Avon 2011 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,” “forecast,” “plan,” “believe,” “may,” “expect,”
“anticipate,” “intend,” “planned,” “potential,” “can,” “expectation” 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 others, the following:
• our ability to implement the key initiatives of, and realize the gross and operating margins and projected benefits (in the amounts and
time schedules we expect) from, our global business strategy, including our multi-year restructuring programs and any initiatives arising
under our long-range business review, product mix and pricing strategies, Enterprise Resource Planning, customer service initiatives, sales
and operation planning process, outsourcing strategies, Internet platform and technology strategies, information technology and related
system enhancements and cash management, tax, foreign currency hedging and risk management strategies;
• our ability to realize the anticipated benefits (including any financial projections concerning, for example, future revenue, profit, cash flow
and operating margin increases) from our multi-year restructuring programs, any initiatives arising under our long-range business review
or other 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 programs, long-range business review or other
initiatives;
• our ability to realize sustainable growth from our investments in our brand and the direct-selling channel;
• our ability to transition our business in North America, including enhancing our Sales Leadership model and optimizing our product
portfolio;
• a general economic downturn, a recession globally or in one or more of our geographic regions, or sudden disruption in business
conditions, and the ability of our broad-based geographic portfolio to withstand an economic downturn, recession, cost inflation,
commodity cost pressures, economic or political instability, competitive or other market pressures or conditions;
• the effect of political, legal, tax and regulatory risks imposed on us in the United States and abroad, our operations or our Representatives,
including foreign exchange or other restrictions, adoption, interpretation and enforcement of foreign laws including any changes thereto,
as well as reviews and investigations by government regulators that have occurred or may occur from time to time, including, for example,
local regulatory scrutiny in China;
• our ability to effectively manage inventory and implement initiatives to reduce inventory levels, including the potential impact on cash
flows and obsolescence;
• our ability to achieve growth objectives, particularly in our largest markets, such as the U.S., and developing and emerging markets, such
as Brazil or Russia;
• our ability to successfully identify new business opportunities and identify and analyze acquisition candidates, secure financing on
favorable terms and negotiate and consummate acquisitions as well as to successfully integrate or manage any acquired business;
• the challenges to our acquired businesses, such as Silpada, including the effect of rising costs, macro-economic pressures, competition,
and the impact of declines in expected future cash flows and growth rates, and a change in the discount rate used to determine the fair
value of expected future cash flows, which have impacted, and may continue to impact, the estimated fair value of the recorded goodwill
and intangible assets;
• the effect of economic factors, including inflation and fluctuations in interest rates and currency exchange rates, as well as the designation
of Venezuela as a highly inflationary economy, foreign exchange restrictions and the potential effect of such factors on our business,
results of operations and financial condition;
• our ability to successfully transition and evolve our business in China in connection with the development and evolution of the direct-
selling business in that market, our ability to operate using a direct-selling model permitted in that market and our ability to retain and
increase the number of Active Representatives there over a sustained period of time;
• general economic and business conditions in our markets, including social, economic and political uncertainties in the international
markets in our portfolio;
• any developments in or consequences of investigations and compliance reviews, and any litigation related thereto, including the ongoing
internal investigation and compliance reviews of Foreign Corrupt Practices Act and related U.S. and foreign law matters in China and
additional countries, as well as any disruption or adverse consequences resulting from such investigations, reviews, related actions or
litigation;
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