FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-4881
AVON PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
New York 13-0544597
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1345 Avenue of the Americas, New York, N.Y. 10105-0196
(New address of principal executive offices)
(212) 282-5000
(Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
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Common stock (par value $.25) New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A or any amendment to
this Form 10-K/A. [ ].
The aggregate market value of Common Stock (par value $.25) held by
non-affiliates at February 29, 2000 was $6.4 billion.
The number of shares of Common Stock (par value $.25) outstanding at
February 29, 2000 was 237,514,173.
Documents Incorporated by Reference
Parts I and II Portions of the 1999 Annual Report to Shareholders.
Part III Portions of the Proxy Statement for the 2000 Annual
Meeting of Shareholders.
Introductory Note--Restatements
In connection with the settlement of the previously disclosed
investigation by the Securities and Exchange Commission ("SEC") relating to the
write off of an order management software system known as the "FIRST" project,
Avon has restated its Consolidated Financial Statements as of December 31,
2001, 2000 and 1999 and for the years then ended and for each of the fiscal
quarters ended March 31, 1999 through March 31, 2002. Avon had written off
$14.8 pretax, or $10.0 after tax, of FIRST assets in the first quarter of 1999
and $23.9 pretax, or $14.5 after tax, of FIRST assets in the third quarter of
2001. Avon has restated its financial statements to reflect the additional
write off as of March 31, 1999 of all capitalized costs ($23.3 pretax, or $14.0
after tax), associated with the FIRST project as of that date and a reversal of
the charge recorded in the third quarter of 2001. Other FIRST-related activity
(capitalized costs and amortization) recorded during 1999-2002 has also been
restated. A description of the adjustments that comprise the restatements is
set forth in Notes 2 and 15 of the Notes to Consolidated Financial Statements
filed with this Form 10-K/A.
The accompanying financial statements have been restated to reflect the
restatements discussed above as well as the accounting changes outlined in Note
2. No attempt has been made in this Form 10-K/A to modify or update any
disclosures except as required to reflect the results of the restatements
discussed above and any changes made to prior period financial information for
which a Form 10-K/A was not filed.
PART I
ITEM 1. BUSINESS
Certain statements in this report which are not historical facts or
information are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not limited to, the
information set forth herein. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, levels of activity, performance or achievement of Avon Products, Inc.
("Avon" or the "Company"), or industry results, to be materially different from
any future results, levels of activity, performance or achievement expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: General economic and business conditions; the ability of the
Company to implement its business strategy; the Company's access to financing
and its management of foreign currency risks; the Company's ability to
successfully identify new business opportunities; the Company's ability to
attract and retain key executives; the Company's ability to achieve anticipated
cost savings and profitability targets; the impact of substantial currency
exchange devaluations in the Company's principal foreign markets; changes in
the industry; competition; the effect of regulatory and legal restrictions
imposed by foreign governments; the effect of regulatory and legal proceedings
and other factors as discussed in Item 1 of this Form 10-K/A. As a result of the
foregoing and other factors, no assurance can be given as to the future results
and achievements of the Company. Neither the Company nor any other person
assumes responsibility for the accuracy and completeness of these statements.
General
The Company is one of the world's leading manufacturers and marketers of
beauty and related products, which include cosmetics, fragrance and toiletries
(CFT); "beauty plus" which consists of jewelry and accessories and apparel; and
"non-core" which consists of gift and decorative and home entertainment
products. Avon commenced operations in 1886 and was incorporated in the State
of New York on January 27, 1916. Avon's business is comprised of one industry
segment, direct selling, which is conducted in North America, Latin America,
the Pacific and Europe. The Company's reportable segments are based on
geographic operations. Financial information relating to the reportable
segments is incorporated by reference to the analysis of net sales and
operating profit by geographic area and to Note 12 of the Notes to the
Consolidated Financial Statements in Avon's 1999 Restated Annual Report to
Shareholders.
Business Process Redesign
In October 1997, the Company announced a worldwide business process
redesign ("BPR") program to streamline operations and improve profitability
through margin improvement and expense reductions. The
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special and non-recurring charges associated with this program totaled $136.4
pretax ($111.9 net of tax, or $.43 per share on a basic and diluted basis) for
the year ended December 31, 1999 and $154.4 pretax ($122.8 net of tax, or $.46
per share on a basic and diluted basis) for the year ended December 31, 1998.
At December 31, 1999, the remaining liability balance was $26.2 and relates
primarily to severance costs that will be paid in 2000.
BPR initiatives underway are intended to reduce costs by up to $400.0 a
year by 2000, with a portion of the savings being reinvested primarily in
consumer-focused initiatives. Total savings from BPR initiatives for 1999
approximated $250.0.
Global Business Strategy
In 1999, the Company adopted a new strategic plan to drive revenue growth
and expand its customer base around the world by building on the Company's
strength as a beauty marketer and a leading home direct seller. The new
strategy includes, but is not limited to, plans to accelerate growth in its
core beauty business by growing global brands, expanding market share,
upgrading its beauty image and new product innovation; building a global
portfolio of jewelry and accessories; developing innovative programs to train,
motivate and retain Representatives; exploiting retail opportunities; and
developing new businesses. The Company expects that its BPR programs will
continue to provide resources to fund these strategic growth initiatives and
contribute to earnings growth. Spending for product innovation and advertising
are also key components in building a global beauty image and reaching the end
consumer. In 2000, the Company will launch its first-ever global advertising
campaign and significantly expand its use of Internet technology.
Avon's global strategies include the following key growth initiatives:
Direct Selling Contemporization
The Company continues to contemporize its direct selling channel enabling
it to reach women quickly and efficiently by offering Representative training,
support and earnings opportunities. The Company is planning to roll out a
global Sales Leadership program in its ten largest markets around the world.
The Sales Leadership program is a modified multi-level selling system which
will give Representatives the opportunity to earn commissions generated from
downstream sales of other Representatives they recruit. This program limits the
number of levels to three and continues to focus on individual product sales.
The Company also plans to implement a Representative development strategy
in 2000. This strategy will focus on the professional training and development
of its Representatives through the introduction of the Avon Beauty Advisor.
Beauty Advisor training will include an in-home study package as well as
seminars where Representatives will be trained
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to do beauty makeovers, where permissible, and consultations. In addition to
introducing the Avon Beauty Advisor, the Company has formed an alliance with a
sales motivation company to introduce a series of Avon-sponsored training
materials and seminars called "Success by Design". Avon is also developing
enhanced Representative training to support the Sales Leadership opportunity,
including a certification process for each Leadership level.
In addition to the Sales Leadership program and Representative development
strategy, the Company is planning to build and relaunch its Avon.com Internet
site in the United States with a technology partner. The site will feature
Avon's full product line and will be designed to help its U.S. sales
Representatives build their own Avon business by enabling them to sell online
through their own personalized web pages, developed in partnership with the
Company. The Representatives can tailor their web pages to their specific
customer bases by promoting particular products, targeting specific age groups
and consumer segments, and reflecting seasonal interests and regional tastes.
These "e-Representatives" will be able to conduct all aspects of their Avon
business online, including customer prospecting, ordering, getting account
status and making payments. Avon will also sell products directly to consumers
if they choose not to purchase through a Representative.
Additionally, the Company annually produces more than 600 million
brochures in a dozen languages, utilizing common imagery and layouts from a
single global database to enhance its global beauty image. In 2000, Avon plans
on incremental spending to upgrade the quality of brochures, in several of its
largest markets, including the U.S.
Complementary Access
To accelerate growth in established industrial nations such as the U.S.,
Western Europe and Japan, the Company has developed new channels to reach more
customers and improve access to its products through Avon Beauty Centers and
Express Centers in the U.S., toll-free telephone numbers, direct mail and "on
line" shopping via the Internet on Avon's web site, Avon.com. Avon Beauty
Centers, located in urban malls across the United States, are designed to
display an upscale beauty image, showcase the Company's beauty brands and
encourage customer trial of product. Avon Express Centers also provide easy
access to products and allow Representatives to fill orders immediately, rather
than waiting for campaign deliveries. In 2000, Avon intends to implement a more
integrated Internet strategy beginning with the U.S. to focus on improving
access and accelerating growth. These complementary access programs will
further increase Avon's brand awareness and drive its global beauty image.
Access strategies also have helped reach new customers in the Pacific
Region. For example, the Philippines, India and Indonesia use decentralized
branches and satellite stores to serve Representatives and customers.
Representatives come to a branch near their homes to place
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and pick up product orders for their customers. The branches also create
visibility for Avon with consumers and help reinforce the Company's beauty
image. In Malaysia, Avon has 180 franchised beauty boutiques, which are staffed
by franchise Representatives and are located in areas with high concentrations
of Representatives. The boutiques provide more direct and personal service to
Representatives and their customers. Additionally, in China and Taiwan, beauty
counters managed by Avon Representatives are in retail store chains.
The Company is exploring potential retail opportunities in the U.S.,
including a franchising opportunity for women who would own their own Avon
retail store or kiosk and a "store within a store" concept developed through a
joint venture with a major retailer.
Image Enhancement
The Company continues to update the image of its core beauty products and
its portfolio of global beauty brands. In the past five years, CFT products
have all undergone extensive upgrades in packaging, imaging and formulations,
consistent with the global brand strategy. These contemporary products project
a consistent, high quality image in all markets and include brands such as
Anew, Skin-So-Soft, Avon Color, Far Away, Rare Gold, Millennia, Perceive,
Starring, Avon Skin Care and Women of Earth. Global brands are growing rapidly
as a percentage of the Company's worldwide CFT business and in 1999, they
accounted for 51% of core beauty sales. The Company plans on launching three
global hair care brands and launching a global jewelry and fashion accessories
line around the world. The development of global brands has also enabled the
Company to deliver a consistent beauty image around the world, as well as
improve margins through pricing and supply chain efficiencies. Avon is also
marketing a more vibrant beauty image through increased advertising and
image-building programs focused on the consumer. In 2000, the Company intends
to launch its first-ever global advertising campaign entitled "Let's Talk",
increase investments in product sampling and development and upgrade the
quality of its brochure to further build its worldwide beauty image.
In 1998, an important image enhancement came with the opening of the Avon
Centre, a spa, salon and retail store located in Trump Tower, New York City.
The Avon Centre emphasizes health and beauty and offers a selection of Avon
beauty products created exclusively for use at the Avon Centre.
Through these strategic initiatives designed to focus on high-
quality, affordable products, as well as convenience for the customer, Avon is
not only positioned for continued growth but also as a leading beauty company.
International Expansion
Avon is one of the most widely recognized brand names in the world. The
Company is particularly well positioned to capitalize on growth in new
international markets due to high demand for quality products, underdeveloped
retail, infrastructures and relatively attractive earnings opportunities for
women. The Company presently has operations in 50
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countries outside the United States and its products are distributed in 86 more
for coverage in 137 markets, and it continues to expand into new markets. The
Company has entered 24 new markets since 1990, including Russia and China and
rapidly emerging nations throughout Central Europe, and is currently evaluating
several other markets in Eastern Europe and the Pacific region.
Distribution
Avon's products are sold worldwide by approximately 3.0 million
Representatives, approximately 445,000 of whom are in the United States. Almost
all Representatives are women who sell on a part-time basis. Representatives
are independent contractors or independent dealers, and are not agents or
employees of Avon. Representatives purchase products directly from Avon and
sell them to their customers.
The Company's products are sold to customers through a combination of
direct selling and marketing utilizing independent Representatives, Avon Beauty
Centers, Express Centers in urban areas, the mail, phone, fax or "on-line".
Representatives go where the customers are, both in the home and in the
workplace.
In the United States, the Representative contacts customers, selling
primarily through the use of brochures which also highlight new products and
specially-priced items for each two-week sales campaign. Product samples,
demonstration products and selling aids such as make-up color charts are also
used. Generally, the Representative forwards an order every two weeks to a
designated distribution center. This order is processed and the products are
assembled at the distribution center and delivered to the Representative's
home, usually by a local delivery service. The Representative then delivers the
merchandise and collects payment from the customer for their own account.
Payment by the Representative to Avon is customarily made when the next order
is forwarded to the distribution center. The cost of merchandise to the
Representative varies according to the product category and/or to the total
order size for each two-week sales campaign and averages approximately 60
percent of the recommended selling price.
Avon employs certain electronic order systems to increase Representative
support in the United States and allow them to run their business more
efficiently as well as to improve order processing accuracy. One of these
systems permits Representatives to submit add-on orders with a touch-tone
telephone, enabling them to augment orders already submitted by placing a phone
call. Another system, Avon's Personal Order Entry Terminal, permits the
top-producing Representatives in the United States to transmit orders
electronically by phone line, 24 hours a day, seven days a week.
The current Internet site, Avon.com, with nearly 400,000 visitors a month,
also sells a limited line of CFT products directly to consumers. In 2000, the
Company plans to launch a completely new Avon.com in the U.S., with
implementation in certain key markets within about one year of the U.S. launch.
The new online initiative will be available to all Representatives and offer a
complete line of Avon products 24 hours a day, 7 days a week, with no
geographic boundaries.
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Outside the United States, each sales campaign is generally of a three or
four week duration. Although terms of payment and cost of merchandise to the
Representative vary from country to country, the basic method of direct selling
and marketing by Representatives is essentially the same as that used in the
United States, and substantially the same merchandising and promotional
techniques are utilized.
The recruiting and training of Representatives are the primary
responsibilities of district managers. In the United States, each district
manager has responsibility for a market area covered by 225 to 300
Representatives. District managers are employees of Avon and are paid a salary
and a sales incentive based primarily on the increase over the prior year's
sales of Avon products by Representatives in their district. Personal contacts,
including recommendations from current Representatives and local advertising,
constitute the primary means of obtaining new Representatives. Because of the
high rate of turnover among Representatives, a characteristic of the
direct-selling method, recruiting and training of new Representatives are
continually necessary.
From time to time, the question of the legal status of Representatives has
arisen, usually in regard to possible coverage under social benefit laws that
would require Avon (and in most instances, the Representatives) to make regular
contributions to social benefit funds. Although Avon has generally been able to
address these questions in a satisfactory manner, the matter has not been fully
resolved in all countries. If there should be a final determination adverse to
Avon in a country, the cost for future, and possibly past, contributions could
be so substantial in the context of the volume of business of Avon in that
country that it would have to consider discontinuing operations in that
country.
Promotion and Marketing
Sales promotion and sales development activities are directed at assisting
the Representatives, through sales aids such as brochures, product samples and
demonstration products. In order to support the efforts of Representatives to
reach new customers, especially working women and other individuals who
frequently are not at home, specially designed sales aids, promotional pieces,
customer flyers and product and image enhancing media advertising are used. In
addition, Avon seeks to motivate its Representatives through the use of special
incentive programs that reward superior sales performance. Periodic sales
meetings with Representatives are conducted by the district managers. The
meetings are designed to keep Representatives abreast of product line changes,
explain sales techniques and provide recognition for sales performance.
A number of merchandising techniques, including the introduction of new
products, the use of combination offers, the use of trial sizes and the
promotion of products packaged as gift items, are used. In general for each
sales campaign, a distinctive brochure is published, in which new products are
introduced and selected items are offered at special prices or are given
particular prominence in the brochure. CFT products are available each sales
campaign at consistently low prices, while maintaining introductory specials
and periodic sales on selected items for limited time periods.
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From time to time, various regulations or laws have been proposed or
adopted that would, in general, restrict the frequency, duration or volume of
sales resulting from new product introductions, special prices or other special
price offers. The Company's pricing flexibility and broad product lines are
expected to be able to mitigate the effect of these regulations.
Competitive Conditions
The CFT; gift and decorative; apparel; and fashion jewelry and accessory
industries are highly competitive. Avon is one of the leading manufacturers and
distributors of cosmetics and fragrances in the United States. Its principal
competitors are the large and well-known cosmetics and fragrances companies
that manufacture and sell broad product lines through various types of retail
establishments. There are many other companies that compete in particular
products or product lines sold through retail establishments.
Avon has many competitors in the gift and decorative products and apparel
industries in the United States, including retail establishments, principally
department stores, gift shops and direct-mail companies, specializing in these
products.
Avon is one of the leading distributors of fashion jewelry and accessories
for women in the United States. Its principal competition in the fashion
jewelry industry consists of a few large companies and many small companies
that manufacture and sell fashion jewelry for women through retail
establishments.
The number of competitors and degree of competition that Avon faces in its
foreign CFT and fashion jewelry markets varies widely from country to country.
Avon is one of the leading manufacturers and distributors in the CFT industry
in most of its foreign markets, as well as in the fashion jewelry industry in
Europe.
There are a number of direct-selling companies which sell product
lines similar to Avon's, some of which also have worldwide operations and
compete with Avon.
Avon believes that the personalized customer service offered by its
Representatives; the high quality, attractive designs and reasonable prices of
its products; new product introductions; innovative CFT products; and its
guarantee of satisfaction are significant factors in establishing and
maintaining its competitive position.
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Avon's consolidated net sales, by classes of principal products, are as
follows:
Years ended December 31
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1999 1998 1997
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Cosmetics, fragrance and toiletries $3,226.1 $3,176.6 $3,093.9
Beauty Plus:
Jewelry and accessories 455.4 408.1 370.2
Apparel 556.1 567.7 565.6
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1,011.5 975.8 935.8
Non-core* 1,051.5 1,060.3 1,049.7
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Total net sales $5,289.1 $5,212.7 $5,079.4
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* Non-core category primarily includes gift and decorative and home
entertainment items.
International Operations
Avon's international operations are subject to certain customary risks
inherent in carrying on business abroad, including the risk of adverse currency
fluctuations, currency remittance restrictions and unfavorable economic and
political conditions.
Avon's international operations are conducted primarily through
subsidiaries in 50 countries and Avon's products are distributed in some 86
other countries.
Manufacturing
Avon manufactures and packages almost all of its CFT products. Raw
materials, consisting chiefly of essential oils, chemicals, containers and
packaging components, are purchased from various suppliers. Packages,
consisting of containers and packaging components, are designed by its staff of
artists and designers.
The design and development of new products are affected by the cost and
availability of materials such as glass, plastics and chemicals. Avon believes
that it can continue to obtain sufficient raw materials and supplies to
manufacture and produce its products.
Avon has eighteen manufacturing laboratories around the world, one of
which is principally devoted to the manufacture of fashion jewelry. In the
United States, Avon's CFT products are produced in three manufacturing
laboratories for the four distribution centers and all Beauty and Express
centers. Most products sold in foreign countries are manufactured in Avon's
facilities abroad.
The fashion jewelry line is generally developed by Avon's staff and
produced in its manufacturing laboratory in Puerto Rico or by several
independent manufacturers.
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Trademarks and Patents
Avon's business is not materially dependent on third party patent or other
intellectual property rights and Avon is not a party to any material license,
franchise or concession. The Company, however, does seek to protect its key
proprietary technologies by aggressively pursuing comprehensive patent coverage
in all major markets.
Avon's major trademarks are protected by registration in the United States
and the other countries where its products are marketed as well as in many
other countries throughout the world.
Contingencies
Although Avon has completed its divestiture of all discontinued
operations, various lawsuits and claims (asserted and unasserted), are pending
or threatened against Avon. The Company is also involved in a number of
proceedings arising out of the federal Superfund law and similar state laws. In
some instances Avon, along with other companies, has been designated as a
potentially responsible party which may be liable for costs associated with
these various hazardous waste sites. In the opinion of Avon's management, based
on its review of the information available at this time, the total cost of
resolving such contingencies should not have a material adverse impact on
Avon's consolidated financial position, results of operations or cash flows.
SEASONAL NATURE OF BUSINESS
Avon's sales and earnings have a marked seasonal pattern characteristic of
many companies selling CFT; gift and decorative products; apparel; and fashion
jewelry. Christmas sales cause a sales peak in the fourth quarter of the year.
Fourth quarter net sales were 30 percent of total net sales in both 1999 and
1998, respectively, and before one-time charges, fourth quarter operating
profit was 36 percent and 37 percent of total operating profit in 1999 and
1998, respectively.
RESEARCH ACTIVITIES
Avon's research and development department is a leader in the industry,
based on the number of new product launches, including formulating effective
beauty treatments relevant to women's needs. In addition, Avon's research and
development supports its environmental responsibilities.
A team of researchers and technicians apply the disciplines of science to
the practical aspects of bringing products to market around the world.
Relationships with well known dermatologists and other specialists extend
Avon's own research to deliver new formulas and ingredients. Each year, Avon
researchers test and develop more than 600 products in the CFT and Beauty Plus
categories.
Avon has pioneered many innovative products, including Skin-So-Soft, its
best-selling bath oil; BioAdvance, the first skin care product with stabilized
retinol, the purest form of Vitamin A; and Collagen Booster, the premier
product to capitalize on Vitamin C technology. Avon also
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introduced the benefits of aromatherapy to millions of American women,
encapsulated color for the Color-Release line and introduced alpha-hydroxy acid
for cosmetic use in the Anew Perfecting Complex products. Today, Avon's Anew
product line has been expanded to include technologically advanced products
such as Retinol Recovery Complex PM Treatment, Night Force Vertical Lifting
Complex, Clearly C 10% Vitamin C Serum and Luminosity Brightening Complex.
Night Force employs a patented material named AVC10, a molecule that was
engineered by Avon researchers over a three-year period. Luminosity Brightening
Complex contains Diamonex, Avon's exclusive skin brightening system. Avon has
introduced Hydra Finish Lip Color, the first lipstick developed with 20% water,
and Perceive, a fragrance which uses the mood-enhancing effects of pheromone
technology. In 2000, the Company will be launching a complete renovation of
Avon Color with improved formulas and redesigned packaging, rolling out a
reformulated Anew All-In-One skin care regimen and launching Positivity, a new
line of skin care products for menopausal women.
The amounts incurred on research activities relating to the development of
new products and the improvement of existing products were $34.4 million in
1999, $31.4 million in 1998, and $29.9 million in 1997. This research included
the activities of product research and development and package design and
development. Most of these activities are related to the development of CFT
products.
ENVIRONMENTAL MATTERS
Pursuant to Avon's global environmental policy, environmental audits are
conducted to ensure Avon facilities around the world meet or exceed local
regulatory standards. A corporate environmental operations committee ensures
that opportunities for environmental performance improvements are reflected in
our products, packaging and manufacturing processes.
In general, compliance with environmental regulations impacting Avon's
global operations has not had, and is not anticipated to have, any material
effect upon the capital expenditures, financial position or competitive
position of Avon.
EMPLOYEES
At December 31, 1999, Avon employed 40,500 people. Of these, 8,800 were
employed in the United States and 31,700 in other countries. The number of
employees tends to rise from a low point in January to a high point in November
and decreases somewhat in December when Christmas shipments are completed.
ITEM 2. PROPERTIES
Avon's principal properties consist of manufacturing laboratories for the
production of CFT and fashion jewelry and distribution centers where offices
are located and where finished merchandise is warehoused and shipped to
Representatives in fulfillment of their orders. Substantially all of these
properties are owned by Avon or its subsidiaries, are in good repair,
adequately meet Avon's needs and operate at reasonable levels of productive
capacity.
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The domestic manufacturing laboratories are located in Morton Grove, IL;
Springdale, OH; and Suffern, NY; the distribution centers are located in
Atlanta, GA; Glenview, IL; Newark, DE; and Pasadena, CA. Other properties
include four manufacturing laboratories and ten distribution centers in Europe;
five manufacturing laboratories and nine distribution centers in Latin America;
two manufacturing laboratories and three distribution centers in North America
(other than in the United States); and four manufacturing laboratories and ten
distribution centers in the Pacific region. The research and development
laboratories are located in Suffern, NY. Avon leases space for its executive
and administrative offices in New York City and its fashion jewelry
manufacturing facility in Puerto Rico.
ITEM 3. LEGAL PROCEEDINGS
Various lawsuits and claims (asserted and unasserted), arising in the
ordinary course of business or related to businesses previously sold, are
pending or threatened against Avon.
In 1991, a class action lawsuit was initiated against Avon on behalf of
certain classes of holders of Avon's Preferred Equity-Redemption Cumulative
Stock ("PERCS"). This lawsuit alleges various contract and securities law
claims relating to the PERCS (which were fully redeemed that year). Avon has
rejected the assertions in this case, believes it has meritorious defenses to
the claims and is vigorously contesting this lawsuit. It is anticipated that a
trial may take place later in 2000.
In the opinion of Avon's management, based on its review of the
information available at this time, the total cost of resolving such
contingencies should not have a material adverse impact on Avon's consolidated
financial position, results of operations or cash flows.
Avon is involved in a number of proceedings arising out of the federal
Superfund law and similar state laws. In some instances Avon, along with other
companies, has been designated as a potentially responsible party which may be
liable for costs associated with these various hazardous waste sites. Based
upon Avon's current knowledge of the proceedings, management believes, without
taking into consideration any insurance recoveries, if any, that in the
aggregate they would not have a material adverse impact on Avon's consolidated
financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the quarter
ended December 31, 1999.
Officers are elected by the Board of Directors at its first meeting
following the Annual Meeting of Shareholders. Officers serve until the first
meeting of the Board of Directors following the Annual Meeting of Shareholders
at which Directors are elected for the succeeding year, or until their
successors are elected, except in the event of death, resignation or removal,
or the earlier termination of the term of office.
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Information regarding employment contracts between Avon and named
executive officers is incorporated by reference to the "Contracts with
Executives" section of Avon's Proxy Statement for the 2000 Annual Meeting of
Shareholders.
Listed below are the executive officers of Avon, each of whom (except as
noted) has served in various executive and operating capacities with Avon
during the past five years:
Elected
Title Name Age Officer
----- ---- --- -------
Retired Chairman of the
Board and Director .................... James E. Preston 66 1971(1)
Retired Chief Executive
Officer and Director................... Charles R. Perrin 54 1998(1)
President and
Chief Executive Officer and Director... Andrea Jung 41 1997(2)
Executive Vice President
Chief Operating Officer, North America
and Global Business Operations........ Susan J. Kropf 51 1997(3)
Executive Vice President
Chief Operating Officer, International
and New Business Development.......... Jose Ferreira 43 1997(4)
Executive Vice President, Asia Pacific... Fernando Lezama 60 1997
Executive Vice President and
Chief Financial Officer............... Robert J. Corti 50 1988
Senior Vice President, General Counsel
and Secretary......................... Ward M. Miller, Jr. 67 1993
Senior Vice President, Human Resources... Jill Kanin-Lovers 48 1998
Vice President and Controller............ Janice Marolda 39 1998
(1) Charles R. Perrin joined Avon as Vice Chairman and Chief Operating Officer
in January 1998 and was later elected Chief Executive Officer, effective July
1998 and Chairman of the Board in May 1999, succeeding James E. Preston in his
capacity as Chairman of the Board. Mr. Perrin retired from Avon in November
1999. Also effective November 1999, Ms. Andrea Jung was named President and
CEO, succeeding Mr. Perrin in his capacity as CEO and outside director Stanley
C. Gault was elected non-executive Chairman of the Board of Directors.
(2) Andrea Jung was elected President and Chief Executive Officer effective
November 1999. succeeding Charles R. Perrin who retired November 1999. Ms. Jung
joined Avon in January 1994 as President, Product Marketing and was promoted to
Executive Vice President, Global Marketing and New Business in March 1997. In
January 1998, she was elected President and was later elected Chief Operating
Officer.
(3) Susan J. Kropf was elected Chief Operating Officer, North America and
Global Business Operations, effective November 1999. Ms. Kropf has been with
Avon for almost thirty years. Prior to this appointment, she had been Executive
Vice President and President, North America. She also served as Senior Vice
President, U.S. Marketing and as Vice President, Product Development.
-12-
(4) Jose Ferreira was elected Chief Operating Officer, International and New
Business Development, effective November 1999. Mr. Ferreira has been with Avon
for twenty years. Prior to this appointment, he had been Executive Vice
President, Europe, Asia and Africa since January 1999. Prior to that, in 1997,
he was promoted to Executive Vice President and President, Asia Pacific.
PART II
ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
This information is incorporated by reference to "Market Prices per Share
of Common Stock by Quarter" in Avon's Restated 1999 Annual Report to
Shareholders.
ITEM 6. SELECTED FINANCIAL DATA (RESTATED)
The information for the five-year period 1995 through 1999 is incorporated
by reference to the "Eleven-Year Review" in Avon's Restated 1999 Annual Report
to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (RESTATED)
This information is incorporated by reference to "Management's Discussion
and Analysis" in Avon's Restated 1999 Annual Report to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See discussion under the heading "Risk Management Strategies and Market
Rate Sensitive Instruments" in Avon's Restated 1999 Annual Report to
Shareholders for information concerning market risk sensitive instruments. Such
information is incorporated by reference in this Form 10-K/A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (RESTATED)
This information is incorporated by reference to the "Consolidated
Financial Statements and Notes", together with the report thereon of
PricewaterhouseCoopers LLP, and "Results of Operations by Quarter" in Avon's
Restated 1999 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
-13-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors is incorporated by reference to the
"Election of Directors" and "Information Concerning the Board of Directors"
sections of Avon's Proxy Statement for the 2000 Annual Meeting of Shareholders.
Information regarding executive officers is presented in Part I of this report.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the "Information
Concerning the Board of Directors" and "Executive Compensation" sections of
Avon's Proxy Statement for the 2000 Annual Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference to the "Ownership of Shares"
section of Avon's Proxy Statement for the 2000 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
This information is incorporated by reference to the "Contracts with
Executives" section of Avon's Proxy Statement for the 2000 Annual Meeting of
Shareholders.
-14-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS
ON FORM 8-K (RESTATED)
Form 10-K/A
Page Number
-----------
(a) 1. Consolidated Financial Statements of
Avon Products, Inc. and Subsidiaries (as restated)
Consolidated statements of income for
each of the years in the three-year
period ended December 31, 1999........... 18
Consolidated balance sheets at
December 31, 1999 and 1998................ 19
Consolidated statements of cash flows
for each of the years in the three-year
period ended December 31, 1999............ 20
Consolidated statements of changes in
shareholders' (deficit)equity for each
of the years in the three-year period
ended December 31, 1999................... 21
Notes to consolidated financial
statements................................ 22-45
Report of Independent Accountants
PricewaterhouseCoopers LLP................ 46
(a) 2. Financial Statement Schedule
Report of Independent Accountants on
Financial Statement Schedule
PricewaterhouseCoopers LLP .............. S-1
Consent of Independent Accountants
PricewaterhouseCoopers LLP .............. S-2
Financial statement schedule for each
of the years in the three-year period
ended December 31, 1999..................
II. Valuation and qualifying
accounts................. S-3
-15-
Financial statements of the registrant and all other financial statement
schedules are omitted because they are not applicable or because the required
information is shown in the consolidated financial statements and notes.
(a)3. Exhibits
Exhibit
Number Description
------- -----------
3.1 Restated Certificate of Incorporation of Avon, filed with the
Secretary of State of the State of New York on May 13, 1996
(incorporated by reference to Exhibit 3.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1996).
3.2 By-laws of Avon, as restated, effective December 2, 1999
(incorporated by reference to Exhibit 3.2 to Avon's Annual Report on
Form 10-K for the year ended December 31, 1999).
3.3 Certificate of Amendment of the Certificate of Incorporation of Avon
Products, Inc., filed May 13, 1998 (incorporated by reference to
Exhibit 3.3 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1998).
4.1 Amended and Restated Revolving Credit and Competitive Advance
Facility Agreement, dated as of August 8, 1996, among Avon, Avon
Capital Corporation and a group of banks and other lenders
(incorporated by reference to Exhibit 4.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996).
4.2 Indenture dated as of August 1, 1997 between Avon as Issuer, and The
Chase Manhattan Bank, as Trustee relating to the 6.55% Notes due
2007 (incorporated by reference to Exhibit 4.2 to Avon's
Registration Statement on Form S-4, Registration Statement No.
333-41299 filed December 1, 1997).
4.3 Rights Agreement, dated as of March 30, 1998 (the "Rights
Agreement"), between Avon and First Chicago Trust Company of New
York (incorporated by reference to Exhibit 4 to Avon's Registration
Statement on Form 8-A, filed March 18, 1998).
4.4 Indenture dated as of November 9, 1999 between Avon as Issuer and
The Chase Manhattan Bank, as Trustee relating to the 6.9% Notes due
November 15, 2004 and the 7.15% Notes due November 15, 2009
(incorporated by reference to Exhibit 4.4 to Avon's Registration
Statement on Form S-4, Registration Statement No. 333-92333 filed
December 8, 1999).
10.1* Avon Products, Inc. 1993 Stock Incentive Plan, approved by
stockholders on May 6, 1993 (incorporated by reference to Exhibit
10.2 to Avon's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993).
-16-
10.2* Form of Stock Option Agreement to the Avon Products, Inc. 1993 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1993).
10.3* First Amendment to the 1993 Avon Stock Incentive Plan effective
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to exhibit 10.1 to Avon's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
10.4* Avon Products, Inc. 1997 Long-Term Incentive Plan, effective as of
January 1, 1997 approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.4 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1997).
10.5* Supplemental Executive Retirement Plan and Supplemental Life Plan of
Avon Products, Inc., as amended and restated as of July 1, 1998
(incorporated by reference to Exhibit 10.5 to Avon's Annual Report
on Form 10K for the year ended December 31, 1998).
10.6* Benefit Restoration Pension Plan of Avon Products, Inc., effective
as of January 1, 1994 (incorporated by reference to Exhibit 10.7 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1994).
10.7* Trust Agreement, amended and restated as of March 2, 1990, between
Avon and Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1990 and refiled under Form SE for the year ended
December 31, 1996).
10.8* First Amendment, dated as of January 30, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.2 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.9* Second Amendment, dated as of June 12, 1992 to the Trust Agreement,
dated as of March 2, 1990, by and between Avon and Chase Manhattan
Bank, N.A. (incorporated by reference to Exhibit 10.3 to Avon's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1993).
10.10* Third Amendment, dated as of November 5, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.4 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
-17-
10.11* The Avon Products, Inc. Deferred Compensation Plan, as amended and
restated as of July 1, 1998 (incorporated by reference to Exhibit
4(b) to Avon's Registration Statement on Form S-8, Registration No.
333-65989 filed October 22, 1998).
10.12* Trust Agreement, dated as of April 21, 1995, between Avon and
Chemical Bank, amending and restating the Trust Agreement as of
August 3, 1989 between Avon and Manufacturers Hanover Trust Company
(incorporated by reference to Exhibit 10.14 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1995).
10.13* Stock Option Agreement between Avon and Stanley C. Gault dated
November 4, 1999 (incorporated by reference to Exhibit 10.13 to
Avon's Annual Report on Form 10K for the year ended December 31,
1999).
10.14* Employment Agreement, dated as of December 11, 1997 between Avon and
Charles R. Perrin (incorporated by reference to Exhibit 10.18 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.15* Stock Option Agreement between Avon and Charles R. Perrin dated
December 10, 1997 (incorporated by reference to Exhibit 10.19 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.16* Employment Agreement dated as of December 11, 1997 between Avon and
Andrea Jung (incorporated by reference to Exhibit 10.20 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1997).
10.17* Form of Employment Agreement, dated as of September 1, 1994, between
Avon and certain senior officers (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
10.18* Avon Products, Inc. Compensation Plan for Non-Employee Directors,
effective May 1, 1997 (incorporated by reference to Exhibit 10.22 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.19* Avon Products, Inc. Board of Directors' Deferred Compensation Plan,
amended and restated, effective January 1, 1997 (incorporated by
reference to Exhibit 10.23 to Avon's Annual Report on Form 10-K for
the year ended December 31, 1997).
10.20* Trust Agreement, dated as of December 31, 1991, between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.23 to Avon's Annual Report on Form 10-K for the year
ended December 31, 1991 and refiled under Form SE for the year ended
December 31, 1996).
-18-
10.21* First Amendment, dated as of November 5, 1992, to the Trust
Agreement dated as of December 31, 1991, by and between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.7 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993).
10.22* Stock Option Agreement between Avon and Charles R. Perrin dated June
4, 1998 (incorporated by reference to Exhibit 10.1 to Avon's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
10.23* Stock Option Agreement between Avon and Andrea Jung dated June 4,
1998 (incorporated by reference to Exhibit 10.2 to Avon's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
13 Portions of the Restated Annual Report to Shareholders for the year
ended December 31, 1999 incorporated by reference in response to
Items 1,5 through 8 in this filing.
18 Preferability letter from PricewaterhouseCoopers LLP regarding
change in accounting principle.
21 Subsidiaries of the registrant (incorporated by reference to Exhibit
21 to Avon's Annual Report on Form 10K for the year ended December
31, 1999).
23 Consent of PricewaterhouseCoopers LLP (set forth on page S-2 of this
Annual Report on Form 10-K/A).
* The Exhibits identified above and in the Exhibit Index with an
asterisk (*) are management contracts or compensatory plans or
arrangements.
(b) Reports on Form 8-K
There was no Form 8-K filed during the fourth quarter of 1999.
(c) Avon's Annual Report on Form 10-K/A for the year ended December 31,
1999, at the time of filing with the Securities and Exchange
Commission, shall modify and supersede all prior documents filed
pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act
of 1934 for purposes of any offers or sales of any securities after
the date of such filing pursuant to any Registration Statement or
Prospectus filed pursuant to the Securities Act of 1933, which
incorporates by reference such Annual Report on Form 10-K/A.
-19-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Avon Products, Inc.
----------------------
(Registrant)
Date: August 12, 2002 /s/ Janice Marolda
----------------------
Janice Marolda
Vice President,
Controller
Principal Accounting Officer
-20-
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Avon Products, Inc.:
Our audits of the consolidated financial statements referred to in our report
dated January 27, 2000, except for Notes 2 and 15 as to which the date is July
31, 2002, appearing in the 1999 Annual Report to Shareholders of Avon Products,
Inc., which report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K/A, also included an audit of the
financial statement schedule listed in Item 14(a)(2) of this Form 10-K/A. In
our opinion, this financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.
PricewaterhouseCoopers LLP
New York, New York
January 27, 2000, except for Notes 2 and 15
as to which the date is July 31, 2002.
S-1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements on Form S-3 (Reg. No. 33-45808) and on Form S-8 (Reg. Nos.
33-43820,33-47209, 33-65989, and 33-65998) of Avon Products, Inc. of our report
dated January 27, 2000, except for Notes 2 and 15 as to which the date is July
31, 2002, relating to the financial statements which appear in the 1999 Annual
Report to Shareholders, which is incorporated in this Annual Report on Form
10-K/A. We also consent to the incorporation by reference of our report dated
January 27, 2000, except for Notes 2 and 15 as to which the date is July 31,
2002, relating to the financial statement schedule, which appears in this Form
10-K/A.
PricewaterhouseCoopers LLP
New York, New York
August 12, 2002
S-2
AVON PRODUCTS, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Years ended December 31
Additions
---------------------
Balance at Charged to Charged Balance
beginning costs and to other at end
of period expenses accounts Deductions of period
---------- ---------- -------- ---------- ---------
1999
Allowance for doubtful
accounts receivable $ 49.0 $ 87.5 $ -- $96.5(a) $40.0
======= ======= ======= ===== =====
1998
Allowance for doubtful
accounts receivable $ $35.5 $ 91.3 $ -- $77.8(a) $49.0
======= ======= ======= ===== =====
1997
Allowance for doubtful
accounts receivable $ $36.4 $ 80.8 $ -- $81.7(a) $35.5
======= ======= ======= ===== =====
(a) Accounts written off, net of recoveries and foreign currency translation
adjustment.
S-3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM 10-K/A
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
Commission file number 1-4881
--------
AVON PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
--------
EXHIBITS
INDEX TO EXHIBITS
(a)3. Exhibits
Exhibit
Number Description
-------- -----------
3.1 Restated Certificate of Incorporation of Avon, filed with the
Secretary of State of the State of New York on May 13, 1996
(incorporated by reference to Exhibit 3.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1996).
3.2 By-laws of Avon, as restated, effective December 2, 1999
(incorporated by reference to Exhibit 3.2 to Avon's Annual Report on
Form 10K for the year ended December 31, 1999).
3.3 Certificate of Amendment of the Certificate of Incorporation of Avon
Products, Inc., filed May 13, 1998 (incorporated by reference to
Exhibit 3.3 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 30, 1998).
4.1 Amended and Restated Revolving Credit and Competitive Advance
Facility Agreement, dated as of August 8, 1996, among Avon, Avon
Capital Corporation and a group of banks and other lenders
(incorporated by reference to Exhibit 4.1 to Avon's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996).
4.2 Indenture dated as of August 1, 1997 between Avon as Issuer, and The
Chase Manhattan Bank, as Trustee relating to the 6.55% Notes due
2007 (incorporated by reference to Exhibit 4.2 to Avon's
Registration Statement S-4, Registration Statement No. 333-41299
filed December 1, 1997).
4.3 Rights Agreement, dated as of March 30, 1998 (the "Rights
Agreement"), between Avon and First Chicago Trust Company of New
York (incorporated by reference to Exhibit 4 to Avon's Registration
Statement on Form 8-A, filed March 18, 1998).
4.4 Indenture dated as of November 9, 1999 between Avon as Issuer and
The Chase Manhattan Bank, as Trustee relating to the 6.9% Notes due
November 15, 2004 and the 7.15% Notes due November 15, 2009
(incorporated by reference to Exhibit 4.4 to Avon's Registration
Statement on Form S-4, Registration Statement No. 333-92333 filed
December 8, 1999).
10.1* Avon Products, Inc. 1993 Stock Incentive Plan, approved by
stockholders on May 6, 1993 (incorporated by reference to Exhibit
10.2 to Avon's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1993).
10.2* Form of Stock Option Agreement to the Avon Products, Inc. 1993 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1993).
10.3* First Amendment to the 1993 Avon Stock Incentive Plan effective
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.1 to Avon's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997).
10.4* Avon Products, Inc. 1997 Long-Term Incentive Plan, effective as of
January 1, 1997, approved by stockholders on May 1, 1997
(incorporated by reference to Exhibit 10.4 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1997).
10.5* Supplemental Executive Retirement Plan and Supplemental Life Plan of
Avon Products, Inc., as amended and restated as of July 1, 1998
(incorporated by reference to Exhibit 10.5 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1998).
10.6* Benefit Restoration Pension Plan of Avon Products, Inc., effective
as of January 1, 1994 (incorporated by reference to Exhibit 10.7 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1994).
10.7* Trust Agreement, amended and restated as of March 2, 1990, between
Avon and Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1990 and refiled under Form SE for the year ended
December 31, 1996).
10.8* First Amendment, dated as of January 30, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.2 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.9* Second Amendment, dated as of June 12, 1992 to the Trust Agreement,
dated as of March 2, 1990, by and between Avon and Chase Manhattan
Bank, N.A. (incorporated by reference to Exhibit 10.3 to Avon's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1993).
10.10* Third Amendment, dated as of November 5, 1992, to the Trust
Agreement, dated as of March 2, 1990, by and between Avon and Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 10.4 to
Avon's Quarterly Report on Form 10-Q for the quarter ended March 31,
1993).
10.11* The Avon Products, Inc. Deferred Compensation Plan, as amended and
restated as of January 1, 1998 (incorporated by reference to Exhibit
4(b) to Avon's Registration Statement on Form S-8, Registration No.
333-65989 filed October 22, 1998).
10.12* Trust Agreement, dated as of April 21, 1995, between Avon and
Chemical Bank, amending and restating the Trust Agreement as of
August 3, 1989 between Avon and Manufacturers Hanover Trust Company
(incorporated by reference to Exhibit 10.14 to Avon's Annual Report
on Form 10-K for the year ended December 31, 1995).
10.13* Stock Option Agreement between Avon and Stanley C. Gualt dated
November 4, 1999 (incorporated by reference to Exhibit 10.13 to
Avon's Annual Report on Form 10K for the year ended December 31,
1999).
10.14* Employment Agreement, dated as of December 11, 1997 between Avon and
Charles R. Perrin (incorporated by reference to Exhibit 10.18 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.15* Stock Option Agreement between Avon and Charles R. Perrin dated
December 10, 1997 (incorporated by reference to Exhibit 10.19 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.16* Employment Agreement dated as of December 11, 1997 between Avon and
Andrea Jung (incorporated by reference to Exhibit 10.20 to Avon's
Annual Report on Form 10-K for the year ended December 31, 1997).
10.17* Form of Employment Agreement, dated as of September 1, 1994, between
Avon and certain senior officers (incorporated by reference to
Exhibit 10.2 to Avon's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994).
10.18* Avon Products, Inc. Compensation Plan for Non-Employee Directors,
effective May 1, 1997 (incorporated by reference to Exhibit 10.22 to
Avon's Annual Report on Form 10-K for the year ended December 31,
1997).
10.19* Avon Products, Inc. Board of Directors' Deferred Compensation Plan,
amended and restated, effective January 1, 1997 (incorporated by
reference to Exhibit 10.23 to Avon's Annual Report on Form 10-K for
the year ended December 31, 1997).
10.20* Trust Agreement, dated as of December 31, 1991, between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.23 to Avon's Annual Report on Form 10-K for the year
ended December 31, 1991 and refiled under Form SE for the year ended
December 31, 1996).
10.21* First Amendment, dated as of November 5, 1992, to the Trust
Agreement dated as of December 31, 1991, by and between Avon and
Manufacturers Hanover Trust Company (incorporated by reference to
Exhibit 10.7 to Avon's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993).
10.22* Stock Option Agreement between Avon and Charles R. Perrin dated June
4, 1998 (incorporated by reference to Exhibit 10.1 to Avon's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
10.23* Stock Option Agreement between Avon and Andrea Jung dated June 4,
1998 (incorporated by reference to Exhibit 10.2 to Avon's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
13 Portions of the Restated Annual Report to Shareholders for the year
ended December 31, 1999 incorporated by reference in response to
Items 1,5 through 8 in this filing.
18 Preferability letter from PricewaterhouseCoopers LLP regarding
change in accounting principle.
21 Subsidiaries of the registrant (incorporated by reference to Exhibit
21 to Avon's Annual Report on Form 10K for the year ended December
31, 1999).
23 Consent of PricewaterhouseCoopers LLP (set forth on page S-2 of this
Annual Report on Form 10-K/A).
* The Exhibits identified above and in the Exhibit Index with an
asterisk (*) are management contracts or compensatory plans or
arrangements.