Avon Products Earnings Call Insights: Repatriation of Cash and Russia
Repatriation of Cash
Christopher Ferrara – Bank of America: Hi, it’s Bank of America. Can you guys talk a little bit more I guess about the negotiation process with the private placements and the decision to repatriate the cash and I guess can you talk a little about what the implication is for credit cost going forward?
Kimberly A. Ross – EVP and CFO: Yes. So, this is Kimberly. I guess let’s start with the repatriation of the cash. So, under the accounting rules of APB-23 and I promise not to go very technical here, but every year management needs to assert if earnings will remain permanently reinvested abroad or not. Due to the potential need for cash in the U.S. we were no longer able to continue to assert that the earnings would continue to be reinvested abroad and thus we took the charge for a $168 million that is a non-cash charge. That then allows us to able to bring cash back when we need cash and however much we might need of those balances that are abroad which will allow us to be able to meet any potential obligations that we have here in the U.S. So, I think the key thing for us is as I said before is we needed to move forward, we are not having constructive discussion despite the fact that we put very different proposals on the table to the noteholders. So, ultimately we just need to remove the uncertainty and move forward with getting our refinancings in place. And so we are in very active dialogues at this point in time and I can’t give you all the details of that, but we are looking forward to being able to say more in the future on it.
Lauren Lieberman – Barclays Capital: It’s Barclays. I’m just curious you guys mentioned driven innovative approach to represent that experience in Russia. Could you talk a little bit of what you’re doing there that’s different?
Sheri S. McCoy – CEO: The Russian team really came in and started looking at what the local consumer insights were as well as starting to work closely with representatives. They have gone digital as it relates to the brochure and online. They’ve done a terrific job on the social media plan where they have Facebook pages for their representatives. They’ve used Google in terms of people being able to find representatives and then they’ve worked hard to look at their sales leadership model and making sure that it was easy for people to advance from a title standpoint. So, they’ve really taken an integrated approach and I really I would say contemporize to the approach to going to market. So, we’ve been very impressive what they’ve been able to do and we’re sharing those learning’s with other markets.
Lauren Lieberman – Barclays Capital: How long have they’ve been at that, because I think everyone is curious how long to kind of get there sort of updating of and getting onto social media and online?
Sheri S. McCoy – CEO: They started working on this and they’ve typically done a little bit more advanced on online and some of our other markets, but they really took a hard look at it beginning in first quarter – first, second quarter last year. And also brought in some new marketing capabilities into their market, so very locally oriented and that’s where they started focusing on lot of local product offerings as well as the digital approach. So, I would say several months.
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