<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 10-Q
-------------
Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
FOR QUARTER ENDED JUNE 30, 1995
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.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT JUNE 30, 1995
<S> <C>
Common Stock, $.25 par value 146,023,163 shares
</TABLE>
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Net sales $2,040 $1,856 $3,995 $3,594
------ ------ ------ ------
Cost of sales 1,223 1,140 2,396 2,203
Operating expenses 544 480 1,108 962
Restructuring charge - 227 - 227
------ ------ ------ ------
1,767 1,847 3,504 3,392
------ ------ ------ ------
Operating income 273 9 491 202
------ ------ ------ ------
Financing costs 31 24 57 44
------ ------ ------ ------
Income before income taxes 242 (15) 434 158
Provision for income taxes 93 (6) 167 62
------ ------ ------ ------
149 (9) 267 96
Minority stockholders' interest 7 6 14 13
------ ------ ------ ------
Net income (loss) $ 142 $ (15) $ 253 $ 83
====== ====== ====== ======
Average common shares
outstanding 146,163 148,670 146,324 149,112
Earnings (loss) per common
share based on net income
reduced by "ESOP" preferred
stock dividends net of taxes $ .96 $(.11) $1.69 $ .52
Cash dividends declared
per common share $ .36 $ .34 $ .72 $ .68
</TABLE>
---------------
See notes to financial statements.
1
<PAGE> 3
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ MILLIONS)
<TABLE>
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 110 $ 125
Notes And accounts receivable, net 1,210 1,093
Inventories 1,029 907
Prepaid expenses 93 90
------ ------
Total current assets 2,442 2,215
------ ------
Investments in unconsolidated
affiliates 98 65
------ ------
Plant and properties 4,781 4,545
Less accumulated depreciation 2,413 2,264
------ ------
2,368 2,281
------ ------
Excess cost over net assets of
businesses acquired and other
intangible assets (net of accumulated
amortization of $192 and $172) 1,069 954
------ ------
Other assets 152 138
------ ------
$6,129 $5,653
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes and drafts payable $ 795 $ 664
Accounts payable and accrued items 1,306 1,237
Income taxes payable 137 134
Dividends payable 53 53
------ ------
Total current liabilities 2,291 2,088
------ ------
Non-current liabilities 855 810
------ ------
Long-term debt 915 879
------ ------
Deferred taxes on income 9 (15)
------ ------
Minority interest 153 142
------ ------
Stockholders' equity
Preferred stock, authorized 25,000,000
shares $1 par value -- --
Designations: Series A ESOP convertible
3,000,000 shares designated - 2,152,829
shares issued at stated value (1994:
2,170,854 shares) 192 194
Series A Junior Participating 600,000
shares designated - none issued -- --
Common stock authorized 900,000,000
shares $.25 par value - issued 195,271,444 49 49
Capital in excess of par value of stock 161 155
Unearned ESOP compensation (134) (141)
Cumulative translation adjustment (129) (181)
Common stock in treasury at cost -
49,248,281 shares (1994: 48,510,458 shares) (1,280) (1,231)
Retained earnings 3,047 2,904
------ ------
Total stockholders' equity 1,906 1,749
------ ------
$6,129 $5,653
====== ======
</TABLE>
------------
See notes to financial statements.
2
<PAGE> 4
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------
1995 1994
----- -----
<S> <C> <C>
Cash Flows from (used for) operating activities
Net income $ 253 $ 83
Non-cash charges (credits) to net income
Restructuring charge -- 227
Depreciation and amortization 154 148
Deferred taxes 6 (83)
Translation losses -- 1
Other, net 6 8
Changes in trade working capital:
Notes and accounts receivable (131) (74)
Inventories (91) (72)
Accounts payable and accrued items 59 (55)
----- -----
Net cash flows from operating activities 256 183
----- -----
Cash Flows from (used for) investing activities
Capital expenditures paid (174) (194)
Disposal of plants and properties 5 4
Investment in joint venture (13) --
Businesses acquired (81) (196)
----- -----
Net cash flows used for investing activities (263) (386)
----- -----
Net cash flows after investments (7) (203)
----- -----
Cash Flows from (used for) financing activities
Purchase of treasury stock (56) (75)
Repayment of long-term debt (20) (24)
New long-term debt 35 40
Net change in short-term debt 126 297
Dividends paid on common stock (105) (99)
Dividends paid on preferred stock (8) (8)
Common stock issued 7 5
Other liabilities (deposits) 12 11
----- -----
Net cash flows (used for) financing activities (9) 147
----- -----
Effects of exchange rate changes on cash 1 --
----- -----
Increase (decrease) in cash and cash equivalents (15) (56)
----- -----
Cash and cash equivalents, beginning of year 125 166
----- -----
Cash and cash equivalents, end of period $ 110 $ 110
===== =====
</TABLE>
----------
See notes to the financial statements.
3
<PAGE> 5
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
(UNAUDITED)
($ MILLIONS)
<TABLE>
<CAPTION>
Preferred
Stock Capital in Unearned Cumulative
Series A Common Excess of ESOP Translation Treasury Retained
ESOP Stock Par Value Compensation Adjustment Stock Earnings
--------- ------ ---------- ------------ ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $194 $49 $155 $(141) $(181) $(1,231) $2,904
Net income for the period 253
ESOP compensation earned 7
ESOP shares redeemed (2)
Common stock dividends (105)
Series A ESOP preferred
stock dividends,
net of taxes (5)
Translation adjustment for
the period 52
Shares issued for:
Stock options,
deferred compensation and
restricted stock awards 6 7
Treasury stock acquired (56)
---------------------------------------------------------------------------
Balance,June 30, 1995 $192 $49 $161 $(134) $(129) $(1,280) $3,047
===========================================================================
</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, 1995 and 1994 and the financial position as of June 30, 1995 and
December 31, 1994.
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, 1994.
2. ACQUISITIONS
In the first quarter of 1995, the Company's Mexican corn refining business
entered into a joint venture with Arancia, S.A. de C.V., a corn refining
business located in Mexico. This venture expects to have annual sales of
approximately $250 million and will be accounted for on the equity method. Also
in the first quarter the Company acquired a dessert business in Hong Kong for $2
million. In the second quarter of 1995, the Company acquired the Lesieur
mayonnaise and salad dressing business in France, which has sales of
approximately $100 million. In July, the Company announced that it had acquired
Golden Wonder Pot Noodle instant hot snacks business in the United Kingdom for
$280 million. This business has annual sales of approximately $100 million.
On August 7, 1995, the Company announced that it had reached an agreement
with Kraft Foods, Inc., a wholly-owned subsidiary of the Philip Morris Companies
Inc., to acquire its $1.2 billion in sales, nationwide baking business for $865
million. The business to be acquired includes four major market-leading brands:
Entenmann's sweet baked products, Freihofer's and Oroweat breads, and Boboli
Italian bread shells. Entenmann's is the 14th largest food brand in the United
States by dollar sales. The acquisition, which is expected to close on October
2, 1995, will be treated as a purchase and financed with borrowings.
3. INVENTORIES
Inventories are summarized as follow:
<TABLE>
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
<S> <C> <C>
Finished and goods in process $ 652 $559
Raw materials 222 207
Supplies 155 141
------ ----
$1,029 $907
====== ====
</TABLE>
5
<PAGE> 7
4. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
June 30, 1995 Dec.31, 1994
------------- ------------
<S> <C> <C>
7.78% ESOP guaranteed notes due
December 2004 $167 $173
5.625% -- 6.75% pollution control
revenue bonds due 2007-2016 15 15
Medium term notes at various rates
due 1996-2005 75 50
8.5% sinking fund debentures due
April 2016 100 100
5% Swiss franc debentures 177 155
6.75% German mark debentures 146 129
Commercial paper supported by revolving
credit agreements 100 100
Other secured and unsecured notes
and loans at various rates and
due dates 209 223
---- ----
989 945
---- ----
Less current maturities 74 66
---- ----
$915 $879
==== ====
</TABLE>
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplementary information for the consolidated statements of cash flows is
set forth below:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------
Cash paid during the period for: 1995 1994
---- ----
<S> <C> <C>
Interest $ 64 $ 51
Income taxes 148 168
Details of businesses acquired were
as follows:
Fair value of assets acquired $ 90 $458
Less: Liabilities assumed 9 262
---- ----
Cash paid $ 81 $196
==== =====
</TABLE>
The details of businesses acquired in 1995, as shown above, are based on
estimates which will be finalized later in the year.
6. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying values of cash
equivalents, accounts receivable, accounts payable, and short-term debt
approximate fair values. The value of long-term debt at December 31, 1994 was
$870 million. The fair value of long-term debt was based on quotes obtained from
brokers.
6
<PAGE> 8
FOREIGN EXCHANGE CONTRACTS - The Company's policy is to hedge its exposure
to foreign currency cash flows resulting from planned dividends, fees and
royalties, intercompany loans, and other similar transactions. The Company also
hedges certain net investments in foreign operations with foreign exchange
contracts or with borrowings 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. 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 stockholders' equity.
At June 30, 1995, the Company had forward exchange contracts to deliver $481
million of foreign currencies comprising $80 million in German marks, $153
million in British pounds, $68 million in Italian lira, $55 million in Dutch
guilders, $85 million in French francs, and $40 million in various other
currencies. The Company also had, at June 30, 1995, contracts to purchase $9
million worth of Austrian schillings.
At December 31, 1994, the Company had forward exchange contracts to deliver
$414 million of foreign currencies comprising $137 million in German marks, $87
million in British pounds, $14 million in Swiss francs, $71 million in Italian
lira, $26 million in Dutch guilders, $52 million in French francs, and $27
million in various other currencies. The Company also had, at December 31, 1994,
contracts to purchase $56 million worth of foreign currencies consisting of $15
million in Italian lira, $13 million in Austrian schillings, and $28 million in
other currencies.
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-rate debt positions. The Company's risk related
to 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. Any interest rate differential on interest rate swaps is
recognized as an adjustment to interest expense over the term of the agreement.
At June 30, 1995, the Company had $50 million notional amount of interest
rate swap agreements outstanding. A portion of the Company's variable interest
rate debt position was hedged with swap agreements with a weighted average
receive rate of 5.97% and a weighted average pay rate of 6.22%.
7
<PAGE> 9
At December 31, 1994, the Company had $280 million notional amount of
interest rate swap agreements outstanding. A portion of the Company's variable
interest rate debt position was hedged with $100 million notional amount of swap
agreements with a weighted average receive rate of 6.50% and a weighted average
pay rate of 5.09%. The remaining agreements with maturity dates through 2000
effectively convert fixed interest rate debt into variable interest rate debt
with a weighted average receive rate of 5.89% and a weighted average pay rate of
6.50%.
COMMODITIES - The Company follows a policy of fixing the cost, with
commodities future contracts, of certain of its key North American raw material
purchases in line with production requirements to minimize cost risk due to
market fluctuations. Such raw materials may or may not be hedged at any given
time based on management's 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. However, as market
prices of these materials depend on a number of unpredictable factors, such as
farm plantings and weather, resulting fluctuations may have an effect on the
Company's earnings to the extent such fluctuations cannot, for competitive
reasons, be passed on immediately through pricing adjustments of the Company's
products. It is the possible exposure to such relatively short-term cost/pricing
imbalances that the Company attempts to cover through fixing, when appropriate,
the costs of certain commodities in the short term by using commodities futures
contracts.
At June 30, 1995 and December 31, 1994, the Company had commodity futures
contracts to purchase primarily corn totaling $85 million and $138 million,
respectively. The commodity futures contracts at June 30, 1995, principally call
for delivery in the period July to December 31, 1995. Contracts for delivery
beyond September 30, 1995, aggregate about $52 million, of which $41 million is
due in December and the balance in March 1996. At June 30, 1995, the Company had
unrealized gains of $5 million on these contracts.
7. RESTRUCTURING CHARGE
In June 1994, the Company recorded a charge of $227 million, $137 million
after taxes or $.92 per common share, to recognize the cost of restructuring.
This program compresses into a period from mid-1994 to mid-1996 restructuring
activities needed to meet the competitive challenge of increasingly unifying
markets throughout the world.
The majority of the charge relates to the Company's European and North
American consumer foods businesses. The restructuring charge and its utilization
at June 30, 1995 is summarized below:
8
<PAGE> 10
<TABLE>
<CAPTION>
Utilized Utilized To be
Total in prior in current utilized in
$Millions charge periods quarter future periods
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employee severance $102 $ 21 $20 $61
Plant and
support facilities 114 114 -- --
Other 11 -- -- 11
-----------------------------------------------------------------------
Total $227 $135 $20 $72
=======================================================================
</TABLE>
The charge is designed to cover the cost of a phased reduction of about
2,600 employees worldwide and the cost of realignment of manufacturing capacity.
The realignment will be achieved through a combination of plant closures,
specializations, and relocations of production. In total, 24 consumer foods
plants and four corn refining plants will be affected by the restructuring. The
restructuring is expected to be completed by June 30, 1996.
At June 30, 1995, $57 million was included in current liabilities and $15
million was included in noncurrent liabilities.
8. SUBSEQUENT EVENTS
During the third quarter of 1995 the Company announced the sale of its 50%
interest in Pekin Energy Company, an ethanol production facility located in
Illinois and a small insecticide business in Brazil. The Company also announced
the closing of a consumer foods plant in Santa Fe Springs, California as well as
the realignment of several production facilities and sales operations for both
consumer foods and corn refining operations around the world. The Company
believes that the net effects of these transactions when finalized will be
minimal.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Second quarter earnings per common share increased 19% to $.96, compared to
$.81 per share in the second quarter last year excluding a restructuring charge
taken in that year. On the same basis, net income rose 16% to $142 million, from
$122.4 million. The performance reflects strong volume gains worldwide.
Including the restructuring charge, second quarter earnings per common share
increased $1.07 over an $.11 per share loss in 1994, and net income increased
$156.9 million over a loss of $14.9 million last year. (All comparisons below
exclude the impact of the charge. See restructuring note above.)
CPC's worldwide sales in the quarter rose 9.9%, to $2.04 billion, from $1.86
billion, chiefly due to volume growth of 6.2%. Operating income was $273.7
million, up 16% from the $236.2 million recorded in the second quarter last
year. Financing costs rose in the quarter due to higher interest rates and
borrowing levels, while an effective tax rate of 38.5%, compared with 39.5% for
1994, benefitted results.
9
<PAGE> 11
Commenting on CPC's results, C.R. Shoemate, chairman and chief executive
officer, said, "The excellent results this quarter demonstrate again that solid
volume growth in nearly all our operations continues to be the most important
driving force in our profit advance. We had some help from strong currencies,
but most of this benefit was reinvested in higher marketing support around the
world to maintain our volume momentum.
"Our Latin American businesses made excellent progress, with our Brazilian
operations, after a difficult second quarter last year due to a troubled
economy, now solidly back on track. We are also pleased with how well our
Mexican business weathered the peso devaluation and resulting economic slowdown.
In Europe, we showed continuing volume growth and good profits. Here in North
America, Best Foods and our corn refining business reported good progress."
For the first six months of 1995, CPC's earnings per share increased 17% to
$1.69 and net income rose 15% to $253.1 million from $220.5 million. Operating
income increased 15% to $491.2 million, from $428.9 million.
CONSUMER FOODS
Second quarter sales of consumer foods rose 12% and operating income was 20%
higher, chiefly due to higher volumes. For the six-month period, sales were 13%
higher and operating income rose 17%.
Best Foods, CPC's North American consumer foods division, reported a sales
gain of 4.1% for the second quarter and a 6.8% increase in operating income. The
results reflected margin improvements from lower costs as well as overall higher
volumes. Volumes were up strongly for Mazola oil and the Knorr business.
Specialty Baking and CPC Foodservice volumes were also higher. Volumes of
Hellmann's and Best Foods mayonnaise were unchanged, while Skippy peanut butter
and Mueller's pasta volumes were lower.
For the six-month period, Best Foods' sales were 4.1% higher. Operating
income was 1.2% higher, reflecting heavy first quarter marketing spending.
CPC Europe reported gains in sales and operating income of 18% and 17%,
respectively, in the second quarter. The sales gain was due to favorable
currency exchange values, strong volume gains, and good pricing in the improving
economies of Europe. Higher marketing spending during the period somewhat
tempered the operating income gain.
For the six months, CPC Europe's sales and operating income were 16% and 15%
higher, respectively, compared to the first half of last year.
10
<PAGE> 12
Sales from CPC's Latin American consumer foods business were 9.1% higher in
the second quarter. Operating income more than doubled, recovering fully from
the year-ago period when results were impacted by difficult operating conditions
in Brazil. In Mexico, CPC's operations performed well, despite the effects of a
currency devaluation that has dampened consumer spending.
For the six-month period, sales and operating income in Latin America rose
15% and 63%, respectively.
Consumer foods sales in Asia increased 20% in the second quarter. Operating
income was slightly lower as CPC continued to invest in its growing Asian brands
and businesses, particularly its new operations in Guangzhou and Beijing, China.
For the first half of the year, division sales were 23% higher and operating
income was essentially flat.
CORN REFINING
CPC's corn refining business recorded an operating income gain of 7.3% in
the second quarter. Sharply higher volumes more than offset prices that were
lower due to lower grain costs. In North America operating income increased 5.4%
in the second quarter, while CPC's Latin American corn refining business
recorded operating income growth of 24%.
For the six-month period the corn refining business had sales and operating
income increases of 4.5% and 9.6%, respectively.
* * * * * * *
Note: The brand names shown on page 10 distinctive type are trademarks of CPC
International Inc. and its affiliates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources and uses of funds as well as its general
financial policy are discussed on pages 22-25 of the 1994 Annual Report to
Stockholders which were incorporated by reference in Form 10-K for the year
ended December 31, 1994.
The Company's capital expenditures are expected to be approximately $410
million in 1995.
11
<PAGE> 13
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In previous reports concerning the site of a former subsidiary, Ott Chemical
Company, located in Muskegon, Michigan, the Company reported that it had been
held liable under the Comprehensive Environmental Response, Compensation and
Liability Act, in a 1991 decision by the U.S. District Court for the Western
District of Michigan. On July 14, 1995, the U.S. Court of Appeals for the Sixth
Circuit reversed the District Court's finding of liability against the Company.
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 July 6, 1995 setting forth under
"Item 5 - Other Events", the Company's announcement regarding a subpoena
relating to high fructose corn syrup.
12
<PAGE> 14
CPC INTERNATIONAL INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements 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.
CPC INTERNATIONAL, INC.
DATE: August 14, 1995
Konrad Schlatter
------------------------------
Konrad Schlatter
Senior Vice President &
Chief Financial Officer
DATE: August 14, 1995
James W. Ripley
------------------------------
James W. Ripley
Comptroller & Chief
Accounting Officer
13
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit 11 Statement re: computation of earnings per
common share (Part I data)
Exhibit 27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
CPC INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
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 1993 Stock and Performance Plan, the deferred compensation and
stock options arising from a previous executive incentive compensation 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>
1995 1994
---- ----
<S> <C>
2.1% 1.7%
</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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 110
<SECURITIES> 0
<RECEIVABLES> 1,210
<ALLOWANCES> 0
<INVENTORY> 1,029
<CURRENT-ASSETS> 2,442
<PP&E> 4,781
<DEPRECIATION> 2,413
<TOTAL-ASSETS> 6,129
<CURRENT-LIABILITIES> 2,291
<BONDS> 0
<COMMON> 49
0
192
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,129
<SALES> 3,995
<TOTAL-REVENUES> 0
<CGS> 2,396
<TOTAL-COSTS> 3,504
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 434
<INCOME-TAX> 167
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 253
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 0
</TABLE>
