Avon 2013 Annual Report Download - page 55

We may seek to repurchase our equity or to retire our outstanding debt in open market purchases, privately negotiated transactions,
through derivative instruments or otherwise. Repurchases of equity and debt may be funded by the incurrence of additional debt or the
issuance of equity or convertible securities and will depend on prevailing market conditions, our liquidity requirements, contractual
restrictions and other factors, and the amounts involved may be material. We may also elect to incur additional debt or issue equity or
convertible securities to finance ongoing operations or to meet our other liquidity needs. Any issuances of equity securities or convertible
securities could have a dilutive effect on the ownership interest of our current shareholders and may adversely impact earnings per share in
future periods. For more information see “Risk Factors – A downgrade in our credit ratings may adversely affect our business and access to
liquidity, and our working capital,” “Risk Factors – Our indebtedness could adversely affect us by reducing our flexibility to respond to
changing business and economic conditions,” and “Risk Factors – A general economic downturn, a recession globally or in one or more of
our geographic regions or sudden disruption in business conditions or other challenges may adversely affect our business, our access to
liquidity and capital, and our credit ratings” included in Item 1A on pages 7 through 17 of our 2013 Annual Report.
Our liquidity could also be negatively impacted by restructuring initiatives, dividends, capital expenditures, acquisitions, and certain
contingencies, including any legal or regulatory settlements, described more fully in Note 16, Contingencies on pages F-50 through F-52 of
our 2013 Annual Report. See our Cautionary Statement for purposes of the “Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995 on pages 1 through 2 of our 2013 Annual Report.
Balance Sheet Data
2013 2012
Cash and cash equivalents $1,107.9 $1,206.9
Total debt 2,720.7 3,195.8
Working capital 1,238.6 1,224.3
Cash Flows
2013 2012 2011
Net cash from continuing operating activities $ 539.6 $ 544.0 $ 628.1
Net cash from continuing investing activities (173.4) (213.4) (267.4)
Net cash from continuing financing activities (467.9) (401.3) (284.5)
Effect of exchange rate changes on cash and equivalents (80.8) 23.4 (37.2)
Net Cash from Continuing Operating Activities
Net cash provided by continuing operating activities during 2013 was $4.4 lower than during 2012. Operating cash flow during 2013 was
unfavorably impacted by the make-whole premiums of approximately $90 paid in connection with the prepayment of the Private Notes and
the 2014 Notes, a $25 contribution to the United Kingdom pension plan in 2013 as a result of our decision to freeze the plan, and higher
payments for employee incentive compensation. Substantially offsetting these unfavorable impacts was improved Adjusted operating profit.
Net cash provided by continuing operating activities during 2012 was $84.1 lower than during 2011. Operating cash flow during 2012 was
negatively impacted primarily by lower cash related net income and higher payments associated with CTI restructuring compared to 2011.
Partially offsetting these negative impacts were improvements in working capital, lower contributions to the U.S. pension plan and a
payment in 2011 associated with a long-term incentive compensation plan of approximately $36 that did not recur in 2012.
We maintain defined benefit pension plans and unfunded supplemental pension benefit plans (see Note 12, Employee Benefit Plans on
pages F-34 through F-42 of our 2013 Annual Report). Our funding policy for these plans is based on legal requirements and available cash
flows. The amounts necessary to fund future obligations under these plans could vary depending on estimated assumptions (as detailed in
“Critical Accounting Estimates” of this MD&A). The future funding for these plans will depend on economic conditions, employee
demographics, mortality rates, the number of associates electing to take lump-sum distributions, investment performance and funding
decisions. Based on current assumptions, we expect to make contributions in the range of $50 to $55 to our U.S. pension and
postretirement plans and in the range of $30 to $35 to our international pension and postretirement plans during 2014.
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