

2013	First			Second			Third			Fourth			Year
Total revenue	$	2,456.0		$	2,508.9		$	2,322.9		$	2,667.2		$	9,955.0
Gross profit	1,530.6			1,573.5			1,451.2			1,627.2			6,182.5
Operating profit (loss)⁽²⁾	174.0			202.2			68.2			(17.2		)	427.2
Income (loss) from continuing operations, before taxes⁽³⁾	29.3			145.3			31.6			(43.6		)	162.6
(Loss) income from continuing operations, net of tax⁽⁴⁾	(11.5		)	84.6			(6.4		)	(67.7		)	(1.0		)
(Loss) income from discontinued operations, net of tax	(1.1		)	(50.4		)	.6			—			(50.9		)
Net (income) loss attributable to noncontrolling interests	(1.1		)	(2.3		)	.3			(1.4		)	(4.5		)
Net (loss) income attributable to Avon	$	(13.7	)	$	31.9		$	(5.5	)	$	(69.1	)	$	(56.4	)

(Loss) earnings per share from continuing operations
Basic	$	(.03	)	$	.19		$	(.01	)	$	(.16	)	$	(.01	)	(5)
Diluted	$	(.03	)	$	.19		$	(.01	)	$	(.16	)	$	(.01	)	(5)



2012	First⁽¹⁾			Second⁽¹⁾			Third			Fourth			Year
Total revenue	$	2,540.4		$	2,558.2		$	2,510.6		$	2,952.2		$	10,561.4
Gross profit	1,545.7			1,608.5			1,539.4			1,764.7			6,458.3
Operating profit⁽²⁾	72.7			128.9			110.6			212.8			525.0
Income from continuing operations, before taxes⁽³⁾	42.0			93.0			82.3			211.4			428.7
Income (loss) from continuing operations, net of tax⁽⁴⁾	28.2			65.1			36.2			(36.2		)	93.3
Loss from discontinued operations, net of tax	(.6		)	(2.4		)	(3.6		)	(124.9		)	(131.5		)
Net income attributable to noncontrolling interests	(1.1		)	(1.1		)	(1.0		)	(1.1		)	(4.3		)
Net income (loss) attributable to Avon	$	26.5		$	61.6		$	31.6		$	(162.2	)	$	(42.5	)

Earnings (loss) per share from continuing operations
Basic	$	.06		$	.15		$	.08		$	(.08	)	$	.20		(5)
Diluted	$	.06		$	.15		$	.08		$	(.08	)	$	.20		(5)

(1) As discussed in Note 1, Description of the Business and Summary of Significant Accounting Policies, we recorded out-of-period adjustments in 2012 that related to prior periods.

2012

During the first quarter of 2012, we recorded an out-of-period adjustment which decreased earnings by approximately $14 before tax ($10 after tax) which related to 2011 and was associated with bad debt expense in our South Africa operations.

During the second quarter of 2012, we recorded an out-of-period adjustment which increased earnings by approximately $5 before tax ($3 after tax) which related to prior years and was associated with vendor liabilities in North America. During the second quarter of 2012, we recorded an out-of-period adjustment which decreased earnings by approximately $4 before tax ($4 after tax) which related to prior years and was associated with brochure costs in Poland.

In addition to the adjustments previously mentioned, in 2012, we also recorded out-of-period adjustments in the aggregate of approximately $1 before tax ($5 after tax) that related to prior years.

We evaluated the out-of-period adjustments in 2012, both individually and in the aggregate, in relation to the quarterly and annual periods in which they originated and the annual period in which they were corrected, and concluded that these adjustments were not material to the consolidated annual financial statements for all impacted periods.

(2) Operating profit (loss) was impacted by the following:



2013	First			Second			Third			Fourth		Year
Costs to implement restructuring initiatives:
Cost of sales	$	(.6	)	$	(.3	)	$	—		$	—	$	(.9	)
Selling, general and administrative expenses	20.9			8.7			(.2		)	37.4		66.8
Total costs to implement restructuring initiatives	$	20.3		$	8.4		$	(.2	)	$	37.4	$	65.9
Venezuelan special items	$	13.3		$	16.5		$	14.9		$	4.9	$	49.6
FCPA accrual	$	—		$	12.0		$	—		$	77.0	$	89.0
Asset impairment and other charges	$	—		$	—		$	42.1		$	117.2	$	159.3

2012	First			Second			Third			Fourth		Year
Costs to implement restructuring initiatives:
Cost of sales	$	2.7		$	.7		$	(.2	)	$	1.3	$	4.5
Selling, general and administrative expenses	24.6			37.5			1.8			56.3		120.2
Total costs to implement restructuring initiatives	$	27.3		$	38.2		$	1.6		$	57.6	$	124.7
Asset impairment and other charges	$	—		$	—		$	44.0		$	—	$	44.0

(3)

In addition to the items impacting operating profit (loss) above, income (loss) from continuing operations, before taxes during 2013 was impacted by a one-time, after-tax loss of $50.7 ($34.1 in other expense, net and $16.6 in income taxes) recorded in the first quarter, primarily reflecting the write-down of monetary assets and liabilities and deferred tax benefits due to the devaluation of Venezuelan currency. Income (loss) from continuing operations, before taxes during 2013 was also impacted by a loss on extinguishment of debt of $73.0 before tax in the first quarter of 2013 caused by the make-whole premium and the write-off of debt issuance costs associated with the prepayment of our Private Notes (as defined in Note 5, Debt and Other Financing), as well as the write-off of debt issuance costs associated with the early repayment of $380.0 of the outstanding principal amount of the term loan agreement (as defined in Note 5, Debt and Other Financing). In addition, income (loss) from continuing operations, before taxes during 2013 was impacted by a loss on extinguishment of debt of $13.0 before tax in the second quarter of 2013 caused by the make-whole premium and the write-off of debt issuance costs and discounts, partially offset by a deferred gain associated with the January 2013 interest-rate swap agreement termination, associated with the prepayment of the 2014 Notes (as defined in Note 5, Debt and Other Financing).

In addition, income (loss) from continuing operations, before taxes during 2012 was impacted by a benefit of $23.8 to other expense, net in 2012 due to the release of a provision in the fourth quarter associated with the excess cost of acquiring U.S. dollars in Venezuela at the regulated market rate as compared with the official exchange rate. This provision was released as the Company capitalized the associated intercompany liabilities.

(4)

(Loss) income from continuing operations, net of tax during 2013 was impacted by valuation allowances for deferred tax assets of $41.8 related to Venezuela in the fourth quarter of 2013 and $9.2 related to the China business in the third quarter of 2013, and during 2012 was impacted by an additional provision for income taxes of $168.3. During the fourth quarter of 2012, we determined that the Company may repatriate offshore cash to meet certain domestic funding needs. Accordingly, we are no longer asserting that the undistributed earnings of foreign subsidiaries are indefinitely reinvested.


(5)	The sum of per share amounts for the quarters does not necessarily equal that for the year because the computations were made independently.

See Note 15, Restructuring Initiatives, "Results Of Continuing Operations - Consolidated" within MD&A on pages 30 through 35, "Segment Review - Latin America" within MD&A on pages 37 through 39, Note 16, Contingencies, Note 17, Goodwill and Intangibles, Note 1, Description of the Business and Summary of Significant Accounting Policies, Note 5, Debt and Other Financing and Note 7, Income Taxes, for more information on these items.