Avon Products, Inc. (Avon), incorporated in January 1916, is a global manufacturer and marketer of beauty and related products. Avon's products fall into three product categories: Beauty, which consists of cosmetics, fragrances, skin care and toiletries (CFT); Beauty Plus, which consists of fashion jewelry, watches, apparel and accessories, and Beyond Beauty, which consists of home products, gift and decorative products, candles and toys. Avon has sales operations in 60 countries or territories, including the United States, and distributes its products in 62 more.

During the year ended December 31, 2003, Avon launched in the United States a new global cosmetics brand, focusing on the market for young women. The brand name is mark. and the product line is targeted to young women in the 16 to 24 age group. Mark. is sold both through the Company's core group of representatives and a separate mark. sales force.

Sales are made to the ultimate customer principally through a combination of direct selling and marketing by approximately 4.9 million active independent Avon Representatives, approximately 483,000 of who are in the United States. Representatives are independent contractors or independent dealers, who are not employees of Avon. Representatives generally purchase products at a discount from the brochure price directly from Avon and sell them to their customers. The Representatives are typically the customers of Avon and Avon generally has no arrangement with any end user of its product beyond the Representative.

A Representative contacts customers, selling primarily through brochures that highlight new products and specially priced items for each sales campaign. Sales campaigns are generally for two-week duration in the United States and two-to-four week duration for most markets outside the United States. Product samples, demonstration products and selling aids, such as make-up color charts are also used.

Avon's international operations are conducted primarily through subsidiaries in 59 countries or territories outside the United States and Avon's products are distributed in some 62 other countries. Avon manufactures and packages almost all of its CFT products. Raw materials, consisting chiefly of essential oils, chemicals, containers and packaging components, are purchased from various suppliers. In addition, Avon produces the brochures that are used by the Representatives to sell Avon products. Packages, consisting of containers and packaging components, are designed by its staff of artists and designers. Avon had 14 manufacturing facilities around the world during the year ended December 31, 2004.

In 2004, Avon's most significant product launches included Anew Clinical Deep Crease Concentrate, an at-home alternative to line-relaxing injections, is a targeted treatment that relaxes and fills expression lines, and TodayTomorrowAlways, a beautiful feminine fragrance, and the first in a trilogy of collectible scents. In 2004, Avon Color V was launched globally, anchored by the launch of My Lip Miracle, one lipstick that offers the three benefits of long wear, moisture, color and shine.