Avon 2011 Annual Report Download - page 23

personnel. Further, other countries in which we do business may initiate their own investigations and impose similar sanctions. Because the
internal investigations, compliance reviews and the government’s investigation are ongoing, there can be no assurance as to how the
resulting consequences, if any, may impact our internal controls, business, reputation, consolidated financial position, results of operations
or cash flows.
Significant changes in pension fund investment performance, assumptions relating to pension
costs or required legal changes in pension funding rules may have a material effect on the
valuation of pension obligations, the funded status of pension plans and our pension cost.
Our funding policy for pension plans is to accumulate plan assets that, over the long run, will approximate the present value of projected
benefit obligations. Our pension cost is materially affected by the discount rate used to measure pension obligations, the level of plan assets
available to fund those obligations at the measurement date and the expected long-term rate of return on plan assets. Significant changes in
investment performance or a change in the portfolio mix of invested assets can result in corresponding increases and decreases in the
valuation of plan assets, particularly equity securities, or in a change of the expected rate of return on plan assets. A change in the discount
rate would result in a significant increase or decrease in the valuation of pension obligations, affecting the reported funded status of our
pension plans as well as the net periodic pension cost in the following fiscal years. Similarly, changes in the expected return on plan assets
can result in significant changes in the net periodic pension cost of the following fiscal years. Finally, recent pension funding requirements
under the Pension Protection Act of 2006, such as pension funding obligations and limitations on a hybrid plan’s interest crediting rate to
the “market rate of return”, may result in a significant increase or decrease in the valuation of pension obligations affecting the reported
funded status of our pension plans.
The market price of our common stock could be subject to fluctuations as a result of many
factors.
Factors that could affect the trading price of our common stock include the following:
• variations in operating results;
• economic conditions and volatility in the financial markets;
• announcements or significant developments in connection with our business and with respect to beauty and related products or the
beauty industry in general;
• actual or anticipated variations in our quarterly or annual financial results;
• unsolicited takeover proposals or proxy contests;
• changes in our dividend practice;
• developments in connection with the FCPA or other investigations and any litigation related thereto;
• governmental policies and regulations;
• estimates of our future performance or that of our competitors or our industries;
• general economic, political, and market conditions;
• market rumors; and
• factors relating to competitors.
The trading price of our common stock has been, and could in the future continue to be, subject to significant fluctuations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Our principal properties worldwide consist of manufacturing facilities for the production of Beauty products, distribution centers where offices
are located and where finished merchandise is packed and shipped to Representatives in fulfillment of their orders, and one principal research
and development facility. Our domestic manufacturing facilities are located in Morton Grove, IL and Springdale, OH. Our domestic distribution
centers are located in Atlanta, GA; Zanesville, OH; and Pasadena, CA. Our research and development facility is located in Suffern, NY. We also
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