Avon 2007 Annual Report Download - page 80

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-Lived Assets by Major Country
2007 2006 2005
U.S. $ 465.5 $ 418.2 $ 431.0
Brazil 197.7 115.5 97.0
Colombia 131.6 145.1 163.3
All other 935.3 800.4 727.7
Total $1,730.1 $1,479.2 $1,419.0
A major country is defined as one with long-lived assets greater
than 10% of consolidated long-lived assets. Long-lived assets
primarily include property, plant and equipment and intangible
assets. The U.S. and Brazil’s long-lived assets consist primarily of
property, plant and equipment related to manufacturing and
distribution facilities. Colombia’s long-lived assets consist primar-
ily of goodwill and intangible assets associated with the 2005
acquisition of this business (See Note 16, Goodwill and
Intangible Assets).
Revenue by Product Category
2007 2006 2005
Beauty (1) $6,932.5 $6,019.6 $5,586.4
Beauty Plus (2) 1,879.1 1,683.2 1,528.9
Beyond Beauty (3) 1,033.6 974.5 949.9
Net sales 9,845.2 8,677.3 8,065.2
Other revenue (4) 93.5 86.6 84.4
Total revenue $9,938.7 $8,763.9 $8,149.6
(1) Beauty includes cosmetics, fragrances, skin care and toiletries.
(2) Beauty Plus includes fashion jewelry, watches, apparel and accessories.
(3) Beyond Beauty includes home products and gift and decorative
products.
(4) Other primarily includes shipping and handling fees billed to
Representatives.
Sales from Health and Wellness products and mark. are included
among these categories based on product type.
NOTE 12. Leases and Commitments
Minimum rental commitments under noncancellable operating
leases, primarily for equipment and office facilities at
December 31, 2007, are included in the following table under
leases. Purchase obligations include commitments to purchase
paper, inventory and other services.
Year Leases
Purchase
Obligations
2008 $ 91.6 $155.8
2009 71.1 70.4
2010 53.2 47.1
2011 36.4 25.3
2012 27.9 17.7
Later years 56.5 64.2
Sublease rental income (38.1) –
Total $298.6 $380.5
Rent expense in 2007 was $118.5 (2006 - $114.7; 2005 -
$109.2). Plant construction, expansion and modernization proj-
ects with an estimated cost to complete of approximately $308.4
were in progress at December 31, 2007.
NOTE 13. Restructuring Initiatives
In November 2005, we announced a multi-year turnaround plan
to restore sustainable growth. As part of our turnaround plan,
restructuring initiatives include:
• enhancement of organizational effectiveness, including efforts
to flatten the organization and bring senior management
closer to consumers through a substantial organization down-
sizing;
• implementation of a global manufacturing strategy through
facilities realignment;
• additional supply chain efficiencies in distribution; and
• streamlining of transactional and other services through out-
sourcing and moves to low-cost countries.