<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 SEPTEMBER 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.
CLASS OUTSTANDING AT SEPTEMBER 30, 1995
Common Stock, $.25 par value 145,749,693 shares
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 2,046 $ 1,813 $ 6,041 $ 5,407
Cost of sales 1,244 1,112 3,639 3,314
------- ------- ------- ------
Gross profit 802 701 2,402 2,093
Operating expenses 533 459 1,641 1,422
Restructuring charge -- -- -- 227
------- ------- ------- -------
Operating income 269 242 761 444
------- ------- ------- -------
Financing costs 27 25 85 69
------- ------- ------- -------
Income before income taxes 242 217 676 375
Provision for income taxes 93 86 260 148
------- ------- ------- -------
149 131 416 227
Minority stockholders'
interest 7 6 21 18
------- ------- ------- -------
Net income $ 142 $ 125 $ 395 $ 209
======= ======= ======= =======
Average common shares
outstanding 145,882 148,052 146,175 148,755
Earnings per common
share based on net income
reduced by "ESOP" preferred
stock dividends, net of taxes $ .95 $ .83 $2.64 $1.35
Cash dividends declared
per common share $ .38 $ .34 $1.10 $1.02
</TABLE>
- ------------
See notes to financial statements.
1
<PAGE> 3
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ MILLIONS)
<TABLE>
<CAPTION>
Sept. 30, 1995 Dec. 31, 1994
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 183 $ 125
Notes and accounts receivable, net 1,128 1,093
Inventories 1,032 907
Prepaid expenses 71 90
------- -------
Total current assets 2,414 2,215
------- -------
Investments in unconsolidated
affiliates 99 65
------- -------
Plant and properties 4,896 4,545
Less accumulated depreciation 2,527 2,264
------- -------
2,369 2,281
------- -------
Excess cost over net assets of
businesses acquired and other
intangible assets (net of accumulated
amortization of $200 and $172) 1,057 954
------- -------
Other assets 145 138
------- -------
$ 6,084 $ 5,653
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Notes and drafts payable $ 573 $ 664
Accounts payable and accrued items 1,335 1,237
Income taxes payable 136 134
Dividends payable 55 53
------- -------
Total current liabilities 2,099 2,088
------- -------
Non-current liabilities 871 810
------- -------
Long-term debt 972 879
------- -------
Deferred taxes on income 7 (15)
------- -------
Minority interest 163 142
------- -------
Stockholders' equity
Preferred stock, authorized 25,000,000
shares $1 par value -- --
Designations: Series A ESOP convertible
3,000,000 shares designated - 2,143,224
shares issued at stated value (1994:
2,170,854 shares) 191 194
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 162 155
Unearned ESOP compensation (134) (141)
Cumulative translation adjustment (130) (181)
Common stock in treasury at cost -
49,521,751 shares (1994: 48,510,458 shares) (1,299) (1,231)
Retained earnings 3,133 2,904
------- -------
Total stockholders' equity 1,972 1,749
------- -------
$ 6,084 $ 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>
Nine Months Ended
September 30,
------------------
1995 1994
------- -------
<S> <C> <C>
Cash Flows from (used for ) operating activities
- ------------------------------------------------
Net income $ 395 $ 209
Non-cash charges (credits) to net income
Restructuring charge and unusual items net 3 227
Depreciation and amortization 237 217
Deferred taxes (5) (82)
Other, net 4 (2)
Changes in trade working capital:
Notes and accounts receivable (23) (12)
Inventories (94) (95)
Accounts payable and accrued items 82 (70)
----- -----
Net cash flows from operating activities 599 392
----- -----
Cash Flows from (used for) investing activities
- -----------------------------------------------
Capital expenditures paid (285) (280)
Proceeds from disposal of plants & properties 5 9
Proceeds from businesses sold 105 --
Investment in joint venture (13) --
Businesses acquired (81) (199)
----- -----
Net cash flows used for investing activities (269) (470)
----- -----
Net cash flows after investments 330 (78)
----- -----
Cash Flows from (used for) financing activities
- -----------------------------------------------
Purchase of treasury stock (76) (116)
Repayment of long-term debt (26) (53)
New long-term debt 109 82
Net change in short-term debt (143) 281
Dividends paid on common stock (158) (149)
Dividends paid on preferred stock (8) (8)
Common stock issued 8 5
Other liabilities (deposits) 20 (1)
----- -----
Net cash flows (used for) financing activities (274) 41
----- -----
Effects of exchange rate changes on cash 2 2
----- -----
Increase (decrease) in cash and cash equivalents 58 (35)
----- -----
Cash and cash equivalents, beginning of year 125 166
----- -----
Cash and cash equivalents, end of period $ 183 $ 131
===== =====
</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 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 395
ESOP compensation earned 7
ESOP shares redeemed (3)
Common stock dividends (161)
Series A ESOP preferred
stock dividends,
net of taxes (5)
Translation adjustment for
the period 51
Shares issued for:
Stock options,
deferred compensation and
restricted stock awards 7 8
Treasury stock acquired (76)
-------------------------------------------------------------------------------
Balance, Sept. 30, 1995 $191 $49 $162 $(134) $(130) $(1,299) $3,133
=================================================================================
</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
September 30, 1995 and 1994 and the financial position as of September 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 October 2, 1995, the Company acquired the nationwide baking business of
Kraft Foods, Inc., a wholly-owned subsidiary of the Philip Morris Companies
Inc., for approximately $865 million. The business has $1.2 billion in sales
and 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 will be treated as a purchase.
3. INVENTORIES
Inventories are summarized as follow:
<TABLE>
<CAPTION>
Sept. 30, 1995 Dec. 31, 1994
-------------- -------------
<S> <C> <C>
Finished and goods in process $ 649 $ 559
Raw materials 220 207
Supplies 163 141
------ ------
$1,032 $ 907
====== ======
</TABLE>
5
<PAGE> 7
4. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
Sept. 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 150 50
8.5% sinking fund debentures due
April 2016 100 100
5% Swiss franc debentures 174 155
6.75% German mark debentures 145 129
Commercial paper supported by revolving
credit agreements 100 100
Other secured and unsecured notes
and loans at various rates and
due dates 218 223
------ ------
1,069 945
------ ------
Less current maturities 97 66
------ ------
$ 972 $ 879
====== ======
</TABLE>
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplementary information for the consolidated statements of cash flows is
set forth below:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------
<S> <C> <C>
Cash paid during the period for: 1995 1994
---- ----
Interest $ 87 $ 75
Income taxes 258 274
Details of businesses acquired
were as follows:
Fair value of assets acquired $ 90 $ 460
Less: Liabilities assumed 9 261
------- -------
Cash paid $ 81 $ 199
======= =======
</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 September 30, 1995, the Company had forward exchange contracts to
deliver $297 million of foreign currencies comprising $70 million in British
pounds, $70 million in Italian lira, $55 million in Dutch guilders, $85 million
in French francs, and $17 million in various other currencies. The Company also
had, at September 30, 1995, contracts to purchase $22 million worth of foreign
currencies primarily, 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 September 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 5.35% and a weighted average pay rate of 5.98%.
In conjunction with the October 2, 1995 purchase of the Kraft Foods baking
business the Company, at September 30, 1995, had entered into two interest rate
futures contracts maturing on January 16, 1996, which locked in a fixed
interest rate on U.S. Treasury Bonds for 10 years of 6.22% on a notional
amount of $200 million. The market rate for these instruments at September 30,
1995 was 6.17%. On October 2, 1995, the Company entered into another contract
for $100 million with a rate of 6.24%.
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 September 30, 1995 and December 31, 1994, the Company had commodity
futures contracts to purchase primarily corn totaling $99 million and $138
million, respectively. The commodity futures contracts at September 30, 1995,
principally call for delivery in the period October 1995 to March 1996.
Contracts for delivery beyond December 31, 1995, aggregate about $71 million,
of which $70 million is due in January 1996. At September 30, 1995, the
Company had unrealized gains of $12 million on these contracts.
7. RESTRUCTURING CHARGE AND UNUSUAL ITEMS
During the third quarter of 1995 the Company sold 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 force reorganization for both
consumer foods and corn refining operations around the world. The net effect
of these transactions was a pre-tax charge of $3 million.
8
<PAGE> 10
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 September 30, 1995 is summarized below:
<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 $ 41 $ 7 $ 54
Plant and
support facilities 114 114 -- --
Other 11 -- -- 11
- ------------------------------------------------------------------
Total $227 $155 $ 7 $ 65
==================================================================
</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 September 30, 1995, $57 million was included in current liabilities and
$8 million was included in noncurrent liabilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Third-quarter earnings per common share rose 14.5% to $.95 compared to $.83
in the third quarter of 1994. Net income of $142.2 million was 13.4% higher
than the $125.4 million earned during the quarter last year. The results
included a net pre-tax charge of $3 million, or $.01 per share, comprising a
$75 million charge in the quarter for plant closures and sales force
reorganization and an offsetting gain from two third-quarter divestitures: the
sale of CPC's 50% share of Pekin Energy Company, an ethanol business; and the
sale of a small insecticide business in Brazil. The number of average shares
outstanding was lower, benefiting earnings per share by one percentage point.
Earnings per share for the first nine months advanced 16% to $2.64,
excluding a 1994 restructuring charge of $.92 per share. Net income for the
nine months rose 14% to $395.3 million, on the same basis. (All comparisons
below exclude the impact of the 1994 charge. Divisional results exclude the
1995 net charge of $3 million noted above.)
9
<PAGE> 11
Worldwide sales for the third quarter rose 13% to $2.05 billion compared
to sales of $1.81 billion in 1994, chiefly due to good volume growth in both
the consumer foods and corn refining businesses. Worldwide operating income
for the third quarter advanced 11.2% to $269.4 million from $242.3 million in
the same period last year. The company increased marketing spending
substantially during the quarter.
Finance charges were higher, due to higher borrowing levels for
acquisitions and somewhat higher interest rates.
Nine-month sales rose 11.7%, and worldwide operating income was 13%
higher, compared to the first nine months of last year.
Commenting on the results, C.R. Shoemate, chairman and chief executive
officer of CPC, said, "Stimulated by higher marking spending in the last
several quarters, volume growth continues to be the main driver of our
progress. Again our marketing expenditures were up, this quarter 24%, with all
four consumer foods divisions investing behind our brands at significantly
higher rates compared to last year. The savings we are gaining from our
restructuring activities as well as currency gains are supporting this
increased marketing spending.
"A recent highlight has been the purchase of the Kraft baking business,
which we completed October 2. This added four great baking brands to our
already strong portfolio. The Entenmann's, Freihofer's, Boboli, and Oroweat
businesses fit extremely well with our Thomas', Arnold, Sahara, and Brownberry
businesses, and we expect to realize synergies from the consolidation very
quickly."
CONSUMER FOODS
CPC's consumer foods business posted a third-quarter sales increase of
15% to $1.73 billion from $1.5 billion in the comparable quarter last year, and
operating income from consumer foods was up 15% to $210.6 million. The results
reflected especially the continuing strong performance of the company's
European and Latin American businesses.
For the nine months, consumer foods sales grew 13% to $5.11 billion, and
operating income was $629.2 million, or 16% higher.
Best Foods, CPC's North American consumer foods business, reported flat
third-quarter sales, with slightly higher volumes. However, despite
significantly higher marketing spending, operating income was up 2% on improved
margins as the effects of restructuring began to take hold. Volumes of
mayonnaise, corn oil, syrups, and Knorr products rose, while volumes of peanut
butter and pasta were lower. Specialty baking volumes were flat.
In the nine-month period, Best Foods' sales and operating income were
each up about 1.5%.
10
<PAGE> 12
Third-quarter sales of CPC's European consumer foods business grew 24% on
better volumes and stronger currencies. The Lesieur dressings business,
acquired in February, contributed significantly to the sales gain, although it
is not yet adding to profits. European profits overall advanced 14%, chiefly
due to improved efficiencies from restructuring. Substantial currency gains in
the quarter were largely reinvested in marketing.
For the nine-month period, sales grew 19%, and operating income was 15%
higher.
CPC's Latin American consumer foods business posted sales growth of
10.4%. Operating income leapt more than 50%, compared to last year's third
quarter when the severe economic downturn in Brazil had a strong negative
effect on CPC's results. The improvement this quarter came primarily from
significantly higher volumes, as growth in this region generally returns to
more normal levels.
In the first nine months, sales advanced 14%, with operating income
growing 60%.
In Asia sales and volume growth momentum for the quarter and the nine
months continued very strong. Operating income grew about 2% in the quarter,
as the company continues to invest in marketing and infrastructure for the
future.
CORN REFINING
Third-quarter results for CPC's corn refining business showed a modest
increase in sales, and volumes grew 6.5%. Third-quarter operating income,
however, was flat in comparison to last year, since this quarter's results do
not include earnings from Peking Energy Company, which was sold during the
quarter.
For the nine-month period, corn refining sales were up 3.4% on strong
volume growth. Operating income was 5.1% higher.
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. The Company also previously reported that 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. Following such reversal, the
Court of Appeals has directed an en banc rehearing of this decision which is
expected to be heard in December of 1995.
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 October 30, 1995 setting forth under
"Item 2 - Acquisition and Disposition of Assets", the Company's acknowledgement
of it's purchase of the nationwide baking business of Kraft Foods, Inc., for
$865 million on October 2, 1995, including as exhibits, the Stock Purchase
Agreement among Kraft Foods Bakery Companies, Inc., Kraft Foods, Inc. and CPC
International Inc. dated as of August 7, 1995, as amended on October 2, 1995
and the Press Release issued by the Company on October 2, 1995, respectively.
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: November 10, 1995
/S/ KONRAD SCHLATTER
-----------------------------
(Konrad Schlatter)
Senior Vice President &
Chief Financial Officer
DATE: November 10, 1995
/S/ JAMES W. RIPLEY
-----------------------------
(James W. Ripley)
Comptroller & Chief
Accounting Officer
13
<PAGE> 15
EXHIBIT INDEX
Exhibit 11 - Statements 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
NINE MONTHS ENDED SEPTEMBER 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 pro rata 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 September 30:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C>
2.2% 1.9%
</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
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 183
<SECURITIES> 0
<RECEIVABLES> 1,128
<ALLOWANCES> 0
<INVENTORY> 1,032
<CURRENT-ASSETS> 2,414
<PP&E> 4,896
<DEPRECIATION> 2,527
<TOTAL-ASSETS> 6,084
<CURRENT-LIABILITIES> 2,099
<BONDS> 0
<COMMON> 49
0
191
<OTHER-SE> 0
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</TABLE>
