<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 10-Q
-------------
Quarterly report pursuant to Section 13 or 15 (d) of the ExchangeeAct of 1934
FOR QUARTER ENDED JUNE 30, 1994
COMMISSION FILE NUMBER 1-4199
CPC INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
36-2385545
(I.R.S. Employer Identification Number)
INTERNATIONAL PLAZA, P.O. BOX 8000
ENGLEWOOD CLIFFS, N.J. 07632-9976
(Address of principal executive office) (Zip Code)
(201)-894-4000
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed
since last report.
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 the number of shares outstanding of each of the
registrant's classes of common stock, as of latest
practicable date.
CLASS OUTSTANDING AT JUNE 30, 1994
Common Stock, $.25 par value 148,449,075 shares
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $1,856.3 $1,689.8 $3,594.0 $3,326.0
-------- -------- -------- --------
Cost of sales 1,140.2 1,015.4 2,202.8 2,011.3
Operating expenses 479.9 447.8 962.3 906.5
Restructuring charge 227.0 - 227.0 -
-------- -------- -------- --------
1,847.1 1,463.2 3,392.1 2,917.8
-------- -------- -------- --------
Operating income 9.2 226.6 201.9 408.2
-------- -------- -------- --------
Financing costs 23.6 23.2 43.8 46.0
-------- -------- -------- --------
Income before income taxes (14.4) 203.4 158.1 362.2
Provision for income taxes (5.7) 81.4 62.4 144.9
-------- -------- -------- --------
(8.7) 122.0 95.7 217.3
Minority stockholders'
interest 6.2 5.1 12.5 10.0
-------- -------- -------- --------
Net income $ (14.9) $ 116.9 $ 83.2 $ 207.3
======== ======== ======== ========
Average common shares
outstanding 148,670 150,570 149,112 150,578
Earnings per common
share based on net income
reduced by "ESOP" preferred
stock dividends net of taxes $(.11) $ .76 $ .52 $1.34
Cash dividends declared
per common share $ .34 $ .32 $ .68 $ .64
</TABLE>
-----------
See notes to financial statements.
1
<PAGE> 3
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ MILLIONS)
<TABLE>
<CAPTION>
June 30, 1994 Dec. 31, 1993
------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 109.6 $ 166.3
Notes and accounts receivable, net 1,041.8 899.7
Inventories 945.9 830.2
Prepaid expenses 102.4 75.7
-------- --------
Total current assets 2,199.7 1,971.9
-------- --------
Investments in unconsolidated
affiliates 77.3 69.9
-------- --------
Plant and properties 4,327.6 4,080.8
Less accumulated depreciation 2,154.8 1,960.1
-------- --------
2,172.8 2,120.7
-------- --------
Excess cost over net assets of
businesses acquired and other
intangible assets (net of accumulated
amortization of $154.2 and $132.3) 859.3 774.7
-------- --------
Other assets 130.8 123.6
-------- --------
$5,439.9 $5,060.8
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Notes and drafts payable $ 745.7 $ 375.0
Accounts payable and accrued items 1,089.9 1,016.3
Income taxes payable 128.7 144.2
Dividends payable 50.5 47.9
------- -------
Total current liabilities 2,014.8 1,583.4
------- -------
Non-current liabilities 769.6 673.6
------- -------
Long-term debt 903.4 897.7
------- -------
Deferred taxes on income (34.8) 42.1
------- -------
Minority interest 132.2 94.9
------- -------
Stockholders' equity
Preferred stock, authorized 25,000,000
shares $1 par value -- --
Designations: Series A ESOP convertible
3,000,000 shares designated - 2,183,034
shares issued at stated value (1993:
2,192,237 shares) 194.7 195.6
Series A Junior Participating 600,000
shares designated - none issued -- --
Common stock authorized 900,000,000
shares $.25 par value - issued 195,271,444 48.8 48.8
Capital in excess of par value of stock 154.1 150.5
Retained earnings 2,751.1 2,774.5
Unearned ESOP compensation (148.2) (155.2)
Cumulative translation adjustment (203.3) (172.6)
Common stock in treasury at cost -
46,822,369 shares (1993: 45,454,592 shares) (1,142.5) (1,072.5)
-------- --------
Total stockholders' equity 1,654.7 1,769.1
-------- --------
$5,439.9 $5,060.8
======== ========
</TABLE>
- --------
See notes to financial statements.
2
<PAGE> 4
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ MILLIONS)
<TABLE>
<CAPTION>
For Six Months Ended
June 30,
-------------------
1994 1993
------- -------
<S> <C> <C>
Cash Flows from (used for) operating activities
- ------------------------------------------------
Net income $ 83.2 $ 207.3
Non-cash charges (credits) to net income
Restructuring charge, net of taxes 137.3 --
Depreciation and amortization 147.6 134.4
Deferred taxes 2.8 (6.9)
Translation losses 1.3 2.5
Other, net 8.0 17.6
Changes in trade working capital:
Notes and accounts receivable (73.8) (27.7)
Inventories (72.3) (77.9)
Accounts payable and accrued items (51.2) (37.1)
------- ------
Net cash flows from operating activities 182.9 212.2
------- ------
Cash Flows from (used for) investing activities
- -----------------------------------------------
Capital expenditures paid (193.9) (144.0)
Disposal of plants and properties 4.2 11.4
Businesses acquired (196.7) (16.9)
------- -------
Net cash flows used for investing activities (386.4) (149.5)
------- -------
Net cash flows after investments (203.5) 62.7
------- -------
Cash Flows from (used for) financing activities
- -----------------------------------------------
Purchase of treasury stock (74.6) (11.8)
Repayment of long-term debt (24.4) (52.7)
New long-term debt 39.6 44.9
Net change in short-term debt 296.9 85.0
Dividends paid on common stock (98.6) (93.4)
Dividends paid on preferred stock (7.8) (7.9)
Common stock issued 4 .6 4.2
Other liabilities (deposits) 11.4 (9.1)
------- -------
Net cash flows (used for) financing activities 147.1 (40.8)
------- -------
Effects of exchange rate changes on cash (.3) (4.6)
------- -------
Increase (decrease) in cash and cash equivalents (56.7) 17.3
------- -------
Cash and cash equivalents, beginning of year 166.3 158.0
------- -------
Cash and cash equivalents, end of period $ 109.6 $ 175.3
======= =======
</TABLE>
- --------
See notes to the financial statements.
3
<PAGE> 5
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
(UNAUDITED)
($ MILLION)
<TABLE>
<CAPTION>
Preferred
Stock Capital in Unearned Cumulative
Series A Common Excess of Treasury ESOP Translation Retained
ESOP Stock Par Value Stock Compensation Adjustment Earnings
-------- ------ --------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $195.6 $48.8 $150.5 $(1,072.5) $(155.2) $(172.6) $2,774.5
Net income for the period 83.2
ESOP compensation earned 7.0
ESOP shares redeemed (.9)
Common dividends (101.2)
Series A ESOP preferred
stock dividends,
net of taxes (5.4)
Translation adjustment for
the period (30.7)
Shares issued for:
Stock options,
deferred compensation and
restricted stock awards 3.6 4.6
Treasury stock acquired (74.6)
-----------------------------------------------------------------------------
Balance, June 30, 1994 $194.7 $48.8 $154.1 $(1,142.5) $(148.2) $(203.3) $2,751.1
=============================================================================
</TABLE>
- --------
See notes to financial statements.
4
<PAGE> 6
CPC INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The unaudited consolidated interim financial statements included herein
were prepared by management and reflect all adjustments (consisting solely of
normal recurring items) which are, in the opinion of management, necessary to
present a fair statement of results of operations for the interim periods ended
June 30, 1994 and 1993 and the financial position as of June 30, 1994 and
December 31, 1993.
References to "the Company" are to CPC International Inc. and its
consolidated subsidiaries. These statements should be read in conjunction
with the consolidated financial statements and the related footnotes to these
statements contained in the Company's Annual Report to Stockholders which
notes were incorporated by reference in Form 10-K for the fiscal year ended
December 31, 1993.
2. ACQUISITIONS
In the first quarter of 1994, the Company acquired an 85% interest in a
European producer and marketer of brand-name potato products. In addition, the
Company acquired the jams, juices and related food products business of a
Company in Sri Lanka. The total costs of these investments amounted to $195
million including assumed debt.
In the second quarter of 1994 the Company purchased the majority
interest of a newly formed company which manufactures and markets selected CPC
food brands in South Africa and export CPC products to sub-Saharan Africa.
This investment cost about $20 million. Also in the second quarter, the
Company acquired three consumer foods businesses located in the United States,
for a total cost of approximately $67 million. These businesses include;
Western, a brand of salad dressing and specialty sauces, Iberia, a marketer of
Hispanic products in the United States and a smaller business which produces
snacks.
3. INVENTORIES
Inventories are summarized as follow:
<TABLE>
<CAPTION>
June 30, 1994 Dec.31,1993
------------- -----------
<S> <C> <C>
Finished and goods in process $575.6 $491.6
Raw Materials 236.1 202.6
Supplies 134.2 136.0
------ ------
$945.9 $830.2
====== ======
</TABLE>
5
<PAGE> 7
4. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
June 30, 1994 Dec.31,1993
------------- -----------
<S> <C> <C>
7.78% ESOP guaranteed notes due
December 2004 $ 178.2 $ 183.3
5.625% -- 6.75% pollution control
revenue bonds due 2007-2016 15.3 15.3
5.02% medium term notes
due 1994-1996 25.0 --
8.5% sinking fund debentures due
April 2016 100.0 100.0
5.75% Swiss franc debentures 141.8 140.8
6.75% German mark debentures 119.8 122.7
Other secured and unsecured notes
and loans at various rates and
due dates 405.2 398.9
------- -------
985.3 961.0
------- -------
Less current maturities 81.9 63.3
------- -------
$ 903.4 $ 897.7
======= =======
</TABLE>
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplementary information for the consolidated statements of cash flows is
set forth below:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
<S> <C> <C>
Cash paid during the period for: 1994 1993
---- ----
Interest $ 50.5 $ 55.6
Income taxes 167.6 162.8
Details of businesses acquired
were as follows:
Fair value of assets acquired $458.6 $ 19.0
Less: Liabilities assumed 261.9 2.1
------ -------
Cash paid $196.7 $ 16.9
====== =======
</TABLE>
The details of businesses acquired in 1994, as shown above, are based on
estimates which will be finalized later in 1994.
6. FINANCIAL INSTRUMENTS
FOREIGN EXCHANGE CONTRACTS - The Company's policy is to hedge its exposure
in foreign currencies resulting from transactions that comprised mainly planned
dividends, fees and royalties, intercompany loans and other transactions.
These exposures relate primarily to the currencies of the major European
countries in which the Company operates, namely Germany, France, the
Netherlands, Switzerland and the United Kingdom. The Company also hedges
certain investments in its foreign operations with similar instruments or with
loans denominated in the particular foreign currency. As a matter of policy,
the Company does not speculate on foreign currencies. Gains and losses, both
realized and unrealized, on financial instruments that hedge operating
activities and related cashflows, flow through income in the same period as the
items being hedged.
6
<PAGE> 8
Gains and losses, both realized and unrealized, on financial instruments
that hedge the Company's investments in foreign operations are recognized as
part of the cumulative translation adjustment in shareholders' equity.
At December 31, 1993 the Company had forward exchange contracts, maturing
in 1994, to deliver $376 million of foreign currencies comprised of $192
million German marks, $90 million British pounds, $35 million French francs,
$33 million Dutch guilders and $26 million of various other currencies
including Belgian francs, Canadian dollars, Danish kroner, Japanese yen and
Spanish peseta. The Company also had, at December 31, 1993, contracts to
purchase $31 million foreign currencies, primarily German marks.
As of June 30, 1994, the Company had forward exchange contracts to deliver
$381 million of foreign currencies comprised of $138 million German marks, $77
million British pounds, $55 million Swiss francs, $34 million Italian lire, $37
million Dutch guilders, $16 million French francs and $24 million of various
other currencies including Belgian francs, Canadian dollars, Danish kroner,
Japanese yen and Spanish peseta.
Most of the forward currency contracts outstanding mature within 90 days of
the respective balance sheets, at December 31, 1993 and June 30, 1994.
INTEREST RATE SWAPS - The Company utilizes interest rate swap agreements to
minimize its financing costs and to balance its current and non-current asset
levels with floating and fixed debt positions. The Company's risk on swap
agreements is limited to the cost of replacing such agreements at current
market rates. The Company continually monitors its positions and credit
ratings of its counterparties and limits the number of agreements it enters
into with any one party. Management believes the risk of incurring a material
loss is remote.
At December 31, 1993, the Company had $300 million notional amount of
interest rate swap agreements outstanding. A portion of these agreements with
maturity dates through 1995 effectively converted an aggregate principal amount
of $100 million fixed interest rate debt into variable interest rate debt with
a weighted average rate of 3.44%. The remaining agreements with maturity dates
through 2000, also effectively converted $200 million of floating interest rate
debt into a fixed interest rate debt with a weighted average interest rate of
5.88%.
At June 30, 1994, the Company had $275 million of interest rate swap
agreements outstanding. The Company's position regarding its floating rate
debt remained the same as at December 31, 1993, but the fixed interest rate
debt position was reduced to $75 million and had a weighted average rate of
interest 4.072%.
7
<PAGE> 9
COMMODITIES - The Company follows a policy of fixing the cost, with
commodities futures contracts, of certain of its key domestic raw material
purchases in line with production requirements to minimize cost risk due to
market fluctuations. Certain domestic raw materials may or may not be hedged
at any given time based on managements decisions as to the need to fix the cost
of such raw materials. In addition, commodity futures contracts are employed
to fix the raw material cost of certain fixed price sales contracts of the corn
refining business. Gains and losses arising from such hedging transactions are
included with the cost of raw material purchases.
The Company's products are manufactured from a number of raw materials,
including soybean and other edible oils, peanuts, corn and wheat, all of which
are, and are expected to continue to be, in adequate supply. As prices of
these materials depend on a number of unpredictable factors such as farm
plantings and weather, and as the Company engages in limited price protection,
fluctuations in raw material prices may have an effect on the Company's
earnings to the extent such fluctuations cannot be reflected in the pricing of
the Company's products.
At December 31, 1993 and June 30, 1994 the Company had commodity futures
contracts to purchase primarily corn totaling $111 million and $63 million
respectively. The commodity futures contracts at June 30, 1994 primarily call
for delivery in the period September to December 1994. Contracts for delivery
beyond September 30, 1994 aggregate about $44 million. Management believes the
risk of incurring a material loss from its commodity contract positions at June
30, 1994 is remote.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Second quarter earnings per common share of $.81, excluding a
restructuring charge of $.92 per share announced in June. Including the
restructuring charge, the company had a net loss for the quarter of $.11 per
share.
The $.81 in earnings per share represents a gain of 6.6% from earnings per
share of $.76 in the second quarter of 1993. Net income, excluding the charge,
rose 4.7% to $122.4 million from $116.9 million in the same period of 1993.
The gains reflect a healthy volume increase of 7.6%, including acquisitions,
but also the negative effect of European currency values, which continued weak
against the dollar during the second quarter of CPC's international operations,
ended March 31. The net loss after the charge was $14.9 million.
CPC's total worldwide sales in the quarter rose 9.9% to $1.86 billion from
$1.69 billion, and operating income excluding the restructuring charge was
$236.2 million, up 4.2% from operating income of $226.6 million in the second
quarter last year.
8
<PAGE> 10
The restructuring charge, which amounted to $227 million ($137.3 million
after taxes), recognizes the cost of restructuring activities around the world,
which are being compressed into the next 18 to 24 months, in order to
anticipate now the competitive needs of the increasingly unified markets of the
late 1990s.
The Company said that about two-thirds of the charge is for non-cash costs
for write-off of assets, including some plant closures and also includes the
cost of a phased near-term reduction in people of about 2,600 worldwide, about
7% of CPC's total work force.
For the first six months of 1994, earnings per share, excluding the
restructuring charge, advanced 7.5% to $1.44, and net income rose 6.4% to
$220.5 million from $207.3 million.
Worldwide sales for the first six months of $3.59 billion were 8.1% higher
than sales of $3.33 billion during the same period in 1993. Excluding the
restructuring charge, worldwide operating income rose 5% to $428.9 million from
$408.3 million. After the charge, operating income and net income were $201.9
million and $83.2 million, respectively. (Divisional results discussed below
also exclude the impact of the restructuring charge).
Commenting on the results, C.R. Shoemate, chairman and chief executive
officer of CPC, said, "We are pleased to report a resumption of strong earnings
growth for our European operations, particularly taking into account the
negative currency effect on the region's results. Asian volumes increased
substantially, and Best Foods in North America turned in an acceptable
performance in a difficult environment. In Latin America all operations
reported excellent growth, with the notable exception of Brazil, where economic
difficulties seriously hurt our results and [Bmay save as much as three to four
cents per share off CPC's growth for the total year.
"Until the last week of June, it appeared that Brazil's economy had at
last turned the corner. However, uncertainties related to the country's change
in currency suddenly resurfaced, bringing customers' purchases of many consumer
foods products to a virtual halt. In spite of this further drawing out of the
Brazilian process of stabilization, however, we continue to have full
confidence in the growth potential of the Brazilian economy and in CPC's
excellent prospects for success there."
CONSUMER FOODS
Second quarter sales of consumer foods advanced 9.4% on volume gains in
all divisions, compared to the same period last year. Operating income from
consumer foods was 2.3% higher, held back significantly by the situation in
Brazil.
For the six-month period, worldwide sales of consumer foods were 7.4%
higher, and operating income advanced 4.7%.
Best foods, CPC's North American consumer foods business, reported sales
growth of 6.9% and an operating income gain of 3.8% for the second quarter.
9
<PAGE> 11
The results reflected some margin improvement and overall volume growth of
about 2%, as added volumes from acquisitions overcame a slight drop in volumes
from traditional products. Volumes of Hellmann's and Best Foods mayonnaise
were flat. Volumes of Best Foods' total dressings businesses were higher,
reflecting primarily the acquisition of the Henri's and Western pourable
dressings businesses.
Volumes of Skippy peanut butter, Knorr products, and Mueller's pasta also
increased strongly. Mazola corn oil volumes were significantly lower in a
highly competitive environment, and specialty baking volumes were also lower.
For the six-month period, Best Foods' sales and operating income were 7.8%
and 2.1% higher, respectively.
CPC Europe reported a gain in second quarter sales and operating income of
13% and 23%, respectively, despite unfavorable currency exchange values. The
division's strong showing reflected economic recovery in some southern European
countries and a volume increase of 17% from the addition of the Pfanni and
South African businesses, as well as from solid growth in existing businesses.
For the six months, European sales and operating income were 7.8% and 15%
higher, respectively, compared to the first half of last year.
Sales of CPC's Latin American consumer foods business rose 2.1% for the
quarter compared to the same period last year, but operating income fell 45%,
entirely as a result of the extremely difficult operating conditions in Brazil.
All of CPC's other Latin American consumer foods businesses performed very
well.
For the six-month period, Latin American sales of consumer foods were 5.9%
higher, while operating income declined 10.7%.
Asian sales and operating income in the second quarter rose 12% and 1.9%,
respectively, on a nearly 20% volume gain, as CPC continued to invest actively
in its Asian brands and businesses. For the first half of the year, Asian
sales were 6.8% higher and operating income rose 4.8%.
CORN REFINING
CPC's corn refining business recorded sales growth of 12% and an operating
income gain of 14%, reflecting strong performance in both North America and
Latin America.
After a maintenance shutdown for a major repair in April, which restrained
volume growth, North American corn refining volumes grew robustly. Operating
income in North America was helped by strong margins.
Throughout Latin America, CPC's corn refining business posted strong
results, which were driven by vigorous volume growth but tempered by lower
profits in Brazil.
For the six-month period CPC's corn refining business achieved sales
growth of 11% and an increase in operating income of 7.2%.
10
<PAGE> 12
RESTRUCTURING CHARGE
On June 23, 1994 the Company announced that it had taken a restructuring
charge of $227 million ($137.3 million after taxes) to recognize the cost of
restructuring activities around the world which are being compressed into the
next 18 to 24 months in order to anticipate now the competitive needs of the
increasingly unified market of the late 1990's.
The majority of the charge relates to our European and North American consumer
food businesses. The restructuring charge is summarized below:
<TABLE>
<CAPTION>
Total Charge To be utilized
Charge Utilized in future periods
-------- -------- -----------------
<S> <C> <C> <C>
Employee severance $102 $ - $102
Plant and support facilities 114 109 5
Other 11 - 11
--- --- ---
$227 $109 $118
=== === ===
</TABLE>
The charge is designed to cover the cost of a phased reduction of about
2,600 employees worldwide combined with the realignment of manufacturing
capacity. The realignment will be achieved through a combination of plant
closures, scale backs and relocations of production. In total, twenty-four
consumer food plants and four corn refining plants will be affected by the
restructuring.
The time period for completion of the restructuring is from a few months
at some sights to two years at others where alternative production sites are to
be constructed.
At June 30, 1994, $57 million of this charge was included in current
liabilities.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources and uses of funds as well as its general
financial policy are discussed on pages 27-30 of the 1993 Annual Report to
Stockholders which were incorporated by reference in Form 10-K for the year
ended December 31, 1993.
The Company's capital expenditures are expected to be approximately $375
million in 1994.
- ----------
Note: The brand names shown above in distinctive type are trademarks of CPC
International Inc. and its affiliates.
11
<PAGE> 13
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material developments in the legal proceedings as
previously reported in Form 10-K for the year ended December 31, 1993.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits pursuant to Item 601 of Regulation S-K.
Exhibit 11 - Statements re: computation of earnings per
common share (Part I data)
b) Reports on Form 8-K.
A report on Form 8-K was filed on June 23, 1994 setting forth under
"Item 5 - Other Events", the Company's announcement regarding a restructuring
of worldwide operations which will take place over the next two years. A
charge of $227 million ($137.3 million after taxes) was taken against second
quarter earnings for the cost of restructuring activities.
12
<PAGE> 14
CPC INTERNATIONAL INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has dully caused this report to be signed on its behalf by the
undersigned thereunto dully authorized.
CPC INTERNATIONAL, INC.
DATE: August 15, 1994
Konrad Schlatter
-----------------------
Konrad Schlatter
Senior Vice President &
Chief Financial Officer
DATE: August 15, 1994
James E. Healey
-----------------------
James E. Healey
Comptroller & Chief
Accounting Officer
13
<PAGE> 15
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
11 Computation of Earnings Per Common Share
<PAGE> 1
EXHIBIT 11
CPC INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Earnings per common share for CPC International Inc. is based on net income
available to common stockholders and the average number of common shares
outstanding during each period. Net income available to common shareholders
has been reduced by the ESOP preferred stock dividend net of the tax benefit.
A potentially dilutive effect on earnings per common share results from the
operation of the 1984 Stock and Performance Plan and the Deferred Compensation
Plan for Outside Directors. The effect on earnings per common share resulting
from the assumed exercise of outstanding options and delivery of deferred stock
awards under these programs is not material. The maximum number of shares of
common stock issuable and deliverable under such assumptions, without giving
effect to the assumed reacquisitions of common stock with the proceeds from
options exercised, amounted to the following percentages of the average number
of shares of common stock outstanding at June 30:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C>
1.7% 1.4%
</TABLE>
Since the dilution resulting from deferred stock awards and stock options is
less than 3%, these items have not been considered in the computation of shares
outstanding. Furthermore, the potentially dilutive effect derived from using
the if-converted method in calculating fully diluted earnings per share for the
ESOP would not cause the dilution to exceed 3% even when considered with the
aforementioned programs.
14
