Colgate Comments on Venezuelan Currency Devaluation
January 11 2010 - 7:00AM
Business Wire
Regulatory News:
On Friday, January 8, 2010 the Venezuelan government announced
its intention to devalue its currency (Bolivar) and move to a two
tier exchange structure. Although no official rules have yet been
issued, the official exchange rate is expected to move from 2.15 to
2.60 for essential goods and 4.30 for non-essential goods and
services. Colgate’s products are expected to fall into the
non-essential classification.
Effective January 1, 2010, Venezuela has been designated
hyper-inflationary and as such all foreign currency fluctuations
are recorded in income. The Company’s preliminary assessment of the
impact of the devaluation is that the Company will incur a one-time
gain of approximately $60 million ($0.12 per share) in the first
quarter of 2010, related to lower taxes on accrued, but unpaid
remittances from Venezuela and the remeasurement of the local
balance sheet at the date of the devaluation. There will also be
ongoing charges primarily related to the translation of the local
financial statements at the new exchange rate. It is the Company’s
preliminary estimate that these charges will be in the range of
$.04 to $.06 per share per quarter in 2010 to the extent the
Company is able to take actions in Venezuela to mitigate the effect
of the devaluation. The devaluation will not have any impact on the
Company’s 2009 results of operations or financial position.
About Colgate-Palmolive: Colgate-Palmolive is a leading global
consumer products Company, tightly focused on Oral Care, Personal
Care, Home Care and Pet Nutrition. Colgate sells its products in
over 200 countries and territories around the world under such
internationally recognized brand names as Colgate, Palmolive,
Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex,
Tom's of Maine, Ajax, Axion, Fabuloso, Soupline and Suavitel, as
well as Hill's Science Diet and Hill's Prescription Diet. For more
information about Colgate's global business, visit the Company's
web site at http://www.colgate.com.
Cautionary Statement on
Forward-Looking Statements
This press release may contain forward-looking statements. Such
statements may relate, for example, to sales or volume growth,
organic sales growth, profit and profit margin growth, earnings
growth, financial goals, cost-reduction plans, tax rates and new
product introductions. These statements are made on the basis of
our views and assumptions as of this time and we undertake no
obligation to update these statements. We caution investors that
any such forward-looking statements are not guarantees of future
performance and that actual events or results may differ materially
from those statements. Investors should consult the Company's
filings with the Securities and Exchange Commission (including the
information set forth under the captions "Risk Factors" and
"Cautionary Statement on Forward-Looking Statements" in the
Company's Annual Report on Form 10-K for the year ended December
31, 2008) for information about certain factors that could cause
such differences. Copies of these filings may be obtained upon
request from the Company's Investor Relations Department or the
Company's web site at http://www.colgate.com.
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