ingr-20240331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


			x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


			o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-13397

INGREDION INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware			22-3514823
(State or other jurisdiction of incorporation or organization)			(I.R.S Employer Identification No.)

5 Westbrook Corporate Center, Westchester, Illinois			60154
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code (708) 551-2600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

INGR

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.


Class						Outstanding at May 6, 2024
Common Stock, $0.01 par value						65,647,485 shares

Table of Contents

INGREDION INCORPORATED

FORM 10-Q

TABLE OF CONTENTS


		Page No.
Part I	Financial Information
Item 1.	Financial Statements and Supplementary Data	3
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Equity and Redeemable Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
Part II	Other Information
Item 1.	Legal Proceedings	26
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Ingredion Incorporated

Condensed Consolidated Statements of Income

(Unaudited)

(dollars and shares in millions, except per share amounts)


	Three Months Ended March 31,
	2024		2023
Net sales	$	1,882	$	2,137
Cost of sales	1,465		1,650
Gross profit	417		487
Operating expenses	189		187
Other operating expense	12		9
Restructuring/impairment charges	3		—
Operating income	213		291
Financing costs	19		32
Net gain on sale of business	(82)		—

Income before income taxes	276		259
Provision for income taxes	58		65
Net income	218		194
Less: Net income attributable to non-controlling interests	2		3
Net income attributable to Ingredion	$	216	$	191

Earnings per common share attributable to Ingredion common shareholders:

Weighted average common shares outstanding:
Basic	65.7		66.1
Diluted	66.8		67.1

Earnings per common share of Ingredion:
Basic	$	3.29	$	2.89
Diluted	$	3.23	$	2.85

See the Notes to the Condensed Consolidated Financial Statements.

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Ingredion Incorporated

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in millions)


	Three Months Ended March 31,
	2024		2023
Net income	$	218	$	194
Other comprehensive income:
(Losses) on cash flow hedges, net of income tax effect of $10 and $16	(31)		(42)
Losses (gains) on cash flow hedges reclassified to earnings, net of income tax effect of $9 and $4	24		(14)

Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect of $0	1		—
Currency translation adjustment	—		6
Comprehensive income	212		144
Less: Comprehensive income (loss) attributable to non-controlling interests	1		(3)
Comprehensive income attributable to Ingredion	$	211	$	147

See the Notes to the Condensed Consolidated Financial Statements.

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Ingredion Incorporated

Condensed Consolidated Balance Sheets

(dollars and shares in millions, except per share amounts)


	March 31, 2024		December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	438	$	401
Short-term investments	7		8
Accounts receivable, net	1,284		1,279
Inventories	1,344		1,450
Prepaid expenses and assets held for sale	52		261
Total current assets	3,125		3,399
Property, plant and equipment, net of accumulated depreciation of $3,444 and $3,428	2,334		2,370
Intangible assets, net of accumulated amortization of $305 and $299	1,286		1,303
Other non-current assets	574		570
Total assets	$	7,319	$	7,642

Liabilities and stockholders' equity
Current liabilities:
Short-term borrowings	$	141	$	448
Accounts payable	659		778
Accrued liabilities and liabilities held for sale	483		546
Total current liabilities	1,283		1,772
Long-term debt	1,740		1,740
Other non-current liabilities	471		480
Total liabilities	3,494		3,992

Share-based payments subject to redemption	43		55
Redeemable non-controlling interests	42		43

Ingredion stockholders’ equity:
Preferred stock — authorized 25.0 shares — $0.01 par value, none issued	—		—
Common stock — authorized 200.0 shares — $0.01 par value, 77.8 shares issued at March 31, 2024 and December 31, 2023	1		1
Additional paid-in capital	1,146		1,146
Less: Treasury stock (common stock: 12.2 and 12.6 shares at March 31, 2024 and December 31, 2023) at cost	(1,179)		(1,207)
Accumulated other comprehensive loss	(1,062)		(1,056)
Retained earnings	4,818		4,654
Total Ingredion stockholders’ equity	3,724		3,538
Non-redeemable non-controlling interests	16		14
Total stockholders' equity	3,740		3,552
Total liabilities and stockholders' equity	$	7,319	$	7,642

See the Notes to the Condensed Consolidated Financial Statements.

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Ingredion Incorporated

Condensed Consolidated Statements of Equity and Redeemable Equity

(Unaudited)

(in millions)


	Total Equity														Share-based Payments Subject to Redemption		Redeemable Non- Controlling Interests
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Non- Redeemable Non- Controlling Interests
Balance, December 31, 2023	$	—	$	1	$	1,146	$	(1,207)	$	(1,056)	$	4,654	$	14	$	55	$	43
Net income attributable to Ingredion	—		—		—		—		—		216		—		—		—
Net income attributable to non-controlling interests	—		—		—		—		—		—		2		—		—
Dividends declared, common stock ($0.78/share)	—		—		—		—		—		(52)		—		—		—
Repurchases of common stock, net	—		—		—		(1)		—		—		—		—		—

Share-based compensation, net of issuance	—		—		—		29		—		—		—		(12)		—


Other comprehensive (loss)	—		—		—		—		(6)		—		—		—		(1)

Balance, March 31, 2024	$	—	$	1	$	1,146	$	(1,179)	$	(1,062)	$	4,818	$	16	$	43	$	42


	Total Equity														Share-based Payments Subject to Redemption		Redeemable Non- Controlling Interests
	Preferred Stock		Common Stock		Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Non- Redeemable Non- Controlling Interests
Balance, December 31, 2022	$	—	$	1	$	1,132	$	(1,148)	$	(1,048)	$	4,210	$	16	$	48	$	51
Net income attributable to Ingredion	—		—		—		—		—		191		—		—		—
Net income attributable to non-controlling interests	—		—		—		—		—		—		3		—		—
Dividends declared, common stock ($0.71/share)	—		—		—		—		—		(47)		—		—		—

Share-based compensation, net of issuance	—		—		1		21		—		—		—		(10)		—


Other comprehensive (loss)	—		—		—		—		(50)		—		(6)		—		—
Balance, March 31, 2023	$	—	$	1	$	1,133	$	(1,127)	$	(1,098)	$	4,354	$	13	$	38	$	51

See the Notes to the Condensed Consolidated Financial Statements.

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Ingredion Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in millions)


	Three Months Ended March 31,
	2024		2023
Cash from operating activities
Net income	$	218	$	194
Non-cash charges to net income:
Depreciation and amortization	53		54
Mechanical stores expense	14		18

Net gain on sale of business	(82)		—
Other non-cash charges	32		20
Changes in working capital:
Accounts receivable and prepaid expenses	6		(44)
Inventories	104		(87)
Accounts payable and accrued liabilities	(135)		(171)
Margin accounts	(11)		(19)
Other	10		(16)
Cash provided by (used for) operating activities	209		(51)
Cash from investing activities
Capital expenditures and mechanical stores purchases	(65)		(76)
Proceeds from disposal of manufacturing facilities and properties	—		1
Proceeds from sale of business	247		—

Other	(1)		(6)
Cash provided by (used for) investing activities	181		(81)
Cash from financing activities
Proceeds from borrowings	149		318
Payments on debt	(134)		(267)
Commercial paper borrowings, net	(312)		107
Repurchases of common stock, net	(1)		—
Issuances of common stock for share-based compensation, net	2		2

Dividends paid, including to non-controlling interests	(51)		(47)
Cash (used for) provided by financing activities	(347)		113
Effects of foreign exchange rate changes on cash	(6)		(1)
Increase (decrease) in cash and cash equivalents	37		(20)
Cash and cash equivalents, beginning of period	401		236
Cash and cash equivalents, end of period	$	438	$	216

See the Notes to the Condensed Consolidated Financial Statements.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

1. Basis of Presentation and New Accounting Standards

Unless the context otherwise requires, all references herein to the “Company,” “Ingredion,” “we,” “us,” and “our” shall mean Ingredion Incorporated and its consolidated subsidiaries. These statements should be read in conjunction with the consolidated financial statements and the related notes to those statements contained in Ingredion’s Annual Report on Form 10-K for the year ended December 31, 2023.

The unaudited Condensed Consolidated Financial Statements as of March 31, 2024 and for the first quarter of 2024 and 2023 included herein were prepared by us on the same basis as our audited Consolidated Financial Statements for the year ended December 31, 2023 and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) that are, in our opinion, necessary for the fair presentation of the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Equity and Redeemable Equity, and Condensed Consolidated Statements of Cash Flows. The results for the interim period are not necessarily indicative of the results expected for the full year or any other future period.

The significant accounting policies and estimates used in preparing these Condensed Consolidated Financial Statements were applied on the same basis consistent with those reflected in Ingredion’s Annual Report on Form 10-K for the year ended December 31, 2023.

In November 2023, we announced a strategic reorganization of our business. As more fully described in Note 10, under our new reportable segments, effective January 1, 2024, there are three reportable segments consisting of - Texture & Healthful Solutions (“T&HS”), Food & Industrial Ingredients - Latin America (“F&II - LATAM”) and Food & Industrial Ingredients - U.S./Canada (“F&II - US/Canada”).

New Accounting Standards

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The amendments require filers to disclose information about supplier finance programs that is sufficient to allow financial statement users to understand their nature, activity during the period, changes from period to period and potential magnitude. The amendments in this ASU are effective for annual periods beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. We adopted this ASU at the beginning of our 2023 fiscal year and adopted the amendment on rollforward information at the beginning of our 2024 fiscal year. The disclosures required by this ASU are reflected in Note 12.

In August 2023, the FASB issued ASU No. 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60). The amendments in this ASU require that a joint venture apply a new basis of accounting upon formation. By applying a new basis of accounting, a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in this ASU are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. A joint venture that was formed before January 1, 2025 may elect to apply the amendments retrospectively. We will adopt this ASU on a prospective basis at the beginning of our 2025 fiscal year and do not believe it will have a material impact on the Condensed Consolidated Financial Statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The amendments in this ASU improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Entities must apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. We are currently assessing the impact of this ASU on the Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require public business entities on an annual basis to disclose specific categories in the rate

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, the amendment requires information pertaining to taxes paid (net of refunds received) to be disaggregated by federal, state, and foreign taxes with further disaggregation for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently waiting for additional guidance to be issued on the quantitative thresholds before we can assess the impact of this ASU on the Condensed Consolidated Financial Statements.

2. Divestitures

South Korea Divestiture

On February 1, 2024, we completed the sale of our South Korea business, which we report for segment purposes in All Other, for a total consideration of 384.0 billion South Korean won, or approximately $294 million. We received 330.0 billion South Korea won, or $247 million net of certain transaction costs, when the transaction closed, and we will receive the remaining consideration in equal annual payments through February 2027. As a result, we recognized a pre-tax net gain of $82 million within Net gain on sale of business in the Condensed Consolidated Statements of Income.

3. Intangible Assets

Goodwill represents the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed. Ingredion assesses goodwill and indefinite-lived intangible assets for impairment annually (or more frequently if impairment indicators arise). Changes to our reportable segments effective January 1, 2024, as described in Note 10, resulted in a change to our reporting units.

As of this effective date, we performed a qualitative assessment of the goodwill under our former reporting units to determine if it is more likely than not that the reporting unit’s goodwill is impaired. As a result of this analysis, we did not identify any indications that any of the carrying amounts of the reporting units exceeded their respective fair values. Next, we performed a quantitative assessment to reallocate goodwill to our new reporting units using a relative fair value approach. We evaluated these new reporting units for impairment as of January 1, 2024, and determined the fair value was in excess of carrying value for all our reporting units indicating no impairments are present.

The original carrying values of goodwill and accumulated impairment charges by reportable segment and All Other as of March 31, 2024 are presented below. There were no accumulated impairment charges by reportable segment.


	T&HS		F&II - LATAM		F&II - U.S./Canada		All Other		Total


Balance as of January 1, 2024	$	388	$	146	$	296	$	88	$	918

Currency translation	(5)		(1)		—		(2)		(8)
Balance as of March 31, 2024	$	383	$	145	$	296	$	86	$	910

4. Investments

Investments as of March 31, 2024 and December 31, 2023 are as follows:


	March 31, 2024		December 31, 2023
Equity investments	$	29	$	27
Equity method investments	98		112
Marketable securities	4		4
Total investments	$	131	$	143

Our investments classified as equity investments do not have readily determinable fair values. Beginning on the dates we entered into the agreements for equity method investments, our share of income from these investments is included within Other operating expense in the Condensed Consolidated Statements of Income.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

Argentina Joint Venture

On February 12, 2021, we entered into an agreement with an affiliate of Grupo Arcor, an Argentine food company, to establish Ingrear Holding S.A. (the “Argentina joint venture”), a joint venture to sell value-added ingredients to customers in the food, beverage, pharmaceutical and other industries in Argentina, Chile and Uruguay. Ingredion and Grupo Arcor have completed all closing conditions, pending customary antitrust review, to combine the manufacturing facilities, finalize the transaction and formally establish the Argentina joint venture, which is managed by a jointly appointed team of executives. The Argentina joint venture is accounted for on the equity method of accounting, and we recognize our share of income or expense in Other operating expense one month in arrears due to the timing of when results are available. On December 13, 2023, the new Argentine government allowed the Argentine peso to devalue from the exchange rate of approximately 366 pesos to one U.S. dollar, to 800 pesos to one U.S. dollar. As we recognize our share of earnings one month in arrears, the loss from the change in value of the peso in December 2023 was recorded in Other operating expense during the first quarter of 2024.

5. Derivative Instruments and Hedging Activities

Commodity price hedging: We had outstanding futures and option contracts that hedged the forecasted purchase of approximately 96 million and 109 million bushels of corn as of March 31, 2024 and December 31, 2023. We also had outstanding swap contracts that hedged the forecasted purchase of approximately 26 million and 28 million mmbtus of natural gas as of March 31, 2024 and December 31, 2023.

Foreign currency hedging: We hedge certain assets using foreign currency derivatives not designated as hedging instruments, which had a notional value of $445 million and $694 million as of March 31, 2024 and December 31, 2023. We also hedge certain liabilities using foreign currency derivatives not designated as hedging instruments, which had a notional value of $171 million and $182 million as of March 31, 2024 and December 31, 2023.

We hedge certain assets using foreign currency cash flow hedging instruments, which had a notional value of $328 million and $449 million as of March 31, 2024 and December 31, 2023. We also hedge certain liability positions using foreign currency cash flow hedging instruments, which had a notional value of $480 million and $621 million as of March 31, 2024 and December 31, 2023.

Interest rate hedging: We periodically enter into T-Locks to hedge our exposure to interest rate changes. We have settled T-Locks associated with the issuance of our senior notes due in 2030 and 2050. The realized loss upon settlement of these T-Locks was recorded in Accumulated other comprehensive loss (“AOCL”) and is amortized into earnings over the term of the senior notes. We did not have outstanding T-Locks as of either March 31, 2024 or December 31, 2023.

The derivative instruments designated as cash flow hedges included in AOCL as of March 31, 2024 and December 31, 2023 are as follows:


	(Losses) included in AOCL as of
	March 31, 2024		December 31, 2023
Commodity contracts, net of income tax effect of $19 and $17	$	(53)	$	(46)
Foreign currency contracts, net of income tax effect of $2 and $1	—		—
Interest rate contracts, net of income tax effect of $1	(2)		(2)
Total	$	(55)	$	(48)

As of March 31, 2024, AOCL included $52 million of net losses (net of income taxes of $18 million) on commodities-related derivative instruments, T-Locks and foreign currency hedges designated as cash flow hedges that are expected to be reclassified into earnings during the next 12 months.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

The fair value and balance sheet location of our derivative instruments, presented gross in the Condensed Consolidated Balance Sheets, are as follows:


	Fair Value of Hedging Instruments as of March 31, 2024
	Designated Hedging Instruments						Non-Designated Hedging Instruments
Balance Sheet Location	Commodity Contracts		Foreign Currency Contracts		Total		Commodity Contracts		Foreign Currency Contracts		Total
Accounts receivable, net	$	8	$	10	$	18	$	1	$	6	$	7
Other non-current assets	—		4		4		—		1		1
Assets	8		14		22		1		7		8
Accounts payable	58		14		72		3		6