0001046257--12-312020Q2false0001046257ingr:AcceleratedShareRepurchaseAgreementMember2018-11-052019-02-060001046257ingr:AcceleratedShareRepurchaseAgreementMember2018-11-052019-02-0500010462572020-03-3100010462572019-03-310001046257ingr:StockRepurchase2018ProgramMember2018-10-220001046257us-gaap:TreasuryStockMember2020-06-300001046257us-gaap:RetainedEarningsMember2020-06-300001046257us-gaap:NoncontrollingInterestMember2020-06-300001046257us-gaap:CommonStockMember2020-06-300001046257us-gaap:AdditionalPaidInCapitalMember2020-06-300001046257us-gaap:TreasuryStockMember2020-03-310001046257us-gaap:RetainedEarningsMember2020-03-310001046257us-gaap:NoncontrollingInterestMember2020-03-310001046257us-gaap:CommonStockMember2020-03-310001046257us-gaap:AdditionalPaidInCapitalMember2020-03-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001046257us-gaap:TreasuryStockMember2019-12-310001046257us-gaap:RetainedEarningsMember2019-12-310001046257us-gaap:NoncontrollingInterestMember2019-12-310001046257us-gaap:CommonStockMember2019-12-310001046257us-gaap:AdditionalPaidInCapitalMember2019-12-310001046257us-gaap:TreasuryStockMember2019-06-300001046257us-gaap:RetainedEarningsMember2019-06-300001046257us-gaap:NoncontrollingInterestMember2019-06-300001046257us-gaap:CommonStockMember2019-06-300001046257us-gaap:AdditionalPaidInCapitalMember2019-06-300001046257us-gaap:TreasuryStockMember2019-03-310001046257us-gaap:RetainedEarningsMember2019-03-310001046257us-gaap:NoncontrollingInterestMember2019-03-310001046257us-gaap:CommonStockMember2019-03-310001046257us-gaap:AdditionalPaidInCapitalMember2019-03-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-310001046257us-gaap:TreasuryStockMember2018-12-310001046257us-gaap:RetainedEarningsMember2018-12-310001046257us-gaap:NoncontrollingInterestMember2018-12-310001046257us-gaap:CommonStockMember2018-12-310001046257us-gaap:AdditionalPaidInCapitalMember2018-12-310001046257us-gaap:AccumulatedTranslationAdjustmentMember2020-06-300001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-300001046257us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-300001046257us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310001046257us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001046257us-gaap:AccumulatedTranslationAdjustmentMember2019-06-300001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-06-300001046257us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-06-300001046257us-gaap:AccumulatedTranslationAdjustmentMember2018-12-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2018-12-310001046257us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-12-3100010462572019-01-012019-12-310001046257us-gaap:RestrictedStockUnitsRSUMember2019-12-310001046257srt:MinimumMemberingr:PerformanceSharesMarketBasedMember2020-01-012020-06-300001046257srt:MinimumMemberingr:PerformanceSharesInternalBasedMember2020-01-012020-06-300001046257srt:MaximumMemberingr:PerformanceSharesMarketBasedMember2020-01-012020-06-300001046257srt:MaximumMemberingr:PerformanceSharesInternalBasedMember2020-01-012020-06-300001046257us-gaap:PerformanceSharesMember2018-01-012018-12-310001046257us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-06-300001046257ingr:SouthAmericaSegmentMember2020-04-012020-06-300001046257ingr:NorthAmericaSegmentMember2020-04-012020-06-300001046257ingr:EMEASegmentMember2020-04-012020-06-300001046257ingr:AsiaPacificSegmentMember2020-04-012020-06-300001046257ingr:SouthAmericaSegmentMember2020-01-012020-06-300001046257ingr:NorthAmericaSegmentMember2020-01-012020-06-300001046257ingr:EMEASegmentMember2020-01-012020-06-300001046257ingr:AsiaPacificSegmentMember2020-01-012020-06-300001046257srt:ScenarioPreviouslyReportedMemberus-gaap:EMEAMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-04-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:SouthAmericaMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-04-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:NorthAmericaMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-04-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:AsiaPacificMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-04-012019-06-300001046257us-gaap:EMEAMember2019-04-012019-06-300001046257srt:SouthAmericaMember2019-04-012019-06-300001046257srt:NorthAmericaMember2019-04-012019-06-300001046257srt:AsiaPacificMember2019-04-012019-06-300001046257ingr:SouthAmericaSegmentMember2019-04-012019-06-300001046257ingr:NorthAmericaSegmentMember2019-04-012019-06-300001046257ingr:EMEASegmentMember2019-04-012019-06-300001046257ingr:AsiaPacificSegmentMember2019-04-012019-06-300001046257srt:ScenarioPreviouslyReportedMemberus-gaap:EMEAMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-01-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:SouthAmericaMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-01-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:NorthAmericaMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-01-012019-06-300001046257srt:ScenarioPreviouslyReportedMembersrt:AsiaPacificMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-01-012019-06-300001046257us-gaap:EMEAMember2019-01-012019-06-300001046257srt:SouthAmericaMember2019-01-012019-06-300001046257srt:NorthAmericaMember2019-01-012019-06-300001046257srt:AsiaPacificMember2019-01-012019-06-300001046257ingr:SouthAmericaSegmentMember2019-01-012019-06-300001046257ingr:NorthAmericaSegmentMember2019-01-012019-06-300001046257ingr:EMEASegmentMember2019-01-012019-06-300001046257ingr:AsiaPacificSegmentMember2019-01-012019-06-300001046257us-gaap:EmployeeSeveranceMember2020-06-300001046257us-gaap:EmployeeSeveranceMember2019-12-310001046257srt:ScenarioForecastMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-07-012020-12-310001046257us-gaap:OtherRestructuringMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-04-012020-06-300001046257us-gaap:EmployeeSeveranceMemberingr:CostSmartCostOfSalesProgramNorthAmericaMember2020-04-012020-06-300001046257ingr:AssetWriteOffMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-04-012020-06-300001046257ingr:AcceleratedDepreciationMemberingr:CostSmartCostOfSalesProgramNorthAmericaMember2020-04-012020-06-300001046257ingr:CostSmartSgaProgramNorthAmericaMember2020-04-012020-06-300001046257ingr:CostSmartProgramSgProgramMember2020-04-012020-06-300001046257ingr:CostSmartProgramMember2020-04-012020-06-300001046257ingr:CostSmartProgramCostOfSalesProgramMember2020-04-012020-06-300001046257us-gaap:OtherRestructuringMemberingr:CostSmartProgramSgProgramMember2020-01-012020-06-300001046257us-gaap:OtherRestructuringMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-01-012020-06-300001046257us-gaap:OtherRestructuringMemberingr:CostSmartCostOfSalesProgramNorthAmericaMember2020-01-012020-06-300001046257us-gaap:EmployeeSeveranceMemberingr:CostSmartProgramSgProgramMember2020-01-012020-06-300001046257us-gaap:EmployeeSeveranceMemberingr:CostSmartProgramMember2020-01-012020-06-300001046257us-gaap:EmployeeSeveranceMemberingr:CostSmartCostOfSalesProgramNorthAmericaMember2020-01-012020-06-300001046257ingr:AssetWriteOffMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-01-012020-06-300001046257ingr:AcceleratedDepreciationMemberingr:CostSmartProgramCostOfSalesProgramProductionFacilityClosureAustraliaMember2020-01-012020-06-300001046257ingr:AcceleratedDepreciationMemberingr:CostSmartCostOfSalesProgramNorthAmericaMember2020-01-012020-06-300001046257ingr:CostSmartProgramSgProgramMember2020-01-012020-06-300001046257ingr:CostSmartProgramMember2020-01-012020-06-300001046257ingr:CostSmartProgramCostOfSalesProgramMember2020-01-012020-06-300001046257us-gaap:OtherRestructuringMemberingr:FinanceTransformationInitiativeInLatinAmericaMember2019-04-012019-06-300001046257ingr:EmployeeSeveranceAndOtherCostsMemberingr:CostSmartProgramSgProgramMember2019-04-012019-06-300001046257ingr:CessationOfWetMillingMemberingr:CostSmartProgramCostOfSalesProgramMember2019-04-012019-06-300001046257ingr:CostSmartProgramCostOfSalesProgramMember2019-04-012019-06-300001046257us-gaap:OtherRestructuringMemberingr:FinanceTransformationInitiativeInLatinAmericaMember2019-01-012019-06-300001046257ingr:EmployeeSeveranceAndOtherCostsMemberingr:CostSmartProgramSgProgramMember2019-01-012019-06-300001046257ingr:CessationOfWetMillingMemberingr:CostSmartProgramCostOfSalesProgramMember2019-01-012019-06-300001046257ingr:CostSmartProgramCostOfSalesProgramMember2019-01-012019-06-300001046257ingr:RevolvingCreditAgreementMember2020-04-012020-06-300001046257ingr:SeniorNotes5.62PercentDue2020Member2020-01-012020-03-310001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMemberingr:FinancingCostsMember2020-04-012020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberingr:NetSalesAndCostOfSalesMember2020-04-012020-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2020-04-012020-06-300001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMemberingr:FinancingCostsMember2020-01-012020-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2020-01-012020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberingr:NetSalesAndCostOfSalesMember2019-04-012019-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2019-04-012019-06-300001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMemberingr:FinancingCostsMember2019-01-012019-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberingr:NetSalesAndCostOfSalesMember2019-01-012019-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2019-01-012019-06-300001046257us-gaap:NoncontrollingInterestMember2019-01-012019-03-310001046257us-gaap:EmployeeSeveranceMember2020-01-012020-06-300001046257ingr:AcceleratedShareRepurchaseAgreementMember2018-11-052018-11-050001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001046257us-gaap:NoncontrollingInterestMember2020-01-012020-03-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMember2020-04-012020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2020-04-012020-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMember2020-04-012020-06-300001046257us-gaap:CashFlowHedgingMember2020-04-012020-06-300001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMember2020-01-012020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2020-01-012020-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMember2020-01-012020-06-300001046257us-gaap:CashFlowHedgingMember2020-01-012020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2019-04-012019-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMember2019-04-012019-06-300001046257us-gaap:CashFlowHedgingMember2019-04-012019-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2019-01-012019-06-300001046257us-gaap:CashFlowHedgingMember2019-01-012019-06-300001046257us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-06-300001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-06-300001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-06-300001046257us-gaap:AccumulatedTranslationAdjustmentMember2019-01-012019-06-300001046257us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-06-300001046257us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-01-012019-06-300001046257us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-01-012019-06-300001046257ingr:FormerPurecircleShareholdersMemberingr:IngredionSrssMemberus-gaap:SubsequentEventMember2020-07-010001046257ingr:IngredionSrssMemberus-gaap:SubsequentEventMember2020-07-010001046257us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-06-300001046257us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-06-300001046257us-gaap:RestrictedStockUnitsRSUMember2020-06-300001046257us-gaap:PerformanceSharesMember2020-06-300001046257us-gaap:EmployeeStockOptionMember2020-06-300001046257us-gaap:RetainedEarningsMember2020-04-012020-06-300001046257us-gaap:NoncontrollingInterestMember2020-04-012020-06-300001046257us-gaap:RetainedEarningsMember2020-01-012020-06-300001046257us-gaap:NoncontrollingInterestMember2020-01-012020-06-300001046257us-gaap:RetainedEarningsMember2020-01-012020-03-310001046257us-gaap:RetainedEarningsMember2019-04-012019-06-300001046257us-gaap:NoncontrollingInterestMember2019-04-012019-06-300001046257us-gaap:RetainedEarningsMember2019-01-012019-06-300001046257us-gaap:NoncontrollingInterestMember2019-01-012019-06-300001046257us-gaap:RetainedEarningsMember2019-01-012019-03-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ShortMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMemberus-gaap:ShortMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMemberus-gaap:LongMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ShortMember2019-12-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LongMember2019-12-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMemberus-gaap:ShortMember2019-12-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMemberus-gaap:LongMember2019-12-310001046257ingr:LongTermDebtNoncurrentMemberus-gaap:FairValueHedgingMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257ingr:NonCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-06-300001046257ingr:NonCurrentLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257ingr:NonCurrentLiabilitiesMemberus-gaap:NondesignatedMember2020-06-300001046257ingr:NonCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:NonCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2019-12-310001046257ingr:NonCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:NonCurrentLiabilitiesMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:AccountsPayableAndAccruedLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:NonCurrentLiabilitiesMemberus-gaap:NondesignatedMember2019-12-310001046257ingr:NonCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257ingr:AccountsReceivableNetMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-06-300001046257ingr:AccountsReceivableNetMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-06-300001046257us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001046257us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001046257us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257ingr:AccountsReceivableNetMemberus-gaap:NondesignatedMember2020-06-300001046257ingr:AccountsReceivableNetMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:NondesignatedMember2020-06-300001046257us-gaap:FairValueMeasurementsRecurringMember2020-06-300001046257us-gaap:DesignatedAsHedgingInstrumentMember2020-06-300001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:CommodityContractMemberus-gaap:NondesignatedMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:OtherNoncurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001046257us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001046257us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2019-12-310001046257us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:NondesignatedMember2019-12-310001046257ingr:AccountsReceivableNetMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:NondesignatedMember2019-12-310001046257us-gaap:FairValueMeasurementsRecurringMember2019-12-310001046257us-gaap:DesignatedAsHedgingInstrumentMember2019-12-310001046257us-gaap:PostemploymentRetirementBenefitsMember2020-04-012020-06-300001046257country:USus-gaap:PensionPlansDefinedBenefitMember2020-04-012020-06-300001046257country:USus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-06-300001046257country:USus-gaap:PensionPlansDefinedBenefitMember2019-04-012019-06-300001046257country:USus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-06-300001046257us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2020-06-300001046257country:USus-gaap:PensionPlansDefinedBenefitMember2020-06-300001046257us-gaap:PensionPlansDefinedBenefitMember2020-06-300001046257us-gaap:ForeignPlanMember2020-01-012020-06-300001046257us-gaap:PostemploymentRetirementBenefitsMember2020-01-012020-06-300001046257us-gaap:PostemploymentRetirementBenefitsMember2019-01-012019-06-300001046257us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2020-04-012020-06-300001046257us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-06-300001046257us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2019-04-012019-06-300001046257us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-06-300001046257ingr:SeniorNotes2.2PercentDue1june2030AndSeniorNotes3.9PercentDue1june2050Member2020-06-300001046257ingr:SeniorNotes4625PercentDueNovember12020Member2020-06-300001046257ingr:SeniorNotes5.62PercentDue2020Member2020-03-310001046257us-gaap:InterestRateSwapMemberus-gaap:FairValueHedgingMemberingr:SeniorNotes4625PercentDueNovember12020Member2019-12-310001046257us-gaap:InterestRateContractMemberus-gaap:FairValueHedgingMemberingr:FinancingCostsMember2020-04-012020-06-300001046257us-gaap:InterestRateContractMemberus-gaap:FairValueHedgingMemberingr:FinancingCostsMember2020-01-012020-06-300001046257us-gaap:InterestRateContractMemberus-gaap:FairValueHedgingMemberingr:FinancingCostsMember2019-04-012019-06-300001046257us-gaap:InterestRateContractMemberus-gaap:FairValueHedgingMemberingr:FinancingCostsMember2019-01-012019-06-300001046257us-gaap:AccountingStandardsUpdate201704Member2020-01-010001046257us-gaap:AccountingStandardsUpdate201613Member2020-01-0100010462572019-06-3000010462572018-12-310001046257ingr:WesternPolymerLlcMember2019-03-012019-03-010001046257ingr:WesternPolymerLlcMember2019-03-010001046257ingr:PurecircleLimitedMemberus-gaap:SubsequentEventMember2020-07-012020-07-010001046257us-gaap:OtherNoncurrentAssetsMember2020-06-300001046257ingr:SouthAmericaSegmentMember2020-06-300001046257ingr:NorthAmericaSegmentMember2020-06-300001046257ingr:EMEASegmentMember2020-06-300001046257ingr:AsiaPacificSegmentMember2020-06-300001046257ingr:SouthAmericaSegmentMember2019-12-310001046257ingr:NorthAmericaSegmentMember2019-12-310001046257ingr:EMEASegmentMember2019-12-310001046257ingr:AsiaPacificSegmentMember2019-12-310001046257us-gaap:RestrictedStockUnitsRSUMember2020-04-012020-06-300001046257us-gaap:EmployeeStockOptionMember2020-04-012020-06-300001046257ingr:PerformanceSharesAndOtherShareBasedAwardsMember2020-04-012020-06-300001046257us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001046257us-gaap:EmployeeStockOptionMember2020-01-012020-06-300001046257ingr:PerformanceSharesAndOtherShareBasedAwardsMember2020-01-012020-06-300001046257us-gaap:RestrictedStockUnitsRSUMember2019-04-012019-06-300001046257us-gaap:EmployeeStockOptionMember2019-04-012019-06-300001046257ingr:PerformanceSharesAndOtherShareBasedAwardsMember2019-04-012019-06-300001046257us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-06-300001046257us-gaap:EmployeeStockOptionMember2019-01-012019-06-300001046257ingr:PerformanceSharesAndOtherShareBasedAwardsMember2019-01-012019-06-300001046257us-gaap:CashFlowHedgingMember2020-06-300001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMember2019-12-310001046257us-gaap:CashFlowHedgingMember2019-12-310001046257ingr:AcceleratedShareRepurchaseAgreementMember2019-02-0500010462572020-01-012020-03-3100010462572019-01-012019-03-310001046257us-gaap:TreasuryStockMember2020-04-012020-06-300001046257us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001046257us-gaap:TreasuryStockMember2020-01-012020-06-300001046257us-gaap:AdditionalPaidInCapitalMember2020-01-012020-06-300001046257us-gaap:TreasuryStockMember2020-01-012020-03-310001046257us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001046257us-gaap:TreasuryStockMember2019-04-012019-06-300001046257us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-300001046257us-gaap:TreasuryStockMember2019-01-012019-06-300001046257us-gaap:AdditionalPaidInCapitalMember2019-01-012019-06-300001046257us-gaap:TreasuryStockMember2019-01-012019-03-310001046257us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-310001046257us-gaap:PerformanceSharesMember2020-01-012020-06-300001046257ingr:PerformanceSharesMarketBasedMember2020-01-012020-06-300001046257ingr:PerformanceSharesInternalBasedMember2020-01-012020-06-300001046257srt:ScenarioPreviouslyReportedMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-04-012019-06-300001046257srt:ScenarioPreviouslyReportedMemberingr:ChangeInPresentationShippingAndHandlingCostsMember2019-01-012019-06-300001046257ingr:AcceleratedShareRepurchaseAgreementMember2019-02-062019-02-060001046257ingr:PerformanceSharesAwardGrantedIn2017Member2020-01-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:SouthAmericaSegmentMember2020-04-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:NorthAmericaSegmentMember2020-04-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:EMEASegmentMember2020-04-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:AsiaPacificSegmentMember2020-04-012020-06-300001046257us-gaap:CorporateNonSegmentMember2020-04-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:SouthAmericaSegmentMember2020-01-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:NorthAmericaSegmentMember2020-01-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:EMEASegmentMember2020-01-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:AsiaPacificSegmentMember2020-01-012020-06-300001046257us-gaap:CorporateNonSegmentMember2020-01-012020-06-300001046257us-gaap:OperatingSegmentsMemberingr:SouthAmericaSegmentMember2019-04-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:NorthAmericaSegmentMember2019-04-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:EMEASegmentMember2019-04-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:AsiaPacificSegmentMember2019-04-012019-06-300001046257us-gaap:CorporateNonSegmentMember2019-04-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:SouthAmericaSegmentMember2019-01-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:NorthAmericaSegmentMember2019-01-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:EMEASegmentMember2019-01-012019-06-300001046257us-gaap:OperatingSegmentsMemberingr:AsiaPacificSegmentMember2019-01-012019-06-300001046257us-gaap:CorporateNonSegmentMember2019-01-012019-06-300001046257ingr:TermLoanCreditAgreementMember2020-06-300001046257ingr:SeniorNotes6.625PercentDue2037Member2020-06-300001046257ingr:SeniorNotes3.9PercentDue1june2050Member2020-06-300001046257ingr:SeniorNotes3.20PercentDueOctober12026Member2020-06-300001046257ingr:SeniorNotes2.2PercentDue1june2030Member2020-06-300001046257ingr:TermLoanCreditAgreementMember2019-12-310001046257ingr:SeniorNotes6.625PercentDue2037Member2019-12-310001046257ingr:SeniorNotes5.62PercentDue2020Member2019-12-310001046257ingr:SeniorNotes4625PercentDueNovember12020Member2019-12-310001046257ingr:SeniorNotes3.20PercentDueOctober12026Member2019-12-310001046257ingr:RevolvingCreditAgreementMember2019-12-3100010462572020-06-300001046257srt:MinimumMemberus-gaap:CommodityContractMember2020-01-012020-06-300001046257srt:MaximumMemberus-gaap:CommodityContractMember2020-01-012020-06-3000010462572020-04-012020-06-3000010462572019-04-012019-06-3000010462572019-01-012019-06-300001046257ingr:CornCommodityMember2020-06-300001046257ingr:NaturalGasCommodityMember2020-06-300001046257ingr:SeniorNotes4625PercentDueNovember12020Memberus-gaap:SubsequentEventMember2020-07-092020-07-0900010462572019-12-310001046257us-gaap:InterestRateContractMemberus-gaap:CashFlowHedgingMember2020-06-300001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMember2020-06-300001046257us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2019-12-310001046257us-gaap:CommodityContractMemberus-gaap:CashFlowHedgingMember2019-12-3100010462572020-07-3100010462572020-01-012020-06-30xbrli:sharesiso4217:USDutr:MMBTUutr:buxbrli:pureingr:itemiso4217:USDxbrli:sharesingr:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2020

or

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

(State or other jurisdiction of incorporation or organization)

22-3514823

(I.R.S. Employer Identification Number)

5 Westbrook Corporate Center

WestchesterIllinois

60154

(Address of principal executive offices)

(Zip Code)

(708) 551-2600

(Registrant’s telephone number, including area code)

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, $.01 par value 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 No

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 No

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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.

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

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 July 31, 2020

Common Stock, $.01 par value

66,987,048 shares

Table of Contents

INGREDION INCORPORATED

FORM 10-Q

TABLE OF CONTENTS

Page

Part I

Item 1

Financial Statements

3

Condensed Consolidated Statements of Income

3

Condensed Consolidated Statements of Comprehensive (Loss) 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 Condensed Consolidated Financial Statements

8

Item 2

Management’s discussion and analysis of financial condition and results of operations

25

Item 3

Quantitative and qualitative disclosures about market risk

35

Item 4

Controls and procedures

35

Part II

Item 1

Legal proceedings

36

Item 1A

Risk factors

36

Item 2

Unregistered sales of equity securities and use of proceeds

36

Item 6

Exhibits

37

Signatures

38

2

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Ingredion Incorporated (“Ingredion”)

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended 

Six Months Ended 

June 30, 

June 30, 

(in millions, except per share amounts)

    

2020

    

2019

    

2020

    

2019

Net sales

$

1,349

$

1,550

$

2,892

$

3,086

Cost of sales

1,078

1,221

2,298

2,441

Gross profit

271

329

594

645

Operating expenses

147

154

301

304

Other income, net

(2)

2

(1)

Restructuring/impairment charges

11

9

25

13

Operating income

113

168

266

329

Financing costs, net

19

16

37

38

Other, non-operating income, net

(1)

Income before income taxes

94

152

230

291

Provision for income taxes

27

45

85

82

Net income

67

107

145

209

Less: Net income attributable to non-controlling interests

1

2

4

4

Net income attributable to Ingredion

$

66

$

105

$

141

$

205

Weighted average common shares outstanding:

Basic

67.2

66.9

67.2

66.9

Diluted

67.6

67.4

67.7

67.4

Earnings per common share of Ingredion:

Basic

$

0.98

$

1.57

$

2.10

$

3.06

Diluted

$

0.98

$

1.56

$

2.08

$

3.04

See Notes to Condensed Consolidated Financial Statements

3

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Ingredion Incorporated (“Ingredion”)

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three Months Ended 

Six Months Ended 

June 30, 

June 30, 

(in millions)

    

2020

    

2019

    

2020

    

2019

 

Net income

  

$

67

  

$

107

  

$

145

$

209

Other comprehensive income (loss):

(Losses) gains on cash flow hedges, net of income tax effect of $4, $3, $16 and $ — , respectively

(16)

10

(50)

1

Losses on cash flow hedges reclassified to earnings, net of income tax effect of $4, $1, $6 and $1, respectively

15

3

19

5

Actuarial losses on pension and other postretirement obligations, settlements and plan amendments, net of income tax effect of $ —

(1)

(1)

Currency translation adjustment

16

(4)

(118)

(3)

Comprehensive income (loss)

82

115

(4)

211

Less: Comprehensive income (loss) attributable to non-controlling interests

2

(2)

2

Comprehensive income (loss) attributable to Ingredion

$

80

$

117

$

(6)

$

211

See Notes to Condensed Consolidated Financial Statements

4

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Ingredion Incorporated (“Ingredion”)

Condensed Consolidated Balance Sheets

June 30, 

December 31, 

(in millions, except share and per share amounts)

    

2020

    

2019

 

(Unaudited)

Assets

  

  

Current assets:

Cash and cash equivalents

$

1,047

$

264

Short-term investments

1

4

Accounts receivable, net

861

977

Inventories

859

861

Prepaid expenses

52

54

Total current assets

2,820

2,160

Property, plant and equipment, net of accumulated depreciation of $3,039 and $3,056, respectively

2,231

2,306

Goodwill

791

801

Other intangible assets, net of accumulated amortization of $210 and $197, respectively

421

437

Operating lease assets

149

151

Deferred income tax assets

17

13

Other assets

182

172

Total assets

$

6,611

$

6,040

Liabilities and equity

Current liabilities:

Short-term borrowings

$

470

$

82

Accounts payable and accrued liabilities

812

885

Total current liabilities

1,282

967

Non-current liabilities

209

220

Long-term debt

2,140

1,766

Non-current operating lease liabilities

115

120

Deferred income tax liabilities

172

195

Share-based payments subject to redemption

27

31

Ingredion stockholders’ equity:

Preferred stock — authorized 25,000,000 shares — $0.01 par value, none issued

Common stock — authorized 200,000,000 shares — $0.01 par value, 77,810,875 issued at June 30, 2020 and December 31, 2019, respectively

1

1

Additional paid-in capital

1,143

1,137

Less: Treasury stock (common stock: 10,825,142 and 10,993,388 shares at June 30, 2020 and December 31, 2019, respectively) at cost

(1,027)

(1,040)

Accumulated other comprehensive loss

(1,307)

(1,158)

Retained earnings

3,836

3,780

Total Ingredion stockholders’ equity

2,646

2,720

Non-controlling interests

20

21

Total equity

2,666

2,741

Total liabilities and equity

$

6,611

$

6,040

See Notes to Condensed Consolidated Financial Statements

5

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Ingredion Incorporated (“Ingredion”)

Condensed Consolidated Statements of Equity and Redeemable Equity

(Unaudited)

Total Equity

Share-based

Additional

Accumulated Other

Non-

Payments

Preferred

Common

Paid-In

Treasury

Comprehensive

Retained

Controlling

Subject to

(in millions)

    

Stock

Stock

    

Capital

    

Stock

    

Loss

    

Earnings

    

Interests

    

Redemption

 

Balance, December 31, 2019

$

$

1

$

1,137

$

(1,040)

$

(1,158)

$

3,780

$

21

$

31

Net income attributable to Ingredion

141

Net income attributable to non-controlling interests

4

Dividends declared

(85)

(3)

Share-based compensation, net of issuance

6

13

(4)

Other comprehensive loss

(149)

(2)

Balance, June 30, 2020

$

$

1

$

1,143

$

(1,027)

$

(1,307)

$

3,836

$

20

$

27

Total Equity

Share-based

 

Additional

Accumulated Other

Non-

Payments

 

Preferred

Common

Paid-In

Treasury

Comprehensive

Retained

Controlling

Subject to

 

(in millions)

    

Stock

Stock

    

Capital

    

Stock

    

Loss

    

Earnings

    

Interests

    

Redemption

 

Balance, December 31, 2018

 

$

$

1

$

1,096

$

(1,091)

$

(1,154)

$

3,536

$

20

$

37

Net income attributable to Ingredion

205

Net income attributable to non-controlling interests

4

Dividends declared

(85)

(4)

Repurchases of common stock

32

31

Share-based compensation, net of issuance

10

13

(12)

Other comprehensive income (loss)

2

(4)

Balance, June 30, 2019

$

$

1

 

$

1,138

 

$

(1,047)

 

$

(1,152)

 

$

3,656

 

$

16

 

$

25

See Notes to Condensed Consolidated Financial Statements

6

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

Ingredion Incorporated (“Ingredion”)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended

June 30, 

(in millions)

    

2020

    

2019

Cash provided by operating activities

Net income

$

145

$

209

Non-cash charges to net income:

Depreciation and amortization

106

103

Mechanical stores expense

26

28

Deferred income taxes

(2)

10

Other

25

33

Changes in working capital:

Accounts receivable and prepaid expenses

64

(65)

Inventories

(31)

(39)

Accounts payable and accrued liabilities

(21)

(32)

Margin accounts

(18)

15

Other

(9)

Cash provided by operating activities

294

253

Cash used for investing activities

Capital expenditures and mechanical stores purchases, net of proceeds on disposals

(175)

(156)

Payments for acquisitions, net of cash acquired of $ — and $4, respectively

(42)

Investment in non-consolidated affiliates

(6)

(10)

Short-term investments

3

3

Cash used for investing activities

(178)

(205)

Cash provided by (used for) financing activities

Proceeds from borrowings

1,486

714

Payments on debt

(709)

(765)

Payments for debt issuance costs

(9)

Repurchases of common stock, net

63

Issuances of common stock for share-based compensation, net of settlements

2

Dividends paid, including to non-controlling interests

  

(87)

  

(87)

Cash provided by (used for) financing activities

683

(75)

Effects of foreign exchange rate changes on cash

(16)

(3)

Increase (decrease) in cash and cash equivalents

783

(30)

Cash and cash equivalents, beginning of period

264

327

Cash and cash equivalents, end of period

$

1,047

$

297

See Notes to Condensed Consolidated Financial Statements

7

Table of Contents

INGREDION INCORPORATED (“Ingredion”)

Notes to Condensed Consolidated Financial Statements

1. Interim Financial Statements

References to the “Company” are to Ingredion Incorporated (“Ingredion”) 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The unaudited Condensed Consolidated Financial Statements as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 included herein were prepared by management on the same basis as the Company’s audited Consolidated Financial Statements for the year ended December 31, 2019 and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income (Loss), 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.

2.     Summary of Significant Accounting Standards and Policies

For detailed information about the Company’s significant accounting standards, see Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Except for the matters discussed below, there have been no other material changes to the Company’s significant accounting policies for the three and six months ended June 30, 2020.

Recently Adopted Accounting Standards

ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350)

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This Update simplifies the subsequent measurement of goodwill as the Update eliminates Step 2 from the goodwill impairment test. Under the Update, an entity will continue to perform its annual, or interim, goodwill impairment test to determine if the fair value of a reporting unit is greater than its carrying amount. An entity should then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value using the results of its Step 1 assessment, with the loss recognized not to exceed the total amount of goodwill allocated to that reporting unit. This Update is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2017-04 at the beginning of its 2020 fiscal year and the Update did not have a material impact on the Company’s Condensed Consolidated Financial Statements upon adoption.

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326)

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. This Update is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2016-13 at the beginning of its 2020 fiscal year and the Update did not have a material impact on the Company’s Condensed Consolidated Financial Statements upon adoption.

Net Sales Presentation Change

During the three months ended December 31, 2019, the Company changed its presentation of shipping and handling costs.  These expenses were previously included as a reduction to Net sales in the Condensed Consolidated Statements of Income.  The Company is now presenting these expenses within Cost of sales in the Condensed Consolidated Statements of Income.  The change in presentation was applied retrospectively to all periods presented in the Condensed Consolidated Statements of Income.  The change in presentation had no effect on Gross profit, Operating income, Net income, or Earnings per share.  The Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of

8

Table of Contents

Comprehensive Income (Loss), Condensed Consolidated Statements of Equity and Redeemable Equity, and Condensed Consolidated Statements of Cash Flows are not affected by this change in presentation.

The effect of the adjustment is as follows:

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

(in millions)

As Reported

As Adjusted

As Reported

As Adjusted

Consolidated Statements of Income:

Net sales before shipping and handling costs

$

1,550

$

$

3,086

$

Less: shipping and handling costs

116

232

Net sales

1,434

1,550

2,854

3,086

Cost of sales

1,105

1,221

2,209

2,441

Gross profit

$

329

$

329

$

645

$

645

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

(in millions)

As Reported

As Adjusted

As Reported

As Adjusted

Net sales to unaffiliated customers:

North America

$

885

$

977

$

1,745

$

1,928

South America

215

226

433

454

Asia-Pacific

195

203

389

406

EMEA

139

144

287

298

Total

$

1,434

$

1,550

$

2,854

$

3,086

3. Acquisitions

On March 1, 2019, the Company completed its acquisition of Western Polymer LLC (“Western Polymer”), a privately-held, U.S.-based company headquartered in Moses Lake, Washington, that produces native and modified potato starches for industrial and food applications for $42 million, net of cash acquired of $4 million. The acquisition will expand the Company's potato starch manufacturing capacity, enhance processing capabilities, and broaden its higher-value specialty ingredients business and customer base. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date forward within the North America business segment.

During the three months ended March 31, 2020, the Company finalized the purchase price allocation for the Western Polymer acquisition. The finalization of goodwill and intangible assets did not have a significant impact on previously estimated amounts. The acquisition of Western Polymer added $13 million of goodwill and intangible assets and $29 million of net tangible assets as of the acquisition date.

Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired. The goodwill results from synergies and other operational benefits expected to be derived from the acquisition. The goodwill related to Western Polymer is tax-deductible due to the structure of the acquisition.

Pro-forma results of operations for the acquisition made in 2019 have not been presented as the effect of the acquisition would not be material to the Company’s results of operations for any periods presented.

4. Revenue Recognition

The Company applies the provisions of Accounting Standards Codification (“ASC”) 606-10, Revenue from Contracts with Customers. The Company recognizes revenue under the core principle to depict the transfer of products to customers in an amount reflecting the consideration the Company expects to receive. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

The Company identified customer purchase orders, which in some cases are governed by a master sales agreement, as the contracts with its customers. For each contract, the Company considers the transfer of products, each of which is distinct, to be the identified performance obligation. In determining the transaction price for the performance

9

Table of Contents

obligation, the Company evaluates whether the price is subject to adjustment to determine the consideration to which the Company expects to be entitled. The pricing model can be fixed or variable within the contract. The variable pricing model is based on historical commodity pricing and is determinable prior to completion of the performance obligation. Additionally, the Company has certain sales adjustments for volume incentive discounts and other discount arrangements that reduce the transaction price. The reduction of the transaction price is estimated using the expected value method based on an analysis of historical volume incentives or discounts, over a period of time considered adequate to account for current pricing and business trends. Historically, actual volume incentives and discounts relative to those estimated and included when determining the transaction price have not materially differed. Volume incentives and discounts are accrued at the satisfaction of the performance obligation and accounted for in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. These amounts are not significant as of June 30, 2020 or December 31, 2019. The product price as specified in the contract, net of any discounts, is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Payment is received shortly after the performance obligation is satisfied; therefore, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component.

Revenue is recognized when the Company’s performance obligation is satisfied and control is transferred to the customer, which occurs at a point in time, either upon delivery to an agreed upon location or to the customer. Further, in determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer.

Shipping and handling activities related to contracts with customers represent fulfillment costs and are recorded in Cost of sales. Taxes assessed by governmental authorities and collected from customers are accounted for on a net basis and excluded from revenues.  The Company applies a practical expedient to expense costs to obtain a contract as incurred as most contracts are one year or less. These costs primarily include the Company’s internal sales force compensation. Under the terms of these programs, these are generally earned and the costs are recognized at the time the revenue is recognized.

From time to time, the Company may enter into long-term contracts with its customers. Historically, the contracts entered into by the Company do not result in significant contract assets or liabilities.  Any such arrangements are accounted for in Other assets or Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets.  There were no significant contract assets or liabilities as of June 30, 2020 or December 31, 2019.

The Company is principally engaged in the production and sale of starches and sweeteners for a wide range of industries, and is managed geographically on a regional basis. The Company’s operations are classified into four reportable business segments: North America, South America, Asia-Pacific and Europe, Middle East and Africa (“EMEA”).  The nature, amount, timing and uncertainty of the Company’s Net sales are managed by the Company primarily based on its geographic segments. Each region’s product sales are unique to each region and have unique risks.

Three Months Ended

Six Months Ended

June 30, 

June 30, 

(in millions)

    

2020

    

2019

2020

    

2019

    

Net sales to unaffiliated customers:

North America

$

848

$

977

$

1,811

$

1,928

South America

182

226

419

454

Asia-Pacific

187

203

376

406

EMEA

132

144

286

298

Total net sales

$

1,349

$

1,550

$

2,892

$

3,086

5. Restructuring and Impairment Charges

For the three and six months ended June 30, 2020, the Company recorded a total of $11 million and $25 million of pre-tax restructuring charges, respectively, as part of the Cost Smart program. For the three months ended June 30, 2020, the Company recorded $6 million of pre-tax restructuring charges for its Cost Smart cost of sales program, including $3 million of asset write-offs and $1 million of other costs in relation to the closure of the Lane Cove, Australia production facility. During the three months ended June 30, 2020, the Company also recorded $1 million of accelerated depreciation and $1 million of employee-related severance, primarily in North America. For the six months ended June 30, 2020, the Company recorded $15 million of pre-tax restructuring charges for its Cost Smart cost of sales program, including $6

10

Table of Contents

million of asset write-offs, $2 million of other costs, and $1 million of accelerated depreciation in relation to the closure of the Lane Cove, Australia production facility. The Company expects to incur $2 million of additional restructuring costs during the remainder of 2020 related to the Lane Cove production facility closure. During the six months ended June 30, 2020, the Company also recorded $