NEW YORK--(BUSINESS WIRE)--
On Friday, February 8, 2013 the Venezuelan government announced its
intention to devalue its currency (bolivar fuerte). Although no official
rules have yet been issued, the official exchange rate is expected to
move from 4.30 to 6.30 per dollar, effective with the publishing of the
next Official Gazette on February 13, 2013.
It was also announced that the currency market administered by the
central bank known as SITME that traded at 5.30 bolivar fuertes per
dollar will be eliminated. As previously disclosed, under applicable
regulations the Company's Venezuelan subsidiary was not permitted to
access this currency market. Since 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 aftertax loss of approximately
$120 million ($0.25 per share) in the first quarter of 2013, related to
the remeasurement of the local balance sheet at the date of the
devaluation.
There will also be ongoing impacts primarily related to the translation
of the local financial statements at the new exchange rate. It is the
Company's preliminary estimate that these impacts will be in the range
of $0.05 to $0.07 per share per quarter in 2013 taking into account both
the Company's ability to take actions in Venezuela and elsewhere to
mitigate the effect of the devaluation and ongoing price control
regulations in Venezuela.
The devaluation will not have any impact on the Company's 2012 results
of operations or financial position.
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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, Speed Stick, Lady Speed Stick,
Softsoap, Irish Spring, Protex, Sorriso, Kolynos, elmex, Tom's of Maine,
Sanex, 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.colgatepalmolive.com.
To learn more about Colgate Bright Smiles, Bright Futures® oral health
education program, please visit http://www.colgatebsbf.com.
CL-E
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 or profit margin growth, earnings growth, financial
goals, the impact of currency devaluations, exchange controls, price
controls and labor unrest, including in Venezuela, cost-reduction plans
including the 2012 Restructuring Program, tax rates, new product
introductions or commercial investment levels. 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 caption "Risk Factors" in the Company's Annual Report on
Form 10-K for the year ended December 31, 2011) 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 on the Company's web site at http://www.colgatepalmolive.com.
Colgate-Palmolive Company
Bina Thompson, 212-310-3072
or
Hope
Spiller, 212-310-2291
Source: Colgate-Palmolive Company
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