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FORM 10-K
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, 1995
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.
(Exact name of registrant as specified in its charter)
NEW YORK 13-0544597
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 WEST 57TH STREET, NEW YORK, NEW YORK 10019
(Address of principal executive offices)
(212) 546-6015
(Telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------
Common Stock (par value $.50) 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 requirementsfor 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 or any
amendment to this Form 10-K. [ ].
The aggregate market value of Common Stock (par value $.50) held by non-
affiliates at February 29, 1996 was $5.4 billion.
The number of shares of Common Stock (par value $.50) outstanding at
February 29, 1996 was 67,246,093.
Documents Incorporated by Reference
Parts I and II Portions of the 1995 Annual Report to Shareholders.
Part III Portions of the Proxy Statement for the 1996 Annual
Meeting of Shareholders.
1
PART I
ITEM 1. BUSINESS
Avon Products, Inc. ("Avon" or "Company") is one of the world's leading
manufacturers and marketers of beauty and related products, which include
cosmetics, fragrance and toiletries; gift and decorative; apparel; and fashion
jewelry and accessories. 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, with worldwide
operations. Financial information relating to geographic areas is
incorporated by reference to the analysis of net sales and pretax income from
operations by geographic area on page 31 in Avon's 1995 Annual Report to
Shareholders.
Distribution
Avon's products are sold worldwide by approximately 2.0 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 directly to their customers.
The Company's products are sold to customers through a combination of
direct selling and marketing utilizing independent Representatives, the mail,
by phone or fax. Representatives go where the customers are, either in the
home or in the workplace. Representatives may sell in a territory, which
typically averages 100 homes in the United States and from 100 to 150 homes
in other countries. Representatives in the United States have the opportunity
to take responsibility for sales in larger areas.
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, make-up color charts and catalogs 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 total order size for each two-week
sales campaign and averages approximately 60 percent of the recommended
selling price.
In order to increase support of the Representative in the United States
and allow them to run their business more efficiently as well as to improve
order processing accuracy, Avon employs certain electronic order systems
technology. One of these systems permits Avon 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.
2
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
responsibility 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 commission based on purchases 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 toward
giving selling assistance to the Representatives by making available 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 manager. 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. Cosmetic, fragrance and toiletry
products are available each sales campaign at a constant low price, while
maintaining introductory specials and periodic sales on selected items for
limited time periods.
From time to time, various regulations or laws have been proposed or
adopted that would, in general, restrict the frequency or duration of, 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.
3
Competitive Conditions
The cosmetic, fragrance and toiletry; 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 cosmetics, fragrance, toiletries and fashion jewelry markets
varies widely from country to country. Avon is one of the leading
manufacturers and distributors in the cosmetics, fragrance and toiletries
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, although none have comparable sales or income.
Avon believes that the personalized customer service offered by
Representatives; the high quality, attractive designs and reasonable prices
of its products; new product introductions; and the guarantee of satisfaction
are significant factors in establishing and maintaining its competitive
position.
Avon's consolidated net sales, by classes of principal products, are as
follows:
Years ended December 31
-----------------------
1995 1994 1993
------- ------- -------
(In millions)
Cosmetics, fragrance
and toiletries........ $2,797.2 $2,604.2 $2,375.2
Gift and decorative..... 780.6 769.2 663.6
Apparel................. 500.5 480.3 350.0
Fashion jewelry and
accessories.......... 413.8 412.8 455.3
-------- -------- --------
$4,492.1 $4,266.5 $3,844.1
======= ======= =======
4
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 40 countries and Avon's products are distributed in some 84
other countries.
Manufacturing
Avon manufactures and packages almost all of its cosmetic, fragrance
and toiletry 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 supply its products.
Avon has eighteen manufacturing laboratories around the world, three
of which are principally devoted to the manufacture of fashion jewelry.
In the United States, Avon's cosmetic, fragrance and toiletry products are
produced in three manufacturing laboratories for the four distribution
centers located throughout the country. 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 two manufacturing laboratories in Puerto Rico, and Avon's
manufacturing laboratory in Ireland or by several independent manufacturers.
Trademarks and Patents
Although Avon owns several patents and has several more patent
applications pending in the United States Patent Office, its business, both
in the United States and abroad, is not materially dependent upon patents
or patent protection. Avon has no material licenses, franchises or
concessions.
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.
DISCONTINUED OPERATIONS
In December 1995, the Company entered into an agreement with
Mallinckrodt Group, Inc. ("Mallinckrodt"), which has fully settled the
litigation initiated by Mallinckrodt. The settlement covers all indemnity
obligations related to Avon's sale of Mallinckrodt, including environmental
clean-up claims and litigation concerning Mallinckrodt's settlement of a
DuPont patent claim.
The settlement payments being made by Avon to Mallinckrodt, and related
costs, resulted in an after-tax charge to discontinued operations in the
fourth quarter of 1995, net of existing reserves, of $29.6 million, or $.43
per share.
During 1994, the Company sold Giorgio Beverly Hills, Inc. ("Giorgio"),
its remaining retail business, for cash of $150.0 million. The Company
recorded a loss of $25.0 million on the sale. Giorgio's operating results
5
are segregated and reported as discontinued operations through the date of
sale.
Since the Company has excess capital loss carryforwards, no tax benefits
were recognized on the above losses in 1995 and 1994.
During 1993, Avon recorded a discontinued operations provision of $10.0
million after tax, or $.14 per share, for the final settlement and related
expenses in an arbitration proceeding related to a business previously sold.
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 difference,
if any, between the total cost of resolving such contingencies and reserves
recorded by Avon at December 31, 1995 should not have a material adverse
impact on Avon's consolidated financial position or results of operations.
SEASONAL NATURE OF BUSINESS
Avon's sales and earnings have a marked seasonal pattern characteristic
of many companies selling cosmetics, fragrance and toiletries; gift and
decorative products; and fashion jewelry. Christmas sales cause a sales peak
in the fourth quarter of the year. Fourth quarter net sales were 31 percent
and 32 percent of full year net sales in 1995 and 1994, respectively, and
fourth quarter pretax income from continuing operations was 40 percent and
42 percent in 1995 and 1994, 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
affordable, effective beauty treatments relevant to women's needs.
A team of researchers and technicians applies the disciplines of science
to the practical aspects of bringing products to market around the world.
Relationships with well known dermatologists and other specialists
supplement Avon's own research to deliver new formulas and ingredients.
Each year, Avon researchers test and develop more than 600 products in the
cosmetic, fragrance, toiletry and jewelry categories as well as analyze,
evaluate and develop gift and decorative products.
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 introduced
the benefits of aromatherapy to millions of American women, encapsulated
color for the Color-Release line and introduced alpha-hydroxy acid for the
Anew Perfecting Complex products.
6
The amounts incurred on research activities relating to the development
of new products and the improvement of existing products were $27.8 million
in 1995, $27.9 million in 1994 and $28.5 million in 1993. 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 cosmetic, fragrance and toiletry 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 in such categories as waste disposal and air and water
emissions. A corporate environmental operations committee ensures that
opportunities for environmental performance improvements are reflected in
our products and packaging.
In general, compliance with environmental regulations which impact
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. Reference is made to Item 3 of this report
for additional information regarding environmental matters.
EMPLOYEES
At December 31, 1995, Avon employed approximately 31,800 people. Of
these, approximately 8,000 were employed in the United States and
approximately 23,800 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 cosmetics, fragrance and toiletries 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.
The domestic manufacturing laboratories are located in Morton Grove,
IL; Springdale, OH; and Suffern, NY; and the distribution centers are located
in Atlanta, GA; Glenview, IL; Newark, DE; and Pasadena, CA. International
properties include three manufacturing laboratories, including a fashion
jewelry manufacturing laboratory in Ireland, and eight distribution centers
in Europe; five manufacturing laboratories and eleven distribution centers
in Latin America; one manufacturing and one distribution center in Canada;
and four manufacturing laboratories and nine distribution centers in the
Pacific. 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 facilities in Puerto Rico. During
1995, the Company signed new leases, commencing in 1997, for office
facilities for the U.S. and global operations, which will be relocated within
New York City.
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.
7
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 defense to
the claims, and is vigorously contesting this lawsuit.
In the opinion of Avon's management, based on its review of the
information available at this time, the difference, if any, between the total
cost of resolving such contingencies and reserves recorded by Avon at
December 31, 1995 should not have a material adverse impact on Avon's
consolidated financial position or results of operations.
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 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 or results of operations.
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, 1995.
- -------------------------------------
Executive Officers of the Registrant
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.
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 1996 Annual Meeting of Shareholders.
8
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
- ----- ---- --- -------
Chairman of the Board,
Chief Executive Officer
and Director................... James E. Preston 62 1971
President, Chief
Operating Officer
and Director................... Edward J. Robinson 55 1989
Senior Vice President,
General Counsel
and Secretary.................. Ward M. Miller, Jr. 63 1993 (1)
Senior Vice President and Chief
Financial Officer.............. Edwina D. Woodbury 44 1990
Senior Vice
Presidents..................... Christina A. Gold 48 1993
Marcia L. Worthing 53 1988
Group Vice President,
Taxes and
Treasurer...................... Robert J. Corti 46 1988
Vice President and
Controller..................... Michael R. Mathieson 43 1995(2)
(1) Ward M. Miller, Jr. was elected Senior Vice President, General Counsel
and Secretary in October 1994. Mr. Miller joined Avon in February 1993 as
Vice President. Prior to joining Avon, he was Senior Vice President and
General Counsel of Nabisco Brands; and Vice President, Associate General
Counsel and Secretary of its parent, RJR Nabisco.
(2) Michael R. Mathieson was elected Vice President and Controller in April
1995. Mr. Mathieson joined Avon in May 1990 as Assistant Corporate
Controller. Prior to joining Avon, he was Vice President and Director of
Accounting Research for Chase Manhattan Bank.
PART II
ITEM 5. MARKET FOR THE REGISTRANTS COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
This information is incorporated by reference to "Market Prices of
Common Stock by Quarter" on page 41 of Avon's 1995 Annual Report to
Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
The information for the five-year period 1991 through 1995 is
incorporated by reference to the "Eleven-Year Review" on pages 58 and 59 of
Avon's 1995 Annual Report to Shareholders.
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
This information is incorporated by reference to "Management's
Discussion and Analysis" on pages 29 through 40 of Avon's 1995 Annual
Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
This information is incorporated by reference to the "Consolidated
Financial Statements and Notes" on pages 42 through 56, together with the
report thereon of Coopers & Lybrand, L.L.P., on page 57, and "Results of
Operations by Quarter" on page 41 of Avon's 1995 Annual Report to
Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
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 1996 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 1996 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 1996 Annual Meeting of
Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
This information is incorporated by reference to the "Compensation
Committee Interlocks and Insider Participation" section and the "Contracts
with Executives" section of Avon's Proxy Statement for the 1996 Annual
Meeting of Shareholders.
10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
Annual
Report to Form 10-K
Shareholders Page
Page Number Number
(a) 1. Consolidated Financial Statements of
Avon Products, Inc. and Subsidiaries
Consolidated statement of income
for each of the years in the
three-year period ended
December 31, 1995 42
Consolidated balance sheet at
December 31, 1995
and 1994 43
Consolidated statement of cash
flows for each of the years in
the three-year period ended
December 31, 1995 44
Consolidated statement of
changes in shareholders'
equity for each of the years
in the three-year period
ended December 31, 1995 45
Notes to consolidated financial
statements 46-56
Report of Independent
Accountants
Coopers & Lybrand L.L.P..............57
(a) 2. Financial Statement Schedules
Report of Independent Accountants
Coopers & Lybrand L.L.P S-1
Consent of Independent Accountants
Coopers & Lybrand L.L.P S-2
Financial statement schedule for each
of the years in the three-year period
ended December 31, 1995 VIII--
Valuation and qualifying accounts S-3
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.
11
(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 August 12, 1988
(incorporated by reference to Exhibit 3.1 to Avon's Annual
Report on Form 10-K for the year ended December 31, 1993).
3.2 By-laws, as amended to April 27, 1990, of Avon (incorporated by
reference to Exhibit 3.1 to Avon's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1990).
4.1 Instrument defining the rights of holders of Avon's preferred
share purchase rights to purchase Avon's Series A
Junior Participating Preferred Stock (reference is made to
Article IIIA of the restated Certificate of Incorporation of
Avon, filed with the Secretary of State of New York State
on August 12, 1988 and included as Exhibit 3.1 to the 1993
Annual Report on Form 10-K).
4.2 Rights Agreement, dated as of March 30, 1988 (the "Rights
Agreement"), between Avon and First Chicago Trust Company of
New York (as successor to Morgan Shareholder Services Trust
Company) (incorporated by reference to Exhibit 1 to Avon's
Registration Statement on Form 8-A, filed April 7, 1988).
4.3 Amendment, dated as of January 3, 1989, to the Rights
Agreement (incorporated by reference to Exhibit 3 to Avon's
Amendment No. 1 on Form 8, filed January 4, 1989, amending its
Registration Statement on Form 8-A, filed April 7, 1988).
4.4 Second Amendment, dated as of April 5, 1990, to the Rights
Agreement (incorporated by reference to Exhibit 4(c) to Avon's
Current Report on Form 8-K, dated April 5, 1990).
4.5 Third Amendment, dated as of May 10, 1990, to the Rights
Agreement (incorporated by reference to Exhibit 4(d) to Avon's
Current Report on Form 8-K, dated May 10, 1990).
4.6 Revolving Credit and Competitive Advance Facility Agreement,
dated as of October 5, 1994, 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, 1994).
10.1* Avon Products, Inc. 1993 Stock Incentive Plan, approved by
stockholders 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).
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10.3* Avon Products, Inc. 1994 Long-Term Incentive Plan, effective as
of January 1, 1994 (incorporated by reference to Exhibit 10.3 to
Avon's Annual Report on Form 10-K for the year ended
December 31, 1993).
10.4* Avon Products, Inc. 1970 Stock Option Incentive Plan, as
amended and restated through May 4, 1989 (incorporated by
reference to Exhibit 4.6 to Avon's Registration Statement on
Form S-8, Registration No. 33-28653, filed May 18, 1989).
10.5* First Amendment, dated as of November 5, 1992, to the Avon
Products, Inc. 1970 Stock Option Incentive Plan as amended
and restated through May 4, 1989 (incorporated by reference to
Exhibit 10.1 to Avon's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993).
10.6* Supplemental Executive Retirement Plan and Supplemental Life
Plan of Avon Products, Inc., as amended and restated as of
September 1, 1994 (incorporated by reference to exhibit 10.6
to Avon's Annual Report on Form 10-K for the year ended
December 31, 1994).
10.7* 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).
10.8* 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).
10.9* 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).
10.10* 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).
10.11* 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).
10.12* The Avon Products, Inc. Deferred Compensation Plan, as
amended and restated as of October 8, 1990 (incorporated by
reference to Exhibit 10.5 to Avon's Annual Report on Form
10-K for the year ended December 31, 1991).
10.13* First Amendment, dated as of November 5, 1992, to the Avon
Products, Inc. Deferred Compensation Plan, as amended and
restated as of October 8, 1990 (incorporated by reference to
Exhibit 10.5 to Avon's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993).
13
10.14* Trust Agreement, dated as of April 12, 1995, between Avon and
Chemical Bank, amending and restating the Trust Agreement
as of August 3, 1989 between Avon and Manufacturers Hanover
Trust Company.
10.15* Instrument of Amendment, effective as of April 1, 1990
amending various employee benefit plans and agreements as
stipulated in the Instrument of Amendment (incorporated by
reference to Exhibit 10.3 to Avon's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1990).
10.16* Employment Agreement, dated as of November 1, 1995,
between Avon and James E. Preston.
10.17* Stock Option Agreement between Avon and James E. Preston
dated October 30, 1995.
10.18* Non-Qualified Stock Option Award, dated as of December 5, 1991,
granted by Avon to James E. Preston (incorporated by
reference to Exhibit 10.11 to Avon's Annual Report on
Form 10-K for the year ended December 31, 1991).
10.19* Employment Agreement, dated as of September 1, 1994,
between Avon and Edward J. Robinson (incorporated by
reference to Exhibit 10.1 to Avon's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1994).
10.20* Restricted Stock Agreement, effective as of November 4,
1993, granted by Avon to Edward J. Robinson (incorporated
by reference to Exhibit 10.21 to Avon's Annual Report on
Form 10-K for the year ended December 31, 1993).
10.21* 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).
10.22* Avon Products, Inc. Directors' Retirement Plan, effective
as of January 1, 1988 (incorporated by reference to
Exhibit 10.22 to Avon's Annual Report on Form 10-K for
the year ended December 31, 1991).
10.23* First Amendment, dated as of November 5, 1992, to the Avon
Products, Inc. Directors' Retirement Plan (incorporated by
reference to Exhibit 10.6 to Avon's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1993).
10.24* 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).
10.25* 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).
11.1 Statement re computation of primary income per share.
11.2 Statement re computation of fully diluted income per share.
14
13 Portions of the Annual Report to Shareholders for the year
ended December 31, 1995, incorporated by reference in
response to Items 1,5 through 8 in this filing.
21 Subsidiaries of the registrant.
21 Subsidiaries of the registrant.
23 Consent of Coopers & Lybrand L.L.P. (set forth on page S-2
of this Annual Report on Form 10-K).
24 Power of Attorney
27. Financial Data Schedule
99 Financial statements for the Avon Products, Inc.,
Employees' Savings and Stock Ownership Plan and the Avon
Mirabella/Lomalinda Employees' Savings Plan for the year
ended December 31, 1995 will be filed by amendment.
* 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
A report on Form 8-K dated December 8, 1995 was filed. This report
disclosed the agreement with Mallinckrodt Group, Inc. setting litigation
initiated by Mallinckrodt.
(c) Avon's Annual Report on Form 10-K for the year ended December 31,
1995, 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.
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, on the 7th day
of March 1996.
Avon Products, Inc.
By /s/WARD M. MILLER, JR.
--------------------------------
Ward M. Miller, Jr.
Senior Vice President, General
Counsel and Secretary
15
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
- ----------- ----- -----
Chairman of the Board
and Chief Executive
Officer--Principal
* Executive Officer
- ---------------- and Director March 27, 1996
James E. Preston
President, Chief
* Operating Officer and
- ---------------- Director March 27, 1996
Edward J. Robinson
Senior Vice President
and Chief Financial
* Officer--Principal
- ----------------- Financial Officer March 27, 1996
Edwina D. Woodbury
Vice President and
* Controller--Principal
- ------------------- Accounting Officer March 27, 1996
Michael R. Mathieson
BRENDA BARNES* )
RICHARD S. BARTON )
DANIEL B. BURKE )
REMEDIOS DIAZ OLIVER*)
EDWARD T. FOGARTY* )
STANLEY C. GAULT )
GEORGE V. GRUNE* ) Directors March 27, 1996
CHARLES S. LOCKE* )
ANN S. MOORE* )
JOSEPH A. RICE* )
CECILY C. SELBY* )
*By/s/ WARD M. MILLER, JR.
- ----------------------------------- March 27, 1996
Ward M. Miller, Jr. Attorney-in-fact
S-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of Avon Products, Inc.
Our report on the consolidated financial statements of Avon Products,
Inc. and subsidiaries as of December 31, 1995 and 1994 and for each of the
years in the three-year period ended December 31, 1995 has been incorporated
by reference in this Form 10-K from page 57 of the 1995 Annual Report to
Shareholders of Avon Products, Inc. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule for each of the years in the three-year period ended December 31,
1995, as listed in the Index under Item 14(a)2 of this Form 10-K.
In our opinion, the financial statement schedule for each of the years
in the three-year period ended December 31, 1995 referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
New York, New York
February 1, 1996 /s/Coopers & Lybrand L.L.P.
S-1
S-2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
following Registration Statements of Avon Products, Inc.:
Form S-8 (Reg. No. 2-37955), Form S-8 (Reg. No. 2-48080),
Form S-8 (Reg. No. 2-61285), Form S-8 (Reg. No. 2-83235),
Form S- 8 (Reg. No. 2-94959), Form S-8 (Reg. No. 33-28653),
Form S-8 (Reg. No. 33-47209), Form S-8 (Reg. No. 33-60218),
Form S-8 (Reg. No. 33-60918), Form S-8 (Reg. No. 33-65998),
Post Effective Amendment No. 1 to Form S-8 (Reg. No. 2-
98707), and Pre-Effective Amendment No. 1 to Form S-8 (Reg.
No. 33-22099), of our reports dated February 1, 1996 on our
audits of (i) the consolidated financial statements of Avon
Products, Inc. as of December 31, 1995 and 1994 and for each
of the years in the three-year period ended December 31,
1995, which report is included in the 1995 Annual Report to
Shareholders and incorporated by reference in this Annual
Report on Form 10-K and (ii) the 1995, 1994 and 1993
financial statement schedule of Avon Products, Inc., which
report is included in this Annual Report on Form 10-K.
New York, New York
March 27, 1996 /s/Coopers & Lybrand L.L.P.
S-2
S-3
AVON PRODUCTS, INC. AND SUBSIDIARIES
SCHEDULE VIII--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
--------- --------- -------- ---------- ---------
1995
Allowance for
doubtful
accounts
receivable $27.3 $78.0 $----- $72.7(a) $32.6
===== ===== ===== ====== =====
1994
Allowance for
doubtful
accounts
receivable $22.0 $64.9 $----- $59.6(a) $27.3
===== ===== ===== ====== =====
1993
Allowance for
doubtful
accounts
receivable $21.4 $51.4 $----- $50.8(a) $22.0
===== ===== ===== ====== =====
(a) Accounts written off, net of recoveries and foreign currency
translation adjustment.
S-3