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VENEZUELA CURRENCY MATTERS (Notes)
3 Months Ended
Mar. 31, 2014
VENEZUELA CURRENCY MATTERS [Abstract]  
Venezuela Currency Matters
                           VENEZUELA CURRENCY MATTERS
 
During the first quarter of 2014, the Venezuelan government enacted changes affecting the country’s currency exchange and other controls. In late January 2014, the government announced the replacement of the Commission for the Administration of Foreign Exchange (“CADIVI”) with a new foreign currency administration, the National Center for Foreign Commerce (“CENCOEX”). In conjunction with this replacement, CENCOEX assumed control of the sale and purchase of foreign currency in Venezuela, and has maintained the official exchange rate of 6.3 Bolivares Fuertes (“VEF”) to 1.0 U.S. dollar (“USD”) (the “Official Rate”). Entities can continue to seek approval to transact through the CENCOEX mechanism at the Official Rate, which is honored for certain priority transactions.

Additional changes in January expanded the types of transactions that may be subject to the weekly auction mechanism under the Complimentary Currency Administration System (“SICAD I”), which had a published rate of 10.7 VEF to 1.0 USD as of March 31, 2014. We concluded that among other items, future inter-company dividend remittances qualify for the purchase of foreign currency at the SICAD I rate under the revised law. As such, we adopted the SICAD I rate for purposes of remeasuring the net monetary assets of our Venezuelan subsidiary effective February 28, 2014. The net impact of this adoption was a loss of $4.0 million, which was recognized in our Statement of Earnings as a component of other expenses - net. Because the SICAD I auction rate is a floating rate, the potential exists for additional financial impacts if the auction rate changes significantly. For the year ended December 31, 2013, net sales from our Venezuelan subsidiary represented approximately 2% of total Company net sales. As of March 31, 2014, our subsidiary had approximately $7 million of net monetary assets.

In February 2014, the Venezuelan government announced plans for the Alternative Foreign Exchange System (“SICAD II”), which is intended to more closely resemble a market-driven exchange. SICAD II became effective on March 24, 2014, with a closing rate of 50.9 VEF to 1.0 USD as of March 31, 2014. We continue to monitor SICAD II developments and any related regulatory developments, but currently do not plan to attempt to access the SICAD II exchange.