Praxair will no longer use the Venezuelan government’s official exchange rate of 6.3 bolivars per US dollar to translate the financial statements of its Venezuelan business.
Effective 31 December, 2014, the company has adopted the Venezuelan government’s SICAD II currency exchange system rate of approximately 50 bolivars per US dollar.
As a result of the change, Praxair expects to record in its fourth-quarter 2014 results a charge of about $131m (before and after tax) or $0.45 per diluted share. This charge includes remeasurement of monetary assets and liabilities to the SICAD II rate and related fixed asset impairments and inventory adjustments. The company’s fourth-quarter and full-year 2014 results will include a non-GAAP adjustment to exclude this charge for comparative purposes.
Praxair estimates that the currency devaluation to the SICAD II rate will reduce the company’s full-year 2015 revenues by approximately $100m and diluted earnings per share by about $0.07 as compared to 2014.
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