Ingredion Posts Strong Fourth-Quarter Earnings

Ingredion Incorporated , a leading global provider of ingredient solutions to diversified industries, has reported results for the fourth quarter 2012. Fourth quarter 2012 reported EPS rose 16 percent to $1.42 from $1.22 in the fourth quarter 2011.

8 Feb 2013 --- Fourth quarter 2012 adjusted EPS increased 32 percent to $1.47 from $1.11 in 2011. 2012 reported EPS increased 3 percent to $5.47 compared to $5.32 in 2011. 2012 adjusted EPS rose 19 percent to $5.57 from $4.68 a year ago. Cash flow from operations up $432 million to $732 million in 2012 from $300 million in 2011.

"We delivered a strong fourth quarter and full year in spite of ongoing macroeconomic volatility," said Ilene Gordon, chairman, president and chief executive officer.  "Underlying this performance, we saw price increases to cover higher raw material costs and foreign exchange headwinds, volume improvement, and operating efficiencies.  We continue to see the strength of our business model, even in challenging times.  Our ability to manage risk while capitalizing on growth markets and trends provides us with an attractive position.

"Looking ahead, 2013 poses its own unique challenges; however, we believe that we are positioned to show further growth as we execute our strategic blueprint.  We continue to demonstrate the ability to realize appropriate pricing to cover higher input cost while our growth opportunities in emerging markets and mix improvement strategy remain intact," Gordon added.

Fourth quarter diluted EPS rose 16 percent to $1.42 compared to $1.22 last year.  The fourth quarter of 2012 included $0.11 of restructuring and impairment charges partially offset by a $0.04 gain from a benefit plan change and a $0.02 gain from the sale of land.  The fourth quarter of 2011 included a $0.23 gain from a change in a post-retirement plan partially offset by $0.09 of business integration costs and $0.03 of restructuring charges.  Excluding these items, adjusted EPS increased 32 percent from $1.11 to $1.47 in the quarter.  The estimated drivers of the increase in the fourth quarter adjusted EPS were $0.30 from margin, $0.06 from higher volumes, and $0.01 from other income, more than offsetting unfavorable currency devaluations of $0.06.  Non-operational items contributed $0.05.  Lower net financing costs contributed $0.04 while a lower tax rate provided a $0.02 benefit, partially offset by an increase in share count which resulted in a negative impact of $0.01.

Full year 2012 diluted EPS rose 3 percent to $5.47 compared to $5.32 last year.  2012 included a $0.16 per share benefit from the discrete release of the Korean deferred tax valuation allowance, a $0.04 gain from a benefit plan change and a $0.02 gain from the sale of land that were offset by $0.29 of restructuring and impairment charges, and $0.03 of business integration costs.  2011 included a $0.75 gain from a NAFTA settlement with the government of Mexico and a $0.23 gain from a change in post-retirement plan, partially offset by $0.26 of business integration costs and $0.08 of restructuring charges.  Excluding these items, adjusted EPS increased 19 percent from $4.68 to $5.57 in 2012.

During the fourth quarter of 2012, net financing costs were $15 million versus $19 million in the year-ago period.  The decrease primarily reflects lower interest expense attributable to reduced borrowings, lower interest rates and an increase in interest income driven by higher cash positions.

The fourth quarter effective tax rate was 33.7 percent compared to 34.2 percent in the year-ago period.  The effective tax rate for the full year was 27.8 percent compared to 28.7 percent in 2011.

At December 31, 2012, total debt and cash and cash equivalents were $1.80 billion and $609 million, respectively, versus $1.95 billion and $401 million, respectively, at December 31, 2011. 

In 2012, cash flow from operations was $732 million compared to $300 million in the prior year, primarily driven by an improvement in working capital.

Capital expenditures, net of disposals, were $304 million in 2012 compared to $260 million in 2011.