Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 03, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Ingredion Inc | |
Entity Central Index Key | 1,046,257 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
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 | 71,641,000 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Income | ||
Net sales before shipping and handling costs | $ 1,537 | $ 1,434 |
Less - shipping and handling costs | 84 | 74 |
Net sales | 1,453 | 1,360 |
Cost of sales | 1,101 | 1,021 |
Gross profit | 352 | 339 |
Operating expenses | 149 | 138 |
Other (income) expense - net | (2) | 1 |
Restructuring / impairment charges | 10 | |
Operating income | 195 | 200 |
Financing costs-net | 21 | 14 |
Income before income taxes | 174 | 186 |
Provision for income taxes | 47 | 53 |
Net income | 127 | 133 |
Less - Net income attributable to non-controlling interests | 3 | 3 |
Net income attributable to Ingredion | $ 124 | $ 130 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 72.2 | 72 |
Diluted (in shares) | 73.7 | 73.6 |
Earnings per common share of Ingredion: | ||
Basic (in dollars per share) | $ 1.72 | $ 1.81 |
Diluted (in dollars per share) | $ 1.68 | $ 1.77 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net income | $ 127 | $ 133 |
Other comprehensive income (loss): | ||
Gains / (loss) on cash-flow hedges, net of income tax effect of $3 and $6, respectively | 5 | (11) |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 and $3, respectively | 3 | 7 |
Currency translation adjustment | 40 | 39 |
Comprehensive income (loss) | 175 | 168 |
Less: Comprehensive income attributable to non-controlling interests | (3) | (3) |
Comprehensive income (loss) attributable to Ingredion | $ 172 | $ 165 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Gains / (loss) on cash-flow hedges, net of income tax effect | $ 3 | $ (6) |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of | $ (1) | $ (3) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 435 | $ 512 |
Short-term investments | 13 | 4 |
Accounts receivable - net | 913 | 923 |
Inventories | 835 | 789 |
Prepaid expenses | 31 | 24 |
Total current assets | 2,227 | 2,252 |
Property, plant and equipment, at cost | ||
Property, plant and equipment - net of accumulated depreciation of $2,885 and $2,826, respectively | 2,146 | 2,116 |
Goodwill | 803 | 784 |
Other intangible assets - net of accumulated amortization of $114 and $106, respectively | 496 | 502 |
Deferred income tax assets | 7 | 7 |
Other assets | 120 | 121 |
Total Assets | 5,799 | 5,782 |
Current liabilities | ||
Short-term borrowings | 118 | 106 |
Accounts payable and accrued liabilities | 815 | 872 |
Total current liabilities | 933 | 978 |
Non-current liabilities | 164 | 158 |
Long-term debt | 1,895 | 1,850 |
Deferred income tax liabilities | 174 | 171 |
Share-based payments subject to redemption | 24 | 30 |
Ingredion Stockholders' equity | ||
Preferred stock - authorized 25,000,000 shares- $0.01 par value - none issued | 0 | 0 |
Common stock — authorized 200,000,000 shares-$0.01 par value, 77,810,875 issued at March 31, 2017 and December 31, 2016, respectively | 1 | 1 |
Additional paid-in capital | 1,139 | 1,149 |
Less - Treasury stock (common stock: 6,202,224 and 5,396,526 shares at March 31, 2017 and December 31, 2016, respectively) at cost | (520) | (413) |
Accumulated other comprehensive loss | (1,023) | (1,071) |
Retained earnings | 2,987 | 2,899 |
Total Ingredion stockholders' equity | 2,584 | 2,565 |
Non-controlling interests | 25 | 30 |
Total equity | 2,609 | 2,595 |
Total liabilities and equity | $ 5,799 | $ 5,782 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Property, plant and equipment - accumulated depreciation (in dollars) | $ 2,885 | $ 2,826 |
Other intangible assets - accumulated amortization (in dollars) | $ 114 | $ 106 |
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 | 77,810,875 |
Treasury stock, shares | 6,202,224 | 5,396,526 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interests | Total |
Balance at Dec. 31, 2015 | $ 1 | $ 1,160 | $ (467) | $ (1,102) | $ 2,552 | $ 36 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Ingredion | 130 | $ 130 | |||||
Net income attributable to non-controlling interests | 3 | (3) | |||||
Dividends declared | (32) | (3) | |||||
Share-based compensation, net of issuance | (9) | 23 | (7) | ||||
Other comprehensive income (loss) | 35 | ||||||
Balance at Mar. 31, 2016 | 1 | 1,151 | (444) | (1,067) | 2,650 | 36 | |
Balance at Dec. 31, 2016 | 1 | 1,149 | (413) | (1,071) | 2,899 | 30 | 2,595 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Ingredion | 124 | 124 | |||||
Net income attributable to non-controlling interests | 3 | (3) | |||||
Dividends declared | (36) | (8) | |||||
Repurchases of common stock | (123) | ||||||
Share-based compensation, net of issuance | (10) | 16 | (6) | ||||
Other comprehensive income (loss) | 48 | ||||||
Balance at Mar. 31, 2017 | $ 1 | $ 1,139 | $ (520) | $ (1,023) | $ 2,987 | $ 25 | $ 2,609 |
Consolidated Statement of Redee
Consolidated Statement of Redeemable Equity $ in Millions | USD ($) |
Beginning Balance at Dec. 31, 2015 | $ 24 |
Consolidated Statements of Equity and Redeemable Equity | |
Share-based compensation, net of issuance | (7) |
Ending Balance at Mar. 31, 2016 | 17 |
Beginning Balance at Dec. 31, 2016 | 30 |
Consolidated Statements of Equity and Redeemable Equity | |
Share-based compensation, net of issuance | (6) |
Ending Balance at Mar. 31, 2017 | $ 24 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash provided by operating activities: | ||
Net income | $ 127 | $ 133 |
Non-cash charges to net income: | ||
Depreciation and amortization | 51 | 47 |
Charge for fair value mark-up of acquired inventory | 5 | |
Other | 23 | 24 |
Changes in working capital: | ||
Accounts receivable and prepaid expenses | 12 | (21) |
Inventories | (40) | (32) |
Accounts payable and accrued liabilities | (48) | (55) |
Decrease in margin accounts | 6 | 12 |
Other | (5) | (9) |
Cash provided by operating activities | 131 | 99 |
Cash used for investing activities: | ||
Capital expenditures, net of proceeds on disposals | (72) | (59) |
Short-term investments | (8) | (13) |
Payments for acquisitions | (13) | |
Other | (1) | |
Cash used for investing activities | (93) | (73) |
Cash (used for) provided by financing activities: | ||
Proceeds from borrowings | 108 | 84 |
Payments on debt | (55) | (44) |
Issuance (repurchase) of common stock - net | (130) | 1 |
Dividends paid (including to non-controlling interests) | (44) | (35) |
Cash (used for) provided by financing activities | (121) | 6 |
Effect of foreign exchange rate changes on cash | 6 | 11 |
(Decrease) Increase in cash and cash equivalents | (77) | 43 |
Cash and cash equivalents, beginning of period | 512 | 434 |
Cash and cash equivalents, end of period | $ 435 | $ 477 |
Recently Adopted and New Accoun
Recently Adopted and New Accounting Standards | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Standards | |
New Accounting Standards | 2. Recently Adopted and New Accounting Standards 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. The FASB has also issued additional ASUs to provide further updates and clarification to the Update, including ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We plan to adopt the standard as of the effective date. The standard will allow various transition approaches upon adoption. We plan to use the modified retrospective approach for the transition to the new standard. Based on the analysis performed by the Company to date, our preliminary assessment is that the adoption of this guidance in the Update will not have a material impact on the Company’s revenue recognition timing or amounts; however, that assessment could change as we complete our analysis. We anticipate that our assessment will be complete by the third quarter of 2017. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases. This Update increases the transparency and comparability of organizations by recognizing lease assets and lease liabilities on the balance sheet for leases longer than 12 months and disclosing key information about leasing arrangements. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This Update is effective for annual periods beginning after December 15, 2018, with early adoption permitted. We currently plan to adopt the standard as of the effective date. Adoption will require a modified retrospective transition. We expect the adoption of the guidance in this Update to have a material impact on our Condensed Consolidated Balance Sheet as operating leases will be recognized both as assets and liabilities on the balance sheet. We are in the process of quantifying the magnitude of these changes and assessing the implementation approach for accounting for these changes. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This Update simplifies the subsequent measurement of Goodwill as the Update eliminates Step 2 from the goodwill impairment test. Instead, under the Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss recognized not to exceed the total amount of goodwill allocated to that reporting unit. This Update is effective for annual periods beginning after December 15, 2019, with early adoption permitted. In March 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This Update requires an entity to change the classification of the net periodic benefit cost for pension and postretirement plans within the statement of income by eliminating the ability to net all of the components of the costs together within operating income. The Update will require the service cost component to continue to be presented within operating income, classified within either cost of sales or operating expenses depending on the employees covered within the plan. The remaining components of the net periodic benefit cost, however, must be presented in the statement of income as a non-operating income (loss) below operating income. The Update is effective for annual periods beginning after December 15, 2017, with early adoption permitted only within the first interim period for public entities. We will not early adopt this Update. When adopted, the new guidance must be applied retrospectively for all income statement periods presented. The Update will reduce the Company’s operating income and will require a new financial statement line item below operating income within the Consolidated Income Statements for the non-operating income (loss) components. Net income within the Consolidated Income Statements will not change upon adoption of the Update. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions | |
Acquisitions | 3. Acquisitions On March 9, 2017, the Company completed its acquisition of Sun Flour Industry Co., Ltd. (“Sun Flour”) in Thailand for $18 million. Upon closing, the Company paid $13 million in cash and recorded $5 million in accrued liabilities for deferred payments due to the previous owner. The Company funded the acquisition primarily with cash. The acquisition of Sun Flour adds a fourth manufacturing facility to our operations in Thailand. It produces rice-based ingredients used primarily in the food industry. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date forward within the Asia Pacific business segment. On December 29, 2016, the Company completed its acquisition of TIC Gums Incorporated (“TIC Gums”), a privately held, U.S.-based company that provides advanced texture systems to the food and beverage industry, for $395 million, net of cash acquired. The acquisition adds a manufacturing facility in the US and in China. The Company funded the acquisition with proceeds from borrowings under its revolving credit agreement. The results of the acquired operations are included in the Company’s consolidated results from the respective acquisition dates forward within the North America and Asia Pacific business segments. On November 29, 2016, the Company completed its acquisition of Shandong Huanong Specialty Corn Development Co., Ltd. (“Shandong Huanong”) in China for $12 million in cash. The Company funded the acquisition primarily with cash. The acquisition of Shandong Huanong, located in Shandong Province, adds a second manufacturing facility to our operations in China. It produces starch raw material for our plant in Shanghai, which makes value-added ingredients for the food industry. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date forward within the Asia Pacific business segment. A preliminary allocation of the purchase price to the assets acquired and liabilities assumed was made based on available information and incorporating management’s best estimates. The assets acquired and liabilities assumed in the transactions are generally recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired. The goodwill results from synergies and other operational benefits expected to be derived from the acquisitions. The goodwill related to TIC Gums and Shandong Huanong are tax deductible due to the structure of the acquisition. The goodwill related to Sun Flour is not tax deductible. The following table summarizes the preliminary purchase price allocation for the acquisition of TIC Gums as of December 29, 2016: Preliminary (in millions) TIC Gums Working capital (excluding cash) $ 50 Property, plant and equipment 42 Identifiable intangible assets 117 Goodwill 186 Total purchase price $ 395 The acquisitions of Sun Flour and Shandong Huanong added $21 million to goodwill and identifiable intangible assets and $9 million to net tangible assets as of their respective acquisition dates. All of the recorded assets and liabilities, including working capital, property, plant and equipment (“PP&E”), goodwill and intangibles, are open to change as the Company is still in process of performing purchase accounting for TIC Gums and Sun Flour. The purchase accounting for Shandong Huanong is still open to finalize the valuation of the intangibles. Included in the results of the acquired businesses for the three months ended March 31, 2017 were increases in cost of sales of $5 million relating to the sale of inventory that was adjusted to fair value at the acquisition dates in accordance with business combination accounting rules. Pro-forma results of operations for the acquisitions made in 2017 and 2016 have not been presented as the effect of each acquisition individually and in aggregate would not be material to the Company’s results of operations for any periods presented. The Company incurred $2 million of pre-tax acquisition and integration costs for the three months ended March 31, 2017, associated with its recent acquisitions. In 2016, the Company incurred $1 million of pre-tax acquisition and integration costs for the three months ended March 31, 2016 associated with the acquisition of Kerr Concentrates, Inc. |
Impairment and Restructuring Ch
Impairment and Restructuring Charges | 3 Months Ended |
Mar. 31, 2017 | |
Impairment and Restructuring Charges | |
Impairment and Restructuring Charges | 4. Impairment and Restructuring Charges For the three months ended March 31, 2017, the Company recorded $10 million of net restructuring charges. During the first quarter of 2017, the Company implemented an organizational restructuring effort in Argentina by notifying both the Argentinian Labor Ministry and the local labor union of a planned reduction in workforce in order to achieve a more competitive cost position. On April 28, 2017, the union notified the Company of their intent to strike. We will continue to work with both the labor union and the Argentinian Labor Ministry on this matter. The Company recorded total pre-tax restructuring related charges in Argentina of $11 million for employee severance-related costs. Additionally, the Company recorded a $1 million reduction in expected employee severance-related charges associated with the execution of global information technology (“IT”) outsourcing contracts. The Company expects to incur approximately $1 million of additional restructuring costs associated with the IT outsourcing project through the third quarter 2017. A summary of the Company’s severance accrual at March 31, 2017 is as follows (in millions): Balance in severance accrual at December 31, 2016 $ 7 Restructuring charge for employee severance costs: Argentina employee-related severance 11 IT transformation (1) Payments made to terminated employees (2) Balance in severance accrual at March 31, 2017 $ 15 The severance accrual is expected to be paid within the next twelve months. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information | |
Segment Information | 5. 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, Middle East and Africa (“EMEA”). Its North America segment includes businesses in the United States, Canada and Mexico. The Company’s South America segment includes businesses in Brazil, Colombia, Ecuador and the Southern Cone of South America, which includes Argentina, Chile, Peru and Uruguay. Its Asia Pacific segment includes businesses in South Korea, Thailand, China, Japan, Indonesia, the Philippines, Singapore, Malaysia, India, Australia and New Zealand. The Company’s EMEA segment includes businesses in Germany, the United Kingdom, Pakistan, South Africa and Kenya. Three Months Ended March 31, (in millions) 2017 2016 Net sales to unaffiliated customers: North America $ 881 $ 841 South America 255 215 Asia Pacific 179 169 EMEA 138 135 Total $ 1,453 $ 1,360 Operating income: North America $ 160 $ 149 South America 14 18 Asia Pacific 30 28 EMEA 28 26 Corporate (20) (20) Subtotal 212 201 Restructuring charges (10) — Acquisition / integration costs (2) (1) Charge for fair value markup of acquired inventory (5) — Total $ 195 $ 200 At At (in millions) March 31, 2017 Dec. 31, 2016 Total assets North America $ 3,727 $ 3,796 South America 841 809 Asia Pacific 754 697 EMEA 477 480 Total $ 5,799 $ 5,782 |
Financial Instruments, Derivati
Financial Instruments, Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2017 | |
Financial Instruments, Derivatives and Hedging Activities | |
Financial Instruments, Derivatives and Hedging Activities | 6. 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 related futures, options and swap contracts, foreign currency related forward contracts, swaps and options, 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 natural 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. The Company also enters into futures contracts to hedge price risk associated with fluctuations in the market price of ethanol. 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 March 31, 2017, AOCI included $6 million of gains (net of income taxes of $2 million), pertaining to commodities-related derivative instruments designated as cash-flow hedges. At December 31, 2016, the amount included in AOCI pertaining to these commodities-related derivative instruments designated as cash-flow hedges was not significant. Interest rate hedging : Derivative financial instruments that have been used by the Company to manage its interest rate risk consist of interest rate swaps and Treasury Lock agreements (“T-Locks”). The Company has 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. 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 (the change in fair value) of the hedged debt instrument that is attributable to changes in interest rates (the hedged risk), which is also recognized in earnings. The fair value of these interest rate swap agreements at March 31, 2017 and December 31, 2016 was $3 million and $3 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. The Company did not have any T-Locks outstanding at March 31, 2017 or December 31, 2016. At March 31, 2017, AOCI included $3 million of losses, (net of income taxes of $2 million), related to settled T-Locks. At December 31, 2016, AOCI included $4 million of losses (net of income taxes of $2 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 operations in many 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 the results of its foreign operations are translated to US dollars and to transactional foreign exchange risk when transactions not denominated in the functional currency 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 March 31, 2017, the Company had foreign currency forward sales contracts that are designated as fair value hedges with an aggregate notional amount of $430 million and foreign currency forward purchase contracts with an aggregate notional amount of $214 million that hedged transactional exposures. At December 31, 2016, the Company had foreign currency forward sales contracts with an aggregate notional amount of $432 million and foreign currency forward purchase contracts with an aggregate notional amount of $227 million that hedged transactional exposures. The Company also has foreign currency derivative instruments that hedge certain foreign currency transactional exposures and are designated as cash-flow hedges. At March 31, 2017, AOCI included $2 million of losses, net of tax, relating to these hedges. At December 31, 2016, AOCI included $3 million of losses, net of tax, relating to these hedges. The fair value and balance sheet location of the Company’s derivative instruments, presented gross in the Condensed Consolidated Balance Sheets, are reflected below: Fair Value of Derivative Instruments Fair Value Fair Value Derivatives designated as At At At At hedging instruments: Balance Sheet March 31, December 31, Balance Sheet March 31, December 31, (in millions) Location 2017 2016 Location 2017 2016 Commodity and foreign currency Accounts receivable-net $ 29 $ 31 Accounts payable and accrued liabilities $ 19 $ 25 Commodity, foreign currency, and interest rate contracts Other assets 4 8 Non-current liabilities 3 2 Total $ 33 $ 39 $ 22 $ 27 At March 31, 2017, the Company had outstanding futures and option contracts that hedged the forecasted purchase of approximately 99 million bushels of corn and 43 million pounds of soybean oil. 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 also had outstanding swap and option contracts that hedged the forecasted purchase of approximately 23 million mmbtu’s of natural gas at March 31, 2017. Additionally at March 31, 2017, the Company had outstanding ethanol futures contracts that hedged the forecasted sale of approximately 15 million gallons of ethanol. Additional information relating to the Company’s derivative instruments is presented below (in millions, pre-tax): Location of Gains Derivatives in Amount of Gains (Losses) (Losses) Amount of Gains (Losses) Cash-Flow Recognized in OCI Reclassified from Reclassified from AOCI into Income Hedging Three Months Ended Three Months Ended AOCI Three Months Ended Three Months Ended Relationships March 31, 2017 March 31, 2016 into Income March 31, 2017 March 31, 2016 Commodity contracts $ 7 $ (18) Cost of sales $ (3) $ (9) Foreign currency contracts 1 1 Gross profit — (1) Interest rate contracts — — Financing costs, net (1) — Total $ 8 $ (17) $ (4) $ (10) At March 31, 2017, AOCI included $6 million of gains (net of income taxes of $3 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 gains to be offset by changes in the underlying commodities costs. The Company also has $1 million of losses on settled T-Locks (net of income taxes of $1 million) recorded in AOCI at March 31, 2017, which are expected to be reclassified into earnings during the next twelve months. Additionally, at March 31, 2017, AOCI included an insignificant amount of losses related to foreign currency hedges that 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: As of March 31, 2017 As of December 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Available for sale securities $ 8 $ 8 $ — $ — $ 7 $ 7 $ — $ — Derivative assets 33 11 22 — 39 6 33 — Derivative liabilities 22 5 17 — 27 11 16 — Long-term debt 1,998 — 1,998 — 1,929 — 1,929 — 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 March 31, 2017, the carrying value and fair value of the Company’s long-term debt were $1,895 million and $1,998 million, respectively. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Share-Based Compensation | |
Share-Based Compensation | 7. 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 generally recognized on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain retirement eligible executive level employees. The Company estimates a forfeiture rate at the time of grant and updates the estimate within the amount of compensation costs recognized in each period. As of March 31, 2017, certain of these nonqualified options have been forfeited due to termination of employees. The Company granted non-qualified options to purchase 268 thousand shares and 329 thousand shares during the three months ended March 31, 2017 and 2016, respectively. The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Three Months Ended March 31, 2017 2016 Expected life (in years) 5.5 5.5 Risk-free interest rate 1.93 % 1.36 % Expected volatility 22.50 % 23.40 % Expected dividend yield % 1.80 % 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 current dividend payments. Stock option activity for the three months ended March 31, 2017 was as follows: Weighted Number of Average Average Aggregate Options Exercise Remaining Intrinsic (in Price per Contractual Value thousands) Share Term (Years) (in millions) Outstanding at December 31, 2016 2,281 $ 61.39 5.93 $ 145 Granted 278 119.08 Exercised (79) 37.38 Cancelled (16) 80.47 Outstanding at March 31, 2017 2,464 $ 68.53 6.26 $ 128 Exercisable at March 31, 2017 1,880 $ 56.86 6.20 120 For the three months ended March 31, 2017, cash received from the exercise of stock options was $3 million. At March 31, 2017, the total remaining unrecognized compensation cost related to stock options was $8 million, which will be amortized over a weighted-average period of approximately 1.6 years. Additional information pertaining to stock option activity is as follows: Three Months Ended March 31, (dollars in thousands, except per share) 2017 2016 Weighted average grant date fair value of stock options granted (per share) $ 23.90 $ 18.73 Total intrinsic value of stock options exercised $ 6,849 $ 12,665 Restricted Stock Units: The Company has granted restricted stock units (“RSUs”) to certain key employees. The RSUs are subject to cliff vesting, generally after three years provided the employee remains in the service of the Company. Compensation expense is generally recognized on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain retirement eligible executive level employees. The Company estimates a forfeiture rate at the time of grant and updates the estimate within the amount of compensation costs recognized in each period. The fair value of the 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 RSU activity for the three months ended March 31, 2017: Weighted Average Number of Fair Value (RSUs in thousands) RSUs per Share Non-vested at December 31, 2016 429 $ Granted 112 Vested (124) Cancelled (5) Non-vested at March 31, 2017 412 $ At March 31, 2017, the total remaining unrecognized compensation cost related to RSUs was $23 million, which will be amortized over a weighted-average period of approximately 2.1 years. Performance Shares: The Company has a long-term incentive plan for senior management in the form of performance shares. The ultimate payments for performance shares awarded and eventually paid will be based solely on the Company’s stock performance as compared to the stock performance of a peer group. The final payments will be calculated at the end of the three year period and are subject to approval by management and the Compensation Committee. Compensation expense is based on the fair value of the performance shares at the grant date, established using a Monte Carlo simulation model. The total compensation expense for these awards is amortized over a three-year graded vesting schedule. For the three months ended March 31, 2017, the Company awarded 38 thousand share units at a weighted average fair value of $114.08 per share unit. The number of shares that ultimately vest can range from zero to 200 percent of the awarded grant depending on the Company’s stock performance as compared to the stock performance of the peer group. The 2014 performance share award vested in the first quarter of 2017, achieving a 200 percent pay out of the grant, or 115 thousand total vested shares. There were no performance share cancellations during the first quarter of 2017. At March 31, 2017, the unrecognized compensation cost related to these awards was $6 million, which will be amortized over the remaining requisite service periods of 2.1 years. The following table summarizes the components of the Company’s share-based compensation expense: Three Months Ended March 31, (in millions) 2017 2016 Stock options: Pre-tax compensation expense $ 2 $ 2 Income tax (benefit) (1) (1) Stock option expense, net of income taxes 1 1 RSUs: Pre-tax compensation expense 3 3 Income tax (benefit) (1) (1) RSUs, net of income taxes 2 2 Performance shares and other share-based awards: Pre-tax compensation expense 2 2 Income tax (benefit) (1) (1) Performance shares and other share-based compensation expense, net of income taxes 1 1 Total share-based compensation: Pre-tax compensation expense 7 7 Income tax (benefit) (3) (3) Total share-based compensation expense, net of income taxes $ 4 $ 4 |
Net Periodic Pension and Postre
Net Periodic Pension and Postretirement Benefit Costs | 3 Months Ended |
Mar. 31, 2017 | |
Net Periodic Pension and Postretirement Benefit Costs | |
Benefit plans | 8. Net Periodic Pension and Postretirement Benefit Costs For detailed information about the Company’s pension and postretirement benefit plans, please refer to Note 10 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, 2016. 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 Ended March 31, US Plans Non-US Plans (in millions) 2017 2016 2017 2016 Service cost $ 1 $ 2 $ 1 $ 1 Interest cost 3 3 2 3 Expected return on plan assets (5) (5) (3) (3) Amortization of actuarial loss — — 1 1 Amortization of prior service credit — — — — Settlement loss — — — — Net periodic benefit cost $ (1) $ — $ 1 $ 2 The Company currently anticipates that it will make approximately $3 million in cash contributions to its pension plans in 2017, consisting of $2 million to its non-US pension plans and $1 million to its US pension plans. For the three months ended March 31, 2017, cash contributions of approximately $1 million were made to the non-US plans and less than $1 million to the US plans. The following table sets forth the components of net postretirement benefit cost for the periods presented: Three Months Ended March 31, (in millions) 2017 2016 Service cost $ — $ — Interest cost 1 1 Amortization of actuarial loss — — Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ — |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings per Common Share | |
Earnings per Common Share | 9. 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 March 31, 2017 Three Months Ended March 31, 2016 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 $ 124 72.2 $ 1.72 $ 130 72.0 $ 1.81 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 1.5 1.6 Diluted EPS $ 124 73.7 $ 1.68 $ 130 73.6 $ 1.77 For both the first quarter 2017 and 2016, approximately 0.3 million share-based awards of common stock were excluded from the calculation of diluted EPS as the impact of their inclusion would have been anti-dilutive. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventories | |
Inventories | 10. Inventories Inventories are summarized as follows: At At March 31, December 31, (in millions) 2017 2016 Finished and in process $ 477 $ 478 Raw materials 304 260 Manufacturing supplies and other 54 51 Total inventories $ 835 $ 789 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt | |
Debt | 11. Debt At March 31, 2017 and December 31, 2016, the Company’s total debt consisted of the following: At At March 31, December 31, (in millions) 2017 2016 3.2% senior notes due October 1, 2026 $ 497 $ 496 4.625% senior notes due November 1, 2020 398 398 1.8% senior notes due September 25, 2017 300 299 6.625% senior notes due April 15, 2037 253 254 6.0% senior notes due April 15, 2017 200 200 5.62% senior notes due March 25, 2020 200 200 Revolving credit facility 44 — Fair value adjustment related to hedged fixed rate debt instruments 3 3 Long-term debt $ 1,895 $ 1,850 Short-term borrowings 118 106 Total debt $ 2,013 $ 1,956 The Company’s long-term debt at March 31, 2017 includes $200 million of 6.0 percent Senior Notes that mature on April 15, 2017 and $300 million of 1.8 percent Senior Notes that mature on September 25, 2017. These borrowings are included in long-term debt as the Company has the ability and intent to refinance them on a long-term basis prior to the respective maturity dates. In April 2017, the $200 million of Senior Notes that matured were refinanced through use of the revolving credit facility. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 12. Accumulated Other Comprehensive Loss A summary of accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 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, 2016 $ (1,008) $ (7) $ (56) $ — $ (1,071) Gains on cash-flow hedges, net of income tax effect of $3 5 5 Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 3 3 Currency translation adjustment 40 40 Balance, March 31, 2017 $ (968) $ 1 $ (56) $ — $ (1,023) 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, 2015 $ (1,025) $ (29) $ (47) $ (1) $ (1,102) Losses on cash-flow hedges, net of income tax effect $6 (11) (11) Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $3 7 7 Currency translation adjustment 39 39 Balance, March 31, 2016 $ (986) $ (33) $ (47) $ (1) $ (1,067) The following table provides detail pertaining to reclassifications from AOCI into net income for the periods presented: Amount Reclassified from AOCI Three Months Ended Affected Line Item in Details about AOCI Components March 31, Condensed Consolidated (in millions) 2017 2016 Statements of Income Losses on cash-flow hedges: Commodity and foreign currency contracts $ (3) $ (10) Gross profit Interest rate contracts (1) — Financing costs, net Total before-tax reclassifications $ (4) $ (10) Income tax benefit 1 3 Total after-tax reclassifications $ (3) $ (7) |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions | |
Summary of final purchase price allocations for TIC Gums | Preliminary (in millions) TIC Gums Working capital (excluding cash) $ 50 Property, plant and equipment 42 Identifiable intangible assets 117 Goodwill 186 Total purchase price $ 395 |
Impairment and Restructuring 22
Impairment and Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Impairment and Restructuring Charges | |
Summary of restructuring reserve | A summary of the Company’s severance accrual at March 31, 2017 is as follows (in millions): Balance in severance accrual at December 31, 2016 $ 7 Restructuring charge for employee severance costs: Argentina employee-related severance 11 IT transformation (1) Payments made to terminated employees (2) Balance in severance accrual at March 31, 2017 $ 15 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information | |
Schedule of segment reporting of net sales, operating income and total assets | Three Months Ended March 31, (in millions) 2017 2016 Net sales to unaffiliated customers: North America $ 881 $ 841 South America 255 215 Asia Pacific 179 169 EMEA 138 135 Total $ 1,453 $ 1,360 Operating income: North America $ 160 $ 149 South America 14 18 Asia Pacific 30 28 EMEA 28 26 Corporate (20) (20) Subtotal 212 201 Restructuring charges (10) — Acquisition / integration costs (2) (1) Charge for fair value markup of acquired inventory (5) — Total $ 195 $ 200 At At (in millions) March 31, 2017 Dec. 31, 2016 Total assets North America $ 3,727 $ 3,796 South America 841 809 Asia Pacific 754 697 EMEA 477 480 Total $ 5,799 $ 5,782 |
Financial Instruments, Deriva24
Financial Instruments, Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Financial Instruments, Derivatives and Hedging Activities | |
Schedule of location and amount of assets and liabilities reported in balance sheet | Fair Value of Derivative Instruments Fair Value Fair Value Derivatives designated as At At At At hedging instruments: Balance Sheet March 31, December 31, Balance Sheet March 31, December 31, (in millions) Location 2017 2016 Location 2017 2016 Commodity and foreign currency Accounts receivable-net $ 29 $ 31 Accounts payable and accrued liabilities $ 19 $ 25 Commodity, foreign currency, and interest rate contracts Other assets 4 8 Non-current liabilities 3 2 Total $ 33 $ 39 $ 22 $ 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): Location of Gains Derivatives in Amount of Gains (Losses) (Losses) Amount of Gains (Losses) Cash-Flow Recognized in OCI Reclassified from Reclassified from AOCI into Income Hedging Three Months Ended Three Months Ended AOCI Three Months Ended Three Months Ended Relationships March 31, 2017 March 31, 2016 into Income March 31, 2017 March 31, 2016 Commodity contracts $ 7 $ (18) Cost of sales $ (3) $ (9) Foreign currency contracts 1 1 Gross profit — (1) Interest rate contracts — — Financing costs, net (1) — Total $ 8 $ (17) $ (4) $ (10) |
Schedule of fair value of financial instruments and derivatives | As of March 31, 2017 As of December 31, 2016 (in millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Available for sale securities $ 8 $ 8 $ — $ — $ 7 $ 7 $ — $ — Derivative assets 33 11 22 — 39 6 33 — Derivative liabilities 22 5 17 — 27 11 16 — Long-term debt 1,998 — 1,998 — 1,929 — 1,929 — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Share-Based Compensation | |
Schedule of valuation assumptions for stock options | For the Three Months Ended March 31, 2017 2016 Expected life (in years) 5.5 5.5 Risk-free interest rate 1.93 % 1.36 % Expected volatility 22.50 % 23.40 % Expected dividend yield % 1.80 % |
Schedule of stock option activity | Weighted Number of Average Average Aggregate Options Exercise Remaining Intrinsic (in Price per Contractual Value thousands) Share Term (Years) (in millions) Outstanding at December 31, 2016 2,281 $ 61.39 5.93 $ 145 Granted 278 119.08 Exercised (79) 37.38 Cancelled (16) 80.47 Outstanding at March 31, 2017 2,464 $ 68.53 6.26 $ 128 Exercisable at March 31, 2017 1,880 $ 56.86 6.20 120 |
Schedule of additional information pertaining to stock option activity | Three Months Ended March 31, (dollars in thousands, except per share) 2017 2016 Weighted average grant date fair value of stock options granted (per share) $ 23.90 $ 18.73 Total intrinsic value of stock options exercised $ 6,849 $ 12,665 |
Schedule of restricted unit activity | Weighted Average Number of Fair Value (RSUs in thousands) RSUs per Share Non-vested at December 31, 2016 429 $ Granted 112 Vested (124) Cancelled (5) Non-vested at March 31, 2017 412 $ |
Schedule of components of share based compensation expense | Three Months Ended March 31, (in millions) 2017 2016 Stock options: Pre-tax compensation expense $ 2 $ 2 Income tax (benefit) (1) (1) Stock option expense, net of income taxes 1 1 RSUs: Pre-tax compensation expense 3 3 Income tax (benefit) (1) (1) RSUs, net of income taxes 2 2 Performance shares and other share-based awards: Pre-tax compensation expense 2 2 Income tax (benefit) (1) (1) Performance shares and other share-based compensation expense, net of income taxes 1 1 Total share-based compensation: Pre-tax compensation expense 7 7 Income tax (benefit) (3) (3) Total share-based compensation expense, net of income taxes $ 4 $ 4 |
Net Periodic Pension and Post26
Net Periodic Pension and Postretirement Benefit Costs (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Pension Plan, Defined Benefit | |
Pension and postretirement benefit plans | |
Components of net periodic benefit cost | Three Months Ended March 31, US Plans Non-US Plans (in millions) 2017 2016 2017 2016 Service cost $ 1 $ 2 $ 1 $ 1 Interest cost 3 3 2 3 Expected return on plan assets (5) (5) (3) (3) Amortization of actuarial loss — — 1 1 Amortization of prior service credit — — — — Settlement loss — — — — Net periodic benefit cost $ (1) $ — $ 1 $ 2 |
Other Postretirement Benefit Plan, Defined Benefit | |
Pension and postretirement benefit plans | |
Components of net periodic benefit cost | Three Months Ended March 31, (in millions) 2017 2016 Service cost $ — $ — Interest cost 1 1 Amortization of actuarial loss — — Amortization of prior service credit (1) (1) Net periodic benefit cost $ — $ — |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings per Common Share | |
Schedule of basic and diluted earnings per common share | Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 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 $ 124 72.2 $ 1.72 $ 130 72.0 $ 1.81 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 1.5 1.6 Diluted EPS $ 124 73.7 $ 1.68 $ 130 73.6 $ 1.77 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventories | |
Components of inventories | At At March 31, December 31, (in millions) 2017 2016 Finished and in process $ 477 $ 478 Raw materials 304 260 Manufacturing supplies and other 54 51 Total inventories $ 835 $ 789 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt | |
Schedule of debt | At At March 31, December 31, (in millions) 2017 2016 3.2% senior notes due October 1, 2026 $ 497 $ 496 4.625% senior notes due November 1, 2020 398 398 1.8% senior notes due September 25, 2017 300 299 6.625% senior notes due April 15, 2037 253 254 6.0% senior notes due April 15, 2017 200 200 5.62% senior notes due March 25, 2020 200 200 Revolving credit facility 44 — Fair value adjustment related to hedged fixed rate debt instruments 3 3 Long-term debt $ 1,895 $ 1,850 Short-term borrowings 118 106 Total debt $ 2,013 $ 1,956 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2016 $ (1,008) $ (7) $ (56) $ — $ (1,071) Gains on cash-flow hedges, net of income tax effect of $3 5 5 Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 3 3 Currency translation adjustment 40 40 Balance, March 31, 2017 $ (968) $ 1 $ (56) $ — $ (1,023) 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, 2015 $ (1,025) $ (29) $ (47) $ (1) $ (1,102) Losses on cash-flow hedges, net of income tax effect $6 (11) (11) Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $3 7 7 Currency translation adjustment 39 39 Balance, March 31, 2016 $ (986) $ (33) $ (47) $ (1) $ (1,067) |
Acquisitions By Acquisition (De
Acquisitions By Acquisition (Details) - USD ($) $ in Millions | Dec. 29, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Consideration net of cash | $ 13 | ||
Final purchase price allocation | |||
Goodwill | $ 803 | $ 784 | |
TIC Gums | |||
Business Acquisition [Line Items] | |||
Consideration net of cash | $ 395 | ||
Final purchase price allocation | |||
Working capital (excluding cash) | 50 | ||
Property, plant and equipment | 42 | ||
Identifiable intangible assets | 117 | ||
Goodwill | 186 | ||
Total final purchase price | $ 395 |
Acquisitions By Major Class (De
Acquisitions By Major Class (Details) - USD ($) $ in Millions | Mar. 09, 2017 | Nov. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 29, 2016 |
Other disclosures | |||||
Increase in cost of sales for fair value mark-up of acquired inventory | $ 5 | ||||
TIC Gums | |||||
Other disclosures | |||||
Tangible assets | $ 42 | ||||
Pre-tax acquisition and integration costs | $ 2 | ||||
Kerr | |||||
Other disclosures | |||||
Pre-tax acquisition and integration costs | $ 1 | ||||
Shandong Huanong | |||||
Other disclosures | |||||
Cash consideration | $ 12 | ||||
Tangible assets | $ 9 | ||||
Sun Flour | |||||
Other disclosures | |||||
Cash consideration | $ 13 | ||||
Total purchase consideration | 18 | ||||
Accrued expenses | 5 | ||||
Intangible Assets, Net (Including Goodwill) | $ 21 |
Impairment and Restructuring 33
Impairment and Restructuring Charges (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Restructuring and asset impairment charges | |
Restructuring Charges | $ 10 |
Employee Severance related costs | |
Restructuring and asset impairment charges | |
Restructuring Charges | 11 |
Restructuring accrual | |
Balance in severance accrual at December 31, 2016 | 7 |
Payments made to terminated employees | (2) |
Balance in severance accrual at March 31, 2017 | 15 |
Employee Severance related costs | IT transformation | |
Restructuring and asset impairment charges | |
Expected restructuring charges in 2017 | 1 |
Restructuring accrual | |
Reduction in expected restructuring charges in 2017 | (1) |
Employee Severance related costs | Argentina employee-related severance | |
Restructuring accrual | |
Restructuring charge for employee severance costs | $ 11 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment information | |||
Number of reportable business segments | segment | 4 | ||
Net sales | $ 1,453 | $ 1,360 | |
Operating income | 195 | 200 | |
Restructuring / impairment charges | (10) | ||
Charge for fair value markup of acquired inventory | (5) | ||
Total Assets | 5,799 | $ 5,782 | |
Operating Segments | |||
Segment information | |||
Operating income | 212 | 201 | |
Total Assets | 5,799 | 5,782 | |
Operating Segments | North America | |||
Segment information | |||
Net sales | 881 | 841 | |
Operating income | 160 | 149 | |
Total Assets | 3,727 | 3,796 | |
Operating Segments | South America | |||
Segment information | |||
Net sales | 255 | 215 | |
Operating income | 14 | 18 | |
Total Assets | 841 | 809 | |
Operating Segments | Asia Pacific | |||
Segment information | |||
Net sales | 179 | 169 | |
Operating income | 30 | 28 | |
Total Assets | 754 | 697 | |
Operating Segments | EMEA | |||
Segment information | |||
Net sales | 138 | 135 | |
Operating income | 28 | 26 | |
Total Assets | 477 | $ 480 | |
Corporate, Non -Segment | |||
Segment information | |||
Operating income | (20) | (20) | |
Restructuring / impairment charges | (10) | ||
Acquisition / integration costs | (2) | $ (1) | |
Charge for fair value markup of acquired inventory | (5) | ||
Employee Severance related costs | |||
Segment information | |||
Restructuring / impairment charges | $ (11) |
Financial Instruments, Deriva35
Financial Instruments, Derivatives and Hedging Activities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2014 | |
Financial instruments, derivatives and hedging activities | |||
Accumulated gains (losses) from derivative instruments, net of tax effect | $ 1,023 | $ 1,071 | |
Carrying amount of fair value adjustment related to hedged fixed rate instrument debt instrument | $ 3 | 3 | |
Senior Notes 4.625 Percent Due November 1, 2020 | |||
Financial instruments, derivatives and hedging activities | |||
Debt, face amount | $ 400 | ||
Commodity Contracts | Minimum | |||
Financial instruments, derivatives and hedging activities | |||
Maturity period of price risk derivative | 12 months | ||
Commodity Contracts | Maximum | |||
Financial instruments, derivatives and hedging activities | |||
Maturity period of price risk derivative | 24 months | ||
Treasury Lock | |||
Foreign currency hedging | |||
Derivative notional amount | $ 0 | 0 | |
Cash Flow Hedging | Commodity Contracts | |||
Financial instruments, derivatives and hedging activities | |||
Accumulated gains (losses) from derivative instruments, net of tax effect | (6) | ||
Accumulated gains (losses) from derivative instruments, net income tax effect | 2 | ||
Cash Flow Hedging | Treasury Lock | |||
Financial instruments, derivatives and hedging activities | |||
Accumulated gains (losses) from derivative instruments, net of tax effect | 3 | 4 | |
Accumulated gains (losses) from derivative instruments, net income tax effect | (2) | (2) | |
Cash Flow Hedging | Foreign Exchange Forward | |||
Financial instruments, derivatives and hedging activities | |||
Accumulated gains (losses) from derivative instruments, net of tax effect | 2 | 3 | |
Fair Value Hedging | Interest Rate Swap | |||
Financial instruments, derivatives and hedging activities | |||
Fair value of interest rate derivatives | $ 3 | 3 | |
Fair Value Hedging | Interest Rate Swap | Senior Notes 6.0 Percent Due April 15, 2017 | |||
Financial instruments, derivatives and hedging activities | |||
Debt, fixed interest rate (as a percent) | 6.00% | ||
Debt, face amount | $ 200 | ||
Debt, floating rate of interest basis | six-month US dollar LIBOR | ||
Fair Value Hedging | Interest Rate Swap | Senior Notes 1.8 Percent Due September 25, 2017 | |||
Financial instruments, derivatives and hedging activities | |||
Debt, fixed interest rate (as a percent) | 1.80% | ||
Debt, face amount | $ 300 | ||
Debt, floating rate of interest basis | six-month US dollar LIBOR | ||
Fair Value Hedging | Interest Rate Swap | Senior Notes 4.625 Percent Due November 1, 2020 | |||
Financial instruments, derivatives and hedging activities | |||
Debt, fixed interest rate (as a percent) | 4.625% | ||
Debt, face amount | $ 200 | ||
Debt, floating rate of interest basis | six-month US dollar LIBOR | ||
Fair Value Hedging | Foreign Exchange Forward | Short | |||
Foreign currency hedging | |||
Derivative notional amount | $ 430 | 432 | |
Fair Value Hedging | Foreign Exchange Forward | Long | |||
Foreign currency hedging | |||
Derivative notional amount | $ 214 | $ 227 |
Financial Instruments, Deriva36
Financial Instruments, Derivatives and Hedging Activities Balance Sheet Location (Details) lb in Millions, gal in Millions, bu in Millions, MMBTU in Millions, $ in Millions | Mar. 31, 2017USD ($)MMBTUlbgalbu | Dec. 31, 2016USD ($) |
Corn Commodity | ||
Fair value of commodity contracts | ||
Futures contract (in bushels for corn and gallons for ethanol) | bu | 99 | |
Soy Bean Oil | ||
Fair value of commodity contracts | ||
Soybean oil futures contract (in pounds) | lb | 43 | |
Natural Gas Commodity | ||
Fair value of commodity contracts | ||
Natural gas futures contract (in mmbtu) | MMBTU | 23 | |
Ethanol Commodity | ||
Fair value of commodity contracts | ||
Futures contract (in bushels for corn and gallons for ethanol) | gal | 15 | |
Designated as Hedging Instrument | Commodity and Foreign Currency Contracts | Accounts Receivable, Net | ||
Fair value of commodity contracts | ||
Fair value of assets | $ 29 | $ 31 |
Designated as Hedging Instrument | Commodity and Foreign Currency Contracts | Accounts Payable and Accrued Liabilities | ||
Fair value of commodity contracts | ||
Fair value of liabilities | 19 | 25 |
Designated as Hedging Instrument | Commodity, foreign currency, and interest rate contracts | Cash Flow Hedging | ||
Fair value of commodity contracts | ||
Fair value of assets | 33 | 39 |
Fair value of liabilities | 22 | 27 |
Designated as Hedging Instrument | Commodity, foreign currency, and interest rate contracts | Other Assets | ||
Fair value of commodity contracts | ||
Fair value of assets | 4 | 8 |
Designated as Hedging Instrument | Commodity, foreign currency, and interest rate contracts | Non Current Liabilities | ||
Fair value of commodity contracts | ||
Fair value of liabilities | $ 3 | $ 2 |
Financial Instruments, Deriva37
Financial Instruments, Derivatives and Hedging Activities Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Gains or losses on derivatives | ||
Amount of Gains (Losses) Recognized in OCI on Derivatives | $ 8 | $ (17) |
Amount of Gains (Losses) Reclassified from AOCI into Income | (4) | (10) |
Cost of Sales | ||
Gains or losses on derivatives | ||
Amount of Gains (Losses) Reclassified from AOCI into Income | (3) | (9) |
Gross Profit | ||
Gains or losses on derivatives | ||
Amount of Gains (Losses) Reclassified from AOCI into Income | (1) | |
Financing Costs, Net | ||
Gains or losses on derivatives | ||
Amount of Gains (Losses) Reclassified from AOCI into Income | (1) | |
Commodity Contracts | ||
Gains or losses on derivatives | ||
Amount of Gains (Losses) Recognized in OCI on Derivatives | 7 | (18) |
Foreign Currency Contracts | ||
Gains or losses on derivatives | ||
Amount of Gains (Losses) Recognized in OCI on Derivatives | 1 | $ 1 |
Cash Flow Hedging | Commodity Contracts | ||
Gains or losses on derivatives | ||
Gains expected to be reclassified into earnings during the next 12 months on commodity hedging contracts, net of tax | 6 | |
Gains expected to be reclassified into earnings during the next twelve months on commodity hedging contracts, income tax effect | 3 | |
Cash Flow Hedging | Treasury Lock | ||
Gains or losses on derivatives | ||
Losses expected to be reclassified into earnings during next twelve months on settled Treasury Lock Agreements, net of tax | 1 | |
Losses expected to be reclassified into earnings during the next twelve months on settled Treasury Lock Agreements, income tax effect | $ (1) |
Financial Instruments, Deriva38
Financial Instruments, Derivatives and Hedging Activities Recurring And Nonrecurring (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fair value of assets and liabilities | ||
Long-term debt | $ 1,998 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 | ||
Fair value of assets and liabilities | ||
Available for sale securities | 8 | $ 7 |
Derivative assets | 11 | 6 |
Derivative liabilities | 5 | 11 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 | ||
Fair value of assets and liabilities | ||
Derivative assets | 22 | 33 |
Derivative liabilities | 17 | 16 |
Long-term debt | 1,998 | 1,929 |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement | ||
Fair value of assets and liabilities | ||
Available for sale securities | 8 | 7 |
Derivative assets | 33 | 39 |
Derivative liabilities | 22 | 27 |
Long-term debt | $ 1,998 | $ 1,929 |
Financial Instruments, Deriva39
Financial Instruments, Derivatives and Hedging Activities Debt Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Financial Instruments, Derivatives and Hedging Activities | ||
Carrying amount | $ 1,895 | $ 1,850 |
Long-term debt | $ 1,998 |
Share-Based Compensation Stock
Share-Based Compensation Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Assumptions used to measure the fair value of awards | |||
Expected life | 5 years 6 months | 5 years 6 months | |
Risk-free interest rate (as a percent) | 1.93% | 1.36% | |
Expected volatility (as a percent) | 22.50% | 23.40% | |
Expected dividend yield (as a percent) | 1.68% | 1.80% | |
Stock option activity | |||
Outstanding at the beginning of the period (in shares) | 2,281 | ||
Granted (in shares) | 278 | ||
Exercised (in shares) | (79) | ||
Cancelled (in shares) | (16) | ||
Outstanding at the end of the period (in shares) | 2,464 | 2,281 | |
Exercisable at the end of the period (in shares) | 1,880 | ||
Share options, weighted average exercise price per share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 61.39 | ||
Granted (in dollars per share) | 119.08 | ||
Exercised (in dollars per share) | 37.38 | ||
Cancelled (in dollars per share) | 80.47 | ||
Outstanding at the end of the period (in dollars per share) | 68.53 | $ 61.39 | |
Exercisable at the end of the period (in dollars per share) | $ 56.86 | ||
Share options, aggregate intrinsic value | |||
Options outstanding average remaining contractual life | 6 years 3 months 4 days | 5 years 11 months 5 days | |
Options outstanding aggregate intrinsic value | $ 128,000 | $ 145,000 | |
Stock options exercisable average remaining contractual life | 6 years 2 months 12 days | ||
Stock options exercisable aggregate intrinsic value | $ 120,000 | ||
Additional information pertaining to stock options | |||
Weighted average fair value of the shares granted | $ 23.90 | $ 18.73 | |
Total intrinsic value of stock options exercised | $ 6,849 | $ 12,665 | |
Employee Non-Qualified Stock Option | |||
Stock option activity | |||
Granted (in shares) | 268 | 329 | |
Employee Stock Option | |||
Equity stock-based compensation | |||
Term of options | 10 years | ||
Period of vesting | 3 years | ||
Required service period | 1 year | ||
Additional information pertaining to stock options | |||
Cash received from exercise of stock options | $ 3,000 | ||
Unrecognized compensation cost | $ 8,000 | ||
Weighted-average period for amortization of unrecognized compensation cost | 1 year 7 months 6 days |
Share-Based Compensation Restri
Share-Based Compensation Restricted Stock (Details) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Equity stock-based compensation | |
Vesting terms | 3 years |
Restricted unit activity | |
Non-vested at the beginning of the period (in shares) | 429 |
Granted (in shares) | 112 |
Vested (in shares) | (124) |
Cancelled (in shares) | (5) |
Non-vested at the end of the period (in shares) | 412 |
Weighted-average fair value per share | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 81.04 |
Granted (in dollars per share) | $ / shares | 119.13 |
Vested (in dollars per share) | $ / shares | 62.18 |
Cancelled (in dollars per share) | $ / shares | 87.96 |
Non-vested at the end of the period (in dollars per share) | $ / shares | $ 98.13 |
Unrecognized compensation cost | $ | $ 23 |
Weighted-average period for amortization of unrecognized compensation cost | 2 years 1 month 6 days |
Other disclosures | |
Service period over which compensation expense would be amortized | 1 year |
Performance Shares award | |
Equity stock-based compensation | |
Vesting terms | 3 years |
Restricted unit activity | |
Vested (in shares) | (115) |
Cancelled (in shares) | 0 |
Weighted-average fair value per share | |
Unrecognized compensation cost | $ | $ 6 |
Other disclosures | |
Service period over which compensation expense would be amortized | 3 years |
Performance Shares award | Long Term Incentive Plan | |
Restricted unit activity | |
Granted (in shares) | 38 |
Share-Based Compensation Expens
Share-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based compensation expense | ||
Weighted average fair value of the shares granted | $ 23.90 | $ 18.73 |
Pre-tax compensation expense | $ 7 | $ 7 |
Income tax (benefit) | (3) | (3) |
Total share-based compensation expense, net of income taxes | 4 | 4 |
Employee Stock Option | ||
Share-based compensation expense | ||
Unrecognized compensation cost | 8 | |
Pre-tax compensation expense | 2 | 2 |
Income tax (benefit) | (1) | (1) |
Total share-based compensation expense, net of income taxes | 1 | 1 |
Restricted Stock Units (RSUs) | ||
Share-based compensation expense | ||
Unrecognized compensation cost | 23 | |
Pre-tax compensation expense | 3 | 3 |
Income tax (benefit) | (1) | (1) |
Total share-based compensation expense, net of income taxes | $ 2 | 2 |
Performance Shares award | ||
Share-based compensation expense | ||
Weighted average fair value of the shares granted | $ 114.08 | |
Award payout achieved (as a percent) | 200.00% | |
Unrecognized compensation cost | $ 6 | |
Remaining requisite service period (in years) | 2 years 1 month 6 days | |
Performance Shares award | Minimum | ||
Share-based compensation expense | ||
Performance shares available for vesting (as a percent) | 0.00% | |
Performance Shares award | Maximum | ||
Share-based compensation expense | ||
Performance shares available for vesting (as a percent) | 200.00% | |
Performance shares and other share-based awards | ||
Share-based compensation expense | ||
Pre-tax compensation expense | $ 2 | 2 |
Income tax (benefit) | (1) | (1) |
Total share-based compensation expense, net of income taxes | $ 1 | $ 1 |
Net Periodic Pension and Post43
Net Periodic Pension and Postretirement Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Anticipated cash contributions | ||
Anticipated cash contributions to pension plans in 2017 | $ 3 | |
United States Pension Plan of US Entity, Defined Benefit | ||
Components of Net Periodic Benefit Costs | ||
Service cost | 1 | $ 2 |
Interest cost | 3 | 3 |
Expected return on plan assets | (5) | (5) |
Net postretirement benefit cost / Net pension cost (credit) | (1) | |
Employer Contributions | ||
Cash contributions to defined benefit pension plan | 1 | |
Anticipated cash contributions | ||
Anticipated cash contributions to pension plans in 2017 | 1 | |
Foreign Pension Plan, Defined Benefit | ||
Components of Net Periodic Benefit Costs | ||
Service cost | 1 | 1 |
Interest cost | 2 | 3 |
Expected return on plan assets | (3) | (3) |
Amortization of actuarial loss | 1 | 1 |
Net postretirement benefit cost / Net pension cost (credit) | 1 | 2 |
Employer Contributions | ||
Cash contributions to defined benefit pension plan | 1 | |
Anticipated cash contributions | ||
Anticipated cash contributions to pension plans in 2017 | 2 | |
Other Postretirement Benefit Plan, Defined Benefit | ||
Components of Net Periodic Benefit Costs | ||
Interest cost | 1 | 1 |
Amortization of prior service credit | $ (1) | $ (1) |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic EPS: | ||
Net Income Available to Ingredion - basic | $ 124 | $ 130 |
Weighted average number of shares outstanding, basic | 72.2 | 72 |
Basic earnings per common share of Ingredion (in dollars per share) | $ 1.72 | $ 1.81 |
Effect of Dilutive Securities: | ||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards | 1.5 | 1.6 |
Diluted EPS: | ||
Net Income Available to Ingredion - diluted | $ 124 | $ 130 |
Weighted Average Number of Shares Outstanding, Diluted, Total | 73.7 | 73.6 |
Diluted earnings per common share of Ingredion (in dollars per share) | $ 1.68 | $ 1.77 |
Antidilutive securities excluded in calculation of diluted EPS: | ||
Antidilutive securities excluded from computation of earnings per share amount | 0.3 | 0.3 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Inventories | ||
Finished and in process | $ 477 | $ 478 |
Raw materials | 304 | 260 |
Manufacturing supplies and other | 54 | 51 |
Total inventories | $ 835 | $ 789 |
Debt (Details)
Debt (Details) - USD ($) | Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2014 |
Debt Instrument [Line Items] | ||||
Fair value adjustment related to hedged fixed rate debt | $ 3,000,000 | $ 3,000,000 | ||
Long-term debt | 1,895,000,000 | 1,850,000,000 | ||
Short-term borrowings | 118,000,000 | 106,000,000 | ||
Total debt | $ 2,013,000,000 | $ 1,956,000,000 | ||
Senior Notes 3.2 Percent Due October 1, 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 3.20% | 3.20% | ||
Long-term debt | $ 497,000,000 | $ 496,000,000 | ||
Senior Notes 4.625 Percent Due November 1, 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 4.625% | 4.625% | ||
Aggregate principal Amount | $ 400,000,000 | |||
Long-term debt | $ 398,000,000 | $ 398,000,000 | ||
Senior Notes 1.8 Percent Due September 25, 2017 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 1.80% | 1.80% | ||
Aggregate principal Amount | $ 300,000,000 | |||
Long-term debt | $ 300,000,000 | $ 299,000,000 | ||
Senior Notes 6.625 Percent Due April 15, 2037 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 6.625% | 6.625% | ||
Long-term debt | $ 253,000,000 | $ 254,000,000 | ||
Senior Notes 6.0 Percent Due April 15, 2017 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 6.00% | 6.00% | ||
Long-term debt | $ 200,000,000 | $ 200,000,000 | ||
Senior Notes 5.62 Percent Due March 25, 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt, interest rate (as a percent) | 5.62% | 5.62% | ||
Long-term debt | $ 200,000,000 | $ 200,000,000 | ||
Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal Amount | $ 200,000,000 | |||
Long-term debt | $ 44,000,000 |
Debt (Details)47
Debt (Details) - USD ($) | Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2014 |
Senior Notes 3.2 Percent Due October 1, 2026 | ||||
Debt | ||||
Debt, interest rate (as a percent) | 3.20% | 3.20% | ||
Senior Notes 6 Percent Due April 15, 2017 | ||||
Debt | ||||
Debt, interest rate (as a percent) | 6.00% | |||
Debt, face amount | $ 200,000,000 | |||
Senior Notes 1.8 Percent Due September 25, 2017 | ||||
Debt | ||||
Debt, interest rate (as a percent) | 1.80% | 1.80% | ||
Debt, face amount | $ 300,000,000 | |||
Senior Notes 4.625 Percent Due November 1, 2020 | ||||
Debt | ||||
Debt, interest rate (as a percent) | 4.625% | 4.625% | ||
Debt, face amount | $ 400,000,000 | |||
Revolving Credit Agreement | ||||
Debt | ||||
Debt, face amount | $ 200,000,000 |
Accumulated Other Comprehensi48
Accumulated Other Comprehensive Loss By Equity Component (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | $ (1,071) | |
Gains / (loss) on cash-flow hedges, net of income tax effect of $3 and $6, respectively | 5 | $ (11) |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 and $3, respectively | 3 | 7 |
Currency translation adjustment | 40 | 39 |
Balance at end of the period | (1,023) | |
Income tax effect of accumulated other comprehensive gain (loss) | ||
Gains / (loss) on cash-flow hedges, net of income tax effect | (3) | 6 |
Amount of losses on cash flow hedges reclassified to earnings, income tax effect | (1) | (3) |
Cumulative Translation Adjustment | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (1,008) | (1,025) |
Currency translation adjustment | 40 | 39 |
Balance at end of the period | (968) | (986) |
Deferred Gain/(Loss) on Hedging Activities | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (7) | (29) |
Gains / (loss) on cash-flow hedges, net of income tax effect of $3 and $6, respectively | 5 | (11) |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 and $3, respectively | 3 | 7 |
Balance at end of the period | 1 | (33) |
Income tax effect of accumulated other comprehensive gain (loss) | ||
Gains / (loss) on cash-flow hedges, net of income tax effect | (3) | 6 |
Amount of losses on cash flow hedges reclassified to earnings, income tax effect | 1 | |
Pension Postretirement Adjustment | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (56) | (47) |
Balance at end of the period | (56) | (47) |
Unrealized Loss on Investment | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (1) | |
Balance at end of the period | (1) | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (1,071) | (1,102) |
Gains / (loss) on cash-flow hedges, net of income tax effect of $3 and $6, respectively | 5 | (11) |
Amount of losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1 and $3, respectively | 3 | 7 |
Currency translation adjustment | 40 | 39 |
Balance at end of the period | $ (1,023) | $ (1,067) |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Gross profit | $ (352) | $ (339) |
Financing costs, net | (21) | (14) |
Reclassification out of Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Total before tax reclassifications | (4) | (10) |
Income tax benefit | 1 | 3 |
Total after-tax reclassifications | (3) | (7) |
Reclassification out of Accumulated Other Comprehensive Income | Commodity and Foreign Currency Contracts | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Gross profit | (3) | $ (10) |
Deferred Gain/(Loss) on Hedging Activities | Reclassification out of Accumulated Other Comprehensive Income | Interest Rate Contract | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Financing costs, net | $ (1) |