Ingredion Incorporated (NYSE: INGR), a leading global provider of
ingredient solutions to the food and beverage manufacturing
industry, today reported results for the third quarter 2020. The
results, reported in accordance with U.S. generally accepted
accounting principles (“GAAP”) for 2020 and 2019, include items
that are excluded from the non-GAAP financial measures that the
Company presents.
“We are pleased with our operational execution and financial
performance for the third quarter. We experienced sequential
improvement over second quarter 2020 in customer volume demand
across all four of our regions, driven by increased consumer
activity in response to easing of COVID-19 restrictions,” said Jim
Zallie, Ingredion’s president and chief executive officer.
“Reported and adjusted operating income were up 35% and 41%,
respectively, from the second quarter. Our intense focus on
servicing customers and operational execution, enabled us to
deliver year-over-year profit growth in most of our regions.”
“As we continue to navigate the different economic environments
around the world, we remain focused on the resilience of our
workforce, the responsibility to the communities in which we
operate and ensuring business continuity for our customers. Our
teams displayed great agility and creativity to advance our
go-to-market strategy with customers, and I am incredibly proud of
them. As part of new ways of working, we are leveraging new forms
of digital collaboration to connect, innovate and co-create with
our customers. Around the world, we are moving our Idea Labs to
virtual interactive studios to bring the innovation process to our
customers, wherever they are,” Zallie continued.
“Today, we announced another strategic step to advance our
Driving Growth Roadmap with the pending acquisition of Verdient
Foods Inc., bringing our ownership to 100%. This transaction
enables us to accelerate net sales growth, further expand our
manufacturing capacity and better manage our supply network to
serve the increasing demand for plant-based proteins. During the
quarter, we also further enhanced our sugar reduction capabilities
by integrating PureCircle’s global team and operations.”
“We are well positioned to effectively manage through the
uncertainties due to the pandemic and successfully support our
customers and their changing needs. We remain confident in the
relevance of our strategy to grow our business and deliver value
for shareholders,” concluded Zallie.
*Adjusted diluted earnings per share (“adjusted EPS”), adjusted
operating income, adjusted effective income tax rate and adjusted
cash flow from operations are non-GAAP financial measures. See
section II of the Supplemental Financial Information entitled
“Non-GAAP Information” following the Condensed Consolidated
Financial Statements included in this press release for a
reconciliation of these non-GAAP financial measures to the most
directly comparable U.S. GAAP measures.
Diluted Earnings Per Share (EPS)
|
3Q19 |
3Q20 |
YTD19 |
YTD20 |
Reported EPS |
$1.47 |
$1.36 |
$4.51 |
$3.45 |
Impairment/Restructuring Costs |
$0.32 |
$0.22 |
$0.47 |
$0.51 |
Acquisition/Integration Costs |
- |
$0.06 |
$0.02 |
$0.10 |
Tax Items |
$0.07 |
$0.01 |
$0.06 |
$0.33 |
Other Adjusted Items |
- |
$0.12 |
- |
$0.12 |
Adjusted EPS** |
$1.86 |
$1.77 |
$5.06 |
$4.50 |
Estimated factors affecting change in reported and
adjusted EPS
|
3Q20 |
YTD20 |
Margin |
(0.07) |
(0.05) |
Volume |
(0.02) |
(0.41) |
Foreign exchange |
(0.07) |
(0.20) |
Other income |
0.01 |
(0.03) |
Total operating items |
(0.15) |
(0.69) |
Other non-operating income |
0.02 |
0.05 |
Financing costs |
0.09 |
0.09 |
Non-Controlling interests |
0.02 |
0.02 |
Shares outstanding |
(0.01) |
(0.02) |
Tax rate |
(0.06) |
(0.02) |
Total non-operating items |
0.06 |
0.12 |
Total items affecting EPS** |
(0.09) |
(0.56) |
**Totals may not foot due to rounding
Financial Highlights
- At September 30, 2020, total debt and cash and short-term
investments were $2.2 billion and $553 million, respectively,
versus $1.8 billion and $268 million, respectively, at December 31,
2019. The increase in total debt and cash and short-term
investments was primarily due to the Company's sale of $1.0 billion
of senior notes in the second quarter 2020, partially offset by the
redemption of $400 million of November 2020 senior notes in
July.
- Net financing costs were $22 million, which includes $5 million
for interest payments associated with the early retirement of the
senior notes in July. Net financing costs were $2 million lower in
the third quarter from the year-ago period. The decrease resulted
from lower net interest expense due to lower interest rates.
- Reported and adjusted effective tax rates for the quarter were
30.1 percent and 26.2 percent, respectively, compared to 27.1
percent and 23.2 percent, respectively, in the year-ago period. The
increase in reported and adjusted tax rates resulted primarily from
US foreign tax credits, country earnings mix, and other one-time
adjustments.
- Year-to-date capital expenditures were $250 million, up $19
million from the year-ago period.
Business Review
Total Ingredion
$ in millions |
2019Net Sales |
FX Impact |
Volume |
Pricemix |
PureCircle |
2020Net Sales |
% change |
% changeexcl. FX |
Third quarter |
1,574 |
-38 |
-36 |
-6 |
8 |
1,502 |
-5% |
-2% |
Year-to-Date |
4,660 |
-138 |
-214 |
78 |
8 |
4,394 |
-6% |
-3% |
Reported Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
PureCircle |
Acquisition /Integration |
Restructuring / Impairment |
Other |
2020 |
% change |
% changeexcl. FX |
Third quarter |
165 |
-6 |
-3 |
-5 |
-5 |
12 |
-5 |
153 |
-7% |
-4% |
Year-to-Date |
494 |
-18 |
-41 |
-5 |
-6 |
- |
-5 |
419 |
-15% |
-11% |
Adjusted Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
PureCircle |
2020 |
% change |
% changeexcl. FX |
Third quarter |
193 |
-6 |
-3 |
-5 |
179 |
-7% |
-4% |
Year-to-Date |
537 |
-18 |
-41 |
-5 |
473 |
-12% |
-8% |
Net Sales
- Third quarter net sales were down from the year-ago period. The
decrease was driven by foreign exchange impacts in South America
and sales volume declines in North America. Excluding foreign
exchange impacts, net sales were down 2 percent for the
quarter.
- Year-to-date net sales were down from the year-ago period. The
decrease in year-to-date net sales was driven by sales volume
declines in North America and South America and foreign exchange
impacts in South America which were partially offset by favorable
pricing. Excluding foreign exchange impacts, net sales were down 3
percent year-to-date.
Operating income
- Reported and adjusted operating income for the quarter were
$153 million and $179 million, respectively, both of which
decreased by 7 percent, from the year-ago period. The decreases
were largely attributable to lower sales volumes in North America
and the inclusion of PureCircle results. Excluding foreign exchange
impacts, reported and adjusted operating income were both down 4
percent from the same period last year.
- Year-to-date reported and adjusted operating income were $419
million and $473 million, respectively, decreases of 15 percent and
12 percent, respectively, from the year-ago period. The decreases
were largely attributable to lower sales volumes in North America
and higher corporate costs due to continued investments to drive
business and digital transformation. Excluding foreign exchange
impacts, reported and adjusted operating income were down 11
percent and 8 percent, respectively, from the same period last
year.
- Third quarter and year-to-date reported operating income were
lower than adjusted operating income by $26 million and $54
million, respectively, due to asset closures and restructuring
costs related to Cost Smart, acquisition and integration costs, and
the impact of the August storm damage in Iowa.
North America
Net Sales
$ in millions |
2019Net Sales |
FX Impact |
Volume |
Pricemix |
2020Net Sales |
% change |
% changeexcl. FX |
Third quarter |
984 |
-1 |
-31 |
-24 |
928 |
-6% |
-6% |
Year-to-Date |
2,912 |
-6 |
-181 |
14 |
2,739 |
-6% |
-6% |
Segment Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
2020 |
% change |
% changeexcl. FX |
Third quarter |
145 |
- |
-13 |
132 |
-9% |
-9% |
Year-to-Date |
409 |
-1 |
-50 |
358 |
-12% |
-12% |
Operating income
- Third quarter operating income was $132 million, a decrease of
$13 million from the year-ago period. The decrease was driven by
lower volumes, as COVID-19 continued to impact away-from-home
consumption across the region, and unfavorable mix in the U.S. and
Canada.
- Year-to-date operating income was $358 million, a decrease of
$51 million from the year-ago period. The decrease was driven by
significantly lower away-from-home consumption across the region
and the shutdown of brewery customers in Mexico in the second
quarter.
South America Net Sales
$ in millions |
2019 Net Sales |
FX Impact |
Volume |
Pricemix |
2020 Net Sales |
% change |
% changeexcl. FX |
Third quarter |
245 |
-38 |
-7 |
24 |
224 |
-9 |
% |
7 |
% |
Year-to-Date |
699 |
-104 |
-20 |
68 |
643 |
-8 |
% |
7 |
% |
Segment Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
2020 |
% change |
% changeexcl. FX |
Third quarter |
27 |
-6 |
8 |
29 |
7 |
% |
30 |
% |
Year-to-Date |
61 |
-13 |
20 |
68 |
11 |
% |
33 |
% |
Operating income
- Third quarter operating income was $29 million, an increase of
$2 million from the year-ago period. The increase was driven by
strong price mix which was partially offset by unfavorable foreign
currency impacts. Excluding foreign exchange impacts, segment
operating income was up 30 percent.
- Year-to-date operating income was $68 million, an increase of
$7 million from the year-ago period due to strong price mix which
was partially offset by unfavorable foreign currency impacts and
lower sales volumes. Excluding foreign exchange impacts, segment
operating income was up 33 percent. Results for Argentina are
accounted for in U.S. dollars under hyper-inflationary
accounting.
Asia-Pacific
Net Sales
$ in millions |
2019 Net Sales |
FX Impact |
Volume |
Pricemix |
PureCircle |
2020 Net Sales |
% change |
% changeexcl. FX |
Third quarter |
205 |
- |
1 |
-7 |
8 |
207 |
1% |
1% |
Year-to-Date |
611 |
-12 |
-12 |
-12 |
8 |
583 |
-5% |
-3% |
Segment Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
PureCircle |
2020 |
% change |
% changeexcl. FX |
Third quarter |
22 |
- |
1 |
-5 |
18 |
-18% |
-18% |
Year-to-Date |
65 |
-1 |
1 |
-5 |
60 |
-8% |
-6% |
Operating income
- Third quarter operating income was $18 million, down $4 million
from the year-ago period driven by $5 million of operating loss
from PureCircle. Excluding PureCircle, third quarter operating
income was $23 million, up $1 million from the year-ago period
driven by lower input costs and operating expenses.
- Year-to-date operating income was $60 million, a decrease of $5
million from the year-ago period. PureCircle results reduced
year-to-date operating income by $5 million. Excluding PureCircle
results, year-to-date operating income was flat to the same period
in the prior year as lower input costs and favorable operating
expenses offset lower sales volumes in the first half due to the
impact of stay-at-home orders. Excluding foreign currency impacts,
segment operating income was down 6%.
Europe, Middle East, and
Africa (EMEA)
Net Sales
$ in millions |
2019Net Sales |
FX Impact |
Volume |
Pricemix |
2020Net Sales |
% change |
% changeexcl. FX |
Third quarter |
140 |
- |
1 |
2 |
143 |
2% |
2% |
Year-to-Date |
438 |
-18 |
-1 |
10 |
429 |
-2% |
2% |
Segment Operating Income
$ in millions |
2019 |
FX Impact |
Business Drivers |
2020 |
% change |
% changeexcl. FX |
Third quarter |
24 |
- |
1 |
25 |
4% |
4% |
Year-to-Date |
71 |
-3 |
5 |
73 |
3% |
8% |
Operating income
- Third quarter operating income was $25 million, up $1 million
from the year-ago period. The increase was largely attributable to
favorable price mix in Pakistan and lower operating expenses in
Europe.
- Year-to-date operating income was $73 million, an increase of
$2 million from a year ago. The increase was largely attributable
to Pakistan pricing actions, solid EMEA specialty sales volume, and
lower operating expenses in Europe, partially offset by the impacts
of stay-at-home orders on Pakistan production and sales volume in
the first half and negative foreign currency impacts. Excluding
foreign currency impacts, segment operating income was up 8
percent.
Dividends
In September 2020, the Company increased the quarterly dividend
to $0.64 per share from $0.63 per share, and paid dividends of $45
million in the third quarter and $132 million year-to-date.
2020 Outlook
Due to continued uncertainty of COVID-19 impacts, the Company
cannot reasonably estimate full-year results at this time and
guidance remains withdrawn.
The Company anticipates continued impacts from COVID-19 on net
sales volume across our operating segments in the fourth quarter,
with recovery in net sales generally correlated with increased
consumer activity. With pandemic case rates rising and falling
across many geographies, we expect away-from-home consumption to
continue to fluctuate, suppressing volume demand for ingredients
that are formulated in food and beverages consumed away-from-home.
We anticipate modestly higher demand for food consumed in home,
increasing volumes for ingredients that are part of the recipes for
these meals.
For the full year, we expect a reported tax rate of 32 percent
to 36 percent and an adjusted effective tax rate in the range of
approximately 27 percent to 28 percent.
Capital expenditures are anticipated to be between $290 million
and $310 million, of which more than $100 million is being invested
to drive Specialty growth.
Conference Call and Webcast
DetailsIngredion will conduct a conference call on
Monday, November 2, 2020 at 8:00 a.m. Central Time hosted by Jim
Zallie, president and chief executive officer, and James Gray,
executive vice president and chief financial officer. The call will
be webcast in real time and will include a presentation accessible
through the Company’s website at www.ingredion.com. The
presentation will be available to download a few hours prior to the
start of the call. A replay of the webcast will be available for a
limited time at www.ingredion.com.
About the CompanyIngredion Incorporated (NYSE:
INGR) headquartered in the suburbs of Chicago, is a leading global
ingredient solutions provider serving customers in more than 120
countries. With 2019 annual net sales over $6 billion, the Company
turns grains, fruits, vegetables and other plant-based materials
into value-added ingredients solutions for the food, beverage,
animal nutrition, brewing and industrial markets. With Ingredion
Idea Labs® innovation centers around the world and more than
11,000 employees, the Company co-creates with customers and
fulfills its purpose of bringing the potential of people, nature
and technology together to make life better. Visit ingredion.com
for more information and the latest Company news.
Forward-Looking StatementsThis news release
contains or may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
The Company intends these forward-looking statements to be covered
by the safe harbor provisions for such statements.
Forward-looking statements include, among others, any statements
regarding the Company's expectations regarding impacts of COVID-19,
and the Company's effective tax rates and capital expenditures for
2020 and any assumptions, expectations or beliefs underlying the
foregoing. These statements can sometimes be identified by the use
of forward looking words such as "may," "will," "should,"
"anticipate," "assume," "believe," "plan," "project," "estimate,"
"expect," "intend," "continue," "pro forma," "forecast," "outlook,"
"propels," "opportunities," "potential," "provisional," or other
similar expressions or the negative thereof. All statements other
than statements of historical facts in this release or referred to
in this release are "forward-looking statements."
These statements are based on current circumstances or
expectations, but are subject to certain inherent risks and
uncertainties, many of which are difficult to predict and are
beyond our control. Although we believe our expectations reflected
in these forward-looking statements are based on reasonable
assumptions, investors are cautioned that no assurance can be given
that our expectations will prove correct.
Actual results and developments may differ materially from the
expectations expressed in or implied by our forward looking
statements as a result of the following risks and uncertainties,
among others: changing consumption preferences and perceptions,
including those relating to high fructose corn syrup; the effects
of global economic conditions and the general political, economic,
business, and market conditions that affect customers and consumers
in the various geographic regions and countries in which we buy our
raw materials or manufacture or sell our products, including,
particularly, economic, currency and political conditions in South
America and economic and political conditions in Europe, and the
impact these factors may have on our sales volumes, the pricing of
our products, our access to credit markets and our ability to
collect our receivables from customers; adverse changes in
investment returns earned on our pension assets; future financial
performance of major industries which we serve and from which we
derive a significant portion of our sales, including the food,
beverage, animal nutrition, and brewing industries; the uncertainty
of acceptance of products developed through genetic modification
and biotechnology; our ability to develop or acquire new products
and services at rates or of qualities sufficient to meet
expectations; changes in U.S. and foreign government policy, laws
or regulations and costs of legal compliance; increased competitive
and/or customer pressure in the corn-refining industry and related
industries, including with respect to the markets and prices for
our primary products and our co-products, particularly corn oil;
the availability of raw materials, including potato starch,
tapioca, gum Arabic and the specific varieties of corn upon which
some of our products are based, and our ability to pass on
potential increases in the cost of corn or other raw materials to
customers; raw material and energy costs and availability; our
ability to contain costs, achieve budgets and to realize expected
synergies, including with respect to our ability to complete
planned maintenance and investment projects on time and on budget,
and to achieve expected savings under our Cost Smart program as
well as with respect to freight and shipping costs; the impact of
financial and capital markets on our borrowing costs, including as
a result of foreign currency fluctuations, fluctuations in interest
and exchange rates and market volatility and the associated risks
of hedging against such fluctuations; the potential effects of
climate change; our ability to successfully identify and complete
acquisitions or strategic alliances on favorable terms as well as
our ability to successfully integrate acquired businesses or
implement and maintain strategic alliances and achieve anticipated
synergies with respect to all of the foregoing; operating
difficulties at our manufacturing plants or with respect to boiler
reliability; risks related to product safety and quality and
compliance with environmental, health and safety, and food safety
laws and regulations; economic, political and other risks inherent
in operating in foreign countries with foreign currencies and
shipping products between countries, including with respect to
tariffs, quotas and duties; interruptions, security breaches or
failures that might affect our information technology systems,
processes and sites; our ability to maintain satisfactory labor
relations; the impact that weather, natural disasters, war or
similar acts of hostility, acts and threats of terrorism, the
outbreak or continuation of pandemics such as COVID-19 and other
significant events could have on our business; the potential
recognition of impairment charges on goodwill or long lived assets;
changes in our tax rates or exposure to additional income tax
liabilities; and our ability to raise funds at reasonable rates to
grow and expand our operations.
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 as a result of new
information or future events or developments. 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 these and other risks,
see "Risk Factors" included in our Annual Report on Form 10-K for
the year ended December 31, 2019 and Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2020 and in our subsequent
reports on Form 10-Q and Form 8-K.
CONTACTS: Investors:
Tiffany Willis, 708-551-2592 Media: Becca
Hary, 708-551-2602
Ingredion
Incorporated ("Ingredion") |
|
Condensed
Consolidated Statements of Income |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions, except per share amounts) |
|
Three Months Ended September 30, |
|
Change % |
|
Nine Months Ended September 30, |
|
Change % |
|
|
|
2020 |
2019 |
|
|
|
2020 |
2019 |
|
|
|
Net
sales |
|
$ |
1,502 |
$ |
1,574 |
|
(5%) |
|
$ |
4,394 |
$ |
4,660 |
|
(6%) |
|
Cost of
sales |
|
1,176 |
1,230 |
|
|
|
3,474 |
3,671 |
|
|
|
Gross
profit |
|
326 |
344 |
|
(5%) |
|
920 |
989 |
|
(7%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
155 |
153 |
|
1% |
|
456 |
457 |
|
0% |
|
Other
expense (income), net |
|
2 |
(2) |
|
|
|
4 |
(3) |
|
|
|
Restructuring/impairment charges |
|
16 |
28 |
|
|
|
41 |
41 |
|
|
|
Operating
income |
|
153 |
165 |
|
(7%) |
|
419 |
494 |
|
(15%) |
|
Financing
costs, net |
|
22 |
24 |
|
|
|
59 |
62 |
|
|
|
Other,
non-operating (income) expense, net |
|
(2) |
1 |
|
|
|
(3) |
1 |
|
|
|
Income
before income taxes |
|
133 |
140 |
|
(5%) |
|
363 |
431 |
|
(16%) |
|
Provision
for income taxes |
|
40 |
38 |
|
|
|
125 |
120 |
|
|
|
Net
income |
|
93 |
102 |
|
(9%) |
|
238 |
311 |
|
(23%) |
|
Less: Net
income attributable to non-controlling interests |
|
1 |
3 |
|
|
|
5 |
7 |
|
|
|
Net income
attributable to Ingredion |
|
$ |
92 |
$ |
99 |
|
(7%) |
|
$ |
233 |
$ |
304 |
|
(23%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share attributable to Ingredion |
|
|
|
|
|
|
|
|
|
|
|
common
shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
67.2 |
66.9 |
|
|
|
67.2 |
66.9 |
|
|
|
Diluted |
|
67.6 |
67.4 |
|
|
|
67.6 |
67.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share of Ingredion: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$1.37 |
$1.48 |
|
(7%) |
|
$3.47 |
$4.54 |
|
(24%) |
|
Diluted |
|
$1.36 |
$1.47 |
|
(7%) |
|
$3.45 |
$4.51 |
|
(24%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion
Incorporated ("Ingredion") |
|
Condensed
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions, except share and per share amounts) |
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
553 |
|
|
$ |
264 |
|
|
|
|
|
Short-term
investments |
|
- |
|
|
|
4 |
|
|
|
|
|
Accounts
receivable – net |
|
913 |
|
|
|
977 |
|
|
|
|
|
Inventories |
|
908 |
|
|
|
861 |
|
|
|
|
|
Prepaid
expenses |
|
56 |
|
|
|
54 |
|
|
|
|
Total current assets |
|
2,430 |
|
|
|
2,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment – net |
|
2,354 |
|
|
|
2,306 |
|
|
|
|
|
Goodwill |
|
841 |
|
|
|
801 |
|
|
|
|
|
Other
intangible assets – net |
|
479 |
|
|
|
437 |
|
|
|
|
|
Operating
lease assets |
|
161 |
|
|
|
151 |
|
|
|
|
|
Deferred
income tax assets |
|
23 |
|
|
|
13 |
|
|
|
|
|
Other
assets |
|
176 |
|
|
|
172 |
|
|
|
Total assets |
$ |
6,464 |
|
|
$ |
6,040 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Short-term
borrowings |
|
62 |
|
|
$ |
82 |
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
893 |
|
|
|
885 |
|
|
|
|
Total current liabilities |
|
955 |
|
|
|
967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
211 |
|
|
|
220 |
|
|
|
|
|
Long-term
debt |
|
2,115 |
|
|
|
1,766 |
|
|
|
|
|
Non-current
operating lease liabilities |
|
123 |
|
|
|
120 |
|
|
|
|
|
Deferred
income tax liabilities |
|
189 |
|
|
|
195 |
|
|
|
|
|
Share-based
payments subject to redemption |
|
32 |
|
|
|
31 |
|
|
|
|
|
Redeemable
non-controlling interests |
|
74 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Ingredion 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,
77,810,875 |
|
|
|
|
|
|
shares issued at September 30, 2020 and December 31, 2019 |
|
1 |
|
|
|
1 |
|
|
|
|
|
Additional
paid-in capital |
|
1,145 |
|
|
|
1,137 |
|
|
|
|
|
Less:
Treasury stock (common stock; 10,822,592 and 10,993,388 shares
at |
|
|
|
|
|
|
|
September 30, 2020 and December 31, 2019, respectively) at
cost |
|
(1,027 |
) |
|
|
(1,040 |
) |
|
|
|
|
Accumulated
other comprehensive loss |
|
(1,259 |
) |
|
|
(1,158 |
) |
|
|
|
|
Retained earnings |
|
3,884 |
|
|
|
3,780 |
|
|
|
|
Total Ingredion stockholders' equity |
|
2,744 |
|
|
|
2,720 |
|
|
|
|
Non-redeemable non-controlling interests |
|
21 |
|
|
|
21 |
|
|
|
|
Total equity |
|
2,765 |
|
|
|
2,741 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
6,464 |
|
|
$ |
6,040 |
|
|
|
|
|
|
|
|
|
|
Ingredion
Incorporated ("Ingredion") |
|
Condensed
Consolidated Statements of Cash Flows |
|
(Unaudited) |
|
|
|
|
|
|
|
For the Nine Months Ended September 30, |
|
|
(in millions) |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities: |
|
|
|
|
|
|
|
Net
income |
|
$ |
238 |
|
|
$ |
311 |
|
|
|
|
Adjustments
to reconcile net income to |
|
|
|
|
|
|
|
net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
158 |
|
|
|
158 |
|
|
|
|
Mechanical stores expense |
|
|
39 |
|
|
|
42 |
|
|
|
|
Deferred income taxes |
|
|
(1 |
) |
|
|
2 |
|
|
|
|
Charge for fair value mark-up of acquired inventory |
|
|
3 |
|
|
|
- |
|
|
|
|
Margin accounts |
|
|
6 |
|
|
|
(4 |
) |
|
|
|
Changes in other trade working capital |
|
|
80 |
|
|
|
(51 |
) |
|
|
|
Other |
|
|
39 |
|
|
|
32 |
|
|
|
|
Cash provided by operating activities |
|
|
562 |
|
|
|
490 |
|
|
|
|
|
|
|
|
|
|
|
Cash used for investing activities: |
|
|
|
|
|
|
|
Capital
expenditures and mechanical stores purchases, net proceeds on
disposals |
|
|
(250 |
) |
|
|
(231 |
) |
|
|
|
Payments for
acquisitions, net of cash acquired |
|
|
(208 |
) |
|
|
(42 |
) |
|
|
|
Investment
in a non-consolidated affiliate |
|
|
(6 |
) |
|
|
(10 |
) |
|
|
|
Short-term
investments |
|
|
4 |
|
|
|
4 |
|
|
|
|
Other |
|
|
- |
|
|
|
1 |
|
|
|
|
Cash used for investing activities |
|
|
(460 |
) |
|
|
(278 |
) |
|
|
|
|
|
|
|
|
|
|
Cash provided by (used for) financing
activities: |
|
|
|
|
|
|
|
Proceeds
from borrowings (payments on), net |
|
|
341 |
|
|
|
(19 |
) |
|
|
|
Debt
issuance costs |
|
|
(9 |
) |
|
|
- |
|
|
|
|
Repurchases
of common stock, net |
|
|
- |
|
|
|
63 |
|
|
|
|
Issuances of
common stock for share-based compensation, net of settlements |
|
|
2 |
|
|
|
1 |
|
|
|
|
Dividends
paid, including to non-controlling interests |
|
|
(132 |
) |
|
|
(131 |
) |
|
|
|
Cash provided by (used for) financing activities |
|
|
202 |
|
|
|
(86 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
|
(15 |
) |
|
|
(10 |
) |
|
|
|
Increase in
cash and cash equivalents |
|
|
289 |
|
|
|
116 |
|
|
|
|
Cash and
cash equivalents, beginning of period |
|
|
264 |
|
|
|
327 |
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
553 |
|
|
$ |
443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion Incorporated ("Ingredion") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
I. Geographic Information of Net Sales and Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions, expect for percentages) |
|
Three Months Ended September 30, |
|
|
|
Change |
|
Nine Months Ended September 30, |
|
Change |
Change |
|
|
|
2020 |
|
|
|
2019 |
|
|
Change |
|
Excl. FX |
|
|
2020 |
|
|
|
2019 |
|
|
% |
Excl. FX |
Net
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
928 |
|
|
$ |
984 |
|
|
(6 |
%) |
|
(6 |
%) |
|
$ |
2,739 |
|
|
$ |
2,912 |
|
|
(6 |
%) |
(6 |
%) |
South America |
|
|
224 |
|
|
|
245 |
|
|
(9 |
%) |
|
7 |
% |
|
|
643 |
|
|
|
699 |
|
|
(8 |
%) |
7 |
% |
Asia-Pacific |
|
|
207 |
|
|
|
205 |
|
|
1 |
% |
|
1 |
% |
|
|
583 |
|
|
|
611 |
|
|
(5 |
%) |
(3 |
%) |
EMEA |
|
|
143 |
|
|
|
140 |
|
|
2 |
% |
|
2 |
% |
|
|
429 |
|
|
|
438 |
|
|
(2 |
%) |
2 |
% |
Total
Net Sales |
|
$ |
1,502 |
|
|
$ |
1,574 |
|
|
(5 |
%) |
|
(2 |
%) |
|
$ |
4,394 |
|
|
$ |
4,660 |
|
|
(6 |
%) |
(3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
132 |
|
|
$ |
145 |
|
|
(9 |
%) |
|
(9 |
%) |
|
$ |
358 |
|
|
$ |
409 |
|
|
(12 |
%) |
(12 |
%) |
South America |
|
|
29 |
|
|
|
27 |
|
|
7 |
% |
|
30 |
% |
|
|
68 |
|
|
|
61 |
|
|
11 |
% |
33 |
% |
Asia-Pacific |
|
|
18 |
|
|
|
22 |
|
|
(18 |
%) |
|
(18 |
%) |
|
|
60 |
|
|
|
65 |
|
|
(8 |
%) |
(6 |
%) |
EMEA |
|
|
25 |
|
|
|
24 |
|
|
4 |
% |
|
4 |
% |
|
|
73 |
|
|
|
71 |
|
|
3 |
% |
8 |
% |
Corporate |
|
|
(25 |
) |
|
|
(25 |
) |
|
0 |
% |
|
0 |
% |
|
|
(86 |
) |
|
|
(69 |
) |
|
(25 |
%) |
(25 |
%) |
Sub-total |
|
|
179 |
|
|
|
193 |
|
|
(7 |
%) |
|
(4 |
%) |
|
|
473 |
|
|
|
537 |
|
|
(12 |
%) |
(8 |
%) |
Restructuring/impairment charges |
|
|
(16 |
) |
|
|
(28 |
) |
|
|
|
|
|
|
(41 |
) |
|
|
(41 |
) |
|
|
|
Acquisition/integration costs |
|
|
(5 |
) |
|
|
- |
|
|
|
|
|
|
|
(8 |
) |
|
|
(2 |
) |
|
|
|
Charge for
fair value markup of acquired inventory |
|
|
(3 |
) |
|
|
- |
|
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
North
America storm damage |
|
|
(2 |
) |
|
|
- |
|
|
|
|
|
|
|
(2 |
) |
|
|
- |
|
|
|
|
Total Operating Income |
|
$ |
153 |
|
|
$ |
165 |
|
|
(7 |
%) |
|
(4 |
%) |
|
$ |
419 |
|
|
$ |
494 |
|
|
(15 |
%) |
(11 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II. Non-GAAP Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To supplement the
consolidated financial results prepared in accordance with
Generally Accepted Accounting Principles (“GAAP”), we use non-GAAP
historical financial measures, which exclude certain GAAP items
such as acquisition and integration costs, restructuring and
impairment cost, Mexico tax provision, and certain other special
items. We generally use the term “adjusted” when referring to these
non-GAAP amounts. Management uses non-GAAP financial measures
internally for strategic decision making, forecasting future
results and evaluating current performance. By disclosing non-GAAP
financial measures, management intends to provide investors with a
more meaningful, consistent comparison of our operating results and
trends for the periods presented. These non-GAAP financial measures
are used in addition to and in conjunction with results presented
in accordance with GAAP and reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results,
provide a more complete understanding of factors and trends
affecting our business. These non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP. Non-GAAP financial measures are not prepared in
accordance with GAAP; therefore, the information is not necessarily
comparable to other companies. A reconciliation of each non-GAAP
historical financial measure to the most comparable GAAP measure is
provided in the tables below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion
Incorporated ("Ingredion") |
|
Reconciliation of GAAP Net Income attributable to Ingredion
and Diluted Earnings Per Share ("EPS") to |
|
Non-GAAP
Adjusted Net Income attributable to Ingredion and Adjusted Diluted
EPS |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
|
|
September 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
(in millions) |
Diluted EPS |
|
(in millions) |
Diluted EPS |
|
(in millions) |
Diluted EPS |
|
(in millions) |
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Ingredion |
$ |
92 |
|
$ |
1.36 |
|
|
$ |
99 |
$ |
1.47 |
|
$ |
233 |
$ |
3.45 |
|
$ |
304 |
$ |
4.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs, net of income tax benefit of $1
million and $2 million for the three and nine months ended
September 30, 2020, respectively, and $ - million and $1 million
for the three and nine months ended September 30, 2019,
respectively (i) |
|
4 |
|
|
0.06 |
|
|
|
- |
|
- |
|
|
6 |
|
0.10 |
|
|
1 |
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges, net of income tax benefit of $1
million and $7 million for the three and nine months ended
September 30, 2020, respectively, and $6 million and $9 million for
the three and nine months ended September 30, 2019, respectively
(ii) |
|
15 |
|
|
0.22 |
|
|
|
22 |
|
0.32 |
|
|
34 |
|
0.51 |
|
|
32 |
|
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for
fair value markup of acquired inventory, net of income tax benefit
of $ - for the three and nine months ending September 30, 2020,
respectively (iii) |
|
3 |
|
|
0.04 |
|
|
|
- |
|
- |
|
|
3 |
|
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for
early extinguishment of debt, net of income tax benefit of $1
million for the three and nine months ended September 30, 2020,
respectively (iv) |
|
4 |
|
|
0.06 |
|
|
|
- |
|
- |
|
|
4 |
|
0.06 |
|
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America storm damage, net of income tax benefit of $ - for the
three and nine months ended September 30, 2020, respectively
(v) |
|
2 |
|
|
0.03 |
|
|
|
- |
|
- |
|
|
2 |
|
0.03 |
|
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
(benefit) provision - Mexico (vi) |
|
(6 |
) |
|
(0.08 |
) |
|
|
3 |
|
0.04 |
|
|
16 |
|
0.24 |
|
|
2 |
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax
matters (vii) |
|
6 |
|
|
0.09 |
|
|
|
2 |
|
0.03 |
|
|
6 |
|
0.09 |
|
|
2 |
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted net income attributable to Ingredion |
$ |
120 |
|
$ |
1.77 |
|
|
$ |
126 |
$ |
1.86 |
|
$ |
304 |
$ |
4.50 |
|
$ |
341 |
$ |
5.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, EPS and
tax rates may not foot or recalculate due to rounding. |
|
|
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Notes |
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(i) The 2020 period
primarily includes costs related to the acquisition and integration
of the business acquired from PureCircle Limited. The 2019 period
primarily includes costs related to the acquisition and integration
of the business acquired from Western Polymer, LLC. |
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(ii) During the three
months ended September 30, 2020, the Company recorded $6 million of
pre-tax restructuring/impairment charges, consisting of $4 million
of employee-related and other costs, including professional
services, associated with its Cost Smart SG&A program and $2
million of restructuring related expenses primarily in North
America and APAC as part of its Cost Smart cost of sales program.
During the nine months ended September 30, 2020, the Company
recorded $31 million of pre-tax restructuring/impairment charges,
consisting of, $17 million of restructuring related expenses
primarily in North America and APAC as part of its Cost Smart cost
of sales program and $14 million of employee-related and other
costs, including professional services, associated with its Cost
Smart SG&A program. In addition, the Company recorded a $10
million impairment of its equity method investment during the three
months ended September 30, 2020, triggered by the decrease in fair
value of its investment resulting from the agreed upon purchase
price of the remaining 80% interest in Verdient Foods, Inc. The
Company expects to complete the acquisition during Q4 2020. During
the three and nine months ended September 30, 2019, the Company
recorded $28 million and $41 million of pre-tax restructuring
charges, respectively. During the third quarter of 2019, the
Company recorded $14 million of net restructuring related expenses
as part of the Cost Smart cost of sales program, including $6
million of employee-related costs and accelerated depreciation as
part of the closure of our Lane Cove, Australia facility.
Additionally, we recorded $4 million of employee-related costs in
South America and APAC, and $4 million of other costs, including
professional services, within the Cost Smart cost of sales program.
The Company also recorded $14 million of restructuring related
costs as part of the Cost Smart SG&A program, including $7
million of employee-related severance and $7 million of other
costs, including professional services, primarily in North America
and South America. During the nine months ended September 30, 2019,
the Company recorded $41 million of restructuring charges including
$20 million of employee-related and other costs, including
professional services, associated with its Cost Smart SG&A
program, $18 million of other costs, including professional
services, and employee-related costs associated with its Cost Smart
cost of sales program, including the closure of the Lane Cove,
Australia facility, and $3 million of other costs related to the
Latin America finance transformation initiative. |
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(iii) The three and
nine months ended September 30, 2020 includes the flow-through of
costs associated with the purchase of PureCircle Limited inventory
that was adjusted to fair value at the acquisition date in
accordance with business combination accounting rules. |
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(iv) During the three
and nine months ended September 30, 2020, the Company incurred $5
million of costs directly related to the early debt extinguishment
of the $400 million 4.625% senior notes due November 1, 2020. The
Company recorded the debt extinguishment charges within Financing
costs, net on the Condensed Consolidated Statements of Income. |
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(v) During the three
and nine months ended September 30, 2020, the Company incurred
storm damage to the Cedar Rapids, IA manufacturing facility. The
facility was shut down for 10 days, and the storm related damage
resulted in $2 million of charges during the three months ended
September 30, 2020. The Company recorded the storm damage costs
within Other expense (income), net on the Condensed Consolidated
Statements of Income. |
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(vi) The tax item
represents the impact of the Company’s use of the U.S. dollar as
the functional currency for its subsidiaries in Mexico. Mexico’s
effective tax rate is strongly influenced by the remeasurement of
the Mexican peso financial statements into U.S. dollars. The
company recorded a tax benefit of $6 million and a tax provision of
$16 million three and nine months ended September 30, 2020,
respectively, as a result of the movement of the Mexican peso
against the U.S. dollar during the periods. During the three and
nine months ended September 30, 2019, the company recorded a tax
provision of $3 million and $2 million, respectively, as a result
of the movement of the Mexican peso against the U.S. dollar during
the periods. |
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(vii) This relates to
other tax settlements, tax adjustments for an intercompany
reorganization, and tax results of the above non-GAAP
addbacks. |
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II. Non-GAAP Information (continued) |
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Ingredion
Incorporated ("Ingredion") |
|
Reconciliation of GAAP Operating Income to Non-GAAP
Adjusted Operating Income |
|
(Unaudited) |
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Three Months
Ended |
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Nine Months
Ended |
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September 30, |
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September 30, |
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(in
millions, pre-tax) |
|
2020 |
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2019 |
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2020 |
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2019 |
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Operating
income |
$ |
153 |
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$ |
165 |
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$ |
419 |
$ |
494 |
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Add
back: |
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Acquisition/integration costs (i) |
|
5 |
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- |
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8 |
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2 |
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Restructuring/impairment charges (ii) |
|
16 |
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28 |
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41 |
|
41 |
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Charge for
fair value markup of acquired inventory (iii) |
|
3 |
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- |
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3 |
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0 |
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North
America storm damage (v) |
|
2 |
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- |
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2 |
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- |
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Non-GAAP
adjusted operating income |
$ |
179 |
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$ |
193 |
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$ |
473 |
$ |
537 |
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For each tickmark
above, see footnotes included in the Reconciliation of GAAP Net
Income attributable to Ingredion and Diluted EPS to Non-GAAP
Adjusted Net Income attributable to Ingredion and Adjusted Diluted
EPS. |
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II.
Non-GAAP Information (continued) |
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Ingredion
Incorporated ("Ingredion") |
|
Reconciliation of GAAP Effective Income Tax Rate to
Non-GAAP Adjusted Effective Income Tax Rate |
|
(Unaudited) |
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Three Months Ended September 30, 2020 |
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Nine Months Ended September 30, 2020 |
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Income before |
|
Provision for |
|
Effective
Income |
|
Income before |
|
Provision for |
|
Effective
Income |
|
(in millions) |
|
Income Taxes (a) |
Income Taxes (b) |
Tax Rate (b / a) |
|
Income Taxes (a) |
Income Taxes (b) |
Tax Rate (b / a) |
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As
Reported |
|
$ |
133 |
|
$ |
40 |
|
|
30.1 |
% |
|
$ |
363 |
|
$ |
125 |
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34.4 |
% |
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Add
back: |
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Acquisition/integration costs (i) |
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|
5 |
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|
1 |
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8 |
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2 |
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|
Restructuring/impairment charges (ii) |
|
|
16 |
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|
1 |
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|
41 |
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|
7 |
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|
Charge for
fair value markup of acquired inventory (iii) |
|
|
3 |
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|
- |
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3 |
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|
- |
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|
Charge for
early extinguishment of debt (iv) |
|
|
5 |
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|
1 |
|
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|
5 |
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|
1 |
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|
North
America storm damage (v) |
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|
2 |
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- |
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2 |
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- |
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|
Tax item -
Mexico (vi) |
|
|
- |
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|
6 |
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- |
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(16 |
) |
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|
Other tax
matters (vii) |
|
|
- |
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|
(6 |
) |
|
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|
- |
|
|
(6 |
) |
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|
Adjusted
Non-GAAP |
|
$ |
164 |
|
$ |
43 |
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|
26.2 |
% |
|
$ |
422 |
|
$ |
113 |
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|
26.8 |
% |
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|
Three Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2019 |
|
|
|
Income before |
|
Provision for |
|
Effective
Income |
|
Income before |
|
Provision for |
|
Effective
Income |
|
(in millions) |
|
Income Taxes (a) |
Income Taxes (b) |
Tax Rate (b / a) |
|
Income Taxes (a) |
Income Taxes (b) |
Tax Rate (b / a) |
|
|
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|
|
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|
As
Reported |
|
$ |
140 |
|
$ |
38 |
|
|
27.1 |
% |
|
$ |
431 |
|
$ |
120 |
|
|
27.8 |
% |
|
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Add
back: |
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|
Acquisition/integration costs (i) |
|
|
- |
|
|
- |
|
|
|
|
|
2 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
28 |
|
|
6 |
|
|
|
|
|
41 |
|
|
9 |
|
|
|
|
|
|
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|
Tax item -
Mexico (vi) |
|
|
- |
|
|
(3 |
) |
|
|
|
|
- |
|
|
(2 |
) |
|
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|
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|
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|
|
|
|
|
|
Other tax
matters (vii) |
|
|
- |
|
|
(2 |
) |
|
|
|
|
- |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Non-GAAP |
|
$ |
168 |
|
$ |
39 |
|
|
23.2 |
% |
|
$ |
474 |
|
$ |
126 |
|
|
26.6 |
% |
|
|
|
|
|
|
|
|
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|
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|
|
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|
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|
For each tickmark
above, see footnotes included in the Reconciliation of GAAP Net
Income attributable to Ingredion and Diluted EPS to Non-GAAP
Adjusted Net Income attributable to Ingredion and Adjusted Diluted
EPS. |
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|
II.
Non-GAAP Information (continued) |
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|
Ingredion
Incorporated ("Ingredion") |
Reconciliation of Reported U.S. GAAP Effective Tax Rate
("GAAP ETR") |
to
Anticipated Adjusted Effective Tax Rate ("Adjusted
ETR") |
(Unaudited) |
|
|
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|
Anticipated
Effective Tax Rate Range |
|
|
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|
|
for Full
Year 2020 |
|
|
|
|
|
Low End |
|
High End |
|
|
|
GAAP
ETR |
|
32.0 |
% |
|
36.0 |
% |
|
|
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|
Add: |
|
|
|
|
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|
|
|
|
|
|
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|
|
|
Acquisition/integration costs (i) |
|
0.4 |
% |
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
1.5 |
% |
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Charge for
fair value markup of acquired inventory (iii) |
|
0.0 |
% |
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Charge for
early extinguishment of debt (iv) |
|
0.2 |
% |
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
North
America storm damage (v) |
|
0.1 |
% |
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Tax item -
Mexico (vi) |
|
-2.3 |
% |
|
-5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Other tax
matters (vii) |
|
-1.0 |
% |
|
-1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Impact of
adjustment on Effective Tax Rate (viii) |
|
-3.9 |
% |
|
-4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
ETR |
|
27.0 |
% |
|
|
28.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
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|
Above is a
reconciliation of our anticipated full year 2020 GAAP ETR to our
anticipated full year 2020 adjusted ETR. The amounts above may not
reflect certain future charges, costs and/or gains that are
inherently difficult to predict and estimate due to their unknown
timing, effect and/or significance. These amounts include, but are
not limited to, acquisition and integration costs, impairment and
restructuring costs, and certain other special items. We generally
exclude these items from our adjusted ETR guidance. For these
reasons, we are more confident in our ability to predict adjusted
ETR than we are in our ability to predict GAAP ETR. |
|
|
|
|
|
|
|
|
For items (i) through
(vii), see footnotes included in the Reconciliation of GAAP Net
Income attributable to Ingredion and Diluted EPS to Non-GAAP
Adjusted Net Income attributable to Ingredion and Adjusted Diluted
EPS. |
|
(viii) Indirect impact
of tax rate after items (i) through (vii). |
|
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