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Venezuela
12 Months Ended
Dec. 31, 2015
Foreign Currency [Abstract]  
Venezuela
Venezuela

Effective December 31, 2015, the Company began accounting for its Venezuelan operations using the cost method of accounting and as a result its Consolidated Balance Sheet no longer includes the assets and liabilities of CP Venezuela. As a result of this change in accounting, the Company recorded an aftertax charge of $1,058 ($1,084 pretax) or $1.16 per diluted share in 2015. The charge primarily consists of an impairment of the Company’s investment in CP Venezuela of $952, which includes intercompany receivables from CP Venezuela, and $111 related to the reclassification of cumulative translation losses.

The restrictive exchange control regulations in Venezuela and CP Venezuela’s increasingly limited access to U.S. dollars have resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and the U.S. dollar. This lack of exchangeability, together with other government controls on pricing, payments, profits and imports and restrictive labor laws, have significantly impacted the Company’s ability to make key operational decisions over CP Venezuela, including the ability to manage its capital structure, material sourcing, product pricing and labor relations. The Company expects these conditions will continue for the foreseeable future. As a result, the Company concluded that, effective December 31, 2015, it did not meet the accounting criteria for consolidation of CP Venezuela and began accounting for CP Venezuela using the cost method of accounting.

In future periods, under the cost method of accounting, the Company will no longer include the results of CP Venezuela in its Consolidated Financial Statements and will include income relating to CP Venezuela only to the extent it receives cash for sales of inventory to CP Venezuela or for dividends or royalties remitted by CP Venezuela. Although CP Venezuela’s local operating results will no longer be included in the Company’s Consolidated Financial Statements for accounting purposes, under current tax rules, the Company is required to continue including CP Venezuela in its consolidated U.S. federal income tax return.

In February 2015, the Venezuelan government implemented changes in Venezuela’s foreign exchange regime. While the official exchange rate, as determined by the National Center for Foreign Commerce (“CENCOEX”), remained at 6.30 bolivares per dollar, and the SICAD I (Supplementary System for the Administration of Foreign Currency) currency market, now known as SICAD, was unchanged, the SICAD II market was eliminated and a new, alternative currency market, the Foreign Exchange Marginal System (“SIMADI”), was created and became operational with a floating exchange rate determined by market participants. CP Venezuela has funded its requirements for imported goods through a combination of U.S. dollars obtained from CENCOEX and intercompany borrowings. Although access to U.S. dollars in Venezuela has been challenging, because the majority of the products in CP Venezuela’s portfolio have been designated as “essential” by the Venezuelan government, historically CP Venezuela’s access to U.S. dollars at the official rate of 6.30 bolivares per dollar was generally sufficient to settle most of its U.S. dollar obligations for imported goods. However, CP Venezuela’s access to U.S. dollars to fund imports became increasingly more limited and sporadic in 2015 and deteriorated even further during the fourth quarter of 2015. Although the SIMADI market has been accessible to CP Venezuela, it did not participate in that market through December 31, 2015. Since its inception, the volume of transactions in the SIMADI market as a whole has been very limited, and the exchange rate at December 31, 2015 was 198.70 bolivares per dollar. Since the majority of CP Venezuela’s product portfolio is subject to price controls, it could not operate profitably without substantial price increases approved by the government if it had to pay for imported materials with U.S. dollars obtained from the SIMADI market.

Prior to the change in accounting for the Company’s Venezuelan operations, which was effective December 31, 2015, the functional currency for CP Venezuela was the U.S. dollar since Venezuela had been designated hyper-inflationary and Venezuelan currency fluctuations were reported in income. The Company remeasured the financial statements of CP Venezuela at the end of each month at the rate at which it expected to remit future dividends which, based on the advice of legal counsel, was the SICAD rate. During the year ended December 31, 2015, the Company incurred pretax losses of $34 ($22 aftertax or $0.02 per diluted common share) related to the remeasurement of CP Venezuela’s local currency-denominated net monetary assets at the quarter-end SICAD rate for the second and third quarters of 2015. The quarter-end SICAD rate was 12.00 bolivares per dollar, 12.80 bolivares per dollar, 13.50 bolivares per dollar and 13.50 bolivares per dollar as of the end of the first, second, third and fourth quarters of 2015, respectively.

During the year ended December 31, 2014, the Company incurred net pretax losses of $327 ($214 aftertax or $0.23 per diluted common share) related to the remeasurement of CP Venezuela’s local currency-denominated net monetary assets at the quarter-end SICAD I rate for each of the first three quarters of 2014. The SICAD I rate did not revalue during the fourth quarter of 2014 and remained at 12.00 bolivares per dollar as of December 31, 2014.

During the year ended December 31, 2013, the Company incurred a pretax loss of $172 ($111 aftertax or $0.12 per diluted common share) related to the remeasurement of CP Venezuela’s local currency-denominated net monetary assets as a result of the devaluation that changed the official exchange rate from 4.30 to 6.30 bolivares per dollar.

Included in the remeasurement losses during 2015 and 2014 were charges related to the devaluation-protected bonds issued by the Venezuelan government and held by CP Venezuela. Because the official exchange rate remained at 6.30 bolivares per dollar, the devaluation-protected bonds did not revalue at the SICAD rate but remained at the official exchange rate, resulting in an impairment in the fair value of the bonds.