Avon 2004 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2004 Avon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 74

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74

2003
Gross Gross
Unrealized Unrealized Market
Cost Gains Losses Value
Equity securities $44.5 $2.3 $(16.0) $30.8
State and municipal
bonds 21.0 .9 — 21.9
Mortgage backed
securities 1.7 .1 — 1.8
Other 3.6 — (.5) 3.1
Total available-
for-sale
securities 70.8 3.3 (16.5) 57.6
Cash and
equivalents .3 — — .3
Total $71.1 $3.3 $(16.5) $57.9
Payments for the purchases, proceeds and gross realized
gains and losses from the sales of these securities totaled
$27.7, $27.6, $.2 and $.4, respectively, during 2003.
For the years ended December 31, 2004 and 2003,
unrealized losses on available-for-sale securities
impacted accumulated other comprehensive loss
as follows:
2004 2003
Net unrealized losses at
beginning of year, net of taxes $(8.5) $(13.0)
Net unrealized gains, net of taxes 1.4 4.4
Reclassification of net losses
to earnings, net of taxes 9.1 .1
Net unrealized gains (losses)
end of year, net of taxes $ 2.0 $ (8.5)
6Income Taxes
Deferred tax assets (liabilities) resulting from tempo-
rary differences in the recognition of income and
expense for tax and financial reporting purposes at
December 31 consisted of the following:
2004 2003
Deferred tax assets:
Postretirement benefits $ 78.5 $ 74.4
Accrued expenses and
reserves 89.1 74.0
Special and non-recurring
charges 2.1 6.0
Employee benefit plans 124.4 105.0
Foreign operating loss
carryforwards 70.0 51.3
Postemployment benefits 15.8 11.8
Revenue recognition 3.2 2.8
Minimum tax credit
carryforwards 29.5 19.4
Foreign tax credit
carryforwards 8.8 32.7
All other 45.5 31.3
Valuation allowance (70.2) (84.8)
Total deferred tax assets 396.7 323.9
Deferred tax liabilities:
Depreciation (42.1) (44.1)
Prepaid retirement plan costs (9.9) (38.7)
Capitalized interest (4.9) (5.5)
Capitalized software (7.9) (6.5)
Unremitted foreign earnings (5.1) (16.9)
All other (25.5) (24.8)
Total deferred tax liabilities (95.4) (136.5)
Net deferred tax assets $301.3 $ 187.4
Deferred tax assets (liabilities) at December 31 were
classified as follows:
2004 2003
Deferred tax assets:
Prepaid expenses and other $ 95.4 $ 94.1
Other assets 222.9 156.2
Total deferred tax assets 318.3 250.3
Deferred tax liabilities:
Income taxes (4.9) (12.3)
Deferred income taxes (12.1) (50.6)
Total deferred tax liabilities (17.0) (62.9)
Net deferred tax assets $301.3 $187.4