1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTER ENDED September 30, 1999
COMMISSION FILE NUMBER 1-13397
CORN PRODUCTS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-3514823
(I.R.S. Employer Identification Number)
6500 SOUTH ARCHER AVENUE,
BEDFORD PARK, ILLINOIS 60501-1933
(Address of principal executive offices) (Zip Code)
(708) 563-2400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter periods that
the registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days:
Yes X No
--- ---
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT OCTOBER 29, 1999
Common Stock, $.01 par value 37,243,568 SHARES
10Q-1
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PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CORN PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
September 30, September 30,
--------- --------- --------- ---------
1999 1998 1999 1998
--------- --------- --------- ---------
Net sales $ 444.6 $ 359.5 $ 1,282.5 $ 1,065.3
Cost of sales 367.3 315.3 1,064.5 942.2
------- ------- --------- ---------
Gross profit 77.3 44.2 218.0 123.1
Operating expense 34.0 24.2 97.6 71.6
(Fees and income) from unconsolidated (2.1) (3.5) (4.4) (10.4)
affiliates
------- ------- --------- ---------
Operating income 45.4 23.5 124.8 61.9
Financing costs 9.2 3.2 24.8 10.7
------- ------- --------- ---------
Income before taxes 36.2 20.3 100.0 51.2
Provision for income taxes 12.7 7.1 35.0 18.0
------- ------- --------- ---------
23.5 13.2 65.0 33.2
Minority stockholder interest 0.9 0.6 4.8 1.9
------- ------- --------- ---------
Net income 22.6 12.6 60.2 31.3
======= ======= ========= =========
Average common shares outstanding:
Basic 37.2 35.7 37.3 35.7
Diluted 37.3 35.8 37.4 35.9
Net income per common share
Basic 0.61 0.35 1.61 0.87
Diluted 0.61 0.35 1.61 0.87
See Notes To Condensed Consolidated Financial Statements
10Q-2
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PART I FINANCIAL INFORMATION
ITEM I FINANCIAL STATEMENTS
CORN PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF:
(IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS) SEPTEMBER 30, DECEMBER 31,
1999 1998
(UNAUDITED)
----------- ---------
ASSETS
Current Assets
Cash and cash equivalents $ 51 $ 36
Accounts receivable - net 237 224
Inventories 174 175
Prepaid expenses 7 6
Deferred tax asset 24 24
------- -------
TOTAL CURRENT ASSETS 493 465
------- -------
Plants and properties - net 1,266 1,298
Goodwill, net of accumulated amortization 158 129
Investments in joint ventures 26 28
Other assets 28 26
------- -------
TOTAL ASSETS $ 1,971 $ 1,946
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short term borrowings and current portion of long-term debt 138 250
Accounts payable 86 96
Accrued liabilities 89 59
------- -------
TOTAL CURRENT LIABILITIES 313 405
------- -------
Non-current liabilities 60 63
Long - term debt 325 154
Deferred taxes on income 182 180
Minority stockholders' interest 91 91
STOCKHOLDERS' EQUITY
Preferred stock - authorized 25,000,000 shares-
$0.01 par value none issued -- --
Common stock - authorized 200,000,000 shares-
$0.01 par value - 37,659,887 and 37,611,396
issued and outstanding on September 30, 1999 and
December 31, 1998, respectively 1 1
Additional paid in capital 1,066 1,066
Less: Treasury stock (common stock; 411,504 and 51,374 shares on (11) (1)
September 30, 1999 and December 31, 1998, respectively)
at cost
Deferred compensation - restricted stock (2) (2)
Accumulated comprehensive loss (141) (48)
Retained earnings 87 37
------- -------
TOTAL STOCKHOLDERS' EQUITY 1,000 1,053
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,971 $ 1,946
======= =======
See Notes To Condensed Consolidated Financial Statements
10Q-3
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PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CORN PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN MILLIONS) THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1999 1998 1999 1998
-------- -------- -------- -------
Net Income $ 23 $ 13 $ 60 $ 31
Comprehensive loss:
Currency translation adjustment (16) (9) (93) (20)
---- ---- ---- ----
Comprehensive income (loss) $ 7 $ 4 $(33) $ 11
==== ==== ==== ====
CORN PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(IN MILLIONS) COMMON ADDITIONAL TREASURY ACCUMULATED RETAINED
STOCK PAID-IN STOCK COMPREHENSIVE EARNINGS
CAPITAL LOSS
-------- ---------- ---------- ------------- ----------
Balance, December 31, 1998 $ 1 $1,066 $ (1) $ (48) $ 37
Net income for the period 60
Dividends declared (10)
Purchase of treasury stock (10)
Translation adjustment (93)
------ ------ ------ ------ ------
Balance, September 30, 1999 $ 1 $1,066 $ (11) $ (141) $ 87
====== ====== ====== ====== ======
See Notes To Condensed Consolidated Financial Statements
10Q-4
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PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CORN PRODUCTS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS) FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
---------- ----------
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES
Net income $ 60 $ 31
Non-cash charges (credits) to net income:
Depreciation and amortization 86 71
Deferred taxes 7 24
Other - net -- 5
Equity in earnings of unconsolidated affiliates -- (3)
Changes in trade working capital:
Accounts receivable, prepaid items, and other assets (25) (50)
Inventories (3) (21)
Accounts payable and accrued liabilities 21 4
----- -----
Net cash flows from operating activities 146 61
----- -----
CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES:
Capital expenditures paid, net of proceeds on disposal (102) (49)
Cash consideration paid for acquired business (75) --
Investments in and loans to unconsolidated affiliates -- 60
----- -----
Net cash flows from (used for) investing activities (177) 11
----- -----
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES:
Payments on short term borrowings, net of proceeds (136) (103)
Proceeds from note issuance 198 --
Dividends paid (9) (3)
Cost of common stock repurchased (10) --
Change in non-current liabilities 7 --
----- -----
Net cash flows from (used for) financing activities 50 (106)
----- -----
Increase (decrease) in cash and cash equivalents 19 (34)
Effect of exchange rates on cash (4) --
Cash and cash equivalents, beginning of period 36 85
----- -----
Cash and cash equivalents, end of period $ 51 $ 51
===== =====
See Notes to Condensed Consolidated Financial Statements
10Q-5
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CORN PRODUCTS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The unaudited condensed consolidated interim financial statements included
herein were prepared by management and reflect all adjustments (consisting
solely of normal recurring items) which are, in the opinion of management,
necessary to present a fair statement of results of operations for the interim
periods ended September 30, 1999 and 1998 and the financial position as of
September 30, 1999 and December 31, 1998. The results for the three months
ended September 30, 1999 are not necessarily indicative of the results expected
for the year.
References to "the Company" are to Corn Products International, Inc. and its
consolidated subsidiaries. These statements should be read in conjunction with
the consolidated financial statements and the related footnotes to these
statements contained in the Company's Annual Report to Stockholders that were
incorporated by reference in Form 10-K for the fiscal year ended December 31,
1998.
2. INVENTORIES ARE SUMMARIZED AS FOLLOWS: September 30, December 31,
------------- ------------
1999 1998
(in millions) ------------- ------------
Finished and in process......................... $ 74 $110
Raw materials .................................. 72 43
Manufacturing supplies ......................... 28 22
---- ----
Total Inventories .............................. $174 $175
==== ====
3. FINANCIAL INSTRUMENTS
COMMODITIES
Following the Company's policy of hedging its margin exposure to firm priced
business, it had open corn futures contracts of $150 million for delivery of
corn beyond September 30, 1999. Of the total commitment, $36 million is due in
December 1999, $60 million is due in March 2000, and $54 million is due May
2000 through December 2000. At September 30, 1999, the price of corn under
these contracts was $9 million above market quotations of the same date.
4. FINANCING ARRANGEMENTS
In July 1999, the Company filed a shelf registration with the Securities and
Exchange Commission for borrowings up to $600 million. Under this filing, the
Company issued, on August 23, 1999, $200 million of 8.45% senior notes maturing
in 2009. Proceeds from the issuance were used for general corporate purposes.
10Q-6
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5. SUPPLEMENTAL GEOGRAPHIC INFORMATION
The Company operates in one business segment - Corn Refining - and is
managed on a geographic regional basis. Its North America Operations include its
wholly owned Corn Refining businesses in the United States and Canada and
majority ownership in Mexico. Its Rest of World businesses include primarily 100
percent owned Corn Refining operations in South America and Asia, and joint
ventures and alliances in Asia, Africa and other areas. Also included in this
group is its North American enzyme business.
TABLE OF GEOGRAPHIC INFORMATION OF NET SALES AND OPERATING INCOME
(UNAUDITED)
(in millions ) THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1999 1998 1999 1998
-------- -------- ---------- ----------
NET SALES
North America $ 316.2 $ 224.7 $ 902.1 $ 660.4
Rest of the World 128.4 134.8 380.4 404.9
-------- -------- -------- -------
Total $ 444.6 $ 359.5 $ 1,282.5 $ 1,065.3
======== ======== ======== =======
Operating Income
North America 28.6 6.3 74.4 11.1
Rest of the World 20.8 19.3 61.0 57.8
Corporate (4.0) (2.1) (10.6) (7.0)
-------- -------- -------- -------
Total $ 45.4 $ 23.5 $ 124.8 $ 61.9
======== ======== ======== =======
10Q-7
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ITEM 2
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1999
WITH COMPARATIVES FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1998
RESULTS OF OPERATIONS
NET SALES. Third quarter 1999 Net Sales totaled $444.6 million, up 24
percent over comparable 1998 sales of $359.5 million. Volumes were up 33
percent with the addition of sales from the acquired companies in Mexico and
Korea. Sales from these acquisitions contributed 30 percent. Lower currency
exchange rates throughout the world resulted in an 11 percent reduction in
revenues while improved price/mix added 2 percent. For the nine months, Net
Sales grew 20 percent to $1,282.5 million from $1,065.3 million in 1998.
Volumes were up 30 percent with the addition of sales from the acquired
companies in Mexico and Korea. Sales from these acquisitions contributed
29 percent. Lower currency exchange rates throughout the world resulted in
a 10 percent reduction in revenues while improved price/mix added 1 percent.
North American Net Sales were up 41 percent in the three months ended
September 30, 1999, from the same quarter last year with increased volumes
contributing 45 percent. Excluding the addition from the full consolidation of
the Mexican business, 1999 third quarter Net Sales were 1 percent higher than
the comparable period last year. This reflected the effect of 4 percent lower
prices following lower corn costs, offset by a 5 percent increase from higher
volumes. Year to date, North American sales grew 37 percent over last year,
reflecting the addition of the Mexican acquisition. Excluding the Mexican
acquisition, Net Sales were 3 percent lower than last year, reflecting 5
percent lower prices following lower corn costs and a 2 percent increase in
volumes.
Rest of the World third quarter 1999 Net Sales were down 5 percent
from the third quarter of 1998 as lower exchange rates, mostly related to the
devaluation of the Brazilian $real, Colombian peso, and Pakistani rupee,
reduced U.S. dollar sales by 29 percent. Overall, higher volumes contributed 12
percent to Net Sales while local currency price/mix added 12 percent. Excluding
Korea, increased volumes added 1 percent to Net Sales as strong gains made by
Pakistan, Malaysia and Kenya offset a 1 percent decline in South America. For
the nine months ended September 30, 1999, Net Sales were 6 percent lower than
last year, due primarily to effects of currency devaluation, principally
Brazil, Colombia, and Pakistan, which reduced sales by 27 percent. Excluding
the Korean acquisition, higher volumes added 1 percent while local currency
price increases added 9 percent.
COST OF SALES AND OPERATING EXPENSES. Costs of Sales for the third
quarter of 1999 were up 16 percent over the comparable quarter last year, well
below the 24 percent increase in volumes, as gross corn costs declined and we
continued to achieve improved operating efficiencies. Gross Profits for the
quarter increased 75 percent from the third quarter 1998 to $77.3 million,
reflecting an improvement in the Gross Profit Margin to 17 percent of Net Sales
from 12 percent in 1998. Lower net corn costs in North America contributed to
improved margins. Year to date, Cost of Sales were up 13 percent over 1998 on a
20 percent increase in volumes. Gross Profit improved 77 percent to $218
million from $123.1 million in 1998 as the Gross Profit Margin increased to 17
percent of Net Sales from 12 percent. The
10Q-8
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improvement in the Gross Profit Margin is attributable to North America and
reflects lower corn costs and manufacturing expense.
Operating Expenses for the quarter ended September 30, 1999, totaled
$34 million, a 40 percent increase over the comparable period in 1998,
reflecting the inclusion of the Mexican and Korean acquisitions and higher
corporate expenses. The increased in corporate expenses are attributable to
costs associated with corporate initiatives and performance based
compensation expenses. Third quarter fees and income from unconsolidated
subsidiaries decreased to $2.1 million, from $3.5 million in 1998. The decline
is attributable to the former Mexican joint venture now being consolidated,
other fees and income have remained fairly constant compared to the prior year.
For the nine months, Operating Expense totaled $97.6 million, a 34 percent
increase over 1998, reflecting the additions of Mexico and Korea and higher
corporate expenses.
Operating Income. Third quarter Operating Income was up 93 percent
over 1998 to $45.4 million from $23.5 million. North America advanced strongly
with Operating Income of $28.6 million, up from $6 million in the third quarter
of 1998. The improvement came from higher profit margins in the U.S. and Canada
and the inclusion of full earnings from the Mexican acquisition. Rest of the
World operating income in the third quarter advanced 8 percent over 1998 to $21
million from $19 million, reflecting the strong performance of the Korean
acquisition which more than offset declines in South America resulting from the
economic crisis created by the Brazilian devaluation. Year to date, Operating
Income grew 102 percent to $125 million from $62 million in 1998. North America
Operating Income increased nearly 7 fold to $74 million from $11 million in
1998, reflecting the improved margins as well as the Mexican acquisition.
FINANCING COSTS. Financing costs for the third quarter 1999 were $9.2
million, up from $3.2 million in the comparable period last year. The increased
financing costs reflects the debt taken on with the Mexican and Korean
transactions and one month's higher interest rates due to the conversion of
$200 million in short term debt to long term senior notes. Year to date,
Financing Costs rose to $24.8 million from $10.7 million in 1998.
PROVISION FOR INCOME TAXES. The effective tax rate remained at 35
percent in the third quarter and year to date 1999, unchanged from the rate at
September 30, 1998. The tax rate is estimated based on the expected mix of
domestic and foreign earnings for the year.
NET INCOME. Net Income for the quarter ended September 30, 1999, grew
80 percent to $22.6 million, or $0.61 per diluted share, from $12.6 million, or
$0.35 per diluted share, in the third quarter of 1998. The improvement is
attributable to the North America operations and the accretive acquisitions in
Mexico and Korea. For the nine months ended September 30, 1999, Net Income grew
92 percent to $60.2 million, or $1.61 per diluted share, from $31.3 million, or
$0.87 per diluted share, in 1998. As with the quarter, the improvement is
attributable to North America operations and the accretive acquisitions in
Mexico and Korea.
COMPREHENSIVE INCOME. Comprehensive Income for the third quarter 1999
was higher than the third quarter 1998 and resulted from improved net income,
partially offset by a negative $16 million currency translation adjustment,
principally from the Brazilian $real to the U.S. dollar. This compared to a $9
million negative currency translation adjustment for the comparable quarter in
1998. Year to date, the decline in Comprehensive Income resulted from the
translation of net assets and liabilities denoted in local currencies into U.S.
dollars at lower
10Q-9
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translation rates. The $93 million currency translation adjustment for the nine
months ended September 30, 1999, compared to a $20 million currency translation
adjustment for the comparable period in 1998, and is related primarily to the
translation of fixed assets in Brazil from the $real to the U.S. dollar after
the Brazilian devaluation.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the Company's Total Assets increased to $1,971
million from $1,946 million at December 31, 1998. The increase in Total Assets
reflects the acquisition of the Korean business adding to our asset base,
partially offset by the effects of lower exchange rates, principally in Brazil,
used to translate our foreign asset values.
Third quarter 1999 net cash flows were used to fund the Company's
capital investment program and the quarterly dividend payment. In the
nine-month period of 1999, net cash flows were also used to help fund the
acquisition of our new South Korean affiliate, the acquisition of 19% minority
interest in our Pakistan affiliate, and the previously announced common stock
repurchase program. For the nine months ending September 30, 1999, net cash
flows from operating activities were $146 million, compared to $61 million in
the third quarter of 1998, reflecting the higher net income and lower working
capital change. Cash used for investing activities totaled $177 million for the
first nine months of 1999, reflecting the acquisitions in Korea and Pakistan,
and $102 million in net capital investments. For the comparable period in 1998,
cash from investing activities totaled $11 million, reflecting the receipt of
the repayment of a $60 million loan made by the company to Arancia-CPC and net
capital expenditures of $49 million. Third quarter 1999 capital expenditures
are in line with planned expenditures. The spending is primarily carry-over
projects from the prior year, approximately 70 percent of which is outside the
U.S., and reflects the Company's plan to continue investing, based on business
opportunity and cash flow availability, to meet customer demand and drive for
delivered cost leadership. Capital expenditure in the U.S. was primarily
carry-over of the previously announced dextrose expansion project.
The Company has a $340 million 5-year revolving credit facility in the
United States due December 2002. In addition, the Company has a number of
short-term credit facilities consisting of operating lines of credit. At
September 30, 1999, the Company had total debt outstanding of $463 million
compared to $404 million December 31, 1998. The increase in debt is
attributable to the Korean acquisition and the increased investment in
Pakistan. The debt outstanding consisted of $200 million of 8.45 percent notes
payable issued during the quarter, as well as affiliate long-term debt of $159
million, mostly assumed in the Arancia transaction, and $104 million in
affiliate short term borrowings against local country operating lines in various
currencies. At September 30, 1999, no funds were drawn against the unsecured
revolving credit facility in the United States. The weighted average interest
rate of affiliate debt was 8.6 percent.
MINORITY STOCKHOLDERS INTEREST. Minority stockholders interest
remained unchanged at $91 million in the third quarter and $91 million in
December of 1998.
READINESS FOR THE YEAR 2000
The Year 2000 (Y2K) issue is the result of certain computer programs
using two digits rather than four to define the applicable year. During 1997,
the Company developed a plan (the "Program") to address the Y2K issue and began
converting its computer systems to be Y2K-
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compliant. The Company established a team with appropriate senior management
support to identify and correct Y2K issues. The Company implemented a program to
fix or replace critical internal software where necessary. This included
software in all of the Company's manufacturing plants, building facilities and
business systems. If not corrected, affected computer applications could fail or
create erroneous results.
The Company believes that it has addressed all significant internal
manufacturing and administrative processes. Nevertheless, Y2K compliance depends
not only on our internal manufacturing and administrative processes, but also on
the ability of the different participants in the supply chain to interchange
products, services, and information without interruption. The Company continues
to communicate with high and medium risk vendors, and carry out a site
assessment of the critical suppliers and service providers, to ascertain whether
the equipment and services provided by them will be Y2K-compliant. In addition,
through the use of third party consultants, the Company continues an ongoing
process of evaluating vendor statements and publicly available information about
the Y2K compliance of various systems in operation at its sites.
The Company continues to refine contingency plans for handling mission
critical areas in the event of unforeseen Y2K failures. Contingency plans may
include the stockpiling of necessary supplies, the build-up of inventory,
creation of computerized or manual back-up systems, replacement of vendors, and
addition of new vendors.
The Company estimates direct costs of the Program to achieve Y2K
readiness at $10 million of expense. As of September 30, 1999, direct expenses
incurred by the Program were $9 million. In addition, the Company has undertaken
$11 million in capital investment programs indirectly related to Y2K. As of
September 30, 1999, committed capital expenditures indirectly related to Y2K
were $10 million.
Corn Products' Y2K plan is subject to a variety of risks and
uncertainties. Some of the risks and uncertainties are beyond the Company's
control, such as the Y2K preparedness of third party vendors and service
providers and unidentified issues with hardware, software and embedded systems.
While the Company believes that it has substantially achieved Y2K preparedness,
unidentified Y2K issues, or Y2K failures on the part of third party vendors or
service providers, could have a material adverse impact on its ability to
manufacture and/or deliver its products.
FORWARD-LOOKING STATEMENTS
This form 10-Q contains or may contain certain forward-looking
statements concerning the Company's financial position, business and future
prospects, in addition to other statements using words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend" and other similar expressions.
These statements contain certain inherent risks and uncertainties. Although we
believe our expectations reflected in these forward-looking statements are based
on reasonable assumptions, stockholders are cautioned that no assurance can be
given that our expectations will prove correct. Actual results and developments
may differ materially from the expectations conveyed in these statements, based
on factors such as the following: fluctuations in worldwide commodities markets
and the associated risks of hedging against such fluctuations; fluctuations in
aggregate industry supply and market demand; general economic, business and
market conditions in the various geographic regions and countries in which we
manufacture and sell our products, including fluctuations in the value of local
currencies; costs or difficulties related to the establishment of the Company as
an independent entity; increased competitive and/or customer pressure in the
corn refining industry; and Year 2000 preparedness. Our forward-looking
statements speak only as of the date on which they are made and we do not
undertake any obligation to update any forward-looking statement to reflect
events or circumstances after the date of the statement. If we do update or
correct one or more of these statements, investors and others should not
conclude that we will make additional updates or corrections. For a further
description of risk factors, see the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 and subsequent reports on Forms 10-Q and 8-K.
10Q-11
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ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is set forth in the Company's Annual Report on Form
10K for the year ended December 31, 1998, and is incorporated herein by
reference. There have been no material changes to the Company's market risk
during the nine and three months ended September 30, 1999.
10Q-12
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PART II OTHER INFORMATION
ITEM: 1. LEGAL PROCEEDINGS
ITEM: 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM: 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits pursuant to Item 601 of Regulation S-K.
Exhibits required by Item 601 of Regulation S-K are listed in the
Exhibit Index hereto.
b) Reports on Form 8-K.
On August 27, 1999 the Company reported that it had entered into an
Underwriting Agreement dated as of August 18, 1999 among the Company, Lehman
Brothers Inc. and Salomon Smith Barney Inc. and an Indenture dated August 18,
1999 between the Company and The Bank of New York. The Company also reported
that on August 23, 1999 the Company issued $200 million principal amount of its
8.45 percent Senior Notes due August 15, 2009.
10Q-13
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CORN PRODUCTS INTERNATIONAL, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORN PRODUCTS INTERNATIONAL, INC.
DATE: November 5, 1999
/s/ James Ripley
----------------------------------
James Ripley
Chief Financial Officer
DATE: November 5, 1999
/s/ Jack Fortnum
----------------------------------
Jack Fortnum
Controller - Principal Accounting Officer
10Q-14
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
11 Statement re: computation of earnings per share
12 Statement re: computation of ratios of earnings to fixed charges
27 Financial Data Schedule
10Q-15
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EXHIBIT 11
EARNINGS PER SHARE
CORN PRODUCTS INTERNATIONAL, INC.
COMPUTATION OF NET INCOME
PER SHARE OF CAPITAL STOCK
(UNAUDITED)
(ALL FIGURES ARE IN MILLIONS EXCEPT PER SHARE DATA ) THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
------------------ ------------------
Average shares outstanding - Basic 37.2 37.3
Effect of dilutive securities:
Stock options 0.1 0.1
----- -----
Average share outstanding - Assuming dilution 37.3 37.4
===== =====
Net income
Earnings per share
Basic $0.61 $1.61
Dilutive $0.61 $1.61
1
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
CORN PRODUCTS INTERNATIONAL, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
FOR THE
NINE MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
SEPTEMBER ---------------------------------------------------------------
($ MILLIONS) 30, 1999 1998 1997 1996 1995 1994
------------ -------- -------- -------- -------- --------
*Income before extraordinary
charges, income taxes and minority
equity: $ 100.0 $ 71.0 $ 20.0* $ 37.0 $ 186.0* $ 188.0*
Fixed charges 33.9 24.0 34.4 38.0 34.7 26.6
Capitalized interest (4.6) (3.7) (3.3) (8.1) (2.9) (2.0)
------------ -------- -------- -------- -------- --------
$ 129.3 $ 91.3 $ 51.1 $ 66.9 $ 217.8 $ 212.7
============ ======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES
3.81 3.81 1.49 1.76 6.27 7.98
============ ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense on debt $ 32.8 $ 22.5 $ 32.9 $ 37.0 $ 34.0 $ 26.0
Amortization of discount on debt -- -- -- -- -- --
Interest portion of rental expense
on operating leases 1.1 1.5 1.5 1.0 0.7 0.6
------------ -------- -------- -------- -------- --------
Total $ 33.9 $ 24.0 $ 34.4 $ 38.0 $ 34.7 $ 26.6
============ ======== ======== ======== ======== ========
Income before income taxes and
minority equity $ 100.0 $ 71.0 ($ 89.0) $ 37.0 $ 223.0 $ 169.0
Restructuring charges 0.0 0.0 109.0 0.0 (37.0) 19.0
------------ -------- -------- -------- -------- --------
Adj. Income $ 100.0 $ 71.0 $ 20.0 $ 37.0 $ 186.0 $ 188.0
============ ======== ======== ======== ======== ========
* - Income before extraordinary charges, income taxes and minority equity does
not include restructuring and spin-off costs
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5
100,000
9-MOS
DEC-31-1998
JAN-01-1999
SEP-30-1999
510
0
2,370
0
1,740
4,930
26,550
13,890
19,710
3,130
2,000
0
0
10
10,660
19,710
12,825
0
10,645
11,577
0
0
248
1,000
350
602
0
0
0
602
1.61
1.61
