Good morning and welcome to the Ingredion Incorporated Fourth Quarter 2012 Earnings Conference Call. All participants will be on a listen-only mode until the question-and-answer session of today’s call. This call is being recorded. If you have any objections please disconnect at this time. I’d now like to turn the call over to Mr. Aaron Hoffman, Vice President of Investor Relations and Corporate Communications for Ingredion Incorporated. Sir, you may begin.

Okay. Thanks, Sue, and good morning and welcome to Ingredion’s fourth quarter 2012 earnings call. Joining me on the call this morning are Ilene Gordon, our Chairman and CEO; and Cheryl Beebe, our Chief Financial Officer. Our results were issued this morning in a press release that can be found on our website ingredion.com. The slides accompanying this presentation can also be found on the website and were posted about an hour ago for your convenience. As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties. Actual results could differ materially from those predicted in the forward-looking statements and Ingredion is under no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from those discussed during today’s conference call or in this morning’s press release can be found in the company’s most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Now, I’m pleased to turn the call over to Ilene.

Thanks Aaron, and let me add my welcome to everyone joining us today. We appreciate your time and interest. Ingredion concluded 2012 with another very good quarter, capping an outstanding year. I’m particularly pleased with our performance in the face of headwinds that included rising corn costs, foreign exchange devaluations, and challenging macroeconomic conditions in a number of markets. As we stress on previous calls and recently, at our Analyst Day, the Ingredion business model provides for significant resiliency to these disruptions. Over the past two years, we’ve realized about $1.2 billion in pricing to account for the rapid rise of our input cost. In 2013, we anticipate the need to achieve an additional $500 million in pricing. With North American contracting essentially complete, we now had visibility on pricing in our largest region. We believe that these actions appropriately reflect the increase in raw materials that we’ve seen. At the same time, as a result of operating efficiencies and mix improvements, we expect our dollar spread to increase. Turning back to the business model, I’ll remind you that our products are largely used in key consumer markets like food, beverage, brewing and even in personal care and pharmaceuticals. Said another way, we sell to industries that are generally stable or growing and are important to consumers. In addition to serving these staple markets, we thoughtfully mitigate risk at the same time. Those risks include foreign exchange fluctuations and input cost volatility. As our results and our outlook indicate today, we have managed through these headwinds admirably. From an operational perspective, we saw particularly strong results in North America and Asia Pacific in the quarter and the full year, which combined represent about two-thirds of our total business. In South America this year, we held our ground in the face…

Good morning and let me add my welcome to everyone joining us. I will start with the fourth quarter financial review then move on to a brief synopsis of 2012, and last but not least, the 2013 guidance. As we discussed on the third quarter call, we expected North America and APAC businesses to be up year over year on pricing and volume, and they were. South America continued to be a challenge with slower economic activity in Brazil. Sales were about 4% below last year primarily due to the weaker real [ph]. Despite the lower sales, South America did show improvement in operating income. EMEA performed better on improved volume and pricing while the euro and the Pakistani rupee declined. All in all, we met our expectations. We had several items in the quarter that I will point out. We realized the benefit from the continuation of our benefits harmonization plan and from a land sale in Chile. The impacts on operating income were $4.8 million and $2.3 million respectively and on an EPS basis the impacts were positive, $0.04 and $0.02. We also concluded our restructuring efforts in Kenya and China. The operating impact of these items was negative $8.6 million and the EPS impact is a negative $0.11 net of the tax benefits. The net impact of these items is $0.05. So the reported earnings per share for the quarter were a $1.42 excluding these items. The adjusted earnings per share were $1.47. Net sales were $1.644 billion up 6% or $96 million versus the same quarter last year. Gross profit increased 19% or $53 million and the gross profit margin expanded 220 basis points from 18.1% to 20.3%. As I have mentioned before, the quarterly comparison can be eschewed based on how our raw material cost…

Thanks, Cheryl. As I’ve done on previous calls, I’ll conclude with our strategic blueprint, which continues to guide our decision-making and strategic choices, with an emphasis on value-added ingredients for our customers. The blueprint is a good reflection of our successful business model, which enables the delivery of good results in an often volatile world. With a broad portfolio of ingredients sold to many industries across a diverse geographic footprint, we have an enviable position. As you’ve heard this morning, we were able to achieve necessary pricing to cover import cost in 2012 and expect to do the same in 2013. At the same time, we are growing volumes. This has resulted in a very robust earnings growth with the past several years, and we believe that growth will continue in 2013 and beyond. At the same time, investors can be assured that we have prudent, thoughtful risk management practices. In sum, I believe that we are well-positioned to deliver another good year while always keeping an eye on our future growth opportunities. And now, we’re glad to take your questions.

Thank you. We will now begin the question-and-answer session. (Operator instructions) The first question comes from Ken Zaslow. You may go ahead with your question, and please state your company name. Ken Zaslow – Bank of Montreal: Bank of Montreal. Good morning, everyone.

Good morning. Ken Zaslow – Bank of Montreal: Let me just start off. How much cost savings and how much expansion do you expect to add in 2013 in terms of your outlook? Can you give us a little color on that?

Ken, it’s Ilene. We don’t give those numbers specifically, but I would say that you know that our cost reductions are focused on the capital investments that we’ve made over the past few years as well as the process improvements that we’re engaged in right now, and it really varies by region. We’ve talked about, as an example, in Europe, we added some specialty capacity which will also help us be more efficient there. North America, we talked about our optimization project and where we moved grounds and specs [ph] during 2012. And so, we would be getting some of that impact from, obviously, those in 2013 and similar in the other regions. But we don’t specifically give those numbers. Ken Zaslow – Bank of Montreal: Okay. And do you have share repurchases in your payments as well?

I’ll let Cheryl answer that.

We have a combination of buying back some of the dilution. As you know, we have an outstanding authorization for a share repurchase program, and we will begin to modestly employ the share repurchase program.

But I would say – this is Ilene – that again, Ken, I always say as I did at the analyst day that our priority is first to fund our capital project opportunities around the world. We are still looking into the process of evaluating M&A opportunities that create shareholder value. We also of course look at our dividend. And as we said at the analyst day, we’re targeting a 20% to 25% payout in our dividend. And then, of course, share repurchase is an option if we don’t find the right M&A opportunities. Ken Zaslow – Bank of Montreal: So my final question, really, I mean, I’m sure everybody is going to be thinking about this too, but the guidance obviously, you can drive a truck through it in terms of the size of it. And if I look at the low-end of it, what would get me there? Because it seems preposterously low given that the amount of activity that you have going on at the company, it seems like there’s a lot in your control. So what would go there? And then, on the flipside, I guess, more rightly, more relevant is, given that you beat your last guidance by 9%, especially it’s more than the growth you’re actually assuming here, what would it take for you to – what assumptions would you state are beatable throughout the year that you’d expect that takedown number to come in much more likely?

To get us to the lower-end of the range, we would have to be off on our expectations with the growth in volume, which as I said, Ken, we expect North America to be, I’m going to call it, relatively stable on a net sales variance analysis, when I take in to account the shedding program, which is what we’ve talked about over the last six quarters of the manufacturing optimization and the mix improvement. So there’s a bit lower volume coming from that, and then we had pretty robust animal feed sales, which we don’t expect to have in 2013. So the growth is coming from the international arena. So we have to see the economic activity in Brazil pick up. We did better when I look at the quarterly layout. You know we don’t really get into the country-level specifics. I will say that Brazil picked up as we came through the fourth quarter compared to the previous three quarters. Clearly not putting a major devaluation into these numbers for Argentina. We are expecting a devaluation, but looking at the 10% to 15% devaluation, not looking for a 50% or more clearly not putting a major devaluation into these numbers for Argentina. We are expecting a devaluation but looking at the 10% to 15% devaluation not looking a 50% or more. So to get ourselves the lower end of the range truthfully has to be that we could come up short on the volume. And it’s the same thing year in and year out if we have been too conservative in forecasting the volume around the world, then we’ll get up to the higher end of it. Ken Zaslow – Bank of Montreal: It is fair to say though when you say animals going down, you have particular in [inaudible] standing hundreds of products and expanding, are you just saying that you guys had extra sales somewhere in there or is that you guys like forecasting production costs in the industry then?

No. We’re not forecasting production cost in the industry. If you think about we’re a little bit less on the grind relative to some of our shedding programs. And we’re not looking for as the same rate of growth that we had last year. So it’s basically just as we optimized our operations. Ken Zaslow – Bank of Montreal: Okay. I appreciate it.

Okay, this is Ilene. I would just also add that we’ve dialed in some of the growth that’s expected in Brazil and the GDP there getting back to more of a 3% range that it being posted to the 1%. We expect that to be happening and economic activity in terms of anticipation of the sporting event. So we think that that’s all in process. But if, for some reason, the country had policy that slowed it down, that’s something else that might contribute to a lower volume. Ken Zaslow – Bank of Montreal: Great. I appreciate it.

Okay.

Thank you. The next question comes from Heather Jones. You may ask your question and please state your company name. Heather Jones, your line is open. Heather Jones – BB&T Capital Markets: Hi, can you hear me?

Yes. Good morning. Heather Jones – BB&T Capital Markets: Okay. BB&T Capital Markets. Sorry about that, I had my mute button on. Really quickly, I want to go on your EBIT guidance. Cheryl, on your prepared comments talked about EBIT roughly flat year on year, but then if we go through the regional outlook, each of the geographies you’re either saying flat or up. And so, wondering what causes consolidated EBIT to be flat year on year.

I didn’t say it was flat, I said we’d see modest improvement in the operating income. And so basically, we’re looking at holding roughly flat in North America and everybody else being up. Heather Jones – BB&T Capital Markets: So, not to get too detail-ish but when you say slight, I mean, the slight mean 1%, to 2%? Could you give us a range that you’re thinking about when you use the word slight or modest?

When you think about modest growth, I think about modest growth being the 2% to 5%, 6%. Heather Jones – BB&T Capital Markets: Perfect. That’s very helpful.

So if everything goes our way, we get on the higher side. If everything doesn’t go our way, you get on the lower side. Heather Jones – BB&T Capital Markets: Does your outlook for North America assume meaningful, incremental synergies from the National Starch combination.

No. Actually, we’re fully integrated with the National Starch. What we do have is some mix improvement in the North American operations but we also have the North American operations – remember, we do a lot of our specialty grain processing here that we ship out to the rest of the world. And so North America is feeling the burden relative to those specialty grain types. And so the cost associated with growing are more typically higher than the yellow dent number 2, and the specialty corn is grown for us in the Indiana region. And so it has the same issues of the yellow dent number 2. So while we got pricing, we still have to be able to move this in the international market, and that’s where some of the squeeze is occurring, which is more of a one year issue.

But we are continuing to employ the cost reduction actions that we took during 2012 in getting the annualization of that in 2013 as I said a little earlier.

We haven’t given back the synergies. Heather Jones – BB&T Capital Markets: Right. Not to overanalyze but would it be fair to say that on specialty starch side, are you assuming maybe some decline there because of these costs associated with specialty corn but actually growth and more of the legacy of business of that and a flattish outlook for North America?

The growth is there, it’s the issue around the cost side of it, Heather. All right. We priced for the raw material cost in general when we get down to the really specifics by a product line which is really not the way that we necessarily report out the business. The logistics costs, the issues around who you can sell your feed to and the prices around it because you got the higher aflatoxin issues. That’s what’s challenging a piece of the specialty business and that’s why I say it’s for us more of a one year issue than anything else. Heather Jones – BB&T Capital Markets: Okay. My final question is on North America again, and there’s been a lot of concern and talk regarding the gap between corn sugar and regular sugar narrowing and the potential impact on volumes. Some of your competitors have struck a fairly benign tone on that and it would sound like given you talked you about for the volume outlook that you’re not expecting much switching. So I was wondering if you could give a little more color there.

Yes. I mean, this is Ilene. Certainly, the gap has narrowed between sugar and high-fructose when you look at some of the area of Mexico. And true, there are some spot prices that seem to have come down. On the other hand, our business has been contracted and we feel that we’ve been able to cover our corn cost and we’ll be able to maintain our volume there. So we’re not overly concerned about any kind of squeeze or volume decline. I think that North America as a region is well balance and that should continue to provide similar results in North America that we’ve been able to provide before, Cheryl just said. And Cheryl, is there anything you want to add to that?

No. I think I kind of like the word benign but on the other hand, I think it really is again, compliments to our North American team is that they are very focused. They understand that given the nature of the business which is a basic ingredient, and obviously, we do have our specialties that they have to be able to get pricing. And every year is another nail-biter. I’ve never had a year where it was not a challenge and that there weren’t headwinds, whether it be in North America or the rest of the world, and the team just does a really solid job of being able to manage that business. So I would say we’re looking at stable market and stable results as come in to 2013. Heather Jones – BB&T Capital Markets: Okay, perfect. Thank you.

You’re welcome.

Thank you. The next question comes from Tim Ramey. Go ahead with your question and please state your company name. Tim Ramey – D.A. Davidson: Good morning. It’s D.A. Davidson. A couple of questions, I think I heard you mention feed two or three time and aflatoxin as well. Is that the source of the expected shortfall in revenues from feed, i.e. with volume it’s appropriate for is or is it higher cost by-product.

It is primarily the first. There is a piece of the second but it’s mostly the first. Tim Ramey – D.A. Davidson: Okay. The outlook in Brazil is pretty important to 2013, and I wonder how you’re thinking about that. I mean, it seems to me over the years that a 3% growth is almost always wrong. It’s either 0% or 8% [ph] or something like that.

[Inaudible]. Tim Ramey – D.A. Davidson: Are you thinking that there is more volatility there in your forecast than perhaps 3% would suggest.

Hey, Tim, this is Ilene. No, I think that when you look at our business in South America and Brazil, again, we’re a global ingredient company and we’re serving regional customers and global customers as an example in Brazil and we’re serving a variety of industries. So of course, the brewery industry is important to us as well as the soft drinks in Argentina. But the processed food industry is growing with the population and the growth of the middle class in Brazil; bakery and dairy. I mean, these segments all require ingredient solutions and we take our capabilities from R&D and product development around the world and we apply them to the local taste. So we continue to be excited about the long term opportunities even medium term in Brazil and Argentina and Colombia, the rest of continent. So we feel good about that. Tim Ramey – D.A. Davidson: Okay. And then just quickly on a CapEx forecast, can you remind if there’s any lumpy projects in that or if that is primarily, as you suggested, cost reduction maintenance type items.

Yes. It’s Ilene again. We started some projects in the last year but we completed our Pakistan third plant. So that large one is done that we’ve called out before. We continue to invest in Brazil for all the future growth that we’re anticipating. So that’s just kind of a three-year plan that we announced maybe two years ago. Europe – we’re completing some projects. So no big, large projects that to continue investment in capacity in growing areas of the world, as well as cost reduction opportunities. So it’s a combination. Tim Ramey – D.A. Davidson: Thanks so much.

You’re welcome.

Thank you. The next question comes from Farha Aslam. You may go ahead with your question and please state your company name. Farha Aslam – Stephens Inc.: Hi, good morning. Stephens Inc. I want to just delve down more into your country-specific comments, and first of all, just starting with the results because it is so important to next year. You’re looking for roughly 3% growth, could you just tell us how you’re thinking of the energy issues that might emerge because of the low-river levels in Brazil versus kind of all the sports events that are going to kind of startup starting in 2013 and going into 2014?

We’re not looking at a major issue with energy for us in Brazil. Our facilities are mostly run on coal generation with long term gas contracts. Farha Aslam – Stephens Inc.: Yes, but I’m just wondering because there’s concerns that all of Brazil might have energy issues this fall. So it would be similar to what you’re experiencing in Pakistan where it’s not an Ingredion-specific issue but the whole country might have issues with energy.

I can say that I haven’t had discussions with the operating team that they were particularly concerned with the energy issue in Brazil. We talk about what’s the economic activity, will people be consuming more beverages, what’s the impact coming from the brewing industry with the dye [ph], significantly weaker and has devalued over the last couple of years, will their export business pick-up. I think, really, it’s been more focused on the economic outlook as opposed to being energy specific. Ilene?

And we also have five different facilities around the country, so we’re not concentrated at any one particular region. So, sure, if there was a regional issue, we’re not focused on that. At the same time, we do cover the north, the south, the middle, so we feel like we cover the population. Farha Aslam – Stephens Inc.: Okay. And then in terms of sporting events, I think the World Cup is coming up. When we think of your volume growth in light of sports events, should we think it starts up a quarter ahead of time, and is volume up kind of 10% during that sports period or is it up more of 5% – there’s a more moderate rise. We just want to try and gauge as we look out longer term into your earnings.

Well, this is Ilene. When we had our analyst day, I know that our head of South America, Julio des Reis, talked about the big parties in the winter for South America that are coming up and of course, that will attract a number of people. And I don’t really have a percent for that. But the way I think about it is getting ready for the events and the people that are working in the country on infrastructure and roads and hotels and getting so that they can accommodate all the different visitors. And so there’s a ramp there. And so, I don’t think that you have to think about it as suddenly there’s so many more people and you get a 10% spike in one month. But rather, I think it’s part of the anticipated growth in getting the country ready for the future in those events and that’s what that 3% is forecasted on for the next few years. Farha Aslam – Stephens Inc.: Okay, thank you. And one final question just on Asia. It was particularly strong in this last quarter. Could you just highlight that country? Which country has really performed well for you and what we’re the drivers there?

The countries performed well. The drivers were, as we indicated in the third quarter call on this one, it was volume and pricing and the volume came from beverage, food, and a bit of paper on the industrial side. I mean, we are enjoying, obviously, these opportunities in Korea. And again, we have a good business there. China is important to us and there’s some growth coming back there, and as Cheryl said, Thailand – where we had three facilities. So there’s been some opportunities there. So I think it’s generally in the region. It’s not in one particular country. Farha Aslam – Stephens Inc.: Okay. Thank you very much.

Thank you. The next question comes from David Driscoll. You may go ahead with your question and please state your company name. David Driscoll – Citigroup: Citigroup, and good morning, everyone.

Good morning. David Driscoll – Citigroup: First off, congratulations on a terrific 2012 and the long term execution of a solid strategic plan. I’d like to just ask a little bit more on the guidance for 2013, and again, you’ve answered this a bit but I just like to try, make sure I understand. The low end – maybe there’s a wide range. When you look at the 560 that would effectively say, no growth versus what you did in 2012. I think you’ve been pretty clear that your expectations are that the international side is where you’re supposed to get for profit growth in 2013 if it happens. But on the North American operations, I just like you to talk a little bit more about the sugar prices and the fructose price. The USDA has quotations for 2013 HFCS at something like $0.38 a pound, maybe $0.40 a pound on an equivalent basis to sugar prices. And they also quote the Mexican sugar prices at about $0.34 cents a pound. So it would look like fructose has gone on, and again, purely equivalent basis, not wet quotes, has gone premium versus sugar. Do you agree with that and then why wouldn’t you be a little bit more concerned? And maybe the final point, if you work this in on Mexico, on January 21st, there was a major protest among the sugar millers, demanding the government do something. Ilene, Cheryl and I lived this over years of the debacles in Calico [ph] because of the sugar industry down there and how much power they wield. Are you worried about that at all?

I’ll just start and then I’m going to turn it to Cheryl. But look, I think we have very good relations, our countries and NAFTA has been a very successful opportunity for everybody. And so, sure you get a motion in different parts of the regions but we feel confident that it will continue to remain a well-run NAFTA organization and the way our business has operated. So again, I think that most of the contracting, it’s really been done. So that is what gives us the confidence that I mentioned earlier that we believe that we’ll have a similar opportunity to ship our volume throughout the region. Cheryl?

Dave, relative to the USDA numbers and the percentages and premiums and discounts you were quoted, I would just remind everyone that we don’t talk about what we price to our customers at a specific level. And as we’ve said on multiple calls and we’ve said on various analyst days that basically, there is contracting which can be firm price, it can be grain-related formulas and that our customers, depending upon their size and their nature of risk will determine how they want to enter into contracts with us. So is the spot price of sugar below, has it deteriorated the premium that we have talked about, the 20% to 30% that corn sweeteners traded below sugar? Yes. Obviously, that margin has narrowed and come in quite close. Do I think that based on the contracting outcome that sugar is trading significantly better? The answer is no. And the last component is there’s very little spot business that is done in the North American market. Most of the volume for the product that you’re talking about is done under annual contracts. The second thing is that these are long term relationships that exist with us and our customers and while nothing is impossible, the probability of our customer reneging on their contracts is pretty slim. And last but not least, the beauty of having done the acquisitions, doing the trade-up strategy among the product portfolio is that HFCS as a total percentage of the company is relatively small, 14%. Granted you have to [inaudible] a larger percent in the North America as we pointed out in the analyst day back in November. But again, the company’s fortunes don’t rise and fall strictly on HFCS. The thing that I find fascinating about the Ingredion business model, and whether it’s in the North American market or the rest of the world, is the ability to maintain the spread. And then the additional profitability, when there are squeezes like this has to come from the team’s relentless focus on driving cost down. David Driscoll – Citigroup: Thank you for all the color. I’ll pass it along.

Thank you.

Thank you. (Operator Instructions) One moment please to see if we have more questions. There are no further questions at this time, I’ll turn the call back over to the speaker for any closing remarks.