Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 29, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Ingredion Inc | ' |
Entity Central Index Key | '0001046257 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 71,863,000 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Income | ' | ' | ' | ' |
Net sales before shipping and handling costs | $1,544.80 | $1,695.80 | $4,547.80 | $5,073.70 |
Less: shipping and handling costs | 84.5 | 84.1 | 247.7 | 244.7 |
Net sales | 1,460.30 | 1,611.70 | 4,300.10 | 4,829 |
Cost of sales | 1,162.70 | 1,352.90 | 3,456.80 | 3,988.50 |
Gross profit | 297.6 | 258.8 | 843.3 | 840.5 |
Operating expenses | 129.1 | 125 | 398.6 | 399.1 |
Other (income), net | -9.6 | -3.1 | -18.4 | -10.7 |
Operating income | 178.1 | 136.9 | 463.1 | 452.1 |
Financing costs, net | 15.1 | 17.9 | 49 | 50.9 |
Income before income taxes | 163 | 119 | 414.1 | 401.2 |
Provision for income taxes | 42.6 | 30.7 | 113.9 | 104.1 |
Net income | 120.4 | 88.3 | 300.2 | 297.1 |
Less: Net income attributable to non-controlling interests | 1.8 | 2 | 6.4 | 4.9 |
Net income attributable to Ingredion | $118.60 | $86.30 | $293.80 | $292.20 |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 73 | 77.3 | 74.2 | 77.5 |
Diluted (in shares) | 74.3 | 78.6 | 75.5 | 78.8 |
Earnings per common share of Ingredion: | ' | ' | ' | ' |
Basic (in dollars per share) | $1.62 | $1.12 | $3.96 | $3.77 |
Diluted (in dollars per share) | $1.60 | $1.10 | $3.89 | $3.71 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Comprehensive Income (Loss) | ' | ' | ' | ' |
Net income | $120.40 | $88.30 | $300.20 | $297.10 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Losses on cash-flow hedges, net of income tax effect of $23, $14, $21 and $25, respectively | -48 | -29 | -47 | -54 |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $5, $9, $11 and $4, respectively | 11 | 18 | 24 | 10 |
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 1 | 2 | 3 | 5 |
Unrealized gain on investment, net of income tax effect | ' | ' | ' | 1 |
Currency translation adjustment | -121 | 6 | -116 | -105 |
Comprehensive income (loss) | -37 | 85 | 164 | 154 |
Comprehensive income attributable to non-controlling interests | -2 | -2 | -6 | -5 |
Comprehensive income (loss) attributable to Ingredion | ($39) | $83 | $158 | $149 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Comprehensive Income (Loss) | ' | ' | ' | ' |
Losses on cash-flow hedges, income tax effect | ($23) | ($14) | ($21) | ($25) |
Amount of losses on cash-flow hedges reclassified to earnings, income tax effect | ($5) | ($9) | ($11) | ($4) |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $565 | $574 |
Accounts receivable - net | 831 | 832 |
Inventories | 722 | 723 |
Prepaid expenses | 27 | 17 |
Deferred income taxes | 71 | 68 |
Total current assets | 2,216 | 2,214 |
Property, plant and equipment - net of accumulated depreciation of $2,836 and $2,776, respectively | 2,095 | 2,156 |
Goodwill | 520 | 535 |
Other intangible assets - net of accumulated amortization of $59 and $49, respectively | 297 | 311 |
Deferred income taxes | 10 | 15 |
Investments | 5 | 11 |
Other assets | 113 | 118 |
Total assets | 5,256 | 5,360 |
Current liabilities | ' | ' |
Short-term borrowings | 29 | 93 |
Accounts payable and accrued liabilities | 734 | 727 |
Total current liabilities | 763 | 820 |
Non-current liabilities | 152 | 163 |
Long-term debt | 1,888 | 1,717 |
Deferred income taxes | 202 | 207 |
Share-based payments subject to redemption | 20 | 24 |
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 and 77,672,670 shares issued at September 30, 2014 and December 31, 2013, respectively | 1 | 1 |
Additional paid-in capital | 1,107 | 1,166 |
Less: Treasury stock (common stock; 5,971,480 and 3,361,180 shares at September 30, 2014 and December 31, 2013, respectively) at cost | -431 | -225 |
Accumulated other comprehensive loss | -719 | -583 |
Retained earnings | 2,245 | 2,045 |
Total Ingredion stockholders' equity | 2,203 | 2,404 |
Non-controlling interests | 28 | 25 |
Total equity | 2,231 | 2,429 |
Total liabilities and equity | $5,256 | $5,360 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Property, plant and equipment, accumulated depreciation (in dollars) | $2,836 | $2,776 |
Other intangible assets, accumulated amortization (in dollars) | $59 | $49 |
Preferred stock, authorized shares | 25,000,000 | 25,000,000 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, issued shares | 0 | 0 |
Common stock, authorized shares | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares issued | 77,810,875 | 77,672,670 |
Treasury stock, shares | 5,971,480 | 3,361,180 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Equity and Redeemable Equity (USD $) | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest | Share Based Payments Subject to Redemption [Member] | Total |
In Millions, unless otherwise specified | ||||||||
Balance at Dec. 31, 2012 | $1 | $1,148 | ($6) | ($475) | $1,769 | $22 | ' | ' |
Balance Share-based Payments Subject to Redemption at Dec. 31, 2012 | ' | ' | ' | ' | ' | ' | 19 | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to Ingredion | ' | ' | ' | ' | 292 | ' | ' | 292.2 |
Net income attributable to non-controlling interests | ' | ' | ' | ' | ' | 5 | ' | -4.9 |
Dividends declared | ' | ' | ' | ' | -89 | -4 | ' | ' |
Losses on cash-flow hedges, net of income tax effect of $21 and $25 for the nine months ended September 30,2014 and 2013, respectively | ' | ' | ' | -54 | ' | ' | ' | -54 |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $11 and $4 for the nine months ended September 30,2014 and 2013 respectively | ' | ' | ' | 10 | ' | ' | ' | 10 |
Repurchases of common stock | ' | ' | -56 | ' | ' | ' | ' | ' |
Share-based compensation | ' | 17 | 2 | ' | ' | ' | 2 | ' |
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | ' | ' | ' | 5 | ' | ' | ' | 5 |
Unrealized gain on investment, net of income tax effect | ' | ' | ' | 1 | ' | ' | ' | 1 |
Currency translation adjustment | ' | ' | ' | -105 | ' | ' | ' | -105 |
Balance at Sep. 30, 2013 | 1 | 1,165 | -60 | -618 | 1,972 | 23 | ' | ' |
Balance Share-based Payments Subject to Redemption at Sep. 30, 2013 | ' | ' | ' | ' | ' | ' | 21 | ' |
Balance at Dec. 31, 2013 | 1 | 1,166 | -225 | -583 | 2,045 | 25 | ' | 2,429 |
Balance Share-based Payments Subject to Redemption at Dec. 31, 2013 | ' | ' | ' | ' | ' | ' | 24 | 24 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to Ingredion | ' | ' | ' | ' | 294 | ' | ' | 293.8 |
Net income attributable to non-controlling interests | ' | ' | ' | ' | ' | 6 | ' | -6.4 |
Dividends declared | ' | ' | ' | ' | -94 | -3 | ' | ' |
Losses on cash-flow hedges, net of income tax effect of $21 and $25 for the nine months ended September 30,2014 and 2013, respectively | ' | ' | ' | -47 | ' | ' | ' | -47 |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $11 and $4 for the nine months ended September 30,2014 and 2013 respectively | ' | ' | ' | 24 | ' | ' | ' | 24 |
Repurchases of common stock | ' | -63 | -241 | ' | ' | ' | ' | ' |
Share-based compensation | ' | 4 | 35 | ' | ' | ' | -4 | ' |
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | ' | ' | ' | 3 | ' | ' | ' | 3 |
Currency translation adjustment | ' | ' | ' | -116 | ' | ' | ' | -116 |
Balance at Sep. 30, 2014 | 1 | 1,107 | -431 | -719 | 2,245 | 28 | ' | 2,231 |
Balance Share-based Payments Subject to Redemption at Sep. 30, 2014 | ' | ' | ' | ' | ' | ' | $20 | $20 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Equity and Redeemable Equity (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Equity and Redeemable Equity | ' | ' | ' | ' |
Losses on cash-flow hedges, income tax effect | ($23) | ($14) | ($21) | ($25) |
Amount of losses on cash-flow hedges reclassified to earnings, income tax effect | ($5) | ($9) | ($11) | ($4) |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash provided by operating activities: | ' | ' |
Net income | $300.20 | $297.10 |
Non-cash charges to net income: | ' | ' |
Depreciation and amortization | 147 | 145 |
Changes in working capital: | ' | ' |
Accounts receivable and prepaid items | -19 | -86 |
Inventories | -15 | 61 |
Accounts payable and accrued liabilities | 8 | -137 |
Decrease (increase) in margin accounts | -11 | 11 |
Other | 52 | 71 |
Cash provided by operating activities | 462 | 362 |
Cash used for investing activities: | ' | ' |
Capital expenditures, net of proceeds on disposals | -187 | -202 |
Proceeds from sale of investment | 11 | ' |
Short-term investments | -1 | 19 |
Other | ' | 2 |
Cash used for investing activities | -177 | -181 |
Cash used for financing activities: | ' | ' |
Proceeds from borrowings | 227 | 20 |
Payments on debt | -118 | -50 |
Repurchases of common stock | -304 | -56 |
Issuance of common stock | 17 | 12 |
Dividends paid (including to non-controlling interests) | -97 | -82 |
Excess tax benefit on share-based compensation | 5 | 1 |
Cash used for financing activities | -270 | -155 |
Effect of foreign exchange rate changes on cash | -24 | -17 |
Increase (decrease) in cash and cash equivalents | -9 | 9 |
Cash and cash equivalents, beginning of period | 574 | 609 |
Cash and cash equivalents, end of period | $565 | $618 |
Interim_Financial_Statements
Interim Financial Statements | 9 Months Ended |
Sep. 30, 2014 | |
Interim Financial Statements | ' |
Interim Financial Statements | ' |
1.Interim Financial Statements | |
References to the “Company” are to Ingredion Incorporated (“Ingredion”) and its consolidated subsidiaries. These statements should be read in conjunction with the consolidated financial statements and the related notes to those statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
The unaudited condensed consolidated interim financial statements included herein were prepared by management on the same basis as the Company’s audited consolidated financial statements for the year ended December 31, 2013 and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of results of operations and cash flows for the interim periods ended September 30, 2014 and 2013, and the financial position of the Company as of September 30, 2014. The results for the interim periods are not necessarily indicative of the results expected for the full years. | |
New_Accounting_Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2014 | |
New Accounting Standards | ' |
New Accounting Standards | ' |
2.New Accounting Standards | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The standard will allow various transition approaches upon adoption. The Company is assessing the impacts of this new standard; however the adoption of the guidance in this Update is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements. | |
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This Update provides guidance pertaining to the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists, to resolve diversity in practice. The Update requires that companies present an unrecognized tax benefit as a reduction of a deferred tax asset for a tax loss or credit carryforward on the balance sheet when (a) the tax law requires the company to use the tax loss or credit carryforward to satisfy amounts payable upon disallowance of the tax position; or (b) the tax loss or credit carryforward is available to satisfy amounts payable upon disallowance of the tax position, and the company intends to use the deferred tax asset for that purpose. The guidance in this Update is effective prospectively for fiscal years beginning after December 15, 2013, and interim periods within those fiscal years. The Company adopted the guidance in this Update prospectively and the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. | |
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This Update clarifies the guidance pertaining to the release of the cumulative translation adjustment (“CTA”) to resolve diversity in practice. The Update clarifies that when a company ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, the company should release any related CTA into net income. In such instances, the CTA should be released into net income only if a sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The Update also requires the release of the CTA (or applicable pro rata portion thereof) upon the sale or partial sale of an equity method investment that is a foreign entity and for a step acquisition in which the acquirer held an equity method investment prior to obtaining control. The guidance in this Update is effective prospectively for fiscal years beginning after December 15, 2013, and interim periods within those fiscal years. The adoption of the guidance contained in this Update did not have an impact on the Company’s 2014 Condensed Consolidated Financial Statements. However, the guidance contained in this Update will impact the accounting for the CTA upon any future de-recognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity; and the effect will be dependent upon the relevant transaction at that time. | |
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Information | ' | |||||||||||||
Segment Information | ' | |||||||||||||
3.Segment Information | ||||||||||||||
The Company is principally engaged in the production and sale of starches and sweeteners for a wide range of industries and is managed geographically on a regional basis. The Company’s operations are classified into four reportable business segments: North America, South America, Asia Pacific and Europe, the Middle East and Africa (“EMEA”). The North America segment includes businesses in the United States, Canada and Mexico. The Company’s South America segment includes businesses in Brazil, Colombia, Ecuador, Peru and the Southern Cone of South America, which includes Argentina, Chile and Uruguay. The Asia Pacific segment includes businesses in Korea, Thailand, Malaysia, China, Japan, Indonesia, the Philippines, Singapore, India, Australia and New Zealand. The Company’s EMEA segment includes businesses in the United Kingdom, Germany, South Africa, Pakistan and Kenya. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net Sales | ||||||||||||||
North America | $ | 805.6 | $ | 948.7 | $ | 2,362.00 | $ | 2,835.30 | ||||||
South America | 307.6 | 322.8 | 906.2 | 992.3 | ||||||||||
Asia Pacific | 205.8 | 204.8 | 594.3 | 600.5 | ||||||||||
EMEA | 141.3 | 135.4 | 437.6 | 400.9 | ||||||||||
Total | $ | 1,460.30 | $ | 1,611.70 | $ | 4,300.10 | $ | 4,829.00 | ||||||
Operating Income | ||||||||||||||
North America | $ | 113.1 | $ | 96.6 | $ | 288.7 | $ | 308.2 | ||||||
South America | 27.4 | 18.8 | 73.8 | 79.5 | ||||||||||
Asia Pacific | 27 | 23.6 | 80.1 | 70.2 | ||||||||||
EMEA | 22.2 | 17.4 | 68.7 | 53.6 | ||||||||||
Corporate (a) | (11.6 | ) | (19.5 | ) | (48.2 | ) | (59.4 | ) | ||||||
Total | $ | 178.1 | $ | 136.9 | $ | 463.1 | $ | 452.1 | ||||||
(a) | Includes $7 million of income relating to a tax indemnification agreement with an offsetting expense of $7 million recorded in the provision for income taxes for the three months and nine months ended September 30, 2014 (see also Note 11). Additionally, includes a $5 million gain from the sale of a non-consolidated affiliate and $4 million of costs relating to product liability claims for the nine months ended September 30, 2014. | |||||||||||||
(in millions) | At | At | ||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||
Total Assets | ||||||||||||||
North America | $ | 2,964 | $ | 3,008 | ||||||||||
South America | 1,014 | 1,088 | ||||||||||||
Asia Pacific | 740 | 711 | ||||||||||||
EMEA | 538 | 553 | ||||||||||||
Total | $ | 5,256 | $ | 5,360 | ||||||||||
Financial_Instruments_Derivati
Financial Instruments, Derivatives and Hedging Activities | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Financial Instruments, Derivatives and Hedging Activities | ' | |||||||||||||||||||||||||
Financial Instruments, Derivatives and Hedging Activities | ' | |||||||||||||||||||||||||
4.Financial Instruments, Derivatives and Hedging Activities | ||||||||||||||||||||||||||
The Company is exposed to market risk stemming from changes in commodity prices (primarily corn and natural gas), foreign currency exchange rates and interest rates. In the normal course of business, the Company actively manages its exposure to these market risks by entering into various hedging transactions, authorized under established policies that place clear controls on these activities. These transactions utilize exchange-traded derivatives or over-the-counter derivatives with investment grade counterparties. Derivative financial instruments currently used by the Company consist of commodity futures, options and swap contracts, foreign currency forward contracts and swaps, and interest rate swaps. | ||||||||||||||||||||||||||
Commodity price hedging: The Company’s principal use of derivative financial instruments is to manage commodity price risk in North America relating to anticipated purchases of corn and natural gas to be used in the manufacturing process, generally over the next twelve to twenty-four months. To manage price risk related to corn purchases in North America, the Company uses corn futures and options contracts that trade on regulated commodity exchanges to lock-in its corn costs associated with firm-priced customer sales contracts. The Company uses over-the-counter gas swaps to hedge a portion of its natural gas usage in North America. These derivative financial instruments limit the impact that volatility resulting from fluctuations in market prices will have on corn and natural gas purchases and have been designated as cash-flow hedges. Unrealized gains and losses associated with marking the commodity hedging contracts to market (fair value) are recorded as a component of other comprehensive income (“OCI”) and included in the equity section of the Condensed Consolidated Balance Sheets as part of accumulated other comprehensive income/loss (“AOCI”). These amounts are subsequently reclassified into earnings in the same line item affected by the hedged transaction and in the same period or periods during which the hedged transaction affects earnings, or in the month a hedge is determined to be ineffective. The Company assesses the effectiveness of a commodity hedge contract based on changes in the contract’s fair value. The changes in the market value of such contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in the price of the hedged items. The amounts representing the ineffectiveness of these cash-flow hedges are not significant. | ||||||||||||||||||||||||||
At September 30, 2014, AOCI included $57 million of losses, net of tax of $26 million, pertaining to commodities-related derivative instruments designated as cash-flow hedges. At December 31, 2013, AOCI included $32 million of losses, net of tax of $15 million, pertaining to commodities-related derivative instruments designated as cash-flow hedges. | ||||||||||||||||||||||||||
Interest rate hedging: Derivative financial instruments that have been used by the Company to manage its interest rate risk consist of Treasury Lock agreements (“T-Locks”) and interest rate swaps. The Company did not have any T-Locks outstanding at September 30, 2014 or December 31, 2013. | ||||||||||||||||||||||||||
In September 2014, the Company entered into interest rate swap agreements that effectively convert the interest rates on its 6.0 percent $200 million senior notes due April 15, 2017, its 1.8 percent $300 million senior notes due September 25, 2017 and on $200 million of its $400 million 4.625 percent senior notes due November 1, 2020, to variable rates. Additionally, the Company has interest rate swap agreements that effectively convert the interest rate on its 3.2 percent $350 million senior notes due November 1, 2015 to a variable rate. These swap agreements call for the Company to receive interest at the fixed coupon rate of the respective notes and to pay interest at a variable rate based on the six-month US dollar LIBOR rate plus a spread. The Company has designated these interest rate swap agreements as hedges of the changes in fair value of the underlying debt obligations attributable to changes in interest rates and accounts for them as fair-value hedges. Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability in the fair value of outstanding debt obligations are reported in earnings. These amounts offset the gain or loss (that is, the change in fair value) of the hedged debt instruments that are attributable to changes in interest rates (that is, the hedged risk), which is also recognized in earnings. The fair value of these interest rate swap agreements at September 30, 2014 and December 31, 2013 was $8 million and $13 million, respectively, and is reflected in the Condensed Consolidated Balance Sheets within other assets, with an offsetting amount recorded in long-term debt to adjust the carrying amount of the hedged debt obligations. | ||||||||||||||||||||||||||
At September 30, 2014, AOCI included $7 million of losses (net of income taxes of $4 million) related to settled T-Locks. At December 31, 2013, AOCI included $8 million of losses (net of income taxes of $5 million) related to settled T-Locks. These deferred losses are being amortized to financing costs over the terms of the senior notes with which they are associated. | ||||||||||||||||||||||||||
Foreign currency hedging: Due to the Company’s global operations, including many operations in emerging markets, it is exposed to fluctuations in foreign currency exchange rates. As a result, the Company has exposure to translational foreign exchange risk when its foreign operation results are translated to US dollars and to transactional foreign exchange risk when transactions not denominated in the functional currency of the operating unit are revalued. The Company primarily uses derivative financial instruments such as foreign currency forward contracts, swaps and options to manage its transactional foreign exchange risk. At September 30, 2014, the Company had foreign currency forward sales contracts with an aggregate notional amount of $101 million and foreign currency forward purchase contracts with an aggregate notional amount of $57 million that hedged transactional exposures. At December 31, 2013, the Company had foreign currency forward sales contracts with an aggregate notional amount of $147 million and foreign currency forward purchase contracts with an aggregate notional amount of $78 million that hedged transactional exposures. The fair value of these derivative instruments were assets of $1 million at September 30, 2014 and liabilities of $5 million at December 31, 2013, respectively. | ||||||||||||||||||||||||||
The Company also has certain foreign currency derivative instruments that hedge certain foreign currency transactional exposures and are designated as cash-flow hedges. At both September 30, 2014 and December 31, 2013, AOCI included $1 million of gains, net of income taxes, associated with these hedges. | ||||||||||||||||||||||||||
The fair value and balance sheet location of the Company’s derivative instruments, accounted for as cash-flow hedges and presented gross on the Condensed Consolidated Balance Sheets, are reflected below: | ||||||||||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||||||||||
Derivatives designated as | Fair Value | Fair Value | ||||||||||||||||||||||||
cash-flow hedging | Balance Sheet | At | At | Balance Sheet | At | At | ||||||||||||||||||||
instruments: | Location | Sept. 30, | December 31, | Location | Sept. 30, | December 31, | ||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Commodity and foreign currency contracts | Accounts receivable-net | $ | 3 | $ | 2 | Accounts payable and accrued liabilities | $ | 44 | $ | 27 | ||||||||||||||||
Commodity and foreign currency contracts | Other assets | — | 5 | Non-current liabilities | 6 | — | ||||||||||||||||||||
Total | $ | 3 | $ | 7 | $ | 50 | $ | 27 | ||||||||||||||||||
At September 30, 2014, the Company had outstanding futures and option contracts that hedged the forecasted purchase of approximately 69 million bushels of corn. Additionally at September 30, 2014, the Company had outstanding swap and option contracts that hedged the forecasted purchase of approximately 14 million mmbtu’s of natural gas. The Company is unable to directly hedge price risk related to co-product sales; however, it occasionally enters into hedges of soybean oil (a competing product to corn oil) in order to mitigate the price risk of corn oil sales. The Company had no soybean oil hedges at September 30, 2014. | ||||||||||||||||||||||||||
Additional information relating to the Company’s derivative instruments is presented below (in millions, pre-tax): | ||||||||||||||||||||||||||
Amount of Gains (Losses) | Location of | Amount of Gains (Losses) | ||||||||||||||||||||||||
Recognized in OCI | Reclassified from AOCI | |||||||||||||||||||||||||
on Derivatives | into Income | |||||||||||||||||||||||||
Derivatives in | Three Months | Three Months | Gains (Losses) | Three Months | Three Months | |||||||||||||||||||||
Cash-Flow | Ended | Ended | Reclassified | Ended | Ended | |||||||||||||||||||||
Hedging | September 30, | September 30, | from AOCI into | September 30, | September 30, | |||||||||||||||||||||
Relationships | 2014 | 2013 | Income | 2014 | 2013 | |||||||||||||||||||||
Commodity and foreign currency contracts | $ | (71 | ) | $ | (43 | ) | Cost of sales | $ | (15 | ) | $ | (26 | ) | |||||||||||||
Interest rate contracts | — | — | Financing costs, net | (1 | ) | (1 | ) | |||||||||||||||||||
Total | $ | (71 | ) | $ | (43 | ) | $ | (16 | ) | $ | (27 | ) | ||||||||||||||
Amount of Gains (Losses) | Location of | Amount of Gains (Losses) | ||||||||||||||||||||||||
Recognized in OCI | Reclassified from AOCI | |||||||||||||||||||||||||
on Derivatives | into Income | |||||||||||||||||||||||||
Derivatives in | Nine Months | Nine Months | Gains (Losses) | Nine Months | Nine Months | |||||||||||||||||||||
Cash-Flow | Ended | Ended | Reclassified | Ended | Ended | |||||||||||||||||||||
Hedging | September 30, | September 30, | from AOCI into | September 30, | September 30, | |||||||||||||||||||||
Relationships | 2014 | 2013 | Income | 2014 | 2013 | |||||||||||||||||||||
Commodity and foreign currency contracts | $ | (68 | ) | $ | (79 | ) | Cost of sales | $ | (33 | ) | $ | (12 | ) | |||||||||||||
Interest rate contracts | — | — | Financing costs, net | (2 | ) | (2 | ) | |||||||||||||||||||
Total | $ | (68 | ) | $ | (79 | ) | $ | (35 | ) | $ | (14 | ) | ||||||||||||||
At September 30, 2014, AOCI included approximately $52 million of losses, net of income taxes of $25 million, on commodities-related derivative instruments designated as cash-flow hedges that are expected to be reclassified into earnings during the next twelve months. The Company expects the losses to be offset by changes in the underlying commodities cost. Additionally at September 30, 2014, AOCI included $2 million of losses on settled T-Locks (net of income taxes of $1 million) and $0.2 million of gains related to foreign currency hedges (net of income taxes), which are expected to be reclassified into earnings during the next twelve months. | ||||||||||||||||||||||||||
Presented below are the fair values of the Company’s financial instruments and derivatives for the periods presented: | ||||||||||||||||||||||||||
At September 30, 2014 | At December 31, 2013 | |||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Available for sale securities | $ | 4 | $ | 4 | $ | — | $ | — | $ | 4 | $ | 4 | $ | — | $ | — | ||||||||||
Derivative assets | 12 | — | 12 | — | 20 | — | 20 | — | ||||||||||||||||||
Derivative liabilities | 50 | 46 | 4 | — | 32 | 22 | 10 | — | ||||||||||||||||||
Long-term debt | 2,009 | — | 2,009 | — | 1,813 | — | 1,813 | — | ||||||||||||||||||
Level 1 inputs consist of quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. | ||||||||||||||||||||||||||
The carrying values of cash equivalents, short-term investments, accounts receivable, accounts payable and short-term borrowings approximate fair values. Commodity futures, options and swap contracts are recognized at fair value. Foreign currency forward contracts, swaps and options are also recognized at fair value. The fair value of the Company’s long-term debt is estimated based on quotations of major securities dealers who are market makers in the securities. At September 30, 2014, the carrying value and fair value of the Company’s long-term debt were $1.89 billion and $2.01 billion, respectively. | ||||||||||||||||||||||||||
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation | ' | |||||||||||||
Share-Based Compensation | ' | |||||||||||||
5. Share-Based Compensation | ||||||||||||||
Stock Options: | ||||||||||||||
Under the Company’s stock incentive plan, stock options are granted at exercise prices that equal the market value of the underlying common stock on the date of grant. The options have a 10-year term and are exercisable upon vesting, which occurs over a three-year period at the anniversary dates of the date of grant. Compensation expense is recognized on a straight-line basis for all awards. | ||||||||||||||
The Company granted non-qualified options to purchase 715 thousand shares and 416 thousand shares of the Company’s common stock during the nine months ended September 30, 2014 and 2013, respectively. The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following assumptions: | ||||||||||||||
For the Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Expected life (in years) | 5.5 | 5.8 | ||||||||||||
Risk-free interest rate | 1.63 | % | 1.11 | % | ||||||||||
Expected volatility | 30.28 | % | 32.64 | % | ||||||||||
Expected dividend yield | 2.82 | % | 1.57 | % | ||||||||||
The expected life of options represents the weighted-average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s historical exercise patterns. The risk-free interest rate is based on the US Treasury yield curve in effect at the grant date for the period corresponding to the expected life of the options. Expected volatility is based on historical volatilities of the Company’s common stock. Dividend yields are based on historical dividend payments. | ||||||||||||||
Stock option activity for the nine months ended September 30, 2014 was as follows: | ||||||||||||||
(dollars and options in thousands, | Number of | Weighted | Average | Aggregate | ||||||||||
except per share amounts) | Options | Average | Remaining | Intrinsic | ||||||||||
Exercise | Contractual | Value | ||||||||||||
Price per | Term (Years) | |||||||||||||
Share | ||||||||||||||
Outstanding at December 31, 2013 | 2,849 | $ | 40.77 | |||||||||||
Granted | 715 | 59.65 | ||||||||||||
Exercised | (523 | ) | 33.37 | |||||||||||
Cancelled | (48 | ) | 51.66 | |||||||||||
Outstanding at September 30, 2014 | 2,993 | 46.4 | 6.34 | $ | 87,961 | |||||||||
Exercisable at September 30, 2014 | 1,938 | 38.63 | 4.93 | $ | 72,008 | |||||||||
For the nine months ended September 30, 2014, cash received from the exercise of stock options was $17 million. At September 30, 2014, the total remaining unrecognized compensation cost related to stock options approximated $11 million, which will be amortized over the weighted-average period of approximately 2.0 years. | ||||||||||||||
Additional information pertaining to stock option activity is as follows: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(dollars in thousands, except per share) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Weighted average grant date fair value of stock options granted (per share) | $ | — | $ | — | $ | 12.99 | $ | 17.87 | ||||||
Total intrinsic value of stock options exercised | $ | 6,416 | $ | 2,686 | $ | 21,339 | $ | 17,338 | ||||||
Restricted Shares of Common Stock and Restricted Stock Units: | ||||||||||||||
The Company has granted shares of restricted common stock (“RSAs”) and restricted stock units (“RSUs”) to certain key employees. The RSAs and RSUs are subject to cliff vesting, generally after three to five years provided the employee remains in the service of the Company. The fair value of the RSAs and RSUs is determined based upon the number of shares granted and the quoted market price of the Company’s common stock at the date of the grant. | ||||||||||||||
The following table summarizes RSA and RSU activity for the nine months ended September 30, 2014: | ||||||||||||||
RSAs | RSUs | |||||||||||||
(in thousands, except per share | Number of | Weighted | Number of | Weighted | ||||||||||
amounts) | RSAs | Average | RSUs | Average | ||||||||||
Fair Value | Fair Value | |||||||||||||
per Share | per Share | |||||||||||||
Non-vested at December 31, 2013 | 48 | $ | 26.25 | 469 | $ | 54.47 | ||||||||
Granted | — | — | 158 | 61.29 | ||||||||||
Vested | (31 | ) | 25.35 | (161 | ) | 48.48 | ||||||||
Cancelled | (1 | ) | 28.75 | (23 | ) | 54.74 | ||||||||
Non-vested at September 30, 2014 | 16 | 27.94 | 443 | 59.09 | ||||||||||
At September 30, 2014, the total remaining unrecognized compensation cost related to RSUs was $13 million, which will be amortized over a weighted-average period of approximately 2.0 years. Unrecognized compensation cost related to RSAs was insignificant at September 30, 2014. | ||||||||||||||
The following table summarizes the components of the Company’s share-based compensation expense: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock options: | ||||||||||||||
Pre-tax compensation expense | $ | 1.7 | $ | 1.5 | $ | 5.4 | $ | 4.7 | ||||||
Income tax (benefit) | (0.5 | ) | (0.5 | ) | (1.6 | ) | (1.4 | ) | ||||||
Stock option expense, net of income taxes | 1.2 | 1 | 3.8 | 3.3 | ||||||||||
RSUs, RSAs and other share-based awards: | ||||||||||||||
Pre-tax compensation expense | 3 | 2.7 | 8.7 | 8.4 | ||||||||||
Income tax (benefit) | (0.9 | ) | (0.8 | ) | (2.5 | ) | (2.5 | ) | ||||||
RSU, RSA and other share-based compensation expense, net of income taxes | 2.1 | 1.9 | 6.2 | 5.9 | ||||||||||
Total share-based compensation: | ||||||||||||||
Pre-tax compensation expense | 4.7 | 4.2 | 14.1 | 13.1 | ||||||||||
Income tax (benefit) | (1.4 | ) | (1.3 | ) | (4.1 | ) | (3.9 | ) | ||||||
Total share-based compensation expense, net of income taxes | $ | 3.3 | $ | 2.9 | $ | 10 | $ | 9.2 | ||||||
Net_Periodic_Pension_and_Postr
Net Periodic Pension and Postretirement Benefit Costs | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Net Periodic Pension and Postretirement Benefit Costs | ' | |||||||||||||||||||||||||
Net Periodic Pension and Postretirement Benefit Costs | ' | |||||||||||||||||||||||||
6.Net Periodic Pension and Postretirement Benefit Costs | ||||||||||||||||||||||||||
For detailed information about the Company’s pension and postretirement benefit plans, please refer to Note 8 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||||||||||||||||||||
The following table sets forth the components of net periodic benefit cost of the US and non-US defined benefit pension plans for the periods presented: | ||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||
US Plans | Non-US Plans | US Plans | Non-US Plans | |||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 1.8 | $ | 2 | $ | 1.5 | $ | 2.3 | $ | 5.3 | $ | 5.9 | $ | 4.4 | $ | 7 | ||||||||||
Interest cost | 3.3 | 2.8 | 3.7 | 3 | 9.8 | 8.5 | 11.1 | 9.2 | ||||||||||||||||||
Expected return on plan assets | (5.2 | ) | (4.6 | ) | (3.6 | ) | (2.9 | ) | (15.7 | ) | (13.7 | ) | (10.7 | ) | (8.9 | ) | ||||||||||
Amortization of net actuarial loss | 0.1 | 0.5 | 0.8 | 1.2 | 0.3 | 1.4 | 2.4 | 3.7 | ||||||||||||||||||
Amortization of prior service credit | — | — | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
Amortization of transition obligation | — | — | 0.1 | 0.1 | — | — | 0.2 | 0.2 | ||||||||||||||||||
Settlement | 0.4 | — | — | — | 0.4 | — | — | — | ||||||||||||||||||
Net pension cost | $ | 0.4 | $ | 0.7 | $ | 2.5 | $ | 3.7 | $ | 0.1 | $ | 2.1 | $ | 7.3 | $ | 11.1 | ||||||||||
The Company currently anticipates that it will make approximately $18 million in cash contributions to its pension plans in 2014, consisting of $6 million to its US pension plans and $12 million to its non-US pension plans. For the nine months ended September 30, 2014, the Company made cash contributions of approximately $5 million and $8 million to its US and non-US pension plans, respectively. | ||||||||||||||||||||||||||
The following table sets forth the components of net postretirement benefit cost for the periods presented: | ||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||
Ended Sept. 30, | Ended Sept. 30, | |||||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Service cost | $ | 0.7 | $ | 0.7 | $ | 2.1 | $ | 2.3 | ||||||||||||||||||
Interest cost | 0.9 | 0.9 | 2.7 | 2.8 | ||||||||||||||||||||||
Amortization of prior service cost | — | — | — | 0.1 | ||||||||||||||||||||||
Amortization of net actuarial loss | 0.1 | 0.2 | 0.3 | 0.8 | ||||||||||||||||||||||
Curtailment | — | (0.3 | ) | — | (0.3 | ) | ||||||||||||||||||||
Net postretirement benefit cost | $ | 1.7 | $ | 1.5 | $ | 5.1 | $ | 5.7 | ||||||||||||||||||
Earnings_per_Common_Share
Earnings per Common Share | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Earnings Per Common Share | ' | |||||||||||||||||
Earnings per Common Share | ' | |||||||||||||||||
7.Earnings per Common Share | ||||||||||||||||||
The following table provides the computation of basic and diluted earnings per common share (“EPS”) for the periods presented. | ||||||||||||||||||
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | |||||||||||||||||
Net Income | Net Income | |||||||||||||||||
Available | Weighted | Available | Weighted | |||||||||||||||
to Ingredion | Average Shares | Per Share | to Ingredion | Average Shares | Per Share | |||||||||||||
(in millions, except per share amounts) | (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||
Basic EPS | $ | 118.6 | 73.0 | $ | 1.62 | $ | 86.3 | 77.3 | $ | 1.12 | ||||||||
Effect of Dilutive Securities: | ||||||||||||||||||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs, RSAs and other awards | 1.3 | 1.3 | ||||||||||||||||
Diluted EPS | $ | 118.6 | 74.3 | $ | 1.60 | $ | 86.3 | 78.6 | $ | 1.10 | ||||||||
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | |||||||||||||||||
Net Income | Net Income | |||||||||||||||||
Available | Weighted | Available | Weighted | |||||||||||||||
to Ingredion | Average Shares | Per Share | to Ingredion | Average Shares | Per Share | |||||||||||||
(in millions, except per share amounts) | (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||
Basic EPS | $ | 293.8 | 74.2 | $ | 3.96 | $ | 292.2 | 77.5 | $ | 3.77 | ||||||||
Effect of Dilutive Securities: | ||||||||||||||||||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs, RSAs and other awards | 1.3 | 1.3 | ||||||||||||||||
Diluted EPS | $ | 293.8 | 75.5 | $ | 3.89 | $ | 292.2 | 78.8 | $ | 3.71 | ||||||||
For the first nine months of 2014, options to purchase approximately 0.4 million shares of common stock were excluded from the calculation of diluted EPS as the impact of their inclusion would have been anti-dilutive. The number of anti-dilutive options excluded from the calculation of diluted EPS for the third quarter of 2014 was not material. For both the third quarter and first nine months of 2013, options to purchase approximately 0.4 million shares of common stock were excluded from the calculation of diluted EPS as the impact of their inclusion would have been anti-dilutive. | ||||||||||||||||||
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
8.Inventories | ||||||||
Inventories are summarized as follows: | ||||||||
(in millions) | At | At | ||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Finished and in process | $ | 437 | $ | 440 | ||||
Raw materials | 240 | 235 | ||||||
Manufacturing supplies and other | 45 | 48 | ||||||
Total inventories | $ | 722 | $ | 723 | ||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
9.Accumulated Other Comprehensive Loss | |||||||||||||||||
A summary of accumulated other comprehensive loss for the nine months ended September 30, 2014 and 2013 is provided below: | |||||||||||||||||
Deferred | Unrealized | Accumulated | |||||||||||||||
Cumulative | Gain/(Loss) | Pension/ | Loss | Other | |||||||||||||
Translation | on Hedging | Postretirement | on | Comprehensive | |||||||||||||
(in millions) | Adjustment | Activities | Adjustment | Investment | Loss | ||||||||||||
Balance, December 31, 2013 | $ | (489 | ) | $ | (40 | ) | $ | (53 | ) | $ | (1 | ) | $ | (583 | ) | ||
Losses on cash-flow hedges, net of income tax effect of $21 | (47 | ) | (47 | ) | |||||||||||||
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $11 | 24 | 24 | |||||||||||||||
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 3 | 3 | |||||||||||||||
Currency translation adjustment | (116 | ) | (116 | ) | |||||||||||||
Balance, September 30, 2014 | $ | (605 | ) | $ | (63 | ) | $ | (50 | ) | $ | (1 | ) | $ | (719 | ) | ||
Deferred | Unrealized | Accumulated | |||||||||||||||
Cumulative | Gain/(Loss) | Pension/ | Loss | Other | |||||||||||||
Translation | on Hedging | Postretirement | on | Comprehensive | |||||||||||||
(in millions) | Adjustment | Activities | Adjustment | Investment | Loss | ||||||||||||
Balance, December 31, 2012 | $ | (335 | ) | $ | (17 | ) | $ | (121 | ) | $ | (2 | ) | $ | (475 | ) | ||
Losses on cash-flow hedges, net of income tax effect of $25 | (54 | ) | (54 | ) | |||||||||||||
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $4 | 10 | 10 | |||||||||||||||
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 5 | 5 | |||||||||||||||
Unrealized gain on investment, net of income tax effect | 1 | 1 | |||||||||||||||
Currency translation adjustment | (105 | ) | (105 | ) | |||||||||||||
Balance, September 30, 2013 | $ | (440 | ) | $ | (61 | ) | $ | (116 | ) | $ | (1 | ) | $ | (618 | ) | ||
The following table provides detail pertaining to reclassifications from AOCI into net income for the periods presented: | |||||||||||||||||
Amount Reclassified from AOCI | |||||||||||||||||
Three Months ended | Nine Months ended | Affected Line Item in | |||||||||||||||
Details about AOCI Components | September 30, | September 30, | Condensed Consolidated | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | Statements of Income | ||||||||||||
Losses on cash-flow hedges: | |||||||||||||||||
Commodity and foreign currency contracts | $ | (15 | ) | $ | (26 | ) | $ | (33 | ) | $ | (12 | ) | Cost of sales | ||||
Interest rate contracts | (1 | ) | (1 | ) | (2 | ) | (2 | ) | Financing costs, net | ||||||||
Losses related to pension and other postretirement obligations | (1 | ) | (2 | ) | (4 | ) | (6 | ) | (a) | ||||||||
Total before tax reclassifications | $ | (17 | ) | $ | (29 | ) | $ | (39 | ) | $ | (20 | ) | |||||
Income tax benefit | 5 | 9 | 12 | 5 | |||||||||||||
Total after-tax reclassifications | $ | (12 | ) | $ | (20 | ) | $ | (27 | ) | $ | (15 | ) | |||||
(a) This component is included in the computation of net periodic benefit cost and affects both cost of sales and operating expenses on the Condensed Consolidated Statements of Income. | |||||||||||||||||
Accelerated_Share_Repurchase_A
Accelerated Share Repurchase Agreement | 9 Months Ended |
Sep. 30, 2014 | |
Accelerated Share Repurchase Agreement | ' |
Accelerated Share Repurchase Agreement | ' |
10.Accelerated Share Repurchase Agreement | |
As part of the stock repurchase program, the Company entered into an accelerated share repurchase agreement (“ASR”) on July 30, 2014 with an investment bank under which the Company repurchased $300 million of its common stock. The Company paid the $300 million on August 1, 2014 and received an initial delivery of shares from the investment bank of approximately 3.2 million shares, representing approximately 80 percent of the shares anticipated to be repurchased based on current market prices. The ASR was accounted for as an initial stock purchase transaction and a forward stock purchase contract. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted net earnings per share from the effective date of the ASR. The forward stock purchase contract is classified as an equity instrument. At September 30, 2014, the $60 million holdback was recorded as a reduction to additional paid-in capital in the Condensed Consolidated Balance Sheet. The ASR was funded through a combination of cash on hand and utilization of the Revolving Credit Agreement. | |
At the conclusion of the ASR, the Company may receive additional shares or cash, or be required to pay additional cash or deliver shares (at the Company’s option) based upon the volume-weighted average price of the Company’s stock, less a discount, over an averaging period, which is expected to end in the fourth quarter of 2014. The ASR is part of the Company’s existing share repurchase program, which had approximately 0.8 million shares available for purchase as of September 30, 2014. The maximum number of shares that can be repurchased under the ASR is limited to 4.0 million shares. As of September 30, 2014, based on the volume-weighted average price of the Company’s common stock since the effective date of the ASR, the investment bank would be required to deliver approximately 0.7 million of additional shares to the Company. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
11.Income Taxes | |
The Company’s effective income tax rate for the third quarter of 2014 was 26.1 percent compared to 25.8 percent a year ago. The effective income tax rate for the first nine months of 2014 was 27.5 percent compared to 25.9 percent a year ago. | |
In the third quarter of 2014, the Company recorded two discrete tax adjustments that partially offset each other. First, the effective tax rate reflects a favorable impact of 5.3 percentage points that relates to the reversal of previously unrecognized tax benefits due to the lapsing of the statute of limitations. | |
Second, an unfavorable impact of 4.5 percentage points was recognized in the period for an unfavorable audit result in a National Starch subsidiary related to a pre-acquisition period for which we are indemnified by Akzo Nobel N.V. (“Akzo”). The $7 million expense incurred by the acquired subsidiary is recorded in the tax provision, while the reimbursement from Akzo under the indemnification is recorded as other income. As the Company is fully indemnified for this pre-acquisition obligation, the impact on net income is zero. | |
Without the discrete tax adjustments and the indemnification income, the Company’s effective income tax rate for both the third quarter and first nine months of 2014 would have been approximately 28 percent. | |
In the third quarter of 2013, the effective tax rate reflected a favorable impact of approximately 4.2 percentage points that relates to the reversal of previously unrecognized tax benefits and favorable provision to return adjustments. The effective income tax rate for the nine months ended September 30, 2013 also reflected a favorable determination received from a Canadian court regarding the tax treatment of a prior period transaction, resulting in a discrete tax benefit of approximately 1.0 percentage point and the favorable impact of approximately 2.0 percentage points related to the reversal of previously unrecognized tax benefits on a year-to-date basis. | |
Without these items, the Company’s effective income tax rates for the third quarter and first nine months of 2013 would have been approximately 30 percent and 29 percent, respectively. | |
Subsequent_Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Event | ' |
Subsequent Event | ' |
12.Subsequent Event | |
On October 14, 2014, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Penford Corporation, a Washington corporation (“Penford”), Prospect Sub, Inc., a Washington corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and the Company. The Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement were unanimously approved by the Company’s board of directors. | |
The Merger Agreement provides for the merger of Merger Sub with and into Penford, on the terms and subject to the conditions set forth in the Merger Agreement (the “Merger”), with Penford continuing as the surviving corporation in the Merger. As a result of the Merger, Penford will become a wholly-owned subsidiary of the Company. | |
Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share (a “Share”) of common stock of Penford (“Penford Common Stock”) issued and outstanding immediately prior to the Effective Time, other than (a) Shares owned by the Company or Merger Sub, or by any subsidiary of the Company or Merger Sub, immediately prior to the Effective Time and (b) Shares outstanding immediately prior to the Effective Time and held by a holder who is entitled to exercise dissenters’ rights and properly exercises dissenters’ rights under Washington law with respect to such Shares, will be converted into the right to receive $19.00 in cash per Share, without interest and subject to and reduced by the amount of any tax withholding. As of the date of the Merger Agreement, Penford had 12,735,038 outstanding Shares and 1,429,000 Shares underlying outstanding options. Outstanding borrowings under Penford’s revolving credit agreement will become due as a result of the Merger. The purchase price is estimated to be $340 million, including the assumption of debt. The Company expects to fund the acquisition of Penford with available cash and proceeds from borrowings under the Company’s revolving credit agreement. | |
Penford, headquartered in Centennial, Colorado had net sales of $467 million for the fiscal year ended August 31, 2013. Penford employs approximately 445 people and operates six plants in the United States, all of which manufacture specialty starches | |
The consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including, among other things, (a) the adoption of the Merger Agreement by the holders of a majority of the voting power of the outstanding Shares entitled to vote thereon, (b) the receipt of certain required antitrust approvals, (c) the receipt by the Company of audited financial statements of Penford for fiscal year 2014 and (d) other specified customary closing conditions. The Merger could close as early as the end of the calendar year 2014. | |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Information | ' | |||||||||||||
Schedule of segment reporting of net sales, operating income and total assets | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Net Sales | ||||||||||||||
North America | $ | 805.6 | $ | 948.7 | $ | 2,362.00 | $ | 2,835.30 | ||||||
South America | 307.6 | 322.8 | 906.2 | 992.3 | ||||||||||
Asia Pacific | 205.8 | 204.8 | 594.3 | 600.5 | ||||||||||
EMEA | 141.3 | 135.4 | 437.6 | 400.9 | ||||||||||
Total | $ | 1,460.30 | $ | 1,611.70 | $ | 4,300.10 | $ | 4,829.00 | ||||||
Operating Income | ||||||||||||||
North America | $ | 113.1 | $ | 96.6 | $ | 288.7 | $ | 308.2 | ||||||
South America | 27.4 | 18.8 | 73.8 | 79.5 | ||||||||||
Asia Pacific | 27 | 23.6 | 80.1 | 70.2 | ||||||||||
EMEA | 22.2 | 17.4 | 68.7 | 53.6 | ||||||||||
Corporate (a) | (11.6 | ) | (19.5 | ) | (48.2 | ) | (59.4 | ) | ||||||
Total | $ | 178.1 | $ | 136.9 | $ | 463.1 | $ | 452.1 | ||||||
(a) | Includes $7 million of income relating to a tax indemnification agreement with an offsetting expense of $7 million recorded in the provision for income taxes for the three months and nine months ended September 30, 2014 (see also Note 11). Additionally, includes a $5 million gain from the sale of a non-consolidated affiliate and $4 million of costs relating to product liability claims for the nine months ended September 30, 2014. | |||||||||||||
(in millions) | At | At | ||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||
Total Assets | ||||||||||||||
North America | $ | 2,964 | $ | 3,008 | ||||||||||
South America | 1,014 | 1,088 | ||||||||||||
Asia Pacific | 740 | 711 | ||||||||||||
EMEA | 538 | 553 | ||||||||||||
Total | $ | 5,256 | $ | 5,360 | ||||||||||
Financial_Instruments_Derivati1
Financial Instruments, Derivatives and Hedging Activities (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Financial Instruments, Derivatives and Hedging Activities | ' | |||||||||||||||||||||||||
Schedule of location and amount of assets and liabilities reported in balance sheet | ' | |||||||||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||||||||||
Derivatives designated as | Fair Value | Fair Value | ||||||||||||||||||||||||
cash-flow hedging | Balance Sheet | At | At | Balance Sheet | At | At | ||||||||||||||||||||
instruments: | Location | Sept. 30, | December 31, | Location | Sept. 30, | December 31, | ||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Commodity and foreign currency contracts | Accounts receivable-net | $ | 3 | $ | 2 | Accounts payable and accrued liabilities | $ | 44 | $ | 27 | ||||||||||||||||
Commodity and foreign currency contracts | Other assets | — | 5 | Non-current liabilities | 6 | — | ||||||||||||||||||||
Total | $ | 3 | $ | 7 | $ | 50 | $ | 27 | ||||||||||||||||||
Schedule of amount of gains and losses recognized in OCI and location and amount of gains and losses reported in income statement | ' | |||||||||||||||||||||||||
Additional information relating to the Company’s derivative instruments is presented below (in millions, pre-tax): | ||||||||||||||||||||||||||
Amount of Gains (Losses) | Location of | Amount of Gains (Losses) | ||||||||||||||||||||||||
Recognized in OCI | Reclassified from AOCI | |||||||||||||||||||||||||
on Derivatives | into Income | |||||||||||||||||||||||||
Derivatives in | Three Months | Three Months | Gains (Losses) | Three Months | Three Months | |||||||||||||||||||||
Cash-Flow | Ended | Ended | Reclassified | Ended | Ended | |||||||||||||||||||||
Hedging | September 30, | September 30, | from AOCI into | September 30, | September 30, | |||||||||||||||||||||
Relationships | 2014 | 2013 | Income | 2014 | 2013 | |||||||||||||||||||||
Commodity and foreign currency contracts | $ | (71 | ) | $ | (43 | ) | Cost of sales | $ | (15 | ) | $ | (26 | ) | |||||||||||||
Interest rate contracts | — | — | Financing costs, net | (1 | ) | (1 | ) | |||||||||||||||||||
Total | $ | (71 | ) | $ | (43 | ) | $ | (16 | ) | $ | (27 | ) | ||||||||||||||
Amount of Gains (Losses) | Location of | Amount of Gains (Losses) | ||||||||||||||||||||||||
Recognized in OCI | Reclassified from AOCI | |||||||||||||||||||||||||
on Derivatives | into Income | |||||||||||||||||||||||||
Derivatives in | Nine Months | Nine Months | Gains (Losses) | Nine Months | Nine Months | |||||||||||||||||||||
Cash-Flow | Ended | Ended | Reclassified | Ended | Ended | |||||||||||||||||||||
Hedging | September 30, | September 30, | from AOCI into | September 30, | September 30, | |||||||||||||||||||||
Relationships | 2014 | 2013 | Income | 2014 | 2013 | |||||||||||||||||||||
Commodity and foreign currency contracts | $ | (68 | ) | $ | (79 | ) | Cost of sales | $ | (33 | ) | $ | (12 | ) | |||||||||||||
Interest rate contracts | — | — | Financing costs, net | (2 | ) | (2 | ) | |||||||||||||||||||
Total | $ | (68 | ) | $ | (79 | ) | $ | (35 | ) | $ | (14 | ) | ||||||||||||||
Schedule of fair value of financial instruments and derivatives | ' | |||||||||||||||||||||||||
At September 30, 2014 | At December 31, 2013 | |||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Available for sale securities | $ | 4 | $ | 4 | $ | — | $ | — | $ | 4 | $ | 4 | $ | — | $ | — | ||||||||||
Derivative assets | 12 | — | 12 | — | 20 | — | 20 | — | ||||||||||||||||||
Derivative liabilities | 50 | 46 | 4 | — | 32 | 22 | 10 | — | ||||||||||||||||||
Long-term debt | 2,009 | — | 2,009 | — | 1,813 | — | 1,813 | — | ||||||||||||||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation | ' | |||||||||||||
Schedule of valuation assumptions for stock options | ' | |||||||||||||
For the Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Expected life (in years) | 5.5 | 5.8 | ||||||||||||
Risk-free interest rate | 1.63 | % | 1.11 | % | ||||||||||
Expected volatility | 30.28 | % | 32.64 | % | ||||||||||
Expected dividend yield | 2.82 | % | 1.57 | % | ||||||||||
Schedule of stock option activity | ' | |||||||||||||
(dollars and options in thousands, | Number of | Weighted | Average | Aggregate | ||||||||||
except per share amounts) | Options | Average | Remaining | Intrinsic | ||||||||||
Exercise | Contractual | Value | ||||||||||||
Price per | Term (Years) | |||||||||||||
Share | ||||||||||||||
Outstanding at December 31, 2013 | 2,849 | $ | 40.77 | |||||||||||
Granted | 715 | 59.65 | ||||||||||||
Exercised | (523 | ) | 33.37 | |||||||||||
Cancelled | (48 | ) | 51.66 | |||||||||||
Outstanding at September 30, 2014 | 2,993 | 46.4 | 6.34 | $ | 87,961 | |||||||||
Exercisable at September 30, 2014 | 1,938 | 38.63 | 4.93 | $ | 72,008 | |||||||||
Schedule of additional information pertaining to stock option activity | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(dollars in thousands, except per share) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Weighted average grant date fair value of stock options granted (per share) | $ | — | $ | — | $ | 12.99 | $ | 17.87 | ||||||
Total intrinsic value of stock options exercised | $ | 6,416 | $ | 2,686 | $ | 21,339 | $ | 17,338 | ||||||
Schedule of restricted share and restricted unit activity | ' | |||||||||||||
RSAs | RSUs | |||||||||||||
(in thousands, except per share | Number of | Weighted | Number of | Weighted | ||||||||||
amounts) | RSAs | Average | RSUs | Average | ||||||||||
Fair Value | Fair Value | |||||||||||||
per Share | per Share | |||||||||||||
Non-vested at December 31, 2013 | 48 | $ | 26.25 | 469 | $ | 54.47 | ||||||||
Granted | — | — | 158 | 61.29 | ||||||||||
Vested | (31 | ) | 25.35 | (161 | ) | 48.48 | ||||||||
Cancelled | (1 | ) | 28.75 | (23 | ) | 54.74 | ||||||||
Non-vested at September 30, 2014 | 16 | 27.94 | 443 | 59.09 | ||||||||||
Schedule of components of share based compensation expense | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock options: | ||||||||||||||
Pre-tax compensation expense | $ | 1.7 | $ | 1.5 | $ | 5.4 | $ | 4.7 | ||||||
Income tax (benefit) | (0.5 | ) | (0.5 | ) | (1.6 | ) | (1.4 | ) | ||||||
Stock option expense, net of income taxes | 1.2 | 1 | 3.8 | 3.3 | ||||||||||
RSUs, RSAs and other share-based awards: | ||||||||||||||
Pre-tax compensation expense | 3 | 2.7 | 8.7 | 8.4 | ||||||||||
Income tax (benefit) | (0.9 | ) | (0.8 | ) | (2.5 | ) | (2.5 | ) | ||||||
RSU, RSA and other share-based compensation expense, net of income taxes | 2.1 | 1.9 | 6.2 | 5.9 | ||||||||||
Total share-based compensation: | ||||||||||||||
Pre-tax compensation expense | 4.7 | 4.2 | 14.1 | 13.1 | ||||||||||
Income tax (benefit) | (1.4 | ) | (1.3 | ) | (4.1 | ) | (3.9 | ) | ||||||
Total share-based compensation expense, net of income taxes | $ | 3.3 | $ | 2.9 | $ | 10 | $ | 9.2 | ||||||
Net_Periodic_Pension_and_Postr1
Net Periodic Pension and Postretirement Benefit Costs (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
Pension Plan, Defined Benefit [Member] | ' | |||||||||||||||||||||||||
Pension and postretirement benefit plans | ' | |||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | ' | |||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||||||||||||
US Plans | Non-US Plans | US Plans | Non-US Plans | |||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Service cost | $ | 1.8 | $ | 2 | $ | 1.5 | $ | 2.3 | $ | 5.3 | $ | 5.9 | $ | 4.4 | $ | 7 | ||||||||||
Interest cost | 3.3 | 2.8 | 3.7 | 3 | 9.8 | 8.5 | 11.1 | 9.2 | ||||||||||||||||||
Expected return on plan assets | (5.2 | ) | (4.6 | ) | (3.6 | ) | (2.9 | ) | (15.7 | ) | (13.7 | ) | (10.7 | ) | (8.9 | ) | ||||||||||
Amortization of net actuarial loss | 0.1 | 0.5 | 0.8 | 1.2 | 0.3 | 1.4 | 2.4 | 3.7 | ||||||||||||||||||
Amortization of prior service credit | — | — | — | — | — | — | (0.1 | ) | (0.1 | ) | ||||||||||||||||
Amortization of transition obligation | — | — | 0.1 | 0.1 | — | — | 0.2 | 0.2 | ||||||||||||||||||
Settlement | 0.4 | — | — | — | 0.4 | — | — | — | ||||||||||||||||||
Net pension cost | $ | 0.4 | $ | 0.7 | $ | 2.5 | $ | 3.7 | $ | 0.1 | $ | 2.1 | $ | 7.3 | $ | 11.1 | ||||||||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ' | |||||||||||||||||||||||||
Pension and postretirement benefit plans | ' | |||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | ' | |||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||
Ended Sept. 30, | Ended Sept. 30, | |||||||||||||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Service cost | $ | 0.7 | $ | 0.7 | $ | 2.1 | $ | 2.3 | ||||||||||||||||||
Interest cost | 0.9 | 0.9 | 2.7 | 2.8 | ||||||||||||||||||||||
Amortization of prior service cost | — | — | — | 0.1 | ||||||||||||||||||||||
Amortization of net actuarial loss | 0.1 | 0.2 | 0.3 | 0.8 | ||||||||||||||||||||||
Curtailment | — | (0.3 | ) | — | (0.3 | ) | ||||||||||||||||||||
Net postretirement benefit cost | $ | 1.7 | $ | 1.5 | $ | 5.1 | $ | 5.7 | ||||||||||||||||||
Earnings_per_Common_Share_Tabl
Earnings per Common Share (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||
Earnings Per Common Share | ' | |||||||||||||||||
Schedule of basic and diluted net income per share | ' | |||||||||||||||||
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | |||||||||||||||||
Net Income | Net Income | |||||||||||||||||
Available | Weighted | Available | Weighted | |||||||||||||||
to Ingredion | Average Shares | Per Share | to Ingredion | Average Shares | Per Share | |||||||||||||
(in millions, except per share amounts) | (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||
Basic EPS | $ | 118.6 | 73.0 | $ | 1.62 | $ | 86.3 | 77.3 | $ | 1.12 | ||||||||
Effect of Dilutive Securities: | ||||||||||||||||||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs, RSAs and other awards | 1.3 | 1.3 | ||||||||||||||||
Diluted EPS | $ | 118.6 | 74.3 | $ | 1.60 | $ | 86.3 | 78.6 | $ | 1.10 | ||||||||
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | |||||||||||||||||
Net Income | Net Income | |||||||||||||||||
Available | Weighted | Available | Weighted | |||||||||||||||
to Ingredion | Average Shares | Per Share | to Ingredion | Average Shares | Per Share | |||||||||||||
(in millions, except per share amounts) | (Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | ||||||||||||
Basic EPS | $ | 293.8 | 74.2 | $ | 3.96 | $ | 292.2 | 77.5 | $ | 3.77 | ||||||||
Effect of Dilutive Securities: | ||||||||||||||||||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs, RSAs and other awards | 1.3 | 1.3 | ||||||||||||||||
Diluted EPS | $ | 293.8 | 75.5 | $ | 3.89 | $ | 292.2 | 78.8 | $ | 3.71 | ||||||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventories | ' | |||||||
Components of inventories | ' | |||||||
(in millions) | At | At | ||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Finished and in process | $ | 437 | $ | 440 | ||||
Raw materials | 240 | 235 | ||||||
Manufacturing supplies and other | 45 | 48 | ||||||
Total inventories | $ | 722 | $ | 723 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Summary of accumulated other comprehensive loss | ' | ||||||||||||||||
Deferred | Unrealized | Accumulated | |||||||||||||||
Cumulative | Gain/(Loss) | Pension/ | Loss | Other | |||||||||||||
Translation | on Hedging | Postretirement | on | Comprehensive | |||||||||||||
(in millions) | Adjustment | Activities | Adjustment | Investment | Loss | ||||||||||||
Balance, December 31, 2013 | $ | (489 | ) | $ | (40 | ) | $ | (53 | ) | $ | (1 | ) | $ | (583 | ) | ||
Losses on cash-flow hedges, net of income tax effect of $21 | (47 | ) | (47 | ) | |||||||||||||
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $11 | 24 | 24 | |||||||||||||||
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 3 | 3 | |||||||||||||||
Currency translation adjustment | (116 | ) | (116 | ) | |||||||||||||
Balance, September 30, 2014 | $ | (605 | ) | $ | (63 | ) | $ | (50 | ) | $ | (1 | ) | $ | (719 | ) | ||
Deferred | Unrealized | Accumulated | |||||||||||||||
Cumulative | Gain/(Loss) | Pension/ | Loss | Other | |||||||||||||
Translation | on Hedging | Postretirement | on | Comprehensive | |||||||||||||
(in millions) | Adjustment | Activities | Adjustment | Investment | Loss | ||||||||||||
Balance, December 31, 2012 | $ | (335 | ) | $ | (17 | ) | $ | (121 | ) | $ | (2 | ) | $ | (475 | ) | ||
Losses on cash-flow hedges, net of income tax effect of $25 | (54 | ) | (54 | ) | |||||||||||||
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $4 | 10 | 10 | |||||||||||||||
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 5 | 5 | |||||||||||||||
Unrealized gain on investment, net of income tax effect | 1 | 1 | |||||||||||||||
Currency translation adjustment | (105 | ) | (105 | ) | |||||||||||||
Balance, September 30, 2013 | $ | (440 | ) | $ | (61 | ) | $ | (116 | ) | $ | (1 | ) | $ | (618 | ) | ||
Schedule of reclassifications from AOCI into net income | ' | ||||||||||||||||
Amount Reclassified from AOCI | |||||||||||||||||
Three Months ended | Nine Months ended | Affected Line Item in | |||||||||||||||
Details about AOCI Components | September 30, | September 30, | Condensed Consolidated | ||||||||||||||
(in millions) | 2014 | 2013 | 2014 | 2013 | Statements of Income | ||||||||||||
Losses on cash-flow hedges: | |||||||||||||||||
Commodity and foreign currency contracts | $ | (15 | ) | $ | (26 | ) | $ | (33 | ) | $ | (12 | ) | Cost of sales | ||||
Interest rate contracts | (1 | ) | (1 | ) | (2 | ) | (2 | ) | Financing costs, net | ||||||||
Losses related to pension and other postretirement obligations | (1 | ) | (2 | ) | (4 | ) | (6 | ) | (a) | ||||||||
Total before tax reclassifications | $ | (17 | ) | $ | (29 | ) | $ | (39 | ) | $ | (20 | ) | |||||
Income tax benefit | 5 | 9 | 12 | 5 | |||||||||||||
Total after-tax reclassifications | $ | (12 | ) | $ | (20 | ) | $ | (27 | ) | $ | (15 | ) | |||||
(a) This component is included in the computation of net periodic benefit cost and affects both cost of sales and operating expenses on the Condensed Consolidated Statements of Income. | |||||||||||||||||
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
item | |||||
Segment Information | ' | ' | ' | ' | ' |
Number of reportable business segments | ' | ' | 4 | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net sales | $1,460.30 | $1,611.70 | $4,300.10 | $4,829 | ' |
Operating income | 178.1 | 136.9 | 463.1 | 452.1 | ' |
Assets | 5,256 | ' | 5,256 | ' | 5,360 |
Provision for income taxes | 42.6 | 30.7 | 113.9 | 104.1 | ' |
North America Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net sales | 805.6 | 948.7 | 2,362 | 2,835.30 | ' |
Assets | 2,964 | ' | 2,964 | ' | 3,008 |
South America Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net sales | 307.6 | 322.8 | 906.2 | 992.3 | ' |
Assets | 1,014 | ' | 1,014 | ' | 1,088 |
Asia Pacific Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net sales | 205.8 | 204.8 | 594.3 | 600.5 | ' |
Assets | 740 | ' | 740 | ' | 711 |
EMEA Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Net sales | 141.3 | 135.4 | 437.6 | 400.9 | ' |
Assets | 538 | ' | 538 | ' | 553 |
Operating Segments [Member] | North America Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Operating income | 113.1 | 96.6 | 288.7 | 308.2 | ' |
Operating Segments [Member] | South America Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Operating income | 27.4 | 18.8 | 73.8 | 79.5 | ' |
Operating Segments [Member] | Asia Pacific Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Operating income | 27 | 23.6 | 80.1 | 70.2 | ' |
Operating Segments [Member] | EMEA Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Operating income | 22.2 | 17.4 | 68.7 | 53.6 | ' |
Corporate, Non-Segment [Member] | ' | ' | ' | ' | ' |
Segment information | ' | ' | ' | ' | ' |
Operating income | -11.6 | -19.5 | -48.2 | -59.4 | ' |
Income relating to tax indemnification agreement | 7 | ' | 7 | ' | ' |
Provision for income taxes | 7 | ' | 7 | ' | ' |
Gain from sale of non-consolidated affiliate | ' | ' | 5 | ' | ' |
Costs related to product liability claims | ' | ' | $4 | ' | ' |
Financial_Instruments_Derivati2
Financial Instruments, Derivatives and Hedging Activities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Senior Notes 4.625 Percent Due November 1, 2020 [Member] | Commodity Contract [Member] | Commodity Contract [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | ||||
Minimum [Member] | Maximum [Member] | Commodity Contract [Member] | Commodity Contract [Member] | Treasury Lock [Member] | Treasury Lock [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | Foreign Exchange Forward [Member] | ||||||
Senior Notes 6.0 Percent Due April 15, 2017 [Member] | Senior Notes 1.8 Percent Due September 25, 2017 [Member] | Senior Notes 4.625 Percent Due November 1, 2020 [Member] | Senior Notes 3.20 Percent Due November 1, 2015 [Member] | Short [Member] | Short [Member] | Long [Member] | Long [Member] | ||||||||||||||||
Financial instruments, derivatives and hedging activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity period of price risk derivative | ' | ' | ' | ' | ' | '12 months | '24 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated gains (losses) from derivative instruments, net of tax effect | ($719) | ($583) | ($618) | ($475) | ' | ' | ' | ($57) | ($32) | ($7) | ($8) | ' | ' | ' | ' | ' | ' | $1 | $1 | ' | ' | ' | ' |
Accumulated gains (losses) from derivative instruments, income tax effect | ' | ' | ' | ' | ' | ' | ' | -26 | -15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, fixed interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | 1.80% | 4.63% | 3.20% | ' | ' | ' | ' | ' | ' |
Debt, face amount | ' | ' | ' | ' | 400 | ' | ' | ' | ' | ' | ' | ' | ' | 200 | 300 | 200 | 350 | ' | ' | ' | ' | ' | ' |
Fair value of interest rate derivatives | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 8 | 13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt, floating rate of interest basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'six-month US dollar LIBOR rate plus a spread | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated gains (losses) from derivative instruments, income tax effect | ' | ' | ' | ' | ' | ' | ' | ' | ' | -4 | -5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Fair value of liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' |
Foreign currency hedging | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $101 | $147 | $57 | $78 |
Financial_Instruments_Derivati3
Financial Instruments, Derivatives and Hedging Activities (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Corn Commodity [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Corn futures contract (in bushels) | 69,000,000 | ' |
Soy Bean Oil [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Soybean oil futures contract (in pounds) | 0 | ' |
Natural Gas Commodity [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Natural gas futures contract (in mmbtu) | 14,000,000 | ' |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Fair value of assets | $3 | $7 |
Fair value of liabilities | 50 | 27 |
Designated as Hedging Instrument [Member] | Commodity and Foreign Currency Contracts [Member] | Accounts Receivable, Net [Member] | Cash Flow Hedging [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Fair value of assets | 3 | 2 |
Designated as Hedging Instrument [Member] | Commodity and Foreign Currency Contracts [Member] | Accounts Payable and Accrued Liabilities [Member] | Cash Flow Hedging [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Fair value of liabilities | 44 | 27 |
Designated as Hedging Instrument [Member] | Commodity and Foreign Currency Contracts [Member] | Other Assets [Member] | Cash Flow Hedging [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Fair value of assets | ' | 5 |
Designated as Hedging Instrument [Member] | Commodity and Foreign Currency Contracts [Member] | Non Current Liabilities [Member] | Cash Flow Hedging [Member] | ' | ' |
Fair value of commodity contracts | ' | ' |
Fair value of liabilities | $6 | ' |
Financial_Instruments_Derivati4
Financial Instruments, Derivatives and Hedging Activities (Details 3) (Cash Flow Hedging [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Gains or losses on derivatives | ' | ' | ' | ' |
Amount of Gains (Losses) Recognized in OCI on Derivatives | ($71) | ($43) | ($68) | ($79) |
Amount of Gains (Losses) Reclassified from AOCI into Income | -16 | -27 | -35 | -14 |
Cost of Sales [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Amount of Gains (Losses) Reclassified from AOCI into Income | -15 | -26 | -33 | -12 |
Financing Costs [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Amount of Gains (Losses) Reclassified from AOCI into Income | -1 | -1 | -2 | -2 |
Commodity Contract [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Losses expected to be reclassified into earnings during the next 12 months on commodity hedging contracts, net of tax | 52 | ' | 52 | ' |
Losses expected to be reclassified into earnings during the next 12 months on commodity hedging contracts, income tax effect | 25 | ' | 25 | ' |
Commodity and Foreign Currency Contracts [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Amount of Gains (Losses) Recognized in OCI on Derivatives | -71 | -43 | -68 | -79 |
Treasury Lock [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Losses expected to be reclassified into earnings during next 12 months on settled Treasury Lock Agreements, net of tax | 2 | ' | 2 | ' |
Losses expected to be reclassified into earnings during the next 12 months on settled Treasury Lock Agreements, income tax effect | 1 | ' | 1 | ' |
Foreign Exchange Forward [Member] | ' | ' | ' | ' |
Gains or losses on derivatives | ' | ' | ' | ' |
Gains related to foreign currency hedges expected to be reclassified into earnings during the next twelve months, net of tax | $0.20 | ' | $0.20 | ' |
Financial_Instruments_Derivati5
Financial Instruments, Derivatives and Hedging Activities (Details 4) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair value of assets and liabilities | ' | ' |
Long -term debt, fair value | $2,010 | ' |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | ' | ' |
Fair value of assets and liabilities | ' | ' |
Available for sale securities | 4 | 4 |
Derivatives assets | 12 | 20 |
Derivatives liabilities | 50 | 32 |
Long -term debt, fair value | 2,009 | 1,813 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair value of assets and liabilities | ' | ' |
Available for sale securities | 4 | 4 |
Derivatives liabilities | 46 | 22 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair value of assets and liabilities | ' | ' |
Derivatives assets | 12 | 20 |
Derivatives liabilities | 4 | 10 |
Long -term debt, fair value | $2,009 | $1,813 |
Financial_Instruments_Derivati6
Financial Instruments, Derivatives and Hedging Activities (Details 5) (USD $) | Sep. 30, 2014 |
In Billions, unless otherwise specified | |
Financial Instruments, Derivatives and Hedging Activities | ' |
Carrying amount | $1.89 |
Long-term debt, fair value | $2.01 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (Employee Stock Option [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Stock Option [Member] | ' | ' | ' | ' |
Equity stock-based compensation | ' | ' | ' | ' |
Term of options | ' | ' | '10 years | ' |
Period of vesting | ' | ' | '3 years | ' |
Assumptions used to measure the fair value of awards | ' | ' | ' | ' |
Expected life | ' | ' | '5 years 6 months | '5 years 9 months 18 days |
Risk-free interest rate (as a percent) | ' | ' | 1.63% | 1.11% |
Expected volatility (as a percent) | ' | ' | 30.28% | 32.64% |
Expected dividend yield (as a percent) | ' | ' | 2.82% | 1.57% |
Stock option activity | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | 2,849,000 | ' |
Granted (in shares) | ' | ' | 715,000 | 416,000 |
Exercised (in shares) | ' | ' | -523,000 | ' |
Cancelled (in shares) | ' | ' | -48,000 | ' |
Outstanding at the end of the period (in shares) | 2,993,000 | ' | 2,993,000 | ' |
Exercisable at the end of the period (in shares) | 1,938,000 | ' | 1,938,000 | ' |
Share options, weighted average exercise price per share | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | $40.77 | ' |
Granted (in dollars per share) | ' | ' | $59.65 | ' |
Exercised (in dollars per share) | ' | ' | $33.37 | ' |
Cancelled (in dollars per share) | ' | ' | $51.66 | ' |
Outstanding at the end of the period (in dollars per share) | $46.40 | ' | $46.40 | ' |
Exercisable at the end of the period (in dollars per share) | $38.63 | ' | $38.63 | ' |
Share options, aggregate intrinsic value | ' | ' | ' | ' |
Options outstanding average remaining contractual life | ' | ' | '6 years 4 months 2 days | ' |
Options outstanding aggregate intrinsic value | $87,961,000 | ' | $87,961,000 | ' |
Stock options exercisable average remaining contractual life | ' | ' | '4 years 11 months 5 days | ' |
Stock options exercisable aggregate intrinsic value | 72,008,000 | ' | 72,008,000 | ' |
Additional information pertaining to stock options | ' | ' | ' | ' |
Cash received from exercise of stock options | ' | ' | 17,000,000 | ' |
Unrecognized compensation cost | 11,000,000 | ' | 11,000,000 | ' |
Weighted-average period for amortization of unrecognized compensation cost | ' | ' | '2 years | ' |
Weighted-average grant date fair value of stock options granted (in dollars per share) | ' | ' | $12.99 | $17.87 |
Total intrinsic value of stock options exercised | $6,416,000 | $2,686,000 | $21,339,000 | $17,338,000 |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (USD $) | 9 Months Ended |
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2014 |
Restricted Stock Awards and Restricted Stock Units RSU [Member] | Minimum [Member] | ' |
Equity stock-based compensation | ' |
Vesting terms | '3 years |
Restricted Stock Awards and Restricted Stock Units RSU [Member] | Maximum [Member] | ' |
Equity stock-based compensation | ' |
Vesting terms | '5 years |
Restricted Stock [Member] | ' |
Restricted shares and unit activity | ' |
Non-vested at the beginning of the period (in shares) | 48 |
Vested (in shares) | -31 |
Cancelled (in shares) | -1 |
Non-vested at the end of the period (in shares) | 16 |
Weighted-average fair value per share | ' |
Non-vested at the beginning of the period (in dollars per share) | 26.25 |
Vested (in dollars per share) | 25.35 |
Cancelled (in dollars per share) | 28.75 |
Non-vested at the end of the period (in dollars per share) | 27.94 |
Restricted Stock Units (RSUs) [Member] | ' |
Restricted shares and unit activity | ' |
Non-vested at the beginning of the period (in shares) | 469 |
Granted (in shares) | 158 |
Vested (in shares) | -161 |
Cancelled (in shares) | -23 |
Non-vested at the end of the period (in shares) | 443 |
Weighted-average fair value per share | ' |
Non-vested at the beginning of the period (in dollars per share) | 54.47 |
Granted (in dollars per share) | 61.29 |
Vested (in dollars per share) | 48.48 |
Cancelled (in dollars per share) | 54.74 |
Non-vested at the end of the period (in dollars per share) | 59.09 |
Unrecognized compensation cost | 13 |
Weighted-average period for amortization of unrecognized compensation cost | '2 years |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Share-based compensation expense | ' | ' | ' | ' |
Pre-tax compensation expense | $4.70 | $4.20 | $14.10 | $13.10 |
Income tax (benefit) | -1.4 | -1.3 | -4.1 | -3.9 |
Total share-based compensation expense, net of income taxes | 3.3 | 2.9 | 10 | 9.2 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Share-based compensation expense | ' | ' | ' | ' |
Pre-tax compensation expense | 1.7 | 1.5 | 5.4 | 4.7 |
Income tax (benefit) | -0.5 | -0.5 | -1.6 | -1.4 |
Total share-based compensation expense, net of income taxes | 1.2 | 1 | 3.8 | 3.3 |
Restricted Stock Units, Restricted Stock Awards And Other Share Based Awards [Member] | ' | ' | ' | ' |
Share-based compensation expense | ' | ' | ' | ' |
Pre-tax compensation expense | 3 | 2.7 | 8.7 | 8.4 |
Income tax (benefit) | -0.9 | -0.8 | -2.5 | -2.5 |
Total share-based compensation expense, net of income taxes | $2.10 | $1.90 | $6.20 | $5.90 |
Net_Periodic_Pension_and_Postr2
Net Periodic Pension and Postretirement Benefit Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Anticipated cash contributions | ' | ' | ' | ' |
Anticipated cash contributions to pension plans in 2014 | ' | ' | $18 | ' |
United States Pension Plan of US Entity, Defined Benefit [Member] | ' | ' | ' | ' |
Components of Net Periodic Benefit Costs | ' | ' | ' | ' |
Service cost | 1.8 | 2 | 5.3 | 5.9 |
Interest cost | 3.3 | 2.8 | 9.8 | 8.5 |
Expected return on plan assets | -5.2 | -4.6 | -15.7 | -13.7 |
Amortization of net actuarial loss | 0.1 | 0.5 | 0.3 | 1.4 |
Settlement | 0.4 | ' | 0.4 | ' |
Net periodic benefit cost | 0.4 | 0.7 | 0.1 | 2.1 |
Employer Contributions | ' | ' | ' | ' |
Cash contributions to defined benefit pension plan | ' | ' | 5 | ' |
Anticipated cash contributions | ' | ' | ' | ' |
Anticipated cash contributions to pension plans in 2014 | ' | ' | 6 | ' |
Foreign Pension Plan, Defined Benefit [Member] | ' | ' | ' | ' |
Components of Net Periodic Benefit Costs | ' | ' | ' | ' |
Service cost | 1.5 | 2.3 | 4.4 | 7 |
Interest cost | 3.7 | 3 | 11.1 | 9.2 |
Expected return on plan assets | -3.6 | -2.9 | -10.7 | -8.9 |
Amortization of prior service credit | ' | ' | -0.1 | -0.1 |
Amortization of net actuarial loss | 0.8 | 1.2 | 2.4 | 3.7 |
Amortization of transition obligation | 0.1 | 0.1 | 0.2 | 0.2 |
Net periodic benefit cost | 2.5 | 3.7 | 7.3 | 11.1 |
Employer Contributions | ' | ' | ' | ' |
Cash contributions to defined benefit pension plan | ' | ' | 8 | ' |
Anticipated cash contributions | ' | ' | ' | ' |
Anticipated cash contributions to pension plans in 2014 | ' | ' | 12 | ' |
Other Postretirement Benefit Plan, Defined Benefit [Member] | ' | ' | ' | ' |
Components of Net Periodic Benefit Costs | ' | ' | ' | ' |
Service cost | 0.7 | 0.7 | 2.1 | 2.3 |
Interest cost | 0.9 | 0.9 | 2.7 | 2.8 |
Amortization of prior service credit | ' | ' | ' | 0.1 |
Amortization of net actuarial loss | 0.1 | 0.2 | 0.3 | 0.8 |
Curtailment | ' | -0.3 | ' | -0.3 |
Net periodic benefit cost | $1.70 | $1.50 | $5.10 | $5.70 |
Earnings_per_Common_Share_Deta
Earnings per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Basic EPS: | ' | ' | ' | ' |
Net Income Available to Ingredion | $118.60 | $86.30 | $293.80 | $292.20 |
Weighted average number of shares outstanding, basic | 73 | 77.3 | 74.2 | 77.5 |
Basic earnings per common share of Ingredion (in dollars per share) | $1.62 | $1.12 | $3.96 | $3.77 |
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs, RSAs and other awards | 1.3 | 1.3 | 1.3 | 1.3 |
Diluted EPS: | ' | ' | ' | ' |
Net Income Available to Ingredion | $118.60 | $86.30 | $293.80 | $292.20 |
Weighted average number of shares outstanding, diluted | 74.3 | 78.6 | 75.5 | 78.8 |
Diluted earnings per common share of Ingredion (in dollars per share) | $1.60 | $1.10 | $3.89 | $3.71 |
Antidilutive securities excluded in calculation of diluted EPS: | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share amount | ' | 0.4 | 0.4 | 0.4 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories | ' | ' |
Finished and in process | $437 | $440 |
Raw materials | 240 | 235 |
Manufacturing supplies and other | 45 | 48 |
Total inventories | $722 | $723 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
Accumulated Translation Adjustment [Member] | Accumulated Translation Adjustment [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member] | |||||
Accumulated other comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ($583) | ($475) | ($489) | ($335) | ($40) | ($17) | ($53) | ($121) | ($2) | ($1) | ($1) |
Losses on cash-flow hedges, net of income tax effect of $21 and $25 for the nine months ended September 30,2014 and 2013, respectively | -48 | -29 | -47 | -54 | ' | ' | -47 | -54 | ' | ' | ' | ' | ' |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $11 and $4 for the nine months ended September 30,2014 and 2013 respectively | 11 | 18 | 24 | 10 | ' | ' | 24 | 10 | ' | ' | ' | ' | ' |
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect | 1 | 2 | 3 | 5 | ' | ' | ' | ' | 3 | 5 | ' | ' | ' |
Unrealized gain on investment, net of income tax effect | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Currency translation adjustment | -121 | 6 | -116 | -105 | -116 | -105 | ' | ' | ' | ' | ' | ' | ' |
Balance at end of the period | -719 | -618 | -719 | -618 | -605 | -440 | -63 | -61 | -50 | -116 | -1 | -1 | -1 |
Income tax effect of accumulated other comprehensive gain (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Losses on cash-flow hedges, income tax effect | -23 | -14 | -21 | -25 | ' | ' | -21 | -25 | ' | ' | ' | ' | ' |
Amount of losses on cash-flow hedges reclassified to earnings, income tax effect | ($5) | ($9) | ($11) | ($4) | ' | ' | ($11) | ($4) | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Cost of sales | ($1,162.70) | ($1,352.90) | ($3,456.80) | ($3,988.50) |
Financing costs, net | -15.1 | -17.9 | -49 | -50.9 |
Income before income taxes | 163 | 119 | 414.1 | 401.2 |
Income tax benefit | -42.6 | -30.7 | -113.9 | -104.1 |
Net income | 120.4 | 88.3 | 300.2 | 297.1 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Income before income taxes | -17 | -29 | -39 | -20 |
Income tax benefit | 5 | 9 | 12 | 5 |
Net income | -12 | -20 | -27 | -15 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Commodity and Foreign Currency Contracts [Member] | ' | ' | ' | ' |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Cost of sales | -15 | -26 | -33 | -12 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Interest Rate Contract [Member] | ' | ' | ' | ' |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Financing costs, net | -1 | -1 | -2 | -2 |
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Losses related to pension and other postretirement obligations | ($1) | ($2) | ($4) | ($6) |
Accelerated_Share_Repurchase_A1
Accelerated Share Repurchase Agreement (Details) (Current Stock Repurchase Program [Member], USD $) | Sep. 30, 2014 | Sep. 30, 2014 | Aug. 01, 2014 | Sep. 30, 2014 | Aug. 01, 2014 | Jul. 30, 2014 | Sep. 30, 2014 |
In Millions, unless otherwise specified | Maximum [Member] | July 30 2014 Accelerated Share Repurchase Agreement [Member] | July 30 2014 Accelerated Share Repurchase Agreement [Member] | July 30 2014 Accelerated Share Repurchase Agreement [Member] | July 30 2014 Accelerated Share Repurchase Agreement [Member] | July 30 2014 Accelerated Share Repurchase Agreement [Member] | |
Estimate | |||||||
Accelerated Share Repurchase Agreement | ' | ' | ' | ' | ' | ' | ' |
Amount of common stock repurchased | ' | ' | ' | ' | ' | $300 | ' |
Cost to repurchase common shares | ' | ' | 300 | ' | ' | ' | ' |
Delivery of shares | ' | ' | 3.2 | ' | ' | ' | ' |
Delivery of holdback shares | ' | ' | ' | ' | ' | ' | 0.7 |
Shares repurchased, as percent to the anticipated shares to be repurchased | ' | ' | ' | ' | 80.00% | ' | ' |
Remaining shares available to be repurchased under its program | 0.8 | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | ' | 4 | ' | ' | ' | ' | ' |
Amount of holdback | ' | ' | ' | $60 | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
item | ||||
Income Taxes | ' | ' | ' | ' |
Effective income tax rate (as a percent) | 26.10% | 25.80% | 27.50% | 25.90% |
Number of discrete tax adjustments | 2 | ' | ' | ' |
Favorable impact of percentage points that relates to the reversal of previously unrecognized tax benefits | 5.30% | 4.20% | ' | 2.00% |
Provision for income taxes | $42.60 | $30.70 | $113.90 | $104.10 |
Effective income tax rate excluding significant adjustments (as a percent) | 28.00% | 30.00% | 28.00% | 29.00% |
Percentage of discrete tax benefit | ' | ' | ' | 1.00% |
Akzo Nobel NV[Member] | ' | ' | ' | ' |
Income Taxes | ' | ' | ' | ' |
Percentage points that relates to unfavorable audit result related to a pre-acquisition period | 4.50% | ' | ' | ' |
Provision for income taxes | 7 | ' | ' | ' |
Impact of pre-acquisition adjustment on net income | $0 | ' | ' | ' |
Subsequent_Event_Details
Subsequent Event (Details) (Penford Corporation[Member], Subsequent Event [Member], USD $) | 0 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Oct. 14, 2014 | Aug. 31, 2013 |
item | ||
employee | ||
Subsequent Event | ' | ' |
Cash consideration (in dollars per share) | $19 | ' |
Shares of acquiree company outstanding | 12,735,038 | ' |
Options of acquiree company outstanding | 1,429,000 | ' |
Net Sales | ' | $467 |
Number of people | 445 | ' |
Number of plants | 6 | ' |
Estimate | ' | ' |
Subsequent Event | ' | ' |
Estimated purchase price in cash, including the assumption of debt | $340 | ' |