FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2000
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.
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(Exact name of registrant as specified in its charter)
New York 13-0544597
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1345 Avenue of the Americas, New York, N.Y. 10105-0196
(New address of principal executive offices)
(212) 282-5000
(Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
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Common stock (par value $.25) New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: 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 X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A or any amendment to
this Form 10-K/A. [ ].
The aggregate market value of Common Stock (par value $.25) held by
non-affiliates at February 28, 2001 was $10.1 billion.
The number of shares of Common Stock (par value $.25) outstanding at
February 28, 2001 was 237,927,022.
Documents Incorporated by Reference
Parts I and II Portions of the 2000 Annual Report to Shareholders.
Part III Portions of the Proxy Statement for the 2001 Annual
Meeting of Shareholders.
Introductory Note--Restatements
In connection with the settlement of the previously disclosed
investigation by the Securities and Exchange Commission ("SEC") relating to the
write off of an order management software system known as the "FIRST" project,
Avon has restated its Consolidated Financial Statements as of December 31,
2001, 2000 and 1999 and for the years then ended and for each of the fiscal
quarters ended March 31, 1999 through March 31, 2002. Avon had written off
$14.8 pretax, or $10.0 after tax, of FIRST assets in the first quarter of 1999
and $23.9 pretax, or $14.5 after tax, of FIRST assets in the third quarter of
2001. Avon has restated its financial statements to reflect the additional
write off as of March 31, 1999 of all capitalized costs ($23.3 pretax, or $14.0
after tax), associated with the FIRST project as of that date and a reversal of
the charge recorded in the third quarter of 2001. Other FIRST-related activity
(capitalized costs and amortization) recorded during 1999-2002 has also been
restated. A description of the adjustments that comprise the restatements is
set forth in Notes 2 and 15 of the Notes to Consolidated Financial Statements
filed with this Form 10-K/A.
The accompanying financial statements have been restated to reflect the
restatements discussed above as well as the accounting changes outlined in Note
2. No attempt has been made in this Form 10-K/A to modify or update any
disclosures except as required to reflect the results of the restatements
discussed above and any changes made to prior period financial information for
which a Form 10-K/A was not filed.
PART I
ITEM 1. BUSINESS
Certain statements in this report which are not historical facts or
information are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not limited to, the
information set forth herein. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, levels of activity, performance or achievement of Avon Products, Inc.
("Avon" or the "Company"), or industry results, to be materially different from
any future results, levels of activity, performance or achievement expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: General economic and business conditions; the ability of the
Company to implement its business strategy; the Company's access to financing
and its management of foreign currency risks; the Company's ability to
successfully identify new business opportunities; the Company's ability to
attract and retain key executives; the Company's ability to achieve anticipated
cost savings and profitability targets; the impact of substantial currency
exchange devaluations in the Company's principal foreign markets; changes in
the industry; competition; the effect of regulatory and legal restrictions
imposed by foreign governments; the effect of regulatory and legal proceedings
and other factors as discussed in Item 1 of this Form 10-K/A. As a result of the
foregoing and other factors, no assurance can be given as to the future results
and achievements of the Company. Neither the Company nor any other person
assumes responsibility for the accuracy and completeness of these statements.
General
The Company is a global manufacturer and marketer of beauty and related
products, which include cosmetics, fragrance and toiletries ("CFT"); "Beauty
Plus" which consists of jewelry, watches and accessories, and apparel; and
"Beyond Beauty" which consists of gift and decorative, home entertainment, and
health and nutrition products. Avon commenced operations in 1886 and was
incorporated in the State of New York on January 27, 1916. Avon's business is
comprised of one industry segment, direct selling, which is conducted in North
America, Latin America, the Pacific and Europe. The Company's reportable
segments are based on geographic operations. Financial information relating to
the reportable segments is incorporated by reference to the analysis of net
sales and operating profit by geographic area, and to Note 12 of the Notes to
the Consolidated Financial Statements, in Avon's Restated 2000 Annual Report to
Shareholders.
Business Process Redesign
In October 1997, the Company announced a worldwide business process
redesign ("BPR") program to streamline operations and improve profitability
through margin improvement and expense reductions. The special and
non-recurring charges associated with this program totaled $136.4 pretax
($111.9 net of tax, or $.43 per share on a basic and diluted basis) for the
year ended December 31, 1999 and $154.4 pretax($122.8 net of tax, or $.46 per
share on a basic and diluted basis) for the year ended December 31, 1998. At
December 31, 2000, the
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remaining liability balance was $7.9, which relates primarily to severance
costs that will be paid in 2001.
Total savings from BPR initiatives reduced costs by approximately $400 in
2000 versus 1997 levels, with a portion of the savings being reinvested
primarily in consumer-focused initiatives.
Global Business Strategy
In 2000, the Company focused on strategic priorities to drive revenue
growth and expand its customer base around the world by building on the
Company's strength as a beauty marketer and a leading home direct seller. Our
business strategy includes, but is not limited to, plans to accelerate growth
in our core beauty business, expanding market share, upgrading our beauty image
and new product innovation; building a global portfolio of jewelry and
accessories; developing innovative programs to train, motivate and retain
Representatives; exploiting retail opportunities; and developing new
businesses. The Company expects that BPR programs will continue to provide
resources to fund these strategic growth initiatives and contribute to earnings
growth. Spending for product innovation and advertising are also key components
in building a global beauty image and reaching the end consumer. In 2000, the
Company committed much of its strategic spending to the launch of its
first-ever global advertising campaign, supported by investments in consumer
sampling and upgrades to its sales brochures. Additionally, in the fourth
quarter of 2000, the Company significantly expanded its use of Internet
technology. In 2001, the Company will launch a new global product category of
women's health and wellness products and plans to sell a new retail brand of
products at Avon Centers located in the stores of two major retailers.
Avon's global strategies include the following key growth initiatives:
Direct Selling Contemporization
The Company continues to modernize its direct selling channel and
Representative experience, enabling it to reach women quickly and efficiently
by offering to Representatives training, enhanced earnings opportunities and
career options. In 2000, the Company rolled out a global Sales Leadership
program in several of its largest markets around the world. The Sales
Leadership program is a modified multi-level selling system which gives
Representatives the opportunity to earn commissions on their own sales, as well
as from downstream sales of Representatives they recruit. This program limits
the number of levels to three and continues to focus on individual product
sales.
The Company also implemented a Representative development strategy in
2000. This strategy focuses on the professional training and development of
Representatives through the Avon Beauty Advisor program, which gives
Representatives the most extensive beauty training ever offered by Avon. Under
this program, Representatives enroll in a series of courses designed to upgrade
their makeup and skin care consulting skills and teach them about the latest
advances in beauty products. Successful graduates are certified as beauty
advisors.
Avon is licensing Representatives to operate stand-alone kiosks selling
Avon's core beauty products in shopping malls across the U.S. In addition to
increasing their personal sales, entrepreneurial Representatives also use the
kiosks to recruit new Representatives to Avon.
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In addition to the Sales Leadership program and Representative development
strategy, the Company built and relaunched its Avon.com internet site in the
United States during 2000. In September 2000, the Company announced to its
Representatives a new online marketing tool called, youravon.com. The site
features Avon's full product line and helps U.S. sales Representatives build
their own Avon business by enabling them to sell online through their own
personalized web pages, developed in partnership with the Company. Using their
own personalized consumer-facing Web sites, e-Representatives provide their
family of customers with 24x7 access to Avon products. At the same time,
e-Representatives have the advantage of business-to-business capabilities that
connect them seamlessly to Avon's order and fulfillment systems. While their
customers benefit from the speed, convenience and delivery flexibility of
online ordering, Avon e-Representatives are able to promote special products,
target specific groups of customers, place and track orders online, and
capitalize on e-mail to share product information, selling tips and marketing
incentives. Self-paced online training also is available, as well as
up-to-the-minute news about the Company. Available to the Representatives and
District Sales Managers are new on-line tools that will allow them to engage in
more value-added activities, such as recruiting, training and selling. Avon
also continues to sell products directly to consumers on Avon's internet site
if they choose not to purchase through a Representative.
The Company annually produces more than 600 million brochures in a dozen
languages, utilizing common imagery and layouts from a single global database
to enhance its global beauty image. Avon is upgrading the quality of brochures
in several of its largest markets, including the United Kingdom and is testing
the concept in the U.S.
Complementary Access
To accelerate growth in established industrial regions such as the U.S.,
Western Europe and Japan, the Company has developed new channels to reach more
customers and improve access to its products through licensed kiosks and
Express Centers in the U.S., toll-free telephone numbers, direct mail and "on
line" shopping via the Internet. These complementary access programs will
further increase sales to an entirely new customer segment -- women who prefer
to do their shopping in stores and malls.
Access strategies also have helped reach new customers in the Pacific
Region. For example, the Philippines, India and Indonesia use decentralized
branches and satellite stores to serve Representatives and customers.
Representatives come to a branch near their homes to place and pick up product
orders for their customers. The branches also create visibility for Avon with
consumers and help reinforce the Company's beauty image. In Malaysia, Avon has
numerous franchised beauty boutiques, which are staffed by franchise
Representatives and are located
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in areas with high concentrations of Representatives. The boutiques provide
more direct and personal service to Representatives and their customers.
Additionally, in China, Venezuela and Taiwan, beauty counters managed by Avon
Representatives are in retail store chains.
In 2001, Avon will open Avon Centers in the stores of Sears, Roebuck and
Company ("Sears") and J.C. Penney Company, Inc. ("J.C. Penney"), to sell a new
line of Avon products called "beComing". The new line will offer beauty
products, as well as a selection of jewelry and accessories and well-being
products. The "beComing" line will be priced significantly higher than the core
Avon line, but well below prestige brands. This retail partnership leverages
Avon's product development and manufacturing capabilities with the retail
expertise of Sears and J.C. Penney. It is expected that approximately 200
"store-within-a-store" locations will open in the latter half of 2001. The new
retail strategy is intended to enable Avon to access new customers that the
Company is not currently reaching through the direct selling channel.
Image Enhancement
The Company continues to update the image of its core beauty products and
its portfolio of global beauty brands. In the past five years, CFT products
have all undergone extensive upgrades in packaging, imaging and formulations,
consistent with the global brand strategy. These contemporary products project
a consistent, high quality image in all markets and include brands such as
Anew, Skin-So-Soft, Avon Color, Far Away, Rare Gold, Perceive, and Avon Skin
Care. Global brands are growing rapidly as a percentage of the Company's
worldwide CFT business and in 2000, they accounted for 50% of core beauty
sales. Anew Retroactive, a ground breaking age-reversal cream introduced in
2000, rolling out globally in 2001, utilizes Avon's exclusive, patent-pending
blend of ingredients formulated to enhance cellular communication and
re-energize aging skin cells. In 2000, the Company launched an upscale global
hair care brand called Advance Techniques and launched a global jewelry and
fashion accessories line around the world. The development of global brands has
also enabled the Company to deliver a consistent beauty image around the world,
as well as improve margins through pricing and supply chain efficiencies. Avon
is also marketing a more vibrant beauty image through increased advertising and
image-building programs focused on the consumer. In 2000, the Company launched
its first-ever global advertising campaign entitled "Let's Talk", increased
investments in product sampling and development and upgraded the quality of its
brochure to further strengthen its worldwide beauty image. In 2001, "Let's
Talk" advertising campaigns will include the Williams sisters, accomplished
young sports professionals who, through their embodiment of Avon's values of
empowerment and self-fulfillment, serve as role models for women everywhere.
In 2001, Avon will launch an entirely new global product category in the
area of women's health and wellness in 15 countries. This new line will help
Avon expand the definition of beauty to include inner health, as well as
outward appearance. The new products will be sold through a separate catalog
and will include vitamins and nutrition supplements, exercise and fitness
items, and a variety of self-care and stress relief
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products. Vitamins and nutritional supplements have been developed for Avon by
Roche Consumer Healthcare and will be marketed under the name VitAdvance.
Twenty VitAdvance products are expected to launch in 2001.
In 1998, an important image enhancement came with the opening of the Avon
Centre, a spa, salon and retail store located in Trump Tower, New York City.
The Avon Centre emphasizes health and beauty and offers a selection of Avon
beauty products created exclusively for use at the Avon Centre.
International Expansion
Avon is one of the most widely recognized brand names in the world. The
Company is particularly well positioned to capitalize on growth in new
international markets due to high demand for quality products, underdeveloped
retail infrastructures, and relatively attractive earnings opportunities for
women. The Company presently has operations in 52 countries outside the United
States and its products are distributed in 86 more for coverage in 139 markets,
and it continues to expand into new markets. The Company has entered 26 new
markets since 1990, including Russia and China and rapidly emerging nations
throughout Central Europe, and is currently evaluating several other markets in
Eastern Europe and the Pacific region.
Distribution
Avon's products are sold worldwide by approximately 3.4 million
Representatives, approximately 452,000 of whom are in the United States. Almost
all Representatives are women who sell on a part-time basis. Representatives
are independent contractors or independent dealers, and are not agents or
employees of Avon. Representatives purchase products directly from Avon and
sell them to their customers.
The Company's products are sold to customers through a combination of
direct selling and marketing utilizing independent Representatives, licensed
kiosks, Express Centers in urban areas, the mail, phone, fax or "on-line".
Representatives go where the customers are, both in the home and in the
workplace.
In the United States, the Representative contacts customers, selling
primarily through the use of brochures which also highlight new products and
specially-priced items for each two-week sales campaign. Product samples,
demonstration products and selling aids such as make-up color charts are also
used. Generally, the Representative forwards an order every two weeks to a
designated distribution center. This order is processed and the products are
assembled at the distribution center and delivered to the Representative's
home, usually by a local delivery service. The Representative then delivers the
merchandise and collects payment from the customer for her own account. Payment
by the Representative to Avon is customarily made when the next order is
forwarded to the distribution center. The cost of merchandise to the
Representative varies according to the product category and/or to the total
order size for each two-week sales campaign and averages approximately 60
percent of the recommended selling price.
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Avon employs certain electronic order systems to increase Representative
support in the United States and allow them to run their business more
efficiently as well as to improve order processing accuracy. One of these
systems permits Representatives to submit add-on orders with a touch-tone
telephone, enabling them to augment orders already submitted by placing a phone
call. Another system, Avon's Personal Order Entry Terminal, permits the
top-producing Representatives in the United States to transmit orders
electronically by phone line, 24 hours a day, 7 days a week.
In September 2000, the Company announced to its U.S. Representatives a new
online marketing tool called youravon.com. The new online initiative is
available to all Representatives and offers a complete line of Avon products 24
hours a day, 7 days a week, with no geographic boundaries. Implementation in
certain other key markets is expected during 2001.
Outside the United States, each sales campaign is generally of a three or
four week duration. Although terms of payment and cost of merchandise to the
Representative vary from country to country, the basic method of direct selling
and marketing by Representatives is essentially the same as that used in the
United States, and substantially the same merchandising and promotional
techniques are utilized.
The recruiting and training of Representatives are the primary
responsibilities of District Sales Managers. In the United States, each
district manager has responsibility for a market area covered by 225 to 300
Representatives. Approximately 1,800 District managers are employees of Avon
and are paid a salary and a sales incentive based primarily on the increase
over the prior year's sales of Avon products by Representatives in their
district. Personal contacts, including recommendations from current
Representatives (including the Sales Leadership Program in the U.S.), and local
advertising constitute the primary means of obtaining new Representatives.
Because of the high rate of turnover among Representatives, a characteristic of
the direct-selling method, recruiting and training of new Representatives are
continually necessary.
From time to time, the question of the legal status of Representatives has
arisen, usually in regard to possible coverage under social benefit laws that
would require Avon (and in most instances, the Representatives) to make regular
contributions to social benefit funds. Although Avon has generally been able to
address these questions in a satisfactory manner, the matter has not been fully
resolved in all countries. If there should be a final determination adverse to
Avon in a country, the cost for future, and possibly past, contributions could
be so substantial in the context of the volume of business of Avon in that
country that it would have to consider discontinuing operations in that
country.
Promotion and Marketing
Sales promotion and sales development activities are directed at assisting
the Representatives, through sales aids such as brochures, product samples and
demonstration products. In order to support the efforts of Representatives to
reach new customers, especially working
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women and other individuals who frequently are not at home, specially designed
sales aids, promotional pieces, customer flyers and product and image enhancing
media advertising are used. In addition, Avon seeks to motivate its
Representatives through the use of special incentive programs that reward
superior sales performance. Periodic sales meetings with Representatives are
conducted by the district managers. The meetings are designed to keep
Representatives abreast of product line changes, explain sales techniques and
provide recognition for sales performance.
A number of merchandising techniques, including the introduction of new
products, the use of combination offers, the use of trial sizes and the
promotion of products packaged as gift items, are used. In general for each
sales campaign, a distinctive brochure is published, in which new products are
introduced and selected items are offered at special prices or are given
particular prominence in the brochure. CFT products are available each sales
campaign at consistently low prices, while maintaining introductory specials
and periodic sales on selected items for limited time periods.
From time to time, various regulations or laws have been proposed or
adopted that would, in general, restrict the frequency, duration or volume of
sales resulting from new product introductions, special prices or other special
price offers. The Company's pricing flexibility and broad product lines are
expected to be able to mitigate the effect of these regulations.
Competitive Conditions
The CFT; gift and decorative; apparel; and fashion jewelry and accessory
industries are highly competitive. Avon is one of the leading manufacturers and
distributors of cosmetics and fragrances in the United States. Its principal
competitors are the large and well-known cosmetics and fragrances companies
that manufacture and sell broad product lines through various types of retail
establishments. There are many other companies that compete in particular
products or product lines sold through retail establishments.
Avon has many competitors in the gift and decorative products and apparel
industries in the United States, including retail establishment principally
department stores, gift shops and direct-mail companies, specializing in these
products.
Avon is one of the leading distributors of fashion jewelry and accessories
for women in the United States. Its principal competition in the fashion
jewelry industry consists of a few large companies and many small companies
that manufacture and sell fashion jewelry for women through retail
establishments.
The number of competitors and degree of competition that Avon faces in its
foreign CFT and fashion jewelry markets varies widely from country to country.
Avon is one of the leading manufacturers and distributors in the CFT industry
in most of its foreign markets, as well as in the fashion jewelry industry in
Europe.
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There are a number of direct-selling companies which sell product lines
similar to Avon's, some of which also have worldwide operations and compete
with Avon.
Avon believes that the personalized customer service offered by its
Representatives; the high quality, attractive designs and reasonable prices of
its products; new product introductions; innovative CFT products; and its
guarantee of satisfaction are significant factors in establishing and
maintaining its competitive position.
Avon's consolidated net sales, by classes of principal products, are as
follows:
Years ended December 31
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2000 1999 1998
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Cosmetics, fragrance and toiletries $3,501.3 $3,220.8 $3,181.1
Beauty Plus:
Fashion jewelry 323.4 313.4 294.5
Accessories 275.8 223.9 222.4
Apparel 476.3 474.5 469.1
Watches 68.6 49.8 42.1
Beyond Beauty and Other* 1,036.3 1,006.7 1,003.5
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Total net sales $5,681.7 $5,289.1 $5,212.7
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*Beyond Beauty and Other primarily includes home products, gift and decorative,
health and nutrition, and candles.
International Operations
Avon's international operations are subject to certain customary risks
inherent in carrying on business abroad, including the risk of adverse currency
fluctuations, currency remittance restrictions and unfavorable economic and
political conditions.
Avon's international operations are conducted primarily through
subsidiaries in 52 countries and Avon's products are distributed in some 86
other countries.
Manufacturing
Avon manufactures and packages almost all of its CFT products. Raw
materials, consisting chiefly of essential oils, chemicals, containers and
packaging components, are purchased from various suppliers. Packages,
consisting of containers and packaging components, are designed by its staff of
artists and designers.
The design and development of new products are affected by the cost and
availability of materials such as glass, plastics and chemicals. Avon believes
that it can continue to obtain sufficient raw materials and supplies to
manufacture and produce its products.
Avon has nineteen manufacturing laboratories around the world, one of
which is principally devoted to the manufacture of fashion jewelry. In
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the United States, Avon's CFT products are produced in three manufacturing
laboratories for the four distribution centers and all kiosks and Express
centers. Most products sold in foreign countries are manufactured in Avon's
facilities abroad.
The fashion jewelry line is generally developed by Avon's staff and
produced in its manufacturing laboratory in Puerto Rico or by several
independent manufacturers.
Trademarks and Patents
Avon's business is not materially dependent on third party patent or other
intellectual property rights and Avon is not a party to any material license,
franchise or concession. The Company, however, does seek to protect its key
proprietary technologies by aggressively pursuing comprehensive patent coverage
in all major markets.
Avon's major trademarks are protected by registration in the United States
and the other countries where its products are marketed as well as in many
other countries throughout the world.
SEASONAL NATURE OF BUSINESS
Avon's sales and earnings have a marked seasonal pattern characteristic of
many companies selling CFT; gift and decorative products; apparel; and fashion
jewelry. Christmas sales cause a sales peak in the fourth quarter of the year.
Fourth quarter net sales were approximately 30 percent of total net sales in
both 2000 and 1999, respectively, and before special and non-recurring charges,
fourth quarter operating profit was 33 percent and 35 percent of total
operating profit in 2000 and 1999, respectively.
RESEARCH ACTIVITIES
Avon's research and development department is a leader in the industry,
based on the number of new product launches, including formulating effective
beauty treatments relevant to women's needs. In addition, Avon's research and
development supports its environmental responsibilities.
A team of researchers and technicians apply the disciplines of science to
the practical aspects of bringing products to market around the world.
Relationships with well known dermatologists and other specialists extend
Avon's own research to deliver new formulas and ingredients. Each year, Avon
researchers test and develop more than 600 products in the CFT and Beauty Plus
categories.
Avon has pioneered many innovative products, including Skin-So-Soft, its
best-selling bath oil; BioAdvance, the first skin care product with stabilized
retinol, the purest form of Vitamin A; and Collagen Booster, the premier
product to capitalize on Vitamin C technology. Avon also introduced the
benefits of aromatherapy to millions of American women, encapsulated color for
the Color-Release line and introduced alpha-hydroxy acid for cosmetic use in
the Anew Perfecting Complex products. Today, Avon's Anew product line has been
expanded to include technologically advanced products such as Retroactive,
launched in the
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fourth quarter of 2000, Retinol Recovery Complex PM Treatment, Night Force
Vertical Lifting Complex, Clearly C 10% Vitamin C Serum and Luminosity
Brightening Complex. Retroactive utilizes Avon's exclusive Rejuvi-cell complex,
a patent pending blend of ingredients formulated to enhance cellular
communication and re-energize aging skin cells. Night Force employs a patented
material named AVC10, a molecule that was engineered by Avon researchers over a
three-year period. Luminosity Brightening Complex contains Diamonex, Avon's
exclusive skin brightening system. Avon has introduced Hydra Finish Lip Color,
the first lipstick developed with 20% water, and Perceive, a fragrance which
uses the mood-enhancing effects of pheromone technology. In 2000, the Company
launched a complete renovation of Avon Color with improved formulas and
redesigned packaging, rolled out a reformulated Anew All-In-One skin care
regimen, launched Positivity, a new line of skin care products for menopausal
women, and launched Advance Techniques, a full line of upscale patented
hair-care products. In 2001, there will be updated packaging for the Anew line
and Anew Retroactive.
The amounts incurred on research activities relating to the development of
new products and the improvement of existing products were $43.1 million in
2000, $38.2 million in 1999, and $31.4 million in 1998. This research included
the activities of product research and development and package design and
development. Most of these activities are related to the development of CFT
products.
ENVIRONMENTAL MATTERS
Pursuant to Avon's global environmental policy, environmental audits are
conducted to ensure Avon facilities around the world meet or exceed local
regulatory standards. A corporate environmental operations committee ensures
that opportunities for environmental performance improvements are reflected in
our products, packaging and manufacturing processes.
In general, compliance with environmental regulations impacting Avon's
global operations has not had, and is not anticipated to have, any material
effect upon the capital expenditures, financial position or competitive
position of Avon.
EMPLOYEES
At December 31, 2000, Avon employed 43,000 people. Of these, 9,800 were
employed in the United States and 33,200 in other countries. The number of
employees tends to rise from a low point in January to a high point in November
and decreases somewhat in December when Christmas shipments are completed.
ITEM 2. PROPERTIES
Avon's principal properties consist of manufacturing laboratories for the
production of CFT and fashion jewelry and distribution centers where offices
are located and where finished merchandise is warehoused and shipped to
Representatives in fulfillment of their orders.
Substantially all of these properties are owned by Avon or its
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subsidiaries, are in good repair, adequately meet Avon's needs and operate at
reasonable levels of productive capacity.
The domestic manufacturing laboratories are located in Morton Grove, IL;
Springdale, OH; and Suffern, NY; the distribution centers are located in
Atlanta, GA; Glenview, IL; Newark, DE; and Pasadena, CA. Other properties
include five manufacturing laboratories and twenty distribution centers in
Europe; five manufacturing laboratories and fourteen distribution centers in
Latin America; two manufacturing laboratories and two distribution centers in
North America (other than in the United States); and four manufacturing
laboratories and eleven distribution centers in the Pacific region. The
research and development laboratories are located in Suffern, NY. Avon leases
space for its executive and administrative offices in New York City and its
fashion jewelry manufacturing facility in Puerto Rico.
ITEM 3. LEGAL PROCEEDINGS
Various lawsuits and claims (asserted and unasserted), arising in the
ordinary course of business or related to businesses previously sold, are
pending or threatened against Avon.
In 1991, a class action lawsuit was initiated against Avon on behalf of
certain classes of holders of Avon's Preferred Equity-Redemption Cumulative
Stock ("PERCS"). This lawsuit alleges various contract and securities law
claims relating to the PERCS (which were fully redeemed that year). While it is
not possible to predict the outcome of litigation, Avon has rejected the
assertions in this case, believes it has meritorious defenses to the claims and
is vigorously contesting this lawsuit. It is anticipated that a trial may take
place in late 2001.
In the opinion of Avon's management, based on its review of the
information available at this time, the total cost of resolving such
contingencies should not have a material adverse impact on Avon's consolidated
financial position, results of operations or cash flows.
Avon is involved in a number of proceedings arising out of the federal
Superfund law and similar state laws. In some instances Avon, along with other
companies, has been designated as a potentially responsible party which may be
liable for costs associated with these various hazardous waste sites. Based
upon Avon's current knowledge of the proceedings, management believes, without
taking into consideration any insurance recoveries, if any, that in the
aggregate they would not have a material adverse impact on Avon's consolidated
financial position, results of operations or cash flows.
-11-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the quarter
ended December 31, 2000.
ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
This information is incorporated by reference to "Market Prices per Share
of Common Stock by Quarter" in Avon's 2000 Restated Annual Report to
Shareholders.
PART II
ITEM 6. SELECTED FINANCIAL DATA (RESTATED)
The information for the five-year period 1996 through 2000 is incorporated
by reference to the "Eleven-Year Review" in Avon's Restated 2000 Annual Report
to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (RESTATED)
This information is incorporated by reference to "Management's Discussion
and Analysis" in Avon's Restated 2000 Annual Report to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is incorporated by reference to "Risk Management
Strategies and Market Rate Sensitive Instruments" and in Avon's Restated
2000 Annual Report to Shareholders for information concerning market risk
sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (RESTATED)
This information is incorporated by reference to the "Consolidated
Financial Statements and Notes", together with the report thereon of
PricewaterhouseCoopers LLP, and "Results of Operations by Quarter" in Avon's
Restated 2000 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
-12-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors is incorporated by reference to the
"Election of Directors" and "Information Concerning the Board of Directors"
sections of Avon's Proxy Statement for the 2001 Annual Meeting of Shareholders.
Officers are elected by the Board of Directors at its first meeting
following the Annual Meeting of Shareholders. Officers serve until the first
meeting of the Board of Directors following the Annual Meeting of Shareholders
at which Directors are elected for the succeeding year, or until their
successors are elected, except in the event of death, resignation or removal,
or the earlier termination of the term of office.
Information regarding employment contracts between Avon and named
executive officers is incorporated by reference to the "Contracts with
Executives" section of Avon's Proxy Statement for the 2001 Annual Meeting of
Shareholders.
Listed below are the executive officers of Avon, each of whom (except as
noted) has served in various executive and operating capacities with Avon
during the past five years:
Elected
Title Name Age Officer
- ----- ---- --- -------
Chief Executive Officer and Director......Andrea Jung 42 1997(1)
President and Chief Operating Officer,
and Director ..........................Susan J. Kropf 52 1997(2)
Executive Vice President, Asia Pacific....Fernando Lezama 61 1997
Executive Vice President and
Chief Financial Officer................Robert J. Corti 51 1988
Senior Vice President and
General Counsel........................Gilbert L. Klemann, II 50 2001(3)
Senior Vice President, Human Resources....Jill Kanin-Lovers 49 1998
Vice President and Controller.............Janice Marolda 40 1998
(1) Andrea Jung has been the Chief Executive Officer of Avon since November
1999 concurrently holding the position of President until January 2001.
Ms. Jung joined Avon in January 1994 as President, Product Marketing and
was promoted to Executive Vice President, Global Marketing and New
Business in March 1997. From January 1998 to November 1999 she was
President and Chief Operating Officer of Avon.
(2) Susan J. Kropf was elected President and Chief Operating Officer,
effective January 2001. She had been elected Executive Vice President,
Chief Operating Officer, North America and Global Business Operations
effective November 1999. Previously she had been Executive Vice President
and President, North America and prior to that she had served as Senior
Vice President, U.S. Marketing and Vice President, Product Development.
Ms. Kropf has been with Avon for 30 years.
-13-
(3) Gilbert L. Klemann, II was elected Senior Vice President and General
Counsel of Avon effective January 1, 2001. Prior to joining Avon he had
been an Executive Vice President of Fortune Brands, Inc. (formerly
American Brands, Inc.)from 1998-1999 with responsibilities that included
corporate development, legal and administrative functions. He was the
Senior Vice President and General Counsel of American Brands, Inc. during
the period 1991-1997 and previously was a partner in the New York law firm
of Chadbourne & Parke.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the "Information
Concerning the Board of Directors" and "Executive Compensation" sections of
Avon's Proxy Statement for the 2001 Annual Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference to the "Ownership of Shares"
section of Avon's Proxy Statement for the 2001 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
This information is incorporated by reference to the "Contracts with
Executives" section of Avon's Proxy Statement for the 2001 Annual Meeting of
Shareholders.
-14-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS
ON FORM 8-K (RESTATED)
Form 10-K/A
Page Number
-----------
(a) 1. Consolidated Financial Statements of
Avon Products, Inc. and Subsidiaries (as restated)
Consolidated statements of income for
each of the years in the three-year
period ended December 31, 2000............ 19
Consolidated balance sheets at
December 31, 2000 and 1999................. 20
Consolidated statements of cash flows
for each of the years in the three-year
period ended December 31, 2000............. 21
Consolidated statements of changes in
shareholders' (deficit) for each
of the years in the three-year period
ended December 31, 2000.................... 22
Notes to consolidated financial
statements................................. 23-50
Report of Independent Accountants
PricewaterhouseCoopers LLP................. 51
(a) 2. Financial Statement Schedule
Report of Independent Accountants on
Financial Statement Schedule
PricewaterhouseCoopers LLP S-1
Consent of Independent Accountants
PricewaterhouseCoopers LLP S-2
Financial statement schedule for each
of the years in the three-year period
ended December 31, 2000...............
II. Valuation and qualifying
accounts............. S-3
-15-
Financial statements of the registrant and all other financial statement
schedules are omitted because they are not applicable or because the required
information is shown in the consolidated financial statements and notes.
(a) 3. Exhibits
Exhibit
Number Description
- ------ -----------
3.1 Restated Certificate of Incorporation of Avon, filed with the
Secretary of State of the State of New York on May 8, 2000
(incorporated by reference to Exhibit 3.4 to Avon's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000).
3.2 By-laws of Avon, as restated, effective December 2, 1999
(incorporated by reference to Exhibit 3.2 to Avon's Annual Report on
Form 10-K for the year ended December 31, 1999).
4.1 Amended and Restated Revolving Credit and Competitive Advance
Facility Agreement, dated as of August 8, 1996, among Avon, Avon
Capital Corporation and a group of banks and other lenders
(incorporated by reference to Exhibit 4.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996).
4.2 Indenture dated as of August 1, 1997 between Avon as Issuer, and The
Chase Manhattan Bank, as Trustee relating to the 6.55% Notes due
2007 (incorporated by reference to Exhibit 4.2 to Avon's
Registration Statement on Form S-4, Registration Statement No.
33-41299 filed December 1, 1997).
4.3 Rights Agreement, dated as of March 30, 1998 (the "Rights
Agreement"), between Avon and First Chicago Trust Company of New
York (incorporated by reference to Exhibit 4 to Avon's Registration
Statement on Form 8-A, filed March 18, 1998).
4.4 Indenture dated as of November 9, 1999 between Avon as Issuer and
The Chase Manhattan Bank, as Trustee relating to the 6.9% Notes due
November 15, 2004 and the 7.15% Notes due November 15, 2009
(incorporated by reference to Exhibit 4.4 to Avon's Registration
Statement on Form S-4, Registration Statement No. 33-92333 filed
December 8, 1999).
10.1* Avon Products, Inc. 1993 Stock Incentive Plan, approved by
stockholders on May 6, 1993 (incorporated by reference to Exhibit
10.2 to Avon's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993).
10.2* Form of Stock Option Agreement to the Avon Products, Inc. 1993 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1993).
-16-
10.3* First Amendment to the 1993 Avon Stock Incentive Plan effective
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.1 to Avon's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
10.4* Avon Products, Inc. 1997 Long-Term Incentive Plan, effective as of
January 1, 1997 approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.4 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1997).
10.5* Supplemental Executive Retirement Plan and Supplemental Life Plan of
Avon Products, Inc., as amended and restated as of July 1, 1998
(incorporated by reference to Exhibit 10.5 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1998).
10.6* Benefit Restoration Pension Plan of Avon Products, Inc., effective as
of January 1, 1994 (incorporated by reference to Exhibit 10.7 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1994).
10.7* Trust Agreement, amended and restated as of March 2, 1990, between
Avon and Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1990 and refiled under Form SE for the year ended
December 31, 1996).
10.8* First Amendment, dated as of January 30, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.2 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.9* Second Amendment, dated as of June 12, 1992 to the Trust Agreement,
dated as of March 2, 1990, by and between Avon and Chase Manhattan
Bank, N.A. (incorporated by reference to Exhibit 10.3 to Avon's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1993).
10.10* Third Amendment, dated as of November 5, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.4 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.11* The Avon Products, Inc. Deferred Compensation Plan, as amended and
restated as of July 1, 1998 (incorporated by reference to Exhibit
4(b) to Avon's Registration Statement on Form S-8, Registration
No. 33-65989 filed October 22, 1998).
10.12* Trust Agreement, dated as of April 21, 1995, between Avon and
Chemical Bank, amending and restating the Trust Agreement as of
August 3, 1989 between Avon and Manufacturers Hanover Trust Company
(incorporated by reference to Exhibit 10.14 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1995).
-17-
10.13* Stock Option Agreement between Avon and Stanley C. Gault dated
November 4, 1999 (incorporated by reference to Exhibit 10.13 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1999).
10.14* Avon Products, Inc. 2000 Stock Incentive Plan (incorporated by
reference to Appendix A to the Company's Proxy Statement on Form 14A
as filed with the Commission on March 27, 2000 (File No. 1-04881)).
10.15* Employment Agreement dated as of December 11, 1997 between Avon and
Andrea Jung (incorporated by reference to Exhibit 10.20 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1997).
10.16* Form of Employment Agreement, dated as of September 1, 1994, between
Avon and certain senior officers (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
10.17* Avon Products, Inc. Compensation Plan for Non-Employee Directors,
amended and restated, effective June 1, 2000 (incorporated by
reference to Exhibit 10.17 to Avon's Annual Report on Form 10-K for
the year ended December 31, 2000).
10.18* Avon Products, Inc. Board of Directors' Deferred Compensation Plan,
amended and restated, effective January 1, 1997 (incorporated by
reference to Exhibit 10.23 to Avon's Annual Report on Form 10-K for
the year ended December 31, 1997).
10.19* Trust Agreement, dated as of December 31, 1991, between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.23 to Avon's Annual Report on Form 10-K for the year
ended December 31, 1991 and refiled under Form SE for the year ended
December 31, 1996).
10.20* First Amendment, dated as of November 5, 1992, to the Trust
Agreement dated as of December 31, 1991, by and between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.7 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993).
10.21* Stock Option Agreement between Avon and Andrea Jung dated June 4,
1998 (incorporated by reference to Exhibit 10.2 to Avon's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
13 Portions of the Restated Annual Report to Shareholders for the year
ended December 31, 2000 incorporated by reference in response to
Items 1,5 through 8 in this filing.
18 Preferability letter from PricewaterhouseCoopers LLP regarding
change in accounting principle (incorporated by reference to Exhibit
18 to Avon's Annual Report on Form 10-K for the year ended December
31, 1999).
-18-
21 Subsidiaries of the registrant (incorporated by reference to Exhibit
21 to Avon's Report Annual Report on Form 10-K for the year ended
December 31, 2000).
23 Consent of PricewaterhouseCoopers LLP (set forth on page S-2 of this
Annual Report on Form 10-K/A).
* The Exhibits identified above and in the Exhibit Index with an
asterisk (*) are management contracts or compensatory plans or
arrangements.
(b) Reports on Form 8-K
On February 8, 2001, the Company filed a Form 8-K to detail
restatements of financial information for the first three quarters
of 2000 as a result of the adoption of SAB No. 101 and EITF 00-10.
(c) Avon's Annual Report on Form 10-K/A for the year ended December 31,
2000, at the time of filing with the Securities and Exchange
Commission, shall modify and supersede all prior documents filed
pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act
of 1934 for purposes of any offers or sales of any securities after
the date of such filing pursuant to any Registration Statement or
Prospectus filed pursuant to the Securities Act of 1933, which
incorporates by reference such Annual Report on Form 10-K/A.
-19-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: August 12, 2002 /s/JANICE MAROLDA.
------------------------------
Janice Marolda
Vice President,
Controller
Principal Accounting Officer
-20-
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Avon Products, Inc.:
Our audits of the consolidated financial statements referred to in our report
dated January 25, 2001, except for Notes 2 and 15 as to which the date is July
31, 2002, appearing in the 2000 Annual Report to Shareholders of Avon Products,
Inc., which report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K/A, also included an audit of the
financial statement schedule listed in Item 14(a)(2) of this Form 10-K/A. In
our opinion, this financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.
PricewaterhouseCoopers LLP
New York, New York
January 25, 2001, except for Notes 2 and 15 as to which the date is
July 31, 2002.
S-1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements on Form S-3 (Reg. No. 33-45808) and Form S-8 (Reg. Nos. 33-43820,
33-47209, 33-65989 and 33-65998) of Avon Products, Inc. of our report dated
January 25, 2001, except for Notes 2 and 15 as to which the date is July 31,
2002, relating to the financial statements which appear in the 2000 Annual
Report to Shareholders, which is incorporated in this Annual Report on Form
10-K/A. We also consent to the incorporation by reference of our report dated
January 25, 2001, except for Notes 2 and 15 as to which the date is July 31,
2002, relating to the financial statement schedule, which appears in this Form
10-K/A.
PricewaterhouseCoopers LLP
New York, New York
August 12, 2002
S-2
AVON PRODUCTS, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Years ended December 31
Additions
---------------------
Balance Charged
at to costs Charged Balance
beginning and to other at end
of period expenses accounts Deductions of period
--------- -------- -------- ---------- ---------
2000
Allowance for doubtful
accounts receivable $ 40.0 $ 94.3 $ -- $ 95.1(a) $39.2
======= ======= ======= ====== =====
1999
Allowance for doubtful
accounts receivable $ 49.0 $ 87.5 $ -- $ 96.5(a) $40.0
======= ======= ======= ===== =====
1998
Allowance for doubtful
accounts receivable $ 35.5 $ 91.3 $ -- $77.8(a) $49.0
======= ======= ======= ===== =====
(a) Accounts written off, net of recoveries and foreign currency translation
adjustment.
S-3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM 10-K/A
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2000
Commission file number 1-4881
--------
AVON PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
--------
EXHIBITS
INDEX TO EXHIBITS
(a)3. Exhibits
Exhibit
Number Description
- ------ -----------
3.1 Restated Certificate of Incorporation of Avon, filed with the
Secretary of State of the State of New York on May 8, 2000
(incorporated by reference to Exhibit 3.4 to Avon's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000).
3.2 By-laws of Avon, as restated, effective December 2, 1999
(incorporated by reference to Exhibit 3.2 to Avon's Annual Report on
Form 10-K for the year ended December 31, 1999).
3.3 Certificate of Amendment of the Certificate of Incorporation of Avon
Products, Inc., filed May 13, 1998 (incorporated by reference to
Exhibit 3.3 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1998).
4.1 Amended and Restated Revolving Credit and Competitive Advance
Facility Agreement, dated as of August 8, 1996, among Avon, Avon
Capital Corporation and a group of banks and other lenders
(incorporated by reference to Exhibit 4.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996).
4.2 Indenture dated as of August 1, 1997 between Avon as Issuer, and The
Chase Manhattan Bank, as Trustee relating to the 6.55% Notes due
2007 (incorporated by reference to Exhibit 4.2 to Avon's
Registration Statement S-4, Registration Statement No. 333-41299
filed December 1, 1997).
4.3 Rights Agreement, dated as of March 30, 1998 (the "Rights
Agreement"), between Avon and First Chicago Trust Company of New
York (incorporated by reference to Exhibit 4 to Avon's Registration
Statement on Form 8-A, filed March 18, 1998).
4.4 Indenture dated as of November 9, 1999 between Avon as Issuer and
The Chase Manhattan Bank, as Trustee relating to the 6.9% Notes due
November 15, 2004 and the 7.15% Notes due November 15, 2009
(incorporated by reference to Exhibit 4.4 to Avon's Registration
Statement on Form S-4, Registration Statement No. 333-92333 filed
December 8, 1999).
10.1* Avon Products, Inc. 1993 Stock Incentive Plan, approved by
stockholders on May 6, 1993 (incorporated by reference to Exhibit
10.2 to Avon's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993).
10.2* Form of Stock Option Agreement to the Avon Products, Inc. 1993 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1993).
10.3* First Amendment to the 1993 Avon Stock Incentive Plan effective
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.1 to Avon's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
10.4* Avon Products, Inc. 1997 Long-Term Incentive Plan, effective as of
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.4 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1997).
10.5* Supplemental Executive Retirement Plan and Supplemental Life Plan of
Avon Products, Inc., as amended and restated as of July 1, 1998
(incorporated by reference to Exhibit 10.5 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1998).
10.6* Benefit Restoration Pension Plan of Avon Products, Inc., effective
as of January 1, 1994 (incorporated by reference to Exhibit 10.7 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1994).
10.7* Trust Agreement, amended and restated as of March 2, 1990, between
Avon and Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1990 and refiled under Form SE for the year ended
December 31, 1996).
10.8* First Amendment, dated as of January 30, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.2 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.9* Second Amendment, dated as of June 12, 1992 to the Trust Agreement,
dated as of March 2, 1990, by and between Avon and Chase Manhattan
Bank, N.A. (incorporated by reference to Exhibit 10.3 to Avon's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1993).
10.10* Third Amendment, dated as of November 5, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.4 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.11* The Avon Products, Inc. Deferred Compensation Plan, as amended and
restated as of January 1, 1998 (incorporated by reference to Exhibit
4(b) to Avon's Registration Statement on Form S-8, Registration No.
333-65989 filed October 22, 1998).
10.12* Trust Agreement, dated as of April 21, 1995, between Avon and
Chemical Bank, amending and restating the Trust Agreement as of
August 3, 1989 between Avon and Manufacturers Hanover Trust Company
(incorporated by reference to Exhibit 10.14 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1995).
10.13* Stock Option Agreement between Avon and Stanley C. Gualt dated
November 4, 1999 (incorporated by reference to Exhibit 10.13 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1999).
10.14 Avon Products, Inc. 2000 Stock Incentive Plan (incorporated by
reference to Appendix A to the Company's Proxy Statement on Form 14A
as filed with the Commission on March 27, 2000 (File No. 1-04881)).
10.15* Employment Agreement dated as of December 11, 1997 between Avon and
Andrea Jung (incorporated by reference to Exhibit 10.20 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1997).
10.16* Form of Employment Agreement, dated as of September 1, 1994, between
Avon and certain senior officers (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
10.17* Avon Products, Inc. Compensation Plan for Non-Employee Directors,
amended and restated effective June 1, 2000 (incorporated by
reference to Exhibit 10.17 to Avon's Annual Report on Form 10-K for
the year ended December 31, 2000).
10.18* Avon Products, Inc. Board of Directors' Deferred Compensation Plan,
amended and restated, effective January 1, 1997 (incorporated by
reference to Exhibit 10.23 to Avon's Annual Report on Form 10-K for
the year ended December 31, 1997).
10.19* Trust Agreement, dated as of December 31, 1991, between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.23 to Avon's Annual Report on Form 10-K for the year
ended December 31, 1991 and refiled under Form SE for the year ended
December 31, 1996).
10.20* First Amendment, dated as of November 5, 1992, to the Trust
Agreement dated as of December 31, 1991, by and between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.7 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993).
10.21* Stock Option Agreement between Avon and Andrea Jung dated June 4,
1998 (incorporated by reference to Exhibit 10.2 to Avon's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
13 Portions of the Restated Annual Report to Shareholders for the year
ended December 31, 2000 incorporated by reference in response to
Items 1,5 through 8 in this filing.
18 Preferability letter from PricewaterhouseCoopers LLP regarding
change in accounting principle (incorporated by reference to
Exhibit 18 to Avon's Annual Report on Form 10-K for the year ended
December 31, 1999).
21 Subsidiaries of the registrant (incorporated by reference to Exhibit
21 to Avon's Annual Report on Form 10-K for the year ended December
31, 2000).
23 Consent of PricewaterhouseCoopers LLP (set forth on page S-2 of this
Annual Report on Form 10-K/A).
* The Exhibits identified above and in the Exhibit Index with an
asterisk (*) are management contracts or compensatory plans or
arrangements.