Avon 2006 Annual Report Download - page 9

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR”
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Statements in this report that are not historical facts or
information are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Words
such as “estimate,” “project,” “plan,” “believe,” “expect,”
“anticipate,” “intend,” “planned,” “potential” and similar
expressions, or the negative of those expressions, may identify
forward-looking statements. Such forward-looking statements
are based on management’s reasonable current assumptions and
expectations. Such forward-looking statements involve risks,
uncertainties and other factors, which may cause the actual
results, levels of activity, performance or achievement of Avon to
be materially different from any future results expressed or
implied by such forward-looking statements, and there can be
no assurance that actual results will not differ materially from
management’s expectations. Such factors include, among oth-
ers, the following:
• our ability to implement the key initiatives of our global busi-
ness strategy, including our multi-year restructuring initiatives,
product mix and pricing strategies, enterprise resource plan-
ning, customer service initiatives, product line simplification,
strategic sourcing initiative, zero overhead growth and cash
management, tax, foreign currency hedging and risk
management strategies;
• our ability to realize the anticipated benefits from our multi-
year restructuring initiatives or other strategic initiatives on the
time schedules or in the amounts that we expect, and our
plans to invest these anticipated benefits ahead of future
growth;
• the possibility of business disruption in connection with our
multi-year restructuring initiatives or other strategic initiatives;
• our ability to realize sustainable growth from our investments
in our brand and the direct selling channel;
• the costs associated with our product line simplification
program;
• our ability to achieve growth objectives, particularly in our
largest markets and new and emerging markets;
• our ability to successfully identify new business opportunities
and acquisition candidates, and our ability to successfully
integrate or manage any acquired business;
• the effect of political, legal and regulatory risks, as well as
foreign exchange or other restrictions, imposed on us, our
operations or our Representatives by governmental entities;
• our ability to successfully transition our business in China in
connection with the resumption of direct selling in that market
and our ability to operate using the direct selling model
permitted in that market;
• the impact of substantial currency fluctuations on the results
of our foreign operations;
• general economic and business conditions in our markets,
including social, economic and political uncertainties in Latin
America, Asia Pacific, Central and Eastern Europe and the
Middle East;
• a general economic downturn, information technology sys-
tems outages, disruption in our supply chain or manufacturing
and distribution operations, or other sudden disruption in
business operations beyond our control as a result of events
such as acts of terrorism or war, natural disasters, pandemic
situations and large scale power outages;
• the risk of product or ingredient shortages resulting from our
concentration of sourcing in fewer suppliers;
• the quality, safety and efficacy of our products;
• the success of our research and development activities;
• our ability to attract and retain key personnel and executives;
• competitive uncertainties in our markets, including competi-
tion from companies in the cosmetics, fragrances, skin care
and toiletries industry, some of which are larger than we are
and have greater resources;
• our ability to implement our Sales Leadership program glob-
ally, to generate Representative activity, to increase
Representative productivity, to improve Internet-based tools
for our Representatives, and to compete with other direct sell-
ing organizations to recruit, retain and service Representatives;
• the impact of the seasonal nature of our business, changes in
market trends, purchasing habits of our consumers and
changes in consumer preferences, particularly given the global
nature of our business and the conduct of our business in
primarily one channel;
• our ability to protect our intellectual property rights;
• the risk of an adverse outcome in our material pending and
future litigations;
• our access to financing; and
• the impact of possible pension funding obligations and
increased pension expense on our cash flow and results of
operations.
We undertake no obligation to update any such forward-looking
statements.
A V O N 2006 3