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Note of Clarification - Earnings Release 4Q08
Kroton Educacional, in accordance with its transparency and corporate governance standards, hereby clarifies its policy for provisioning for doubtful accounts and corrects the annex disclosed today in its quarterly earnings release.
- Historically the company has maintained a policy of provisioning up to 4% of its net revenue in its post-secondary education operations for doubtful accounts and up to 1.5% of its net revenue in the primary and secondary education operations.
- The provisions constituted in recent years have been at percentages below these levels.
- In 2008, Kroton’s consolidated provisioning stood at 2% of the company’s net revenue, down 0.4 percentage point in relation to 2007.
- We corrected the quarterly earnings release disclosed: the correct value of the provision for doubtful accounts in 4Q08 was actually R$1.5 million, and not the disclosed figure of R$3.9 million. Our provision for doubtful accounts as a percentage of net revenue was actually 2.2%, and not 5.7%.
- Accordingly, our provision for doubtful accounts in the quarter fell from 3% of the company’s net revenue in 4Q07 to 2.2% of net revenue in 4Q08, not the 5.7% disclosed in the quarterly earnings release.
- Our selling expenses (which includes the provision for doubtful) in the quarter were R$6.9 million, or 10.2% as a percentage of net revenue, representing an improvement of 3.7 percentage points from the 13.9% of net revenue in 4Q07.
- The correction does not affect the total amounts of Kroton’s financial statements for fiscal year 2008 once the amounts of selling expenses and provisions for doubtful accounts are consolidated.
Data for our selling expenses and provision for doubtful accounts in 2008 are shown below:
The company resubmitted its results to the Securities and Exchange Commission of Brazil (CVM) with the corrected numbers described above, and the revised version of the earnings release is already available on the company‘s website: www.kroton.com.br/ir
For further information, please contact:
Investor Relations - Kroton Educacional
Alícia Maria Gross Figueiró Pinheiro
Vice-Chairman Executive and IRO
Phone: +55 (31) 3297-2213
E-mail: dri@kroton.com.br
Thiago Ribas
IR Manager
Phone: +55 (31) 2126-0837
E-mail: thiagorb@kroton.com.br
Phillipe Casale
IR Analyst
Phone: +55 (31) 2126-0899
E-mail: phillipec@kroton.com.br
Fax: +55 (31) 3297-4983
www.kroton.com.br/ir
To access the PDF, please click here.