Avon Reports Fourth-Quarter and Full-Year 2012 Results

            Avon Reports Fourth-Quarter and Full-Year 2012 Results

Fourth-Quarter Revenue Down 1% (Up 1% in Constant Dollars)

Fourth-Quarter Operating Profit was $11 Million; Adjusted(1) Non-GAAP $277
Million

Full-Year Cash from Operations $556 Million

PR Newswire

NEW YORK, Feb. 12, 2013

NEW YORK, Feb. 12, 2013 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) today
reported fourth-quarter and full-year 2012 results. "2012 was a challenging
year for Avon, but I'm encouraged to see that the overall business is showing
early signs of stabilization," said Sheri McCoy, Chief Executive Officer. "We
have a lot of work ahead of us, but I am confident that in 2013, we will see
progress against our three-year financial goals."

Fourth-Quarter 2012 (compared with fourth-quarter 2011)

For the fourth quarter, total revenue of $3.0 billion decreased 1%, but
increased 1% in constant dollars. Total units grew 2% and price/mix decreased
1% during the quarter. Active Representatives were up 1%.

Avon Beauty sales declined 2%, or increased 1% in constant dollars. On a
reported basis, fragrance was flat, color and personal care both declined 1%
and skincare declined 5%. On a constant-dollar basis, fragrance and color both
increased 2%, personal care increased 1% and skincare declined 2%.

Fourth-quarter 2012 gross margin was 59.8%. Adjusted Non-GAAP gross margin
was 59.9%, 130 basis points lower than the prior-year quarter, primarily due
to unfavorable mix reflecting actions to flow inventory, mainly in Brazil as
well as flowing more unit-driving offers in several key markets.

Operating profit was $11 million in the fourth quarter of 2012 and operating
margin was 0.4%. Adjusted Non-GAAP operating profit was $277 million and
adjusted Non-GAAP operating margin was 9.2%, down 20 bps from the fourth
quarter of 2011. The lower gross margin was almost fully offset by lower
operating expenses, primarily due to lower net brochure costs, lower overhead
and advertising expenses. Additionally, foreign exchange negatively impacted
operating margin.

Fourth-quarter 2012's effective tax rate was 1845% versus 102% in the fourth
quarter of 2011. On an adjusted Non-GAAP basis, the effective tax rate was
35.9%, versus 32.2% in the fourth-quarter 2011.

Loss from continuing operations in the fourth quarter of 2012 was $161
million, or $0.37 per share. Adjusted Non-GAAP net income from continuing
operations was $162 million, or $0.37 per share.

Adjustments to Fourth-Quarter GAAP Results

During the fourth quarter of 2012, the following items had a significant
impact on the financial results:

As a result of the weaker-than-expected performance in the fourth quarter of
2012 in our Silpada business and the corresponding lowering of our long-term
growth estimates for this business, our annual impairment assessment of the
fair value of goodwill and intangible assets related to the business resulted
in a Q4 non-cash pre-tax impairment charge, within operating profit, of $209
million, or $0.31 per share.

In the fourth quarter of 2012, we also recorded costs to implement ("CTI")
restructuring charges, within operating profit, of $58 million pre-tax, or
$0.09 per share, most of which relate to our previously announced cost savings
initiative.

The fourth-quarter results benefited from a release of a provision, within
other income, of $24 million, or $0.03 per share, associated with the excess
cost of acquiring U.S. dollars in Venezuela at the regulated market rate as
compared to the official exchange rate. This provision was released as the
Company capitalized the associated intercompany liabilities.

During the fourth quarter of 2012, we determined that the Company may
repatriate offshore cash to meet certain domestic funding needs. Accordingly,
we are no longer asserting that the undistributed earnings of certain foreign
subsidiaries are indefinitely reinvested, and therefore, we recorded an
additional provision for income taxes of $168 million or $0.39 per share.

Full-Year 2012 Results (compared with full-year 2011)

Total revenue of $10.7 billion decreased 5%, orwas flat in constant dollars.
Total Beauty sales declined 5%, or increased 1% on a constant-dollar basis.
Active Representatives declined 1% and units sold were flat.

Operating profit of $315 million decreased 63% and operating margin was 2.9%,
down 470 basis points. Adjusted Non-GAAP operating profit was $693 million,
down 40%, and adjusted Non-GAAP operating margin was 6.5%, down 380 basis
points from a year ago.

Full-year loss from continuing operations was $38 million, or $0.10 per share,
compared with income of $526 million, or $1.20 per share, last year. Adjusted
Non-GAAP income from continuing operations was $373 million, or $0.85 per
share, compared with $719 million, or $1.64 per share.

Adjustments to Full-Year 2012 GAAP Results:

During 2012, the following items had a significant impact on the financial
results:

  oCTI restructuring initiatives related to previously announced cost savings
    initiatives of $125 million pre-tax, or $0.19 per share
  oChina non-cash impairment charge of $44 million pre-tax, or $0.10 per
    share
  oSilpada non-cash impairment charge of $209 million pre-tax, or $0.30 per
    share
  oBenefit from release of a provision of $24 million, or $0.04 per share,
    associated with the excess cost of acquiring U.S. dollars in Venezuela at
    the regulated market rate as compared to the official exchange rate
  oAdditional provision for income taxes of $168 million, or $0.39 per share,
    associated with the potential repatriation of foreign earnings

Cash flow from operations was $556 million for the twelve months ended
December 31, 2012, $100 million lower than in the same period in 2011, due to
lower net income and higher payments associated with CTI restructuring
initiatives, which were partially offset by improvements in working capital,
lower contributions to the U.S. pension plan, and a payment in 2011 associated
with a long-term incentive compensation plan of $36 million. The overall net
cash used in the twelve months ended December 31, 2012 was $36 million,
compared with net cash provided of $65 million for the same period in 2011,
primarily due to lower issuances of commercial paper, partially offset by the
proceeds related to the term loan agreement, the scheduled repayment of our
notes in 2011, lower dividend payments, lower capital expenditures and the
termination of two of our interest-rate swap agreements.

Avon's net debt (total debt less cash) as of December 31, 2012 was $2.0
billion, down $77 million from December 31, 2011.

Estimated Impacts from 32% Venezuelan Currency Devaluation

The Venezuelan government has announced its intention to devalue its currency
by approximately 32%. Although no official rules have been issued, the
official exchange rate is expected to change from 4.30 Bolivars to the U.S.
dollar to 6.30 Bolivars to the U.S. dollar, effective February 13, 2013, and
the regulated SITME market will be eliminated. Based on a preliminary
analysis, Avon anticipates the following impacts, both of which will be
excluded for purposes of calculating adjusted Non-GAAP results during 2013:

  oOne time after tax loss estimated to be approximately $50 million in the
    first quarter of 2013, primarily reflecting the write-down of monetary net
    assets and deferred tax benefits;
  oEstimated charges of approximately $50 million associated with the
    historical cost in U.S. dollars of non-monetary assets, such as inventory,
    primarily during the first half of 2013.

In addition, had the devaluation occurred at the beginning of 2012, Avon's
revenue and adjusted Non-GAAP operating profit would have been adversely
impacted by approximately 2% each, assuming no mitigating factors, such as
price increases.



Fourth-Quarter 2012 Regional Highlights (compared with fourth-quarter 2011)

Latin America
$ in millions                         Fourth-Quarter 2012  FY 2012
                                                % var. vs            % var. vs
                                                4Q11                 12M11
Total revenue                         $1,330.5  2%         $4,993.7  (3)%
C$                                              7%                   5%
Active Representatives                          6%                   3%
Units sold                                      6%                   2%
Operating profit                      136.0     6%         443.9     (30)%
Adjusted Non-GAAP operating profit    143.7     7%         463.5     (27)%
Operating margin                      10.2%     40 bps     8.9%      (340) bps
Adjusted Non-GAAP operating margin    10.8%     50 bps     9.3%      (300) bps

Note: Effective in the second quarter of 2012, the Dominican Republic was
included in Latin America, whereas in prior periods it had been included in
North America. The impact was not material to either segment. Accordingly,
Latin America amounts include the results of the Dominican Republic for all
periods presented.

  oFourth-quarter constant-dollar revenue increased, primarily due to an
    increase in Active Representatives. Units sold increased 6%, primarily
    attributable to Brazil.
  oBrazil revenue was down 3%, or up 10% in constant dollars, primarily due
    to an increase in Active Representatives.
  oMexico revenue was up 9%, or 4% in constant dollars, driven primarily by
    an increase in Active Representatives partially offset by a decline in
    average order.
  oVenezuela revenue was up 2% in both reported and constant dollars, as
    average order benefited from the inflationary impact on pricing, but was
    partially offset by a decrease in Active Representatives.
  oThe increase in adjusted Non-GAAP operating margin was due to lower net
    brochure costs and improved bad debt and distribution expenses. This was
    partially offset by a decline in gross margin, primarily due to the
    unfavorable net impact of pricing and mix partially due to a planned
    initiative to flow excess inventory, primarily in Brazil. Foreign exchange
    and higher investments in Representative Value Proposition² ("RVP") also
    negatively impacted operating margin.

Europe, Middle East & Africa
$ in millions                         Fourth-Quarter 2012  FY 2012
                                                % var. vs            % var. vs
                                                4Q11                 12M11
Total revenue                         $ 905.8   1%         $2,914.2  (7)%
C$                                              2%                   (1)%
Active Representatives                          1%                   -%
Units sold                                      5%                   -%
Operating profit                      131.4     (4)%       312.8     (35)%
Adjusted Non-GAAP operating profit    131.5     (5)%       324.6     (33)%
Operating margin                      14.5%     (80) bps   10.7%     (460) bps
Adjusted Non-GAAP operating margin    14.5%     (100) bps  11.1%     (440) bps

Note: Effective in the second quarter of 2012, the results of Central and
Eastern Europe and Western Europe, Middle East & Africa were managed as a
single operating segment. Accordingly, Europe, Middle East & Africa amounts
include the results of Central and Eastern Europe and Western Europe, Middle
East & Africa for all periods presented.

  oFourth-quarter constant-dollar revenue increased primarily due to an
    increase in Active Representatives and unit growth.
  oRevenue in Russia was up 3% in both reported and constant dollars,
    primarily due to higher average order and an increase in Active
    Representatives.
  oRevenue in the U.K. was flat, or down 2% in constant dollars, primarily
    due to a decrease in Active Representatives, partially offset by higher
    average order.
  oRevenue in Turkey was up 1%, or down 1% in constant dollars, primarily due
    to lower average order, partially offset by growth in Active
    Representatives.
  oRevenue in South Africa was flat, or up 8% in constant dollars, primarily
    due to growth in average order, partially offset by a decrease in Active
    Representatives.
  oThe decline in adjusted Non-GAAP operating margin was due to lower gross
    margin, caused by the unfavorable impact of pricing and mix due to planned
    investments in unit-driving offers across all price tiers. This decline
    was also partially offset by improved bad debt expense and lower net
    brochure costs, primarily in Russia.

North America
$ in millions                         Fourth-Quarter 2012  FY 2012
                                                % var. vs            % var. vs
                                                4Q11                 12M11
Total revenue                         $516.2    (12)%      $1,906.8  (8)%
C$                                              (12)%                (8)%
Active Representatives                          (13)%                (12)%
Units sold                                      (11)%                (6)%
Operating loss                        (201.4)   17%        (214.9)   (14)%
Adjusted Non-GAAP operating profit    26.6      25%        24.6      (75)%
Operating margin                      (39.0)%   230 bps    (11.3)%   (220) bps
Adjusted Non-GAAP operating margin    5.2%      160 bps    1.3%      (350) bps

Note: Effective in the second quarter of 2012, the Dominican Republic was
included in Latin America, whereas in prior periods it had been included in
North America. The impact was not material to either segment. Accordingly,
North America amounts exclude the results of the Dominican Republic for all
periods presented.

  oFourth-quarter North America revenue declined 12%, primarily due to a
    decrease in Active Representatives.
  oThe North America Avon business revenue declined 11%, primarily due to a
    decrease in Active Representatives, partially offset by higher average
    order.
  oSilpada revenue declined 18%, primarily due to a decline in average order
    as well as a decrease in Active Representatives.
  oThe increase in adjusted Non-GAAP operating margin was due to lower
    overhead expenses, which include compensation costs, and lower advertising
    costs, which were partially offset by increased investments in RVP
    primarily related to the One Simple Sales Model implementation. The
    increase in operating margin was also impacted by higher gross margin at
    Silpada, which was partially due to the decrease in silver prices and
    favorable net impact of pricing and mix.

Asia Pacific
$ in millions                         Fourth-Quarter 2012   FY 2012
                                                 % var. vs          % var. vs
                                                 4Q11               12M11
Total revenue                         $  246.6  (3)%       $902.4  (4)%
C$                                               (6)%               (5)%
Active Representatives                           (8)%               (9)%
Units sold                                       (9)%               (7)%
Operating profit                      8.8        (64)%      5.1     (94)%
Adjusted Non-GAAP operating profit    21.8       (11)%      67.3    (17)%
Operating margin                      3.6%       (590) bps  0.6%    (800) bps
Adjusted Non-GAAP operating margin    8.8%       (80) bps   7.5%    (110) bps

  oFourth-quarter constant-dollar revenue decreased primarily due to
    continued weakness in China.
  oRevenue in China declined 23%, or 24% in constant dollars, primarily as a
    result of a decline in units sold. We continue to focus on independently
    owned retail locations (Beauty Boutiques).
  oRevenue in the Philippines grew 7%, or 2% in constant dollars, primarily
    due to growth in Active Representatives and higher average order, due to
    an increase in Fashion and Home sales.
  oThe region's adjusted Non-GAAP operating margin decline was largely driven
    by lower gross margin, which was caused primarily by the unfavorable net
    impact of pricing and mix, primarily due to the flow of excess inventory
    as well as the negative impact of foreign exchange. Sales deleverage was
    also a factor. Partially offsetting these items was lower investment in
    RVP, primarily in China.



Global Expenses
$ in millions                       Fourth-Quarter 2012   FY 2012
                                               % var. vs             % var. vs
                                               4Q11                  12M11
Total global expenses               $  191.1  13%        $  706.3  8%
Allocated to segments               (127.0)    (5)%       (474.2)    (5)%
Net global expenses                 64.1       83%        232.1      53%
Adjusted Non-GAAP net global        46.3       34%        187.5      30%
expenses

Avon will conduct a conference call at 9:00 A.M. today to discuss the
quarterly results. The dial-in number for the call is (800) 843-2086 in the
U.S. or (706) 643-1815 from non-U.S. locations (conference ID number:
89451727). The call will be webcast live at www.avoninvestor.comand can be
accessed or downloaded from that site for a period of one year.

Avon, the company for women, is a leading global beauty company, with nearly
$11 billion in annual revenue. As the world's largest direct seller, Avon is
sold through more than 6 million active independent Avon Sales
Representatives. Avon products are available in over 100 countries, and the
product line includes color cosmetics, skincare, fragrance, fashion and home
products, featuring such well-recognized brand names as Avon Color, ANEW,
Skin-So-Soft, Advance Techniques, and mark. Learn more about Avon and its
products at www.avoncompany.com.

Footnotes

^1 "Adjusted" items refer to financial results presented in accordance with
U.S. GAAP that have been adjusted to exclude certain costs as described below,
under "Non-GAAP Financial Measures."

^2 "RVP" - In the first quarter of 2012, we revised the definition of
Representative Value Proposition to represent the expenses of activities
directly associated with Representatives and independent leaders including the
cost of incentives and sales aids (net of any fees charged). RVP no longer
includes strategic investments such as the Service Model Transformation and
Web enablement, and it no longer adjusts for the impact of volume.

Non-GAAP Financial Measures

To supplement our financial results presented in accordance with generally
accepted accounting principles in the United States ("GAAP"), we disclose
operating results that have been adjusted to exclude the impact of changes due
to the translation of foreign currencies into U.S. dollars, including revenue
growth, operating profit, adjusted Non-GAAP operating profit, operating
margin, and adjusted Non-GAAP operating margin. We refer to these adjusted
financial measures as Constant $ items, which are Non-GAAP financial measures.
We believe these measures provide investors an additional perspective on
trends. To exclude the impact of changes due to the translation of foreign
currencies into U.S. dollars, we calculate current year results and prior year
results at a constant exchange rate. Currency impact is determined as the
difference between actual growth rates and constant currency growth rates.

We also present gross margin, selling, general and administrative expenses as
a percentage of revenue, net global expenses, operating profit, operating
margin, income from continuing operations, earnings per share from continuing
operations and effective tax rate on a Non-GAAP basis. The discussion of our
segments presents operating profit and operating margin on a Non-GAAP basis.
We have provided a quantitative reconciliation of the difference between the
Non-GAAP financial measure and the financial measure calculated and reported
in accordance with GAAP. The Company uses theNon-GAAP financial measures to
evaluate its operating performance and believes that it is meaningful for
investors to be made aware of, on a period-to-period basis, the impacts of 1)
costs to implement ("CTI") restructuring initiatives, 2) the goodwill and
intangible assets charges related to Silpada and the goodwill charge related
to China (each an "Impairment charge," and collectively, "Impairment
charges"), 3) the benefit related to the release of a provision associated
with the excess cost of acquiring U.S. dollars in Venezuela ("Venezuelan
special items"), and 4) the additional provision for income taxes as we are no
longer assessing that the undistributed earnings of certain foreign
subsidiaries are indefinitely reinvested ("Special taxitems"). The Company
believes investors find the Non-GAAP information helpful in understanding the
ongoing performance of operations separate from items that may have a
disproportionate positive or negative impact on the Company's financial
results in any particular period.

The Impairment charges include the impact on the Statement of Income caused by
the goodwill and intangible assets impairment charges related to Silpada in
2012 and 2011 and the goodwill impairment charge related to China in 2012. The
Venezuelan special items include the impact on the Statement of Income caused
by the release of a provision associated with the excess cost of acquiring
U.S. dollars in Venezuela at the regulated market rate as compared to the
official exchange rate. TheSpecial taxitems include the impact on the
Statement of Income in 2012 caused by an additional provision for income taxes
as we are no longer assessing that the undistributed earnings of certain
foreign subsidiaries are indefinitely reinvested. During the fourth quarter of
2012, we determined that the Company may repatriate offshore cash to meet
certain domestic funding needs.

These Non-GAAP measures should not be considered in isolation, or as a
substitute for, or superior to, financial measures calculated in accordance
with GAAP.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements in this release that are not historical facts or information may be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as "plan," "planned," "may," "will,"
"expect," "anticipate," "estimate," "would,""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 regarding the
Company's current or future results and future business and economic
conditions more generally. 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:

  oour 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, and including any financial projections concerning,
    for example, future revenue, profit, cash flow and operating margin
    increases) from, our stabilization strategies, cost savings initiative,
    multi-year restructuring programs and other initiatives, 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, and any plans to invest these
    projected benefits ahead of future growth;
  othe possibility of business disruption in connection with our
    stabilization strategies, cost savings initiative, multi-year
    restructuring programs or other initiatives;
  oour ability to reverse declining margins and net income;
  oour substantial indebtedness and debt service obligations, our ability to
    access and generate cash to repay debt and cover debt service obligations,
    our access to short- and long-term financing, our ability to refinance
    upcoming maturities of our current indebtedness or to secure such
    refinancing at attractive rates and terms, our ability to secure other
    financing or to secure such other financing at attractive rates and terms,
    and our credit ratings and the impact of any changes on our financing
    costs and debt service obligations and access to lending sources;
  oour ability to realize sustainable growth from our investments in our
    brand and the direct-selling channel;
  oour ability to improve our business in North America, including enhancing
    our Leadership model;
  oa 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;
  othe effect of political, legal, tax and regulatory risks imposed on us in
    the United States ("U.S.") and abroad, our operations or our
    Representatives, including foreign exchange or other restrictions,
    adoption, interpretation and enforcement of foreign laws, including in
    non-U.S. jurisdictions such as Brazil, Russia, Venezuela and Argentina,
    and 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;
  oour ability to improve working capital and effectively manage doubtful
    accounts and inventory and implement initiatives to reduce inventory
    levels, including the potential impact on cash flows and obsolescence;
  oour ability to achieve growth objectives, particularly in our largest
    markets, such as Brazil and the U.S., and developing and emerging markets,
    such as Mexico or Russia;
  oour ability to successfully identify new business opportunities and
    strategic alternatives 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;
  othe challenges to our businesses, such as Silpada and China, including the
    effects of rising costs, macro-economic pressures, competition, any
    potential strategic decisions, including the review of strategic
    alternatives for Silpada, 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;
  othe 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;
  ogeneral economic and business conditions in our markets, including social,
    economic and political uncertainties in the international markets in our
    portfolio;
  oany developments in or consequences of investigations and compliance
    reviews, and any litigation related thereto, including the ongoing
    investigations 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;
  okey information technology systems, process or site outages and
    disruptions;
  odisruption in our supply chain or manufacturing and distribution
    operations;
  oother sudden disruption in business operations beyond our control as a
    result of events such as acts of terrorism or war, natural disasters,
    pandemic situations, large-scale power outages and similar events;
  othe risk of product or ingredient shortages resulting from our
    concentration of sourcing in fewer suppliers;
  othe quality, safety and efficacy of our products;
  othe success of our research and development activities;
  oour ability to attract and retain key personnel;
  ocompetitive uncertainties in our markets, including competition from
    companies in the cosmetics, fragrances, skincare and toiletries industry,
    some of which are larger than we are and have greater resources;
  oour ability to reverse declines in Active Representatives, to implement
    our Leadership program globally, to generate Representative activity, to
    increase the number of consumers served per Representative and their
    engagement online, to enhance the Representative and consumer experience
    and increase Representative productivity through field activation programs
    and technology tools and enablers, execution of Service Model
    Transformation and other investments in the direct-selling channel, and to
    compete with other direct-selling organizations to recruit, retain and
    service Representatives and to continue to innovate the direct-selling
    model;
  othe impact of the typically seasonal nature of our business, adverse
    effect of rising energy, commodity and raw material prices, 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;
  oour ability to protect our intellectual property rights;
  othe risk of an adverse outcome in any material pending and future
    litigations or with respect to the legal status of Representatives;
  oour ability to comply with certain covenants in our debt instruments,
    including the impact of any significant non-cash impairments, significant
    currency devaluations, or significant legal or regulatory settlements, or
    obtain necessary waivers from compliance with, or necessary amendments to,
    such covenants, and the impact any non-compliance may have on our ability
    to secure financing;
  othe impact of possible pension funding obligations, increased pension
    expense and any changes in pension regulations or interpretations thereof
    on our cash flow and results of operations; and
  othe impact of changes in tax rates on the value of our deferred tax assets
    and declining earnings on our ability to realize foreign tax credits in
    the U.S.

Additional information identifying such factors is contained in Item1A of our
Form 10-Q for the quarterly period ended September 30, 2012 and our Form 10-K
for the year ended December31, 2011. We undertake no obligation to update any
such forward-looking statements.





AVON PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In millions, except per share data)
                 Three Months Ended    Percent  Twelve Months Ended     Percent
                 December 31           Change   December 31             Change
                 2012       2011                2012        2011
Net sales        $ 2,955.7  $ 2,997.9  (1)%     $ 10,546.1  $ 11,112.0  (5)%
Other revenue      43.4       45.8                171.0       179.6
Total revenue      2,999.1    3,043.7  (1)%       10,717.1    11,291.6  (5)%
Cost of sales      1,204.5    1,182.5             4,169.3     4,148.6
Selling, general
and                1,574.9    1,585.3             5,980.0     6,025.4
administrative
expenses
Impairment of
goodwill and       209.0      263.0               253.0       263.0
intangible asset
Operating profit   10.7       12.9     (17)%      314.8       854.6     (63)%
Interest expense   27.5       23.4                104.3       92.9
Interest income    (4.6)      (3.2)               (15.1)      (16.5)
Other (income)     (21.4)     10.0                7.0         35.6
expense, net
Total other        1.5        30.2                96.2        112.0
expenses
Income (loss)
from continuing    9.2        (17.3)   (153)%     218.6       742.6     (71)%
operations,
before tax
Income taxes       (170.3)    17.6                (256.8)     (216.2)
(Loss) income
from continuing    (161.1)    0.3      *          (38.2)      526.4     (107)%
operations, net
of tax
Discontinued
operations, net    -          -                   -           (8.6)
of tax
Net (loss)         (161.1)    0.3                 (38.2)      517.8
income
Net income
attributable to    (1.1)      (0.7)               (4.3)       (4.2)
noncontrolling
interests
Net (loss)
income           $ (162.2)  $ (0.4)    *        $ (42.5)    $ 513.6     (108)%
attributable to
Avon
(Loss) earnings
per share:^(1)
Basic
Basic EPS from
continuing       $ (.37)    $ -        *        $ (.10)     $ 1.20      (108)%
operations
Basic EPS from
discontinued     $ -        $ -                 $ -         $ (.02)
operations
Basic EPS
attributable to  $ (.37)    $ -        *        $ (.10)     $ 1.18      (108)%
Avon
Diluted
Diluted EPS from
continuing       $ (.37)    $ -        *        $ (.10)     $ 1.20      (108)%
operations
Diluted EPS from
discontinued     $ -        $ -                 $ -         $ (.02)
operations
Diluted EPS
attributable to  $ (.37)    $ -        *        $ (.10)     $ 1.18      (108)%
Avon
Weighted-average
shares
outstanding:
Basic              432.1      430.9               431.9       430.5
Diluted            432.1      431.8               431.9       432.1
* Calculation not meaningful

     Under the two-class method, (loss) earnings per share is calculated using
     net (loss) earnings allocable to common shares, which is derived by
     reducing net (loss) earnings by the (loss) earnings allocable to
     participating securities. Net (loss) earnings allocable to common shares
^(1) used in the basic and diluted (loss) earnings per share calculation were
     ($159.2) and ($0.1) for the three months ended December 31, 2012 and
     2011, respectively. Net (loss) earnings allocable to common shares used
     in the basic and diluted (loss) earnings per share calculation were
     ($42.2) and $508.1 for the twelve months ended December 31, 2012 and
     2011, respectively.



AVON PRODUCTS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
                                           December 31  December 31
                                           2012         2011
Assets
Current Assets
Cash and cash equivalents                  $ 1,209.6    $ 1,245.1
Accounts receivable, net                     751.9        761.5
Inventories                                  1,135.4      1,161.3
Prepaid expenses and other                   832.0        930.9
Total current assets                         3,928.9      4,098.8
Property, plant and equipment, at cost       2,711.8      2,708.8
Less accumulated depreciation                (1,161.6)    (1,137.3)
Property, plant and equipment, net           1,550.2      1,571.5
Goodwill                                     374.9        473.1
Other intangible assets, net                 120.3        279.9
Other assets                                 1,408.2      1,311.7
Total assets                               $ 7,382.5    $ 7,735.0
Liabilities and Shareholders' Equity
Current Liabilities
Debt maturing within one year              $ 572.0      $ 849.3
Accounts payable                             920.0        850.2
Accrued compensation                         266.6        217.1
Other accrued liabilities                    661.0        663.6
Sales and taxes other than income            211.4        212.4
Income taxes                                 73.6         98.4
Total current liabilities                    2,704.6      2,891.0
Long-term debt                               2,623.9      2,459.1
Employee benefit plans                       637.6        603.0
Long-term income taxes                       52.0         67.0
Other liabilities                            131.1        129.7
Total liabilities                          $ 6,149.2    $ 6,149.8
Shareholders' Equity
Common stock                               $ 188.3      $ 187.3
Additional paid-in-capital                   2,119.6      2,077.7
Retained earnings                            4,357.8      4,726.1
Accumulated other comprehensive loss         (876.7)      (854.4)
Treasury stock, at cost                      (4,571.9)    (4,566.3)
Total Avon shareholders' equity              1,217.1      1,570.4
Noncontrolling interests                     16.2         14.8
Total shareholders' equity                 $ 1,233.3    $ 1,585.2
Total liabilities and shareholders' equity $ 7,382.5    $ 7,735.0



AVON PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
                                                         Twelve Months Ended
                                                         December 31
                                                         2012       2011
Cash Flows from Operating Activities
(Loss) income from continuing operations, net of tax     $ (38.2)   $  526.4
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization                              229.6       239.6
Provision for doubtful accounts                            251.1       247.2
Provision for obsolescence                                 122.1       128.1
Share-based compensation                                   41.1        36.6
Deferred income taxes                                      (49.2)      (196.6)
Impairment of goodwill and intangible asset                253.0       263.0
Other                                                      35.5        52.7
Changes in assets and liabilities:
Accounts receivable                                        (241.1)     (241.5)
Inventories                                                (89.7)      (210.3)
Prepaid expenses and other                                 58.5        24.6
Accounts payable and accrued liabilities                   84.5        (55.7)
Income and other taxes                                     (28.7)      (50.7)
Noncurrent assets and liabilities                          (72.4)      (107.6)
Net cash provided by operating activities of continuing    556.1       655.8
operations
Cash Flows from Investing Activities
Capital expenditures                                       (228.8)     (276.7)
Disposal of assets                                         15.4        17.1
Purchases of investments                                   (1.5)       (28.8)
Proceeds from sale of investments                          1.2         33.7
Acquisitions and other investing activities                -           (13.0)
Net cash used by investing activities of continuing        (213.7)     (267.7)
operations
Cash Flows from Financing Activities
Cash dividends                                             (329.3)     (403.4)
Debt, net (maturities of three months or less)             (710.5)     635.7
Proceeds from debt                                         735.8       88.9
Repayment of debt                                          (138.3)     (614.6)
Interest rate swap termination                             43.6        -
Proceeds from exercise of stock options                    8.6         16.8
Excess tax benefit realized from share-based               (2.4)       (0.2)
compensation
Repurchase of common stock                                 (8.8)       (7.7)
Net cash used by financing activities of continuing        (401.3)     (284.5)
operations
Net cash used by investing activities of discontinued      -           (1.2)
operations
Net cash used by discontinued operations                   -           (1.2)
Effect of exchange rate changes on cash and equivalents    23.4        (37.2)
Net change in cash and equivalents                         (35.5)      65.2
Cash and equivalents at beginning of year                $ 1,245.1  $  1,179.9
Cash and equivalents at end of period                    $ 1,209.6  $  1,245.1



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
(Unaudited)
(In millions)
THREE MONTHS ENDED 12/31/12
REGIONAL RESULTS
                                                                            Price/Mix                   Average
                        Total Revenue US$       C$           Units Sold      C$         ActiveReps(1)  OrderC$(1)
 $ in Millions
                                    %var.vs   % var. vs    % var. vs 4Q11  % var. vs  % var. vs 4Q11   % var. vs
                                    4Q11        4Q11                         4Q11                        4Q11
Latin America           $  1,330.5  2%          7%                6%           1%       6%               1%
Europe, Middle East &      905.8    1           2                 5            (3)      1                1
Africa
North America              516.2    (12)        (12)              (11)         (1)      (13)             1
Asia Pacific (1)           246.6    (3)         (6)               (9)          3        (8)              2
Total from operations      2,999.1  (1)         1                 2            (1)      1                -
Global and other           -        -           -                 -            -        -                -
Total                   $  2,999.1  (1)%        1%                2%           (1)%     1%               -%
                        2012 GAAP                            2012            2011       2012             2011
                        Operating   % var. vs   2012GAAP    Non-GAAP        Non-GAAP   Non-GAAP         Non-GAAP
                        Profit      4Q11        Operating    Operating       Operating  Operating        Operating
                        (Loss) US$              MarginUS$   ProfitUS$(2)  Profit     Margin (2)       Margin (2)
                                                                             US$ (2)
Latin America           $  136.0    6%          10.2%        $    143.7      $ 134.8    10.8%            10.3%
Europe, Middle East &      131.4    (4)         14.5              131.5        138.7    14.5             15.5
Africa
North America              (201.4)  17          (39.0)            26.6         21.3     5.2              3.6
Asia Pacific              8.8      (64)        3.6               21.8         24.4     8.8              9.6
Total from operations      74.8     57          2.5               323.6        319.2    10.8             10.5
Global and other           (64.1)   (83)        -                 (46.3)       (34.6)   -                -
Total                   $  10.7     (17)%       0.4%         $    277.3      $ 284.6    9.2%             9.4%
CATEGORY SALES (US$)
                                                                               Consolidated
                                                                             US$                         C$
                                                                                        % var. vs 4Q11   % var. vs
                                                                                                         4Q11
Beauty (color                                                                $ 2,109.2  (2)%             1%
cosmetics/fragrances/skincare/personal care)
Fashion                                                                        538.3    (1)              -
(jewelry/watches/apparel/footwear/accessories/children's)
Home (gift & decorative products/housewares/entertainment &                    308.2    -                2
leisure/children's/nutrition)
Net sales                                                                    $ 2,955.7  (1)%             1%
Other revenue                                                                  43.4     (5)              (6)
Total revenue                                                                $ 2,999.1  (1)%             1%
            Beauty
            Category:
            Fragrance                                                                   -%               2%
            Color                                                                       (1)              2
            Skincare                                                                    (5)              (2)
            Personal                                                                    (1)              1
            care
            Asia Pacific's decline in Active Representatives and increase in average order are impacted by the
            transition to a retail compensation model in
(1)         China. Due to this transition, the Active Representatives and average order performance metrics are not a
            relevant indicator of the underlying
            business trends.
            For a further discussion on our Non-GAAP financial measures, please refer to our discussion of Non-GAAP
(2)         financial measures in this release
            and reconciliations of our Non-GAAP financial measures to the related GAAP financial measure in the
            following supplemental schedules.



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
(Unaudited)
(In millions)
TWELVE MONTHS ENDED 12/31/12
REGIONAL RESULTS
        $ in Millions Total Revenue US$          C$          Units      Price/Mix   ActiveReps(1)  Average
                                                             Sold       C$                           OrderC$(1)
                                      %var.vs  % var. vs   % var. vs  % var. vs   % var. vs 12M11  % var. vs
                                      12M11      12M11       12M11      12M11                        12M11
Latin America         $    4,993.7    (3)%       5%            2%         3%        3%               2%
Europe, Middle East &      2,914.2    (7)        (1)           -          (1)       -                (1)
Africa
North America              1,906.8    (8)        (8)           (6)        (2)       (12)             4
Asia Pacific (1)           902.4      (4)        (5)           (7)        2         (9)              4
Total from operations      10,717.1   (5)        -             -          -         (1)              1
Global and other           -          -          -             -          -         -                -
Total                 $    10,717.1   (5)%       -%            -%         -%        (1)%             1%
                      2012 GAAP                              2012       2011        2012             2011
                      Operating       % var. vs  2012GAAP   Non-GAAP   Non-GAAP    Non-GAAP         Non-GAAP
                      Profit (Loss)   12M11      Operating   Operating  Operating   Operating        Operating
                      US$                        MarginUS$  Profit     Profit US$  Margin(2)       Margin (2)
                                                             US$ (2)    (2)
Latin America         $    443.9      (30)%      8.9%        $ 463.5    $ 637.1     9.3%             12.3%
Europe, Middle East &      312.8      (35)       10.7          324.6      484.2     11.1             15.5
Africa
North America              (214.9)    (14)       (11.3)        24.6       99.7      1.3              4.8
Asia Pacific              5.1        (94)       0.6           67.3       81.1      7.5              8.6
Total from operations      546.9      (46)       5.1           880.0      1,302.1   8.2              11.5
Global and other           (232.1)    (53)       -             (187.5)    (144.5)   -                -
Total                 $    314.8      (63)%      2.9%        $ 692.5    $ 1,157.6   6.5%             10.3%
CATEGORY SALES (US$)
                                                                          Consolidated
                                                                        US$                          C$
                                                                                    % var. vs 12M11  % var. vs
                                                                                                     12M11
Beauty (color                                                           $ 7,642.7   (5)%             1%
cosmetics/fragrances/skincare/personal care)
Fashion                                                                   1,891.7   (5)              (2)
(jewelry/watches/apparel/footwear/accessories/children's)
Home (gift & decorative products/housewares/entertainment &               1,011.7   (4)              2
leisure/children's/nutrition)
Net sales                                                               $ 10,546.1  (5)%             -%
Other revenue                                                             171.0     (5)              (3)
Total revenue                                                           $ 10,717.1  (5)%             -%
        Beauty
        Category:
        Fragrance                                                                   (4)%             2%
        Color                                                                       (6)              1
        Skincare                                                                    (7)              (1)
        Personal care                                                               (6)              -
        Asia Pacific's decline in Active Representatives and increase in average order are impacted by the
        transition to a retail compensation model in
(1)     China during the latter half of 2012. Due to this transition, the Active Representative and average order
        performance metrics are not a relevant
        indicator of the underlying business trends.
        For a further discussion on our Non-GAAP financial measures, please refer to our discussion of Non-GAAP
(2)     financial measures in this release
        and reconciliations of our non-GAAP financial measures to the related GAAP financial measure in the
        following supplemental schedules.



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
NON-GAAP FINANCIAL MEASURES
(Unaudited)
This supplemental schedule provides adjusted Non-GAAP financial
information and a quantitative reconciliation
of the difference between the Non-GAAP financial measure and the
financial measure calculated and reported in
accordance with GAAP.
$ in Millions
(except per    THREE MONTHS ENDED 12/31/12
share data)
                          CTI
               Reported   restructuring  Impairment  Venezuelan  Special      Adjusted
               (GAAP)     initiatives    charge      special      tax items     (Non-GAAP)
                                                     items
Cost of        $ 1,204.5  $    1.3       $  -        $   -        $ -         $ 1,203.2
sales
Selling,
general and      1,574.9       56.3         -            -          -           1,518.6
administrative
expenses
Operating        10.7          57.6         209.0        -          -           277.3
profit
Income from
continuing       9.2           57.6         209.0        (23.8)     -           252.0
operations
before taxes
Income           (170.3)       (19.9)       (76.7)       8.1        168.3       (90.5)
taxes
(Loss) income
from           $ (161.1)  $    37.7      $  132.3    $   (15.7)   $ 168.3     $ 161.5
continuing
operations
Diluted EPS
from             (0.37)        0.09         0.31         (0.03)     0.39        0.37
continuing
operations
Gross margin     59.8%         -            -            -          -           59.9%
SG&A as a %      52.5%         (1.9)        -            -          -           50.6%
of revenues
Operating        0.4%          1.9          7.0          -          -           9.2%
margin
Effective        1845.3%       (0.4)        14.1         0.3        (1823.3)    35.9%
tax rate
SEGMENT
OPERATING
PROFIT (LOSS)
Latin America  $ 136.0    $    7.7       $  -                                 $ 143.7
Europe,
Middle East &    131.4         0.1          -                                   131.5
Africa
North America    (201.4)       19.0         209.0                               26.6
Asia Pacific    8.8           13.0         -                                   21.8
Global and       (64.1)        17.8         -                                   (46.3)
other
Total          $ 10.7     $    57.6      $  209.0                             $ 277.3
SEGMENT
OPERATING
MARGIN
Latin America    10.2%         0.6          -                                   10.8%
Europe,
Middle East &    14.5%         -            -                                   14.5%
Africa
North America    (39.0)%       3.7          40.5                                5.2%
Asia Pacific    3.6%          5.3          -                                   8.8%
Global and       -             -            -                                   -
other
Total            0.4%          1.9          7.0                                 9.2%
Amounts in the table above may not necessarily sum
because the computations are made independently.



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
NON-GAAP FINANCIAL MEASURES
(Unaudited)
This supplemental schedule provides adjusted Non-GAAP financial
information and a quantitative reconciliation
of the difference between the Non-GAAP financial measure and
the financial measure calculated and reported in
accordance with GAAP.
$ in Millions
(except per    TWELVE MONTHS ENDED 12/31/12
share data)
                          CTI
               Reported   restructuring  Impairment  Venezuelan  Special   Adjusted
               (GAAP)     initiatives    charges     special     tax       (Non-GAAP)
                                                     items       items
Cost of        $ 4,169.3  $    4.5       $  -        $  -        $ -       $  4,164.8
sales
Selling,
general and      5,980.0       120.2        -           -          -          5,859.8
administrative
expenses
Operating        314.8         124.7        253.0       -          -          692.5
profit
Income from
continuing       218.6         124.7        253.0       (23.8)     -          572.5
operations
before taxes
Income           (256.8)       (42.0)       (76.7)      8.1        168.3      (199.1)
taxes
(Loss) income
from           $ (38.2)   $    82.7      $  176.3    $  (15.7)   $ 168.3   $  373.4
continuing
operations
Diluted EPS
from             (0.10)        0.19         0.40        (0.04)     0.39       0.85
continuing
operations
Gross margin     61.1%         -            -           -          -          61.1%
SG&A as a %      55.8%         (1.1)        -           -          -          54.7%
of revenues
Operating        2.9%          1.2          2.4         -          -          6.5%
margin
Effective        117.5%        (0.3)        (5.5)       0.1        (77.0)     34.8%
tax rate
SEGMENT
OPERATING
PROFIT (LOSS)
Latin America  $ 443.9    $    19.6      $  -                              $  463.5
Europe,
Middle East &    312.8         11.8         -                                 324.6
Africa
North America    (214.9)       30.5         209.0                             24.6
Asia Pacific    5.1           18.2         44.0                              67.3
Global and       (232.1)       44.6         -                                 (187.5)
other
Total          $ 314.8    $    124.7     $  253.0                          $  692.5
SEGMENT
OPERATING
MARGIN
Latin America    8.9%          0.4          -                                 9.3%
Europe,
Middle East &    10.7%         0.4          -                                 11.1%
Africa
North America    (11.3)%       1.6          11.0                              1.3%
Asia Pacific    0.6%          2.0          4.9                               7.5%
Global and       -             -            -                                 -
other
Total            2.9%          1.2          2.4                               6.5%
Amounts in the table above may not necessarily sum
because the computations are made independently.



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
NON-GAAP FINANCIAL MEASURES
(Unaudited)
This supplemental schedule provides adjusted Non-GAAP financial information
and a quantitative reconciliation
of the difference between the Non-GAAP financial measure and the financial
measure calculated and reported in
accordance with GAAP.
$ in Millions (except    THREE MONTHS ENDED 12/31/11
per share data)
                                      CTI
                         Reported     restructuring  Impairment  Adjusted
                         (GAAP)       initiatives    charge      (Non-GAAP)
Cost of sales            $  1,182.5   $    3.0       $  -        $  1,179.5
Selling, general and        1,585.3        5.7          -           1,579.6
administrative expenses
Operating profit            12.9           8.7          263.0       284.6
Income from continuing      (17.3)         8.7          263.0       254.4
operations before taxes
Income taxes                17.6           (2.8)        (96.8)      (82.0)
Income from continuing   $  0.3       $    5.9       $  $166.2   $  172.4
operations
Diluted EPS from            -              0.01         0.38        0.39
continuing operations
Gross margin                61.1%          0.1          -           61.2%
SG&A as a % of              52.1%          (0.2)        -           51.9%
revenues
Operating margin            0.4%           0.3          8.6         9.4%
Effective tax rate          101.7%         -            (69.9)      32.2%
SEGMENT OPERATING PROFIT
(LOSS)
Latin America            $  128.4     $    6.4       $  -        $  134.8
Europe, Middle East &       137.1          1.6          -           138.7
Africa
North America               (241.7)        -            263.0       21.3
Asia Pacific               24.1           0.3          -           24.4
Global and other            (35.0)         0.4          -           (34.6)
Total                    $  12.9      $    8.7       $  263.0    $  284.6
SEGMENT OPERATING
MARGIN
Latin America               9.8%           0.5          -           10.3%
Europe, Middle East &       15.3%          0.2          -           15.5%
Africa
North America               (41.3)%        -            45.0        3.6%
Asia Pacific               9.5%           0.1          -           9.6%
Global and other            -              -            -           -
Total                       0.4%           0.3          8.6         9.4%
Amounts in the table above may not necessarily sum because the
computations are made independently.



AVON PRODUCTS, INC.
SUPPLEMENTAL SCHEDULE
NON-GAAP FINANCIAL MEASURES
(Unaudited)
This supplemental schedule provides adjusted Non-GAAP financial information
and a quantitative reconciliation
of the difference between the Non-GAAP financial measure and the financial
measure calculated and reported in
accordance with GAAP.
$ in Millions (except   TWELVE MONTHS ENDED 12/31/11
per share data)
                                      CTI
                        Reported      restructuring  Impairment  Adjusted
                        (GAAP)        initiatives    charge      (Non-GAAP)
Cost of sales           $  4,148.6    $    11.2      $  -        $  4,137.4
Selling, general and       6,025.4         28.8         -           5,996.6
administrative expenses
Operating profit           854.6           40.0         263.0       1,157.6
Income from continuing     742.6           40.0         263.0       1,045.6
operations before taxes
Income taxes               (216.2)         (13.9)       (96.8)      (326.9)
Income from             $  526.4      $    26.1      $  $166.2   $  718.7
continuing operations
Diluted EPS from           1.20            0.06         0.38        1.64
continuing operations
Gross margin               63.3%           0.1          -           63.4%
SG&A as a % of             53.4%           (0.3)        -           53.1%
revenues
Operating margin           7.6%            0.4          2.3         10.3%
Effective tax rate         29.1%           0.1          2.0         31.3%
SEGMENT OPERATING
PROFIT (LOSS)
Latin America           $  634.0      $    3.1       $  -        $  637.1
Europe, Middle East &      478.9           5.3          -           484.2
Africa
North America              (188.0)         24.7         263.0       99.7
Asia Pacific              81.4            (0.3)        -           81.1
Global and other           (151.7)         7.2          -           (144.5)
Total                   $  854.6      $    40.0      $  263.0    $  1,157.6
SEGMENT OPERATING
MARGIN
Latin America              12.3%           0.1          -           12.3%
Europe, Middle East &      15.3%           0.2          -           15.5%
Africa
North America              (9.1)%          1.2          12.7        4.8%
Asia Pacific              8.6%            -            -           8.6%
Global and other           -               -            -           -
Total                      7.6%            0.4          2.3         10.3%
Amounts in the table above may not necessarily sum because the
computations are made independently.







SOURCE Avon Products, Inc.

Website: http://www.avon.com
Contact: INVESTORS: Amy Low Chasen or Natalija Jovasevic, +1-212-282-5320;
MEDIA: Jennifer Vargas, +1-212-282-5404
 
Press spacebar to pause and continue. Press esc to stop.