AVON
PRODUCTS, INC.
RECONCILIATION SCHEDULE FOR UNUSUAL ITEMS
Avon Strategic Update Meeting
December 8, 2004
"Evolution of Business Transformation" Slide
Susan Kropf, Presenter
| ($ in
millions) |
|
| |
Base Year
1998 |
|
2001 |
|
1999-2001
Operating Margin
Improvement (bps) |
2004F
|
2002-2004
Operating Margin
Improvement (bps) |
| |
|
|
|
|
|
|
|
| Total Revenue |
$5,247.7 |
|
$6,000.3 |
|
|
|
|
| Operating Profit |
473.2 |
|
763.2 |
|
|
|
|
| |
|
|
|
|
|
|
|
| Special Charge/(benefit) or adjustment |
154.4 |
(a) |
75.8 |
(b) |
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted Operating Profit |
627.5 |
|
839.0 |
|
|
|
|
| |
|
|
|
|
|
|
|
| Operating Margin (as reported) |
9.0% |
|
12.7% |
|
370 |
16.0% |
330 |
| Operating Margin (w/o special charge) |
12.0% |
|
14.0% |
|
200 |
16.0% |
200 |
| |
|
|
|
|
|
|
|
|
This supplemental schedule provides adjusted non-GAAP financial information and a quantitative reconciliation of the differences between the non-GAAP financial measures with the financial measures calculated and presented in accordance with GAAP. This information is provided to assist in investors' understanding of the Company's results of operations.
-
The Company recorded a Special Charge of $154.4 pretax for a worldwide Business Process Redesign program, of which $37.9 pretax was included in Cost of Sales.
-
The Company recorded a Special Charge of $94.9 pretax, primarily related to facility closures and workforce reduction programs. A Cost of Sales charge of $2.5 relating to inventory write-downs was associated with facility closures. 2001 Special charges totaled $97.4 pretax. In addition, the Company received a cash settlement, net of related expenses, of $21.6 pretax to compensate Avon for lost profits and incremental expenses as a result of the cancellation of a retail agreement with Sears.
These items are unusual in nature and materially impact the comparability of the Company's results of operations. The adjusted information is intended to be more indicative of Avon's ongoing operations, and is intended to assist investors in evaluating performance and analyzing trends across periods. |
