RYE, N.Y., April 16 /PRNewswire-FirstCall/ -- Jarden Corporation today announced that it has filed a Form 8-K with the Securities and Exchange Commission (the "SEC") that addresses the impact of recent interim guidance provided by the SEC staff regarding foreign currency issues in Venezuela. The text of the Form 8-K reads as follows:
"Item 8.01. Other Events.
As described in Note 1 to the Company's Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2009, there were two events subsequent to December 31, 2009 that impacted the Company's subsidiary in Venezuela. The first event was the designation, effective January 1, 2010, of Venezuela as a hyper-inflationary economy. The second event, announced on January 8, 2010, was the decision by the Venezuelan government to devalue its currency and implement a two-tier official exchange rate structure.
Following guidance provided by the staff of the Securities and Exchange Commission ("SEC") on March 18, 2010, the Company will change its accounting retroactive to January 1, 2010 related to the conversion of Venezuela to hyper-inflationary status, as more fully described below.
As a result of Venezuela having been designated as hyper-inflationary effective January 1, 2010, the functional currency of the Company's subsidiary in Venezuela changed from the Venezuelan bolivar to the U.S. dollar. Prior to the SEC staff's guidance, with the concurrence of its auditors and in accordance with the accounting guidance in effect at the time, the Company recorded a cumulative translation adjustment of approximately $56 million to equity through "Accumulated other comprehensive income (loss)" relating to U.S. dollar denominated assets and liabilities that previously had been remeasured into Venezuelan bolivars at the parallel market rate and then translated for financial reporting purposes at the official rate.
In its recent guidance, the SEC staff indicated that as part of the conversion to hyper-inflationary status in Venezuela, any differences that had previously arisen from the remeasurement of U.S. dollar-denominated assets and liabilities at the parallel rate and their subsequent translation for financial reporting purposes at the official rate should now be recognized in the income statement. In accordance with this new guidance, the Company will retroactively change its accounting, with the result that the $56 million adjustment referred to above that was originally recorded through equity as of January 1, 2010 will now be recorded as a one-time charge against earnings in the Company's Consolidated Financial Statements as of and for the quarter ending March 31, 2010.
The SEC staff's guidance pertains only to the accounting for the impact of Venezuela converting to hyper-inflationary status and does not affect the Company's previously disclosed preliminary estimate of the impact of the devaluation, which is approximately $22 million, nor will it affect the Company's reported non-GAAP adjusted net income for the quarter, which excludes such non-recurring items.
Cautionary Statement on Forward-Looking Statements
This current report on Form 8-K contains forward-looking statements relating to the impact of the designation of Venezuela as hyper-inflationary and the devaluation of its currency. 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, 2009) 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 the Company's web site at http://www.jarden.com/."
About Jarden Corporation
Jarden Corporation is a leading provider of niche consumer products. Jarden operates in three primary business segments through a number of well recognized brands, including: Outdoor Solutions: Abu Garcia®, Berkley®, Campingaz® and Coleman®, Fenwick®, Gulp!®, K2®, Marker®, Marmot®, Mitchell®, Penn®, Rawlings®, Shakespeare®, Stearns®, Stren®, Trilene®, Volkl® and Zoot®; Consumer Solutions: Bionaire®, Crock-Pot®, FoodSaver®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rival®, Seal-a-Meal®, Sunbeam®, VillaWare® and White Mountain®; and Branded Consumables: Ball®, Bee®, Bicycle®, Billy Boy®, Crawford®, Diamond®, Dicon®, First Alert®, Forster®, Hoyle®, Kerr®, Lehigh®, Leslie-Locke®, Loew Cornell®, Mapa®, NUK®, Pine Mountain® and Spontex®. Headquartered in Rye, N.Y., Jarden has over 24,000 employees worldwide. For more information, please visit http://www.jarden.com/.
Jarden Corporation
CONTACT: Paul J. Warburg, Vice President, Finance, +1-914-967-9400; or
for Investor Relations: Erica Pettit or for Press: Evan Goetz or Melissa
Kahaly, all of FD, +1-212-850-5600, all for Jarden Corporation
Web Site: http://www.jarden.com/
