Avon 2003 Annual Report Download - page 78

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97
18. Acquisition
In the second quarter of 2003, Avon purchased the outstanding 50% of shares
in its Turkish joint venture business, Eczacibasi Avon Kozmetik (EAK) from its
partner, Eczacibasi Group, for $18.4, including transaction costs. As a result of
the acquisition agreement, Avon consolidated the remaining 50% of its Turkish
joint venture business in the second quarter of 2003. Prior to the second quar-
ter of 2003, the investment was accounted for under the equity method. The
impact on Net sales and Operating profit in 2003 was $47.2 and $14.6, respec-
tively. Avon Turkey is included in Avon’s European operating segment. Avon
allocated approximately $17.0 of the purchase price to goodwill.
19. Subsequent Events
On January 14, 2004, Avon entered into an agreement to purchase 20%
of the outstanding shares in its two joint venture subsidiaries in China from
a minority interest shareholder, for approximately $50.0 (407.0 Chinese
renminbi). The transfer of shares is contingent on approval by various Chinese
government authorities. Avon currently consolidates its 73.845% interest in
these subsidiaries. The purchase of these shares will not have a material
impact on Avon’s consolidated Net income.
On February 3, 2004, Avon announced an increase in its quarterly cash divi-
dend to $.28 per share from $.21 per share. The first dividend at the new rate
will be paid on March 1, 2004, to shareholders of record on February 14,
2004. On an annualized basis, the new dividend rate is $1.12 per share.
On February 3, 2004, Avon also announced a two-for-one stock split in the
form of a dividend of one share of common stock in respect of each share of
common stock issued and outstanding or held in treasury, subject to share-
holder approval at the May 6, 2004 annual meeting of shareholders of an
amendment to the Company’s Restated Certificate of Incorporation to increase
the number of authorized shares. If the stock split is approved, the new
annual dividend rate will be $.56 per share (quarterly rate of $.14 per share).