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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of report (Date of earliest event reported):     January 29, 2004

CORN PRODUCTS INTERNATIONAL, INC.

(708) 551-2600
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 

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	Item 12. Results of Operations and Financial Condition.
SIGNATURES
Earnings Press Release
Fourth Quarter 2003 Earnings Presentation Slides

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Table of Contents

Item 12. Results of Operations and Financial Condition.

 

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Table of Contents

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 hereunto duly authorized.

 

 

Exhibit 99.1

Corn Products International, Inc.
Westchester, IL 60154

NEWS RELEASE

CORN PRODUCTS INTERNATIONAL, INC.
REPORTS RECORD FOURTH-QUARTER & FULL-YEAR 2003 EARNINGS
Company Reports 19-Percent EPS Growth for Full Year

     WESTCHESTER, Ill., January 29, 2004 — Corn Products International, Inc. (NYSE: CPO) today announced fourth-quarter and full-year 2003 results.

     For the quarter ended December 31, 2003, the Company reported diluted earnings of $0.67 per share, compared with diluted earnings per share of $0.46 in the fourth quarter of 2002. The 2002 results included net after-tax income of $0.06 per diluted share, resulting from the impact of the dissolution of CornProductsMCP Sweeteners LLC (CPMCP) in December 2002.

     Diluted earnings per share for the full-year 2003 were $2.11, up from $1.77 in 2002. The full-year 2002 results included net after-tax income of $0.14 per diluted share, consisting primarily of a gain from the sale of a business unit, net of restructuring charges, and the impact from the previously mentioned dissolution of CPMCP.

     “2003 was a very successful year for our Company,” said Sam Scott, chairman, president and chief executive officer of Corn Products International. “We made significant progress toward our goal of earning returns that meet and ultimately exceed our cost of capital, and we are pleased to report that our annual net sales exceeded $2 billion for the first time in our history. We also achieved record performances in operating income, net income and earnings per share. At the same time, we continue to benefit from our working capital initiative, generating significant cash flow and using our increased cash from operations to grow our business, increase our dividend and pay down debt.”

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Corn Products International – Page 2

     FOURTH QUARTER RESULTS FOR 2003

     The Company’s results for the fourth quarter of 2003, compared with the prior year period, were as follows:

•

Net sales were $542 million, up from $473 million

•

Operating income was $51.1 million, up from $41.6 million

•

Net income was $24.5 million, up from $16.5 million

FULL-YEAR RESULTS FOR 2003

     The Company’s results for the year ended December 31, 2003, compared with the prior year period, were as follows:

•

Net sales were $2.1 billion, up from $1.9 billion

•

Operating income was $173.9 million, up from $153.5 million

•

Net income was $76.4 million, up from $63.4 million

     The increase in net income reflects significantly improved operating income in South America and North America, which more than offset increased corporate expenses and higher financing costs. The effective income tax rate for 2003 was 36 percent, unchanged from 2002.

     Cash provided by operations grew 15 percent to $236 million, up from $206 million last year. Total debt was reduced to $550 million at December 31, 2003, from $600 million a year ago, and net debt stands at $480 million. Financing costs increased to $39 million in 2003, from $36 million in 2002, due to higher interest rates associated with our 2002 debt refinancing to extend maturities.

BUSINESS BREAKDOWN BY REGION

On a regional basis, results for the year ended December 31, 2003, compared with the prior year period, were as follows:

     In North America:

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Net sales were $1.3 billion, up from $1.2 billion

•

Volume was consistent with the prior year

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Operating income was $68.2 million, up from $56.3 million

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Corn Products International – Page 3

     Net sales in North America increased 9 percent, driven principally by price/product mix improvement. Operating income in the region rose 21 percent from a year ago, reflecting significantly higher earnings in the United States, where we continued to make progress in our efforts to return to acceptable levels of profitability. Earnings also increased in Mexico, despite that country’s continuing tax on soft drinks sweetened with high fructose corn syrup (HFCS). The Company continues to support the ongoing bilateral trade negotiations between the United States and Mexico to resolve the HFCS issue.

     In South America:

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Net sales were $495 million, up from $401 million

•

Volume increased 7 percent

•

Operating income was $82.7 million, up 42 percent from $58.4 million

     Net sales in South America increased 23 percent, driven primarily by price/product mix improvement and higher volumes. The 42-percent rise in operating income was a result of earnings growth in Brazil and in the Company’s Southern Cone businesses, as those regions recovered strongly from the economic volatility and currency devaluations of the recent past.

     In Asia/Africa:

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Net sales were $278 million, up from $251 million

•

Volume improved 7 percent

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Operating income was $54.3 million, up from $53.5 million

     Net sales in Asia/Africa increased 11 percent, reflecting higher volumes and stronger local currencies. Operating income improved, while volume growth and favorable currency translation effects were offset by a number of issues. They included a weaker price/product mix; a sluggish economy in South Korea; a $1 million asset write-down associated with the Company’s transfer of its manufacturing facility from Malaysia to Thailand; and start-up costs associated with the new glucose channel in Thailand.

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Corn Products International – Page 4

OUTLOOK

     Looking to 2004, the Company expects to see continued improvement over its 2003 performance. However, because US contracting has not yet been finalized, the Company cannot provide specific guidance for the year at this time. The Company currently plans to quantify its guidance for 2004 when it announces first-quarter results.

     “In 2004, we will continue to focus our energies on increasing profitability through business growth, reducing costs and gaining operating efficiencies across our global operations, while maintaining a strong balance sheet,” said Scott.

ABOUT THE COMPANY

     Corn Products International, Inc. is one of the world’s largest corn refiners and a major supplier of high-quality food ingredients and industrial products derived from the wet milling and processing of corn and other starch-based materials. The Company is the number-one worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2003, the Company recorded net sales of $2.1 billion with operations in 19 countries at 37 plants, including wholly owned businesses, affiliates and alliances. Headquartered in Westchester, Ill., it was founded in 1906. The Company is listed on the New York Stock Exchange under the symbol CPO. Additional information can be found on the World Wide Web at www.cornproducts.com.

This press release contains or may contain forward-looking statements concerning the Company’s financial position, business and future earnings and 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 various factors, including fluctuations in worldwide commodities markets and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies, energy costs and availability and changes in regulatory controls regarding quotas, tariffs, taxes and biotechnology issues; increased competitive and/or customer pressure in the corn-refining industry; the outbreak or continuation of hostilities; stock market fluctuation and volatility; and the resolution of the current uncertainties relating to the Mexican HFCS tax. 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 most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.

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CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(Unaudited)

(All figures are in millions, except per share amounts)

 

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CORN PRODUCTS INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

*Reflects restatement of redeemable common stock from stockholders’ equity to redeemable equity.

 

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CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

 

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CORN PRODUCTS INTERNATIONAL, INC.
Supplemental Financial Information
(Unaudited)

(Dollars in millions, except per share amounts)

I. Geographic Information of Net Sales and Operating Income

II. Estimated Sources of Earnings Per Share for the Three Months and Year Ended December 31

The following is a list of the major items that impacted our fourth-quarter and year-to-date results. The amounts are calculated on a net after-tax basis and attempt to estimate total business effects.

III. Capital expenditures

Capital expenditures for the years ended December 31, 2003 and 2002 were $82 million and $77 million, respectively. For 2004, the Company anticipates capital expenditures of approximately $90 million.

 

 

Exhibit 99.2

Fourth Quarter 2003 Earnings Presentation Samuel C. Scott Chairman, President and Chief Executive Officer James W. Ripley Vice President, Chief Financial Officer Richard M. Vandervoort Vice President, Strategic Business Development and Investor Relations January 29, 2004

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Corn Products International, Inc. Forward-looking Statement This presentation contains or may contain forward-looking statements concerning the Company's financial position, business and future earnings and 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 various factors, including fluctuations in worldwide commodities markets and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies, energy costs and availability and changes in regulatory controls regarding quotas, tariffs, taxes and biotechnology issues; increased competitive and/or customer pressure in the corn-refining industry; the outbreak or continuation of hostilities; stock market fluctuation and volatility; and the resolution of the current uncertainties relating to the Mexican HFCS tax. 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 most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.

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Agenda Introduction - Forward-looking Statement Financials Business Review Currency Update Q4 in Aggregate 2003 in Aggregate North America South America Asia/Africa 2004 Outlook

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Financial Results For the Quarter and Year Ended December 31, 2003

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Summary Income Statement Quarter Ended December 31 ($ millions)

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Summary Income Statement Year Ended December 31 ($ millions)

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Net Sales by Geographic Segment Year Ended December 31 ($ millions)

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Net Sales Variance Analysis Year Ended December 31, 2003 (percents %)

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Operating Income by Geographic Segment Year Ended December 31 ($ millions)

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Estimated Source of Diluted Earnings Per Share Year Ended December 31 (cents per share)

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Cash Flow For the Year Ended December 31 ($ millions)

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Key Ratios Year Ended December 31 ($ millions)

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Business Review For the Quarter and Year Ended December 31, 2003

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Currency Update* *Source: Bloomberg; mid-range rates - dates and averages

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Q4 2003 - In Aggregate Pro forma EPS up >67 percent Sales, operating and net income Outstanding recovery in South America Excellent progress in United States and Mexico Cash generation Net debt down $68 million from $548 million in Q3 2003 Working capital progress continued Increased dividend by 20 percent GAAP EPS up 46 percent Fourth quarter - all-time record

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2003 - In Aggregate Pro forma EPS up 30%* $2.1B sales up 12%* Volume up despite Mexico tax on HFCS use* Cash generation Operating cash flow up 15% > $6.50/share* Free cash flow up 20% > $4.20/share* EBITDA up 7% $7.60/share Excellent progress toward goal To return and exceed our cost of capital GAAP EPS up 19 percent* *All-time record

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North America - 2003 Mexico Unlike 2002, HFCS-sweetened soft drinks taxed full year Balance of business performed well Operating income increased Bilateral trade discussions continue - no news yet United States Solid performance in slow HFCS 55 market Op. income ramping toward acceptable returns Improvement from both pricing and cost reduction ....Though with the need for more Operating income up 21 percent

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South America Macro environment Argentina, Brazil currencies firmed through 2003 Economies healing Our business - excellent recovery and growth Sales up 23 percent Volume up 7 percent Price/product mix double-digits Andean region Good volume growth Difficult economic/political environment continues Operating income: up 42 percent

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Asia/Africa Sales up 11 percent Volume up 7 percent Thai plant - Q4 "flex point" - operating income turn Korea Slow economy Strong year, slightly under 2002 Pakistan Macro environment - positive Strongest yearly operating income in history - again Construction for new plant Operating income up ~$800,000

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Outlook Global Corn, energy costs higher By-product credits higher North America Earnings improvement expected to continue United States Improvement pace projected to lessen Product pricing still underway Mexico Bilateral trade negotiations continue Resolution not assumed in outlook 2004 EPS: expect another record year - too soon to quantify

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Outlook (cont'd.) South America Project another good year, but... Don't expect 42 percent operating income gains Q1 and Q2 against easier 2003 comps Asia/Africa Expecting better operating income growth in 2004 Thai business anticipated to deliver earnings growth Pakistan Base business to continue strong New plant to start up later in year 2004 EPS: expect another record year - too soon to quantify

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Q&A