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Corn Products International, Inc. Reports Third Quarter 2002 Results
WESTCHESTER, Ill., Oct 22, 2002 /PRNewswire-FirstCall via COMTEX/ -- Corn Products International, Inc. (NYSE: CPO) today reported diluted earnings of $0.48 per share for the quarter ended September 30, 2002, compared to $0.55 per diluted share in the period last year.

The third quarter 2001 results included net non-recurring aftertax earnings of $3.5 million ($0.10 per diluted share) related to a valued-added- tax (VAT) refund, net of one-time charges.

Excluding last year's net non-recurring earnings, the results for the third quarter of 2002 compared as follows to the same period in 2001 --

    -- Net sales were $480 million, up from $475 million
    -- Gross profit was $70 million versus $73 million
    -- Operating income was $40 million versus $42 million
    -- Net income was $17 million, up from $16 million
Excluding last year's net non-recurring earnings, third quarter 2002 net income exceeded the year-ago results, reflecting significantly lower financing costs, improved Asia/Africa operating results and the discontinuation of goodwill amortization. Goodwill amortization was $2-million aftertax ($0.05 per diluted share) in the third quarter of 2001. The effective tax rate is 36 percent versus 35 percent last year.

"Our business performed well in the third quarter, despite weaker results in South America and reduced high fructose corn syrup (HFCS) sales in Mexico, caused by the resumption of the value-added tax (VAT) on soft drinks sweetened with HFCS," said Sam Scott, chairman, president and chief executive officer. "We are particularly pleased with the progress we are making toward improved performance in the United States and Argentina, and the continued earnings growth in Asia. Additionally, we have generated strong cash flow worldwide that has enabled us to further reduce our debt and lower our interest costs."

    Third Quarter Business Breakdown By Region
Results for the third quarter of 2002 compared as follows to the same period in 2001 --

    In North America

    -- Net sales were $322 million, up from $311 million
    -- Operating income was $18 million, consistent with last year
    -- Volume was up 4 percent from last year
Despite significantly lower HFCS sales in Mexico, sales volume in the region grew 4 percent. Operating income was relatively flat as improved 2002 annual US pricing, cost reductions, volume and mix substantially offset a decline in Mexico.

    In South America

    -- Net sales were $94 million versus $106 million
    -- Operating income was $14 million, down 17 percent
    -- Volume was flat from last year
The Company achieved better operating income in the Southern Cone of South America, principally Argentina, through strong export business and lower costs including goodwill amortization. Additionally, price improvements in the South American region have been significant, although they continue to lag currency devaluation. The decline in operating income mainly reflects lower results in Brazil, attributable to the recent difficult economic conditions in that country.

    In Asia/Africa

    -- Net sales were $64 million, up from $58 million
    -- Operating income was $14 million, up 27 percent
    -- Volume grew 2 percent from last year
As the Company's Asian strategy continues to deliver growth, the region reported another strong quarter. Net sales and operating income were boosted by higher volumes and favorable exchange rates.


For the nine months ended September 30, 2002, diluted earnings were $1.31 per share, which included net non-recurring earnings of $0.08 per diluted share, consisting primarily of a one-time gain from the sale of assets, partially offset by a restructuring charge. This compared with the results for the same period in 2001 of $1.34 per diluted share, which included net non-recurring earnings of $0.10 per diluted share. The year-ago period also included goodwill amortization of $0.16 per diluted share.

Excluding the net non-recurring earnings, the results for the first nine months of 2002 compared as follows to same period in 2001 --

    -- Net sales were $1.40 billion versus $1.41 billion
    -- Gross profit was $200 million versus $221 million
    -- Operating income was $107 million versus $123 million
    -- Net income was $44 million consistent with last year
Cash provided by operations for the first nine months of 2002 doubled to $164 million from the year ago period, driven mainly by improved working capital management. The improved cash flow was used primarily to pay down debt. Reduced debt levels, coupled with lower interest rates, contributed to a 43-percent decrease in financing costs from a year ago.


The Company stated that while the US/Mexican sweetener issue has not yet been resolved, negotiations continue and the Company is encouraged with the progress to date. It also reconfirmed that its outlook for 2002 earnings per share is expected to be at or near 2001 results.

The Company also noted that it anticipates its joint marketing company -- CornProductsMCP Sweeteners LLC, will be terminated effective December 31, 2002, and has developed a comprehensive plan for its dissolution, which includes a smooth transition for its customers. The net financial impact of this action, although indeterminate at this point, is anticipated to be positive, and is not included in the above outlook.

A real-time web cast, available on the Corn Products International web site,, will follow this release today at 7:30 a.m. CDT, during which the Company's senior management will present an overview of results.

About Corn Products International, Inc.

The Company is one of the world's largest corn refiners and a major supplier of high-quality food ingredients and industrial products derived from the wet milling and processing of corn and other starch-based materials. The Company is the No. 1 worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2001, the Company recorded sales of $1.9 billion with operations in 19 countries at 42 plants, including wholly owned businesses, affiliates and alliances. Headquartered in Westchester, Ill., it was founded in 1906. The Company is listed on the New York Stock Exchange under the symbol CPO. Additional information can be found on the World Wide Web at .

This press release contains or may contain forward-looking statements concerning the Company's financial position, business and future earnings and 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 political, economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies, energy costs and availability and changes in regulatory controls regarding quotas, tariffs, taxes and biotechnology issues; and 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 recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.

                 Condensed Consolidated Statements of Income

    (All figures are in millions, except per share amounts)

                      Three Months Ended  Change  Nine Months Ended   Change
                         September 30,       %      September 30,        %
                        2002       2001            2002      2001
    Net sales before
     shipping and
     handling costs   $507.4     $505.7      0% $1,480.0  $1,525.8      -3%
    Less: Shipping and
     handling costs     27.3       31.2    -13%     81.8     114.5     -29%
    Net sales          480.1      474.5      1%  1,398.2   1,411.3      -1%
    Cost of sales      410.1      390.4      5%  1,198.0   1,179.7       2%
    Gross profit        70.0       84.1    -17%    200.2     231.6     -14%

    Operating expense   32.4       40.9    -21%    102.2     115.8     -12%
    Income from
     affiliates and other
     income              2.8        3.8    -26%     13.9      13.0       7%

    Operating income    40.4       47.0    -14%    111.9     128.8     -13%

    Financing costs      9.3       14.8    -37%     25.6      45.3     -43%

    Income before taxes 31.1       32.2     -3%     86.3      83.5       3%
    Provision for income
     taxes              11.2       11.3             31.1      29.2
                        19.9       20.9     -5%     55.2      54.3       2%
     interest            2.8        1.4    100%      8.3       6.9      20%
    Net income         $17.1      $19.5    -12%    $46.9     $47.4      -1%

    Weighted average
     common shares
    Basic               35.6       35.3             35.6      35.3
    Diluted             35.7       35.5             35.7      35.4

    Earnings per common
    Basic              $0.48      $0.55    -13%    $1.31     $1.34      -2%
    Diluted            $0.48      $0.55    -13%    $1.31     $1.34      -2%

                    Condensed Consolidated Balance Sheets

    (In millions, except share amounts)
                                                   September 30,December 31,
                                                        2002           2001
      Current assets
        Cash and cash equivalents                        $54            $65
        Accounts receivable - net                        220            279
        Inventories                                      172            201
        Prepaid expenses                                  11             10
      Total current assets                               457            555

        Property, plant and equipment - net            1,135          1,293
        Goodwill, net of accumulated amortization        270            283
        Deferred tax asset                                20             20
        Investments                                       44             41
        Other assets                                      35             35
      Total assets                                    $1,961         $2,227

    Liabilities and stockholders' equity
      Current liabilities
        Short-term borrowings and current portion
         of long-term debt                               144            444
        Accounts payable and accrued liabilities         195            231
      Total current liabilities                          339            675

        Non-current liabilities                           76             50
        Long-term debt                                   473            312
        Deferred income taxes                            180            186
        Minority interest in subsidiaries                 89            147
    Stockholders' equity
        Preferred stock - authorized 25,000,000 shares-
         $0.01 par value, none issued                      -              -
        Common stock - authorized 200,000,000 shares-
         $0.01 par value - 37,659,887 issued
         at September 30, 2002 and December 31, 2001       1              1
        Additional paid in capital                     1,073          1,073
        Less: Treasury stock (common stock; 1,996,307
         and 2,253,578 shares on September 30, 2002
         and December 31, 2001, respectively) at cost    (51)           (56)
        Deferred compensation - restricted stock          (3)            (3)
        Accumulated other comprehensive loss            (427)          (333)
        Retained earnings                                211            175
      Total stockholders' equity                         804            857
    Total liabilities and stockholders' equity        $1,961         $2,227

               Condensed Consolidated Statements of Cash Flows

                                                        For The Nine Months
                                                        Ended September 30,
    (In millions)                                       2002            2001
    Cash provided by (used for) operating activities:
      Net income                                         $47            $47
      Adjustments to reconcile net income to net cash
       provided by (used for) operating activities:
        Depreciation and amortization                     79             98
        Gain on sale of business                          (8)             -
      Decrease (increase) in trade working capital        44            (70)
      Other                                                2              7
      Cash provided by operating activities              164             82

    Cash provided by (used for) investing activities:
      Capital expenditures, net of proceeds on disposal  (51)           (57)
      Proceeds from sale of business                      35              -
      Payments for acquisitions, net of cash acquired    (42)           (78)
      Cash used for investing activities                 (58)          (135)

    Cash provided by (used for) financing activities:
      Proceeds from borrowings                           208            126
      Payments on debt                                  (309)           (73)
      Dividends paid                                     (15)           (19)
      Issuance of common stock                             3              1
      Cash (used for) provided by financing activities  (113)            35

      Effect of foreign exchange rate changes on cash     (4)            (3)
      Decrease in cash and cash equivalents              (11)           (21)
      Cash and cash equivalents, beginning of period      65             41
      Cash and cash equivalents, end of period           $54            $20

                      Supplemental Financial Information

    (Dollars in millions, except per share amounts)

    I.  Geographic Information of Net Sales and Operating Income

                    Three Months Ended    Change  Nine Months Ended   Change
                        September 30,                September 30,
                        2002     2001*       %      2002     2001*       %
    Net sales
      North America   $321.9     $310.7      4%   $916.1    $907.4       1%
      South America     94.2      105.5    -11%    294.5     326.4     -10%
      Asia/Africa       64.0       58.3     10%    187.6     177.5       6%
      Total           $480.1     $474.5      1% $1,398.2  $1,411.3      -1%

    Operating income
      North America    $17.6      $18.3     -4%    $41.3     $51.6     -20%
      South America     13.6       16.3    -17%     42.2      50.7     -17%
      Asia/Africa       14.4       11.3     27%     40.3      34.8      16%
      Corporate         (5.2)      (4.3)    21%    (16.5)    (13.7)     20%
      Non-recurring items  -        5.4       -      4.6       5.4     -15%
     Total             $40.4      $47.0    -14%   $111.9    $128.8     -13%
*Certain prior year amounts have been reclassified in order to conform with current year presentation.

II. Estimated Source of Earnings Per Share for the Three and Nine Months Ended September 30

The following is a list of the major items that impacted our third quarter and year-to-date results. The amounts are calculated on a net after-tax basis and attempt to estimate total business effects.

                                     Earnings Per Share    Earnings Per Share
                                         Three Months          Nine Months

    Earnings Per Share September 30, 2001    $0.55                     $1.34
      Non-recurring items, net               (0.10)                    (0.10)
    Earnings Per Share September 30, 2001,
     as adjusted                             $0.45                     $1.24
      Volumes                                (0.01)                    (0.15)
      Operating margin                        0.14                      0.17
      Goodwill amortization                   0.05                      0.16
      Foreign currency translation           (0.20)                    (0.48)
      Financing costs                         0.10                      0.36
      Tax rate                               (0.01)                    (0.02)
      Minority interest                      (0.04)                    (0.04)
      Shares outstanding                      -                        (0.01)
      Non-recurring items, net                -                         0.08
    Net change                                0.03                      0.07
    Earnings Per Share September 30, 2002    $0.48                     $1.31

    III.  Capital expenditures
Capital expenditures for full year 2002 are expected to be $80 million versus $94 million in 2001.

Corn Products International, Inc.

Investor, Richard Vandervoort, +1-708-551-2595, or Media, Jennifer Woomer Dinehart, +1-708-551-2602, both of Corn Products International