GM (GM) Sees $400M Remeasurement Charge on Venezuelan Bolivar Adjustment
Get Alerts GM Hot Sheet
Join SI Premium – FREE
General Motors (NYSE: GM) disclosed the following today:
Previously we utilized the official exchange rate of Bolivar Fuerte (BsF) 6.3 to $1.00 set by the Venezuelan government for remeasuring the net assets of our Venezuelan subsidiaries. Effective March 31, 2014 we are changing the exchange rate we use for remeasuring these amounts to the rate determined by an auction process conducted by Venezuela’s Complimentary System of Foreign Currency Administration (“SICAD I”). At March 31, 2014 the SICAD I exchange rate was BsF 10.7 to $1.00.
This change in exchange rate was made as we believe the SICAD I rates are the most representative rates to be used for remeasurement, as the official rate of BsF 6.3 to $1.00 will increasingly be reserved only for the settlement of USD-denominated obligations related to purchases of “essential goods and services” and future dividends will likely not be paid at the official rate. The net assets of our Venezuelan subsidiaries may be impacted by periodic auctions in SICAD I rates which may have a material impact to the results of operations in Venezuela in future quarters.
We expect this change in exchange rate to result in a pre-tax remeasurement charge of approximately $400 million in the three months ended March 31, 2014. The remeasurement charge will be treated as special for EBIT-adjusted reporting purposes.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- USCB Financial Holdings (USCB) Reports Q1, Announces 500K Share Buyback
- Gilead Sciences (GILD) Misses Q1 EPS by 288c
- General Motors (GM) PT Raised to $55 at Wedbush
Create E-mail Alert Related Categories
Corporate News, Forex, GuidanceRelated Entities
DividendSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!