| Statement Of Income Alternative (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Net sales | 2445.7 | $2,711 | 4603.4 | 5188.9 |
| Other revenue | 24.6 | 25.1 | 46.7 | 48.9 |
| Total revenue | 2470.3 | 2736.1 | 4650.1 | 5237.8 |
| Costs, expenses and other: | ||||
| Cost of sales | 934.3 | 993.4 | 1745.5 | 1917.1 |
| Selling, general and administrative expenses | 1353.1 | 1368.8 | 2553.3 | 2650.6 |
| Operating profit | 182.9 | 373.9 | 351.3 | 670.1 |
| Interest expense | 27.9 | 26.1 | 52.7 | 52.2 |
| Interest income | -4.7 | -8.6 | (12) | -17.8 |
| Other (income) expense, net | -0.2 | 12 | 4 | 12.7 |
| Total other expenses | 23 | 29.5 | 44.7 | 47.1 |
| Income before taxes | 159.9 | 344.4 | 306.6 | 623 |
| Income taxes | -75.3 | -107.4 | -104.5 | -199.8 |
| Net income | 84.6 | 237 | 202.1 | 423.2 |
| Net income attributable to noncontrolling interest | -1.7 | -1.4 | -1.9 | -2.9 |
| Net income attributable to Avon | 82.9 | 235.6 | 200.2 | 420.3 |
| Earnings per share: | ||||
| Basic | 0.19 | 0.55 | 0.47 | 0.98 |
| Diluted | 0.19 | 0.55 | 0.46 | 0.97 |
| Cash dividends per common share | 0.21 | 0.2 | 0.42 | 0.4 |
| Statement Of Financial Position Classified (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Current Assets | ||
| Cash and cash equivalents | $1,221 | 1104.7 |
| Accounts receivable, net | 689.1 | 687.8 |
| Inventories | 1083.1 | 1007.9 |
| Prepaid expenses and other | 850.6 | 756.5 |
| Total current assets | 3843.8 | 3556.9 |
| Property, plant and equipment, at cost | 2545.2 | 2439.9 |
| Less accumulated depreciation | -1147.5 | (1,096) |
| Property, Plant and Equipment, Net, Total | 1397.7 | 1343.9 |
| Other assets | 1075.8 | 1173.2 |
| Total assets | 6317.3 | 6,074 |
| Current Liabilities | ||
| Debt maturing within one year | 446.9 | 1031.4 |
| Accounts payable | 662.9 | 724.3 |
| Accrued compensation | 220.2 | 234.4 |
| Other accrued liabilities | 616.6 | 581.9 |
| Sales and taxes other than income | 219.6 | 212.2 |
| Income taxes | 69.6 | 128 |
| Total current liabilities | 2235.8 | 2912.2 |
| Long-term debt | 2243.5 | 1456.2 |
| Employee benefit plans | 659.9 | 665.4 |
| Long-term income taxes | 160 | 168.9 |
| Other liabilities | 155.6 | 159 |
| Total liabilities | 5454.8 | 5361.7 |
| Contingencies (Note 5) | 0 | 0 |
| Shareholders' Equity | ||
| Common stock | 185.9 | 185.6 |
| Additional paid-in capital | 1,903 | 1874.1 |
| Retained earnings | 4138.7 | 4118.9 |
| Accumulated other comprehensive loss | -860.1 | -965.9 |
| Treasury stock, at cost | -4543.4 | -4537.8 |
| Total Avon shareholders' equity | 824.1 | 674.9 |
| Noncontrolling interest | 38.4 | 37.4 |
| Total shareholders' equity | 862.5 | 712.3 |
| Total liabilities and shareholders' equity | 6317.3 | $6,074 |
| Statement Of Cash Flows Indirect (USD $) | |||||||||||||||||||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 | |||||||||||||||||
| Cash Flows from Operating Activities | |||||||||||||||||||
| Net income | 202.1 | 423.2 | |||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
| Depreciation and amortization | 82.2 | 92.7 | |||||||||||||||||
| Provision for doubtful accounts | 92.6 | 95.3 | |||||||||||||||||
| Provision for obsolescence | 44.7 | 28.9 | |||||||||||||||||
| Share-based compensation | 31.9 | 31.1 | |||||||||||||||||
| Deferred income taxes | -0.1 | 3.7 | |||||||||||||||||
| Other | 27.5 | 17.3 | |||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||
| Accounts receivable | -65.3 | 8.1 | |||||||||||||||||
| Inventories | -102.4 | -145.2 | |||||||||||||||||
| Prepaid expenses and other | -49.4 | -117.1 | |||||||||||||||||
| Accounts payable and accrued liabilities | -65.3 | -231.9 | |||||||||||||||||
| Income and other taxes | -89.2 | -8.9 | |||||||||||||||||
| Noncurrent assets and liabilities | -33.9 | -24.8 | |||||||||||||||||
| Net cash provided by operating activities | 75.4 | 172.4 | |||||||||||||||||
| Cash Flows from Investing Activities | |||||||||||||||||||
| Capital expenditures | -108.1 | (136) | |||||||||||||||||
| Disposal of assets | 5.7 | 5.1 | |||||||||||||||||
| Purchases of investments | -0.7 | -18.3 | |||||||||||||||||
| Proceeds from sale of investments | 61.7 | 18.1 | |||||||||||||||||
| Other investing activities | 5.8 | 0 | |||||||||||||||||
| Net cash used by investing activities | -35.6 | -131.1 | |||||||||||||||||
| Cash Flows from Financing Activities | |||||||||||||||||||
| Cash dividends | -183.6 | -177.3 | |||||||||||||||||
| Debt, net (maturities of three months or less) | -501.6 | (281) | |||||||||||||||||
| Proceeds from debt | 884.7 | 496.3 | |||||||||||||||||
| Repayment of debt | -131.6 | -59.5 | |||||||||||||||||
| Proceeds from exercise of stock options | 0.7 | 28.6 | |||||||||||||||||
| Excess tax benefit realized from share-based compensation | -1.6 | 5 | |||||||||||||||||
| Repurchase of common stock | -6.2 | -120.9 | |||||||||||||||||
| Net cash provided (used) by financing activities | 60.8 | [1] | -108.8 | [1] | |||||||||||||||
| Effect of exchange rate changes on cash and equivalents | 15.7 | 64.4 | |||||||||||||||||
| Net increase (decrease) in cash and equivalents | 116.3 | -3.1 | |||||||||||||||||
| Cash and equivalents at beginning of year | 1104.7 | 963.4 | |||||||||||||||||
| Cash and equivalents at end of period | $1,221 | 960.3 | |||||||||||||||||
| [1]Non-cash financing activities in 2009 and 2008 included the change in fair market value of interest-rate swap agreements of $(56.2) and $(0.2), respectively. | |||||||||||||||||||
| Notes to Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| 1.ACCOUNTING POLICIES | 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. We consistently applied the accounting policies described in our 2008 Annual Report on Form 10-K (2008 Form 10-K) in preparing these unaudited financial statements. In our opinion, we made all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods. 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 2008 Form 10-K. When used in these notes, the terms Avon, Company, we or us mean Avon Products, Inc. For interim consolidated financial statement purposes, we compute our tax provision on the basis of our estimated annual effective income tax rate, and provide for accruals under our various employee benefit plans for each quarter based on one quarter of the estimated annual expense. We have reclassified some prior year amounts in the consolidated financial statements and accompanying notes for comparative purposes. We reclassified $15.6 from accounts receivable to prepaid expenses and other on the Consolidated Statements of Cash Flows for the six months ended June30, 2008. New Accounting Standards Implemented Effective January1, 2009, we adopted the provisions of SFAS 157, Fair Value Measurements (SFAS 157), as it relates to non-recurring, nonfinancial assets and liabilities. The adoption of these provisions of SFAS 157 did not have an impact on our Consolidated Financial Statements. Effective January1, 2009, we adopted SFAS No.161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.133, (SFAS 161), which changes, among other things, the disclosure requirements for derivative instruments and hedging activities. We are required to provide enhanced disclosures about how and why we use derivative instruments, how they are accounted for, and how they affect our financial performance. See Note 12, Derivative Instruments and Hedging Activities. Effective January1, 2009, we adopted FSP Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (FSP EITF 03-6-1), which addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method. Prior period EPS was adjusted retrospectively. The adoption of FSP EITF 03-6-1 did not have a material impact on the calculation of basic or diluted earnings per share. See Note 2, Earnings Per Share and Share Repurchases. Effective January1, 2009, we adopted SFAS No.141 (revised 2007), Business Combinations, (SFAS 141R), which changed how business combinations are accounted for and will impact financial statements both on the acquisition date and in subsequ |
| 2.EARNINGS PER SHARE AND SHARE REPURCHASES | 2. EARNINGS PER SHARE AND SHARE REPURCHASES We compute earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Our participating securities are our grants of restricted stock and restricted stock units which contain non-forfeitable rights to dividend equivalents. (shares in millions) Three Months Ended June30, Six Months Ended June30, Components of Basic and Diluted Earnings per Share 2009 2008 2009 2008 Numerator: Net income attributable to Avon $ 82.9 $ 235.6 $ 200.2 $ 420.3 Less: Earnings allocated to participating securities (.6 ) (1.4 ) (1.7 ) (2.6 ) Net income allocated to common shareholders 82.3 234.2 198.5 417.7 Denominator: Basic EPS weighted-average shares outstanding 426.92 426.57 426.64 426.68 Dilutive effect of assumed conversion of stock options 1.30 2.42 0.61 2.43 Diluted EPS adjusted weighted-average shares outstanding 428.22 428.99 427.25 429.11 Earnings per Common Share: Basic EPS $ .19 $ .55 $ .47 $ .98 Diluted EPS $ .19 $ .55 $ .46 $ .97 At June30, 2009 and 2008, we did not include stock options to purchase 21.1million shares and 9.9million shares of Avon common stock, respectively, in the calculations of diluted earnings per share because their inclusion would be anti-dilutive. We purchased approximately 0.3million shares of Avon common stock for $6.2 during the first six months of 2009, as compared to approximately 3.3million shares of Avon common stock for $125.3 during the first six months of 2008 under our previously announced share repurchase program and through acquisition of stock from employees in connection with tax payments upon vesting of restricted stock units. |
| 3.INVENTORIES | 3. INVENTORIES Components of Inventories June30, 2009 December31, 2008 Raw materials $ 347.3 $ 292.7 Finished goods 735.8 715.2 Total $ 1,083.1 $ 1,007.9 |
| 4.EMPLOYEE BENEFIT PLANS | 4. EMPLOYEE BENEFIT PLANS Three Months Ended June30, Pension Benefits Net Periodic Benefit Costs U.S. Plans Non-U.S. Plans PostretirementBenefits 2009 2008 2009 2008 2009 2008 Service cost $ 2.8 $ 4.2 $ 3.8 $ 4.4 $ 0.9 $ .7 Interest cost 10.8 11.3 10.1 10.7 2.8 2.6 Expected return on plan assets (11.3 ) (13.1 ) (9.0 ) (11.8 ) (.6 ) (.9 ) Amortization of prior service credit (.1 ) (.3 ) (.2 ) (.4 ) (1.5 ) (1.5 ) Amortization of actuarial losses 8.1 6.6 3.1 2.7 .7 .2 Settlements/curtailments 1.5 11.6 Special termination changes 2.8 Net periodic benefit costs $ 14.6 $ 8.7 $ 19.4 $ 5.6 $ 2.3 $ 1.1 Six Months Ended June30, Pension Benefits Net Periodic Benefit Costs U.S. Plans Non-U.S. Plans PostretirementBenefits 2009 2008 2009 2008 2009 2008 Service cost $ 5.6 $ 9.1 $ 7.3 $ 8.7 $ 1.8 $ 1.7 Interest cost 21.6 22.9 19.6 21.4 5.6 5.4 Expected return on plan assets (22.6 ) (25.6 ) (17.6 ) (23.7 ) (1.2 ) (1.5 ) Amortization of prior service credit (.2 ) (.6 ) (.4 ) (.8 ) (3.0 ) (3.0 ) Amortization of actuarial losses 16.2 15.3 6.0 5.5 1.4 .6 Settlements/curtailments 1.5 12.3 Special termination changes 2.8 Net periodic benefit costs $ 24.9 $ 21.1 $ 27.2 $ 11.1 $ 4.6 $ 3.2 We previously disclosed in our financial statements for the year ended December31, 2008, that we expected to contribute approximately $60 to $100 and $20 to $30 to our U.S. and non-U.S. pension plans, respectively, in 2009. As of June30, 2009, we made approximately $11 and $7 of contributions to the U.S. and non-U.S pension plans, respectively. We anticipate contributing approximately $49 to $89 and $13 to $23 to fund our U.S. and non-U.S. pension plans, respectively, during the remainder of 2009. Our funding requirements may be impacted by regulations or interpretations thereof. |
| 5.CONTINGENCIES | 5. CONTINGENCIES In December 2002, our Brazilian subsidiary received a series of excise and income tax assessments from the Brazilian tax authorities asserting that the establishment in 1995 of separate manufacturing and distribution companies in that country was done without a valid business purpose. The assessments assert tax deficiencies during portions of the years 1997 and 1998 of approximately $107.3 at the exchange rate on June30, 2009, plus penalties and accruing interest totaling approximately $201.4 at the exchange rate on June30, 2009. In July 2003, a first-level appellate body rejected the basis for income tax assessments representing approximately 76% of the total assessment, or $235.5 (including interest). In March 2004, that rejection was confirmed in a mandatory second-level appellate review. The remaining assessments relating to excise taxes (approximately $73.2) were not affected and are awaiting a decision at the first administrative level. In December 2003, an additional assessment was received in respect of excise taxes for the balance of 1998, totaling approximately $148.0 at the exchange rate on June30, 2009, and asserting a different theory of liability based on purported market sales data. In January 2005, an unfavorable first administrative level decision was received with respect to the appeal of that assessment and a further appeal has been taken. In December 2004, an additional assessment was received in respect of excise taxes for the period from January 1999 to December 2001, totaling approximately $329.8 at the exchange rate on June30, 2009, and asserting the same theory of liability as in the December 2003 assessment. We appealed that assessment. In September 2005, an unfavorable first administrative level decision was received with respect to the appeal of the December 2004 assessment, and a further appeal is being taken. The assessments issued in 2003 and 2004 are awaiting a decision at the second administrative level. In the event that assessments are upheld in the earlier stages of review, it may be necessary for us to provide security to pursue further appeals, which, depending on the circumstances, may result in a charge to income. It is not possible to make a reasonable estimate of the amount or range of expense that could result from an unfavorable outcome in respect of these or any additional assessments that may be issued for subsequent periods. The structure adopted in 1995 is comparable to that used by many companies in Brazil, and we believe that it is appropriate, both operationally and legally, and that the assessments are unfounded. This matter is being vigorously contested and in the opinion of our outside counsel the likelihood that the assessments ultimately will be upheld is remote. Management believes that the likelihood that the assessments will have a material impact on our consolidated financial position, results of operations or cash flows is correspondingly remote. We are conducting an internal investigation under the oversight of the Audit Committee and with the assistance of outside independent counsel into compliance with the Foreign Corrupt Practices Act (FCPA) and rel |
| 6.COMPREHENSIVE INCOME | 6. COMPREHENSIVE INCOME ThreeMonthsEnded June30, Six Months Ended June30, Components of Comprehensive Income 2009 2008 2009 2008 Net income $ 84.6 $ 237.0 $ 202.1 $ 423.2 Foreign currency translation adjustments 185.8 64.8 76.0 154.1 Change in unrealized gains from available-for-sale securities (.1 ) (.1 ) (.1 ) (.3 ) Change in derivative losses on cash flow hedges 3.4 1.0 4.4 (6.9 ) Adjustment for amortization of net actuarial loss, prior service cost, and transition obligation, net of taxes 18.5 3.9 25.5 10.2 Comprehensive income $ 292.2 $ 306.6 $ 307.9 $ 580.3 Less: comprehensive income attributable to noncontrolling interest 2.8 (3.7 ) 0.3 (1.0 ) Comprehensive income attributable to Avon $ 295.0 $ 302.9 $ 308.2 $ 579.3 |
| 7.SEGMENT INFORMATION | 7. SEGMENT INFORMATION Summarized financial information concerning our reportable segments was as follows: Three Months Ended June30, 2009 2008 Revenue Operating Profit Revenue Operating Profit (Loss) Latin America $ 977.0 $ 133.9 $ 1,010.7 $ 187.5 North America 570.6 25.1 633.3 75.2 Central Eastern Europe 324.4 19.4 432.6 91.6 Western Europe, Middle East Africa 299.9 13.1 354.6 41.9 Asia Pacific 208.8 11.5 227.2 27.5 China 89.6 7.1 77.7 (7.9 ) Total from operations 2,470.3 210.1 2,736.1 415.8 Global and other (27.2 ) (41.9 ) Total $ 2,470.3 $ 182.9 $ 2,736.1 $ 373.9 Six Months Ended June30, 2009 2008 Revenue Operating Profit Revenue Operating Profit Latin America $ 1,771.0 $ 222.1 $ 1,875.0 $ 308.1 North America 1,096.3 47.6 1,226.9 139.1 Central Eastern Europe 645.8 67.7 854.2 184.7 Western Europe, Middle East Africa 543.1 19.1 671.6 61.2 Asia Pacific 408.4 26.7 444.6 50.5 China 185.5 20.6 165.5 5.7 Total from operations 4,650.1 403.8 5,237.8 749.3 Global and other (52.5 ) (79.2 ) Total $ 4,650.1 $ 351.3 $ 5,237.8 $ 670.1 Our consolidated net sales by classes of principal products were as follows: Three Months Ended June30, Six Months Ended June30, 2009 2008 2009 2008 Beauty(1) $ 1,761.9 $ 1,960.9 $ 3,321.6 $ 3,740.7 Fashion(2) 427.9 491.2 818.0 934.8 Home(3) 255.9 258.9 463.8 513.4 Net sales 2,445.7 2,711.0 4,603.4 5,188.9 Other revenue(4) 24.6 25.1 46.7 48.9 Total revenue $ 2,470.3 $ 2,736.1 $ 4,650.1 $ 5,237.8 (1) Beauty includes cosmetics, fragrances, skin care and toiletries. (2) Fashion includes fashion jewelry, watches, apparel, footwear and accessories. (3) Home includes gift and decorative products, housewares, entertainment and leisure products and childrens and nutritional products. (4) Other primarily includes shipping and handling fees billed to Representatives. Sales from Health and Wellness products and mark. are included among these categories based on product type. |
| 8.SUPPLEMENTAL BALANCE SHEET INFORMATION | 8. SUPPLEMENTAL BALANCE SHEET INFORMATION At June30, 2009 and December31, 2008, prepaid expenses and other included the following: Components of Prepaid expenses and other June30, 2009 December31, 2008 Deferred tax assets $ 222.7 $ 194.6 Receivables other than trade 133.6 127.1 Prepaid taxes and tax refunds receivable 220.1 156.5 Prepaid brochure costs, paper and other literature 125.8 126.0 Short-term investments 33.1 40.1 Other 115.3 112.2 Prepaid expenses and other $ 850.6 $ 756.5 At June30, 2009 and December31, 2008, other assets included the following: Components of Other Assets June30, 2009 December31, 2008 Deferred tax assets $ 492.7 $ 502.5 Goodwill (Note 10) 222.6 224.5 Intangible assets (Note 10) 21.1 28.6 Investments 54.0 108.9 Deferred software 106.3 98.3 Interest-rate swap agreements (Note 11 and 12) 57.0 103.7 Other 122.1 106.7 Other assets $ 1075.8 $ 1,173.2 |
| 9.RESTRUCTURING INITIATIVES | 9. RESTRUCTURING INITIATIVES 2005 Restructuring Program In November 2005, we announced a multi-year turnaround plan to restore sustainable growth. As part of our turnaround plan we launched a restructuring program in late 2005 (the 2005 Restructuring Program). Restructuring initiatives under this program include: enhancement of organizational effectiveness, including efforts to flatten the organization and bring senior management closer to consumers through a substantial organization downsizing; implementation of a global manufacturing strategy through facilities realignment; implementation of additional supply chain efficiencies in distribution; and streamlining of transactional and other services through outsourcing and moves to lower-cost countries. We have approved and announced all of the initiatives that are part of our 2005 Restructuring Program. We expect to record total restructuring charges and other costs to implement restructuring initiatives of approximately $530 before taxes. We have recorded total costs to implement, net of adjustments, of $521.2 ($17.0 in the first six months of 2009, $60.6 in 2008, $158.3 in 2007, $228.8 in 2006, and $56.5 in 2005) for actions associated with our restructuring initiatives. Restructuring Charges First and Second Quarters of 2009 During the three and six months ended June30, 2009, we recorded total costs to implement associated with previously approved initiatives that are part of our 2005 Restructuring Program of $12.5 and $17.0, respectively, and the costs consisted of the following: net charges of $8.1 and $6.3, respectively, primarily for employee-related costs; implementation costs of $2.4 and $6.7, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance processes and realign certain distribution operations; and accelerated depreciation of $2.0 and $4.0, respectively, associated with our initiatives to realign certain distribution operations. Of the total costs to implement, $12.2 and $16.7 were recorded in selling, general and administrative expenses for the three and six months ended June30, 2009, respectively, and $.3 was recorded in cost of sales for each of the three and six months ended June30, 2009. Restructuring Charges First and Second Quarters of 2008 During the three and six months ended June30, 2008, we recorded total costs to implement associated with previously approved initiatives that are part of our 2005 Restructuring Program of $13.3 and $38.8, respectively, and the costs consisted of the following: net charges of $.9 and $14.7, respectively, primarily for employee-related costs; implementation costs of $10.5 and $20.6, respectively, for professional service fees, primarily associated with our initiatives to outsource certain finance and human resource processes; and accelerated depreciation of $1.9 and $3.5, respectively, associated with our initiatives to realign certain distribution operations and realign certain manufacturing operations. Of the total cos |
| 10.GOODWILL AND INTANGIBLE ASSETS | 10. GOODWILL AND INTANGIBLE ASSETS Goodwill Latin America Central Eastern Europe Western Europe, MiddleEast Africa Asia Pacific China Total Balance at December31, 2008 $ 94.9 $ 8.8 $ 33.3 $ 12.4 $ 75.1 $ 224.5 Adjustments (.3 ) (.3 ) Foreign exchange (.9 ) (.2 ) (.6 ) .1 (1.6 ) Balance at June30, 2009 $ 94.9 $ 7.9 $ 33.1 $ 11.5 $ 75.2 $ 222.6 Intangible assets June30, 2009 December31, 2008 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Amortized Intangible Assets Customer relationships $ 38.4 $ (28.3 ) $ 38.4 $ (25.6 ) Licensing agreements 42.4 (33.0 ) 42.4 (28.3 ) Noncompete agreements 7.4 (5.8 ) 7.4 (5.7 ) Total $ 88.2 $ (67.1 ) $ 88.2 $ (59.6 ) Estimated Amortization Expense: 2009 $ 14.0 2010 2.0 2011 2.0 2012 2.0 2013 2.0 Aggregate amortization expense during the three and six months ended June30, 2009, was $3.9 and $7.5, respectively, compared to $4.3 and $8.6, respectively, for the same periods of 2008. |
| 11.FAIR VALUE | 11. FAIR VALUE We adopted SFAS 157 as of January1, 2008, with the exception of the application of the statement to non-recurring, nonfinancial assets and liabilities, which was adopted as of January1, 2009, with no impact. The adoption of SFAS 157 did not have a material impact on our fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3 - Unobservable inputs based on our own assumptions. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June30, 2009: Fair Value at June30, 2009 Level1 Level2 Level3 Total Assets: Available-for-sale securities $ 1.7 $ 1.7 Interest-rate swap agreements $ 57.0 57.0 Foreign exchange forward contracts 6.4 6.4 Total $ 1.7 $ 63.4 $ 65.1 Liabilities: Interest-rate swap agreements $ 17.1 $ 17.1 Foreign exchange forward contracts 7.7 7.7 Total $ 24.8 $ 24.8 The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of financial instruments at June30, 2009 and December31, 2008 consisted of the following: 2009 2008 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 1,221.0 $ 1,221.0 $ 1,104.7 $ 1,104.7 Available-for-sale securities 1.7 1.7 2.3 2.3 Grantor trust cash and cash equivalents 8.9 8.9 20.1 20.1 Debt maturing within one year 446.9 453.9 1,031.4 1,038.6 Long-term debt, net of related discount or premium 2,243.5 2,306.8 1,456.2 1,346.1 Foreign exchange forward contracts (1.3 ) (1.3 ) (10.7 ) (10.7 ) Interest-rate swap agreements 39.9 39.9 87.6 87.6 The methods and assumptions used to estimate fair value are as follows: Available-for-sale securities - The fair values of these investments were based on the quoted market prices for issues listed on securities exchanges. Debt maturing within one year and long-term debt - The fair values of all debt and other financing were determined based on quoted market prices. Foreign exchange forward contracts - The fair values of forward contracts were based on quoted forward fore |
| 12.DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Derivatives are recognized on the balance sheet at their fair values. The following table presents the fair value of derivative instruments outstanding at June30, 2009: Asset Liability BalanceSheet Classification Fair Value BalanceSheet Classification Fair Value Derivatives designated as hedges: Interest-rate swap agreements Otherassets $ 44.3 Other Liabilities $ 6.9 Foreign exchange forward contracts Prepaidexpensesandother AccountsPayable 3.5 Total derivatives designated as hedges $ 44.3 $ 10.4 Derivatives not designated as hedges: Interest-rate swap agreements Other assets $ 12.7 Other Liabilities $ 10.2 Foreign exchange forward contracts Prepaid expenses and other 6.4 Accounts Payable 4.2 Total derivatives not designated as hedges $ 19.1 $ 14.4 Total derivatives $ 63.4 $ 24.8 When we become a party to a derivative instrument, we designate, for financial reporting purposes, the instrument as a fair value hedge, a cash flow hedge, a net investment hedge, or a non-hedge. We assess, both at the hedges inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The ineffective portion of a derivatives gain or loss, if any, is recorded in earnings in other expense, net on the Consolidated Statements of Income. When we determine that a derivative is not highly effective as a hedge, hedge accounting is discontinued. When it is probable that a hedged forecasted transaction will not occur, we discontinue hedge accounting for the affected portion of the forecasted transaction, and reclassify gains or losses that were accumulated in accumulated other comprehensive income (AOCI) to earnings. Interest Rate Risk We use interest-rate swap agreements, which effectively convert the fixed rate on long-term debt to a floating interest rate, to manage our interest rate exposure. These agreements are designated as fair value hedges. At June30, 2009, we held interest-rate swap agreements that effectively converted approximately 84% of our outstanding long-term, fixed-rate borrowings to a variable interest rate based on LIBOR. Our total exposure to floating interest rates at June30, 2009, was approximately 80%. At June30, 2009, we had interest-rate swap agreements designated as fair value hedges of fixed-rate debt, with notional amounts totaling $1,975. During the three and six months ended June30, 2009, we recorded a net loss of $51.7 and $54.8 in interest expense for these interest-rate swap agreements designated as fair value hedges. The loss on these interest-rate swap agreements was offset by an equal gain in interest expense on our fixed-rate debt. At times, we may de-designate the hedging relationship of a receive-fixed/pay-variable interest-rate swap agreement. In these cases, we |
| 13.DEBT AND FINANCIAL INSTRUMENTS | 13. DEBT AND FINANCIAL INSTRUMENTS In March 2009, we issued $850.0 principal amount of notes payable in a public offering. $500.0 of the notes bear interest at a per annum coupon rate equal to 5.625%, payable semi-annually, and mature on March1, 2014 (the 2014 Notes). $350.0 of the notes bear interest at a per annum coupon rate equal to 6.500%, payable semi-annually, and mature on March1, 2019. The net proceeds from the offering of $837.6 were used to repay the outstanding indebtedness under our commercial paper program and for general corporate purposes. In connection with the offering of the 2014 Notes, we entered into five-year interest-rate swap agreements with notional amounts totaling $500.0 to effectively convert the fixed interest rate on the 2014 Notes to a variable interest rate, based on LIBOR. The indentures under which the above notes were issued contain certain covenants, including limits on the incurrence of liens and restrictions on the incurrence of sale/leaseback transactions and transactions involving a merger, consolidation or sale of substantially all of our assets. At June30, 2009, we were in compliance with all covenants in our indentures. |
| Document Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Amendment Description | N.A. |
| Document Period End Date | 2009-06-30 |
| Entity Information (USD $) | ||
| 6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
| |
| Entity [Text Block] | ||
| Trading Symbol | AVP | |
| Entity Registrant Name | AVON PRODUCTS INC | |
| Entity Central Index Key | 0000008868 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Current Reporting Status | Yes | |
| Entity Voluntary Filers | No | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 426,950,389 | |
| Entity Public Float | $15,300,000,000 |
