Ingredion Incorporated (NYSE:INGR), a leading global provider of ingredient solutions to diversified industries, today reported results for the third quarter 2016. Our results reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for 2016 and 2015 include items which are excluded from the non-GAAP financial measures which we present*.

“We delivered another robust quarter with solid operating income and earnings per share. More favorable price/product mix across the portfolio, as well as our global optimization efforts contributed to margin expansion,” said Ilene Gordon, chairman, president and chief executive officer. “North America had record operating income for the quarter and operating income was up in Asia Pacific and EMEA year-over-year.  South America, although down slightly, performed better than expected as regional network optimization and restructuring efforts were accelerated to offset difficult macroeconomic conditions and foreign-exchange headwinds.

“We remain committed to our strategic blueprint which has significantly moved us toward our vision of leadership in high-value, on-trend specialty ingredients. As we continue to execute our plan, we expect an outstanding year and are raising our anticipated 2016 adjusted EPS to $6.95 to $7.10,” Gordon added.

Financial Highlights

• At September 30, 2016, total debt and cash and short-term investments were $1.89 billion and $764 million, respectively, versus $1.84 billion and $440 million, respectively, at December 31, 2015. Cash and short-term investments were higher primarily driven by higher net income.

• During the third quarter of 2016, net financing costs were $15 million, or $1 million higher than the year-ago period, largely due to lower interest income.

• During the third quarter of 2016 the company issued $500 million of 3.20 percent 10 year senior notes to repay $350 million of term loan debt and $52 million of outstanding balances on its revolving credit facility.

• For the third quarter of 2016, reported and adjusted effective tax rates* were both 29.2 percent compared to reported and adjusted effective tax rates of 31.8 percent and 31.9 percent, respectively, in the year-ago period. The lower rates were largely driven by the adoption of a new accounting standard for share-based compensation as well as the impact of the sharper Mexican peso devaluation in the year-ago period.

• Year-to-date capital expenditures were $197 million, up slightly from the year-ago period.

Net Sales

• Third quarter net sales were up as a result of improved price/mix in North America and South America and a more favorable product mix in both specialty and core ingredients. These factors were  partially offset by changes in foreign currency exchange rates and organic volume declines attributable to the sale of our Port Colborne, Canada, facility and difficult macroeconomic conditions in South America.

• Year-to-date net sales were up as a result of improved price/mix in North America and South America, a more favorable product mix in both specialty and core ingredients, as well as acquisition-related growth. These factors were mostly offset by changes in foreign currency exchange rates and organic volume declines attributable to the sale of our Port Colborne, Canada, facility and difficult macroeconomic conditions in South America.

Operating income

• Third quarter reported and adjusted operating income were $221 million and $224 million, respectively.  These were 27 percent and 16 percent increases, respectively, compared to $175 million of reported operating income and $192 million of adjusted operating income in the third quarter of 2015. The increases in operating income were primarily due to better price/product mix in both our specialty and core ingredients and reduced costs resulting from our global optimization efforts.

• Year-to-date 2016 reported and adjusted operating income were $619 million and $636 million, respectively. These were 27 percent and 20 percent increases, respectively, compared to $487 million of year-to-date 2015 reported operating income and $529 million of year-to-date 2015 adjusted operating income. The increases in operating income were primarily due to a better price/product mix in both our specialty and core ingredients, acquisition-related growth, and reduced costs resulting from our global optimization efforts. These positives were partially offset by the negative effect of foreign exchange and difficult macroeconomic conditions in South America.

• Third quarter reported operating income was lower than adjusted operating income by $3 million. Of this difference, $2 million is related to employee-related severance and other costs associated with the execution of a global IT outsourcing project.

Conference Call and Webcast

Ingredion will conduct a conference call today at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to be hosted by Ilene Gordon, chairman, president and chief executive officer, and Jack Fortnum, executive vice president and chief financial officer.

The call will be webcast in real time, and will include a visual presentation accessible through the Ingredion 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 at www.ingredion.com.

ABOUT THE COMPANY

Ingredion Incorporated (NYSE:INGR) is a leading global ingredient solutions provider. We turn corn, tapioca, potatoes and other vegetables and fruits into value-added ingredients and biomaterial solutions for the food, beverage, paper and corrugating, brewing and other industries. Serving customers in over 100 countries, our ingredients make yogurts creamy, candy sweet, paper stronger and face creams silky. Visit ingredion.com to learn more.