reclassifications out of AOCI for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at June 30, 2020	$	(1,053.1)	$	(4.3)	$	(88.4)	$	(1,145.8)
Other comprehensive (loss) income other than reclassifications	(25.5)		—		2.4		(23.1)
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $0.2(1)	—		—		2.0		2.0
Total reclassifications into earnings	—		—		2.0		2.0
Balance at September 30, 2020	$	(1,078.6)	$	(4.3)	$	(84.0)	$	(1,166.9)

Three Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at June 30, 2019	$	(935.2)	$	(2.1)	$	(4.3)	$	(90.7)	$	3.4	$	(1,034.4)
Other comprehensive loss other than reclassifications	(19.1)		(.1)		—		—		—		(19.2)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		.2		—		—		—		.2
Amortization of net actuarial loss and prior service cost, net of tax of $0.21)	—		—		—		1.6		—		1.6
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		.2		—		1.6		(3.4)		(1.6)
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

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Nine Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at December 31, 2019	$	(942.7)	$	(.6)	$	(4.3)	$	(92.4)	$	(1,040.0)
Other comprehensive (loss) income other than reclassifications	(135.9)		—		—		2.4		(133.5)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0	—		.6		—		—		.6
Amortization of net actuarial loss and prior service cost, net of tax of $0.6(1)	—		—		—		6.0		6.0
Total reclassifications into earnings	—		.6		—		6.0		6.6
Balance at September 30, 2020	$	(1,078.6)	$	—	$	(4.3)	$	(84.0)	$	(1,166.9)

Nine Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at December 31, 2018	$	(936.2)	$	.5	$	(4.3)	$	(93.8)	$	3.4	$	(1,030.4)
Other comprehensive (loss) other than reclassifications	(18.1)		(3.6)		—		—		—		(21.7)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		1.1		—		—		—		1.1
Amortization of net actuarial loss and prior service cost, net of tax of $0.51)	—		—		—		4.7		—		4.7
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		1.1		—		4.7		(3.4)		2.4
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

For further details on Other Comprehensive loss other than reclassifications see the Consolidated Statement of Comprehensive Loss.

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

(2) In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. This transaction closed on August 14, 2019 and the related balance was reclassified into earnings.

Foreign exchange net gain of $5.6 and net loss of $5.1 for the three months ended September 30, 2020 and 2019, respectively, and foreign exchange net gain of $1.7 and net loss of $5.8 for the nine months ended September 30, 2020 and 2019, 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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9. SEGMENT INFORMATION

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding. We have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments.

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of central expenses to the extent they support the operating activity of the segment. Segment profit excludes certain CTI restructuring initiatives, certain significant asset impairment charges, and other expenses, 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 September 30,				Nine Months Ended September 30,
Total Revenue	2020		2019		2020		2019
Avon International	$	457.1	$	505.6	$	1,239.2	$	1,614.4
Avon Latin America (5)	540.0		682.4		1,319.9		1,935.3
Total revenue from reportable segments (1)	997.1		1,188.0		2,559.1		3,549.7
Revenue from affiliates to Natura &Co	.9		—		2.7		—
Total revenue(1)	998.0		1,188.0		2,561.8		3,549.7

	Three Months Ended September 30,				Nine Months Ended September 30,
Operating Profit	2020		2019		2020		2019
Segment Profit
Avon International	$	17.4	$	35.4	$	15.7	$	129.9
Avon Latin America(5)	22.0		108.0		(46.0)		174.4
Total profit from reportable segments (2)	$	39.4	$	143.4	$	(30.3)	$	304.3
Unallocated global expenses(3)	(3.2)		(8.9)		(5.0)		(26.9)
Certain Brazil indirect taxes(6)	—		—		10.6		—
CTI restructuring initiatives	(12.4)		(17.5)		(17.6)		(116.7)
Costs related to the Transaction (4)	—		(19.3)		(85.8)		(36.4)
Operating profit	$	23.8	$	97.7	$	(128.1)	$	124.3

(1)Total revenue also includes revenue from other business activities of $2.8 and $4.7 for the three months ended September 30, 2020 and 2019 and $11.6 and $14.7 for the nine months ended September 30, 2020 and 2019, respectively, allocated to Avon International and Avon Latin America segments. Other business activities 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. Previously reported amount has been allocated to Avon International and Avon Latin America segments to conform to the current year presentation.

(2)Total profit from reportable segments also includes profit from other business activities and central expenses allocated to Avon International and Avon Latin America segments. Other business activities of $1.3 and $.9 for the three months ended September 30, 2020 and 2019 and $5.4 and $2.0 for the nine months ended September 30, 2020 and 2019, respectively, include profit 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. Central expenses of $50.2 and $58.8 for the three months ended September 30, 2020 and 2019 and $153.2 and $187.2 for the nine months ended September 30, 2020 and 2019, respectively, include corporate general and administrative expenses allocated to Avon International and Avon Latin America to the extent they support the operating activity of the segment. Previously reported amounts has been allocated to segments to conform to the current year presentation.

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(3)For the three and nine months ended September 30, 2020 and the three and nine months ended September 30, 2019, unallocated global expenses primarily include stewardship and other expenses not directly attributable to reportable segments.

(4)For the nine months ended September 30, 2020, costs related to the Transaction primarily include professional fees of approximately $46, severance payments of approximately $25 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions. For the three months and nine month ended September 30, 2019, costs related to the Transaction primarily include professional fees and other impairment losses on assets. Refer to Note 18, Merger with Natura for more information relating to the Natura transaction.

(5)The three and nine month periods ended September 30, 2019 include the impact of certain Brazil indirect taxes, which were recorded in revenue in the amount of approximately $68.

(6)The nine month period ended September 30, 2020 includes the impact of certain Brazil indirect taxes, which were recorded in selling, general and administrative expenses, net in the amounts of approximately $11.

10. SUPPLEMENTAL BALANCE SHEET INFORMATION

At September 30, 2020 and December 31, 2019, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	September 30, 2020		December 31, 2019
Prepaid taxes and tax refunds receivable	$	115.5	$	141.1
Receivables other than trade(1)	48.1		51.4
Prepaid brochure costs, paper and other literature	10.3		13.1
Other	36.3		46.5
Prepaid expenses and other	$	210.2	$	252.1

(1) As of September 30, 2020, the Company has recognized insurance receivables of $12 related to a contingent liability of approximately $15 for Shareholder Litigation, recognized in the Consolidated Balance Sheet under Other Accrued Liabilities. See Note 7, Contingencies.

At September 30, 2020 and December 31, 2019, other assets included the following:

Components of Other Assets(1)	September 30, 2020		December 31, 2019
Net overfunded pension plans	$	100.5	$	100.6
Capitalized software	69.5		83.1
Judicial deposits	47.4		70.1
Long-term receivables	145.7		196.1
Trust assets associated with supplemental benefit plans	35.5		37.3
Other	18.8		27.6
Other assets	$	417.4	$	514.8

(1) As of September 30, 2020 and December 31, 2019, the Company had tooling, net of amortization of $8.0 and $12.9, respectively. Tooling balance as of December 31, 2019 previously included in other long-term assets has been reclassified to property, plant and equipment to conform to the current year presentation.

11. RESTRUCTURING INITIATIVES

Natura &Co - Avon Integration

Subsequent to the merger of Natura and Avon in January 2020, an integration plan (the "Avon Integration") was established to create the right global infrastructure to support the future ambitions of the Natura &Co Group while also identifying synergies and opportunities to leverage our combined strength, scale and reach. Synergies will be derived mainly from procurement, manufacturing/distribution and administrative, including new top line synergies at Natura &Co Latin America, as well as cost synergies at Avon International.

AVON PRODUCTS, INC.

Open Up Avon, Open Up & Grow and 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 $ 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 below.

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. These savings have been and are expected to continue to be achieved through restructuring actions (that have may continue to 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.

In May 2020, the new leadership of Avon refreshed our strategy ("Open Up & Grow") which aims to return Avon to growth over the next three years. Open Up & Grow replaces and builds on the success of the Open Up Avon strategy, launched in 2018 to strengthen competitiveness through enhancing the representative experience, improving brand position and relevance, accelerating digital expansion and improving costs. Over the next three years, savings are expected to continue to be achieved through restructuring actions (that may continue to result in charges related to severance, contract terminations and asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges.

Costs to Implement Restructuring Initiatives - Three and Nine Months Ended September 30, 2020 and 2019

During the three months ended September 30, 2020, we recorded net costs to implement of $10.9, of which $11.1 related to Avon Integration, $0.7 related to Open Up & Grow and a benefit of $.9 related to the Transformation Plan, in our Consolidated Statements of Operations. During the three months ended September 30, 2019, we recorded costs to implement of $17.5 of which $10.8 related to Open Up Avon, $6.7 related to the Transformation Plan, in our Consolidated Statements of Operations.

During the nine months ended September 30, 2020, we recorded net costs to implement of $16.1, of which $12.7 related to Avon Integration, $7.6 related to Open Up & Grow and a benefit of $4.2 related to the Transformation Plan, in our Consolidated Statements of Operations. During the nine months ended September 30, 2019, we recorded costs to implement of $93.2 of which $84.1 related to Open Up Avon, $9.0 related to the Transformation Plan, and $.1 related to other restructuring initiatives, in our Consolidated Statements of Operations.

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The costs during the three and nine months ended September 30, 2020 and 2019 consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	—	$	1.1	$	—	$	10.9
Inventory write-off	(.8)		(2.1)		(1.1)		1.0
	(.8)		(1.0)		(1.1)		11.9
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	5.7		3.2		4.0		51.9
Implementation costs, primarily related to professional service fees	5.9		7.8		6.7		33.7
Dual running costs	.8		3.7		2.3		8.2
Contract termination and other net benefits	.4		(.1)		3.4		4.5
Impairment of other assets	—		.1		.7		2.4
Accelerated depreciation	—		2.3		.4		2.6
Variable lease charges	.4		1.5		1.3		1.5
	13.2		18.5		18.8		104.8
CTI recorded in operating profit	12.4		17.5		17.7		116.7
CTI recorded in other (expense) income
(Gain) loss on sale of business / assets	(1.5)		—		(1.6)		(23.5)
Total CTI	$	10.9	$	17.5	$	16.1	$	93.2
Avon Integration	$	11.1	$	—	$	12.7	$	—
Open Up & Grow	$	.7	$	10.8	$	7.6	$	84.1
Transformation Plan	$	(.9)	$	6.7	$	(4.2)	$	9.0
Other	$	—	$	—			$	.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 Balance Sheet for the restructuring actions associated with Avon Integration at September 30, 2020 is $.7 related to employee related costs.

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The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with Open Up & Grow at September 30, 2020 is as follows:

	Employee-Related Costs		Inventory/Assets Write-offs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	17.8	$	—	$	6.4	$	24.2
2020 charges	2.3		(.5)		3.0		4.8
Adjustments	(2.6)		—		.3		(2.3)
Cash payments	(7.8)		—		(6.9)		(14.7)
Non-cash write-offs	—		.5		—		.5
Foreign exchange	(.6)		—		(.1)		(.7)
Balance at September 30, 2020	$	9.1	$	—	$	2.7	$	11.8

The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with our Transformation Plan as of September 30, 2020 is as follows:

	Employee-Related Costs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	8.4	$	1.5	$	9.9
2020 charges	(.2)		—		(.2)
Adjustments	(4.3)		—		(4.3)
Cash payments	(.4)		(1.3)		(1.7)
Foreign exchange	(.1)		(.1)		(.2)
Balance at September 30, 2020	$	3.4	$	.1	$	3.5

The majority of cash payments, if applicable, associated with the year-end liability are expected to be made during 2020.

The following table presents the restructuring charges incurred to date, under, Avon Integration, Open Up & Grow (formerly 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
Avon Integration
Charges incurred to-date	$	8.8	$	—	$	—	$	—	$	8.8
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	8.8	$	—	$	—	$	—	$	8.8
Open Up & Grow
Charges incurred to-date	$	83.3	$	107.1	$	11.9	$	(10.9)	$	191.4
Estimated charges to be incurred on approved initiatives	—		—		2.5		—		2.5
Total expected charges on approved initiatives	$	83.3	$	107.1	$	14.4	$	(10.9)	$	193.9
Transformation Plan
Charges incurred to-date	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4

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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:

	Avon International*		Avon Latin America*		Total
Avon Integration
Second quarter 2020	$	1.5	$	—	$	1.5
Third quarter 2020	4.5		2.8		7.3
Charges incurred to-date	6.0		2.8		8.8
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	6.0	$	2.8	$	8.8
Open Up & Grow
2018	$	52.8	$	64.3	$	117.1
2019	34.7		36.9		71.6
First quarter 2020	3.7		(.1)		3.6
Second quarter 2020	(.3)		(.1)		(.4)
Third quarter 2020	(.2)		(.3)		(.5)
Charges incurred to-date	90.7		100.7		191.4
Estimated charges to be incurred on approved initiatives	2.5		—		2.5
Total expected charges on approved initiatives	$	93.2	$	100.7	$	193.9
Transformation Plan
2015	$	21.4	$	—	$	21.4
2016	56.8		17.6		74.4
2017	49.8		5.0		54.8
2018	19.0		4.7		23.7
2019	(1.0)		.6		(.4)
First quarter 2020	(2.9)		.1		(2.8)
Second quarter 2020	(.2)		—		(.2)
Third quarter 2020	(1.6)		.1		(1.5)
Charges incurred to-date	141.3		28.1		169.4
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	141.3	$	28.1	$	169.4

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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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AVON PRODUCTS, INC.

12. SERIES C CONVERTIBLE 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 pursuant to an Investment Agreement, dated as of December 17, 2015, between the Company and Cerberus Investor. In connection with the issuance of the series C preferred stock, the Company incurred direct and incremental expenses of $8.7, composed of financial advisory fees and legal expenses, which reduced the carrying value of the series C preferred stock. 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 $91.3 as of December 31, 2019.

On December 19, 2019, the Company and Natura &Co Holding announced that as of such date, all regulatory approvals required by the Merger Agreement to complete the Transactions have been obtained. As a result, the series C preferred stock were probable of becoming redeemable and the redemption value was adjusted. Subsequently, on December 30, 2019, Cerberus elected to convert the series C preferred stock, and the series C preferred stock was no longer probable of becoming redeemable. We recognize changes in redemption value immediately as they occur and the carrying value of the security is adjusted to equal what the redemption amount would be as if redemption were to occur at the end of the reporting date based on the conditions that exist as of that date. As a result, we recognized an increase of $60.9 in the carrying value of the series C preferred stock for the year ended December 31, 2019.

On December 30, 2019, Cerberus elected to convert 435,000 shares of series C preferred stock, representing all shares of series C preferred stock outstanding, into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, pursuant to the holder of the Company’s series C preferred stock’s rights under the Company’s certificate of incorporation. The foregoing election was conditioned upon the filing of the certificates of merger with respect to the First Merger (the "Conversion Condition").

On January 3, 2020, the Company consummated the Transaction to become a wholly owned direct subsidiary of Natura &Co Holding. Upon consummation of the Transaction, the Company’s common stock was converted to Natura &Co Holding common stock. After the effective time of the Second Merger and in January 2020, Natura &Co Holding elected to pay the accrued dividends on the shares of series C preferred stock in an amount equal to $91.5 to Cerberus. See Note 18, Mergers with Natura Cosméticos S.A., and Note 3, Related Party Transactions.

13. GOODWILL

	Avon International		Avon Latin America		Total
Net balance at December 31, 2019*	$	20.0	$	66.2	$	86.2
Changes during the period ended September 30, 2020:
Foreign exchange	(1.0)		(10.2)		(11.2)
Net balance at September 30, 2020	$	19.0	$	56.0	$	75.0

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with Natura &Co Holding operations. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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14. 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 September 30, 2020:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.2	$	—	$	4.2
Foreign exchange forward contracts	$	—	$	—	$	—
Total	$	4.2	$	—	$	4.2
Liabilities:
Foreign exchange forward contracts	$	—	$	24.8	$	24.8
Total	$	—	$	24.8	$	24.8

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.3	$	—	$	4.3
Foreign exchange forward contracts	$	—	$	5.6	$	5.6
Total	$	4.3	$	5.6	$	9.9
Liabilities:
Foreign exchange forward contracts	$	—	$	3.8	$	3.8
Total	$	—	$	3.8	$	3.8

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, debt maturing within one year and short-term investments approximate fair value because of the short-term nature of these instruments.

The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of our remaining financial instruments at September 30, 2020 and December 31, 2019, respectively, consisted of the following:

	September 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Available-for-sale securities	$	4.2	$	4.2	$	4.3	$	4.3
Debt maturing within one year	(30.2)		(30.2)		(1.8)		(1.8)
Long-term debt(1)	(1,566.8)		(1,654.7)		(1,590.4)		(1,748.1)
Foreign exchange forward contracts	(24.8)		(24.8)		1.8		1.8

(1) The carrying value of long-term debt is presented net of debt issuance costs and includes any related discount or premium.

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.

•Long-term debt - The fair values of our debt and other financing were determined using Level 2 inputs based on indicative market prices.

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•Foreign exchange forward contracts - The fair values of forward contracts were estimated based on quoted forward foreign exchange prices at the reporting date.

15. 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 Transaction.

Derivatives are recognized in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at September 30, 2020:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	24.8
Total derivatives		$	—		$	24.8

Derivatives are recognized in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at December 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	$	.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	5.6	Accounts payable	$	3.2
Total derivatives		$	5.6		$	3.8

Interest Rate Risk

At September 30, 2020 and December 31, 2019, our exposure to floating interest rate risk was minimal as over 98% of our borrowings are at fixed rates of interest. Only our short-term debt, which represents approximately 2% of our debt portfolio, is exposed to floating interest rates.

Foreign Currency Risk

We may use foreign exchange forward contracts to manage a portion of our foreign currency exchange rate exposures. At September 30, 2020, we had outstanding foreign exchange forward contracts with notional amounts totaling approximately $417 for various currencies, none of which were designated as cash flow hedges.

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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 translation impact recognized in earnings relating to the associated intercompany loans. During the three months ended September 30, 2020 and 2019, we recorded a loss of $13.9 and a gain of $35.1, respectively, in other (expense) income, net in our Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. During the nine months ended September 30, 2020 and 2019, we recorded a loss of $7.1 and a gain of $57.0, respectively, in other (expense) income, net in our Consolidated Statements of Operations related to these 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 expired during the first quarter of 2020. Our designated hedges did not have a material impact on our Consolidated Financial Statements for the nine months ended September 30, 2020 and 2019.

16. DEBT

Natura Revolving Credit Facility

In May 2020, the Company’s subsidiary, Avon Luxembourg Holdings S.à r.l entered into a Revolving Credit Facility Agreement with Natura &Co International S.à r.l,. a subsidiary of Natura &Co Holding S.A. and an affiliate of the Company in the amount of $100 which may be used for working capital and other general corporate purposes (the "Facility"). Any borrowings under the Facility will bear interest at a rate per annum of LIBOR plus 7.7% and the Facility will mature on May 31, 2022. During the third quarter of 2020, we drew down $59.7 and repaid $19.8 including interest. As at September 30, 2020, $40.8 including interest was outstanding under the Facility.

Other loans from affiliates of Natura &Co

During the second quarter of 2020, the Company’s subsidiary, Cosmeticos Avon S.A.C.I entered into an agreement to receive funding from Natura Cosmeticos S.A., a subsidiary of Natura &Co Holding S.A and an affiliate of the Company in the amount of 300 million Argentine Peso which may be used for working capital and other general corporate purposes (the "Argentina Facility"). Any borrowings under the Argentina Facility will bear interest at a rate per annum of 29.81% and has a six-month maturity. At September 30, 2020 the balance outstanding under this loan is $4.5.

Loans from affiliates of Natura &Co Holding at September 30, 2020 also include a $1.9 previously intercompany balance that became a related party balance on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

Other short-term financing

In addition, at September 30, 2020, we utilized approximately $30 of short-term financing from third-party banks across multiple markets.

2019 Revolving Credit 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 senior secured revolving credit facility (the "2019 facility") and capitalized $11.0 of issuance costs, the related cash outflow is presented in other financing activities within the 10-K Consolidated Statement of Cash Flows. The 2019 facility was available for general corporate and working capital purposes.

As of December 31, 2019, there were no amounts outstanding under the 2019 facility and on January 3, 2020, the facility was automatically canceled upon change of control, and as a result $7.8 of unamortized issuance costs were written off, see Note 18, Mergers with Natura Cosméticos S.A.,.

Unsecured Notes

In March 2013, we issued a series of unsecured notes (the "2013 Notes"). As of September 30, 2020, the following 2013 Notes remain outstanding; $461.9 aggregate principal amount of 5% Notes due March 15, 2023 and $216.1 aggregate principal amount of 6.95% Notes due March 15, 2043. Interest on the 2013 Notes is payable semiannually 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. The interest rate on the 2013 Notes is currently at the maximum allowable level of 2% above the respective interest rates in effect on date of issuance.

In September 2020, we repurchased $27.8 of our 6.95% Notes due March 15, 2043. The aggregate repurchase price was equal to the principal amount of the notes, plus a premium of $3.8 and accrued interest of $1.2. In connection with the repurchase, we incurred a loss on extinguishment of debt of $4.1 before tax in the third quarter of 2020 consisting of the $3.8 premium paid for

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AVON PRODUCTS, INC.

the repurchases, and $0.3 for the write-off of debt issuance costs and discounts related to the initial issuance of the notes that were repurchased.

Senior Secured Notes

In August 2016, Avon International Operations, Inc. ("AIO"), issued $500.0 in aggregate principal amount of 7.875% Senior Secured Notes due August 15, 2022 (the "2016 Notes"). Interest on the 2016 Notes is payable semi-annually on February 15 and August 15 of each year.

In July 2019, AIC issued $400.0 in aggregate principal amount of 6.5% Senior Secured Notes due August 15, 2022 (the "2019 Notes"). Interest on the 2019 Notes is payable semi-annually on February 15 and August 15 of each year.

On November 2, 2020, AIO and AIC redeemed the 2016 Notes and the 2019 Notes, respectively. See Note 19, Subsequent Events, for additional information.

For a more detailed description of the Company’s debt agreements, refer to Note 8, Debt and Other Financing of our Annual Report on Form 10-K for the year ended December 31, 2019.

17. 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 September 30, 2020, our annual effective tax rate, excluding discrete items, is 25.9% for 2020, as compared to 25.2% as of September 30, 2019. 

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 2020 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 central expenses. Withholding taxes associated with the relatively consistent intercompany payments 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 September 30, 2020 and 2019 was $11.8 and $31.5, respectively. Our effective tax rates for the three months ended September 30, 2020 and 2019 were (68.6)% and 21.8%, respectively. The provision for income taxes for the nine months ended September 30, 2020 and 2019 were $26.7 and $78.2, respectively. Our effective tax rates for the nine months ended September 30, 2020 and 2019 were (10.4)% and 48.5%.

The effective tax rates for the three months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the third quarter of 2020 was unfavorably impacted by the accrual of net income tax benefits of approximately $5.7 associated with the release of income tax reserves of approximately $10.8 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $.8. The effective tax rate for the third quarter of 2019 was also favorably impacted by the accrual of miscellaneous income tax benefits of approximately $2.3.

The effective tax rates for the nine months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the nine months ended September 30, 2020 was also unfavorably impacted by the accrual of net income tax benefits of approximately $1.8 associated with the release of income tax reserves of approximately $11.2 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $5.1. The effective tax rate in the nine months ended September 30, 2019, was also favorably impacted by the accrual of net income tax benefits of approximately $5.2 associated with our uncertain tax positions and other net, miscellaneous income tax benefits of approximately $2.2.

In prior years, we had previously recorded valuation allowances against certain deferred tax assets associated with the U.S. and various 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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AVON PRODUCTS, INC.

Further, the Company continuously assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize our existing deferred tax assets that are not subject to a valuation allowance. As of September 30, 2020, the COVID-19 pandemic is negative evidence the Company must consider. As of September 30, 2020, the increase in negative evidence due to COVID-19, primarily lower revenue and profit performance, resulted in approximately $4.3 of valuation allowances being recorded against deferred tax assets. The Company will continue to monitor the COVID-19 pandemic and other effects that could impact the conclusions regarding the realizability of its remaining deferred tax assets. Potential negative evidence, including such things as the worsening of the economies in the markets we operate in and reduced profitability of our markets could give rise to a need for a valuation allowance to reduce our deferred tax assets in upcoming quarters.

18. MERGER WITH NATURA COSMÉTICOS S.A.

On May 22, 2019, the Company entered into the Agreement and Plan of Mergers (as amended by Amendment Number One to

Agreement and Plant of Mergers, dated as of October 3, 2019, and as further amended by Amendment Number Two to

Agreement and Plan of Mergers, dated as of November 5, 2019, the "Merger Agreement") among the Company, Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) ("Natura Cosméticos"), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima), Nectarine Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Natura &Co Holding ("Merger Sub I"), and Nectarine Merger Sub II, Inc., a Delaware corporation and a direct wholly owned subsidiary of Merger Sub I ("Merger Sub II"), pursuant to which (i) Natura &Co Holding, after the completion of certain restructuring steps, holds all issued and outstanding shares of Natura Cosméticos, (ii) Merger Sub II merged with and into the Company, with the Company surviving the merger (the "First Merger") and (iii) Merger Sub I merged with and into Natura &Co Holding (the "Second Merger"), with Natura &Co Holding surviving the merger and as a result of which the Company and Natura Cosméticos became wholly owned direct subsidiaries of Natura &Co Holding (collectively, the "Transaction").

The Transaction was consummated on January 3, 2020, and at this time, the Company became a wholly owned direct subsidiary of Natura &Co Holding. In connection with the Transaction, trading of the Company’s stock was suspended by the NYSE, and the Company’s common stock was subsequently delisted and deregistered.

On completion of the Transaction, each share of the Company’s common stock issued and outstanding immediately prior to the consummation of the Transaction was converted into the ultimate right to receive, (i) 0.300 validly issued and allotted, fully paid-up American Depositary Shares of Natura &Co Holding, ("Natura &Co Holding ADSs") against the deposit of two shares of common stock of Natura &Co Holding ("Natura &Co Holding Shares", subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional Natura &Co Holding ADSs or (ii) 0.600 validly issued and allotted, fully paid-up Natura &Co Holding Shares, subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional Natura &Co Holding Shares. The Company’s Series C Preferred Stock held by Cerberus Investor were converted to common stock prior to consummation of the Transaction and were therefore automatically converted into common stock of Natura &Co; see Note 12, Series C Convertible Preferred Stock.

Natura &Co Holding Shares are listed on the B3 S.A. - Brasil, Bolsa, Balcão stock exchange, and Natura &Co Holding ADSs are listed on the NYSE. Additionally, upon the consummation of the Transaction, Avon common stock ceased to be traded on the NYSE.

In January 2020, subsequent to the Transaction, the Company restated the certificate of incorporation. The certificate of incorporation was restated to effect a change in capitalization of the Company by changing the number of authorized shares of stock from 1,525,000,000 shares (of which (i) 1,500,000,000 shares, par value $0.25 per share, are common stock and (ii) 25,000,000 shares, par value $1.00 per share, are preferred stock) to 1,000 shares of common stock, par value $0.01 per share. As a result, all of the issued and outstanding common stock of the Company, being 550,890,788 were canceled and converted into 101.34 common stock, par value $0.01 per share, and all outstanding treasury shares were canceled.

The Company incurred costs of $46 and $44 in relation to the Transaction, primarily professional fees during the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.

During January 2020, it was announced that the employment of certain senior officers of the Company would be terminated, in connection with the Transaction. The Company incurred severance of approximately $24 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions.

As a result of the Transaction, the Company made payments of approximately $26 related to the settlement of stock options. In addition, any remaining restricted stock units and performance restricted stock units were exchanged for awards of Natura &Co Holding. The replacement awards contain substantially the same terms and conditions of the original awards except for the removal of the performance conditions. As such, the replacement awards contain only a service vesting condition.

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AVON PRODUCTS, INC.

On consummation of the Transaction, a deferred compensation scheme relating to former employees of the Company became payable which resulted in extinguishing the liability and a cash outflow of approximately $12.

In January 2020, upon completion of the Transaction, the Company’s revolving credit facility was canceled, triggered by change in control provisions. As a result, debt issuance costs of $7.8 were written off.

As a result of the Transaction, the Company will no longer have access to certain tax attributes of approximately $480 to approximately $550 in certain taxing jurisdictions.

19. SUBSEQUENT EVENTS

In November 2020, the Company’s subsidiary, Avon International Operations Inc. entered into a Promissory Note with Natura &Co International S.à r.l, a subsidiary of Natura &Co Holding S.A. and an affiliate of the Company in the amount of $960. The loan agreement will bear interest at a rate per annum of 3.13% and will mature on November 2, 2021 (“the Natura &Co Loan”).

In November 2020, in connection with the Natura & Co Loan, we redeemed the remaining principal amount of our 2016 Notes due August 15, 2022 and the remaining principal amount of our 2019 Notes due August 15, 2022. With respect to the 2016 Notes, the aggregate redemption amount paid was equal to the remaining principal amount of $500, plus a premium of $9.8 and accrued interest of $8.4. With respect to the 2019 Notes, the aggregate redemption amount paid was equal to the remaining principal amount of $400, plus a premium of $7.9 and accrued interest of $5.6.

In connection with the redemption, we expect to incur a loss on extinguishment of debt of $25.6 before tax in the fourth quarter of 2020 consisting of the $17.7 premiums, and the write-off of $7.9 of debt issuance costs related to the initial issuances of the notes that were redeemed.

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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, with a strategy to expand to omni-channel. During 2019, we had sales operations in 54 countries and territories, and distributed products in 24 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 two regions, Avon International and Avon Latin America. Our product categories are Beauty and Fashion & Home. Beauty consists of skincare, fragrance and color (cosmetics). Fashion & Home consists of fashion apparel, accessories, housewares and leisure products. Sales are made to the ultimate consumer principally through direct selling by Representatives, who are independent contractors and not our employees.

During the nine months ended September 30, 2020, revenue decreased 28% compared to the prior-year period, impacted by certain indirect taxes recognized in Brazil in the nine month period ended September 30, 2019. Excluding these items, Adjusted revenue decreased 26%, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Brazilian real, the Argentinian peso and the Mexican peso. Constant $ Adjusted revenue decreased 17%.

Revenue and Constant $ Adjusted revenue were impacted by a decrease in Active Representatives of 16%, across all markets. Average Representative Sales decreased 12% on a reported basis, unfavorably impacted by foreign exchange and Constant $ Adjusted Average Representative Sales decreased 1%. The decline in Revenue and Constant $ revenue was affected by the COVID-19 pandemic, which negatively impacted the initial signs of recovery coming from a lower Representative base in 2019, with the third quarter showing revenue growth in Brazil and signs of recovery from the pandemic in most markets. See below for further

details related to COVID-19.

Units sold decreased 15%, across all markets, with Brazil relatively unchanged compared to the prior year period.

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.

Mergers with Natura Cosméticos S.A.

On January 3, 2020 the Company became a fully owned direct subsidiary of Natura &Co Holding following the consummation of the Merger Agreement with Natura Cosméticos, Natura &Co Holding and two subsidiaries of Natura &Co Holding (the "Transaction"). In connection with the Transaction, trading of the Company's stock was suspended by the NYSE, the Company's common stock was subsequently delisted and deregistered.

COVID-19 pandemic

A novel strain of coronavirus (COVID-19) was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. Due to the uncertain and rapidly evolving nature of current conditions around the world, the impacts of COVID-19 most of which are beyond the Company’s control, continue to evolve, and the outcome is uncertain. We are therefore unable to predict accurately the impact that COVID-19 will have on our business going forward.

During the second quarter of 2020, COVID-19 had a significant impact on our operations as many markets were subject to lockdown restrictions which limited our ability to recruit and enroll Representatives, operate manufacturing facilities and distribution centers and to process and deliver orders. Most markets showed signs of recovery in the third quarter of 2020 but it

is unclear whether this recovery will continue in the remaining of 2020 or if new lockdown measures currently being imposed

in parts of Europe will dampen the recovery. We continue to closely monitor the evolution of the COVID-19 pandemic, deciding on actions to minimize impacts, ensure the continuity of operations and promote the safety and health of all the people involved. Since the beginning of the virus spread and the consequent restrictive measures imposed by governments, such as closing non-essential trade and restricting the movement of people across borders, the Company has implemented some measures in all its operations, in line with the official measures:

•Incentives to remote working and adoption of essentiality criteria to limit industrial and logistical operations;

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AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

•Adoption of new safety measures for operational workers, such as the use of masks and procedures to distance people between processes;

•Re-planning of sales cycles, prioritizing personal care items;

•Speeding up the digitization of sales channels;

•We communicated social distancing protocols to our Representatives around the world;

•Change in the minimum order criteria, start kit and increased deadline for payment of Representatives - original practices are being restored as the markets are recovering from pandemic; and

•Daily monitoring of suppliers to ensure supply.

As of the date of this report, we are unable to estimate the long term impact of the economic paralysis arising from efforts to curb the spread of the COVID-19 virus and the expected reduction in activity on our business, results of operations and financial condition. We will continue to review our revenue, investments, expenses and cash outflows, as well as adjusting our relationships with suppliers. Furthermore, the actions outlined above are continuously being re-evaluated in light of global developments relating to COVID-19. See also “Item 1A. Risk Factors—The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, manufacturing, supply chains and distribution systems, and we have

experienced and expect to continue to experience unpredictable negative effects associated with the pandemic".

Cyber incident

In June 2020, the Company became aware that it was exposed to a cyber incident in its Information Technology ("IT") environment which interrupted some systems and partially affected the Company's operations. We engaged leading external cyber security and IT general controls specialists, launched a comprehensive containment and remediation effort and started a forensic investigation. By mid-August, the Company had re-established all of its core business processes and resumed operations in all of its markets, including all of its distribution centers.

The cyber incident had a significant impact on our revenue performance for the second quarter of 2020, with the majority of the impact (approximately $87 million in sales) being shifted to the third quarter of 2020 as the Company fulfilled the order backlog created. The incremental expense incurred as a result of the cyber incident was not material.

Although we have no indication that the accuracy and completeness of any financial information was impacted as a result of the incident and the Company has performed extensive procedures to validate such accuracy and completeness, we believe that, if the incident had gone differently, it could have potentially resulted in a material impact to the Company’s financial statements. Refer to Item 4. Controls and Procedures for conclusions related to internal controls.

Natura &Co - Avon Integration

Subsequent to the merger of Natura and Avon in January 2020, an integration plan (the "Avon Integration") was established to create the right global infrastructure to support the future ambitions of the Natura &Co Group while also identifying synergies and opportunities to leverage our combined strength, scale and reach. Synergies will be derived mainly from procurement, manufacturing/distribution and administrative, including new top line synergies at Natura &Co Latin America, as well as cost synergies at Avon International.

Open Up Avon, Open Up & Grow and 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 $ 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 below.

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. These savings have been and are expected to continue to be achieved through restructuring actions (that have may continue to 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.

In May 2020, the new leadership of Avon refreshed our strategy ("Open Up & Grow") which has aims to return Avon to growth over the next three years. Open Up & Grow replaces and builds on the success of the Open Up Avon strategy, launched in 2018 to strengthen competitiveness through enhancing the representative experience, improving brand position and relevance,

40

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

accelerating digital expansion and improving costs. Over the next three years, savings are expected to continue to be achieved through restructuring actions (that may continue to result in charges related to severance, contract terminations and asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges.

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 AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AS COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019

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, Adjusted 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 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 and income (loss) before taxes on a Non-GAAP basis. We refer to these Non-GAAP financial measures as "Adjusted." 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) certain Brazil indirect taxes 2) CTI restructuring initiatives; 3) costs related to the Transaction; 4) costs associated with the early termination of debt.

(1)The three and nine month periods ended September 30, 2019 include the impact of certain Brazil indirect taxes, which

were recorded in product sales and other income (expense), net in the amounts of approximately $68 and approximately $51, respectively, in our Consolidated Income Statements. See Note 10, Supplemental balance sheet information, to the Consolidated Financial Statements contained herein for further information. The corresponding tax impact was $23. The nine month period ended September 30, 2020 includes the impact of certain Brazil indirect taxes, which were recorded in selling, general and administrative expenses, net in the amounts of approximately $11.

(2)CTI restructuring initiatives includes the impact on the Consolidated Statements of Operations for all periods presented of net charges incurred on approved restructuring initiatives. See Note 11, Restructuring Initiatives, to the Consolidated Financial Statements contained herein for further information.

(3)For the nine months ended September 30, 2020, costs related to the Transaction of $86 primarily included professional fees incurred in relation to the Transaction of approximately $46, severance payments of approximately $25 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions. In three and nine month periods ended September 30, 2019, the Company recorded approximately $19 and $36 respectively, of costs related to the Transaction, primarily professional fees and impairment losses on assets. Further information relating to the Transaction is included in Note 18, Merger with Natura, to the Consolidated Financial Statements included herein.

(4)During the three and nine month periods ended September 30, 2020, the Company incurred costs of $4 and $12, respectively, associated with the early termination of debt. During the third quarter of 2019, the Company incurred costs of $8 associated with the early termination of debt.

41

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 September 30,								Nine Months Ended September 30,
	2020			2019			%/Basis Point Change		2020			2019			%/Basis Point Change
Select Consolidated Financial Information
Total revenue	$	998.0		$	1,188.0		(16)	%	$	2,561.8		$	3,549.7		(28)	%
Cost of sales	(440.0)			(468.2)			(6)	%	(1,111.5)			(1,482.7)			(25)	%
Selling, general and administrative expenses	(534.2)			(622.1)			(14)	%	(1,578.4)			(1,942.7)			(19)	%
Operating (loss) income	23.8			97.7			(76)	%	(128.1)			124.3			*
Interest expense	(37.4)			(32.0)			17	%	(100.9)			(95.9)			5	%
Loss on extinguishment of debt and credit facilities	(4.1)			(8.1)			(49)	%	(11.9)			(10.1)			18	%
Interest income	.1			2.1			(95)	%	1.6			5.3			(70)	%
Other (expense) income, net	(1.0)			57.9			*		(20.1)			87.3			*
Gain on sale of business / assets	1.4			26.8			(95)	%	1.5			50.3			(97)	%
(Loss) income from continuing operations, before income taxes	(17.2)			144.4			*		(257.9)			161.2			*
Loss from continuing operations, net of tax	(29.0)			112.9			*		(284.6)			83.0			*
Net loss attributable to Avon	$	(32.8)		$	106.9		*		$	(296.6)		$	54.7		*
Advertising expenses(1)	$	14.2		$	22.7		(37)	%	$	37.0		$	50.4		(27)	%
Reconciliation of Non-GAAP Financial Measures
Total revenue	$	998.0		$	1,188.0		(16)	%	$	2,561.8		$	3,549.7		(28)	%
Certain Brazil Indirect taxes	—			(67.7)					—			(67.7)
Adjusted revenue	$	998.0		$	1,120.3		(11)	%	$	2,561.8		$	3,482.0		(26)	%
Gross margin	55.9		%	60.6		%	(470)		56.6		%	58.2		%	(160)
CTI restructuring	(.1)			(.1)			—		—			.3			(30)
Certain Brazil Indirect taxes	—			(2.4)			240		—			(.7)			70
Adjusted gross margin	55.8		%	58.1		%	(230)		56.6		%	57.8		%	(120)
Selling, general and administrative expenses as a % of total revenue	53.5		%	52.4		%	110		61.6		%	54.7		%	690
CTI restructuring	(1.3)			(1.6)			30		(.7)			(3.0)			230
Certain Brazil Indirect taxes	—			3.0			(300)		.4			1.0			(60)
Costs related to the Transaction	—			(1.6)			160		(3.4)			(1.0)			(240)
Adjusted selling, general and administrative expenses as a % of total revenue	52.2		%	52.2		%	—		57.9		%	51.7		%	620
Operating (loss) income	$	23.8		$	97.7		(76)	%	$	(128.1)		$	124.3		(203)	%
CTI restructuring	12.4			17.5					17.6			116.7
Certain Brazil Indirect taxes	—			(67.7)					(10.6)			(67.7)
Costs related to the Transaction	—			19.2					85.8			36.4
Adjusted operating (loss) profit	$	36.2		$	66.7		(46)	%	$	(35.3)		$	209.7		(117)	%
Operating margin	2.4		%	8.2		%	(580)		(5.0)		%	3.5		%	(850)
CTI restructuring	1.2			1.5			(30)		.7			3.3			(260)
Certain Brazil Indirect taxes	—			(5.3)			530		(.4)			(1.8)			140
Costs related to the Transaction	—			1.6			(160)		3.3			1.0			230
Adjusted operating margin	3.6		%	6.0		%	(240)		(1.4)		%	6.0		%	(740)

42

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 September 30,								Nine Months Ended September 30,
	2020			2019			%/Basis Point Change		2020			2019			%/Basis Point Change
Change in Constant $ Adjusted operating margin(2)							(110)								(650)
Loss before taxes	$	(17.2)		$	144.4		(112)	%	$	(257.9)		$	161.2		(260)	%
CTI restructuring	11.0			17.5					16.1			93.2
Certain Brazil Indirect taxes	—			(118.3)					(10.6)			(118.3)
Costs related to the Transaction	—			26.7					85.8			43.9
Other items	4.1			—					11.9			—
Adjusted (loss) income before taxes	$	(2.1)		$	70.3		(103)	%	$	(154.7)		$	180.0		(186)	%
Income taxes	$	(11.8)		$	(31.5)		(63)	%	$	(26.7)		$	(78.2)		(66)	%
Effective tax rate	(68.6)		%	21.8		%			(10.4)		%	48.5		%
Performance Metrics
Change in Active Representatives							(4)	%							(16)	%
Change in units sold							5	%							(15)	%

* 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 September 30, 2020

Revenue

During the three months ended September 30, 2020, revenue decreased 16% compared to the prior-year period, significantly impacted by certain indirect tax items recognized in Brazil in the prior year. Excluding these items, Adjusted revenue decreased 11%, unfavorably impacted by foreign exchange, primarily the Brazilian real, the Argentinian peso and the Mexican peso. Constant $ Adjusted revenue increased 1%.

Revenue and Constant $ Adjusted revenue were impacted by a decrease in Active Representatives of 4%, across multiple markets. Average Representative Sales decreased 12% on a reported basis, unfavorably impacted by foreign exchange and Constant $ Adjusted Average Representative Sales increased 5%. Revenue and Constant $ Adjusted revenue benefited from the shift of approximately $87 in revenue from the prior quarter as the company fulfilled the order backlog caused by the cyber incident in June 2020. Excluding the benefit of the order backlog shift, Constant $ Adjusted revenue growth was primarily seen in Brazil, driven by pricing strategies and a significant increase in the Fashion & Home category. Constant $ Adjusted revenue growth in Brazil was more than offset by declines elsewhere, although there were signs of recovery from the pandemic in most markets.

Units sold increased 5%, driven by Brazil.

43

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 product sales from reportable segments and associated growth rates were as follows:

	Three Months Ended September 30,				% Change
	2020		2019		US$		Constant $
Beauty:
Skincare	$	315.1	$	326.2	(3)	%	9	%
Fragrance	249.8		295.6		(15)		(5)
Color	125.4		171.6		(27)		(17)
Total Beauty	690.3		793.4		(13)		(2)
Fashion & Home:
Fashion	122.3		143.9		(15)		(7)
Home	137.5		112.2		23		48
Total Fashion & Home	259.8		256.1		1		17
Certain Brazil indirect taxes	—		67.7		(100)		(100)
Product sales	$	950.1	$	1,117.2	(15)		(4)

* Calculation not meaningful

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

Operating Margin

Operating margin decreased by 580 basis points, significantly impacted by certain indirect taxes recognized in Brazil in the three month period ended September 30, 2019. Excluding these items, Adjusted operating margin decreased by 240 basis points, compared to the same period of 2019. The declines in operating margin and Adjusted operating margin were driven by gross margin performance as SG&A as a percentage of total revenue remained relatively unchanged. The movements 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 470 basis points, significantly impacted by the effects of certain indirect taxes recognized in Brazil in the three month period ended September 30, 2019. Excluding these items, Adjusted gross margin decreased 230 basis points, compared to the same period of 2019, due to higher supply chain costs from higher material costs and the unfavorable impact of foreign currency, partially offset by the favorable net impact of price/mix.

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

SG&A as a percentage of total revenue increased 110 basis points, significantly impacted by certain indirect taxes recognized in Brazil and costs related to the Natura transaction in the three month period ended September 30, 2019. Excluding these items, Adjusted SG&A as a percentage of Adjusted revenue remained relatively unchanged, compared to the same period of 2019, as the impact of revenue reduction causing deleverage of our fixed expenses was offset by lower bad debt and advertising expenses, primarily in Latin America. Reduction of bad debt expense was driven by continued improvements in credit control and collections processes in Brazil, while actions were taken to reduce advertising expense following the pandemic.

Other Expenses

Interest expense increased by approximately $5 and interest income decreased by approximately $2 compared to the prior-year period.

Loss on extinguishment of debt and credit facilities of approximately $4 in the three month period ended September 30, 2020 related to the repurchase of a portion of our 6.95% Notes due March 15, 2043. The loss on extinguishment of debt and credit facilities of approximately $8 in the three month period ended September 30, 2019 was primarily comprised of the costs of termination of a portion of the 2020 bonds. Refer to Note 16, Debt, to the Consolidated Financial Statements included herein for more information relating to these extinguishments of debt.

Other (expense) income, net, of approximately ($1) represents an unfavorable impact of $59 compared to the third quarter of 2019 primarily attributable to the impact of interest on certain indirect tax items recognized in Brazil of approximately $50 in the third quarter of 2019.

44

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Gain on sale of business/assets of approximately $1 in the three month period ended September 30, 2020 related to the sale of the China Wellness Plant in August 2020. The gain on sale of business/assets in the three month period ended September 30, 2019 related to the sale of our investment in New Avon in August 2019. Refer to Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for more information relating to the sale of these businesses and assets.

Effective Tax Rate

The effective tax rates in 2020 and 2019 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 in 2020 and 2019 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.

Our effective tax rates for the three months ended September 30, 2020 and 2019 were (68.6)% and 21.8%, respectively. The effective tax rates for the three months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the third quarter of 2020 was favorably impacted by the accrual of net income tax benefits of approximately $5.7 associated with the release of income tax reserves of approximately $10.8 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $0.8. The effective tax rate for in the third quarter of 2019 was also favorably impacted by the accrual of miscellaneous income tax benefits of approximately $2.3.

Our Adjusted effective tax rates for the three months ended September 30, 2020 and 2019 were (580.9)% and 14.2%, respectively. The Adjusted effective tax rates in 2020 and 2019 were impacted by country mix of earnings and withholding taxes. The Adjusted effective tax rate for the third quarter of 2020 was favorably impacted by the accrual of net income tax benefits of approximately $5.7 associated with the release of income tax reserves of approximately $10.8 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $0.8. The Adjusted effective tax rate in the third quarter of 2019 was also favorably impacted by the accrual of miscellaneous income tax benefits of approximately $2.3.

Further, the Company continuously assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize our existing deferred tax assets that are not subject to a valuation allowance. As of September 30, 2020, the global COVID-19 pandemic is negative evidence the Company must consider. As of September 30, 2020, the increase in negative evidence due to COVID-19 resulted in approximately $4.3 of valuation allowances being recorded against deferred tax assets. The Company will continue to monitor the COVID-19 pandemic and other effects that could impact the conclusions regarding the realizability of its remaining deferred tax assets. Potential negative evidence, including such things as the worsening of the economies in the markets we operate in and reduced profitability of our markets could give rise to a need for a valuation allowance to reduce our deferred tax assets in upcoming quarters.

See Note 17, Income Taxes, to the Consolidated Financial Statements included herein for more information on the effective tax rate, and Note 11, 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 190 basis points and 200 basis points to operating margin and Adjusted operating margin, respectively;

•foreign currency translation, which had an unfavorable impact of approximately $15 to operating profit and Adjusted operating profit, or an unfavorable impact of approximately 150 basis points and 140 basis points to operating margin and Adjusted operating margin, respectively; and

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

45

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Nine Months Ended September 30, 2020

Revenue

During the nine months ended September 30, 2020, revenue decreased 28% compared to the prior-year period, impacted by certain indirect taxes recognized in Brazil in the nine month period ended September 30, 2019. Excluding these items, Adjusted revenue decreased 26%, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Brazilian real, the Argentinian peso and the Mexican peso. Constant $ Adjusted revenue decreased 17%.

Revenue and Constant $ Adjusted revenue were impacted by a decrease in Active Representatives of 16%, across all markets. Average Representative Sales decreased 12% on a reported basis, unfavorably impacted by foreign exchange and Constant $ Adjusted Average Representative Sales decreased 1%. Revenue and Constant $ Adjusted revenue were affected by the COVID-19 pandemic, which negatively impacted the initial signs of recovery coming from a lower Representative base in 2019, with the third quarter showing revenue growth in Brazil and signs of recovery from the pandemic in most markets.

Units sold decreased 15%, across all markets, with Brazil relatively unchanged compared to the prior year period.

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

	Nine Months Ended September 30,				% Change
	2020		2019		US$		Constant $
Beauty:
Skincare	$	827.9	$	1,021.4	(19)	%	(10)	%
Fragrance	647.6		896.7		(28)		(19)
Color	349.4		541.6		(35)		(28)
Total Beauty	1,824.9		2,459.7		(26)		(17)
Fashion & Home:
Fashion	303.7		464.4		(35)		(29)
Home	294.4		350.4		(16)		—
Total Fashion & Home	598.1		814.8		(27)		(17)
Certain Brazil indirect taxes	$	—	67.7
Product sales	$	2,423.0	$	3,342.2	(28)		(19)

* Calculation not meaningful

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

Operating Margin

Operating margin decreased by 850 basis points, impacted by certain indirect taxes recognized in Brazil in the nine month period ended September 30, 2019. Excluding the impact of these items, Adjusted operating margin decreased by 740 basis points, compared to the same period of 2019. The declines in operating margin and Adjusted operating margin were mostly due to the impact of lower revenue on SG&A expenses. The movements 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 by 160 basis points, impacted by certain indirect tax items recognized in Brazil in the nine month period ended September 30, 2019. Excluding these items, Adjusted gross margin decreased 120 basis points, compared to the same period of 2019, as the favorable impact of price/mix was more than offset by higher supply chain costs driven by lower volume on fixed overhead costs and increased material costs.

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

SG&A as a percentage of total revenue increased 690 basis points, impacted by costs related to the Natura transaction in the nine month period ended September 30, 2020 and by higher CTI restructuring charges in the nine month period ended September 30, 2019. Adjusted SG&A as a percentage of Adjusted revenue increased 620 basis points, compared to the same period of 2019.

46

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

The increase in SG&A as a percentage of total revenue and Adjusted SG&A as a percentage of Adjusted revenue was largely due to revenue reduction causing deleverage of our fixed expenses and higher sales leader and field investments in Avon International in response to COVID-19 to support our representatives, maintain engagement and accelerate revenue recovery.

Other Expenses

Interest expense increased by approximately $5 and interest income decreased by approximately $3 compared to the prior-year period.

Loss on extinguishment of debt and credit facilities of approximately $12 consists primarily of the costs of termination of our 2019 revolving credit facility and the repurchase of a portion of our 6.95% Notes due March 15, 2043. The loss on extinguishment of debt and credit facilities of approximately $10 in the nine month period ended September 30, 2019 was primarily comprised of the costs of termination of a portion of the 2020 bonds repaid in the third quarter of 2019. Refer to Note 16, Debt, to the Consolidated Financial Statements included herein for more information relating to these extinguishments of debt.

Other expense, net, of $20 decreased by approximately $107 compared to other income, net of $87 in the prior-year period. The prior period income was primarily attributable to the impact of interest on certain indirect tax items recognized in Brazil of approximately $55 and the favorable impact of foreign exchange net gains in the nine month period ended September 30, 2019 compared to losses in the nine month period ended September 30, 2020.

Gain on sale of business/assets of approximately $2 in the nine month period ended September 30, 2020 related primarily to the sale of the China Wellness Plant in August 2020. The gain on sale of business/assets of approximately $50 in the nine months ended September 30, 2019 related to the sale of Avon Manufacturing (Guangzhou), Ltd Maximin Corporation Sdn Bhd and the Rye Office in February, May and June 2019 respectively and the sale of our investment in New Avon in August 2019. Refer to Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, to the Consolidated Financial Statements included herein, for more information relating to the sale of these businesses and assets.

Effective Tax Rate

The effective tax rates in 2020 and 2019 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 in 2020 and 2019 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.

Our effective tax rates for the nine months ended September 30, 2020 and 2019 were (10.4)% and 48.5%, respectively. The effective tax rates for the nine months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the nine months ended September 30, 2020 was favorably impacted by the accrual of net income tax benefits of approximately $1.8 associated with the release of income tax reserves of approximately $11.2 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $5.1. The effective tax rate for the nine months ended September 30, 2019 was also favorably impacted by the accrual of net income tax benefits of approximately $5.2 associated with the release of income tax reserves of approximately $3.0 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $2.2.

Our Adjusted effective tax rates for the nine months ended September 30, 2020 and 2019 were (15.3)% and 37.2%, respectively. The Adjusted effective tax rates in 2020 and 2019 were impacted by country mix of earnings and withholding taxes. The Adjusted effective tax rate for the nine months ended September 30, 2020 was favorably impacted by the accrual of net income tax benefits of approximately $1.8 associated with the release of income tax reserves of approximately $11.2 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $5.1. The Adjusted effective tax rate in the nine months ended September 30, 2019 was also favorably impacted by the accrual of net income tax benefits of approximately $5.2 associated with the release of income tax reserves of approximately $3.0 associated with our uncertain tax positions net of other miscellaneous income tax expenses of approximately $2.2.

Further, the Company continuously assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize our existing deferred tax assets that are not subject to a valuation allowance. As of September 30, 2020, the global COVID-19 pandemic is a new piece of negative evidence the Company must consider. As of September 30, 2020, the increase in negative evidence due to COVID-19 has not resulted in any changes to the Company’s conclusions regarding the realizability of existing deferred tax assets that are not subject to a valuation allowance. The Company will continue to monitor the COVID-19 pandemic and other effects that could impact the conclusions regarding the realizability of its deferred tax assets. Potential negative evidence, including worsening of the economies in the markets we

47

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

operate in and reduced profitability of our markets could give rise to a need for a valuation allowance to reduce our deferred tax assets in upcoming quarters.

See Note 18, Income Taxes, to the Consolidated Financial Statements included herein for more information on the effective tax rate, and Note 12, 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 $35, or approximately 90 basis points to operating margin and Adjusted operating margin;

•foreign currency translation, which had an unfavorable impact of approximately $25 to operating profit and Adjusted operating profit, or an unfavorable impact of approximately 140 basis points and 100 basis points to operating margin and Adjusted operating margin, respectively; and

•foreign exchange net losses, on our working capital (classified within other income (expense), net in our Consolidated Statements of Operations) as compared to gains in the prior year, resulting in an unfavorable impact of approximately $40 before tax on both a reported and Adjusted basis.

Segment Review

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments.

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of central expenses to the extent they support the operating activity of the segment. Segment profit excludes certain CTI restructuring initiatives, certain significant asset impairment charges, and other expenses, 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 9, Segment Information, to the Consolidated Financial Statements included herein for a reconciliation of segment profit to operating profit.

Avon International

	Three Months Ended September 30,										Nine Months Ended September 30,
							%/Basis Point Change										%/Basis Point Change
	2020			2019			US$		Constant $		2020			2019			US$		Constant $
Total revenue	$	457.1		$	505.6		(10)	%	(7)	%	$	1,239.2		$	1,614.4		(23)	%	(21)	%
Segment profit	17.4			35.4			(51)	%	(41)	%	$	15.7		129.9			(88)	%	(84)	%
Segment margin	3.8		%	7.0		%	(320)		(260)		1.3		%	8.0		%	(670)		(640)
Change in Active Representatives									(14)	%									(20)	%
Change in units sold									(8)	%									(20)	%

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

Three Months Ended September 30, 2020

Total revenue decreased 10% compared to the prior-year period, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Russian Ruble, the South African Rand and the Turkish Lira. On a Constant $ basis, revenue decreased 7% primarily driven by a decrease in Active Representatives of 14% across most markets, partially offset by an increase in Average Representative Sales. Revenue and Constant $ revenue in the third quarter showed signs of recovery following the COVID-19 pandemic impact in prior quarters in most markets. Revenue and Constant $ revenue also benefited from the shift of approximately $12 in revenue from the prior quarter as the company fulfilled the order backlog caused by the cyber incident in June 2020.

48

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Segment margin decreased 320 basis points, or 260 on a Constant $ basis, mostly driven by higher SG&A as a percentage of total revenue.

Constant $ Adjusted gross margin was relatively unchanged as the positive impact of price/mix fully offset the unfavorable impact of foreign currency transaction losses.

The increase in Constant $ Adjusted SG&A as a percentage of Adjusted revenue was largely due to higher sales leader and field investments to accelerate revenue recovery and the impact of revenue reduction causing deleverage of our fixed expenses.

Nine Months Ended September 30, 2020

Total revenue decreased 23% compared to the prior-year period, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Russian Ruble, the South African Rand and the Turkish Lira. On a Constant $ basis, revenue decreased 21% primarily driven by a decrease in Active Representatives of 20% across most markets. Revenue and Constant $ revenue were affected by the COVID-19 pandemic, which negatively impacted the initial signs of recovery coming from a lower Representative base in 2019, with the third quarter showing signs of recovery in most markets.

Segment margin decreased 670 basis points, or 640 on a Constant $ basis, was mostly due to the impact of lower revenue on SG&A expenses.

Constant $ Adjusted gross margin was relatively unchanged as the positive impact of price/mix offset higher supply chain costs primarily due to lower volume on fixed overhead costs.

The increase in Constant $ Adjusted SG&A as a percentage of Adjusted revenue was largely due to the impact of revenue reduction causing deleverage of our fixed expenses and higher sales leader and field investments in response to COVID-19 to support our representatives, maintain engagement and accelerate revenue recovery.

Avon Latin America

	Three Months Ended September 30,										Nine Months Ended September 30,
							%/Basis Point Change										%/Basis Point Change
	2020			2019			US$		Constant $		2020			2019			US$		Constant $
Total revenue	$	540.0		$	682.4		(21)	%	(3)	%	$	1,319.9		$	1,935.3		(32)	%	(18)	%
Certain Brazil indirect tax benefit	—			(67.7)			*		*		—			(67.7)			*		*
Adjusted revenue	540.0			614.7			(12)	%	8	%	1,319.9			1,867.6			(29)	%	(15)	%
Segment profit	22.0			108.0			(80)	%	(65)	%	(46.0)			174.4			(126)	%	(111)	%
Certain Brazil indirect tax benefit	—			(67.7)			*		*		—			(67.7)			*		*
Adjusted segment profit	22.0			40.3			(45)	%	(8)	%	(46.0)			106.7			(143)	%	(117)	%
Segment margin	4.1		%	15.8		%	(1,170)		(1,080)		(3.5)		%	9.0		%	(1,250)		(1,100)
Certain Brazil indirect tax benefit	—		%	9.2		%	*		*		—		%	3.3		%	*		*
Adjusted segment margin	4.1		%	6.6		%	(250)		(110)		(3.5)		%	5.7		%	(920)		(740)
Change in Active Representatives									3	%									(14)	%
Change in units sold									14	%									(12)	%

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

Three Months Ended September 30, 2020

Total revenue decreased 21% compared to the prior-year period, impacted by certain indirect taxes recognized in Brazil in the

three month period ended September 30, 2019. Excluding these items, Adjusted revenue for the region was down 12%, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Brazilian real, the Argentinian Peso and the Mexican peso. On a Constant $ basis, Adjusted revenue increased 8% primarily driven by an increase in both Average Representative Sales and Active Representatives, which benefited from the shift of approximately $75 in revenue from the prior quarter as the company fulfilled the order backlog caused by the cyber incident in June 2020. Excluding the benefit of this shift, Constant $ Adjusted revenue growth in Brazil

49

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

was more than offset by declines elsewhere in the region, with signs of recovery from the pandemic in the second half of the quarter.

Revenue in Brazil decreased 28%, significantly impacted by certain indirect tax items recognized in the three month period ended September 30, 2019. Excluding these items, Adjusted revenue in Brazil decreased 8%, unfavorably impacted by foreign exchange, while Brazil's Constant $ Adjusted revenue increased 24%. Constant $ Adjusted revenue growth in Brazil were primarily driven by an increase in Active Representatives as well as higher Average Representative Sales, which were largely attributable to a shift in revenue from the prior quarter as the company fulfilled the order backlog caused by the cyber incident in June 2020. Excluding the benefit of this shift, Constant $ Adjusted revenue growth in Brazil was driven by pricing strategies and a significant increase in the Fashion & Home category.

Segment margin decreased, significantly impacted by the effects of indirect tax items recognized in Brazil in the prior year. Excluding these items, Adjusted Segment margin decreased 250 basis points, or 110 basis points on a Constant $ basis, due to gross margin decline, largely offset by improvements in SG&A.

Adjusted gross margin declined primarily due to increased supply chain costs from higher material costs and the unfavorable impact of foreign currency, partially offset by the positive impact of price/mix. The year-on-year comparison of Adjusted gross margin included other certain indirect tax benefits in revenue in the prior year.

The decrease in Adjusted SG&A as a percentage of Adjusted revenue was driven by lower bad debt and advertising expenses, primarily in Brazil. Reduction of bad debt expense was driven by continued improvements in credit control and collections processes in Brazil, while actions were taken to reduce advertising expense following the pandemic.

Nine Months Ended September 30, 2020

Total revenue decreased 32% compared to the prior-year period, impacted by certain indirect taxes recognized in Brazil in the

nine month period ended September 30, 2019. Excluding these items, Adjusted revenue for the region was down 29%, unfavorably impacted by foreign exchange, which was driven by the strengthening of the U.S. dollar relative to multiple currencies, primarily the Brazilian real, the Argentinian peso and the Mexican peso. On a Constant $ basis, Adjusted revenue declined 18% primarily driven by a decrease in Active Representatives of 14% across all markets in Latin America. The decline in Revenue and Constant $ revenue was affected by the COVID-19 pandemic, which negatively impacted the initial signs of recovery coming from a lower Representative base in 2019, with the third quarter showing improving trends across Latin America markets and revenue growth in Brazil.

Revenue in Brazil decreased 32%, significantly impacted by certain indirect tax items recognized in Brazil in the nine month period ended September 30, 2019. Excluding these items, Adjusted revenue in Brazil decreased 26%, unfavorably impacted by foreign exchange, while Brazil's Constant $ Adjusted revenue decreased 4%. Revenue and Constant $ Adjusted revenue in Brazil were driven by a decrease in Active Representatives and lower Average Representative Sales, impacted by the COVID-19 pandemic, which negatively affected the initial signs of recovery coming from a lower Representative base in 2019. Brazil returned to growth in the third quarter driven by pricing strategies and a significant increase in the Fashion & Home category.

Segment margin decreased, significantly impacted by the effects of certain indirect tax items recognized in Brazil in the nine month period ended September 30, 2019. Excluding these items, Adjusted segment margin decreased 920 basis points, or 740 basis points on a Constant $ basis, mostly due to the impact of lower revenue on SG&A expenses as well as a decline in gross margin.

Adjusted gross margin declined primarily due to increased supply chain costs driven by lower volume on fixed overhead costs and increased material costs as well as the unfavorable impact of foreign currency losses. This was partially offset by the positive impact of price/mix. The year-on-year comparison of Adjusted gross margin included other certain indirect tax benefits in revenue in the prior year.

The increase in SG&A as a percentage of Adjusted revenue was primarily due to the impact of revenue reduction causing deleverage of our fixed expenses.

50

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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 private placement of notes. Furthermore, since January 3, 2020, we are part of the Natura &Co group of companies which gives us access to intercompany funding. As of September 30, 2020, the Company had a $900.0 debt maturity obligation due August 2022, which was redeemed on November 2, 2020. See Note 19, Subsequent Events, to the Consolidated Financial Statements included herein for more information.

The Company has cash on hand of $321.1 and restricted cash of $7.6 as of September 30, 2020.

COVID-19 pandemic and going concern

Considering the uncertain nature of any possible future COVID-19 impacts which are beyond the Company's control, we might expect some negative impact on revenue from COVID-19 to continue for the remainder of 2020 and into 2021, which will, in turn, result in lower cash generation from activities. If the downturn is deeper or for longer than we anticipate, the Company could take certain further actions to ease the pressure of certain cash outflows, such as reducing discretionary expenditure, selling non-core assets, accessing government pandemic initiatives or arranging borrowing facilities with third-party banks and affiliate companies. Our projections indicate that we should have sufficient liquidity to meet our obligations to parties other than Natura &Co and its affiliates for a period of not less than 12 months from the issuance date of the Consolidated Financial Statements contained herein. The Company has received an irrevocable commitment from Natura &Co Holding that it will provide sufficient financial support if and when needed to enable the Company to meet its obligations as they come due in the normal course of business for a period of not less than 12 months from the date issuance of the Consolidated Financial Statements contained herein.

Other liquidity matters

We may seek to retire our outstanding debt in open market purchases, through existing call mechanisms, privately negotiated transactions, through derivative instruments, cash tender offers or otherwise. Repurchases of debt may be funded by cash or the incurrence of additional debt 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 to finance ongoing operations or to meet our other liquidity needs. However, our credit ratings remain below investment grade which may impact our ability to access such transactions on favorable terms, if at all. For more information, see "Risk Factors - Our credit ratings are below investment grade, which could limit our access to financing, affect the market price of our financing and increase financing costs. A 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 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" included in Item 1A of our 2019 Annual Report.

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 7, 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

Nine months ended September 30, 2020

Net Cash Used by Operating Activities of Continuing Operations

Net cash used by operating activities of continuing operations during the first nine months of 2020 was approximately $307 as compared to net cash used by operating activities of continuing operations of approximately $141 during the first nine months of 2019, an increased cash outflow of approximately $166. The increase in net cash used by operating activities was primarily due to lower cash profits impacted by lower revenue levels and unfavorable one-time items linked to the acquisition by Natura &Co Holding. Cash outflows related the Transaction included professional fees, senior officer severance and other expenses during the first quarter of 2020. Further information relating to the Transaction is included in Note 18, Merger with Natura Cosméticos S.A., to the Consolidated Financial Statements included herein.

51

AVON PRODUCTS, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Net Cash (Used) Provided by Investing Activities of Continuing Operations

Net cash used by continuing investing activities during the first nine months of 2020 was approximately $17, as compared to net cash provided by continuing investing activities of approximately $60 during the first nine months of 2019. The approximate $77 decrease to net cash provided by continuing investing activities was driven by lower net proceeds from the sale of businesses and assets in the first nine months of 2020 compared to the first nine months of 2019. In the nine month period ended September 30, 2020, net proceeds of $11 were received from the sale of the Hungary Distribution Center in Gödöllő in the second quarter of 2020, and the sale of the China Wellness Plant and Avon Management Shanghai, both of which closed during the third quarter of 2020. In the nine month period ended September 30, 2019, net proceeds of $100 from the sale of Avon Manufacturing (Guangzhou), Ltd, which closed during the first quarter of 2019, the sale of the Rye office and the sale of Maximin Corporation Sdn Bhd, both of which closed during the second quarter of 2019, and the sale of our 19.9% ownership interest in New Avon, which was closed during the third quarter of 2019. Further information relating to these divestitures is included in Note 2, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, to the Consolidated Financial Statements included herein.

Net Cash Provided by Financing Activities of Continuing Operations

Net cash provided by continuing financing activities during the first nine months of 2020 was approximately $26, as compared to cash provided by continuing financing activities of $147 in the first nine months of 2019. The approximate $121 decrease to net cash from financing activities was primarily due to the net impact of proceeds from debt issued offset by the repayment of debt in the prior year period.

52

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

Approximately 2% of our debt portfolio, our short-term debt, is exposed to floating interest rates. Our long-term borrowings are all at fixed rates of interest.

Foreign Currency Risk

We conduct business globally, with operations in various locations around the world. Since 2016, all of our consolidated revenue has been 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, Open Up & Grow, stabilization strategies, digital 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 Open Up & Grow, 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, digital 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 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;

•the possibility of business disruption in connection with our Transformation Plan, Open Up Avon, Open Up & Grow, 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, Russia and the United Kingdom;

53

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 improve working capital and effectively manage doubtful accounts and inventory and implement initiatives to reduce inventory levels, including through our recent structural reset of inventory processes, and 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;

•the COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, manufacturing, supply chains and distribution systems. There is uncertainty around the duration and breadth of the COVID-19 pandemic and the response to it. As a result, we cannot reasonably estimate at this time the continued impact, that COVID-19 may have on our business or operations. The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact including on financial markets or otherwise. See also "Item 1A. Risk Factors—The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, manufacturing, supply chains and distribution systems, and we have experienced and expect to continue to experience unpredictable negative effects associated with the pandemic."

•key information technology systems, process or site outages and disruptions, and any cybersecurity 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 cybersecurity breaches. This includes the cyber incident which occurred in the second quarter of 2020, see Note 1, Accounting Policies, to the Consolidated Financial Statements included herein and Part 4, Controls and Procedures;

•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;

54

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 successfully identify new business opportunities, strategic alliances and strategic alternatives and identify and analyze alliance candidates, secure financing on favorable terms and negotiate and consummate alliances;

•disruption in our supply chain or manufacturing and distribution operations;

•the quality, safety and efficacy of our products;

•the success of our research and development activities;

•our ability to protect our intellectual property rights, including in connection with the separation of the North America business;

•the risk of an adverse outcome in any material pending and future litigation or with respect to the legal status of Representatives; and

•other risks and uncertainties include the possibility that the expected synergies and value creation from the Transaction will not be realized or will not be realized within the expected time period; the risk that the businesses of the Company and Natura &Co Holding will not be integrated successfully; disruption from the Transaction making it more difficult to maintain business and operational relationships; the possibility that the intended accounting and tax treatments of the Transaction are not achieved; the effect of the consummation of the Transaction on customers, employees, representatives, suppliers and partners and operating results; as well as more specific risks and uncertainties.

Additional information identifying such factors is contained in Item 1A of our 2019 Form 10-K for the year ended December 31, 2019, and in Item 1A of this 10-Q. We undertake no obligation to update any such forward-looking statements.

55

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 2019 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 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 not effective as of September 30, 2020, due to a material weakness in our IT general controls (“ITGCs”) identified as of June 30, 2020 and not yet remediated, which is described below.

In June 2020, the Company became aware that it was exposed to a cyber incident in its Information Technology environment which interrupted some systems and partially affected operations. The Company engaged a leading cyber security firm to perform a forensic investigation of this incident. Management concluded that controls related to our IT environment have not been designed and/or operated effectively to prevent access and changes to our IT systems supporting financial information processing. Although we have no indication that the accuracy and completeness of any financial information was impacted as a result of the incident and the Company has performed extensive procedures to validate such accuracy and completeness, we believe that, if the incident had gone differently, it could have potentially resulted in a material impact to the Company’s financial statements, which leads to the conclusion that the magnitude of these control deficiencies represent a material weakness in our IT general controls as of September 30, 2020.

At the date of this report, the Company has concluded its investigation and continues to work diligently through the remediation plan to address the IT general controls material weakness in a timely manner.

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 have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, other than the material weakness identified and discussed above, our management has concluded that no such changes have occurred.

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AVON PRODUCTS, INC.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 7, Contingencies, to the Consolidated Financial Statements included herein.

ITEM 1A. RISK FACTORS

The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, manufacturing, supply chains and distribution systems, and we have experienced and expect to continue to experience unpredictable negative effects associated with the pandemic.

Public health officials worldwide have recommended and mandated precautions to mitigate the spread of COVID-19, including restrictions on manufacturing, distribution, congregating in heavily populated areas and shelter-in-place orders or similar measures. As a result, manufacturing and distribution of our products have been negatively impacted and could be further affected in the future. Our suppliers have been similarly impacted which further affects our ability to produce and distribute. Distribution has also been impacted by certain restrictions on import and export in various countries and such restrictions may continue in the future. As a result of the COVID-19 pandemic, we have also been unable to satisfy certain demand for our products. The pandemic has also led to challenges in recruiting Representatives, and enrollment of Representatives will likely occur at a slower pace. As a result, customers have experienced and may continue to experience delays in receiving our products. Additionally, there is a general risk that our employees or other workers could be exposed to the virus and that an incident of infection in one of our sites could result in "lock-down" measures for the whole site that could negatively impact our business.

Our results will continue to be adversely impacted by these public health restrictions and other actions taken to contain or mitigate the impact of COVID-19.

We might expect some negative impact on revenue from COVID-19 to continue for the remainder of 2020 and into 2021, which will, in turn, result in lower cash generation from activities. If the downturn is deeper or for longer than we anticipate, the Company could take certain further actions to ease the pressure of certain cash outflows, such as reducing discretionary expenditure, selling non-core assets, accessing government pandemic initiatives or arranging borrowing facilities with third-party banks and affiliate companies. Our projections indicate that we should have sufficient liquidity to meet our obligations to parties other than Natura &Co and its affiliates for a period of not less than 12 months from the date issuance of the Consolidated Financial Statements contained herein. The Company has received an irrevocable commitment from Natura &Co Holding that it will provide sufficient financial support if and when needed to enable the Company to meet its obligations as they come due in the normal course of business for a period of not less than 12 months from the date issuance of the Consolidated Financial Statements contained herein. For further information see Note 1, Accounting Policies, to the Consolidated Financial Statements included herein.

Although there have been certain improvements in the restrictive measures being adopted to contain the impacts of the COVID-19 pandemic, there is still considerable uncertainty as to whether future restrictions might be required or enforced by the authorities in the future. The extent of the continued impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and its impact on our clients, suppliers and employees, all of which are uncertain and cannot be predicted. COVID-19 also poses risks that our employees, contractors, suppliers, customers and other business partners may be prevented from conducting business activities for an indefinite period of time, including current or future shutdowns that may be requested or mandated by governmental authorities and could have a material adverse effect on our results of operations, financial condition and liquidity going forward. Furthermore, to the extent the COVID-19 pandemic adversely affects our business, results of operations, financial condition and liquidity, it may also have the effect of heightening many of the other risks to which we are exposed, such as those relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness, our ability to comply with the covenants contained in the agreements that govern our indebtedness.

There is uncertainty around the duration and breadth of the COVID-19 pandemic and the response to it. As a result the ultimate impact on our business, financial condition or operating results cannot be reasonably estimated at this time. While we expect the impacts of COVID-19 to continue to have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or precise nature of these impacts at this time. If the pandemic or the resulting economic downturn continues to worsen, we could experience loss of business, which could have a material impact on our financial position and cash flows.

In addition, in the future, other regional and / or global outbreaks of communicable diseases may occur. If they occur, the effects that the Company will suffer may be similar or even greater than the effects it is suffering as a result of the COVID-19 pandemic.

57

AVON PRODUCTS, INC.

Our ability to conduct business in our international markets may be affected by political, legal, tax and regulatory risks.

Our ability to achieve growth in our international markets, and to improve operations in our existing international markets, is exposed to various risks, including:

•the possibility that a foreign government might ban, halt or severely restrict our business, including our primary method of direct selling;

•the possibility that local civil unrest, economic or political instability, bureaucratic delays, changes in macro-economic conditions, changes in diplomatic or trade relationships (including any sanctions, restrictions and other responses such as those related to Russia and Ukraine) or other uncertainties might disrupt our operations in an international market;

•the lack of well-established or reliable legal systems in certain areas where we operate;

•the adoption of new U.S. or foreign tax legislation or exposure to additional tax liabilities, including exposure to tax assessments without prior notice or the opportunity to review the basis for any such assessments in certain jurisdictions; including in Brazil, particularly, where the tax system is highly complex and the interpretation of the tax laws and regulations is commonly controversial, and the Brazilian government regularly implements changes to tax regimes that may increase our tax burden, including modifications in the rate of assessments and the enactment of new or temporary taxes, the proceeds of which are earmarked for designated governmental purposes;

•the possibility that a government authority might impose legal, tax or other financial burdens on the Representatives, as direct sellers, or on Avon, due, for example, to the structure of our operations in various markets, or additional taxes on our products, including in Brazil;

•the possibility that a government authority might challenge the status of the Representatives as independent contractors or impose employment or social taxes on the Representatives; and

•those associated with data privacy regulation and the international transfer of personal data.

We are also subject to the adoption, interpretation and enforcement by governmental agencies abroad and in the U.S. (including on federal, state and local levels) of other laws, rules, regulations or policies, including any changes thereto, such as restrictions on trade, competition, manufacturing, license and permit requirements, import and export license requirements, privacy and data protection laws, anti-trust laws, anti-corruption laws, environmental laws, records and information management, tariffs and taxes, laws relating to the sourcing of "conflict minerals," health care reform requirements such as those required by the Patient Protection and Affordable Healthcare Act, and regulation of our brochures, product claims or ingredients, which may require us to adjust our operations and systems in certain markets where we do business.

For example, from time to time, local governments and others question the legal status of Representatives or impose burdens inconsistent with the Representative's status as independent contractors, often in regard to possible coverage under social benefit laws that would require us (and, in most instances, the Representatives) to make regular contributions to government social benefit funds.

If we are unable to address these matters in a satisfactory manner, or adhere to or successfully implement processes in response to changing regulatory requirements, our business, costs and/or reputation may be adversely affected. We cannot predict with certainty the outcome or the impact that pending or future legislative and regulatory changes may have on our business in the future.

We were the target of a cybersecurity incident which disrupted our systems.

In June 2020, we became aware that we were exposed to a cyber incident in our Information Technology (IT) environment which interrupted some of our systems and partially affected our operations. We engaged leading external cyber security and IT general controls specialists, launched a comprehensive containment and remediation effort and started a forensic investigation. By mid-August, the Company had re-established all of its core business processes and resumed operations in all of its markets, including all of its distribution centers.

The cyber incident had a significant impact on our revenue performance for the second quarter of 2020, with the majority of the impact (approximately US$87 million in sales) being shifted to the third quarter of 2020 as we fulfilled the order backlog created. The incremental expense incurred as a result of the cyber incident was not material.

Management concluded that controls related to our IT environment have not been designed and/or operated effectively to prevent access and changes to our IT systems supporting financial information processing. Although we have no indication that the accuracy and completeness of any financial information was impacted as a result of the incident and we have performed extensive procedures to validate such accuracy and completeness, we believe that, if the incident had gone differently, it could have potentially resulted in a material impact to our financial statements, which leads to the conclusion that the magnitude of

58

AVON PRODUCTS, INC.

these control deficiencies represent a material weakness in our IT general controls as of as of June 30, 2020, which is not yet remediated as of September 30, 2020.

At the date of this report, the Company has concluded its investigation and continues to work diligently through the remediation plan to address the IT general controls material weakness in a timely manner.

As a result of the incident, we may be subject to litigation and investigations by regulators in the jurisdictions in which we operate. We may incur losses associated with potential claims by third parties or individuals, as well as fines, penalties and other sanctions imposed by regulators relating to or arising from the incident. We may also incur contingencies related to the incident. We are not able to reliably forecast all of the losses that may occur as a result of the incident, and such excess losses could have a material adverse effect on our financial condition or results of operations in future periods.

Following the incident, we have taken certain additional preventative measures to reduce cyber risks. However, we cannot provide assurance that our security frameworks and measures will be successful in preventing future cybersecurity incidents. In addition, the costs of such measures and management attention required may be significant. Further, the incident may have a negative impact on our reputation and cause customers, suppliers and other third parties with whom we maintain relationships to lose confidence in us. We are unable to definitively determine the impact to these relationships and whether we will need to engage in any activities to rebuild them.

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

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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AVON PRODUCTS, INC.

ITEM 6. EXHIBITS

10.1	Credit Agreement, dated May 13, 2020, between Natura &Co International S.à r.l, as lender, and Avon Luxembourg Holdings S.à r.l, as borrower
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

60

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:	November 13, 2020	/s/ Elena Casap
		Elena Casap
		Controller - Principal Accounting Officer
		Signed both on behalf of the
		registrant and as chief
		accounting officer.

61

EX-10.1

Exhibit 10.1

May 13, 2020

Effective as of May 13, 2020, Natura &Co International S.à r.l, 6, rue Eugène Ruppert, L – 2453 Luxembourg (“Lender”) has agreed to enter into a US$100,000,000 equivalent value, multi-currency uncommitted Revolving Credit Facility (“Facility”) with Avon Luxembourg Holdings S.à r.l, a private limited company, with registered office at 8-10, Avenue de la Gare, L-1610 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies Register under number B 98931 (“Borrower”) under the following terms and conditions.

Lender: Natura &Co International S.à r.l

Borrower: Avon Luxembourg Holdings S.à r.l

Terms:

The Facility will mature on May 31, 2022. The unused portion of the Facility can be canceled at any time by either the Borrower or the Lender by giving five (5) days’ written notice (it being agreed that such notice may be provided via email). In no event does the cancellation of the Facility affect the rights of either the Borrower or the Lender with regard to any outstanding Loans (as such term is defined below).

Facility Limit:

Loans may be made in mutually agreed currency up to a maximum aggregate principal amount of US$100,000,000 (the “USD Maximum Amount”) or equivalent based on the exchange rate applicable to outstanding and new Loans as of the date any new Loan is made, as determined by the Lender (the “Applicable Exchange Rates”). In no case shall the USD equivalent of the aggregate principal amount of each of the new Loans made on that day, when combined with the USD equivalent of the aggregate principal amount of each of the existing Loans, in each case based on the Applicable Exchange Rates, exceed the USD Maximum Amount.

Loan tenor:

The Borrower can borrow for periods up to twelve (12) months subject to the availability of funds for the requested Loan tenor. All borrowings will be recorded by the Lender which will be deemed correct subject to manifest error.

Each borrowing under the Facility will be referred to as a “Loan” and collectively as the “Loans”. Notwithstanding anything to the contrary, no Loan may extend beyond the maturity date of this Facility when all Loans are due and payable.

The Borrower must advise the Lender at least two (2) days in advance of its intention to borrow funds under the Facility as well as its intention to roll over a Loan at its scheduled maturity date. The Borrower will advise the Lender of the maturity date required for each new Loan. The Lender will review the Borrower’s requests and confirm acceptance or otherwise of such requests promptly. The parties agree that such communications shall be provided via email.

Loans:

The minimum amount for any Loan under this facility is US$1,000,000 or equivalent (based on the Applicable Exchange Rate) in the chosen currency. In no event can the aggregate of all Loans outstanding exceed the overall USD Maximum Amount. All repayments and associated interest with respect to a Loan shall be made in the same currency as the Loan so borrowed.

Exhibit 10.1

Interest Rates:

The rate of interest on each Loan for each interest period is the percentage rate per annum which is the aggregate of:

a) 7.7%; and

b) the London Interbank Offered Rate or equivalent benchmark interest rate applicable for the relevant currency and interest period

Interest Payment:

Interest is due at the maturity date of each Loan, on the date of any prepayment, and at the termination of the Facility. Interest shall be paid in the same currency as the Loan.

Withholding Tax:

All interest will be paid net of withholding tax.

Default:

All outstanding Loans under this Facility will be due and payable regardless of their scheduled maturity date if:

(a) the principal amount of a Loan is not received by the Lender on the Loan’s scheduled maturity date; or

(b) the interest due on a Loan is not received within three (3) days of the scheduled due date.

The Borrower waives presentment of payment, notice of non-payment and protest as well as claim to any set-off, counter claim, or deduction of any nature.

Prepayment:

The Borrower may prepay any Loan in whole or in part at any time before the scheduled maturity date without penalty by irrevocably advising its intention to do so to the Lender, three (3) business days in advance of such prepayment.

Counterparts:

This agreement may be signed in any number of counterparts and all such counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this agreement by facsimile or other electronic image scan transmission shall be effective as delivery of a manually executed counterpart of this agreement.

Law:

This agreement and all matters, claims or causes of action based upon, arising out of, or relating to this agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof. The terms of this agreement may be modified, amended, or renewed only upon the written consent of both of the parties hereto. This agreement shall be binding to the benefit of the respective parties, their successors and assigns.

If any term, covenant, condition or provision of this agreement or the application thereof to any person or circumstance, shall to any extent be held invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefore in order to carry out, so far as may be valid or enforceable, such provision and (b) the remainder of this agreement, other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each other term, covenant, condition or provision of this agreement shall be valid and shall be enforced to the fullest extent provided by law.

Exhibit 10.1

Signed by:Signed by:

Natura &Co International S.à r.l Avon Luxembourg Holdings S.à r.l

Name: David Burgos Name:

Title: Manager Title: Manager A

Date: 06 May 2020 Date: 13 May 2020

Name: Atem Salameh Name:

Title: Manager Title: Manager B

Date: 06 May 2020 Date:

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Angela Cretu, 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: November 13, 2020

/s/ Angela Cretu

Angela Cretu

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Carl Rogberg, 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: November 13, 2020

/s/ Carl Rogberg

Carl Rogberg

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 September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Angela Cretu, 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/ Angela Cretu

Angela Cretu

Chief Executive Officer

November 13, 2020

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 September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carl Rogberg, 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/ Carl Rogberg

Carl Rogberg

Vice President and Chief Financial Officer

November 13, 2020

XML

Cover Page	9 Months Ended
	Sep. 30, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	1-4881
Entity Registrant Name	AVON PRODUCTS, INC.
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	13-0544597
Entity Address, Address Line One	Building 6, Chiswick Park
Entity Address, City or Town	London
Entity Address, Postal Zip Code	W4 5HR
Entity Address, Country	GB
Country Region	44
City Area Code	1904
Local Phone Number	232425
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	101.34
Entity Central Index Key	0000008868
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue				$ 3,549.7
Revenue from affiliates of Natura &Co	$ 0.9	$ 0.0	$ 2.7	0.0
Total revenue	998.0	1,188.0	2,561.8	3,549.7
Costs, expenses and other:
Cost of sales	(440.0)	(468.2)	(1,111.5)	(1,482.7)
Selling, general and administrative expenses	(534.2)	(622.1)	(1,578.4)	(1,942.7)
Operating income	23.8	97.7	(128.1)	124.3
Interest expense	(37.4)	(32.0)	(100.9)	(95.9)
Loss on extinguishment of debt and credit facilities	(4.1)	(8.1)	(11.9)	(10.1)
Interest income	0.1	2.1	1.6	5.3
Other (expense) income, net	(1.0)	57.9	(20.1)	87.3
Gain on sale of business/assets	1.4	26.8	1.5	50.3
Total other (expenses) income	(41.0)	46.7	(129.8)	36.9
(Loss) income from continuing operations, before income taxes	(17.2)	144.4	(257.9)	161.2
Income taxes	(11.8)	(31.5)	(26.7)	(78.2)
(Loss) income from continuing operations, net of tax	(29.0)	112.9	(284.6)	83.0
Loss from discontinued operations, net of tax	(4.5)	(6.3)	(14.3)	(29.0)
Net (loss) income	(33.5)	106.6	(298.9)	54.0
Net loss attributable to noncontrolling interests	0.7	0.3	2.3	0.7
Net (loss) income attributable to Avon	(32.8)	106.9	(296.6)	54.7
Product sales
Revenue	950.1	1,117.2	2,423.0	3,342.2
Total revenue	950.1	1,117.2	2,423.0
Other revenue
Revenue	$ 47.0	$ 70.8	$ 136.1	$ 207.5

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (33.5)	$ 106.6	$ (298.9)	$ 54.0
Other comprehensive loss:
Foreign currency translation adjustments	(65.7)	0.0	(149.7)	1.3
Unrealized gain (loss) on revaluation of long-term intercompany balances	40.4	(19.1)	13.8	(19.4)
Change in unrealized gain (loss) on cash flow hedges, net of taxes	0.0	0.1	0.6	(2.5)
Adjustments and amortization of net actuarial loss and prior service cost, net of taxes	4.4	1.6	8.4	4.7
Sale of New Avon	0.0	(3.4)	0.0	(3.4)
Total other comprehensive loss, net of income taxes	(20.9)	(20.8)	(126.9)	(19.3)
Comprehensive (loss) income	(54.4)	85.8	(425.8)	34.7
Less: comprehensive loss attributable to noncontrolling interests	0.5	0.3	2.3	0.8
Comprehensive (loss) income attributable to Avon	$ (53.9)	$ 86.1	$ (423.5)	$ 35.5

XML

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Change in unrealized gain/losses on cash flow hedges, tax	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Adjustments and amortization of net actuarial loss and prior service cost, taxes	$ 0.2	$ 0.2	$ 0.6	$ 0.5

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 321.1	$ 650.6
Restricted cash	7.6	2.9
Accounts receivable, net	261.2	280.2
Receivables from affiliates of Natura &Co	3.3	0.0
Inventories	461.1	452.3
Prepaid expenses and other	210.2	252.1
Assets held for sale	8.5	22.6
Total current assets	1,273.0	1,660.7
Property, plant and equipment, at cost	1,089.9	1,203.0
Less accumulated depreciation	(677.0)	(715.0)
Property, plant and equipment, net	412.9	488.0
Right-of-use assets	153.8	175.4
Goodwill	75.0	86.2
Deferred tax asset	120.2	161.2
Other assets	417.4	514.8
Total assets	2,452.3	3,086.3
Current Liabilities
Debt maturing within one year	30.2	1.8
Loans from affiliates of Natura &Co	47.2	0.0
Accounts payable	660.9	723.3
Payables to affiliates of Natura &Co	92.8	0.0
Dividends payable	0.0	8.7
Accrued compensation	92.3	114.5
Other accrued liabilities	314.6	410.7
Sales taxes and taxes other than income	104.2	118.7
Income taxes	1.1	7.4
Current liabilities of discontinued operations	19.2	16.0
Total current liabilities	1,362.5	1,401.1
Long-term debt	1,566.5	1,590.4
Long-term operating lease liability	123.4	143.3
Employee benefit plans	127.6	137.6
Long-term income taxes	104.6	128.7
Other liabilities	96.7	90.5
Total liabilities	3,381.3	3,491.6
Series C convertible preferred stock	0.0	578.5
Shareholders’ Deficit
Common stock	0.0	192.6
Additional paid-in capital	527.7	2,321.2
Retained earnings	(294.3)	2,138.9
Accumulated other comprehensive loss	(1,166.9)	(1,040.0)
Treasury stock, at cost	0.0	(4,603.3)
Total Avon shareholders’ deficit	(933.5)	(990.6)
Noncontrolling interests	4.5	6.8
Total shareholders’ deficit	(929.0)	(983.8)
Total liabilities, series C convertible preferred stock and shareholders’ deficit	$ 2,452.3	$ 3,086.3

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Consolidated Statements of Cash Flows - USD ($) $ in Millions		3 Months Ended				9 Months Ended		12 Months Ended
		Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Cash Flows from Operating Activities
Net (loss) income		$ (33.5)	$ (171.9)	$ 106.6	$ (33.5)	$ (298.9)	$ 54.0
Loss from discontinued operations, net of tax		(4.5)		(6.3)		(14.3)	(29.0)
(Loss) income from continuing operations, net of tax		(29.0)		112.9		(284.6)	83.0
Adjustments to reconcile net (loss) income from continuing operations to net cash used by operating activities:
Depreciation						43.4	54.6
Amortization						19.3	18.7
Provision for doubtful accounts						64.2	86.9
Provision for obsolescence						28.2	22.2
Share-based compensation						21.8	8.9
Foreign exchange losses (gains)						3.0	(42.8)
Deferred income taxes						21.8	21.7
Impairment loss on assets						1.8	15.4
Gain on sale of business / assets		(1.4)		(26.8)		(1.5)	(50.3)
Certain Brazil indirect taxes		0.0		(118.3)
Other						22.1	16.7
Changes in assets and liabilities:
Accounts receivable						(84.0)	(56.1)
Inventories						(84.1)	10.1
Prepaid expenses and other						(9.0)	34.1
Accounts payable and accrued liabilities						(85.7)	(232.8)
Income and other taxes						2.8	5.5
Noncurrent assets and liabilities						13.9	(18.9)
Net cash used by operating activities of continuing operations						(306.6)	(141.4)
Cash Flows from Investing Activities
Capital expenditures						(30.0)	(42.8)
Disposal of assets						1.8	1.8
Net proceeds from sale of business / assets						11.3	99.9
Other investing activities						0.4	1.0
Net cash (used) provided by investing activities of continuing operations						(16.5)	59.9
Cash Flows from Financing Activities
Cash dividends						(8.6)	0.0
Debt, net (maturities of three months or less)						12.5	(6.9)
Proceeds from debt						80.8	400.0
Repayment of debt						(48.3)	(275.8)
Repurchase of common stock						(0.4)	(1.0)
Costs associated with debt issue / repayment						(3.8)	(25.4)
Settlement of stock options						(25.8)	0.0
Settlement of derivative contracts						19.5	36.1
Proceeds from sale of PIS/COFINS tax credits						0.0	19.4
Other financing activities						0.0	0.5
Net cash provided by financing activities of continuing operations						25.9	146.9
Net cash used by operating activities of discontinued operations						(11.2)	(14.8)
Net cash used by discontinued operations						(11.2)	(14.8)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash						(23.9)	(15.2)
Net decrease in cash and cash equivalents, and restricted cash						(332.3)	35.4
Cash and cash equivalents, and restricted cash at beginning of year	[1]		$ 661.0		$ 536.4	661.0	536.4	$ 536.4
Cash and cash equivalents, and restricted cash at end of period	[1]	$ 328.7		571.8		$ 328.7	571.8	661.0
Cash and cash equivalents, classified as held for sale									$ 3.7
Long-term restricted cash				$ 7.5			$ 7.5	$ 7.5

[1] The balance at the beginning of the nine month period ended September 30, 2019 includes cash and cash equivalents of $3.7 classified as Held for sale assets in our Consolidated Balance Sheets.The balance at the end of the nine month period ended Sept 30, 2019 and the balance at the beginning of the nine month period ended September 30, 2020 includes Long-term restricted cash of $7.5 which is presented in other assets in our Consolidated

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Consolidated Statements of Changes in Shareholders' Deficit - USD ($) $ in Millions		Total	Cumulative effect adjustment	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Cumulative effect adjustment	Accumulated Other Comprehensive Loss	Treasury Stock	Noncontrolling Interest
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) income		(33.5)				(32.7)				(0.8)
Other comprehensive (loss) income		(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)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.0		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
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) income		54.0
Other comprehensive (loss) income		(19.3)
Ending balance (in shares) at Sep. 30, 2019				763,400,000					319,900,000
Ending balance at Sep. 30, 2019		(875.2)		$ 190.4	2,310.5	2,270.0		(1,049.7)	$ (4,603.3)	6.9
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
Ending balance (in shares) at Dec. 31, 2019				770,000,000.0					319,900,000
Ending balance at Dec. 31, 2019		$ (983.8)	$ (2.0)	$ 192.6	2,321.2	2,138.9	$ (2.0)	(1,040.0)	$ (4,603.3)	6.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member
Beginning balance (in shares) at Mar. 31, 2019				763,100,000					319,400,000
Beginning balance at Mar. 31, 2019		$ (941.5)		$ 190.6	2,302.1	2,195.4		(1,034.4)	$ (4,602.3)	7.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		(19.1)				(19.5)				0.4
Other comprehensive (loss) income		5.5						5.5
Dividends accrued - Series C convertible preferred stock		(6.4)				(6.4)
Exercise/ vesting/ expense of share-based compensation		5.4			5.4
Repurchase of common stock (in shares)				100,000					500,000
Repurchase of common stock		(1.0)		$ 0.1					$ (1.0)
Purchases and sales of noncontrolling interests, net of dividends paid of $0.0		(0.3)								(0.3)
Ending balance (in shares) at Jun. 30, 2019				763,200,000					319,900,000
Ending balance at Jun. 30, 2019		(957.3)		$ 190.7	2,307.5	2,169.5		(1,028.9)	$ (4,603.3)	7.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		106.6				106.9				(0.3)
Other comprehensive (loss) income		(20.8)						(20.8)
Dividends accrued - Series C convertible preferred stock		(6.4)				(6.4)
Exercise/ vesting/ expense of share-based compensation (in shares)				300,000
Exercise/ vesting/ expense of share-based compensation		3.3		$ 0.3	3.0
Repurchase of common stock (in shares)				(100,000)
Repurchase of common stock		(0.6)		$ (0.6)
Ending balance (in shares) at Sep. 30, 2019				763,400,000					319,900,000
Ending balance at Sep. 30, 2019		$ (875.2)		$ 190.4	2,310.5	2,270.0		(1,049.7)	$ (4,603.3)	6.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock (in dollars per share)		$ 0.25
Stock, shares authorized (in shares)		1,525,000,000
Common stock, authorized (in shares)		1,500,000,000
Preferred stock, authorized (in shares)		25,000,000
Preferred stock, par value (in dollars per share)		$ 1.00
Beginning balance (in shares) at Dec. 31, 2019				770,000,000.0					319,900,000
Beginning balance at Dec. 31, 2019		$ (983.8)	(2.0)	$ 192.6	2,321.2	2,138.9	(2.0)	(1,040.0)	$ (4,603.3)	6.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		(171.9)				(171.0)				(0.9)
Other comprehensive (loss) income		(104.5)						(104.3)		(0.2)
Conversion of Series C convertible preferred stock (in shares)	[1]								(87,000,000.0)
Conversion of Series C convertible preferred stock	[1]	486.8				(710.8)			$ 1,197.6
Exercise/ vesting/ expense of share-based compensation		(9.9)		$ (0.2)	(9.7)
Exchange of common stock (in shares)	[2]			(770,000,000.0)					(232,900,000)
Exchange of common stock	[2]			$ (192.4)	(1,788.1)	(1,425.2)			$ 3,405.7
Ending balance (in shares) at Mar. 31, 2020	[3]			0					0
Ending balance at Mar. 31, 2020	[3]	(785.3)		$ 0.0	523.4	(170.1)		(1,144.3)	$ 0.0	5.7
Beginning balance (in shares) at Dec. 31, 2019				770,000,000.0					319,900,000
Beginning balance at Dec. 31, 2019		(983.8)	$ (2.0)	$ 192.6	2,321.2	2,138.9	$ (2.0)	(1,040.0)	$ (4,603.3)	6.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		(298.9)
Other comprehensive (loss) income		(126.9)
Ending balance (in shares) at Sep. 30, 2020				0					0
Ending balance at Sep. 30, 2020		$ (929.0)		$ 0.0	527.7	(294.3)		(1,166.9)	$ 0.0	4.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member
Beginning balance (in shares) at Mar. 31, 2020	[3]			0					0
Beginning balance at Mar. 31, 2020	[3]	$ (785.3)		$ 0.0	523.4	(170.1)		(1,144.3)	$ 0.0	5.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		(93.5)				(92.8)				(0.7)
Other comprehensive (loss) income		(1.5)						(1.5)
Exercise/ vesting/ expense of share-based compensation		0.8			0.8
Ending balance (in shares) at Jun. 30, 2020				0					0
Ending balance at Jun. 30, 2020		(879.5)		$ 0.0	524.2	(262.9)		(1,145.8)	$ 0.0	5.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income		(33.5)				(32.8)				(0.7)
Gain on common control transaction		1.4				1.4
Other comprehensive (loss) income		(20.9)						(21.1)		0.2
Exercise/ vesting/ expense of share-based compensation		3.5			3.5
Ending balance (in shares) at Sep. 30, 2020				0					0
Ending balance at Sep. 30, 2020		$ (929.0)		$ 0.0	$ 527.7	$ (294.3)		$ (1,166.9)	$ 0.0	$ 4.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock (in dollars per share)		$ 0.01
Common stock shares outstanding (in shares)		101.34

[1] On December 30, 2019, an affiliate of Cerberus Capital Management, L.P. ("Cerberus") elected to convert 435,000 shares of Series C Preferred Stock into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, conditioned on the Conversion Condition (as defined below). See Note 12, Series C Convertible Preferred Stock.

[2] In January 2020, subsequent to the Transaction, the Company restated its certificate of incorporation to effect a change in capitalization of the Company by changing the number of authorized shares of stock from 1,525,000,000 shares (of which (i) 1,500,000,000 shares, par value $0.25 per share, were common stock and (ii) 25,000,000 shares, par value $1.00 per share, were preferred stock) to 1,000 shares of common stock, par value $0.01 per share. As a result of the Merger, all of the issued and outstanding common stock of the Company, being 550,890,788, were canceled and converted. See Note 18, Mergers     with Natura Cosméticos S.A.,.

[3] The number of shares of Common Stock (par value $0.01 per share) outstanding at September 30, 2020 was 101.34.

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Consolidated Statements of Changes in Shareholders' Deficit (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Dividends	$ 0.1	$ 0.0

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ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2020

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 2019 Annual Report on Form 10-K ("2019 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. On January 3, 2019, we completed the Agreement and Plan of Mergers with Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) ("Natura Cosméticos"), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima) ("Natura &Co Holding"), and two subsidiaries of Natura &Co Holding S.A. ("Natura &Co") pursuant to which, in a series of transactions (the "Transaction"). Upon the consummation of the Transaction, the Company became a wholly owned subsidiary of Natura &Co Holding and Avon common stock ceased to be traded on the NYSE. As a result, we have excluded disclosures of Earnings per Share from our consolidated financial statements. For additional information, see Note 18, Agreement and Plan of Mergers with Natura Cosméticos S.A.

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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 2019 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;

•the impact of changes in tax legislation, 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.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation in the Consolidated Balance Sheets. As of September 30, 2020 and December 31, 2019, the Company had tooling, net of amortization of $8.0 and $12.9, respectively. The tooling balance as of December 31, 2019, representing cost of $94.4 and accumulated depreciation of $81.5, previously included in other long-term assets has been reclassified to property, plant and equipment to conform to the current year presentation.

As of September 30, 2020, we identified an immaterial classification error in the Consolidated Statement of Cash Flows relating to the nine month period ended September 30, 2019 with respect to cash flows from the settlement of derivative contracts. Our accounting policy is to classify derivative cash flows as operating, investing or financing consistent with the nature of the underlying hedged item. However, we have identified that cash flows relating to derivative contracts that economically hedge foreign exchange gains and losses on intercompany loans have been incorrectly classified as operating activities rather than financing activities. We have corrected this reclassification error through a revision to the nine month period ended September 30, 2019 to reclassify cash inflows of $36.1 from the settlement of derivative contracts from operating activities to financing activities.

COVID-19 pandemic

A novel strain of coronavirus (COVID-19) was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. Due to the uncertain and rapidly evolving nature of current conditions around the world, the impacts of COVID-19 most of which are beyond the Company’s control, continue to evolve, and the outcome is uncertain. We are therefore unable to predict accurately the impact that COVID-19 will have on our business going forward.

During the second quarter of 2020, COVID-19 had a significant impact on our operations as many markets were subject to lockdown restrictions which limited our ability to recruit and enroll Representatives, operate manufacturing facilities and distribution centers and to process and deliver orders. Most markets showed signs of recovery in the third quarter of 2020 but it is unclear whether this recovery will continue in the remaining of 2020 or if new lockdown measures currently being imposed in parts of Europe will dampen the recovery. We continue to closely monitor the evolution of the COVID-19 pandemic, deciding on actions to minimize impacts, ensure the continuity of operations and promote the safety and health of all the people involved. Since the beginning of the virus spread and the consequent restrictive measures imposed by governments, such as closing non-essential trade and restricting the movement of people across borders, the Company has implemented some measures in all its operations, in line with the official measures:

•Incentives to remote working and adoption of essentiality criteria to limit industrial and logistical operations;

•Adoption of new safety measures for operational workers, such as the use of masks and procedures to distance people between processes;

•Re-planning of sales cycles, prioritizing personal care items;

•Speeding up the digitization of sales channels;

•We communicated social distancing protocols to our Representatives around the world;

•Change in the minimum order criteria, start kit and increased deadline for payment of Representatives - original practices are being restored as the markets are recovering from pandemic; and

•Daily monitoring of suppliers to ensure supply.

As of the date of this report, we are unable to estimate the long term impact of the economic paralysis arising from efforts to curb the spread of the COVID-19 virus and the expected reduction in activity on our business, results of operations and financial condition. We will continue to review our revenue, investments, expenses and cash outflows, as well as adjusting our relationships with suppliers. Furthermore, the actions outlined above are continuously being re-evaluated in light of global developments relating to COVID-19.

Cyber incident

In June 2020, the Company became aware that it was exposed to a cyber incident in its Information Technology ("IT") environment which interrupted some systems and partially affected the Company's operations. We engaged leading external cyber security and IT general controls specialists, launched a comprehensive containment and remediation effort, and started a forensic investigation. By mid-August, the Company had re-established all of its core business processes and resumed operations in all of its markets, including all of its distribution centers.

The cyber incident had a significant impact on our revenue performance for the second quarter of 2020, with the majority of the impact (approximately $87 million in sales) being shifted to the third quarter of 2020 as the Company fulfilled the order backlog created. The incremental expense incurred as a result of the cyber incident was not material.

Although we have no indication that the accuracy and completeness of any financial information was impacted as a result of the incident and the Company has performed extensive procedures to validate such accuracy and completeness, we believe that, if the incident had gone differently, it could have potentially resulted in a material impact to the Company’s financial statements.

Going concern

Considering the uncertain nature of any possible future COVID-19 impacts which are beyond the Company’s control, we might expect some negative impact on revenue from COVID-19 to continue for the remainder of 2020 and into 2021, which will, in turn, result in lower cash generation from activities. If the downturn is deeper or for longer than we anticipate, the Company could take certain further actions to ease the pressure of certain cash outflows, such as reducing discretionary expenditure, selling non-core assets, accessing government pandemic initiatives or arranging borrowing facilities with third-party banks and affiliate companies. Our projections indicate that we should have sufficient liquidity to meet our obligations to parties other than Natura &Co and its affiliates for a period of not less than 12 months from the issuance date of the Consolidated Financial Statements. The Company has received an irrevocable commitment from Natura &Co Holding that it will provide sufficient financial support if and when needed to enable the Company to meet its obligations as they come due in the normal course of business for a period of not less than 12 months from the date issuance of the Consolidated Financial Statements.

Accounting Standards Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In June 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 adopted this new accounting guidance effective January 1, 2020, using a modified retrospective transition approach. The adoption did not have a material impact on our condensed consolidated financial statements and disclosures and did not significantly impact the Company’s accounting policies or estimation methods related to the allowance for doubtful accounts. The adoption resulted in a cumulative effect decrease to retained earnings of approximately $2 to reflect a change in the allowance for doubtful accounts.

Accounting Standards to be Implemented

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes, which is intended to simplify the accounting standard and improve the usefulness of information provided in the financial statements. We intend to implement this new accounting guidance effective January 1, 2021, however early adoption is permitted. We are currently assessing the impact this new accounting guidance will have on our financial statements.

ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU 2018-14 are effective for public business entities for annual periods ending after December 15, 2020. Early adoption is permitted. An entity should apply the amendments in ASU 2018-14 on a retrospective basis to all periods presented. We do not expect this new accounting guidance to have a material impact on the disclosures in our financial statements.

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

9 Months Ended

Sep. 30, 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, LLC ("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. In April 2019, we signed an agreement with LG Household & Health Care Ltd. to sell our 19.9% ownership interest in New Avon, which was completed during August 2019.

The Company incurred costs during the three and nine months ended September 30, 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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Selling, general and administrative expenses	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Operating loss	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Loss from discontinued operations, net of tax	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)

Assets Held for Sale

The major classes of assets comprising held for sale assets on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 are shown in the following table.

	September 30, 2020	December 31, 2019
Current held for sale assets
Property, Plant and Equipment (net)	8.5	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.

During the second quarter of 2020, the Company decided to proceed with the sale of the one property in the Avon Latin America segment with a carrying value of $3.0. As a result, the Company reclassified the property from property, plant and equipment to held for sale and depreciation has ceased.

At September 30, 2020, assets held for sale include one property in Avon International segment and one property in the Avon Latin America Segment.

Divestitures

Avon Shanghai

In August 2020, we signed an agreement to sell Avon Management Shanghai ("Avon Shanghai") to an affiliate of Natura &Co for a selling price of $2.9. In August 2020, we completed the sale of the entity and received proceeds of $2.9. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows. As the sale was to an affiliate under common control of Natura &Co, the gain on sale of $1.4 was recorded directly to Retained earnings.

Hungary Distribution Center in Gödöllő

In April 2020, we signed an agreement to sell the Hungary Distribution Center in Gödöllő for a selling price of $3.4, and received a deposit of $.3. In June 2020, we completed the sale of the asset and the remaining proceeds of $3.1 were received. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows.

In the second quarter of 2020, we recorded a gain of $.1 before and after tax, which is reported separately in the Consolidated Statements of Operations. The gain represents the difference between the proceeds and the carrying value of the Hungary Distribution Center on the date of sale.

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. In the six-month period ended June 30, 2020 we received a cash deposit for the selling price of $6.6, which included $3.3 of restricted cash held in escrow.

In August 2020, we completed the sale of the China Wellness Plant and $3.3 of restricted cash in escrow was transferred to Avon. In the third quarter of 2020, we recorded a gain of $1.4 before tax, which is reported separately in the Consolidated Statements of Operations. The gain represents the difference between the net proceeds (after associated expenses) and the carrying value of the China Wellness Plant on the date of sale.

Rye Office

On June 26, 2019, we completed the sale of the Rye office for a selling price of $23.2, less expenses of approximately $.8, resulting in proceeds of $22.4. These proceeds are presented as investing activities in the Consolidated Statement of Cash Flows.

In the second quarter of 2019, we recorded a gain on sale of $9.9 before and after tax, which is reported separately in the Consolidated Statements of Operations. The gain recorded represents the difference between the proceeds and the carrying value of the Rye office on the date of sale.

Malaysia Maximin

On May 9, 2019, we completed the sale of all of the equity interests in Maximin Corporation Sdn Bhd ("Malaysia Maximin") for a total purchase price of $7.8. The cash proceeds of $7.6, net of expenses, are presented within investing activities in the Consolidated Statement of Cash Flows.

In the second quarter of 2019, we recorded a gain on sale of $3.3 before tax, which is reported separately in the Consolidated Statements of Operations, and $3.0 after tax. The gain recorded represents the difference between the proceeds and the carrying value of Malaysia Maximin on the date of sale.

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 $7.5 of restricted cash as of December 31, 2019. This was subsequently 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.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

On January 3, 2020, the Company became a wholly owned subsidiary of Natura &Co Holding. From this point Natura &Co Holding, its subsidiaries and affiliates became related parties of the Company.

The following tables present the related party transactions with Natura &Co and its affiliates, New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. On August 14, 2019, we sold our investment in New Avon to LG Household & Health Care Ltd. Upon completion of the sale, New Avon was no longer a related party. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Statement of Operations Data
Revenue from sale of product to New Avon(1)	N/A		$	3.5	N/A		$	12.0
Gross profit from sale of product to New Avon(1)	N/A		$	.1	N/A		$	.2
Cost of sales for purchases from New Avon(2)	N/A		$	.7	N/A		$	2.1
Revenue from affiliates of Natura &Co(8)	$	.9	$	—	$	2.7	$	—
Gross profit from affiliates of Natura &Co(8)	$	.1	$	—	$	.5	$	—
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases	N/A		$	—	N/A		$	(.2)
Project management team(3)	N/A		$	.6	N/A		$	4.0
Interest income from Instituto Avon(4)	$	—	$	—	$	.1	$	.1
Interest expense on Loan from affiliates of Natura &Co(7)	$	1.3	$	—	$	1.6	$	—

	September 30, 2020		December 31, 2019
Balance Sheet Data
Receivables due from Instituto Avon(4)	$	1.1	$	2.1
Receivables due from affiliates of Natura &Co(8)	$	3.3	$	—
Payables due to an affiliate of Cerberus(5)	N/A		$	2.1
Payables due to affiliates of Natura &Co(6)	$	92.8	$	—
Loans from affiliates of Natura &Co(7)	$	47.2	$	—

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd, from that point New Avon was no longer a related party. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement discussed in footnote (1) above. The Company purchased $.5 from New Avon associated with this agreement during the three months ended September 30, 2019, and recorded $.7 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended September 30, 2019. The Company purchased $1.6 from New Avon associated with this agreement during the nine months ended September 30, 2019, and recorded $2.1 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the nine months ended September 30, 2019. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd; from that point New Avon was no longer a related party.

(3) The Company also entered into agreements with an affiliate of Cerberus, which provided 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. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party. During the three and nine months ended September 30, 2019 the Company recorded net costs of $.6 and $4.0, respectively, in selling, general and administrative expenses associated with these agreements.

(4) 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 reais) for an unsecured five-year term at a fixed interest rate of 7% per annum, to be paid back in five 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 was 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.

(5) Payables due to an affiliate of Cerberus related to the agreement for the project management team, classified within other accrued liabilities in our Consolidated Balance Sheets. Upon the consummation of Transaction with Natura in January 2020, Cerberus ceased their involvement in Company operations and is no longer a related party.

(6) Upon consummation of the Transaction on January 3, 2020, the Company was acquired by Natura &Co Holding and became a wholly owned direct subsidiary of Natura &Co Holding. Payables due to affiliates of Natura &Co Holding of $92.8 at September 30, 2020 include $91.5 due to Natura &Co Holding related to the amount of accrued dividend paid by Natura &Co Holding in relation to Series C preferred stock. On December 30, 2019, Cerberus elected to convert 435,000 shares of series C preferred stock, representing all shares of series C preferred stock outstanding, into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, pursuant to the holder of the Company’s series C preferred stock’s rights under the Company’s certificate of incorporation. The foregoing election was conditioned upon the filing of the certificates of merger with respect to the First Merger (the "Conversion Condition"). Upon consummation of the Transaction in January 2020, the Company’s common stock was converted to Natura &Co Holding common stock. In January 2020 Natura &Co Holding paid the accrued unpaid dividends on the shares of series C preferred stock in an amount equal to U.S. $91.5 to Cerberus. See Note 12, Series C Convertible Preferred Stock, for discussion of preferred shares issued to Cleveland Apple Investor L.P. (“Cerberus Investor”). Payables due to affiliates of Natura &Co Holding at September 30, 2020 also include $1.3 of payables from normal operations, primarily previously intercompany balances that became related party balances on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(7) Loans from affiliates of Natura &Co Holding at September 30, 2020 of $47.2 include $40.8 outstanding under the Revolving Credit Facility between Avon Luxembourg Holdings S.à r.l and Natura &Co International S.à r.l., a subsidiary of Natura &Co Holding. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include $4.5 (300 Argentinian Pesos) pursuant to an agreement to receive funding from Natura &Co Holding with respect to our Argentina operations during the second quarter of 2020. See Note 18, Debt for further details of the terms of these loans. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include a $1.9 previously intercompany balance that became a related party balance on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(8) During the second quarter of 2020, the Company entered into manufacturing agreements with affiliates of Natura &Co Holding. The Company recorded revenue from related party of $.9 and $2.7 associated with these agreements during the three and nine months ended September 30, 2020 respectively. The Company recorded gross profit from related party of $.1 and $.5 associated with these agreements during the three and nine months ended September 30, 2020 respectively. Receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

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REVENUE

9 Months Ended

Sep. 30, 2020

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 September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	156.1	$	159.0	$	315.1	$	—	$	315.1
Fragrance	137.2		112.6		249.8		—		249.8
Color	64.5		60.9		125.4		—		125.4
Total Beauty	357.8		332.5		690.3		—		690.3
Fashion & Home:
Fashion	67.6		54.7		122.3		—		122.3
Home	13.9		123.6		137.5		—		137.5
Total Fashion & Home	81.5		178.3		259.8		—		259.8
Product sales	439.3		510.8		950.1		—		950.1
Representative fees	16.7		29.6		46.3		—		46.3
Other	1.1		(.4)		.7		.9		1.6
Other revenue	17.8		29.2		47.0		.9		47.9
Total revenue	$	457.1	$	540.0	$	997.1	$	.9	$	998.0

	Three Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	153.0	$	173.2	$	326.2
Fragrance	148.3		147.3		295.6
Color	82.0		89.6		171.6
Total Beauty	383.3		410.1		793.4
Fashion & Home:
Fashion	86.9		57.0		143.9
Home	12.4		99.8		112.2
Total Fashion & Home	99.3		156.8		256.1
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	482.6		634.6		1,117.2
Representative fees	21.7		38.9		60.6
Other	1.3		8.9		10.2
Other revenue	23.0		47.8		70.8
Total revenue	$	505.6	$	682.4	$	1,188.0

	Nine Months Ended September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	429.3	$	398.6	$	827.9	$	—	$	827.9
Fragrance	348.2		299.4		647.6		—		647.6
Color	194.9		154.5		349.4		—		349.4
Total Beauty	972.4		852.5		1,824.9		—		1,824.9
Fashion & Home:
Fashion	178.8		124.9		303.7		—		303.7
Home	34.8		259.6		294.4		—		294.4
Total Fashion & Home	213.6		384.5		598.1		—		598.1
Product sales	1,186.0		1,237.0		2,423.0		—		2,423.0
Representative fees	48.0		78.4		126.4		—		126.4
Other	5.2		4.5		9.7		2.7		12.4
Other revenue	53.2		82.9		136.1		2.7		138.8
Total revenue	$	1,239.2	$	1,319.9	$	2,559.1	$	2.7	$	2,561.8

	Nine Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	491.2	$	530.2	$	1,021.4
Fragrance	443.0		453.7		896.7
Color	282.0		259.6		541.6
Total Beauty	1,216.2		1,243.5		2,459.7
Fashion & Home:
Fashion	285.3		179.1		464.4
Home	41.1		309.3		350.4
Total Fashion & Home	326.4		488.4		814.8
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	1,542.6		1,799.6		3,342.2
Representative fees	68.7		117.5		186.2
Other	3.1		18.2		21.3
Other revenue	71.8		135.7		207.5
Total revenue	$	1,614.4	$	1,935.3	$	3,549.7

In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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, changing trends and the impact of COVID-19. 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 September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
Accounts receivable, net of allowances of $50.6 and $66.6	$	261.2	$	280.2
Contract liabilities	$	41.1	$	51.0

The contract liability balances relate to certain material rights (loyalty points, status program and prospective discounts). During the nine months ended September 30, 2020, we recognized $38.0 of revenue related to the contract liability balance at the beginning of the nine month period ended September 30, 2020, as the result of performance obligations satisfied. In addition, we deferred an additional $32.1 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 September 30, 2020 as compared with December 31, 2019.

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 composed 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

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Components of Inventories	September 30, 2020		December 31, 2019
Raw materials	$	136.6	$	130.6
Finished goods	324.5		321.7
Total	$	461.1	$	452.3

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LEASES

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Our sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The table below shows the sublease income recorded in the Consolidated Statement of Operations incurred during the three and nine months ended September 30, 2020 and 2019:

		Three months ended September 30,		Nine months ended September 30,
Lease Costs	Classification	2020	2019	2020	2019
Sublease income	Selling, general and administrative expenses	3.1	2.5	11.7	8.3

Leases

LEASES

We have operating and finance leases for corporate and market offices, warehouses, automotive and other equipment. Our sublease portfolio consists of the sublease of our previous principal executive office located at 777 Third Avenue, New York, NY.

The table below shows the sublease income recorded in the Consolidated Statement of Operations incurred during the three and nine months ended September 30, 2020 and 2019:

		Three months ended September 30,		Nine months ended September 30,
Lease Costs	Classification	2020	2019	2020	2019
Sublease income	Selling, general and administrative expenses	3.1	2.5	11.7	8.3

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CONTINGENCIES

9 Months Ended

Sep. 30, 2020

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 $174, 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. In April 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 $46 (including associated penalty and interest). In December 2019, we received an unfavorable decision in the third administrative level. In October 2020, Avon was formally notified about the December unfavorable decision that rejected the Motion for Clarification. Avon will appeal to the administrative decision that denied the motion for clarification in court.

In October 2017, Avon Brazil Manufacturing received a new tax assessment notice regarding IPI for the year 2014 on grounds similar to the 2012 assessment. The 2017 IPI assessment totals approximately $173, including penalties and accrued interest. In April 2018, Avon was notified of an unfavorable decision at the first administrative level. In February, 2019, this IPI assessment was upheld at the second administrative level and in April 2019 we appealed this decision to the third administrative level. In December 2019, Avon received an unfavorable decision and presented an appeal.

In the event that the 2012 and the 2017 IPI assessments are upheld in the third and final administrative level, it may be necessary to provide a guarantee letter or a deposit in the total amount of the debt to move the discussion in the judicial sphere. Depending on the circumstances, this may result in 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 through 2014 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. As of September 30, 2020, we have not recognized a liability for the 2012 or 2017 IPI assessments.

Brazil IPI Tax on Cosmetics

In May 2015, an executive decree established the levy of IPI on the sales of cosmetic products by Avon Brazil. Avon Brazil filed an objection to this levy on the basis that it is not constitutional since this tax is already paid by Avon Brazil Manufacturing. 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 federal authority.

From May 2015 through April 2016, Avon Brazil deposited in Court the amount relating to the IPI being discussed. In May 2016, Avon Brazil obtained an injunction authorizing the Company not to pay the IPI. As a result, in June 2018, Avon Brazil received a decision authorizing the Company to withdraw the amount deposited in Court and replace it with a letter of guarantee. In June 2018, the tax authorities presented an appeal against that decision. In July 2018, the amount deposited was withdrawn. In September 2018, due in part to contemporaneous judicial decisions in favor of taxpayers in the cosmetics

industry and other developments, and supported by our legal counsel’s opinion, we assessed the IPI according to ASC 450, Contingencies and determined that the risk of loss was reasonably possible but not probable. Accordingly, we released the associated liability as of September 30, 2018 of approximately $195 and stopped accruing the IPI 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 product 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 $203 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 $69 at September 30, 2020. This reserve would 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 September 30, 2020, there were 143 individual cases pending against the Company. During the three months ended September 30, 2020, 17 new cases were filed and thirteen 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, the Company has not proceeded to trial in any case filed against it and there have been no findings of liability enforceable 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 the outcome of all individual 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. For the remaining cases, we provide an estimate of exposure on an aggregated and ongoing basis, which takes into account the historical outcomes of all cases we have resolved to date. Any accruals currently recorded on the Company’s balance sheet with respect to these 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 September 30, 2020 is approximately $8 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 was subsequently amended and recaptioned "In re Avon Products, Inc. Securities Litigation". The amended complaint is brought on behalf of a purported class consisting of all purchasers or acquirers of Avon common stock between January 21, 2016 and November 1, 2017, inclusive. The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange 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. Avon and the individual defendants filed a motion to dismiss which the court denied. The parties have reached an agreement on a settlement of this class action. The terms of settlement include releases by members of the class of claims against the Company and the individual defendants and payment of $14.5 million. Approximately $2 million of the settlement

will be paid by the Company (which represents the remaining deductible under the Company’s applicable insurance policies) and the remainder of the settlement will be paid by the Company’s insurers. On August 31, 2020, the court granted preliminary approval of the settlement and scheduled a hearing on January 20, 2021 to consider final approval. In the event the settlement is not approved by the court, or is otherwise terminated before it is finalized, the Company will be unable to predict the outcome of this matter. Furthermore, in that event, it is reasonably possible that the Company may incur a loss in connection with this matter, which the Company is unable to reasonably estimate.

Other Matters

Various other lawsuits and claims, arising in the ordinary course of business or related to businesses previously sold, are pending or threatened against Avon. In management’s opinion, based on its review of the information available at this time, the total cost of resolving such other contingencies at September 30, 2020, 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)

9 Months Ended

Sep. 30, 2020

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 and nine months ended September 30, 2020 and 2019:

Three Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at June 30, 2020	$	(1,053.1)	$	(4.3)	$	(88.4)	$	(1,145.8)
Other comprehensive (loss) income other than reclassifications	(25.5)		—		2.4		(23.1)
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $0.2(1)	—		—		2.0		2.0
Total reclassifications into earnings	—		—		2.0		2.0
Balance at September 30, 2020	$	(1,078.6)	$	(4.3)	$	(84.0)	$	(1,166.9)

Three Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at June 30, 2019	$	(935.2)	$	(2.1)	$	(4.3)	$	(90.7)	$	3.4	$	(1,034.4)
Other comprehensive loss other than reclassifications	(19.1)		(.1)		—		—		—		(19.2)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		.2		—		—		—		.2
Amortization of net actuarial loss and prior service cost, net of tax of $0.21)	—		—		—		1.6		—		1.6
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		.2		—		1.6		(3.4)		(1.6)
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

Nine Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at December 31, 2019	$	(942.7)	$	(.6)	$	(4.3)	$	(92.4)	$	(1,040.0)
Other comprehensive (loss) income other than reclassifications	(135.9)		—		—		2.4		(133.5)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0	—		.6		—		—		.6
Amortization of net actuarial loss and prior service cost, net of tax of $0.6(1)	—		—		—		6.0		6.0
Total reclassifications into earnings	—		.6		—		6.0		6.6
Balance at September 30, 2020	$	(1,078.6)	$	—	$	(4.3)	$	(84.0)	$	(1,166.9)

Nine Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at December 31, 2018	$	(936.2)	$	.5	$	(4.3)	$	(93.8)	$	3.4	$	(1,030.4)
Other comprehensive (loss) other than reclassifications	(18.1)		(3.6)		—		—		—		(21.7)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		1.1		—		—		—		1.1
Amortization of net actuarial loss and prior service cost, net of tax of $0.51)	—		—		—		4.7		—		4.7
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		1.1		—		4.7		(3.4)		2.4
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

For further details on Other Comprehensive loss other than reclassifications see the Consolidated Statement of Comprehensive Loss.

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

(2) In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. This transaction closed on August 14, 2019 and the related balance was reclassified into earnings.

Foreign exchange net gain of $5.6 and net loss of $5.1 for the three months ended September 30, 2020 and 2019, respectively, and foreign exchange net gain of $1.7 and net loss of $5.8 for the nine months ended September 30, 2020 and 2019, 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

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding. We have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments.

We determine segment profit by deducting the related costs and expenses from segment revenue. Segment profit includes an allocation of central expenses to the extent they support the operating activity of the segment. Segment profit excludes certain CTI restructuring initiatives, certain significant asset impairment charges, and other expenses, 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 September 30,				Nine Months Ended September 30,
Total Revenue	2020		2019		2020		2019
Avon International	$	457.1	$	505.6	$	1,239.2	$	1,614.4
Avon Latin America (5)	540.0		682.4		1,319.9		1,935.3
Total revenue from reportable segments (1)	997.1		1,188.0		2,559.1		3,549.7
Revenue from affiliates to Natura &Co	.9		—		2.7		—
Total revenue(1)	998.0		1,188.0		2,561.8		3,549.7

	Three Months Ended September 30,				Nine Months Ended September 30,
Operating Profit	2020		2019		2020		2019
Segment Profit
Avon International	$	17.4	$	35.4	$	15.7	$	129.9
Avon Latin America(5)	22.0		108.0		(46.0)		174.4
Total profit from reportable segments (2)	$	39.4	$	143.4	$	(30.3)	$	304.3
Unallocated global expenses(3)	(3.2)		(8.9)		(5.0)		(26.9)
Certain Brazil indirect taxes(6)	—		—		10.6		—
CTI restructuring initiatives	(12.4)		(17.5)		(17.6)		(116.7)
Costs related to the Transaction (4)	—		(19.3)		(85.8)		(36.4)
Operating profit	$	23.8	$	97.7	$	(128.1)	$	124.3

(1)Total revenue also includes revenue from other business activities of $2.8 and $4.7 for the three months ended September 30, 2020 and 2019 and $11.6 and $14.7 for the nine months ended September 30, 2020 and 2019, respectively, allocated to Avon International and Avon Latin America segments. Other business activities 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. Previously reported amount has been allocated to Avon International and Avon Latin America segments to conform to the current year presentation.

(2)Total profit from reportable segments also includes profit from other business activities and central expenses allocated to Avon International and Avon Latin America segments. Other business activities of $1.3 and $.9 for the three months ended September 30, 2020 and 2019 and $5.4 and $2.0 for the nine months ended September 30, 2020 and 2019, respectively, include profit 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. Central expenses of $50.2 and $58.8 for the three months ended September 30, 2020 and 2019 and $153.2 and $187.2 for the nine months ended September 30, 2020 and 2019, respectively, include corporate general and administrative expenses allocated to Avon International and Avon Latin America to the extent they support the operating activity of the segment. Previously reported amounts has been allocated to segments to conform to the current year presentation.

(3)For the three and nine months ended September 30, 2020 and the three and nine months ended September 30, 2019, unallocated global expenses primarily include stewardship and other expenses not directly attributable to reportable segments.

(4)For the nine months ended September 30, 2020, costs related to the Transaction primarily include professional fees of approximately $46, severance payments of approximately $25 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions. For the three months and nine month ended September 30, 2019, costs related to the Transaction primarily include professional fees and other impairment losses on assets. Refer to Note 18, Merger with Natura for more information relating to the Natura transaction.

(5)The three and nine month periods ended September 30, 2019 include the impact of certain Brazil indirect taxes, which were recorded in revenue in the amount of approximately $68.

(6)The nine month period ended September 30, 2020 includes the impact of certain Brazil indirect taxes, which were recorded in selling, general and administrative expenses, net in the amounts of approximately $11.

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SUPPLEMENTAL BALANCE SHEET INFORMATION

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTAL BALANCE SHEET INFORMATION

SUPPLEMENTAL BALANCE SHEET INFORMATION

At September 30, 2020 and December 31, 2019, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	September 30, 2020		December 31, 2019
Prepaid taxes and tax refunds receivable	$	115.5	$	141.1
Receivables other than trade(1)	48.1		51.4
Prepaid brochure costs, paper and other literature	10.3		13.1
Other	36.3		46.5
Prepaid expenses and other	$	210.2	$	252.1

(1) As of September 30, 2020, the Company has recognized insurance receivables of $12 related to a contingent liability of approximately $15 for Shareholder Litigation, recognized in the Consolidated Balance Sheet under Other Accrued Liabilities. See Note 7, Contingencies.

At September 30, 2020 and December 31, 2019, other assets included the following:

Components of Other Assets(1)	September 30, 2020		December 31, 2019
Net overfunded pension plans	$	100.5	$	100.6
Capitalized software	69.5		83.1
Judicial deposits	47.4		70.1
Long-term receivables	145.7		196.1
Trust assets associated with supplemental benefit plans	35.5		37.3
Other	18.8		27.6
Other assets	$	417.4	$	514.8

(1) As of September 30, 2020 and December 31, 2019, the Company had tooling, net of amortization of $8.0 and $12.9, respectively. Tooling balance as of December 31, 2019 previously included in other long-term assets has been reclassified to property, plant and equipment to conform to the current year presentation.

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RESTRUCTURING INITIATIVES

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING INITIATIVES

RESTRUCTURING INITIATIVES

Natura &Co - Avon Integration

Subsequent to the merger of Natura and Avon in January 2020, an integration plan (the "Avon Integration") was established to create the right global infrastructure to support the future ambitions of the Natura &Co Group while also identifying synergies and opportunities to leverage our combined strength, scale and reach. Synergies will be derived mainly from procurement, manufacturing/distribution and administrative, including new top line synergies at Natura &Co Latin America, as well as cost synergies at Avon International.

Open Up Avon, Open Up & Grow and 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 $ 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 below.

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. These savings have been and are expected to continue to be achieved through restructuring actions (that have may continue to 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.

In May 2020, the new leadership of Avon refreshed our strategy ("Open Up & Grow") which aims to return Avon to growth over the next three years. Open Up & Grow replaces and builds on the success of the Open Up Avon strategy, launched in 2018 to strengthen competitiveness through enhancing the representative experience, improving brand position and relevance, accelerating digital expansion and improving costs. Over the next three years, savings are expected to continue to be achieved through restructuring actions (that may continue to result in charges related to severance, contract terminations and asset write-offs), as well as other cost-savings strategies that would not result in restructuring charges.

Costs to Implement Restructuring Initiatives - Three and Nine Months Ended September 30, 2020 and 2019

During the three months ended September 30, 2020, we recorded net costs to implement of $10.9, of which $11.1 related to Avon Integration, $0.7 related to Open Up & Grow and a benefit of $.9 related to the Transformation Plan, in our Consolidated Statements of Operations. During the three months ended September 30, 2019, we recorded costs to implement of $17.5 of which $10.8 related to Open Up Avon, $6.7 related to the Transformation Plan, in our Consolidated Statements of Operations.

During the nine months ended September 30, 2020, we recorded net costs to implement of $16.1, of which $12.7 related to Avon Integration, $7.6 related to Open Up & Grow and a benefit of $4.2 related to the Transformation Plan, in our Consolidated Statements of Operations. During the nine months ended September 30, 2019, we recorded costs to implement of $93.2 of which $84.1 related to Open Up Avon, $9.0 related to the Transformation Plan, and $.1 related to other restructuring initiatives, in our Consolidated Statements of Operations.

The costs during the three and nine months ended September 30, 2020 and 2019 consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	—	$	1.1	$	—	$	10.9
Inventory write-off	(.8)		(2.1)		(1.1)		1.0
	(.8)		(1.0)		(1.1)		11.9
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	5.7		3.2		4.0		51.9
Implementation costs, primarily related to professional service fees	5.9		7.8		6.7		33.7
Dual running costs	.8		3.7		2.3		8.2
Contract termination and other net benefits	.4		(.1)		3.4		4.5
Impairment of other assets	—		.1		.7		2.4
Accelerated depreciation	—		2.3		.4		2.6
Variable lease charges	.4		1.5		1.3		1.5
	13.2		18.5		18.8		104.8
CTI recorded in operating profit	12.4		17.5		17.7		116.7
CTI recorded in other (expense) income
(Gain) loss on sale of business / assets	(1.5)		—		(1.6)		(23.5)
Total CTI	$	10.9	$	17.5	$	16.1	$	93.2
Avon Integration	$	11.1	$	—	$	12.7	$	—
Open Up & Grow	$	.7	$	10.8	$	7.6	$	84.1
Transformation Plan	$	(.9)	$	6.7	$	(4.2)	$	9.0
Other	$	—	$	—			$	.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 Balance Sheet for the restructuring actions associated with Avon Integration at September 30, 2020 is $.7 related to employee related costs.

The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with Open Up & Grow at September 30, 2020 is as follows:

	Employee-Related Costs		Inventory/Assets Write-offs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	17.8	$	—	$	6.4	$	24.2
2020 charges	2.3		(.5)		3.0		4.8
Adjustments	(2.6)		—		.3		(2.3)
Cash payments	(7.8)		—		(6.9)		(14.7)
Non-cash write-offs	—		.5		—		.5
Foreign exchange	(.6)		—		(.1)		(.7)
Balance at September 30, 2020	$	9.1	$	—	$	2.7	$	11.8

The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with our Transformation Plan as of September 30, 2020 is as follows:

	Employee-Related Costs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	8.4	$	1.5	$	9.9
2020 charges	(.2)		—		(.2)
Adjustments	(4.3)		—		(4.3)
Cash payments	(.4)		(1.3)		(1.7)
Foreign exchange	(.1)		(.1)		(.2)
Balance at September 30, 2020	$	3.4	$	.1	$	3.5

The majority of cash payments, if applicable, associated with the year-end liability are expected to be made during 2020.

The following table presents the restructuring charges incurred to date, under, Avon Integration, Open Up & Grow (formerly 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
Avon Integration
Charges incurred to-date	$	8.8	$	—	$	—	$	—	$	8.8
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	8.8	$	—	$	—	$	—	$	8.8
Open Up & Grow
Charges incurred to-date	$	83.3	$	107.1	$	11.9	$	(10.9)	$	191.4
Estimated charges to be incurred on approved initiatives	—		—		2.5		—		2.5
Total expected charges on approved initiatives	$	83.3	$	107.1	$	14.4	$	(10.9)	$	193.9
Transformation Plan
Charges incurred to-date	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4

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:

	Avon International*		Avon Latin America*		Total
Avon Integration
Second quarter 2020	$	1.5	$	—	$	1.5
Third quarter 2020	4.5		2.8		7.3
Charges incurred to-date	6.0		2.8		8.8
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	6.0	$	2.8	$	8.8
Open Up & Grow
2018	$	52.8	$	64.3	$	117.1
2019	34.7		36.9		71.6
First quarter 2020	3.7		(.1)		3.6
Second quarter 2020	(.3)		(.1)		(.4)
Third quarter 2020	(.2)		(.3)		(.5)
Charges incurred to-date	90.7		100.7		191.4
Estimated charges to be incurred on approved initiatives	2.5		—		2.5
Total expected charges on approved initiatives	$	93.2	$	100.7	$	193.9
Transformation Plan
2015	$	21.4	$	—	$	21.4
2016	56.8		17.6		74.4
2017	49.8		5.0		54.8
2018	19.0		4.7		23.7
2019	(1.0)		.6		(.4)
First quarter 2020	(2.9)		.1		(2.8)
Second quarter 2020	(.2)		—		(.2)
Third quarter 2020	(1.6)		.1		(1.5)
Charges incurred to-date	141.3		28.1		169.4
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	141.3	$	28.1	$	169.4

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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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SERIES C CONVERTIBLE PREFERRED STOCK

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

SERIES C CONVERTIBLE PREFERRED STOCK

SERIES C CONVERTIBLE 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 pursuant to an Investment Agreement, dated as of December 17, 2015, between the Company and Cerberus Investor. In connection with the issuance of the series C preferred stock, the Company incurred direct and incremental expenses of $8.7, composed of financial advisory fees and legal expenses, which reduced the carrying value of the series C preferred stock. 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 $91.3 as of December 31, 2019.

On December 19, 2019, the Company and Natura &Co Holding announced that as of such date, all regulatory approvals required by the Merger Agreement to complete the Transactions have been obtained. As a result, the series C preferred stock were probable of becoming redeemable and the redemption value was adjusted. Subsequently, on December 30, 2019, Cerberus elected to convert the series C preferred stock, and the series C preferred stock was no longer probable of becoming redeemable. We recognize changes in redemption value immediately as they occur and the carrying value of the security is adjusted to equal what the redemption amount would be as if redemption were to occur at the end of the reporting date based on the conditions that exist as of that date. As a result, we recognized an increase of $60.9 in the carrying value of the series C preferred stock for the year ended December 31, 2019.

On December 30, 2019, Cerberus elected to convert 435,000 shares of series C preferred stock, representing all shares of series C preferred stock outstanding, into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, pursuant to the holder of the Company’s series C preferred stock’s rights under the Company’s certificate of incorporation. The foregoing election was conditioned upon the filing of the certificates of merger with respect to the First Merger (the "Conversion Condition").

On January 3, 2020, the Company consummated the Transaction to become a wholly owned direct subsidiary of Natura &Co Holding. Upon consummation of the Transaction, the Company’s common stock was converted to Natura &Co Holding common stock. After the effective time of the Second Merger and in January 2020, Natura &Co Holding elected to pay the accrued dividends on the shares of series C preferred stock in an amount equal to $91.5 to Cerberus. See Note 18, Mergers with Natura Cosméticos S.A., and Note 3, Related Party Transactions.

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GOODWILL

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

	Avon International		Avon Latin America		Total
Net balance at December 31, 2019*	$	20.0	$	66.2	$	86.2
Changes during the period ended September 30, 2020:
Foreign exchange	(1.0)		(10.2)		(11.2)
Net balance at September 30, 2020	$	19.0	$	56.0	$	75.0

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with Natura &Co Holding operations. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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FAIR VALUE

9 Months Ended

Sep. 30, 2020

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 September 30, 2020:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.2	$	—	$	4.2
Foreign exchange forward contracts	$	—	$	—	$	—
Total	$	4.2	$	—	$	4.2
Liabilities:
Foreign exchange forward contracts	$	—	$	24.8	$	24.8
Total	$	—	$	24.8	$	24.8

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.3	$	—	$	4.3
Foreign exchange forward contracts	$	—	$	5.6	$	5.6
Total	$	4.3	$	5.6	$	9.9
Liabilities:
Foreign exchange forward contracts	$	—	$	3.8	$	3.8
Total	$	—	$	3.8	$	3.8

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, debt maturing within one year and short-term investments approximate fair value because of the short-term nature of these instruments.

The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of our remaining financial instruments at September 30, 2020 and December 31, 2019, respectively, consisted of the following:

	September 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Available-for-sale securities	$	4.2	$	4.2	$	4.3	$	4.3
Debt maturing within one year	(30.2)		(30.2)		(1.8)		(1.8)
Long-term debt(1)	(1,566.8)		(1,654.7)		(1,590.4)		(1,748.1)
Foreign exchange forward contracts	(24.8)		(24.8)		1.8		1.8

(1) The carrying value of long-term debt is presented net of debt issuance costs and includes any related discount or premium.

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.

•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

9 Months Ended

Sep. 30, 2020

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 Transaction.

Derivatives are recognized in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at September 30, 2020:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	24.8
Total derivatives		$	—		$	24.8

Derivatives are recognized in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at December 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	$	.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	5.6	Accounts payable	$	3.2
Total derivatives		$	5.6		$	3.8

Interest Rate Risk

At September 30, 2020 and December 31, 2019, our exposure to floating interest rate risk was minimal as over 98% of our borrowings are at fixed rates of interest. Only our short-term debt, which represents approximately 2% of our debt portfolio, is exposed to floating interest rates.

Foreign Currency Risk

We may use foreign exchange forward contracts to manage a portion of our foreign currency exchange rate exposures. At September 30, 2020, we had outstanding foreign exchange forward contracts with notional amounts totaling approximately $417 for various currencies, none of which 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 translation impact recognized in earnings relating to the associated intercompany loans. During the three months ended September 30, 2020 and 2019, we recorded a loss of $13.9 and a gain of $35.1, respectively, in other (expense) income, net in our Consolidated Statements of Operations related to these undesignated foreign exchange forward contracts. During the nine months ended September 30, 2020 and 2019, we recorded a loss of $7.1 and a gain of $57.0, respectively, in other (expense) income, net in our Consolidated Statements of Operations related to these 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 expired during the first quarter of 2020. Our designated hedges did not have a material impact on our Consolidated Financial Statements for the nine months ended September 30, 2020 and 2019.

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DEBT

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

DEBT

DEBT

Natura Revolving Credit Facility

In May 2020, the Company’s subsidiary, Avon Luxembourg Holdings S.à r.l entered into a Revolving Credit Facility Agreement with Natura &Co International S.à r.l,. a subsidiary of Natura &Co Holding S.A. and an affiliate of the Company in the amount of $100 which may be used for working capital and other general corporate purposes (the "Facility"). Any borrowings under the Facility will bear interest at a rate per annum of LIBOR plus 7.7% and the Facility will mature on May 31, 2022. During the third quarter of 2020, we drew down $59.7 and repaid $19.8 including interest. As at September 30, 2020, $40.8 including interest was outstanding under the Facility.

Other loans from affiliates of Natura &Co

During the second quarter of 2020, the Company’s subsidiary, Cosmeticos Avon S.A.C.I entered into an agreement to receive funding from Natura Cosmeticos S.A., a subsidiary of Natura &Co Holding S.A and an affiliate of the Company in the amount of 300 million Argentine Peso which may be used for working capital and other general corporate purposes (the "Argentina Facility"). Any borrowings under the Argentina Facility will bear interest at a rate per annum of 29.81% and has a six-month maturity. At September 30, 2020 the balance outstanding under this loan is $4.5.

Loans from affiliates of Natura &Co Holding at September 30, 2020 also include a $1.9 previously intercompany balance that became a related party balance on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

Other short-term financing

In addition, at September 30, 2020, we utilized approximately $30 of short-term financing from third-party banks across multiple markets.

2019 Revolving Credit 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 senior secured revolving credit facility (the "2019 facility") and capitalized $11.0 of issuance costs, the related cash outflow is presented in other financing activities within the 10-K Consolidated Statement of Cash Flows. The 2019 facility was available for general corporate and working capital purposes.

As of December 31, 2019, there were no amounts outstanding under the 2019 facility and on January 3, 2020, the facility was automatically canceled upon change of control, and as a result $7.8 of unamortized issuance costs were written off, see Note 18, Mergers with Natura Cosméticos S.A.,.

Unsecured Notes

In March 2013, we issued a series of unsecured notes (the "2013 Notes"). As of September 30, 2020, the following 2013 Notes remain outstanding; $461.9 aggregate principal amount of 5% Notes due March 15, 2023 and $216.1 aggregate principal amount of 6.95% Notes due March 15, 2043. Interest on the 2013 Notes is payable semiannually 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. The interest rate on the 2013 Notes is currently at the maximum allowable level of 2% above the respective interest rates in effect on date of issuance.

In September 2020, we repurchased $27.8 of our 6.95% Notes due March 15, 2043. The aggregate repurchase price was equal to the principal amount of the notes, plus a premium of $3.8 and accrued interest of $1.2. In connection with the repurchase, we incurred a loss on extinguishment of debt of $4.1 before tax in the third quarter of 2020 consisting of the $3.8 premium paid for

the repurchases, and $0.3 for the write-off of debt issuance costs and discounts related to the initial issuance of the notes that were repurchased.

Senior Secured Notes

In August 2016, Avon International Operations, Inc. ("AIO"), issued $500.0 in aggregate principal amount of 7.875% Senior Secured Notes due August 15, 2022 (the "2016 Notes"). Interest on the 2016 Notes is payable semi-annually on February 15 and August 15 of each year.

In July 2019, AIC issued $400.0 in aggregate principal amount of 6.5% Senior Secured Notes due August 15, 2022 (the "2019 Notes"). Interest on the 2019 Notes is payable semi-annually on February 15 and August 15 of each year.

On November 2, 2020, AIO and AIC redeemed the 2016 Notes and the 2019 Notes, respectively. See Note 19, Subsequent Events, for additional information.

For a more detailed description of the Company’s debt agreements, refer to Note 8, Debt and Other Financing of our Annual Report on Form 10-K for the year ended December 31, 2019.

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INCOME TAXES

9 Months Ended

Sep. 30, 2020

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 September 30, 2020, our annual effective tax rate, excluding discrete items, is 25.9% for 2020, as compared to 25.2% as of September 30, 2019. 

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 2020 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 central expenses. Withholding taxes associated with the relatively consistent intercompany payments 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 September 30, 2020 and 2019 was $11.8 and $31.5, respectively. Our effective tax rates for the three months ended September 30, 2020 and 2019 were (68.6)% and 21.8%, respectively. The provision for income taxes for the nine months ended September 30, 2020 and 2019 were $26.7 and $78.2, respectively. Our effective tax rates for the nine months ended September 30, 2020 and 2019 were (10.4)% and 48.5%.

The effective tax rates for the three months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the third quarter of 2020 was unfavorably impacted by the accrual of net income tax benefits of approximately $5.7 associated with the release of income tax reserves of approximately $10.8 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $.8. The effective tax rate for the third quarter of 2019 was also favorably impacted by the accrual of miscellaneous income tax benefits of approximately $2.3.

The effective tax rates for the nine months ended September 30, 2020 and 2019 were impacted by CTI restructuring charges which could not all be benefited, country mix of earnings and withholding taxes. The effective tax rate in the nine months ended September 30, 2020 was also unfavorably impacted by the accrual of net income tax benefits of approximately $1.8 associated with the release of income tax reserves of approximately $11.2 associated with our uncertain tax positions, net of recording a valuation allowance of $4.3 and other miscellaneous income tax expense of approximately $5.1. The effective tax rate in the nine months ended September 30, 2019, was also favorably impacted by the accrual of net income tax benefits of approximately $5.2 associated with our uncertain tax positions and other net, miscellaneous income tax benefits of approximately $2.2.

In prior years, we had previously recorded valuation allowances against certain deferred tax assets associated with the U.S. and various 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.

Further, the Company continuously assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize our existing deferred tax assets that are not subject to a valuation allowance. As of September 30, 2020, the COVID-19 pandemic is negative evidence the Company must consider. As of September 30, 2020, the increase in negative evidence due to COVID-19, primarily lower revenue and profit performance, resulted in approximately $4.3 of valuation allowances being recorded against deferred tax assets. The Company will continue to monitor the COVID-19 pandemic and other effects that could impact the conclusions regarding the realizability of its remaining deferred tax assets. Potential negative evidence, including such things as the worsening of the economies in the markets we operate in and reduced profitability of our markets could give rise to a need for a valuation allowance to reduce our deferred tax assets in upcoming quarters.

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MERGER WITH NATURA COSMETICOS S.A.

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

MERGER WITH NATURA COSMETICOS S.A.

MERGER WITH NATURA COSMÉTICOS S.A.

On May 22, 2019, the Company entered into the Agreement and Plan of Mergers (as amended by Amendment Number One to

Agreement and Plant of Mergers, dated as of October 3, 2019, and as further amended by Amendment Number Two to

Agreement and Plan of Mergers, dated as of November 5, 2019, the "Merger Agreement") among the Company, Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) ("Natura Cosméticos"), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima), Nectarine Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Natura &Co Holding ("Merger Sub I"), and Nectarine Merger Sub II, Inc., a Delaware corporation and a direct wholly owned subsidiary of Merger Sub I ("Merger Sub II"), pursuant to which (i) Natura &Co Holding, after the completion of certain restructuring steps, holds all issued and outstanding shares of Natura Cosméticos, (ii) Merger Sub II merged with and into the Company, with the Company surviving the merger (the "First Merger") and (iii) Merger Sub I merged with and into Natura &Co Holding (the "Second Merger"), with Natura &Co Holding surviving the merger and as a result of which the Company and Natura Cosméticos became wholly owned direct subsidiaries of Natura &Co Holding (collectively, the "Transaction").

The Transaction was consummated on January 3, 2020, and at this time, the Company became a wholly owned direct subsidiary of Natura &Co Holding. In connection with the Transaction, trading of the Company’s stock was suspended by the NYSE, and the Company’s common stock was subsequently delisted and deregistered.

On completion of the Transaction, each share of the Company’s common stock issued and outstanding immediately prior to the consummation of the Transaction was converted into the ultimate right to receive, (i) 0.300 validly issued and allotted, fully paid-up American Depositary Shares of Natura &Co Holding, ("Natura &Co Holding ADSs") against the deposit of two shares of common stock of Natura &Co Holding ("Natura &Co Holding Shares", subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional Natura &Co Holding ADSs or (ii) 0.600 validly issued and allotted, fully paid-up Natura &Co Holding Shares, subject to adjustment in accordance with the terms of the Merger Agreement, and any cash in lieu of fractional Natura &Co Holding Shares. The Company’s Series C Preferred Stock held by Cerberus Investor were converted to common stock prior to consummation of the Transaction and were therefore automatically converted into common stock of Natura &Co; see Note 12, Series C Convertible Preferred Stock.

Natura &Co Holding Shares are listed on the B3 S.A. - Brasil, Bolsa, Balcão stock exchange, and Natura &Co Holding ADSs are listed on the NYSE. Additionally, upon the consummation of the Transaction, Avon common stock ceased to be traded on the NYSE.

In January 2020, subsequent to the Transaction, the Company restated the certificate of incorporation. The certificate of incorporation was restated to effect a change in capitalization of the Company by changing the number of authorized shares of stock from 1,525,000,000 shares (of which (i) 1,500,000,000 shares, par value $0.25 per share, are common stock and (ii) 25,000,000 shares, par value $1.00 per share, are preferred stock) to 1,000 shares of common stock, par value $0.01 per share. As a result, all of the issued and outstanding common stock of the Company, being 550,890,788 were canceled and converted into 101.34 common stock, par value $0.01 per share, and all outstanding treasury shares were canceled.

The Company incurred costs of $46 and $44 in relation to the Transaction, primarily professional fees during the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.

During January 2020, it was announced that the employment of certain senior officers of the Company would be terminated, in connection with the Transaction. The Company incurred severance of approximately $24 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions.

As a result of the Transaction, the Company made payments of approximately $26 related to the settlement of stock options. In addition, any remaining restricted stock units and performance restricted stock units were exchanged for awards of Natura &Co Holding. The replacement awards contain substantially the same terms and conditions of the original awards except for the removal of the performance conditions. As such, the replacement awards contain only a service vesting condition.

On consummation of the Transaction, a deferred compensation scheme relating to former employees of the Company became payable which resulted in extinguishing the liability and a cash outflow of approximately $12.

In January 2020, upon completion of the Transaction, the Company’s revolving credit facility was canceled, triggered by change in control provisions. As a result, debt issuance costs of $7.8 were written off.

As a result of the Transaction, the Company will no longer have access to certain tax attributes of approximately $480 to approximately $550 in certain taxing jurisdictions.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

In November 2020, the Company’s subsidiary, Avon International Operations Inc. entered into a Promissory Note with Natura &Co International S.à r.l, a subsidiary of Natura &Co Holding S.A. and an affiliate of the Company in the amount of $960. The loan agreement will bear interest at a rate per annum of 3.13% and will mature on November 2, 2021 (“the Natura &Co Loan”).

In November 2020, in connection with the Natura & Co Loan, we redeemed the remaining principal amount of our 2016 Notes due August 15, 2022 and the remaining principal amount of our 2019 Notes due August 15, 2022. With respect to the 2016 Notes, the aggregate redemption amount paid was equal to the remaining principal amount of $500, plus a premium of $9.8 and accrued interest of $8.4. With respect to the 2019 Notes, the aggregate redemption amount paid was equal to the remaining principal amount of $400, plus a premium of $7.9 and accrued interest of $5.6.

In connection with the redemption, we expect to incur a loss on extinguishment of debt of $25.6 before tax in the fourth quarter of 2020 consisting of the $17.7 premiums, and the write-off of $7.9 of debt issuance costs related to the initial issuances of the notes that were redeemed.

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ACCOUNTING POLICIES (Policy)

9 Months Ended

Sep. 30, 2020

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 2019 Annual Report on Form 10-K ("2019 Form 10-K") in preparing these unaudited interim Consolidated Financial Statements, other than those impacted by new accounting standards as described below. On January 3, 2019, we completed the Agreement and Plan of Mergers with Natura Cosméticos S.A., a Brazilian corporation (sociedade anônima) ("Natura Cosméticos"), Natura &Co Holding S.A., a Brazilian corporation (sociedade anônima) ("Natura &Co Holding"), and two subsidiaries of Natura &Co Holding S.A. ("Natura &Co") pursuant to which, in a series of transactions (the "Transaction"). Upon the consummation of the Transaction, the Company became a wholly owned subsidiary of Natura &Co Holding and Avon common stock ceased to be traded on the NYSE. As a result, we have excluded disclosures of Earnings per Share from our consolidated financial statements. For additional information, see Note 18, Agreement and Plan of Mergers with Natura Cosméticos S.A.

The Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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 2019 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;

•the impact of changes in tax legislation, 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.

Reclassifications

ReclassificationsCertain prior year amounts have been reclassified to conform to the current year presentation in the Consolidated Balance Sheets.

Accounting Standards Implemented

Accounting Standards Implemented

ASU 2016-13, Financial Instruments - Credit Losses

In June 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 adopted this new accounting guidance effective January 1, 2020, using a modified retrospective transition approach. The adoption did not have a material impact on our condensed consolidated financial statements and disclosures and did not significantly impact the Company’s accounting policies or estimation methods related to the allowance for doubtful accounts. The adoption resulted in a cumulative effect decrease to retained earnings of approximately $2 to reflect a change in the allowance for doubtful accounts.

Accounting Standards to be Implemented

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes, which is intended to simplify the accounting standard and improve the usefulness of information provided in the financial statements. We intend to implement this new accounting guidance effective January 1, 2021, however early adoption is permitted. We are currently assessing the impact this new accounting guidance will have on our financial statements.

ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU 2018-14 are effective for public business entities for annual periods ending after December 15, 2020. Early adoption is permitted. An entity should apply the amendments in ASU 2018-14 on a retrospective basis to all periods presented. We do not expect this new accounting guidance to have a material impact on the disclosures in our financial statements.

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES (Tables)

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Selling, general and administrative expenses	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Operating loss	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)
Loss from discontinued operations, net of tax	$	(4.5)	$	(6.3)	$	(14.3)	$	(29.0)

Major Classes of Financial Statement Components Comprising the Loss on Discontinued Operations

The major classes of assets comprising held for sale assets on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 are shown in the following table.

	September 30, 2020	December 31, 2019
Current held for sale assets
Property, Plant and Equipment (net)	8.5	22.6

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RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following tables present the related party transactions with Natura &Co and its affiliates, New Avon, affiliates of Cerberus and the Instituto Avon in Brazil. There are no other related party transactions. On August 14, 2019, we sold our investment in New Avon to LG Household & Health Care Ltd. Upon completion of the sale, New Avon was no longer a related party. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Statement of Operations Data
Revenue from sale of product to New Avon(1)	N/A		$	3.5	N/A		$	12.0
Gross profit from sale of product to New Avon(1)	N/A		$	.1	N/A		$	.2
Cost of sales for purchases from New Avon(2)	N/A		$	.7	N/A		$	2.1
Revenue from affiliates of Natura &Co(8)	$	.9	$	—	$	2.7	$	—
Gross profit from affiliates of Natura &Co(8)	$	.1	$	—	$	.5	$	—
Selling, general and administrative expenses related to New Avon:
Transition services, intellectual property, technical support and innovation and subleases	N/A		$	—	N/A		$	(.2)
Project management team(3)	N/A		$	.6	N/A		$	4.0
Interest income from Instituto Avon(4)	$	—	$	—	$	.1	$	.1
Interest expense on Loan from affiliates of Natura &Co(7)	$	1.3	$	—	$	1.6	$	—

	September 30, 2020		December 31, 2019
Balance Sheet Data
Receivables due from Instituto Avon(4)	$	1.1	$	2.1
Receivables due from affiliates of Natura &Co(8)	$	3.3	$	—
Payables due to an affiliate of Cerberus(5)	N/A		$	2.1
Payables due to affiliates of Natura &Co(6)	$	92.8	$	—
Loans from affiliates of Natura &Co(7)	$	47.2	$	—

(1) The Company supplies product to New Avon as part of a manufacturing and supply agreement. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd, from that point New Avon was no longer a related party. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above.

(2) New Avon supplies product to the Company as part of the same manufacturing and supply agreement discussed in footnote (1) above. The Company purchased $.5 from New Avon associated with this agreement during the three months ended September 30, 2019, and recorded $.7 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the three months ended September 30, 2019. The Company purchased $1.6 from New Avon associated with this agreement during the nine months ended September 30, 2019, and recorded $2.1 associated with these purchases within cost of sales in our Consolidated Statement of Operations during the nine months ended September 30, 2019. Transactions entered into with New Avon for the three and nine month periods ended September 30, 2019 have been disclosed above. On August 14, 2019, the Company sold its investment in New Avon to LG Household & Health Care Ltd; from that point New Avon was no longer a related party.

(3) The Company also entered into agreements with an affiliate of Cerberus, which provided 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. Furthermore, upon consummation of the Transaction with Natura &Co Holding in January 2020, Cerberus ceased being a related party. During the three and nine months ended September 30, 2019 the Company recorded net costs of $.6 and $4.0, respectively, in selling, general and administrative expenses associated with these agreements.

(4) 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 reais) for an unsecured five-year term at a fixed interest rate of 7% per annum, to be paid back in five 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 was 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.

(5) Payables due to an affiliate of Cerberus related to the agreement for the project management team, classified within other accrued liabilities in our Consolidated Balance Sheets. Upon the consummation of Transaction with Natura in January 2020, Cerberus ceased their involvement in Company operations and is no longer a related party.

(6) Upon consummation of the Transaction on January 3, 2020, the Company was acquired by Natura &Co Holding and became a wholly owned direct subsidiary of Natura &Co Holding. Payables due to affiliates of Natura &Co Holding of $92.8 at September 30, 2020 include $91.5 due to Natura &Co Holding related to the amount of accrued dividend paid by Natura &Co Holding in relation to Series C preferred stock. On December 30, 2019, Cerberus elected to convert 435,000 shares of series C preferred stock, representing all shares of series C preferred stock outstanding, into 87,000,000 shares of the Company’s common stock, par value U.S.$0.25 per share, pursuant to the holder of the Company’s series C preferred stock’s rights under the Company’s certificate of incorporation. The foregoing election was conditioned upon the filing of the certificates of merger with respect to the First Merger (the "Conversion Condition"). Upon consummation of the Transaction in January 2020, the Company’s common stock was converted to Natura &Co Holding common stock. In January 2020 Natura &Co Holding paid the accrued unpaid dividends on the shares of series C preferred stock in an amount equal to U.S. $91.5 to Cerberus. See Note 12, Series C Convertible Preferred Stock, for discussion of preferred shares issued to Cleveland Apple Investor L.P. (“Cerberus Investor”). Payables due to affiliates of Natura &Co Holding at September 30, 2020 also include $1.3 of payables from normal operations, primarily previously intercompany balances that became related party balances on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(7) Loans from affiliates of Natura &Co Holding at September 30, 2020 of $47.2 include $40.8 outstanding under the Revolving Credit Facility between Avon Luxembourg Holdings S.à r.l and Natura &Co International S.à r.l., a subsidiary of Natura &Co Holding. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include $4.5 (300 Argentinian Pesos) pursuant to an agreement to receive funding from Natura &Co Holding with respect to our Argentina operations during the second quarter of 2020. See Note 18, Debt for further details of the terms of these loans. Loans from affiliates of Natura &Co Holding at September 30, 2020 also include a $1.9 previously intercompany balance that became a related party balance on the sale of Avon Shanghai Management to an affiliate of Natura &Co Holding in August 2020. See Note 3, Discontinued Operations, Assets and Liabilities Held for Sale and Divestitures, for further information relating to this divestiture.

(8) During the second quarter of 2020, the Company entered into manufacturing agreements with affiliates of Natura &Co Holding. The Company recorded revenue from related party of $.9 and $2.7 associated with these agreements during the three and nine months ended September 30, 2020 respectively. The Company recorded gross profit from related party of $.1 and $.5 associated with these agreements during the three and nine months ended September 30, 2020 respectively. Receivables due from affiliates of Natura &Co primarily relate to these manufacturing agreements.

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REVENUE (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

All revenue is recognized at a point in time when control of a product is transferred to a customer:

	Three Months Ended September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	156.1	$	159.0	$	315.1	$	—	$	315.1
Fragrance	137.2		112.6		249.8		—		249.8
Color	64.5		60.9		125.4		—		125.4
Total Beauty	357.8		332.5		690.3		—		690.3
Fashion & Home:
Fashion	67.6		54.7		122.3		—		122.3
Home	13.9		123.6		137.5		—		137.5
Total Fashion & Home	81.5		178.3		259.8		—		259.8
Product sales	439.3		510.8		950.1		—		950.1
Representative fees	16.7		29.6		46.3		—		46.3
Other	1.1		(.4)		.7		.9		1.6
Other revenue	17.8		29.2		47.0		.9		47.9
Total revenue	$	457.1	$	540.0	$	997.1	$	.9	$	998.0

	Three Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	153.0	$	173.2	$	326.2
Fragrance	148.3		147.3		295.6
Color	82.0		89.6		171.6
Total Beauty	383.3		410.1		793.4
Fashion & Home:
Fashion	86.9		57.0		143.9
Home	12.4		99.8		112.2
Total Fashion & Home	99.3		156.8		256.1
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	482.6		634.6		1,117.2
Representative fees	21.7		38.9		60.6
Other	1.3		8.9		10.2
Other revenue	23.0		47.8		70.8
Total revenue	$	505.6	$	682.4	$	1,188.0

	Nine Months Ended September 30, 2020
	Avon International		Avon Latin America		Total reportable segments		Affiliates of Natura&Co		Total
Beauty:
Skincare	$	429.3	$	398.6	$	827.9	$	—	$	827.9
Fragrance	348.2		299.4		647.6		—		647.6
Color	194.9		154.5		349.4		—		349.4
Total Beauty	972.4		852.5		1,824.9		—		1,824.9
Fashion & Home:
Fashion	178.8		124.9		303.7		—		303.7
Home	34.8		259.6		294.4		—		294.4
Total Fashion & Home	213.6		384.5		598.1		—		598.1
Product sales	1,186.0		1,237.0		2,423.0		—		2,423.0
Representative fees	48.0		78.4		126.4		—		126.4
Other	5.2		4.5		9.7		2.7		12.4
Other revenue	53.2		82.9		136.1		2.7		138.8
Total revenue	$	1,239.2	$	1,319.9	$	2,559.1	$	2.7	$	2,561.8

	Nine Months Ended September 30, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	491.2	$	530.2	$	1,021.4
Fragrance	443.0		453.7		896.7
Color	282.0		259.6		541.6
Total Beauty	1,216.2		1,243.5		2,459.7
Fashion & Home:
Fashion	285.3		179.1		464.4
Home	41.1		309.3		350.4
Total Fashion & Home	326.4		488.4		814.8
Certain Brazil indirect taxes	—		67.7		67.7
Net sales	1,542.6		1,799.6		3,342.2
Representative fees	68.7		117.5		186.2
Other	3.1		18.2		21.3
Other revenue	71.8		135.7		207.5
Total revenue	$	1,614.4	$	1,935.3	$	3,549.7

Receivables and Contract Liabilities from Contracts with Customers

The following table provides information about receivables and contract liabilities from contracts with customers at September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
Accounts receivable, net of allowances of $50.6 and $66.6	$	261.2	$	280.2
Contract liabilities	$	41.1	$	51.0

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INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

Components of Inventories	September 30, 2020		December 31, 2019
Raw materials	$	136.6	$	130.6
Finished goods	324.5		321.7
Total	$	461.1	$	452.3

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LEASES (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lease Cost

The table below shows the sublease income recorded in the Consolidated Statement of Operations incurred during the three and nine months ended September 30, 2020 and 2019:

		Three months ended September 30,		Nine months ended September 30,
Lease Costs	Classification	2020	2019	2020	2019
Sublease income	Selling, general and administrative expenses	3.1	2.5	11.7	8.3

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2020

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 and nine months ended September 30, 2020 and 2019:

Three Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at June 30, 2020	$	(1,053.1)	$	(4.3)	$	(88.4)	$	(1,145.8)
Other comprehensive (loss) income other than reclassifications	(25.5)		—		2.4		(23.1)
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax of $0.2(1)	—		—		2.0		2.0
Total reclassifications into earnings	—		—		2.0		2.0
Balance at September 30, 2020	$	(1,078.6)	$	(4.3)	$	(84.0)	$	(1,166.9)

Three Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at June 30, 2019	$	(935.2)	$	(2.1)	$	(4.3)	$	(90.7)	$	3.4	$	(1,034.4)
Other comprehensive loss other than reclassifications	(19.1)		(.1)		—		—		—		(19.2)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		.2		—		—		—		.2
Amortization of net actuarial loss and prior service cost, net of tax of $0.21)	—		—		—		1.6		—		1.6
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		.2		—		1.6		(3.4)		(1.6)
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

Nine Months Ended September 30, 2020	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Total
Balance at December 31, 2019	$	(942.7)	$	(.6)	$	(4.3)	$	(92.4)	$	(1,040.0)
Other comprehensive (loss) income other than reclassifications	(135.9)		—		—		2.4		(133.5)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax of $0.0	—		.6		—		—		.6
Amortization of net actuarial loss and prior service cost, net of tax of $0.6(1)	—		—		—		6.0		6.0
Total reclassifications into earnings	—		.6		—		6.0		6.6
Balance at September 30, 2020	$	(1,078.6)	$	—	$	(4.3)	$	(84.0)	$	(1,166.9)

Nine Months Ended September 30, 2019	Foreign Currency Translation Adjustments		Cash Flow Hedges		Net Investment Hedges		Pension and Postretirement Benefits		Investment in New Avon (2)		Total
Balance at December 31, 2018	$	(936.2)	$	.5	$	(4.3)	$	(93.8)	$	3.4	$	(1,030.4)
Other comprehensive (loss) other than reclassifications	(18.1)		(3.6)		—		—		—		(21.7)
Reclassifications into earnings:
Derivative loss on cash flow hedges, net of tax of $0.0	—		1.1		—		—		—		1.1
Amortization of net actuarial loss and prior service cost, net of tax of $0.51)	—		—		—		4.7		—		4.7
Sale of New Avon	—		—		—		—		(3.4)		(3.4)
Total reclassifications into earnings	—		1.1		—		4.7		(3.4)		2.4
Balance as September 30, 2019	$	(954.3)	$	(2.0)	$	(4.3)	$	(89.1)	$	—	$	(1,049.7)

For further details on Other Comprehensive loss other than reclassifications see the Consolidated Statement of Comprehensive Loss.

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

(2) In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. In April 2019, Avon and Cerberus signed an agreement with LG Household & Health Care Ltd. for the sale of New Avon, including our 19.9% ownership interest. This transaction closed on August 14, 2019 and the related balance was reclassified into earnings.

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Total Revenue

Summarized financial information concerning our reportable segments was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Total Revenue	2020		2019		2020		2019
Avon International	$	457.1	$	505.6	$	1,239.2	$	1,614.4
Avon Latin America (5)	540.0		682.4		1,319.9		1,935.3
Total revenue from reportable segments (1)	997.1		1,188.0		2,559.1		3,549.7
Revenue from affiliates to Natura &Co	.9		—		2.7		—
Total revenue(1)	998.0		1,188.0		2,561.8		3,549.7

Schedule of Operating Profit

	Three Months Ended September 30,				Nine Months Ended September 30,
Operating Profit	2020		2019		2020		2019
Segment Profit
Avon International	$	17.4	$	35.4	$	15.7	$	129.9
Avon Latin America(5)	22.0		108.0		(46.0)		174.4
Total profit from reportable segments (2)	$	39.4	$	143.4	$	(30.3)	$	304.3
Unallocated global expenses(3)	(3.2)		(8.9)		(5.0)		(26.9)
Certain Brazil indirect taxes(6)	—		—		10.6		—
CTI restructuring initiatives	(12.4)		(17.5)		(17.6)		(116.7)
Costs related to the Transaction (4)	—		(19.3)		(85.8)		(36.4)
Operating profit	$	23.8	$	97.7	$	(128.1)	$	124.3

(1)Total revenue also includes revenue from other business activities of $2.8 and $4.7 for the three months ended September 30, 2020 and 2019 and $11.6 and $14.7 for the nine months ended September 30, 2020 and 2019, respectively, allocated to Avon International and Avon Latin America segments. Other business activities 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. Previously reported amount has been allocated to Avon International and Avon Latin America segments to conform to the current year presentation.

(2)Total profit from reportable segments also includes profit from other business activities and central expenses allocated to Avon International and Avon Latin America segments. Other business activities of $1.3 and $.9 for the three months ended September 30, 2020 and 2019 and $5.4 and $2.0 for the nine months ended September 30, 2020 and 2019, respectively, include profit 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. Central expenses of $50.2 and $58.8 for the three months ended September 30, 2020 and 2019 and $153.2 and $187.2 for the nine months ended September 30, 2020 and 2019, respectively, include corporate general and administrative expenses allocated to Avon International and Avon Latin America to the extent they support the operating activity of the segment. Previously reported amounts has been allocated to segments to conform to the current year presentation.

(3)For the three and nine months ended September 30, 2020 and the three and nine months ended September 30, 2019, unallocated global expenses primarily include stewardship and other expenses not directly attributable to reportable segments.

(4)For the nine months ended September 30, 2020, costs related to the Transaction primarily include professional fees of approximately $46, severance payments of approximately $25 and acceleration of share based compensation of approximately $10 relating to these terminations triggered by change in control provisions. For the three months and nine month ended September 30, 2019, costs related to the Transaction primarily include professional fees and other impairment losses on assets. Refer to Note 18, Merger with Natura for more information relating to the Natura transaction.

(5)The three and nine month periods ended September 30, 2019 include the impact of certain Brazil indirect taxes, which were recorded in revenue in the amount of approximately $68.

(6)The nine month period ended September 30, 2020 includes the impact of certain Brazil indirect taxes, which were recorded in selling, general and administrative expenses, net in the amounts of approximately $11.

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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Components of Prepaid Expenses and Other

At September 30, 2020 and December 31, 2019, prepaid expenses and other included the following:

Components of Prepaid Expenses and Other	September 30, 2020		December 31, 2019
Prepaid taxes and tax refunds receivable	$	115.5	$	141.1
Receivables other than trade(1)	48.1		51.4
Prepaid brochure costs, paper and other literature	10.3		13.1
Other	36.3		46.5
Prepaid expenses and other	$	210.2	$	252.1

(1) As of September 30, 2020, the Company has recognized insurance receivables of $12 related to a contingent liability of approximately $15 for Shareholder Litigation, recognized in the Consolidated Balance Sheet under Other Accrued Liabilities. See Note 7, Contingencies.

Schedule of Components of Other Assets

At September 30, 2020 and December 31, 2019, other assets included the following:

Components of Other Assets(1)	September 30, 2020		December 31, 2019
Net overfunded pension plans	$	100.5	$	100.6
Capitalized software	69.5		83.1
Judicial deposits	47.4		70.1
Long-term receivables	145.7		196.1
Trust assets associated with supplemental benefit plans	35.5		37.3
Other	18.8		27.6
Other assets	$	417.4	$	514.8

(1) As of September 30, 2020 and December 31, 2019, the Company had tooling, net of amortization of $8.0 and $12.9, respectively. Tooling balance as of December 31, 2019 previously included in other long-term assets has been reclassified to property, plant and equipment to conform to the current year presentation.

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RESTRUCTURING INITIATIVES (Tables)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Summary of Restructuring and Related Costs

The costs during the three and nine months ended September 30, 2020 and 2019 consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
CTI recorded in operating profit - COGS
Manufacturing asset write-offs	$	—	$	1.1	$	—	$	10.9
Inventory write-off	(.8)		(2.1)		(1.1)		1.0
	(.8)		(1.0)		(1.1)		11.9
CTI recorded in operating profit - SG&A
Net charges for employee-related costs, including severance benefits	5.7		3.2		4.0		51.9
Implementation costs, primarily related to professional service fees	5.9		7.8		6.7		33.7
Dual running costs	.8		3.7		2.3		8.2
Contract termination and other net benefits	.4		(.1)		3.4		4.5
Impairment of other assets	—		.1		.7		2.4
Accelerated depreciation	—		2.3		.4		2.6
Variable lease charges	.4		1.5		1.3		1.5
	13.2		18.5		18.8		104.8
CTI recorded in operating profit	12.4		17.5		17.7		116.7
CTI recorded in other (expense) income
(Gain) loss on sale of business / assets	(1.5)		—		(1.6)		(23.5)
Total CTI	$	10.9	$	17.5	$	16.1	$	93.2
Avon Integration	$	11.1	$	—	$	12.7	$	—
Open Up & Grow	$	.7	$	10.8	$	7.6	$	84.1
Transformation Plan	$	(.9)	$	6.7	$	(4.2)	$	9.0
Other	$	—	$	—			$	.1

Schedule of Restructuring Reserve

The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with Open Up & Grow at September 30, 2020 is as follows:

	Employee-Related Costs		Inventory/Assets Write-offs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	17.8	$	—	$	6.4	$	24.2
2020 charges	2.3		(.5)		3.0		4.8
Adjustments	(2.6)		—		.3		(2.3)
Cash payments	(7.8)		—		(6.9)		(14.7)
Non-cash write-offs	—		.5		—		.5
Foreign exchange	(.6)		—		(.1)		(.7)
Balance at September 30, 2020	$	9.1	$	—	$	2.7	$	11.8

The liability balance included in other accrued liabilities in our Consolidated Balance Sheet for the restructuring actions associated with our Transformation Plan as of September 30, 2020 is as follows:

	Employee-Related Costs		Contract Terminations/Other		Total
Balance at December 31, 2019	$	8.4	$	1.5	$	9.9
2020 charges	(.2)		—		(.2)
Adjustments	(4.3)		—		(4.3)
Cash payments	(.4)		(1.3)		(1.7)
Foreign exchange	(.1)		(.1)		(.2)
Balance at September 30, 2020	$	3.4	$	.1	$	3.5

Schedule of Restructuring Charges Reportable by Business Segment

The following table presents the restructuring charges incurred to date, under, Avon Integration, Open Up & Grow (formerly 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
Avon Integration
Charges incurred to-date	$	8.8	$	—	$	—	$	—	$	8.8
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	8.8	$	—	$	—	$	—	$	8.8
Open Up & Grow
Charges incurred to-date	$	83.3	$	107.1	$	11.9	$	(10.9)	$	191.4
Estimated charges to be incurred on approved initiatives	—		—		2.5		—		2.5
Total expected charges on approved initiatives	$	83.3	$	107.1	$	14.4	$	(10.9)	$	193.9
Transformation Plan
Charges incurred to-date	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4
Estimated charges to be incurred on approved initiatives	—		—		—		—		—
Total expected charges on approved initiatives	$	122.6	$	2.5	$	40.9	$	3.4	$	169.4

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:

	Avon International*		Avon Latin America*		Total
Avon Integration
Second quarter 2020	$	1.5	$	—	$	1.5
Third quarter 2020	4.5		2.8		7.3
Charges incurred to-date	6.0		2.8		8.8
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	6.0	$	2.8	$	8.8
Open Up & Grow
2018	$	52.8	$	64.3	$	117.1
2019	34.7		36.9		71.6
First quarter 2020	3.7		(.1)		3.6
Second quarter 2020	(.3)		(.1)		(.4)
Third quarter 2020	(.2)		(.3)		(.5)
Charges incurred to-date	90.7		100.7		191.4
Estimated charges to be incurred on approved initiatives	2.5		—		2.5
Total expected charges on approved initiatives	$	93.2	$	100.7	$	193.9
Transformation Plan
2015	$	21.4	$	—	$	21.4
2016	56.8		17.6		74.4
2017	49.8		5.0		54.8
2018	19.0		4.7		23.7
2019	(1.0)		.6		(.4)
First quarter 2020	(2.9)		.1		(2.8)
Second quarter 2020	(.2)		—		(.2)
Third quarter 2020	(1.6)		.1		(1.5)
Charges incurred to-date	141.3		28.1		169.4
Estimated charges to be incurred on approved initiatives	—		—		—
Total expected charges on approved initiatives	$	141.3	$	28.1	$	169.4

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura &Co Holding. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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GOODWILL (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

	Avon International		Avon Latin America		Total
Net balance at December 31, 2019*	$	20.0	$	66.2	$	86.2
Changes during the period ended September 30, 2020:
Foreign exchange	(1.0)		(10.2)		(11.2)
Net balance at September 30, 2020	$	19.0	$	56.0	$	75.0

*In January 2020 the Company became a fully owned subsidiary of Natura &Co Holding. As a result of this transaction, the Company has updated its reportable segments to align with Natura &Co Holding operations. Previously reported segment information has been recast throughout the financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 9, Segment Information for more information.

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FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2020

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 September 30, 2020:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.2	$	—	$	4.2
Foreign exchange forward contracts	$	—	$	—	$	—
Total	$	4.2	$	—	$	4.2
Liabilities:
Foreign exchange forward contracts	$	—	$	24.8	$	24.8
Total	$	—	$	24.8	$	24.8

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2019:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	4.3	$	—	$	4.3
Foreign exchange forward contracts	$	—	$	5.6	$	5.6
Total	$	4.3	$	5.6	$	9.9
Liabilities:
Foreign exchange forward contracts	$	—	$	3.8	$	3.8
Total	$	—	$	3.8	$	3.8

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 September 30, 2020 and December 31, 2019, respectively, consisted of the following:

	September 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Available-for-sale securities	$	4.2	$	4.2	$	4.3	$	4.3
Debt maturing within one year	(30.2)		(30.2)		(1.8)		(1.8)
Long-term debt(1)	(1,566.8)		(1,654.7)		(1,590.4)		(1,748.1)
Foreign exchange forward contracts	(24.8)		(24.8)		1.8		1.8

(1) The carrying value of long-term debt is presented net of debt issuance costs and includes any related discount or premium.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The following table presents the fair value of derivative instruments at September 30, 2020:

	Asset			Liability
	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	—	Accounts payable	$	24.8
Total derivatives		$	—		$	24.8

Derivatives are recognized in the Consolidated Balance Sheets at their fair values. The following table presents the fair value of derivative instruments at December 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	$	.6
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other	$	5.6	Accounts payable	$	3.2
Total derivatives		$	5.6		$	3.8

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ACCOUNTING POLICIES - Narrative (Details) $ in Millions	3 Months Ended	9 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) segment	Mar. 31, 2020 USD ($)	[1]	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Property, Plant and Equipment [Line Items]
Number of reportable segments | segment		2		4
Property, plant and equipment, net		$ 412.9		$ 488.0
Property, plant and equipment, at cost		1,089.9		1,203.0
Accumulated depreciation		677.0		$ 715.0
Foreign exchange gain		3.0	$ (42.8)
Settlement of derivative contracts		$ 19.5	36.1
Revenue shift	$ 87.0
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member		us-gaap:AccountingStandardsUpdate201613Member
Decrease in retained earnings	$ 879.5	$ 929.0	875.2	$ 983.8	$ 785.3		$ 957.3	$ 941.5	$ 896.8
Revision of Prior Period, Reclassification, Adjustment
Property, Plant and Equipment [Line Items]
Foreign exchange gain			36.1
Settlement of derivative contracts			$ 36.1
Cumulative effect adjustment
Property, Plant and Equipment [Line Items]
Decrease in retained earnings				2.0
Retained Earnings | Cumulative effect adjustment
Property, Plant and Equipment [Line Items]
Decrease in retained earnings				2.0
Tooling
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net		$ 8.0		12.9
Property, plant and equipment, at cost				94.4
Accumulated depreciation				$ 81.5

[1] The number of shares of Common Stock (par value $0.01 per share) outstanding at September 30, 2020 was 101.34.

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DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES - Narrative (Details) $ in Millions				1 Months Ended					3 Months Ended						6 Months Ended	9 Months Ended		12 Months Ended
	Jun. 26, 2019 USD ($)	May 09, 2019 USD ($)	Feb. 15, 2019 USD ($)	Aug. 31, 2020 USD ($)	Jun. 30, 2020 USD ($) property	Apr. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Aug. 31, 2019 USD ($)	Sep. 30, 2020 USD ($) property	Jun. 30, 2020 USD ($) property	Mar. 31, 2020 USD ($) property	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2020 USD ($) property	Sep. 30, 2020 USD ($) property	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) property	Mar. 01, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties held for sale | property																		5
Net proceeds from sale of business / assets																$ 11.3	$ 99.9
Gain on sale of business/assets									$ 1.4			$ 26.8				1.5	50.3
Release of accumulated other comprehensive income									$ 0.0			3.4				$ 0.0	$ 3.4
Held for sale liabilities
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Carrying value of property previously held for sale											$ 9.1
Avon Manufacturing (Guangzhou), Ltd.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets																		$ 46.4
Gain on sale of business/assets														$ 10.3
Restricted cash																		$ 7.5
Gain on sale, net of tax														$ 8.2
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
Loans assumed			$ 23.5
Avon International
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties held for sale | property									1							1
Number of properties, previously held for sale | property											1
Avon Latin America
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties held for sale | property					1				1	1					1	1
Number of properties, previously held for sale | property											1
Avon Latin America | Held for sale liabilities
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Carrying value of property previously held for sale										$ 3.0
Avon Shanghai
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets				$ 2.9
Gain on sale of business/assets				1.4
Hungary Distribution Center in Gödöllő
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets					$ 3.1	$ 3.4
Gain on sale of business/assets										0.1
Deposit						$ 0.3
China Wellness Plant
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets							$ 6.6								$ 6.6
Gain on sale of business/assets									$ 1.4
Restricted cash				$ 3.3	$ 3.3					$ 3.3					$ 3.3
Rye Office
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets	$ 22.4
Gain on sale of business/assets													$ 9.9
Sale purchase price	23.2
Acquisition expenses	$ 0.8
Malaysia Maximin
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets		$ 7.6
Gain on sale of business/assets													3.3
Sale purchase price		$ 7.8
Gain on sale, net of tax													$ 3.0
New Avon
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net proceeds from sale of business / assets								$ 23.4
Gain on sale of business/assets												$ 26.8
Sale purchase price								24.5
Acquisition expenses								$ 1.1
New Avon
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of ownership																			19.90%

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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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Held for Sale
Disposal Group, Including Discontinued Operation, Assets, Current [Abstract]
Property, Plant and Equipment (net)	$ 8.5		$ 8.5		$ 22.6
New Avon | Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Selling, general and administrative expenses	(4.5)	$ (6.3)	(14.3)	$ (29.0)
Operating loss	(4.5)	(6.3)	(14.3)	(29.0)
Loss from discontinued operations, net of tax	$ (4.5)	$ (6.3)	$ (14.3)	$ (29.0)

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RELATED PARTY TRANSACTIONS - Summary of Related Parties (Details) $ / shares in Units, R$ in Millions, $ in Millions		1 Months Ended	3 Months Ended			9 Months Ended
	Dec. 30, 2019 $ / shares shares	Jan. 31, 2020 USD ($) $ / shares	Sep. 30, 2020 USD ($) $ / shares	Sep. 30, 2019 USD ($)	Jun. 30, 2018 BRL (R$) installment	Sep. 30, 2020 USD ($) $ / shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 ARS ($)	Jun. 30, 2020 ARS ($)	Dec. 31, 2019 USD ($) $ / shares
Related Party Transaction [Line Items]
Revenue from related parties			$ 900,000	$ 0		$ 2,700,000	$ 0
Loan term					5 years
Dividends payable			$ 0			$ 0				$ 8,700,000
Shares converted (in shares) | shares	435,000
Converted Series C Convertible Preferred Stock (in shares) | shares	87,000,000
Common stock (in dollars per share) | $ / shares	$ 0.25	$ 0.01	$ 0.01			$ 0.01				$ 0.25
Outstanding										$ 0
Loans from affiliates of Natura &Co			$ 47,200,000			$ 47,200,000				0
Natura Revolving Facility Due May 2022
Related Party Transaction [Line Items]
Outstanding			40,800,000			40,800,000
Affiliates of Natura&Co
Related Party Transaction [Line Items]
Dividends		$ 91,500,000
New Avon | Manufacturing and Supply Agreement
Related Party Transaction [Line Items]
Revenue from related parties				3,500,000			12,000,000.0
Gross profit from sale of product				100,000			200,000
Cost of sales for purchases from New Avon				700,000			2,100,000
Purchases from related party				500,000			1,600,000
New Avon | Transition Services, Intellectual Property, Technical Support and Innovation and Subleases
Related Party Transaction [Line Items]
Selling, general and administrative expenses related to New Avon				0			(200,000)
New Avon | Project Management Agreement
Related Party Transaction [Line Items]
Selling, general and administrative expenses related to New Avon				600,000			4,000,000.0
Affiliates of Natura&Co
Related Party Transaction [Line Items]
Interest expense on loan from Natura & Co			1,300,000	0		1,600,000	0
Receivables due from related party			3,300,000			3,300,000				0
Payables due to related parties			92,800,000			92,800,000				0
Loan from Natura &Co			47,200,000			47,200,000				0
Dividends payable			91,500,000			91,500,000
Payable for normal operations			1,300,000			1,300,000
Affiliates of Natura&Co | Avon Shanghai
Related Party Transaction [Line Items]
Loans from affiliates of Natura &Co			1,900,000			1,900,000
Affiliates of Natura&Co | Argentina Facility
Related Party Transaction [Line Items]
Loans from affiliates of Natura &Co			4,500,000			4,500,000		$ 300.0	$ 300.0
Affiliates of Natura&Co | Manufacturing and Supply Agreement
Related Party Transaction [Line Items]
Revenue from related parties			900,000	0		2,700,000	0
Gross profit from sale of product			100,000	0		500,000	0
Instituto Avon
Related Party Transaction [Line Items]
Interest income from Instituto Avon			0	$ 0		100,000	$ 100,000
Receivables due from related party			$ 1,100,000			$ 1,100,000				2,100,000
Cerberus
Related Party Transaction [Line Items]
Payables due to related parties										$ 2,100,000
Affiliated entity | Loan to Related Party | Instituto Avon
Related Party Transaction [Line Items]
Loan amount | R$					R$ 12
Loan interest rate					7.00%
Number of loan annual installments | installment					5

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REVENUE - Disaggregation of Revenues (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue				$ 3,549.7
Revenue from affiliates of Natura &Co	$ 0.9	$ 0.0	$ 2.7	0.0
Total revenue	998.0	1,188.0	2,561.8	3,549.7
Beauty
Disaggregation of Revenue [Line Items]
Revenue				2,459.7
Total revenue	690.3	793.4	1,824.9
Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue				1,021.4
Total revenue	315.1	326.2	827.9
Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue				896.7
Total revenue	249.8	295.6	647.6
Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue				541.6
Total revenue	125.4	171.6	349.4
Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue				814.8
Total revenue	259.8	256.1	598.1
Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue				464.4
Total revenue	122.3	143.9	303.7
Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue				350.4
Total revenue	137.5	112.2	294.4
Brazil IPI Tax Release
Disaggregation of Revenue [Line Items]
Total revenue		67.7		67.7
Net Sales
Disaggregation of Revenue [Line Items]
Revenue	950.1	1,117.2	2,423.0	3,342.2
Total revenue	950.1	1,117.2	2,423.0
Other revenue
Disaggregation of Revenue [Line Items]
Revenue				207.5
Total revenue	47.9	70.8	138.8
Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue				186.2
Total revenue	46.3	60.6	126.4
Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue				21.3
Total revenue	1.6	10.2	12.4
Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	997.1		2,559.1
Total revenue	997.1	1,188.0	2,559.1	3,549.7
Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	690.3		1,824.9
Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	315.1		827.9
Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	249.8		647.6
Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	125.4		349.4
Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	259.8		598.1
Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	122.3		303.7
Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	137.5		294.4
Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	950.1		2,423.0
Operating Segments | Other revenue
Disaggregation of Revenue [Line Items]
Revenue	47.0		136.1
Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	46.3		126.4
Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	0.7		9.7
Revenue from affiliates to Natura &Co
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.9		2.7
Total revenue	0.9	0.0	2.7	0.0
Revenue from affiliates to Natura &Co | Beauty
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Net Sales
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Other revenue
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.9		2.7
Revenue from affiliates to Natura &Co | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.0		0.0
Revenue from affiliates to Natura &Co | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue from affiliates of Natura &Co	0.9		2.7
Avon International | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	457.1	505.6	1,239.2	1,614.4
Total revenue	457.1	505.6	1,239.2	1,614.4
Avon International | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	357.8	383.3	972.4	1,216.2
Avon International | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	156.1	153.0	429.3	491.2
Avon International | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	137.2	148.3	348.2	443.0
Avon International | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	64.5	82.0	194.9	282.0
Avon International | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	81.5	99.3	213.6	326.4
Avon International | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	67.6	86.9	178.8	285.3
Avon International | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	13.9	12.4	34.8	41.1
Avon International | Operating Segments | Brazil IPI Tax Release
Disaggregation of Revenue [Line Items]
Revenue		0.0		0.0
Avon International | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	439.3	482.6	1,186.0	1,542.6
Avon International | Operating Segments | Other revenue
Disaggregation of Revenue [Line Items]
Revenue	17.8	23.0	53.2	71.8
Avon International | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	16.7	21.7	48.0	68.7
Avon International | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	1.1	1.3	5.2	3.1
Avon Latin America | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	540.0	682.4	1,319.9	1,935.3
Total revenue	540.0	682.4	1,319.9	1,935.3
Avon Latin America | Operating Segments | Beauty
Disaggregation of Revenue [Line Items]
Revenue	332.5	410.1	852.5	1,243.5
Avon Latin America | Operating Segments | Beauty - Skincare
Disaggregation of Revenue [Line Items]
Revenue	159.0	173.2	398.6	530.2
Avon Latin America | Operating Segments | Beauty - Fragrance
Disaggregation of Revenue [Line Items]
Revenue	112.6	147.3	299.4	453.7
Avon Latin America | Operating Segments | Beauty - Color
Disaggregation of Revenue [Line Items]
Revenue	60.9	89.6	154.5	259.6
Avon Latin America | Operating Segments | Fashion And Home
Disaggregation of Revenue [Line Items]
Revenue	178.3	156.8	384.5	488.4
Avon Latin America | Operating Segments | Fashion & Home - Fashion
Disaggregation of Revenue [Line Items]
Revenue	54.7	57.0	124.9	179.1
Avon Latin America | Operating Segments | Fashion & Home - Home
Disaggregation of Revenue [Line Items]
Revenue	123.6	99.8	259.6	309.3
Avon Latin America | Operating Segments | Brazil IPI Tax Release
Disaggregation of Revenue [Line Items]
Revenue		67.7		67.7
Avon Latin America | Operating Segments | Net Sales
Disaggregation of Revenue [Line Items]
Revenue	510.8	634.6	1,237.0	1,799.6
Avon Latin America | Operating Segments | Other revenue
Disaggregation of Revenue [Line Items]
Revenue	29.2	47.8	82.9	135.7
Avon Latin America | Operating Segments | Other - Representative Fees
Disaggregation of Revenue [Line Items]
Revenue	29.6	38.9	78.4	117.5
Avon Latin America | Operating Segments | Other - Other Product And Services
Disaggregation of Revenue [Line Items]
Revenue	$ (0.4)	$ 8.9	$ 4.5	$ 18.2

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REVENUE - Assets and Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Accounts receivable, net of allowances of $50.6 and $66.6	$ 261.2	$ 280.2
Contract liabilities	41.1	51.0
Accounts receivable, allowances	$ 50.6	$ 66.6

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REVENUE - Narrative (Details) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) segment	Dec. 31, 2019 segment
Revenue from Contract with Customer [Abstract]
Number of reportable segments | segment	2	4
Performance obligations satisfied	$ 38.0
Material rights	$ 32.1

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INVENTORIES - Components of Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 136.6	$ 130.6
Finished goods	324.5	321.7
Inventories	$ 461.1	$ 452.3

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LEASES - Income and Expenses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Sublease income	$ 3.1	$ 2.5	$ 11.7	$ 8.3

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CONTINGENCIES - Narrative (Details) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2020 USD ($) lawsuit	Sep. 30, 2019 USD ($)	Apr. 18, 2018 USD ($)	Oct. 31, 2017 USD ($)	Dec. 31, 2012 USD ($)
Loss Contingencies [Line Items]
Assessment of contingencies, including penalties and accruing interest, adjustment						$ 46.0
Revenue					$ 3,549.7
Other expense, net	$ (1.0)	$ 57.9		$ (20.1)	$ 87.3
Number of litigation suits | lawsuit				143
Number of litigation suits, new | lawsuit				17
Number of litigation suits, dismissed | lawsuit				13
Assessment for 2012
Loss Contingencies [Line Items]
Assessment of contingencies, including penalties and accruing interest								$ 174.0
Assessment for 2017
Loss Contingencies [Line Items]
Assessment of contingencies, including penalties and accruing interest							$ 173.0
IPI Tax on Cosmetics
Loss Contingencies [Line Items]
Estimated litigation liability			$ 195.0
Revenue			168.0
Other expense, net			$ 27.0
Possible loss	203.0			$ 203.0
Tax reserve	69.0			69.0
Brazil labor-related
Loss Contingencies [Line Items]
Estimated litigation liability	$ 8.0			8.0
Shareholder Litigation
Loss Contingencies [Line Items]
Litigation settlement payment				14.5
Settlement payment paid by company				$ 2.0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 01, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance			$ (990.6)
Other comprehensive (loss) income other than reclassifications	$ (23.1)	$ (19.2)	(133.5)	$ (21.7)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax		0.2	0.6	1.1
Amortization of net actuarial loss and prior service cost, net of tax	2.0	1.6	6.0	4.7
Sale of New Avon	0.0	(3.4)	0.0	(3.4)
Total reclassifications into earnings	2.0	(1.6)	6.6	2.4
Accumulated other comprehensive income, ending balance	(933.5)		(933.5)
Derivative losses on cash flow hedges, tax		0.0	0.0	0.0
Amortization of net actuarial loss and prior service cost, tax	0.2	0.2	0.6	0.5
New Avon
Reclassifications into earnings:
Percentage of ownership					19.90%
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(1,053.1)	(935.2)	(942.7)	(936.2)
Other comprehensive (loss) income other than reclassifications	(25.5)	(19.1)	(135.9)	(18.1)
Reclassifications into earnings:
Total reclassifications into earnings	0.0	0.0	0.0	0.0
Accumulated other comprehensive income, ending balance	(1,078.6)	(954.3)	(1,078.6)	(954.3)
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		(2.1)	(0.6)	0.5
Other comprehensive (loss) income other than reclassifications		(0.1)	0.0	(3.6)
Reclassifications into earnings:
Derivative losses on cash flow hedges, net of tax		0.2	0.6	1.1
Total reclassifications into earnings		0.2	0.6	1.1
Accumulated other comprehensive income, ending balance	0.0	(2.0)	0.0	(2.0)
Net Investment Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(4.3)	(4.3)	(4.3)	(4.3)
Other comprehensive (loss) income other than reclassifications	0.0		0.0
Reclassifications into earnings:
Total reclassifications into earnings	0.0	0.0	0.0	0.0
Accumulated other comprehensive income, ending balance	(4.3)	(4.3)	(4.3)	(4.3)
Pension and Postretirement Benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(88.4)	(90.7)	(92.4)	(93.8)
Other comprehensive (loss) income other than reclassifications	2.4		2.4
Reclassifications into earnings:
Amortization of net actuarial loss and prior service cost, net of tax	2.0	1.6	6.0	4.7
Total reclassifications into earnings	2.0	1.6	6.0	4.7
Accumulated other comprehensive income, ending balance	(84.0)	(89.1)	(84.0)	(89.1)
Investment in New Avon
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance		3.4		3.4
Reclassifications into earnings:
Sale of New Avon		(3.4)		(3.4)
Total reclassifications into earnings		(3.4)		(3.4)
Accumulated other comprehensive income, ending balance		0.0		0.0
AOCI Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated other comprehensive income, beginning balance	(1,145.8)	(1,034.4)	(1,040.0)	(1,030.4)
Reclassifications into earnings:
Accumulated other comprehensive income, ending balance	$ (1,166.9)	$ (1,049.7)	$ (1,166.9)	$ (1,049.7)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Equity [Abstract]
Foreign exchange gains (losses)	$ 5.6	$ (5.1)	$ 1.7	$ (5.8)

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SEGMENT INFORMATION - Narrative (Details) - segment	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Segment Reporting [Abstract]
Number of reportable segments	2	4

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SEGMENT INFORMATION - Total Revenue and Operating Profit by Reporting Segment (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Total revenue		$ 998.0	$ 1,188.0	$ 2,561.8	$ 3,549.7
Operating profit		23.8	97.7	(128.1)	124.3
Certain Brazil indirect taxes		0.0	118.3
CTI restructuring initiatives		(10.9)	(17.5)	(16.1)	(93.2)
Other expense, net		(1.0)	57.9	(20.1)	87.3
Royalty expense		50.2	58.8	153.2	187.2
Merger Agreement
Segment Reporting Information [Line Items]
Acquisition expenses				46.0		$ 44.0
Severance costs	$ 24.0	25.0
Accelerated share based compensation	$ 10.0			10.0
Reportable segments
Segment Reporting Information [Line Items]
Total revenue		997.1	1,188.0	2,559.1	3,549.7
Operating profit		39.4	143.4	(30.3)	304.3
All other
Segment Reporting Information [Line Items]
Total revenue		2.8	4.7	11.6	14.7
Operating profit		1.3	0.9	5.4	2.0
Unallocated Expenses		(3.2)	(8.9)	(5.0)	(26.9)
Certain Brazil indirect taxes		0.0	0.0	10.6	0.0
CTI restructuring initiatives		(12.4)	(17.5)	(17.6)	(116.7)
Other expense, net		0.0	(19.3)	(85.8)	(36.4)
Revenue from affiliates to Natura &Co
Segment Reporting Information [Line Items]
Total revenue		0.9	0.0	2.7	0.0
Avon International | Reportable segments
Segment Reporting Information [Line Items]
Total revenue		457.1	505.6	1,239.2	1,614.4
Operating profit		17.4	35.4	15.7	129.9
Avon Latin America | Reportable segments
Segment Reporting Information [Line Items]
Total revenue		540.0	682.4	1,319.9	1,935.3
Operating profit		22.0	$ 108.0	(46.0)	$ 174.4
Certain Brazil indirect taxes		$ 68.0		$ 68.0

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SUPPLEMENTAL BALANCE SHEET INFORMATION - Components of Prepaid Expenses and Other (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]
Prepaid taxes and tax refunds receivable	$ 115.5	$ 141.1
Receivables other than trade	48.1	51.4
Prepaid brochure costs, paper and other literature	10.3	13.1
Other	36.3	46.5
Prepaid expenses and other	210.2	$ 252.1
Shareholder Litigation
Loans and Leases Receivable Disclosure [Line Items]
Insurance receivables	12.0
Contingent liability	$ 15.0

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SUPPLEMENTAL BALANCE SHEET INFORMATION - Components of Other Assets (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Net overfunded pension plans	$ 100.5	$ 100.6
Capitalized software	69.5	83.1
Judicial deposits	47.4	70.1
Long-term receivables	145.7	196.1
Trust assets associated with supplemental benefit plans	35.5	37.3
Other	18.8	27.6
Other assets	417.4	514.8
Property, plant and equipment, net	412.9	488.0
Tooling
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 8.0	$ 12.9

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RESTRUCTURING INITIATIVES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs	$ 10.9	$ 17.5	$ 16.1	$ 93.2
Avon Integration
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs	11.1	0.0	12.7	0.0
Employee-related liabilities	0.7		0.7
Open Up & Grow
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs	0.7	10.8	7.6	84.1
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs	(0.9)	6.7	(4.2)	9.0
Other Restructuring Initiatives
Restructuring Cost and Reserve [Line Items]
Restructuring charges and other costs	$ 0.0	$ 0.0		$ 0.1

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RESTRUCTURING INITIATIVES - Summary (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	$ 10.9	$ 17.5	$ 16.1	$ 93.2
Avon Integration
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	11.1	0.0	12.7	0.0
Open Up & Grow
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.7	10.8	7.6	84.1
Transformation Plan
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	(0.9)	6.7	(4.2)	9.0
Other Restructuring Initiatives
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.0	0.0		0.1
Cost of Goods Sold
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	(0.8)	(1.0)	(1.1)	11.9
Cost of Goods Sold | Manufacturing asset write-offs
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.0	1.1	0.0	10.9
Cost of Goods Sold | Inventory write-off
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	(0.8)	(2.1)	(1.1)	1.0
Selling, General and Administrative Expense
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	13.2	18.5	18.8	104.8
Selling, General and Administrative Expense | Net charges for employee-related costs, including severance benefits
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	5.7	3.2	4.0	51.9
Selling, General and Administrative Expense | Implementation costs, primarily related to professional service fees
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	5.9	7.8	6.7	33.7
Selling, General and Administrative Expense | Dual running costs
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.8	3.7	2.3	8.2
Selling, General and Administrative Expense | Contract termination and other net benefits
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.4	(0.1)	3.4	4.5
Selling, General and Administrative Expense | Impairment of other assets
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.0	0.1	0.7	2.4
Selling, General and Administrative Expense | Accelerated depreciation
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.0	2.3	0.4	2.6
Selling, General and Administrative Expense | Variable lease charges
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	0.4	1.5	1.3	1.5
Operating Profit
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	12.4	17.5	17.7	116.7
Other (Expense) Income | (Gain) loss on sale of business / assets
Restructuring Cost and Reserve [Line Items]
CTI restructuring initiatives	$ (1.5)	$ 0.0	$ (1.6)	$ (23.5)

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RESTRUCTURING INITIATIVES - Open Up Avon (Details) - Open Up & Grow $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 24.2
2020 charges	4.8
Adjustments	(2.3)
Cash payments	(14.7)
Non-cash write-offs	0.5
Foreign exchange	(0.7)
Ending balance	11.8
Employee-Related Costs
Restructuring Reserve [Roll Forward]
Beginning balance	17.8
2020 charges	2.3
Adjustments	(2.6)
Cash payments	(7.8)
Non-cash write-offs	0.0
Foreign exchange	(0.6)
Ending balance	9.1
Inventory/Assets Write-offs
Restructuring Reserve [Roll Forward]
Beginning balance	0.0
2020 charges	(0.5)
Adjustments	0.0
Cash payments	0.0
Non-cash write-offs	0.5
Foreign exchange	0.0
Ending balance	0.0
Contract Terminations/Other
Restructuring Reserve [Roll Forward]
Beginning balance	6.4
2020 charges	3.0
Adjustments	0.3
Cash payments	(6.9)
Non-cash write-offs	0.0
Foreign exchange	(0.1)
Ending balance	$ 2.7

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RESTRUCTURING INITIATIVES - Transformation Plan, Liability Balances (Details) - Transformation Plan $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 9.9
2020 charges	(0.2)
Adjustments	(4.3)
Cash payments	(1.7)
Foreign exchange	(0.2)
Ending balance	3.5
Employee-Related Costs
Restructuring Reserve [Roll Forward]
Beginning balance	8.4
2020 charges	(0.2)
Adjustments	(4.3)
Cash payments	(0.4)
Foreign exchange	(0.1)
Ending balance	3.4
Contract Terminations/Other
Restructuring Reserve [Roll Forward]
Beginning balance	1.5
2020 charges	0.0
Adjustments	0.0
Cash payments	(1.3)
Foreign exchange	(0.1)
Ending balance	$ 0.1

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RESTRUCTURING INITIATIVES - Restructuring Initiatives by Charge Type (Details) $ in Millions	Sep. 30, 2020 USD ($)
Avon Integration
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	$ 8.8
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	8.8
Avon Integration | Employee-Related Costs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	8.8
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	8.8
Avon Integration | Inventory/Assets Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	0.0
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	0.0
Avon Integration | Contract Terminations/Other
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	0.0
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	0.0
Avon Integration | Foreign Currency Translation Adjustment Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	0.0
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	0.0
Open Up & Grow
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	191.4
Estimated charges to be incurred on approved initiatives	2.5
Total expected charges on approved initiatives	193.9
Open Up & Grow | Employee-Related Costs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	83.3
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	83.3
Open Up & Grow | Inventory/Assets Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	107.1
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	107.1
Open Up & Grow | Contract Terminations/Other
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	11.9
Estimated charges to be incurred on approved initiatives	2.5
Total expected charges on approved initiatives	14.4
Open Up & Grow | Foreign Currency Translation Adjustment Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	(10.9)
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	(10.9)
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	169.4
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	169.4
Transformation Plan | Employee-Related Costs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	122.6
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	122.6
Transformation Plan | Inventory/Assets Write-offs
Restructuring Cost and Reserve [Line Items]
Charges incurred to-date	2.5
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	2.5
Transformation Plan | Contract Terminations/Other
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 Adjustment Write-offs
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
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Avon Integration
Restructuring Cost and Reserve [Line Items]
Charges incurred	$ 7.3	$ 1.5
Charges incurred to-date	8.8
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	8.8
Avon Integration | Avon International
Restructuring Cost and Reserve [Line Items]
Charges incurred	4.5	1.5
Charges incurred to-date	6.0
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	6.0
Avon Integration | Avon Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	2.8	0.0
Charges incurred to-date	2.8
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	2.8
Open Up & Grow
Restructuring Cost and Reserve [Line Items]
Charges incurred	(0.5)	(0.4)	$ 3.6	$ 71.6	$ 117.1
Charges incurred to-date	191.4
Estimated charges to be incurred on approved initiatives	2.5
Total expected charges on approved initiatives	193.9
Open Up & Grow | Avon International
Restructuring Cost and Reserve [Line Items]
Charges incurred	(0.2)	(0.3)	3.7	34.7	52.8
Charges incurred to-date	90.7
Estimated charges to be incurred on approved initiatives	2.5
Total expected charges on approved initiatives	93.2
Open Up & Grow | Avon Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	(0.3)	(0.1)	(0.1)	36.9	64.3
Charges incurred to-date	100.7
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	100.7
Transformation Plan
Restructuring Cost and Reserve [Line Items]
Charges incurred	(1.5)	(0.2)	(2.8)	(0.4)	23.7	$ 54.8	$ 74.4	$ 21.4
Charges incurred to-date	169.4
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	169.4
Transformation Plan | Avon International
Restructuring Cost and Reserve [Line Items]
Charges incurred	(1.6)	(0.2)	(2.9)	(1.0)	19.0	49.8	56.8	21.4
Charges incurred to-date	141.3
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	141.3
Transformation Plan | Avon Latin America
Restructuring Cost and Reserve [Line Items]
Charges incurred	0.1	$ 0.0	$ 0.1	$ 0.6	$ 4.7	$ 5.0	$ 17.6	$ 0.0
Charges incurred to-date	28.1
Estimated charges to be incurred on approved initiatives	0.0
Total expected charges on approved initiatives	$ 28.1

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SERIES C CONVERTIBLE PREFERRED STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	12 Months Ended
	Dec. 30, 2019	Mar. 01, 2016	Jan. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Class of Stock [Line Items]
Dividend rate		1.25%
Dividends payable				$ 8.7	$ 0.0
Increase in Carrying Amount of Redeemable Preferred Stock				$ 60.9
Shares converted (in shares)	435,000
Common stock (in dollars per share)	$ 0.25		$ 0.01	$ 0.25	$ 0.01
Converted Series C Convertible Preferred Stock (in shares)	87,000,000
Affiliates of Natura&Co
Class of Stock [Line Items]
Dividends			$ 91.5
Private Placement
Class of Stock [Line Items]
Preferred stock, discount on shares		$ 8.7
Series C Preferred Stock
Class of Stock [Line Items]
Shares issued (in shares)		435,000
Shares issued		$ 435.0
Dividends payable				$ 91.3
Shares converted (in shares)	435,000

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GOODWILL - Schedule of Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Goodwill [Roll Forward]
Net balance at beginning	$ 86.2
Foreign exchange	(11.2)
Net balance at ending	75.0
Avon International
Goodwill [Roll Forward]
Net balance at beginning	20.0
Foreign exchange	(1.0)
Net balance at ending	19.0
Avon Latin America
Goodwill [Roll Forward]
Net balance at beginning	66.2
Foreign exchange	(10.2)
Net balance at ending	$ 56.0

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FAIR VALUE- Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Assets:
Available-for-sale securities	$ 4.2	$ 4.3
Foreign exchange forward contracts	0.0	5.6
Total Assets	4.2	9.9
Liabilities:
Foreign exchange forward contracts	24.8	3.8
Total Liabilities	24.8	3.8
Level 1
Assets:
Available-for-sale securities	4.2	4.3
Foreign exchange forward contracts	0.0	0.0
Total Assets	4.2	4.3
Liabilities:
Foreign exchange forward contracts	0.0	0.0
Total Liabilities	0.0	0.0
Level 2
Assets:
Available-for-sale securities	0.0	0.0
Foreign exchange forward contracts	0.0	5.6
Total Assets	0.0	5.6
Liabilities:
Foreign exchange forward contracts	24.8	3.8
Total Liabilities	$ 24.8	$ 3.8

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FAIR VALUE - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	$ 4.2	$ 4.3
Debt maturing within one year	(30.2)	(1.8)
Long-term debt	(1,566.8)	(1,590.4)
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale securities	4.2	4.3
Debt maturing within one year	(30.2)	(1.8)
Long-term debt	(1,654.7)	(1,748.1)
Foreign exchange forward contracts | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign exchange forward contracts	(24.8)	1.8
Foreign exchange forward contracts | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign exchange forward contracts	$ (24.8)	$ 1.8

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Fair Value of Derivative Instruments (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Foreign exchange forward contracts, asset	$ 0.0	$ 5.6
Foreign exchange forward contracts, liability	24.8	3.8
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	0.0	5.6
Accounts payable | Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, liability		0.6
Accounts payable | Not Designated as Hedging Instrument
Derivative [Line Items]
Foreign exchange forward contracts, liability	$ 24.8	$ 3.2

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Derivative [Line Items]
Percent of borrowings with fixed rate interest			98.00%		98.00%
Total exposure to floating rate interest rates	2.00%		2.00%
Foreign Exchange Contract
Derivative [Line Items]
Notional amount	$ 417,000,000		$ 417,000,000
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments	(13,900,000)	$ 35,100,000	(7,100,000)	$ 57,000,000.0
Foreign Exchange Contract | Cash Flow Hedging
Derivative [Line Items]
Notional amount	$ 0		$ 0

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DEBT - Narrative (Details) $ in Millions			1 Months Ended		3 Months Ended		9 Months Ended
	May 13, 2020 USD ($)	Jan. 03, 2020 USD ($)	Sep. 30, 2020 USD ($)	Feb. 28, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 ARS ($)	Jun. 30, 2020 ARS ($)	Dec. 31, 2019 USD ($)	Jul. 31, 2019 USD ($)	Feb. 28, 2019 EUR (€)	Aug. 31, 2016 USD ($)
Debt Instrument [Line Items]
Outstanding											$ 0
Loans from affiliates of Natura &Co			$ 47,200,000		$ 47,200,000		$ 47,200,000				$ 0
Short-term financing			30,000,000		30,000,000		30,000,000
Loss on extinguishment of debt					4,100,000	$ 8,100,000	11,900,000	$ 10,100,000
Affiliates of Natura&Co | Avon Shanghai
Debt Instrument [Line Items]
Loans from affiliates of Natura &Co			1,900,000		1,900,000		1,900,000
Natura Revolving Facility Due May 2022
Debt Instrument [Line Items]
Line of credit facility	$ 100,000,000
Basis spread on variable rate	7.70%
Proceeds from lines of credit					59,700,000
Repayments of lines of credit					19,800,000
Outstanding			40,800,000		40,800,000		40,800,000
Argentina Facility | Affiliates of Natura&Co
Debt Instrument [Line Items]
Loans from affiliates of Natura &Co			$ 4,500,000		$ 4,500,000		$ 4,500,000		$ 300.0	$ 300.0
Interest rate			29.81%		29.81%		29.81%		29.81%
Debt term							6 months
2019 Facility
Debt Instrument [Line Items]
Line of credit facility | €													€ 200,000,000.0
Debt term				3 years
2015 Facility
Debt Instrument [Line Items]
Write off debt issuance costs		$ 7,800,000
2013 Notes
Debt Instrument [Line Items]
Maximum aggregate increase in interest rate related to downgrade of long-term credit ratings below investment grade							2.00%
4.6% Notes due February 2022 | 2019 Facility
Debt Instrument [Line Items]
Debt issuance costs				$ 11,000,000.0
5.0% Notes due March 2023
Debt Instrument [Line Items]
Interest rate			5.00%		5.00%		5.00%		5.00%
Principal amount			$ 461,900,000		$ 461,900,000		$ 461,900,000
6.95% Notes due March 2043
Debt Instrument [Line Items]
Interest rate			6.95%		6.95%		6.95%		6.95%
Write off debt issuance costs			$ 300,000
Principal amount			216,100,000		$ 216,100,000		$ 216,100,000
Repurchase of debt			27,800,000		27,800,000		27,800,000
Debt premium			3,800,000		3,800,000		$ 3,800,000
Accrued interest			$ 1,200,000
Loss on extinguishment of debt					$ 4,100,000
7.875% Notes due August 2022
Debt Instrument [Line Items]
Interest rate														7.875%
Principal amount														$ 500,000,000.0
6.50% Notes due August 2022
Debt Instrument [Line Items]
Interest rate												6.50%
Principal amount												$ 400,000,000.0

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INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate, excluding discrete items			25.90%	25.20%
Income taxes provision	$ 11.8	$ 31.5	$ 26.7	$ 78.2
Effective income tax rate	(68.60%)	21.80%	(10.40%)	48.50%
Income tax accrual benefit	$ 5.7		$ 1.8	$ 5.2
Tax expense, uncertain tax positions	(10.8)		11.2
Valuation allowance	4.3		4.3
Miscellaneous income tax expense (benefit)	$ 0.8	$ (2.3)	$ 5.1	$ (2.2)

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MERGER WITH NATURA COSMETICOS S.A. - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
	May 22, 2019	Jan. 31, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jan. 03, 2020	Dec. 30, 2019
Business Combination, Separately Recognized Transactions [Line Items]
Stock, shares authorized (in shares)						1,525,000,000
Common stock, authorized (in shares)		1,000				1,500,000,000
Common stock (in dollars per share)		$ 0.01	$ 0.01	$ 0.01		$ 0.25		$ 0.25
Preferred stock, authorized (in shares)						25,000,000
Preferred stock, par value (in dollars per share)		$ 0.01				$ 1.00
Stock converted or cancelled (in shares)		550,890,788
Common stock, shares outstanding (in shares)		101.34
Settlement of stock options				$ 25.8	$ 0.0
Minimum
Business Combination, Separately Recognized Transactions [Line Items]
Lost tax attributes		$ 480.0
Maximum
Business Combination, Separately Recognized Transactions [Line Items]
Lost tax attributes		550.0
Merger Agreement
Business Combination, Separately Recognized Transactions [Line Items]
Share conversion ratio	60.00%
Acquisition expenses				46.0		$ 44.0
Severance costs		24.0	$ 25.0
Accelerated share based compensation		10.0		$ 10.0
Settlement of stock options		26.0
Deferred compensation expense		12.0
Write off debt issuance costs		$ 7.8
Merger Agreement | Affiliates of Natura&Co
Business Combination, Separately Recognized Transactions [Line Items]
Common stock composing one American depository shares (in shares)							2
American Depositary Shares | Merger Agreement
Business Combination, Separately Recognized Transactions [Line Items]
Share conversion ratio	30.00%

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SUBSEQUENT EVENTS (Details) - USD ($)		3 Months Ended			9 Months Ended
	Nov. 13, 2020	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jul. 31, 2019	Aug. 31, 2016
Subsequent Event [Line Items]
Loans from affiliates of Natura &Co			$ 47,200,000		$ 47,200,000		$ 0
Loss on extinguishment of debt			$ 4,100,000	$ 8,100,000	$ 11,900,000	$ 10,100,000
7.875% Notes due August 2022
Subsequent Event [Line Items]
Interest rate									7.875%
6.50% Notes due August 2022
Subsequent Event [Line Items]
Interest rate								6.50%
Subsequent Event | Forecast
Subsequent Event [Line Items]
Loss on extinguishment of debt		$ 25,600,000
Loss on extinguishment of debt, premiums		17,700,000
Write off debt issuance costs		$ 7,900,000
Subsequent Event | 7.875% Notes due August 2022
Subsequent Event [Line Items]
Repayments of debt, principal	$ 500,000,000
Repayments of debt, premium	9,800,000
Repayments of debt, accrued interest	8,400,000
Subsequent Event | 6.50% Notes due August 2022
Subsequent Event [Line Items]
Repayments of debt, principal	400,000,000
Repayments of debt, premium	7,900,000
Repayments of debt, accrued interest	5,600,000
Subsequent Event | 3.13% Promissory Notes due November 2022
Subsequent Event [Line Items]
Loans from affiliates of Natura &Co	$ 960,000,000
Interest rate	3.13%