Colgate Comments on Venezuelan Currency Developments

  Colgate Comments on Venezuelan Currency Developments

Business Wire

NEW YORK -- February 18, 2014

In late January 2014, the Venezuelan government made several announcements
affecting currency exchange and other controls. Although the official exchange
rate remains at 6.30 bolivares fuerte per dollar, the government announced
that the exchange rate for foreign investments will move to the rate available
on the SICAD (Supplementary System for the Administration of Foreign Currency)
currency market, which in the last auction was 11.70 bolivares fuerte per
dollar. While there is considerable uncertainty as to the nature of
transactions that will flow through SICAD and how SICAD will operate in the
future, effective with the quarter ending March 31, 2014, the Company expects
that the majority of Colgate’s Venezuelan subsidiary’s (CP Venezuela) net
monetary assets will be remeasured at the SICAD rate since that is the rate
the Company now believes, based on the advice of legal counsel, will be
applicable for future dividend remittances. In addition, because the official
exchange rate remains at 6.30 bolivares fuerte per dollar, the Company
currently expects that the devaluation-protected bonds issued by the
Venezuelan government and held by CP Venezuela will not revalue at the rate
available on the SICAD currency market but will remain at the official rate.
If the SICAD rate were to remain at 11.70 during the quarter ending March 31,
2014, the Company estimates it would incur a one-time aftertax loss of
approximately $180 million - $200 million, or $0.19 - $0.21 per share.

Because the SICAD market is auction-based and auctions are held periodically
during each quarter, the exchange rate available through SICAD may vary
throughout the year which would cause additional remeasurements of CP
Venezuela’s local currency-denominated net monetary assets and further impact
CP Venezuela’s ongoing results.

Although, as described above, there is considerable uncertainty with respect
to the implementation of the SICAD rate, the Company anticipates that there
also will be ongoing impacts primarily related to the translation of the local
financial statements and, to a lesser degree, the import of materials at the
new exchange rate. While it is still unclear, the Company believes that some
of its imports may still qualify for the official rate of 6.30 bolivares
fuerte per dollar. Based on this assumption and the SICAD rate at the most
recent 11.70 bolivares fuertes per dollar, the Company preliminarily estimates
that the ongoing impacts during 2014 would be in the range of $0.11 - $0.14
per share for the year and $0.03 - $0.04 per share in the first quarter.

As part of the January 2014 announcements, the Venezuelan government also
issued a new Law on Fair Pricing, establishing a maximum profit margin of 30%.
At this time, it is unclear based on the current regulations how this new law
may affect CP Venezuela and its current pricing structure and, as a result,
its impact is not included in the range of estimated ongoing impacts outlined
above.

About Colgate-Palmolive (NYSE:CL): 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, 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, Hill’s Prescription
Diet and Hill’s Ideal Balance. 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 contains forward-looking statements. Such statements may
relate, for example, to earnings growth, financial goals or the impact of
currency devaluations, exchange controls, price controls and labor unrest,
including in Venezuela. 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, 2012) 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.

Contact:

Colgate-Palmolive
Bina Thompson, 212-310-3072
or
Hope Spiller, 212-310-2291
 
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