Avon 2001 Annual Report Download - page 48

PAGE 74
Eleven-Year Review
In millions, except per share and employee data
2002 2001 2000 1999
Income data
Net sales $6,170.6 $5,957.8 $5,681.7 $5,289.1
Other revenue 57.7 42.5 40.9(4) 38.8(4)
Total revenue 6,228.3 6,000.3 5,722.6 5,327.9
Operating profit(7) 870.0(1) 773.4(3) 789.9 523.1(11)
Interest expense(7) 52.0 71.1 84.7 43.2
Income from continuing operations before taxes, minority interest
and cumulative effect of accounting changes 835.6(1) 689.7(3) 692.2 480.3(11)
Income from continuing operations before minority interest and
cumulative effect of accounting changes 543.3(1) 449.4(3) 490.0 286.6(11)
Income from continuing operations before cumulative effect
of accounting changes 534.6(1) 444.9(3) 485.8 286.6(11)
(Loss) income from discontinued operations, net ————
Cumulative effect of accounting changes, net —(0.3)(2) (6.7)(5) —
Net income 534.6(1) 444.6(3) 479.1 286.6(11)
Earnings (loss) per share–basic (8) (9)
Continuing operations $ 2.26(1) $ 1.88(3) $ 2.04 $ 1.12(11)
Discontinued operations — — —
Cumulative effect of accounting changes —— (.03) —
Net income 2.26(1) 1.88(3) 2.01 1.12(11)
Earnings (loss) per share–diluted (6) (8) (9)
Continuing operations $ 2.22(1) $ 1.85(3) $ 2.02 $ 1.10(11)
Discontinued operations ————
Cumulative effect of
accounting changes —— (.03) —
Net income 2.22(1) 1.85(3) 1.99 1.10(11)
Cash dividends per share
Common $ .80 $ .76 $ .74 $ .72
Preferred ————
Balance sheet data
Working capital $ 72.7 $ 428.1 $ 186.4 $ (375.0)
Capital expenditures 126.5 155.3 193.5 200.2
Property, plant and equipment, net 769.1 771.7 765.7 732.1
Total assets 3,327.5 3,181.0 2,811.3 2,512.8
Debt maturing within one year 605.2 88.8 105.4 306.0
Long-term debt 767.0 1,236.3 1,108.2 701.4
Total debt 1,372.2 1,325.1 1,213.6 1,007.4
Shareholders’ (deficit) equity (127.7) (75.1) (230.9) (421.9)
Number of employees
United States 9,200 9,600 9,800 9,700
International 36,100 34,200 33,200 30,800
Total employees(10) 45,300 43,800 43,000 40,500
(1) In 2002, Avon recorded Special charges of $43.6 pretax ($30.4 after tax, or
$.12 per diluted share), primarily related to workforce reductions and facility
rationalizations. Avon also reversed $7.3 pretax ($5.2 after tax, or $.02 per
diluted share) against the Special charges line related to the Special charges
recorded in 2001.
(2) Effective, January 1, 2001, Avon adopted FAS No. 133 “Accounting for
Derivative Instruments and Hedging Activities,” as amended by FAS No. 138,
“Accounting for Certain Derivatives and Hedging Activities,” which establishes
accounting and reporting standards for derivative instruments and hedging activ-
ities. To reflect the adoption of FAS 133, Avon recorded a charge of $0.3, net of a
tax benefit of $0.2. This charge is reflected as a cumulative effect of an account-
ing change in the Consolidated Statements of Income.
(3) In 2001, Avon recorded Special charges of $97.4 pretax ($68.3 after tax or
$.28 per diluted share), primarily related to workforce reductions and facility
rationalizations. In 2001, Avon also received a cash settlement, net of related
expenses, of $25.9 pretax ($15.7 after tax, or $.06 per diluted share) to compen-
sate Avon for lost profits and incremental expenses as a result of the cancellation
of a retail agreement with Sears.
(4) For the year ended December 31, 2000, the Company adopted the provisions
of Emerging Issues Task Force (“EITF”) 00-10, “Accounting for Shipping and
Handling Fees and Costs,” which requires that amounts billed to customers for
shipping and handling fees be classified as revenues. 1999 and 1998 have been
restated to reflect shipping and handling fees, previously reported in Marketing,
distribution and administrative expenses, in Other revenue in the Consolidated
Statements of Income.
(5) For the year ended December 31, 2000, the Company recorded a charge of
$6.7 million, after tax, to reflect the adoption of Staff Accounting Bulletin
(“SAB”) No. 101, “Revenue Recognition in Financial Statements.” This charge
is reflected as a cumulative effect of an accounting change in the Consolidated
Statements of Income.
(6) For purposes of calculating diluted earnings per share for the year ended
December 31, 2002, 2001 and 2000, after tax interest expense of $10.4, $10.0
and $4.5, respectively, applicable to Convertible Notes, has been added back to
net income.
(7) Certain reclassifications have been made to conform to the current full
year presentation.