Jim Zallie<\/a>, Ingredion\u2019s president and chief executive officer. \u201cThroughout the year, our teams demonstrated resilience and agility as they overcame macroeconomic headwinds while executing against our Driving Growth Roadmap while also expanding and transforming our solutions and opportunity set with customers.<\/p>\n\n\n\n\u201cFor the fourth quarter, Ingredion\u2019s net sales were up 13% driven by strong performance for both core and specialty ingredients. We effectively managed strong demand for texturizing, sugar reduction and higher-value industrial applications through both customer and product mix management and pricing. These actions combined with expanded raw material risk management and improved supply chain conditions drove increased year-over-year gross margins.<\/p>\n\n\n\n
\u201cSpecialty ingredients once again delivered strong double-digit growth, with net sales higher across all four regions versus last year. Notably, we completed one-third of our planned $160 million multi-year global capacity expansion for specialty starches to strengthen our leadership position in texturizing of foods,\u201d Zallie continued. \u201cI am especially proud of the work our team did ramping up production at our new Shandong, China facility, despite widespread Covid related challenges. With the expanded capacity, our business in China is well-positioned for accelerated growth as the economy reopens. Additionally, we acquired a specialty ingredient pharma business in India that broadens our capabilities to serve this growing and attractive high value market.<\/p>\n\n\n\n
\u201cFollowing our contracting season, having worked with customers to balance their demand requirements amidst rising input costs, we anticipate another year of double-digit sales growth. Given the resiliency of our business model, the diversification of our products and customer base, and track record of disciplined capital allocation, we are confident in Ingredion\u2019s ability to deliver sustainable growth and create value for our shareholders,\u201d Zallie concluded.<\/p>\n\n\n\n
*Adjusted diluted earnings per share (\u201cadjusted EPS\u201d), adjusted operating income, adjusted effective income tax rate and adjusted diluted weighted average common shares outstanding are non-GAAP financial measures. See section II of the Supplemental Financial Information entitled \u201cNon-GAAP Information\u201d following the Condensed Consolidated Financial Statements included in this news release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.<\/p>\n\n\n\n
Diluted Earnings Per Share (EPS)<\/u><\/strong><\/p>\n\n\n\n<\/td> 4Q21<\/strong><\/td>4Q22<\/strong><\/td>FY2021<\/strong><\/td>FY2022<\/strong><\/td><\/tr>Reported EPS<\/em><\/strong><\/td>$<\/em><\/strong>0.99<\/em><\/strong><\/td>$<\/em><\/strong>1.71<\/em><\/strong><\/td>$<\/em><\/strong>1.73<\/em><\/strong><\/td>$<\/em><\/strong>7.34<\/em><\/strong><\/td><\/tr>Restructuring\/Impairment costs<\/td> 0.28<\/td> –<\/td> 0.53<\/td> 0.05<\/td><\/tr> Acquisition\/Integration costs<\/td> 0.01<\/td> 0.06<\/td> 0.10<\/td> 0.08<\/td><\/tr> Impairment***<\/sup><\/td>–<\/td> –<\/td> 5.01<\/td> –<\/td><\/tr> Tax items and other matters<\/td> (0.19)<\/td> (0.12)<\/td> (0.70)<\/td> (0.02)<\/td><\/tr> Adjusted EPS<\/em><\/strong>**<\/em><\/strong><\/sup><\/td>$<\/em><\/strong>1.09<\/em><\/strong><\/td>$<\/em><\/strong>1.65<\/em><\/strong><\/td>$<\/em><\/strong>6.67<\/em><\/strong><\/td>$<\/em><\/strong>7.45<\/em><\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nEstimated factors affecting changes in Reported and Adjusted EPS<\/u><\/strong><\/p>\n\n\n\n<\/td> 4Q22<\/strong><\/td>FY2022<\/strong><\/td><\/tr>Total items affecting EPS<\/em><\/strong>**<\/em><\/strong><\/sup><\/td>0.56<\/em><\/strong><\/td>0.78<\/em><\/strong><\/td><\/tr>Total operating items<\/em><\/strong><\/td>0.62<\/em><\/td>1.12<\/em><\/td><\/tr>Margin<\/td> 0.82<\/td> 1.70<\/td><\/tr> Volume<\/td> (0.09)<\/td> (0.23)<\/td><\/tr> Foreign exchange<\/td> (0.10)<\/td> (0.33)<\/td><\/tr> Other income<\/td> (0.01)<\/td> (0.02)<\/td><\/tr> Total non-operating items<\/em><\/strong><\/td>(0.06<\/em>)<\/em><\/td>(0.34<\/em>)<\/em><\/td><\/tr>Other non-operating income<\/td> (0.01)<\/td> (0.01)<\/td><\/tr> Financing costs<\/td> (0.15)<\/td> (0.23)<\/td><\/tr> Shares outstanding<\/td> 0.02<\/td> 0.09<\/td><\/tr> Non-controlling interests<\/td> 0.01<\/td> (0.02)<\/td><\/tr> Tax rate<\/td> 0.07<\/td> (0.17)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n**Totals may not foot due to rounding; ***Related to the Argentina joint venture, 2021 reported results reflect a $340 million assets held for sale impairment charge, net of a $20 million favorable adjustment made in the third quarter of 2021, including $311 million of cumulative translation losses.<\/sup>Financial Highlights<\/u><\/strong><\/p>\n\n\n\n\nAt December 31, 2022, total debt and cash including short-term investments were $2.5 billion and $239 million, respectively, versus $2.0 billion and $332 million, respectively, at December 31, 2021.<\/li>\n\n\n\n Reported net financing costs for the fourth quarter were $34 million versus $16 million for the year-ago period.<\/li>\n\n\n\n Reported and adjusted effective tax rates for the fourth quarter were 7.3 percent and 20.1 percent, respectively, compared to 12.8 percent and 24.2 percent, respectively, for the year-ago period. The decrease in reported tax rate resulted primarily from South American non-taxable incentives, partially offset by favorable judgments related to the treatment of interest and credits on Brazil indirect taxes in the fourth quarter of 2021.<\/li>\n\n\n\n Full-year net capital expenditures were $293 million, up $11 million from the year-ago period.<\/li>\n<\/ul>\n\n\n\nBusiness Review<\/u><\/strong>Total Ingredion<\/strong>Net Sales<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>2021<\/strong><\/td>FX Impact<\/strong><\/td>Volume<\/strong><\/td>Argentina JV Volume<\/strong>*<\/strong><\/sup><\/td>Price mix<\/strong><\/td>2022<\/strong><\/td>Change<\/strong><\/td>Change<\/strong> excl. FX<\/strong><\/td><\/tr>Fourth quarter<\/strong><\/td>1,755<\/td> (65)<\/td> (39)<\/td> 0<\/td> 336<\/td> 1,987<\/td> 13%<\/td> 17%<\/td><\/tr> Full year<\/strong><\/td>6,894<\/td> (201)<\/td> 117<\/td> (146)<\/td> 1,282<\/td> 7,946<\/td> 15%<\/td> 18%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n*<\/strong> Related to the Argentina joint venture closing in third quarter 2021; 2021 reported results were part of the transferred business<\/sup>Reported Operating Income<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>2021<\/strong><\/td>FX Impact<\/strong><\/td>Business Drivers<\/strong><\/td>Acquisition \/<\/strong> Integration<\/strong><\/td>Restructuring \/ Impairment<\/strong><\/td>Other<\/strong><\/td>2022<\/strong><\/td>Change<\/strong><\/td>Change<\/strong> excl. FX<\/strong><\/td><\/tr>Fourth quarter<\/strong><\/td>86<\/td> (9)<\/td> 64<\/td> 2<\/td> 25<\/td> (11)<\/td> 157<\/td> 83%<\/td> 93%<\/td><\/tr> Full year<\/strong><\/td>310<\/td> (30)<\/td> 132<\/td> 2<\/td> 43<\/td> 305<\/td> 762<\/td> 146%<\/td> 155%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nAdjusted Operating Income<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>2021<\/strong><\/td>FX Impact<\/strong><\/td>Business Drivers<\/strong><\/td>2022<\/strong><\/td>Change<\/strong><\/td>Change<\/strong> excl. FX<\/strong><\/td><\/tr>Fourth quarter<\/strong><\/td>113<\/td> (9)<\/td> 64<\/td> 168<\/td> 49%<\/td> 57%<\/td><\/tr> Full year<\/strong><\/td>685<\/td> (30)<\/td> 132<\/td> 787<\/td> 15%<\/td> 19%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nNet Sales<\/strong><\/p>\n\n\n\n\nFourth quarter and full-year net sales were up from the year-ago period. The increase for the fourth quarter was driven by strong price mix, partially offset by foreign currency impacts and lower volumes. For the full year, price mix was partially offset by foreign currency impacts. Excluding foreign exchange impacts, net sales were up 17% for the quarter and 18% for the full year.<\/li>\n<\/ul>\n\n\n\nOperating Income<\/strong><\/p>\n\n\n\n