Avon 2013 Annual Report Download - page 25

Government reviews, inquiries, investigations, and actions could harm our business or
reputation. In addition, from time to time we may conduct other internal investigations and
compliance reviews, the consequences of which could negatively impact our business or
reputation.
As we operate in various locations around the world, our operations in certain countries are subject to significant governmental scrutiny and
may be harmed by the results of such scrutiny. The regulatory environment with regard to direct selling in emerging and developing markets
where we do business is evolving, and government officials in such locations often exercise broad discretion in deciding how to interpret and
apply applicable regulations. From time to time, we may receive formal and informal inquiries from various government regulatory
authorities about our business and compliance with local laws and regulations. In addition, from time to time, we may conduct internal
investigations and compliance reviews. The consequences of such government reviews, inquiries, investigations, and actions or such internal
investigations and compliance reviews may adversely impact our business, prospects, reputation, financial condition, liquidity, results of
operations or cash flows.
Any determination that our operations or activities, or the activities of our Representatives, are not, or were not, in compliance with existing
U.S. or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or
other third-party relationships, termination of necessary licenses and permits, and other legal or equitable sanctions. Other legal or
regulatory proceedings, as well as government investigations, which often involve complex legal issues and are subject to uncertainties, may
also follow as a consequence.
Additionally, any determination that our operations or activities, or, where local law mandates, the activities of our Representatives,
including our licenses or permits, importing or exporting, or product testing or approvals are not, or were not, in compliance with existing
laws or regulations could result in the imposition of substantial fines, civil and criminal penalties, interruptions of business, modification of
business practices and compliance programs, equitable remedies, including disgorgement, injunctive relief and other sanctions that we may
take against our personnel or that may be taken against us or our personnel. Further, other countries in which we do business may initiate
their own investigations and impose similar sanctions. Even if an inquiry or investigation does not result in these types of determinations, it
potentially could create negative publicity and give rise to third-party litigation or action.
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;
• developments in connection with the FCPA or other investigations and any litigation related thereto;
• a change in our credit ratings;
• 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, proxy contests or other shareholder activism;
• changes in our dividend practice;
• 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.
A V O N 2013 17