1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission file number 1-13397
CORN PRODUCTS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 22-3514823
- ------------------------------- ---------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6500 SOUTH ARCHER AVENUE, BEDFORD PARK, ILLINOIS 60501-1933
(Address of Principal Executive Offices) ---------------------------
(Zip Code)
Registrant's telephone number, including area code (708) 563-2400
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common Stock, $.01 par value per share New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
(currently traded with Common Stock)
Securities registered pursuant to Section 12(g) of the Act:
NONE
- --------------------------------------------------------------------------------
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant (based upon the per share closing price of
$23.75 on March 21, 2000, and, for the purpose of this calculation only, the
assumption that all Registrant's directors and executive officers are
affiliates) was approximately $32,951,000.
The number of shares outstanding of the Registrant's Common Stock, par
value $.01 per share, as of March 21, 2000, was 35,202,654.
Documents Incorporated by Reference:
Information required by Part II (Items 6, 7 and 8) and Part IV (Item 14(a)(1))
of this document is incorporated by reference to certain portions of the
Registrant's 1999 Annual Report to Stockholders.
Information required by Part III (Items 10, 11, 12 and 13) of this document is
incorporated by reference to certain portions of the Registrant's definitive
Proxy Statement distributed in connection with its 2000 Annual Meeting of
Stockholders.
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PART I.
ITEM 1. BUSINESS
THE COMPANY
Corn Products International, Inc. (the "Company") was incorporated as a
Delaware corporation in March 1997 to assume the operations of the corn refining
business of Bestfoods, formerly CPC International Inc. ("Bestfoods") and to
effect the distribution of 100 percent of the outstanding shares of the Company
to the Bestfoods common stockholders. On December 31, 1997, Bestfoods
transferred the assets and related liabilities of its corn refining business to
the Company. Effective at 11:59:59 p.m. on December 31, 1997, Bestfoods
distributed all of the common stock of the Company to holders of common stock of
Bestfoods. Since that time, the Company has operated as an independent company
whose common stock is traded on the New York Stock Exchange. Unless the context
indicates otherwise, references to the "Company" and "Corn Products" refer to
the corn refining business of Bestfoods for periods prior to January 1, 1998 and
to Corn Products International, Inc. and its subsidiaries for the periods on or
after such date.
OVERVIEW
The corn refining business dates back to the original formation of
Bestfoods' predecessor over 90 years ago. In 1906, Corn Products Refining
Company was formed through an amalgamation of virtually all the corn syrup and
starch companies in the United States. International expansion followed soon
thereafter and in 1928 Latin American operations commenced in Brazil, followed
quickly by expansions into Argentina and Mexico.
Corn Products International, Inc., together with its subsidiaries,
produces a large variety of food ingredients and industrial products derived
from the wet milling of corn and other starch-based materials (such as tapioca
and yucca). The Company is one of the largest corn refiners in the world and the
leading corn refiner in Latin America. In addition, it is the world's leading
producer of dextrose and has strong regional leadership in cornstarch. The
Company's consolidated operations are located in 15 countries with 27 plants
and, in 1999, the Company had consolidated net sales of approximately $1.73
billion. The Company also holds interests in 7 other countries through
unconsolidated joint ventures and allied operations, which operate 15 additional
plants. Approximately 70 percent of the Company's 1999 revenues were generated
in North America with the remainder coming from South America, Asia and Africa.
Corn refining is a capital-intensive two-step process that involves the
wet milling and processing of corn. During the front-end process, corn is
steeped in water and separated into starch and co-products such as animal feed
and germ. The starch is then either dried for sale or further modified or
refined through various processes to make sweeteners and other starch-based
products designed to serve the particular needs of various industries. The
Company's sweetener products include high fructose corn syrups ("HFCS"), glucose
corn syrups, high maltose corn syrups, dextrose, maltodextrins and glucose and
corn syrup solids. The Company's starch-based products include both industrial
and food grade starches.
The Company supplies a broad range of customers in over 60 industries.
The Company's most important customers are in the food and beverage,
pharmaceutical, paper products, corrugated and
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laminated paper, textile and brewing industries and in the animal feed markets
worldwide. The Company believes its customers value its local approach to
service.
BUSINESS STRATEGY
Corn Products International's vision is to be "Your local resource,
worldwide" to users of corn refined products. We plan on working toward
achieving our Vision by continuously focusing on our customers, by providing an
environment that attracts and retains competent and committed employees and by
seeking to implement the following closely linked strategies, pursuing our
"Strategize globally - Execute locally" approach:
- - Continue to drive for leadership in delivered cost efficiency in the
markets we serve. Since ours is a cost-driven business, we intend to
continue implementing productivity improvements and cost-reduction efforts
at our factories. We expect to improve facility reliability with ongoing
preventative maintenance, and continue to drive down logistics, raw
material and supplies cost through a combination of local and corporate
strategic procurement. In the Sales, General and Administrative areas, we
plan on continuing to benchmark and analyze costs and processes to further
assure cost competitiveness.
- - Maintain our leadership positions - globally in dextrose, and regionally in
starch. We believe that our ongoing expansion and product-quality
investments position the Company for continued sales growth. We intend to
invest to satisfy future profitable customer demand and to maintain our
share leadership.
- - In North America, concentrate on continuing to restore acceptable
profitability in the United States, and seek investment opportunities to
strengthen this important business further. In the near term, given the US
pricing environment, we plan to give priority to reducing our cost
structure and optimizing volumes and product mix to deliver earnings
performance.
- - In the Rest of the World (ROW), we plan to further improve our solid South
American business through investing in profitable internal and external
growth opportunities; elsewhere, we intend to selectively enter new markets
through acquisitions and alliances to enhance our geographic business
position.
- - Evaluate other major growth investment in and outside our current
geographic and product portfolio reach. We plan to act on those that we
judge to be clearly beneficial to our long-term market position, earnings
growth and shareholder value.
PRODUCTS
The Company's sweetener products account for approximately half of net
sales while starch products and co-products each account for approximately one
quarter of net sales.
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Sweetener Products. The Company's sweetener products accounted for
approximately 51 percent, or $884 million, of the Company's net sales in 1999;
50 percent, or $731 million, of its net sales in 1998; and 54 percent, or $761
million, of its net sales in 1997.
High Fructose Corn Syrup: The Company produces three types of
high fructose corn syrup: (i) HFCS-55, which is primarily used as a
sweetener in soft drinks made in the United States, Canada, Mexico and
Japan, (ii) HFCS-42, which is used as a sweetener in various consumer
products such as fruit-flavored beverages, yeast-raised breads, rolls,
dough, ready-to-eat cakes, yogurt and ice cream, and (iii) HFCS-90
which is used in specialty and low calorie foods.
Glucose Corn Syrups: Corn syrups are fundamental ingredients
in many industrial products and are widely used in food products such
as baked goods, snack foods, beverages, canned fruits, condiments,
candy and other sweets, dairy products, ice cream, jams and jellies,
prepared mixes and table syrups. The Company offers corn syrups that
are manufactured through an ion exchange process, a method that creates
the highest quality, purest corn syrups.
High Maltose Corn Syrup: This special type of glucose syrup
has a unique carbohydrate profile, making it ideal for use as a source
of fermentable sugars in brewing beers. High maltose corn syrups are
also used in the production of confections, canning and some other food
processing applications.
Dextrose: The Company was granted the first U.S. patent for
dextrose in 1923. The Company currently produces dextrose products that
are grouped in three different categories - monohydrate, anhydrous and
specialty. Monohydrate dextrose is used across the food industry in
many of the same products as glucose corn syrups, especially in
confectionery applications. Anhydrous dextrose is used to make
solutions for intravenous injection and other pharmaceutical
applications, as well as some specialty food applications. Specialty
dextrose products are used in a wide range of applications, from
confectionery tableting to dry mixes to carriers for high intensity
sweeteners. Dextrose also has a wide range of industrial applications,
including use in wall board and production of biodegradable surfactants
(surface agents), humectants (moisture agents), and as the base for
fermentation products including vitamins, organic acids, amino acids
and alcohol.
Maltodextrins and Glucose and Corn Syrup Solids: These
products have a multitude of food applications, including formulations
where liquid corn syrups cannot be used. Maltodextrins are resistant to
browning, provide excellent solubility, have a low hydroscopicity (do
not retain moisture), and are ideal for their carrier/bulking
properties. Corn syrup solids have a bland flavor, remain clear in
solution, and are easy to handle and also provide bluing properties.
Starch Products. Starch products accounted for approximately 22
percent, or $375 million, of the Company's net sales in 1999; 25 percent, or
$357 million, of its net sales in 1998; and 23 percent, or $328 million, of its
net sales in 1997. Starches are an important component in a wide range of
processed foods, where they are used particularly as a thickener and binder.
Cornstarch is also sold to cornstarch packers for sale to consumers. Starches
are also used in paper production to produce a smooth surface for printed
communications and to improve strength in today's recycled papers. In the
corrugating industry, starches are used to produce high quality adhesives for
the production of shipping containers, display board and other corrugated
applications. The textile industry has successfully used starches for over a
century to provide size and finishes for manufactured products. Industrial
starches are used in the
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production of construction materials, adhesives, pharmaceuticals and cosmetics,
as well as in mining, water filtration and oil and gas drilling.
Enzymes. Enzymes are produced and marketed for a variety of food and
industrial applications.
Co-Products. Co-products and others accounted for 27 percent, or $477
million, of the Company's net sales in 1999; 25 percent, or $360 million, of its
net sales in 1998; and 23 percent, or $329 million, of its net sales in 1997.
Refined corn oil is sold to packers of cooking oil and to producers of
margarine, salad dressings, shortening, mayonnaise and other foods. Corn gluten
feed is sold as animal feed. Corn gluten meal and steepwater are sold as
additives for animal feed.
OPERATIONS
The Company's North American operations, which include the U.S., Canada
and Mexico, operate 11 plants producing regular and modified starches, dextrose,
high fructose and high maltose corn syrups and corn syrup solids, dextrins and
maltodextrins, caramel color and sorbitol. The Company's plant in Bedford Park,
Illinois is a major supplier of starch and dextrose products for the Company's
U.S. and export customers. The Company's other U.S. plants in Winston-Salem,
North Carolina and Stockton, California enjoy strong market shares in their
local areas, as do the Company's Canadian plants in Cardinal, London and Port
Colborne, Ontario. The Company is the largest corn refiner in Mexico and was
first to produce HFCS-55 locally for sale to the Mexican soft drink bottling
industry, having completed an HFCS channel at the San Juan Del Rio plant in
1997.
The Company is the largest corn refiner in South America, with leading
market shares in Chile, Brazil and Colombia and a strong position in Argentina.
Its South American consolidated operations have 11 plants that produce regular,
modified, waxy and tapioca starches, high maltose and corn syrups, dextrins and
maltodextrins, dextrose, caramel color, sorbitol and vegetable adhesives.
The Company has additional subsidiaries in Kenya, South Korea, Malaysia
and Pakistan, which operate five additional plants. These operations produce
modified, regular, waxy and tapioca starches, dextrins, glucose, dextrose and
caramel color.
In addition to the operations in which it engages directly, the Company
has strategic alliances through technical license agreements with companies in
Australia, India, Japan, New Zealand, Thailand, South Africa, Zimbabwe, Serbia
and Venezuela. As a group, the Company's strategic alliance partners operate 15
plants and produce high fructose, glucose and high maltose syrups (both corn and
tapioca), regular, modified, waxy and tapioca starches, dextrose and dextrins,
maltodextrins and caramel color. These products have leading market positions in
many of their target markets.
COMPETITION
The corn refining industry is highly competitive. Most of the Company's
products compete with virtually identical products and derivatives manufactured
by other companies in the industry. The U.S. is the most competitive market with
participation by eleven corn refiners. Competitors include ADM Corn Processing
Division ("ADM") (a division of Archer Daniels Midland Company), Cargill, A.E.
Staley Manufacturing Co. ("Staley") (a subsidiary of Tate & Lyle, PLC) and
National Starch and Chemical Company ("National Starch") (a subsidiary of
Imperial Chemicals Industries plc). Mexico and Canada face competition from US
imports and local production including ALMEX, a Mexican joint venture between
ADM and Staley. In South America, Cargill and National Starch have corn-refining
operations
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in Brazil and Staley has operations in Argentina. Other local corn refiners also
operate in many of our markets. Competition within markets is largely based on
price, quality and product availability.
Several of the Company's products also compete with products made from
raw materials other than corn. High fructose corn syrup and monohydrate dextrose
compete principally with cane and beet sugar products. Co-products such as corn
oil and gluten meal compete with products of the corn dry milling industry and
with soybean oil and soybean meal. Fluctuations in prices of these competing
products may affect prices of, and profits derived from, the Company's products.
CUSTOMERS
The Company supplies a broad range of customers in over 60 industries.
Historically, Bestfoods' worldwide branded foods business has been one of the
Company's largest customers, accounting for approximately 7 percent of total
sales in 1999. Approximately 18 percent of the Company's 1999 net sales were of
HFCS to international, regional and local companies engaged in the soft drink
industry, primarily in North America, and 13 percent of its 1999 net sales were
to international, regional and local companies engaged in the brewing industry.
RAW MATERIALS
The basic raw material of the corn refining industry is yellow dent
corn. In the United States, the corn refining industry processes about 10
percent to 15 percent of the annual U.S. corn crop. The supply of corn in the
United States has been, and is anticipated to continue to be, adequate for the
Company's domestic needs. The price of corn, which is determined by reference to
prices on the Chicago Board of Trade, fluctuates as a result of three primary
supply factors -- farmer planting decisions, climate and government policies --
and three major market demand factors -- livestock feeding, shortages or
surpluses of world grain supplies and domestic and foreign government policies
and trade agreements.
Corn is also grown in other areas of the world, including Canada, South
Africa, Argentina, Brazil, China and Australia. The Company's affiliates outside
the United States utilize both local supplies of corn and corn imported from
other geographic areas, including the United States. The supply of corn for
these affiliates is also generally expected to be adequate for the Company's
needs. Corn prices for the Company's non-U.S. affiliates generally fluctuate as
a result of the same factors that affect U.S. corn prices.
Due to the competitive nature of the corn refining industry and the
availability of substitute products not produced from corn, such as sugar from
cane or beet, end product prices may not necessarily fluctuate in relation to
raw material costs of corn.
Approximately 50 percent of the Company's starch and refinery products
are sold at prices established in supply contracts lasting for periods of up to
one year. The remainder of the Company's starch and refinery products is not
sold under firm pricing arrangements and actual pricing for those products is
affected by the cost of corn at the time of production and sale.
The Company follows a policy of hedging its exposure to commodity
fluctuations with commodities futures contracts for certain of its North
American corn purchases. All firm priced business is hedged when contracted.
Other business may or may not be hedged at any given time based on management's
judgment as to the need to fix the costs of its raw materials to protect the
Company's profitability. Realized gains and losses arising from such hedging
transactions are considered an integral
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part of the cost of those commodities and are included in the cost when
purchased. See Registrant's Annual Report to Stockholders "Management Analysis
and Discussion" section on "Risk and Uncertainties - Commodity Costs."
GEOGRAPHIC SCOPE
The Company engages in business in 22 countries, operating directly and
through affiliates in 14 countries with 27 plants and indirectly through joint
ventures and technical licensing agreements elsewhere in South America, Asia,
Africa, Australia and New Zealand. The Company has wholly owned operations in
North America, South America, Asia and Africa, and other joint venture interests
and licensing and technical agreements in South America, Asia and Africa. In
1999, approximately 70 percent of the Company's net sales was derived from its
operations in North America and 30 percent from operations in other geographic
areas, primarily South America (representing approximately 70 percent of sales
and operating income of other geographic areas). See Note 12 of Notes to
Consolidated Financial Statements for certain financial information with respect
to geographic areas.
RESEARCH AND DEVELOPMENT
The Company's product development activity is focused on developing
product applications for identified customer and market needs. Through this
approach, the Company has developed value-added products for use in the
corrugated paper, food, textile, baking and confectionery industries. The
Company usually collaborates with customers to develop the desired product
application either in the customers' facilities, the Company's technical service
laboratories or on a contract basis. The Company's marketing, product technology
and technology support staff devote a substantial portion of their time to these
efforts. Product development is enhanced through technology transfers pursuant
to existing licensing arrangements.
SALES AND DISTRIBUTION
Salaried sales personnel, who are generally dedicated to customers in a
geographic region, sell the Company's products directly to manufacturers and
distributors. In addition, the Company has a staff that provides technical
support to the sales personnel on an industry basis. The Company generally
utilizes contract truck drivers to deliver bulk products to customer
destinations but also has some of its own trucks for product delivery. In North
America, the trucks generally ship to nearby customers. For those customers
located considerable distances from Company plants, a combination of railcars
and trucks is used to deliver product. Railcars are generally leased for terms
of five to fifteen years.
PATENTS, TRADEMARKS AND TECHNICAL LICENSE AGREEMENTS
The Company owns a number of patents, which relate to a variety of
products and processes, and a number of established trademarks under which the
Company markets such products. The Company also has the right to use certain
other patents and trademarks pursuant to patent and trademark licenses. The
Company does not believe that any individual patent or trademark is material.
There is not currently any pending challenge to the use or registration of any
of the Company's significant patents or trademarks that would have a material
adverse impact on the Company or its results of operations.
The Company is a party to eight technical license agreements with third
parties in other countries whereby the Company provides technical, management
and business advice on the operations of corn refining businesses and receives
royalties in return. These arrangements provide the Company with
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product penetration in the various countries in which they exist, as well as
experience and relationships that could facilitate future expansion. The
duration of the agreements ranges from one to ten years or longer, and many of
these relationships have been in place for many years. These agreements in the
aggregate provide approximately $3 million of annual revenue to the Company.
EMPLOYEES
As of December 31, 1999, the Company had approximately 6,000 employees,
of which approximately 1,100 were located in the U.S. Approximately 32 percent
of U.S. and 59 percent of non-U.S. employees are unionized. The Company believes
its union and non-union employee relations are good.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
As a manufacturer and maker of food items and items for use in the
pharmaceutical industry, the Company's operations and the use of many Company
products are subject to various U.S., state, foreign and local statutes and
regulations, including the Federal Food, Drug and Cosmetic Act and the
Occupational Safety and Health Act, and to regulation by various government
agencies, including the United States Food and Drug Administration, which
prescribe requirements and establish standards for product quality, purity and
labeling. The finding of a failure to comply with one or more regulatory
requirements can result in a variety of sanctions, including monetary fines. The
Company may also be required to comply with U.S., state, foreign and local laws
regulating food handling and storage. The Company believes these laws and
regulations have not negatively affected its competitive position.
The operations of the Company are also subject to various U.S., state,
foreign and local laws and regulations with respect to environmental matters,
including air and water quality and underground fuel storage tanks, and other
regulations intended to protect public health and the environment. The Company
believes it is in material compliance with all such applicable laws and
regulations. Based upon current laws and regulations and the interpretations
thereof, the Company does not expect that the costs of future environmental
compliance will be a material expense, although there can be no assurance that
the Company will remain in compliance or that the costs of remaining in
compliance will not have a material adverse effect on the Company's financial
condition and results of operations.
The Company currently anticipates that it will spend approximately $9
million in fiscal 2000 for environmental control equipment to be incorporated
into existing facilities and in planned construction projects. This equipment is
intended to enable the Company to continue its policy of compliance with
existing known environmental laws and regulations. Under the U.S. Clean Air Act
Amendments of 1990, air toxin regulations will be promulgated for a number of
industry source categories. The U.S. Environmental Protection Agency's
regulatory timetable specifies the promulgation of standards for vegetable oil
production and for industrial boilers during the year 2000. At that time, the
Company's U.S. facilities may require additional pollution control devices to
meet these standards. Currently, the Company can not accurately estimate the
ultimate financial impact of the standards.
RELATIONSHIP BETWEEN THE COMPANY AND BESTFOODS
In connection with the spin-off of the Company from Bestfoods, the
Company entered into various agreements with Bestfoods for the purpose of
governing certain of the ongoing relationships between Bestfoods and the Company
after the distribution.
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The Company entered into a tax indemnification agreement that requires
the Company to indemnify Bestfoods against tax liabilities arising from the loss
of the tax-free reorganization status of the spin-off. This agreement restricted
the Company, for a two-year period ending December 12, 1999, from entering into
certain transactions, including limitations on the liquidation, merger or
consolidation with another company, certain issuance and redemption of Company
common stock and the distribution or sale of certain assets.
The Company entered into a Master Supply Agreement to supply Bestfoods
and its affiliates with certain corn refining products at prices based generally
at prevailing market conditions for a minimum two-year term, ending December 31,
1999. The Company continues to supply Bestfoods under the extension of the
Master Supply Agreement or in accordance with the terms of locally negotiated
supply agreements at prices based generally at prevailing market conditions. See
Note 4 of Notes to Consolidated Financial Statements for certain information
relating to transactions with Bestfoods.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names and ages of all executive officers of the
Company, indicating their positions and offices with the Company.
Name Age All positions and offices with the Company
- ---- --- ------------------------------------------
Konrad Schlatter 64 Chairman and Chief Executive Officer of
Corn Products since 1997. Mr. Schlatter
served as Senior Vice President of
Bestfoods from 1990 to 1997 and Chief
Financial Officer of Bestfoods from 1993 to
February 1997.
Samuel C. Scott 55 President and Chief Operating Officer of
Corn Products since 1997. Mr. Scott served
as President of Bestfoods' worldwide Corn
Refining Business from 1995 to 1997 and was
President of Bestfoods' North American Corn
Refining Business from 1989 to 1997. He was
elected a Vice President of Bestfoods in
1991. Mr. Scott is a director of Motorola,
Inc., Reynolds Metal Company, and Russell
Reynolds Associates.
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Cheryl K. Beebe 44 Vice President since 1999 and Treasurer of
Corn Products since 1997. Ms. Beebe served
as Director of Finance and Planning for the
Bestfoods Corn Refining Business worldwide
from 1995 to 1997 and as Director of
Financial Analysis and Planning for Corn
Products North America from 1993. Ms. Beebe
joined Bestfoods in 1980 and served in
various financial positions in Bestfoods.
Marcia E. Doane 58 Vice President, General Counsel and
Corporate Secretary of Corn Products since
1997. Ms. Doane served as Vice President,
Legal and Regulatory Affairs of the Corn
Products Division of Bestfoods from 1996 to
1997. Prior thereto, she served as Counsel
to the Corn Products Division from 1994 to
1996. Ms. Doane joined Bestfoods' legal
department in 1989 as Operations Attorney
for the Corn Products Division.
Jorge Fiamenghi 44 Vice President and President, South
American Division of Corn Products since
December 1999. Mr. Fiamenghi served as
President and General Manager Corn Products
Brazil from 1996 - 1999 and was elected
Vice President Corn Products International,
Inc. in 1999. Mr. Fiamenghi was General
Manager for the Bestfoods Corn Refining
affiliate in Argentina beginning in 1991.
Prior there to, he was Financial and
Planning Director for the Bestfoods South
American Corn Refining division from
1989-1991 and served as Financial and
Administrative Manager for the Bestfoods
Corn Refining division in Mexico beginning
in 1987. Mr. Fiamenghi joined Bestfoods in
1971 and served in various financial and
planning positions in Bestfoods.
Jack C. Fortnum 43 Vice President since 1999 and Comptroller
of Corn Products since 1997. Mr. Fortnum
served as the Vice President of Finance for
Refineries de Maize, Bestfoods' Argentine
subsidiary from 1995 to 1997, as the
Director of Finance and Planning for
Bestfoods Latin America Corn Refining
Division from 1993 to 1995, and as the Vice
President and Comptroller of Canada Starch
Co., Inc., the Canadian
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subsidiary of Bestfoods, and Vice President
of Finance of the Canadian Corn Refining
Business from 1989.
James I. Hirchak 45 Vice President - Human Resources of Corn
Products since 1997. Mr. Hirchak joined
Bestfoods in 1976 and held various Human
Resources positions in Bestfoods until
1984, when he joined Bestfoods' Corn
Products Division. In 1987, Mr. Hirchak was
appointed Director, Human Resources for
Corn Products' North American operation and
has served as Vice President, Human
Resources for the Corn Products Division
since 1992.
Frank J. Kocun 57 Vice President and President, Asia and
Africa Division (formerly known as
Cooperative Management Group) since 1997.
Mr. Kocun served as President of the
Cooperative Management Group of the Corn
Products Division of Bestfoods from 1991 to
1997 and as Vice President of the
Cooperative Management Group from 1985. Mr.
Kocun joined Bestfoods in 1968 and served
in various executive positions in the Corn
Products Division and in Penick
Corporation, a Bestfoods subsidiary.
Michael R. Pyatt 52 Vice President and Executive Vice
President, North American Division of Corn
Products since 1997. Mr. Pyatt served as
Chairman, President and Chief Executive
Officer of Canada Starch Co., Inc., a
Bestfoods subsidiary, from 1994 to 1997 and
as President of the Canadian business of
Bestfoods' Corn Products Division, Vice
Chairman of Canada Starch and as a Vice
President of the Corn Products Division
since 1992. Mr. Pyatt joined Bestfoods in
1982 and served in various sales and
marketing positions in the Casco business.
James W. Ripley 56 Vice President - Finance and Chief
Financial Officer of Corn Products since
1997. Mr. Ripley served as Comptroller of
Bestfoods from 1995 to 1997. Prior thereto,
he served as Vice President of Finance for
Bestfoods'
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North American Corn Refining Division from
1984 to 1995. Mr. Ripley joined Bestfoods
in 1968 as chief international accountant,
and subsequently served as Bestfoods'
Assistant Corporate Comptroller, Corporate
General Audit Coordinator and Assistant
Comptroller for Bestfoods' European
Consumer Foods Division.
Richard M. Vandervoort 56 Vice President - Strategic Business
Development and Investor Relations of Corn
Products since 1998. Mr. Vandervoort has
served as Vice President - Business
Development and Procurement, Corn Products
International North American Division from
1997 to 1998. Prior thereto, he served as
Vice President - Business Management and
Marketing for Bestfoods' Corn Products
Division from 1989 to 1997. Mr. Vandervoort
joined Bestfoods in 1971 and served in
various executive sales positions in
Bestfoods' Corn Products Division and in
Peterson/Puritan Inc., a Bestfoods
subsidiary.
ITEM 2. PROPERTIES
The Company operates, directly and through its subsidiaries, 27
manufacturing facilities, 26 of which are owned and one of which is leased
(Jundiai, Brazil). In addition, the Company owns its corporate headquarters in
Bedford Park, Illinois. The following list details the location of the Company's
manufacturing facilities:
U.S. South America
--- -------------
Stockton, California Baradero, Argentina
Bedford Park, Illinois Balsa Nova, Brazil
Winston-Salem, North Carolina Cabo, Brazil
Beloit, Wisconsin Jundiai, Brazil
Mogi-Guacu, Brazil
Conchal, Brazil
Canada Llay-Llay, Chile
------ Barranquilla, Colombia
Cardinal, Ontario Cali, Colombia
London, Ontario Medellin, Colombia
Port Colborne, Ontario Guayaquil, Ecuador
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Africa Asia
------ ----
Eldoret, Kenya Petaling Jaya, Malaysia
Faisalabad, Pakistan
Inchon, South Korea
Ichon, South Korea
Mexico
------
San Juan del Rio
Guadalajara (2 plants)
Mexico City
In addition to the foregoing, the Company has interests in 15 plants through its
unconsolidated joint ventures and allied operations.
While the Company has achieved high capacity utilization, the Company
believes its manufacturing facilities are sufficient to meet its current
production needs. The Company has preventive maintenance and de-bottlenecking
programs designed to further improve grind capacity and facility reliability.
The Company has electricity co-generation facilities at all of its U.S.
and Canadian plants, as well as its plants in San Juan del Rio, Mexico,
Baradero, Argentina and Faisalabad, Pakistan, that provide electricity at a
lower cost than is available from third parties. The Company generally owns and
operates such co-generation facilities itself, but has two large facilities at
its Stockton, California and Cardinal, Ontario locations that are owned by, and
operated pursuant to, co-generation agreements with third parties.
The Company believes it has competitive, up-to-date and cost-effective
facilities. In recent years, significant capital expenditures have been made to
update, expand and improve the Company's facilities, averaging in excess of $145
million per year for the last five years. Capital investments have included the
rebuilding of the Company's plants in Cali, Colombia and Baradero, Argentina; an
expansion of both grind capacity and dextrose production capacity at the
Company's Argo facility in Bedford Park, Illinois and Baradero, Argentina; entry
into the high maltose corn syrup business in Brazil, Colombia and Argentina;
entry into the HFCS business in Argentina and the installation of energy
co-generation facilities in Canada. In addition, prior to the Company's
acquisition of Arancia-CPC, the Mexican business completed a major expansion of
the San Juan del Rio plant to produce HFCS. The Company believes these capital
expenditures will allow the Company to operate highly efficient facilities for
the foreseeable future with further annual capital expenditures that are in line
with historical averages.
ITEM 3. LEGAL PROCEEDINGS
Under the terms of the agreements relating to the spin-off of the
Company from Bestfoods, the Company agreed to indemnify Bestfoods for certain
liabilities relating to the operation of the Corn Refining Business prior to the
spin-off, including liabilities relating to antitrust legal the proceedings
14
described below.
In July 1995, Bestfoods received a federal grand jury subpoena in
connection with an investigation by the Antitrust Division of the U.S.
Department of Justice of U.S. corn refiners regarding the marketing of high
fructose corn syrup and other "food additives" (the investigation of Bestfoods
relates only to high fructose corn syrup). Bestfoods has produced the documents
sought by the Justice Department and the federal grand jury has since been
disbanded. Bestfoods, as a high fructose corn syrup producer, was also named as
one of the defendants in a number of private treble damage class actions, by
direct and indirect customers, and one individual action, alleging violations of
federal and state antitrust laws. Following the certification of the
consolidated federal class actions, Bestfoods entered into settlements of the
federal claims and the one individual action. Bestfoods remains a party to the
state law actions filed in Alabama, California, the District of Columbia, West
Virginia and Kansas, each of which was filed in 1995 or 1996. The amount of
damages claimed in the various pending state law actions is either unspecified
or stated as not exceeding $50,000 per claimant.
The Company was named as a defendant in a lawsuit filed on January 24,
2000, in the Supreme Court of the Sate of New York, County of New York, by
Indopco, Inc. d/b/a/ National Starch and Chemical Company ("National Starch").
Also named as defendants are the Company's majority-owned subsidiary,
Arancia-Corn Products, S.A. de C.V. ("Arancia-Corn Products") and Araten, S.A.
de C.V. ("Araten") and Promociones Industriales Aralia, S.A. de C.V. ("Aralia"),
companies which the complaint alleges are controlled by the family of Ignacio
Aranguren-Castiello, a member of Corn Products Board of Directors. In addition
to the claims brought only against Araten and Aralia, the complaint alleges that
by inducing certain companies controlled by the Aranguren family ("Aranguren
Companies") to enter into various agreements, the Company tortiously interfered
with a joint venture agreement that was originally between National Starch and
Aranguren y Cia. The complaint also alleges that the Company aided and abetted
the Aranguren Companies in a breach of fiduciary duty to National Starch and
conspired with the Aranguren Companies to deprive National Starch of its rights
under the joint venture agreement. The complaint further seeks a declaratory
judgement concerning the defendants' obligation to deliver raw starch pursuant
to a Supply Agreement between the joint venture and Arancia-Corn Products. In
addition to declaratory and injunctive relief, the complaint seeks compensatory
damages of $50 million and punitive damages of at least $50 million. The Company
intends to defend this suit vigorously and believes that it has meritorious
defenses.
The Company is currently subject to various other claims and suits
arising in the ordinary course of business, including certain environmental
proceedings. The Company does not believe that the results of such legal
proceedings, even if unfavorable to the Company, will be material to the
Company. There can be no assurance, however, that any claims or suits arising in
the future, whether taken individually or in the aggregate, will not have a
material adverse effect on the Company's financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter ended December
31, 1999.
15
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Shares of Corn Product's Common Stock are traded on the New York Stock
Exchange ("NYSE") under the ticker symbol "CPO." The range of the NYSE reported
high and low closing sale prices of the Company's Common Stock, holders of
record and quarterly dividends are set forth in page 35 of the Annual Report to
Stockholders for the year ended December 31, 1999 and incorporated herein by
reference.
The Company's policy is to pay a modest dividend. The amount and timing
of the dividend payment, if any, is based on a number of factors including
estimated earnings, financial position and cash flow. The payment of a dividend
is solely at the discretion of the Company's Board of Directors. It is subject
to the Company's financial results and the availability of surplus funds to pay
dividends.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from the Registrant's Annual Report to
Stockholders, page 35-36, section entitled "Supplemental Financial Information."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Incorporated by reference from the Registrant's Annual Report to
Stockholders, pages 9-14, section entitled "Management's Discussion and
Analysis."
ITEM 7A. QUALITATIVE & QUANTITATIVE RISKS
Incorporated by reference from the Registrant's Annual Report to
Stockholders, pages 13-14, section entitled "Management's Discussion and
Analysis - Risks and Uncertainties."
INTERNATIONAL OPERATIONS AND FOREIGN EXCHANGE. For more than 70 years,
the Company has operated a multinational business subject to the risks inherent
in operating in foreign countries and with foreign currencies. The Company's US
Dollar denominated results are subject to foreign exchange fluctuations, and its
non-US operations are subject to political, economic and other risks.
The Company primarily sells world commodities and; therefore, believes
that local prices will adjust relatively quickly to offset the effect of a local
devaluation. The Company generally does not enter into foreign currency hedging
transactions. The Company's policy is to hedge only commercial transactions
denominated in a currency other than the currency of the country in which the
operating unit responsible for the transaction is located.
UNCERTAIN ABILITY TO GENERATE ADEQUATE FINANCIAL PERFORMANCE. The
Company's ability to generate operating income and to increase profitability
depends to a large extent upon its ability to price finished products at a level
that will cover manufacturing and raw material costs and provide a profit
margin. The Company's ability to maintain appropriate price levels is determined
by a number of factors largely beyond the Company's control, such as aggregate
industry supply and market demand, which may vary from time to time and by the
geographic region of the Company's operations.
16
UNCERTAIN ABILITY TO CONTAIN COSTS OR TO FUND CAPITAL EXPENDITURES. The
Company's future profitability and growth also depends on the Company's ability
to contain operating costs and per-unit product costs, to maintain and/or
implement effective cost control programs and to develop successfully
value-added products and new product applications, while at the same time
maintaining competitive pricing and superior quality products, customer service
and support. The Company's ability to maintain a competitive cost structure
depends on continued containment of manufacturing, delivery and administrative
costs as well as the implementation of cost-effective purchasing programs for
raw materials, energy and related manufacturing requirements. The Company plans
to focus capital expenditures on implementing productivity improvements and, if
supported by profitable customer demand, expand the production capacity of its
facilities. The Company may need additional funds for working capital as the
Company grows and expands its operations. To the extent possible, the Company
expects to fund these capital expenditures from operations. If the Company's
cash flow is insufficient to fund such expenses, the Company may either reduce
its capital expenditures or utilize certain general credit facilities. The
Company may also seek to generate additional liquidity through the sale of debt
or equity securities in private or public markets or through the sale of
non-productive assets. The Company cannot provide any assurance that cash flow
from operations will be sufficient to fund anticipated capital expenditures and
working capital requirements or that additional funds can be obtained from the
financial markets or the sale of assets at terms favorable to the Company. If
the Company is unable to generate sufficient cash flows or raise sufficient
additional funds to fund capital expenditures, it may not be able to achieve its
desired operating efficiencies and expansion plans, which may adversely impact
the Company's competitiveness and, therefore, its results of operations.
INTEREST RATE EXPOSURE. Approximately 40 percent of the Company's
borrowings are long-term fixed rate notes. Of the remaining 60 percent of the
Company's borrowings, approximately 30 percent are short-term credit facilities
with floating interest rates and 30 percent are long-term loans with variable
interest rates primarily tied to LIBOR. Should short-term rates change, this
could affect our interest costs. Current economic projections do not indicate a
significant change in the interest rate in the near future.
During 1998, the carrying value of long-term debt approximated fair
value. At December 31, 1999, the carrying and fair value of long-term debt,
including the current portion were as follows:
(in millions) Carrying value Fair value
-------------------- -------------------
8.45% senior notes, due 2009 $ 200 $ 196
Mexican Import Credit Facility, due 2001 at LIBOR + 1.75% 40 40
Mexican Import Credit Facility, due 2007 at LIBOR + 3.30% 60 60
Mexican Export Credit, due 2000 at LIBOR + 1.49% 24 24
Other, due in varying amounts through 2007, fixed and floating
interest rates ranging from 6.57% - 21.37% 57 57
-------------------------------------------------------------------------------------------------------------
Total $ 381 $ 377
COMPETITION; EXPANDING INDUSTRY CAPACITY. The Company operates in a
highly competitive environment. Almost all of the Company's products compete
with virtually identical or similar products manufactured by other companies in
the corn refining industry. In the United States, there are ten other corn
refiners, several of which are divisions of larger enterprises that have greater
financial resources and some of which, unlike the Company, have vertically
integrated their corn refining and other operations.
17
Many of the Company's products also compete with products made from raw
materials other than corn. Fluctuation in prices of these competing products may
affect prices of, and profits derived from, the Company's products. Competition
within markets is largely based on price, quality and product availability.
PRICE VOLATILITY AND UNCERTAIN AVAILABILITY OF CORN. Corn purchasing
costs, which include the price of the corn plus delivery cost, vary between 40
percent and 65 percent of the Company's product costs. The price and
availability of corn are influenced by economic and industry conditions,
including supply and demand factors such as crop disease and severe weather
conditions such as drought, floods or frost, that are difficult to anticipate
and cannot be controlled by the Company. In addition, government programs
supporting sugar prices indirectly impact the price of corn sweeteners,
especially high fructose corn syrup. The Company can not assure that it will be
able to purchase corn at prices that it can adequately pass on to customers or
in quantities sufficient to sustain or increase its profitability.
COMMODITY COSTS. The Company's finished products are made primarily from corn.
Purchased corn accounts for 40 percent to 65 percent of finished product costs.
In North America, the Company sells a large portion of finished product at firm
prices established in supply contracts lasting for periods of up to one year. In
order to minimize the effect of volatility in the cost of corn related to these
firm-priced supply contracts, the Company enters into corn futures contracts, or
takes hedging positions in the corn futures market. From time to time, the
Company may also enter into anticipatory hedges. These contracts typically
mature within one year. At expiration, the Company settles the derivative
contracts at a net amount equal to the difference between the then-current price
of corn and the fixed contract price. While these hedging instruments are
subject to fluctuations in value, changes in the value of the underlying
exposures the Company is hedging generally offset such fluctuations. While the
corn futures contracts or hedging positions are intended to minimize the
volatility of corn costs on operating profits, occasionally the hedging activity
can result in losses, some of which may be material. In the Rest of World, sales
of finished product under long-term, firm-priced supply contracts are not
material.
As the Company's hedging instruments generally relate to contracted firm-priced
business, and based on the Company's overall commodity hedge exposure at
December 31, 1999, a hypothetical 10% change in market rates applied to the fair
value of the instruments would have no material impact on the Company's
earnings, cash flows, financial position, or fair value of commodity price
risk-sensitive instruments over a one-year period.
VOLATILITY OF MARKETS. The market price for the common stock of the
Company may be significantly affected by factors such as the announcement of new
products or services by the Company or its competitors; technological innovation
by the Company, its competitors or other vendors; quarterly variations in the
Company's operating results or the operating results of the Company's
competitors; general conditions in the Company's and its customers' markets;
changes in the earnings estimates by analysts or reported results that vary
materially from such estimates. In addition, the stock market has experienced
significant price fluctuations that have affected the market prices of equity
securities of many companies that have been unrelated to the operating
performance of any individual company. These broad market fluctuations may
materially and adversely affect the market price of the Company's common stock.
18
UNCERTAINTY OF DIVIDENDS. The payment of dividends is at the discretion
of the Company's Board of Directors and will be subject to the Company's
financial results and the availability of surplus funds to pay dividends. No
assurance can be given that the Company will continue to pay dividends.
CERTAIN ANTI-TAKEOVER EFFECTS. Certain provisions of the Company's
Amended and Restated Certificate of Incorporation (the "Corn Products Charter")
and the Company's By-laws (the "Corn Products By-Laws") and of the Delaware
General Corporation Law (the "DGCL") may have the effect of delaying, deterring
or preventing a change in control of the Company not approved by the Company's
Board. These provisions include (i) a classified Board of Directors, (ii) a
requirement of the unanimous consent of all stockholders for action to be taken
without a meeting, (iii) a requirement that special meetings of stockholders be
called only by the Chairman of the Board or the Board of Directors, (iv) advance
notice requirements for stockholder proposals and nominations, (v) limitations
on the ability of stockholders to amend, alter or repeal the Company's By-laws
and certain provisions of the Corn Products Charter, (vi) authorization for the
Company's Board to issue without stockholder approval preferred stock with such
terms as the Board of Directors may determine and (vii) authorization for the
Corn Products Board to consider the interests of creditors, customers, employees
and other constituencies of the Company and its subsidiaries and the effect upon
communities in which the Company and its subsidiaries do business, in evaluating
proposed corporate transactions. With certain exceptions, Section 203 of the
DGCL ("Section 203") imposes certain restrictions on mergers and other business
combinations between the Company and any holder of 15 percent or more of the
Company's Common Stock. In addition, the Company has adopted a stockholder
rights plan (the "Rights Plan"). The Rights Plan is designed to protect
stockholders in the event of an unsolicited offer and other takeover tactics,
which, in the opinion of the Company's Board, could impair the Company's ability
to represent stockholder interests. The provisions of the Rights Plan may render
an unsolicited takeover of the Company more difficult or less likely to occur or
might prevent such a takeover.
These provisions of the Corn Products Charter and Corn Products
By-laws, the DGCL and the Rights Plan could discourage potential acquisition
proposals and could delay or prevent a change in control of the Company,
although such proposals, if made, might be considered desirable by a majority of
the Company's stockholders. Such provisions could also make it more difficult
for third parties to remove and replace the members of the Company's Board.
Moreover, these provisions could diminish the opportunities for a stockholder to
participate in certain tender offers, including tender offers at prices above
the then-current market value of the Company's Common Stock, and may also
inhibit increases in the market price of the Company's Common Stock that could
result from takeover attempts or speculation.
LIMITED RELEVANCE OF HISTORICAL FINANCIAL INFORMATION. The Company's
historical financial information may not necessarily reflect the results of
operations, financial position and cash flows of the Company in the future or
the results of operations, financial position and cash flows had the Company
operated as a separate stand-alone entity during all of the periods presented.
RELIANCE ON MAJOR CUSTOMERS. Historically, Bestfoods' worldwide branded
foods business has been one of the Company's largest customers, accounting for
approximately 7 percent of total sales in 1999. The Company continues to supply
Bestfoods either under the terms of a Master Supply Agreement or in accordance
with the terms of locally negotiated supply agreements at prices based generally
at prevailing market conditions. See Note 4 of Notes to Consolidated Financial
Statements for certain information relating to transactions with Bestfoods. In
addition,
19
approximately 18 percent of the Company's 1999 worldwide sales represented sales
of high fructose corn syrup to international, regional and local companies
engaged in the soft drink industry, primarily in North America. If Bestfoods
were not to continue to purchase products from the Company or the Company's soft
drink customers were to substantially decrease their purchases, the business of
the Company might be materially adversely affected.
READINESS FOR THE YEAR 2000. The year 2000 (Y2K) issue was the result of certain
computer programs using two digits rather than four to define the applicable
year. During 1997, the Company developed a plan, and established a team with
appropriate senior management support, to identify and correct Y2K issues (the
"Program"). The Program included the repair or replacement, when necessary, of
critical internal systems, hardware and software throughout its plants, building
facilities and business systems, the review of critical vendors and the
development of contingency plans. Total costs of the Program to achieve Y2K
readiness were $10 million of expense. Capital expenditures indirectly related
to Y2K added an additional $10 million to the cost of the Program.
The Company's manufacturing and administrative processes operated as normal on
January 1, 2000 and the Company has not experienced any disruptions in its
operations from Y2K related issues in 2000.
FORWARD LOOKING STATEMENTS
This annual report contains or may contain certain forward-looking statements
concerning the Company's financial position, business and future prospects, in
addition to other statements using words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend" and other similar expressions. These
statements contain certain inherent risks and uncertainties. Although we believe
our expectations reflected in these forward-looking statements are based on
reasonable assumptions, stockholders are cautioned that no assurance can be
given that our expectations will prove correct. Actual results and developments
may differ materially from the expectations conveyed in these statements, based
on factors such as the following: fluctuations in worldwide commodities markets
and the associated risks of hedging against such fluctuations; fluctuations in
aggregate industry supply and market demand; general economic, business and
market conditions in the various geographic regions and countries in which we
manufacture and sell our products, including fluctuations in the value of local
currencies; increased competitive and/or customer pressure in the corn refining
industry. Our forward-looking statements speak only as of the date on which they
are made and we do not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of the statement. If
we do update or correct one or more of these statements, investors and others
should not conclude that we will make additional updates or corrections. For a
further description of risk factors, see the Company's most recent Annual Report
to Stockholders and subsequent reports on Forms 10-Q and 8-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from the Registrant's Annual Report to
Stockholders, pages 15-34, sections entitled "Reports of Management and
Independent Auditors" and "Financial Statements."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information contained under the headings "Board of Directors,"
"Matters To Be Acted Upon - Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Company's definitive proxy statement for
the Company's 2000 Annual Meeting of Stockholders (the "Proxy Statement") and
the information contained under the heading "Executive Officers of the
Registrant" in Item 1 hereof is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information contained under the heading "Executive Compensation" in
the Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the heading "Security Ownership of
Certain Beneficial Owners and Management" in the Proxy Statement is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the heading "Certain Relationships and
Related Transactions" in the Proxy Statement is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Item 14(a)(1) Consolidated Financial Statements and Schedules
Incorporated by reference from the Registrant's Annual Report to
Stockholders, pages 15-34, sections entitled "Report by Management and
Independent Auditors" and "Financial Statements."
Item 14(a)(2) Financial Statement Schedules
All financial statement schedules have been omitted either because the
information is not required or is otherwise included in the financial statements
and notes thereto.
Item 14(a)(3) Exhibits
The Exhibits set forth in the accompanying Exhibit Index are filed as a
part of this report. The following is a list of each management contract or
compensatory plan or arrangement required to be filed as an Exhibit to this
report:
Exhibit Number
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
Item 14(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended December 31, 1999.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 24 day of
March, 2000.
CORN PRODUCTS INTERNATIONAL, INC.
By: *Konrad Schlatter
-----------------------------------
Konrad Schlatter
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant, in the capacities indicated and on the 25 day of March, 2000.
Signature Title
- --------- -----
*Konrad Schlatter Chairman and Chief Executive Officer
Konrad Schlatter
/s/ James W. Ripley Chief Financial Officer
James W. Ripley
/s/ Jack C. Fortnum Comptroller
Jack C. Fortnum
*Ignacio Aranguren-Castiello Director
Ignacio Aranguren-Castiello
*Alfred C. DeCrane, Jr. Director
Alfred C. DeCrane, Jr.
*Guenter E. Greiner Director
Guenter E Greiner
*Ronald M. Gross Director
Ronald M. Gross
*William C. Ferguson Director
William C. Ferguson
*Bernard H. Kastory Director
Bernard H. Kastory
*Richard G. Holder Director
Richard G. Holder
*William S. Norman Director
William S. Norman
*Samuel C. Scott Director
Samuel C. Scott
*Clifford B. Storms Director
Clifford B. Storms
*By: /s/ Marcia E. Doane
Marcia E. Doane
Attorney-in-fact
(Being the principal executive officers, the principal financial and accounting
officers and all of the directors of Corn Products International, Inc.)
22
EXHIBIT NO. DESCRIPTION
2.1** Distribution Agreement dated December 1, 1997, between
the Company and Bestfoods
3.1** Amended and Restated Certificate of Incorporation of
the Company, filed as Exhibit 3.1 to the Company's
Registration Statement on Form 10, File No.1-13397
3.2** Amended By-Laws of the Company, filed as Exhibit 3.2 to
the Company's Registration Statement on Form 10, File
No.1-13397
4.1** Rights Agreement dated November 19, 1997 between the
Company and First Chicago Trust Company of New York,
filed as Exhibit 1 to the Company's Registration
Statement on Form 8-Al2B, File No.1-13397
4.2** Certificate of Designation for the Company's Series A
Junior Participating Preferred Stock, filed as Exhibit
1 to the Company's Registration Statement on Form
8-Al2B, File No.1-13397
4.3** 5-Year Revolving Credit Agreement dated December 17,
1997 among the Company and the agents and banks named
therein
4.4* Indenture Agreement dated as of August 18, 1999 between
the Company and The Bank of New York, as Trustee, files
on August 27, 1999 as Exhibit 4.1 to the Company's
current report on Form 8-K, File No. 1-12297.
10.1** Master Supply Agreement dated January 1, 1998 between
the Company and Bestfoods
l0.2** Tax Sharing Agreement dated December 1, 1997 between
the Company and Bestfoods
10.3** Tax Indemnification Agreement dated December 1, 1997
between the Company and Bestfoods
10.4** Debt Agreement dated December 1, 1997 between the
Company and Bestfoods
10.5** Transition Services Agreement dated December 1, 1997
between the Company and Bestfoods
10.6** Master License Agreement dated January 1, 1998 between
the Company and Bestfoods
23
EXHIBIT NO. DESCRIPTION
10.7** Employee Benefits Agreement dated December 1, 1997
between the Company and Bestfoods, filed as Exhibit 4.E
to the Company's Registration Statement on Form S-8,
File No.333-43525
10.8** Access Agreement dated January 1, 1998 between the
Company and Bestfoods
10.9** Stock Incentive Plan of the Company, filed as Exhibit
4.E to the Company's Registration Statement on Form
S-8, File No.333-43525
10.10** Deferred Stock Unit Plan of the Company
10.11** Form of Severance Agreement entered into by each of K.
Schlatter, S.C. Scott, E.J. Northacker, M.R. Pyatt and
J.W. Ripley (the "Named Executive Officers")
10.12** Letter Agreement dated December 12, 1997 between the
Company and E.J. Northacker
10.13** Form of Indemnification Agreement entered into by each
of the members of the Company's Board of Directors and
the Named Executive Officers
10.14** Deferred Compensation Plan for Outside Directors of the
Company
10.15** Supplemental Executive Retirement Plan
10.16** Executive Life Insurance Plan
10.17** Deferred Compensation Plan
10.18* Annual Incentive Plan
10.19* Performance Plan
12.1* Earnings Per Share Computation
12.2* Computation of Ratio of Earnings to Fixed Charges
13.1* Portions of the 1999 Annual Report to Stockholders of
the Company
21.1* Subsidiaries of the Company
23.1* Consent of KPMG LLP
24.1* Powers of Attorney
27.1* Financial Data Schedule
- -------------------
* Incorporated herein by reference as indicated in the exhibit description.
** Incorporated herein by reference to the exhibits filed with the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.