Avon 2004 Annual Report Download - page 71

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Eleven-Year Review
(continued)
In millions, except per share and employee data 2004 2003(3) 2002(4)
Balance sheet data
Working capital $ 980.9 $ 619.1 $ 72.7
Capital expenditures 250.1 162.6 126.5
Property, plant and equipment, net 1,014.8 855.6 769.1
Total assets 4,148.1 3,562.3 3,327.5
Debt maturing within one year 51.7 244.1 605.2
Long-term debt 866.3 877.7 767.0
Total debt 918.0 1,121.8 1,372.2
Shareholders’ equity (deficit) 950.2 371.3 (127.7)
Number of employees
United States 8,900 9,400 9,200
International 38,800 36,500 36,100
Total employees(13) 47,700 45,900 45,300
(1) 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.
(2) Certain reclassifications have been made to conform to the current full year presentation.
(3) In 2003, Avon reversed $2.1 pretax ($1.3 after tax, or $.006 per diluted share) related to the special charges recorded in 2001 and $1.8 pretax
($1.3 after tax, or $.005 per diluted share) related to the special charges recorded in 2002 against the special charges line. The net effect of the
adjustments is a benefit of $3.9 pretax ($2.7 after tax, or $.01 per diluted share).
(4) 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.
(5) 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
compensate Avon for lost profits and incremental expenses as a result of the cancellation of a retail agreement with Sears.
(6) In 1998, Avon began a worldwide business process redesign program in order to streamline operations and recorded special charges of $154.4 pretax
($122.8 after tax, or $.46 per diluted share). In 1999, special charges related to this program totaled $136.4 pretax ($111.9 after tax, or $.43 per diluted
share). In 1999, Avon recorded an asset impairment charge of $38.1 pretax ($24.0 after tax, or $.09 per diluted share) related to the write-off of an order
management software system that had been under development.
(7) 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 activities. 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 accounting change in the Consolidated Statements of Income.