Welcome to Ingredion's Third Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to our host, Aaron Hoffman, Vice President of Investor Relations and Corporate Communications. Please go ahead, sir.

Thanks, Marla. Good morning, and welcome to Ingredion's Third Quarter 2013 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 Form 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. Clearly, our third quarter results did not meet our expectations or yours. This is disappointing to me and to our management team. Ingredion has a long history of delivering against our commitments, and the results that we've reported over the past 2 quarters are simply not acceptable. With that said, the primary issue over both quarters can be very clearly isolated to South America, and particularly Argentina. We continue to believe that these are short-term issues. We will still see significant long-term value in our South American franchise. When these economies hit their stride again, we believe that there will be a truly meaningful impact for our company. Suffice it to say that without the largely exogenous issues in Argentina, our business is performing well and in accord with our expectations for our business models. Look no farther than our North America region, which delivered almost flat operating income in the third quarter and record operating income through 9 months in spite of historically challenging conditions. Asia Pacific and EMEA have largely delivered to our expectations. Positively in the quarter, we also saw cash from operations rose significantly, as expected, and we used some of our cash to repurchase almost 1 million shares. Cheryl will provide some further detail later. Let's now spend a minute on each of the regions and our third quarter business performance. As I just pointed out, our North America business has faced tremendous headwinds in the form of a historically bad drought in 2012, extremely low sugar prices and a weak consumer environment. The third quarter was the worst of the impact from the drought as basis ran to all-time highs and corn availability was scarce.…

Thank you, Ilene. This is a difficult moment, but I want to say thanks to my many colleagues and friends. I have been so blessed to work with such an outstanding group of people over my 33 years with the company. I have learned so much over the years and am so proud of what we have built together. This is truly a great company with a sound and executable strategy and the people to take it to the next level. I have every confidence in Jack and Jim as they take their new positions. I will be using my passion and focus for getting my true love and friend, Jim, to victory in his battle with cancer. Many, many thanks for all the prayers coming our way. And thank you, Ilene. It has been a great partnership. Now let me move to the numbers. We will do our best to explain why we have revised the guidance. As Ilene said, this is disappointing, to say the least. As we said in the second quarter call, South America, with particular emphasis on Argentina, was under pressure and that year-over-year, we expected a 50% decline in the operating income. The third quarter began with a slow July, which nicely improved in August. Argentina swung from slightly negative operating income in July to positive in August. In fact, August looked like May, providing some level of confidence that our 50% haircut was appropriate. September took a backwards turn. Brazil is improving slowly. In fact, Brazil has more than doubled its performance from the second quarter. The Brewing segment is picking up. October volume is almost back to the level of 1 year ago. The strike and social unrest in Colombia impacted volume and costs, causing the local team to fall short of…

Thanks, Cheryl. As I've said a few times this morning, our business model, which is reflected in our strategic blueprint, is working. In the case of Argentina, we are in a short-term severe situation that we expect will right itself over time. And in the meantime, we are proactively making changes to control costs. Elsewhere, in spite of challenges, our business is doing well. As Cheryl indicated, the early look at 2014 suggests that we have a much better environment in front of us. And that should position Ingredion for a return to our historic strong earnings growth rates. We've also demonstrated a track record of good stewardship of shareholder capital. Dividend increases and smart M&A point to a management team working towards shareholder value creations. We sit today with a strong balance sheet and a disciplined team executing a clearly defined strategy. We believe this is a position that will benefit our shareholders in the years to come. Taken together, we believe in our prospects and our ability to deliver over the long term. Let me conclude by thanking Cheryl again personally and on behalf of our executive leadership team, our 11,000 employees and our Board of Directors. Again, you've been a great partner, and we all wish you and your family the best. Thank you for everything. And now, we're glad to take your questions.

[Operator Instructions] And our first question, we'll go to line of Brett with BB&T Capital Markets. Brett M. Hundley - BB&T Capital Markets, Research Division: Just very quickly, Ilene, you just mentioned the long-term CAGR target. Is it still your belief that 10% to 12% over time, but that 2014 should be above that level?

Brett, what I've always said, and I know I said it last quarter, we still believe in the long-term compounded annual growth of 10% to 12% off the 2012 base. And we still believe in that, but it's too early to give 2014. But I do reiterate that we're confident in the long-term 10% to 12% per year. I know some years have been higher than that. This is a year that's lower. But again, long term, off the 2012 base, we're still committed to those targets. Brett M. Hundley - BB&T Capital Markets, Research Division: Okay, so of course, broadly speaking, if you're committed to that target and you have a softer year one year, you should have another year that's going to make up for that?

Hopefully. Brett M. Hundley - BB&T Capital Markets, Research Division: Okay. And then, Cheryl, I say this, of course, respectfully. I would love to get as candid a response as possible from you. On capital allocation, you've generated $250 million in CFO during the quarter. You've reduced CapEx. You've added $50 million to the cash ledger sequentially. Your share repurchase, it was nice to see, but it was really inconsequential during Q3. And late last year, you guys made the comments that, look, 2014 -- or excuse me, 2013 could be difficult, and if it is, we can step in and protect shareholders somewhat. So for me, it's not necessarily a disappointment that we're having a weak environment materializing this year. It's more of kind of perceived inaction by management related to capital allocation, et cetera. So what can you say to investors, somewhat candidly, as far as how you think about it and what you're looking at going forward? I mean, is there something in the M&A environment that is attractive to you? Is it something related to potentially the dividend? Can you just answer that for me?

Absolutely. And let me be direct and candid. We bought back the equivalent of $56 million in the third quarter. We have a share reauthorization that was about $3.4 billion. So let's -- it was $880,000 in the quarter. Let's call it -- let's do easy math, the $2.5 billion. We are committed to spending another $200 million to repurchase shares and to clean out that authorization. And if necessary, we'll go for another authorization if the board were to approve it. The capital allocation hasn't changed. We are consistent over the short term and the long term that our belief is the best value for the shareholder, long term, is to find assets that will produce future cash flow. And so acquisitions are a priority. Obviously, we are dialing back the capital expenditure in concert with the operating performance and the economic outlook. We expect that to be more of a short-term issue than a long-term issue. So again, we are absolutely committed to the long-term value creation, which, over time, we have demonstrated with acquisitions and organic growth that we can create that shareholder value. With that said, when we are sitting with cash on the balance sheet and the performance is not as strong as we would anticipate or like, then we will do the right capital allocation decisions. We have raised the dividend 3 times, and we will continue to buy back our shares. Brett M. Hundley - BB&T Capital Markets, Research Division: I just have 2 other quick questions. In South America, and specifically Brazil, you noted a sequential improvement in volumes, specifically in the brewing sector. Do you think -- can you talk about that on a seasonally adjusted basis? Do you think that you're seeing real improvement above and beyond? Or do you just think that you're seeing that normal sequential seasonal improvement?

Well, I'll just start out. It's Ilene, and then I'll turn it to Cheryl. There is clearly some seasonal improvement. But again, when we look year-over-year, because the seasons are, in general, the same, we are seeing a lessening of the gap between being down last year over this year. And so even as we look at October, we're actually seeing coming close to last year. So again, it's -- by definition, it's seasonally adjusted. So I think that there's been -- there's certainly been overcapacity in Brazil. We're not seeing threats yet from the Olympics and from the World Cup. And I think in our comments, when we talked about that, we believe, in 2014, we'll start to see that. But I think the good news is, is that in the third quarter and even now, we're starting to see an improvement in the brewing industry in Brazil. Cheryl, I don't know if you had anything...

No, it's a sequential improvement. So when I think about the guidance that we put together back in July, we assumed that the year-over-year decline in brewing segment sales, driven by volume, would be 10% to 12%, which was an improvement versus what we saw in the second quarter, which was, I believe, around 27%, and we're actually -- we saw a better performance than that in the third quarter. But again, year-over-year, that comparison is still down. So with the October, and we spoke to the team yesterday, the October volume numbers looked -- are very positive. And so that gives us the confidence relative to that fourth quarter projections. Brett M. Hundley - BB&T Capital Markets, Research Division: Very helpful. And then just one -- my last one very quickly. There are some concerns out there that corn processors could compete away the entire inherent margin gain from lower corn as you guys contract this year. And I'm just curious if you could give a view on that thought.

Yes. This is Ilene. My view is this: When you look at the operating rates of our industry in North America, they've been in the high 80s. And while maybe this year, there was a little bit of noise and some spot sugar prices that competed with high fructose, in general, the industry is still operating at those high levels, in the high 80s. So the reality is, is that nobody's announced any new capacity. That takes many years to happen. We talked on different calls about the potential of people converting, and we don't see that, people converting their wet mill ethanol capacity to the corn sweeteners side. So again, we feel very good about the operating environment. And couple that with -- now that corn prices are down, I mean, nobody debates that from a year ago, given the better crop. We do believe that the food companies will pass some of that, if not all of that, on to consumers, and that volume demand will be up. And because after 3 years of higher prices, the consumer will have some relief, and that will create higher demand, and that will tighten up capacity utilization even further. So we see a good environment.

Next, we'll go to line of Farha with Stephens.

And then -- well, just focusing on Argentina for a moment. Right now, you're translating your Argentine earnings at the official rate, correct?

That's correct.

And so now, what happens in a devaluation? Will earnings take another hit if you retranslate it to the -- or is that going to be a net positive because corn prices will then go down because the farmer might be more willing to set -- to sell? Could you just share with us how we should think about devaluation?

Sure. If we think about the devaluation in the third quarter, it's around 21%. And if we look at, as you go into the fourth quarter, assuming it continues on the 2% to 3% downward revisions, let's call it 25% in the fourth quarter. So when we translate the financial statements, our revenue line will come down, as will our cost. So on a purely apples-to-apples basis, you will have a decline all the way to the operating income line, not at the level of the 25% because, obviously, your costs are coming down as well. From a business perspective, as the currency devalues, the longer-term costs should come down, which makes that country more competitive. And I would expect that the farmers, both for corn and for sugar, would start to release some of their supplies into the international market, which would give us some cost relief in that country as well.

And so you would view a devaluation as a positive event?

Yes, I would. Yes, it's the short-term hit. So let me be clear, there is a short-term hit for that devaluation. But then the long-term benefit is that Argentina becomes much more cost-competitive and you improve the profitability.

Okay. And just between the short-term hit and long-term cost benefit, kind of the time horizon that's normally seen in that business?

Based on past experience, it's been 6 to 12 months.

Okay. All right. And then when you look at Mexico, they -- I believe the senate yesterday passed that sugar tax on beverages and...

Right, 1 peso per liter.

Right. And so I think that the expectation is that Mexican high fructose corn syrup use will be down somewhere around 10% to 15% next year. First, is that in line with your team's expectations? And second, how do you anticipate -- what would that do to North American utilization? And how do you think that's going to affect the pricing environment going into this contracting season?

Well, again, this is Ilene, and this tax passing is very new, and so we're still looking at that. But again, when I go back to what I said before, of course, it will have an impact in the beverage side of Mexico. But the heightened awareness of some of the issues that, that tax is addressing on obesity actually creates a positive environment for some of our starches and specialty starches that are targeted at healthy food products in Mexico, and we're a local producer there. So that's kind of the positive side for us. But you're right. There will be some hit to the demand for high fructose in Mexico. But again, going back to the total system, as I said before, we do believe that the lower-price corn environment in all of North America will be very positive for demand -- for food products and demand overall. And so there's an opportunity there to fill in any gap that might be created from that tax, both in a local Mexico market as well as total North America in both the beverage side and the food side for our products.

Great. And my last question relates to capital allocation. In terms of M&A, could you share with us kind of the most attractive markets and areas of particular interest for you?

Yes. I'm happy to repeat that. It always gets published what I say. It's maybe sometimes not exactly what I say. But look, we're a global ingredient company, and we have 1,000 ingredients. And really, when I look at our strategy, well, I talk a lot about geographic, would certainly -- are some opportunities that we're looking at. And again, I've said Asia, Eastern Europe. We're looking at some opportunities there. But you've got to find the right opportunity that will create value for shareholders. I'm always very big on shareholder value. And so while we want to capture some of that geographic growth, we certainly want to do it in a way that it has long-term value creation for our company. So that's one avenue. It's the geographic side. But equally as important is what I call broadening the portfolio. And again, we started to talk about this last November in our Analyst Day, where we are texturizing and sweetener specialists. And so opportunities in the texture space, and there are a lot of nonstarch texturizers that would build on our portfolio and make us more important to our customers, and are very focused on the health and wellness trends that consumers want and need and new products that are being developed for them. I mean, that is obviously a high priority. And we're looking at those texturizing opportunities around the world. I mean, there in Europe, there are global companies that are based around the world. Again, we're looking for those that create shareholder value. And then, as I say, the other adjacency are other ingredients that, again, would help make us more important to our customers as we formulate the new products. And those are -- that go beyond texturizing, and maybe there's natural colors and there's natural flavors and there's all sorts of ways to enhance food ingredients to, again, make these food products very much targeted, health and wellness trend. So those are the ones we're looking at. We have a portfolio of opportunities. We've narrowed those to ones that really will create shareholder value. And we believe that with our strong balance sheet and our right focus on shareholder value, we ought to be able to do that.

Our next question comes from Ken with BMO Capital Markets.

In terms of just thinking about the company. Can we -- how much profit would you -- would Ingredion generate if you had 1% revenue -- 1% growth in volume, holding dollar margin steady? Can you give us a context to that?

Ken, is your question about North America or...

No, let's say, generally speaking, you are able to have 1% volume growth across the portfolio. What would your dollar -- holding your dollar margin steady, what type of profit would you assume would go up? Is it $60 million, $70 million? Is that a fair number?

If you think about 1 -- so let's do some math. Let's call $6.4 billion in revenues, right? At 1%, and so it's strictly on a volume basis, that's $64 million of incremental revenue. If you're looking at an 18%, on average, gross profit, then you're talking about $11.5 million to $12 million on volume. So if I then say, given last year's performance, in addition to just the straight value from a 1% volume, I also have to add in improvement from fixed cost absorption. And so I would double that number on the fixed cost absorption, depending upon what region of the world we were talking about.

So you're talking about throughput through the facility?

Absolutely. Yes. So then you're talking probably, Ken, let's do $12 million to $24 million, a 1% improvement in volume.

Okay, great. That's -- and then if I take a step back, would there be any reason not to believe that there would be any region around the world that you would not get at least a 1% volume increase?

I would -- if I look at South America, which has been, as we said, the year-to-date number, we're off $62 million. $60 million of that is coming out of South America. Let's start with Brazil. I have every confidence, every reason to believe in the confidence of the local team, that their volumes will sequentially improve as we go through 2014 based upon the World Cup and the economic improvement in Brazil. And so if I look at the potential, you could have at least another $10-plus million benefit from volume. In Argentina -- and Argentina is the wildcard. We've -- if I look at this quarter, as both Ilene and I have said, extremely disappointing. September took a turn for the worst versus what we saw in July and August. And so it is a bit of a wildcard. But if I look at it righting itself as we go through 2014, there's a significant opportunity. Do I think we're going to get back to the level that we were in 2013? The answer would be an absolute no. But improvement up from the levels that we're at, both from a volume and a cost perspective, yes. So I think there's a tremendous amount of opportunity from a volume and cost absorption standpoint in South America. If I look at Europe, Middle East and Africa, I see benefits coming from the expanded operations in Germany, and that's volume. And then Pakistan, our third plant is, let's call it, running at 30% as we get into the second year of production. One expects that to ramp up, so that would give me positive volume. In EMEA, Asia Pacific, the challenge has been the high corn costs and the low sugar, which is the South Korean issue. And South Korea can swing with that loss of sales to the beverage industry by, I'm going to call it, $4 million to $5 million, so I would expect a positive response in 2014 as we get the benefit of lower corn costs. And then it brings us to North America. So the combination of lower pricing and having a positive impact on volume in North America would be beneficial. And then the Mexican with the sugar prices, if we look at where corn has dropped by over 40%, yes, there could be some switching relative to sugar. But I believe FEMSA, in their third quarter call, gave a range of sugar and HFCS: sugar at about 40%; HFCS, maximum blend, 60%. And so if I look at how we've performed against sugar in the third quarter of 2013, we did fairly well. Our volume is down, as Ilene mentioned, but the impact to the financial results is minimal. So to wind this up, I would say that I would expect growth in volume, cost savings and better cost absorption across the board.

And I guess -- this is Ilene, and what I would also add is -- and I agree with Cheryl, what Cheryl has said, but at the same time, while we talked about some challenges in volume this year, we've been working on cost reduction with our continuous improvement process, again, looking at ways to improve quality, improve throughput, either on a lower volume basis. So it's very important to control what you can at all times, and especially at times like this. And it's not just people cost, but it's process cost and, again, ensuring best practices. So that should also help us next year as we ramp up the volume.

Okay. That's very complete, I appreciate that, more than I actually expected. So when I look at Argentina, once devaluation happens, you said that would take 6 to 12 months. My question, I guess, 2 things, is: One is the profitability in the fourth quarter seems much higher than I would have thought, which is obviously a good news. But also, what about if corn becomes available, why wouldn't your utilization rates go -- I'm assuming your utilization rates are very suboptimal at this point. Why would they go from like 60%, 70% utilization rates, if even that, all the way up very quickly? And why wouldn't your profitability come back quicker than the historical levels, just because this seems to be more of a corn relationship issue?

Let me answer that, Ken. It's Cheryl. The reason I don't believe that Argentina will come back to the profitability in 2014 vis-à-vis where it was in 2012 is that we had some benefits from lower corn costs, which I think structurally have changed. And so I'm going to say that probably $10 million to $20 million may have been structurally destroyed in 2013, 2014. But then if I look at what the business is capable of doing, that would say that we get back on track if we follow the historical pattern as corn costs come down from where they are, sugar prices come back to normal levels and we price against the sugar. So if I look at the haircut that we've taken again for Argentina, and frankly, I don't think anybody is more disappointed than I am when I look at what the team provided, I put a $20 million haircut, as I said on the second quarter call, on what the operating team's numbers were. And I normally -- as I -- we discussed this. I thought I was being conservative. When we saw the September numbers again, it was just -- it's absolutely frustrating because you think you're turning the corner and the cost just skyrocketed again. As now it's not that the quota just went up, as Ilene said, but now the farmers are holding, the corn farmers, because they don't want the devaluation. So it is a bit of a wildcard here as to when this rights itself. Again, historically, we've seen it 6 to 12 months. The fourth quarter, based upon October's performance, we're getting back on track. It would take us back to closer to where we were in April. I can't tell you how disappointed I was that we went from a negative number in July to a very sound, positive number in August, and then it dropped again. It was still positive, but we're talking $3 million to $4 million swings in the numbers, which do make a difference. And we have been -- the South America numbers were revised down from what the fourth quarter -- in the fourth quarter from what we had in the second quarter outlook of the $5.25 to $5.40, if you will.

And my very final question is, can you just give us the impact in 2013 of -- if you want to do it aggregately, however you want to do it, is Columbia, the 2 storms in Mexico, the supply issues in Europe, the fungus and the basis, because all of this seems to be onetime and I want to be able to edit back to next year and I think that's a fair way of doing it, if you could just give us that and I'll be done today with my questions.

Okay. Let's see if I can remember the list. There's...

Ken, you're trying to make this difficult because it's Cheryl's last call. Is that what this is? This is like the final...

It's the last shot I have at this.

You want to see whether or not I still have that passion and drive.

I think I covered it, though: Colombia, 2 storms in Mexico, supply issues in the -- in Europe, Fungus and basis. I don't know if I'm missing anything, but those are the ones I have. And if you want to just tell me it's $100 million, I'm good too. I was just curious.

I think that we're probably talking, in South America, all right, somewhere between $7 million to $10 million. When I think about the stevia situation, the strike, some of the social unrest, $7 million to $10 million relative to the supply chain disruption, which is actually between 2 regions. It's in Europe or EMEA because basically, in order to provide the specialty grain, so these are the specialty starches, with the non-GMO waxy and high amylose, we had to utilize the global supply chain. So my estimate is we probably have somewhere between $5 million to $15 million in additional supply chain costs associated with that. And I would say I'd split it 1/3 in EMEA and 2/3 in North America.

And basis?

The basis. All right, we [indiscernible]...

That's just corn. This is just this quarter, I think.

If I look at the basis for the third quarter, and again, the way some of our contracts work, this would've been embedded in the net corn costs. So I can't say that next year, when the basis is down, that we get a benefit from it. But I would say the supply chain logistics for the third quarter is probably another $5 million.

And next, we'll go to Akshay with KeyBanc.

So I just want to ask one quarter question on CapEx. It's 2 parts. One is the level of spending and then what -- how you view the returns on it. And so first, even with your reduced guidance on CapEx this year, I mean, you're spending close to around 5 -- 4.6% of sales on CapEx. A lot of that would be growth. So nonmaintenance CapEx is a big chunk of that. And you've been doing that for several years. So first question is, what is the level of spending that, longer term, is a good rate for this company? And it's -- the question is related to the second part, which is, based on what we see in the numbers you report on volumes, you've had very little volume growth in aggregate over the last 5 or 6 years. Why have you been spending this growth CapEx now? I know maybe it's not the right way to look at the return on your spending. Maybe a better way to look at it is on mix and margin. So if you can help us understand how you look at the returns you're getting on the growth CapEx that you've spent over the last few years, that would certainly help. And then secondly, I guess, based on that answer, we'll be able to figure out why -- what's the right rate of spending for this company going forward given all of these issues we're having on volumes?

Okay, this is Ilene. I'll start out and then I'll turn it to Cheryl. When I think about the capital spending, since I've been here 4.5 years, we've been spending ahead of demand in several different areas because, as I've said before, new greenfield capacity can take 4 to 5 years. So if you take an example, our third plant in Pakistan that just came on about a little less than a year ago, again, we'd been spending and putting in capacity ahead of demand. And so again, you're forecasting that and you may be off a year. But again, I'm very happy with where we've spent that money in Pakistan for both that market and potential export. If you look at South America, again, we've talked about -- I remember talking about 2 years ago about spending $75 million to $100 million in Brazil. And that's, in a way, why we're confident that any growth in volume that happens due to GDP in a place like Brazil due to whatever reason, growth of the middle class, that we'll be able to be there as a leader with that additional capacity. And then you're right, it's not just trying to capture the volume, it's a margin play. And so again, if you look at the capacity that we've just brought on in Germany for Europe for our patented NOVATION product, again, we're addressing the clean label and specialty starches there. So as we look at that growth capital, we're certainly looking for returns that are in the high teens because we have maintenance capital that, obviously, we need to spend that doesn't always have a return. And we talk about our cost of capital, I don't know, 8.5%, 9% higher in some other higher-risk areas, but we're expecting our growth investments, as well as our quality and cost reduction improvements, to also have an appropriate return. So Cheryl, anything to add?

No. Ilene hit it right on the head. It's -- these are long-term investments. They're not short-term. It's a function of the mix and organic growth. If I look at the levels of spending, it's probably $300 million on average that we would look to spend going forward, barring any major expansions in the specialty starches, and that would attend to the cost savings as well as to the organic growth. And if I look at the performance -- so let's take North America, where some of this capital has been spent as well, and I look at the performance on a 9-month year-to-date basis and factoring in the fourth quarter guidance, all right, it says that we're looking to have an up year -- a slightly up year versus last year in an environment that record-high corn costs, record-high supply chain costs, and we still performed, and low sugar prices in Mexico. So it's not apparent because there are other things offsetting it, but we would not have had that performance unless we had made the investments in the cost savings and manufacturing optimization. So that $300 million over time delivers as it starts to kick in. If you use a 10% average return, it should kick in $30 million.

That's helpful. So in other words, looking from the outside, where we said it's more in the earnings numbers. I mean, it's evident in the earnings and the margin, less evident in the volume, where there's a lot of noise and you don't break up mix, so harder to parse out. Is that a fair way to think about it, as earnings is really where it's showing up already and will continue to show going forward visibly?

Correct.

And that supports a strategy of being a global ingredient company and having many different ingredients focused on the consumer trends.

That's very helpful. So a follow-up to that, then, is, so if that's the case, over time, your spread of ROIC to WACC should go up. I mean, should we expect, over time, for you to increase that guidance? I mean, obviously, you've said something like 200 basis -- if I remember correctly, 200 to 300 basis points.

These are basis points over our average cost of capital at 8%, 8.5%. And the answer would be yes. Because if you think about what we've said strategically, part of this capital is not only organic growth and cost savings. But then the other piece is the mix improvement relative to the specialty starches. And from an M&A standpoint, that cash flow goes towards trying to acquire specialty products, which have a higher value which, over time, will improve that mix.

So this is very helpful. So then if you look at where your ROIC is today, I mean, it's well over 200 basis points above that 8.5% cost of cap. And I know those numbers move around year-to-year, but you're well over that. And what you're saying is you've spent a lot of growth capital and you expect the spread to improve over time, right? So how do I reconcile your ROIC being already over this 200-basis-point goal and the fact that you've spent growth capital, which should improve that spread? Should that spread be improving from where it is now? Or how should I think about that?

I'm not quite sure that I understand the question. All right, so if I think about, based upon the mix that we have today, all right, and let's call it 12% roughly, give or take, as the return on invested capital. So if I think about $300 million, our depreciation is $200 million, so that adds $100 million of capital to the base, year in and year out. And so if we got a 10% return on the invested capital of $100 million, over time, it basically keeps our return on invested capital within that range. Now to the extent that we acquire and we do the same type of execution -- negotiation and execution that we did with National Starch, then you would see an expansion in that ROIC. Is that a little clearer?

Yes, that's definitely clear. And I apologize for not being clear. But the 12% roughly ROIC on a -- compared to 8.5% weighted average cost of capital is -- that spread is larger than 200 bps, right? So what I'm -- the fear, I guess, on some investor's minds has always been that this company is somewhat commoditized. In return, they may be overearning. And so your guidance on ROIC leaves some room for interpretation to that extent, right? That's all I'm saying, is right now, your spread is above 200 bps and, if anything, longer term, I would expect that, that would increase at least slightly.

I understand exactly where you're going. If I think about the fact that a portion of our strategy relates to M&A, de facto, when you do M&A, you normally -- it takes you a couple of years to get the benefit. And so if I do straight math and say the 12 -- let's use 8% as the weighted average cost of capital, and we're at 12%, so that's 400 basis points over, all right? And you're saying, okay, given the capital expenditures, there's too much noise in that spread. It's really the fact that, as the strategy indicates, that we want to do M&A. We're just being somewhat conservative and not trying to hinder ourselves in that M&A as we move forward. But over time, we're not expecting that, that 12% -- let's call it 11% to 12%, over time, does not materially change. And that goes back to the focus. And again, if I go back over the 15 years that this has been a public company, from where we started, we had a return on invested capital that was less than 3%. And so we have driven it through solid capital allocation, capital discipline and business performance discipline to that 12%.

As we demonstrated with the National Starch acquisition, in terms of the price paid and the shareholder value creation, that we were able to build the company and still have, in the short term, a very attractive return.

I really appreciate it. One last one on North America. It seems from what ADM has said that the contract season, from a timing perspective, is getting extended a little bit later. I know there's a window. It's 3 to 4 months that these things happen over time. But it seems like it's getting delayed a little bit relative to the average. Is that accurate? And just so that I understand, if utilization rates do tighten from already high levels, like you're expecting them, rough numbers, gross net corn cost expected to be down about 25%. From margins to expand, which is what would happen in that environment, your pricing would have to be down less than 12.5%, right? So am I thinking of that sort of equation correctly? And secondly, what is -- can you help us understand the timing of these contracts this year? And does that tell us anything about the environment, positive or negative?

Yes, it's Ilene. We really don't comment on contract negotiations while they're ongoing. And so our plan is to update you in early 2014, when we release the year-end 2013 results and provide the outlook for 2014. But as I said before when I talked about North America, I think the environment for utilization rates looks good with lower corn prices and demand growing. And I really think that's all we want to comment on at this moment, but I appreciate your comments.

Next we'll go to Tim with Davidson. Timothy S. Ramey - D.A. Davidson & Co., Research Division: We spoke on -- after the third quarter, and I was disappointed that you, at least, hadn't stemmed the $0.03 of EPS dilution coming from share count creep in the first half of the year. And now we have another $0.01 of that, and of course that's totally discretionary. I thought I understood you at the time to say we won't -- we'll try not to let that happen. But -- and also, I was thinking about your 30-year tenure, and you were there and I followed the company during the period of time that crawl icon [ph] greenmailed the company.

You're going back to the CPC. Timothy S. Ramey - D.A. Davidson & Co., Research Division: Yes, yes. And...

Late '80s. Timothy S. Ramey - D.A. Davidson & Co., Research Division: It was. It was '87 or '88, as I recall. And having a high cash balance, a low multiple is sort of a perfect scenario for an activist investor.

Tim, can I interject here? First of all, and let me address your issue with regards to the share repurchase and the several pennies of dilution being caused in the year-to-date numbers. #1, we did buy back shares. There is a weighted average that occurs here. It's not that you can go in and buy back the full amount and say, "Okay, I've taken care of that dilution." So the benefit comes, not only it dribbles in, in the third and the fourth quarter, but you get the largest benefit in 2014. #2, given the fact that we are beginning to see the cash flow come back from the working capital, which was not apparent in the second quarter, it was a fairly significant drag, all right? We spent the $56 billion -- the $56 million. The third is that I think I made it fairly clear that we would go and execute the remaining shares and we would also, if appropriately, reauthorize once we'd cleaned that up in 2013. Relative to the cash balance, this is a multinational corporation, and it's disclosed in the Q as to how much of the cash sits outside the United States. So even though there's over a $600 million cash balance, that doesn't mean that it's all accessible and that the cost of breakage to bring it back to the United States is not shareholder-friendly. The situation with CPC International with the greenmail was the fact they were sitting on a, if I remember correctly, a AA if not a AAA balance sheet. That's not the case with this company. We're sitting with a BBB rating with a desire to create long-term cash flow for the shareholders. And so the capital allocation decision, I think, is appropriately balanced towards long-term growth and short-term return to the shareholders. We've also increased the dividend 3x in the last 12 -- 2 quarters, if you will -- 2 years, sorry. And so I think we've got all the right components driving further value for the shareholders. The third quarter is disappointing relative to Argentina. We're focused on the things that we can manage in terms of control. Labor cost are very difficult in Argentina. The corn costs are out of our control. We're not corn farmers. We buy it in the local market. As Ilene said, we're focused on energy savings. We're focused on process savings. So I think we have the right balance, and we have the cash flow to do it. From an activist standpoint, you can never say never. But again, given the fact that over 60%, closer to 70% of the company's assets are outside the United States, the breakage cost of bringing back cash into the United States as well as leveraging up all of the foreign affiliates is not a winning strategy. It could be done, but it's not a winning strategy.

Next, we'll go to the line of David with Citi Research.

I want to do this kind of 2014 conversation slightly differently than I think maybe 5 other questions on this call have been done. Consensus right now is $6. There is no conversation in the consensus expectation that you're not going to see improvement over the '13 numbers. So my first kind of just funny observation is that in all these conversations, it seems like everyone's thinking this thing about, is it going to get better? From my point of view, it's hard to imagine that it can get worse. So it's certainly that we all expect it to get better. Now with that said, though, conditions deteriorated in the third quarter and you've had to reduce guidance. And so this does matter to me because it then leads into some questions about momentum and pacings into 2014. Ilene, I know you said -- of course, you guys aren't providing '14 guidance right now. And somebody else, I forgot who said it, but somebody said something about your 10% to 12%, and I think you kind of neatly avoided the 2014, is that going to be exactly in line off the '12 base. But I want to boil it down to just 2 issues: first off, South American profit recovery; and secondly, Mexican volumes. In the South America business, it seems to me like this situation is still a very, very tough one. To say that 2014 full year profitability is equivalent to 2012 profitability, give or take a few -- a little bit of leeway, that seems to be a very tough goal right now. And I mean, I'm -- as I stare at these numbers, that makes me nervous. So I'd love to hear your response to 2014, not just the run rate. Sometimes I think people get mixed up on this run rate comment versus just 2014 because I think we need to manage these '14 expectations. Second point is just on Mexican volumes. Volumes really surged in 2010 to Mexico when Mexican sugar prices surged over $0.40 a pound. Sugar prices are now down to $0.27, latest USDA data. So to me, the question here is really, what's your confidence that you actually see -- I mean, that you can hold the line at all on these Mexican volumes? I mean, this situation feels pretty nervous to me about what happens in 2014. Sorry for the long-winded question, by the way.

This is Ilene. I'll start out and then I'll turn it over to Cheryl. Look, when somebody was asking me about 2014, I wanted to be clear that in terms of -- as you said, looking at the improvement over 2013, absolutely. I didn't want to define a number until we've gone through all the forecasting for next year. And I also, when I talked about our expectation that over the long term, we ought to be able to do the 10% to 12%, that's absolutely true. Now if you go back to last quarter, somebody pointed out that you've actually -- we've actually exceeded that number and, in many years, done 18% to 19%. And I didn't want to mislead anybody on that number. So not really giving a number, but saying absolute improvement next year, we absolutely believe it. And I think if you listen to the comments that I've made on North America as a total system, that with the lower corn prices, I mean, it was unprecedented what happened with this drought, that we would expect the demand for North America to offset any kind of noise in Mexico and that the demand for food products in U.S., Canada and food products in Mexico would help tighten up those operating rates to the extent that they've been in the past. And so it's true, there's a little bit of noise going on in Mexico, but if you look at the total system, I think we feel very good about North America. And when you listen to Cheryl's comments on the way that we've improved a lot of our capacity, and the good news is there and we'll be able to run more and meet the needs of our customers and have done a great job of satisfying those needs this year. So North America, we feel good about. South America, as Cheryl has said, the Brazilian numbers all look like they're going in the right direction with GDP growing. The IMF forecast for next year is 2.5%. We do have the World Cup. We do have the capacity there that looks good. The brewing numbers are better. We feel good about that. The number that we're not ready to commit on is the Argentina number. And again, while things looked better in the fourth quarter, we did say we didn't see going back to 2012. So I know there's a lot of arithmetic that you want to do with those comments, and of course, we'll be more definitive when we get to February. I do think you can feel confident that 2014 will be better than 2013. We're just not saying what number, and -- but I'll leave it to Cheryl, and maybe she wants to go further. Then she'll leave it to me.

Should I make Jack's life difficult? No, I won't do that. But if I go back, Dave, and I look at the previous comments, so you get 1% volume; you get some leverage, you're talking, call it, $24 million; you think about the supply chain issues between Europe and North America, we said $10 million to $15 million; you think about some of the basis; you think about some of the investments coming out of Europe and Pakistan. And so clearly, that would give us growth off of the 2013 numbers. The wildcard is Argentina, as Ilene said. But it's not our belief that it will get worse in 2014. We think we'll have a slow recovery. And so that's a positive. And then it's the issue around how strong is the recovery in the U.S. on the volume side. Clearly, with corn costs being down over 40% and utilization rates still being strong, all right, that should bode well for holding on to the North American margins as the corn prices come down. FEMSA, in their comments on the third quarter, said that the tax could impact volume 5% to 7%. So we do have some, what I call, uncertainties around a bit of the volume, but I do believe, with that lower corn cost, significantly lower corn cost, that we will be in a better position with the sugar, even though sugar prices are down vis-à-vis 2012, 2013. I hope that gives you a little bit more color, Dave.

It does, it does. I know it's a tough equation and that we need to get into 2014. So I'll leave it here, and we'll certainly come back to it in January.

And I understand that there are still some people in the queue, and I apologize that we are not going to get to your question today. I am certainly happy to spend some time and catch up with anybody who we didn't get to or if there's any follow-up question, but just given the time, we do need to cut the call. I'm going to turn it back to Ilene for just a second to wrap up.

So thanks, Aaron. Before we sign off, I just to reiterate our confidence in our long-term outlook and our business model. We've made comments about that today. We remain keenly focused on shareholder value creation and are committed to deliver the best possible results and actions for our shareholders. And again, thank you, Cheryl, for everything. And I look forward to our future. That brings our third quarter 2013 earnings call to a close, and we'd like to thank you again for your time today.

That does conclude our conference for today. Thank you for your participation and for using AT&T teleconference service. You may now disconnect.