International Flavors & Fragrances (NYSE: IFF) to sell Food Ingredients arm for $3.832B
International Flavors & Fragrances Inc. reported second‑quarter 2026 net sales from continuing operations of $1,954 million, slightly up from $1,919 million a year earlier. Operating profit from continuing operations was $158 million versus $142 million, while income from continuing operations before taxes declined to $64 million from $438 million, reflecting the absence of a prior‑year $488 million debt extinguishment gain and higher regulatory and other special costs.
Net income attributable to IFF shareholders was $50 million for the quarter, or $0.20 diluted EPS, compared with $599 million or $2.33 a year earlier. For the first six months of 2026, net income attributable to shareholders was $219 million, versus a loss of $419 million in the prior‑year period, helped by discontinued operations moving from a $1,036 million loss to a $33 million profit.
The company agreed to sell its Food Ingredients business for estimated proceeds of $3.832 billion, retaining a 10% equity interest; together with the earlier Soy Crush, Concentrates & Lecithin divestiture, this represents a strategic shift and is reported as discontinued operations. A separate sale of the CitraSource business led to a $27 million loss on assets held for sale. Operating cash flow for the first half of 2026 increased to $679 million, while total debt was $5,699 million at June 30, 2026, including $50 million of commercial paper.
Positive
- Strategic $3.832 billion divestiture: IFF agreed to sell its Food Ingredients business for estimated proceeds of $3.832 billion while retaining a 10% equity interest, simplifying its portfolio and supporting future balance‑sheet flexibility.
- Stronger operating cash generation: Net cash provided by operating activities for the first six months of 2026 was $679 million, up from $368 million a year earlier, improving internal funding capacity.
- Discontinued operations turnaround: Discontinued operations delivered $33 million net income in the first half of 2026 versus a $1,036 million loss in the prior‑year period, materially reducing headline volatility.
Negative
- Higher special and regulatory costs: Adjustments labeled as Regulatory Costs totaled $71 million in Q2 2026 and $81 million year‑to‑date, contributing to a higher effective tax rate and lower pre‑tax income.
- Impairment and divestiture‑related losses: A $27 million loss on CitraSource assets held for sale and ongoing losses on business disposals weigh on profitability despite modest operating improvement.
- Elevated leverage: Total debt was $5,699 million at June 30, 2026; while lower than year‑end, this still represents a substantial debt load ahead of major refinancing and divestiture‑related cash movements.
Filing Explained
IFF has $1.0 billion of refinancing capacity, but any Food Ingredients sale proceeds must repay the facility.
IFF entered a June 23 agreement for a
As an unaudited quarterly report, this Form 10-Q updates interim financial statements and liquidity disclosures. The Food Ingredients transaction remains subject to closing conditions and regulatory approvals, with closing expected by the end of the second quarter of
The CitraSource transaction, classified as held for sale at
IFF’s productivity program is targeted for substantial completion by
The next state changes to track are whether the term-loan facility is drawn by
Key Figures
Net sales from continuing ops Q2 2026: $1,954 million
Net income attributable to shareholders H1 2026: $219 million
Net income (loss) from discontinued ops H1 2025: $(1,036) million
+5 more
8 metrics
Net sales from continuing ops Q2 2026
$1,954 million
Three months ended June 30, 2026, compared with $1,919 million in 2025
Net income attributable to shareholders H1 2026
$219 million
Six months ended June 30, 2026, versus a $419 million loss in 2025
Net income (loss) from discontinued ops H1 2025
$(1,036) million
Six months ended June 30, 2025, before shifting to $33 million income in 2026
Operating cash flow H1 2026
$679 million
Net cash provided by operating activities for six months ended June 30, 2026
Estimated Food Ingredients sale proceeds
$3.832 billion
Gross proceeds less $98 million remaining costs to sell, before adjustments
Total debt at June 30, 2026
$5,699 million
Includes $964 million short‑term and $4,735 million long‑term borrowings
Adjusted Operating EBITDA Q2 2026
$408 million
Sum of Taste, Health & Biosciences, and Scent from continuing operations
Shares outstanding
255,149,963 shares
Number of common shares outstanding as of July 31, 2026
Key Terms
discontinued operations, held for sale, Adjusted Operating EBITDA, net investment hedges, +2 more
6 terms
discontinued operations financial
"represented a strategic shift and met the held for sale and discontinued operations accounting criteria"
Discontinued operations are parts of a company that it has decided to sell or shut down, and no longer plans to run in the future. This matters to investors because it helps them understand which parts of the business are ongoing and which are being phased out, providing a clearer picture of the company’s current performance and future prospects. Think of it like a store closing a department—it no longer contributes to sales or profits.
held for sale financial
"met the criteria to be presented as “held for sale” during the second quarter of 2026"
An asset or a group of assets classified as 'held for sale' is one the company intends to sell rather than keep using, and management has committed to that plan with an active effort to find a buyer. Investors care because these items are removed from ongoing operating results and valued differently, offering a clearer view of the business’s continuing performance—think of it like marking a piece of furniture for the garage sale rather than counting it as part of your regular household setup.
Adjusted Operating EBITDA financial
"CODM evaluates the performance of these reportable segments based on its Adjusted Operating EBITDA"
A measure of a company's recurring profit from its core business before paying interest, taxes and accounting charges for wear and tear, with additional adjustments to remove one-time, non-cash or non-operational items so the figure reflects normal, ongoing performance. Investors use it to see the business’s cash-earning ability and to compare companies more fairly, like judging a car’s regular fuel efficiency after ignoring rare long trips or repairs.
net investment hedges financial
"qualified as net investment hedges in order to mitigate a portion of the Company’s net European investments"
A net investment hedge is a financial step a company takes to protect the reported value of its ownership in foreign subsidiaries from swings in exchange rates. By using derivatives or foreign‑currency borrowings to offset translation gains or losses, the company reduces how much its balance sheet and reported equity jump around when currencies move — like locking a price tag on a foreign store so its value in the home currency stays steadier for investors.
cross currency swaps financial
"The Company has twenty-two EUR/USD cross currency swaps with a notional value of $2.4 billion"
A cross-currency swap is a contract where two parties agree to exchange amounts of money and the interest payments tied to those amounts in different currencies for a set period, then swap the original amounts back at maturity. Think of it like two neighbors swapping their local paychecks and agreeing to pay each other interest in the other's money; investors use these swaps to lock in borrowing costs, manage currency risk, or gain foreign-currency exposure without buying the actual currencies.
Term SOFR financial
"using the Secured Overnight Financing Rate (“Term SOFR”) swap curve and forward interest and exchange rates"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
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FAQ
How did IFF (IFF) perform financially in Q2 2026?
IFF generated $1,954 million in net sales from continuing operations and operating profit of $158 million in Q2 2026, with net income attributable to shareholders of $50 million or $0.20 diluted EPS, compared with $2.33 diluted EPS a year earlier.
What is included in IFF (IFF) discontinued operations for 2026?
Discontinued operations combine the Food Ingredients disposal group and the Soy Crush, Concentrates & Lecithin businesses, producing $1,662 million net sales and $33 million net income in the first half of 2026, versus a $1,036 million loss in the prior‑year period.
What are the terms of IFF (IFF) Food Ingredients business sale?
IFF agreed to sell its Food Ingredients business for estimated proceeds of $3.832 billion less $98 million of remaining costs to sell, while retaining a 10% minority equity interest. Closing is expected by the end of the second quarter of 2027, subject to approvals.
How strong is IFF (IFF) cash flow and debt position in 2026?
For the first six months of 2026, IFF generated $679 million in operating cash flow. Total debt was $5,699 million at June 30, 2026, including $964 million classed as short‑term and $50 million of commercial paper outstanding.
What major divestitures has IFF (IFF) recently completed?
IFF completed the Pharma Solutions sale with fair value consideration of $2,678 million, divested the Nitrocellulose business for $157 million fair value, and sold the Soy Crush, Concentrates & Lecithin business for $105 million cash proceeds, all as part of portfolio reshaping.
How are IFF (IFF) segments performing on an Adjusted Operating EBITDA basis?
In Q2 2026, Adjusted Operating EBITDA from continuing operations was $408 million, split as Taste $124 million, Health & Biosciences $150 million, and Scent $134 million, reflecting broadly similar aggregate performance to the prior‑year quarter’s $399 million.
What dividend did IFF (IFF) pay in the first half of 2026?
IFF declared cash dividends totaling $0.80 per common share for the six months ended June 30, 2026, including $0.40 per share each quarter, resulting in total declared dividends of $204 million over the period.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
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 1-4858
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (212 ) 765-5500
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | 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 ☑
Number of shares of common stock outstanding as of July 31, 2026: 255,149,963
INTERNATIONAL FLAVORS & FRAGRANCES INC.
TABLE OF CONTENTS
| PAGE | ||||||||
| PART I - Financial Information | ||||||||
| ITEM 1. | Financial Statements (Unaudited) | |||||||
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - Three and Six Months Ended June 30, 2026 and 2025 | 1 | |||||||
Consolidated Balance Sheets - June 30, 2026 and December 31, 2025 | 3 | |||||||
Consolidated Statements of Shareholders’ Equity - Three and Six Months Ended June 30, 2026 and 2025 | 4 | |||||||
Consolidated Statements of Cash Flows - Six Months Ended June 30, 2026 and 2025 | 6 | |||||||
Notes to Consolidated Financial Statements | 7 | |||||||
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 40 | ||||||
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 54 | ||||||
| ITEM 4. | Controls and Procedures | 54 | ||||||
| PART II - Other Information | ||||||||
| ITEM 1. | Legal Proceedings | 55 | ||||||
| ITEM 1A. | Risk Factors | 55 | ||||||
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 55 | ||||||
| ITEM 5. | Other Information | 55 | ||||||
| ITEM 6. | Exhibits | 56 | ||||||
Signatures | 57 | |||||||
Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||||||||||||||||||||
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||||||||||||||||||||
| Research and development expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Selling and administrative expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangibles | ||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | ||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and other charges | ||||||||||||||||||||||||||||||||||||||||||||
| Losses on sale of assets | ||||||||||||||||||||||||||||||||||||||||||||
| Operating profit | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||||||||||||
| Gain on extinguishment of debt | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Losses on business disposals | ||||||||||||||||||||||||||||||||||||||||||||
| Loss on assets classified as held for sale | ||||||||||||||||||||||||||||||||||||||||||||
| Other expense, net | ||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations before taxes | ||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net income from continuing operations | ||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from discontinued operations before tax | ( | |||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes from discontinued operations | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) from discontinued operations | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to non-controlling interests from continuing operations | ||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to non-controlling interests from discontinued operations | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to IFF shareholders | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Income (loss) per share - basic | ||||||||||||||||||||||||||||||||||||||||||||
| Continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Discontinued operations | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) per share - basic | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Income (loss) per share - diluted | ||||||||||||||||||||||||||||||||||||||||||||
| Continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Discontinued operations | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) per share - diluted | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Average number of shares outstanding | ||||||||||||||||||||||||||||||||||||||||||||
| Average number of shares outstanding - basic | ||||||||||||||||||||||||||||||||||||||||||||
| Average number of shares outstanding - diluted | ||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
1
Table of Contents
| Statement of Comprehensive Income (Loss) | |||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | ||||||||||||||||||
| Other comprehensive income (loss), after tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
| Gains (losses) on derivatives qualifying as hedges | ( | ( | |||||||||||||||||||||
| Pension and postretirement liability adjustment | ( | ( | |||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||
| Comprehensive income (loss) attributable to IFF shareholders | $ | ( | $ | $ | $ | ||||||||||||||||||
2
Table of Contents
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | June 30, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Trade receivables (net of allowances of $ | |||||||||||
| Inventories | |||||||||||
| Assets held for sale | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Current assets of discontinued operations | |||||||||||
| Total Current Assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets | |||||||||||
| Non-current assets of discontinued operations | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Short-term debt and current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued payroll and bonus | |||||||||||
| Dividends payable | |||||||||||
| Liabilities held for sale | |||||||||||
| Other current liabilities | |||||||||||
| Current liabilities of discontinued operations | |||||||||||
| Total Current Liabilities | |||||||||||
| Non-Current Liabilities: | |||||||||||
| Long-term debt | |||||||||||
| Retirement liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Non-current liabilities of discontinued operations | |||||||||||
| Total Non-Current Liabilities | |||||||||||
Commitments and Contingencies (Note 18) | |||||||||||
| Shareholders’ Equity: | |||||||||||
Common stock $ | |||||||||||
| Capital in excess of par value | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
| Total Shareholders’ Equity | |||||||||||
| Non-controlling interests | |||||||||||
| Total Shareholders’ Equity including Non-controlling interests | |||||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
3
Table of Contents
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | Common stock | Capital in excess of par value | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury stock | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at April 1, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options/SSARs | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units and awards | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | Common stock | Capital in excess of par value | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury stock | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at April 1, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options/SSARs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury share repurchases | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units and awards | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | Common stock | Capital in excess of par value | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury stock | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options/SSARs | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units and awards | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
4
Table of Contents
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | Common stock | Capital in excess of par value | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury stock | Non-controlling interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options/SSARs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury share repurchases | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Vested restricted stock units and awards | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
_______________________
(1)Cash dividends declared per common share were $0.40 0.80
The accompanying notes are an integral part of these Consolidated Financial Statements.
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile to net cash provided by operating activities | |||||||||||
| Depreciation and amortization | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Loss on assets classified as held for sale | |||||||||||
| Losses on sale of assets | |||||||||||
| Losses on business disposals | |||||||||||
| Stock-based compensation | |||||||||||
| Pension contributions | ( | ( | |||||||||
| Gain on extinguishment of debt | ( | ||||||||||
| Impairment of goodwill | |||||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Trade receivables | ( | ( | |||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Accruals for incentive compensation | ( | ( | |||||||||
| Other assets/liabilities, net | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to property, plant and equipment | ( | ( | |||||||||
| Additions to intangible assets | ( | ||||||||||
| Net proceeds received from business disposals | |||||||||||
| Payments to buyer for business disposals | ( | ||||||||||
| Cash (paid) received on foreign currency forward contracts | ( | ||||||||||
| Joint venture capital contributions | ( | ||||||||||
| Net cash (used in) provided by investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Cash dividends paid to shareholders | ( | ( | |||||||||
| Net repayments of commercial paper (maturities less than three months) | ( | ||||||||||
| Principal payments of debt | ( | ||||||||||
| Withholding tax paid on stock-based compensation | ( | ( | |||||||||
| Purchase of treasury stock | ( | ||||||||||
| Other, net | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of year | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental Disclosures: | |||||||||||
| Interest paid, net of amounts capitalized | $ | $ | |||||||||
| Income taxes paid, net | |||||||||||
| Accrued capital expenditures | |||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements.
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
International Flavors & Fragrances Inc. and its subsidiaries (the “Registrant,” “IFF,” the “Company,” “we,” “us” and “our”) is a leading creator and manufacturer of products for application in food, beverage, health & biosciences, scent (and pharmaceuticals, until the sale of our Pharma Solutions disposal group in May 2025), as well as complementary adjacent products, all of which are used in a wide variety of consumer and end-use products. Our products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods, grain processors and other foods, personal care products, soaps and detergents, cleaning products, perfumes, dietary supplements, food protection, infant, elderly and animal nutrition, functional food, biofuel, pharmaceutical and oral care products. As a result, we hold global leadership positions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Tastes, Textures, Scents, Nutrition, Enzymes, Cultures, Soy Proteins, and Probiotics categories, among others.
On May 29, 2026, the Company announced it had entered into an agreement to sell its Food Ingredients business, with minor perimeter adjustments (the “Food Ingredients disposal group”) to funds advised by CVC Capital Partners, a leading global private markets manager. As part of the transaction, the Company has chosen to retain a 10 % minority equity interest in the business. The transaction is expected to close by the end of the second quarter of 2027, subject to customary closing conditions and receipt of regulatory approvals. The Company determined that the sale of the Food Ingredients disposal group, combined with the sale of the related Soy Crush, Concentrates, and Lecithin businesses (the “SCL disposal group”), represented a strategic shift and met the held for sale and discontinued operations accounting criteria during the second quarter of 2026. Accordingly, the Company is separately reporting the results of both disposal groups as discontinued operations for all periods presented. See Note 3 for further information.
Basis of Presentation
The accompanying interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the related notes included in our 2025 Annual Report on Form 10-K (“2025 Form 10-K”), filed on February 27, 2026 with the Securities and Exchange Commission (“SEC”).
The interim Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and with the rules and regulations for reporting on Form 10-Q, and are unaudited. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP in the United States of America have been condensed or omitted, if not materially different from the 2025 Form 10-K. The year-end balance sheet data included in this Form 10-Q was derived from the audited financial statements. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim Consolidated Financial Statements, have been made.
Financial information included in this Form 10-Q has been presented to separately show the effects of discontinued operations, unless otherwise specified. The cash flows from discontinued operations are included in the Consolidated Statements of Cash Flows. See Note 3 for significant cash flow items related to discontinued operations.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the periods reported. The Company uses estimates to assess expected credit losses on its financial assets, sales discounts, rebates and allowances, the recoverability of inventory, the realization of deferred tax assets, annual effective tax rate, the recoverability of long-lived assets, useful lives and impairment of tangible and intangible assets including goodwill, restructuring reserves, pension and postretirement benefit costs, fair value of equity compensation, and the amount of exposure from potential loss contingencies, among others. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the Consolidated Financial Statements in the period they are determined to be necessary. Inputs into the Company’s judgments and estimates take into account the ongoing global current events and macroeconomic environment on the Company’s critical and significant accounting estimates. Actual results could differ from those estimates.
Revision of Previously Issued Financial Statements
In preparing the Consolidated Financial Statements as of and for the three and nine months ended September 30, 2025 and the year ended December 31, 2025, Management identified certain income tax-related adjustments that primarily relate to the understatement of income tax expense due to errors in the accounting for transfer pricing, the correction of deferred tax
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liabilities on goodwill recorded in purchase accounting, and other income tax entries that impacted prior interim and annual financial statements. Management also identified certain other errors that were concluded to be immaterial, individually and in the aggregate, to the Company’s consolidated financial statements as of and for the relevant periods. These include an adjustment to the Pharma Solutions disposal group loss on business disposal which should have been recognized upon the initial classification of the disposal group as held for sale, tax adjustments identified in prior periods primarily related to deferred taxes, balance sheet misclassifications to correct the netting of value added tax receivables and payables and uncertain tax provisions and benefits, an error in the classification of uncertain tax provisions recognized as deferred tax liabilities, an adjustment to record the right of use asset and lease liability related to a lease upon lease commencement that was incorrectly omitted, and a cash flow adjustment to correct the classification of cash paid/received on foreign currency forward contracts from operating activities to investing activities.
Management assessed the materiality of the errors on prior period interim and annual consolidated financial statements in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, in consideration of both quantitative and qualitative factors, management determined that the related impacts of the errors were not material to any previously issued interim or annual financial statements. However, if the corrections were recorded in the three months ended September 30, 2025, they would be material to that period. As such, management revised the prior period amounts presented in these financial statements to correct the errors. A summary of the revisions to the previously issued financial statements is included in Note 19.
Cash and Cash Equivalents
Cash, cash equivalents and restricted cash reported in the Company’s balance sheet as of June 30, 2026, December 31, 2025, June 30, 2025 and December 31, 2024 were as follows:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | June 30, 2025 | December 31, 2024 | |||||||||||||||||||
| Current assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Cash and cash equivalents included in Assets held for sale | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
The Company had no restricted cash as of June 30, 2026 and December 31, 2025.
Accounts Receivable
The Company has various factoring agreements globally under which it can factor up to approximately $578 million of its trade receivables (“Company’s own factoring agreements”). In addition, the Company utilizes factoring agreements sponsored by certain customers. Under all of the arrangements, the Company sells the trade receivables on a non-recourse basis to unrelated financial institutions and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company’s Consolidated Balance Sheets when the cash proceeds are received by the Company.
On a total Company basis (including both continuing operations and discontinued operations), the Company sold a total of approximately $1,045 million and $910 million of receivables under the Company’s own factoring agreements and customer sponsored factoring agreements for the six months ended June 30, 2026 and 2025, respectively. The cost of participating in these programs was approximately $6 million for the three months ended June 30, 2026 and 2025, and was approximately $11 million and $12 million for the six months ended June 30, 2026 and 2025, respectively. These costs are included as a component of interest expense. Although the Company’s own factoring agreements are non-recourse to the Company, the Company has continued responsibility to collect receivables on behalf of sponsoring banks. Under these agreements, the Company sold approximately $820 million and $503 million of receivables for the six months ended June 30, 2026 and 2025, respectively. The outstanding principal amounts of receivables under the Company’s own factoring agreements amounted to approximately $423 million and $361 million as of June 30, 2026 and December 31, 2025, respectively. The proceeds from the sales of receivables are included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows.
Expected Credit Losses
As of June 30, 2026, the Company reported $1.424 billion of trade receivables, net of allowances of $20 million. Based on the aging analysis as of June 30, 2026, less than 1 % of the Company’s accounts receivable were past due by over 365 days based on the payment terms of the invoice.
The following is a roll-forward of the Company’s allowances for bad debts for the six months ended June 30, 2026 and 2025.
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| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Balance at January 1 | $ | $ | |||||||||
| Bad debt expense | |||||||||||
| Write-offs | ( | ( | |||||||||
| Foreign exchange losses | |||||||||||
| Balance at June 30 | $ | $ | |||||||||
Inventories
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Total | $ | $ | |||||||||
Recent Accounting Pronouncements
In May 2026, the FASB issued ASU 2026-02 “Environmental Credits and Environmental Credit Obligations” to establish a comprehensive model for the recognition, measurement, presentation, and disclosure of environmental credits, including renewable energy certificates and carbon offsets. The update is intended to reduce diversity in practice and improve consistency in the accounting for these instruments. The guidance provides a model for recognizing and measuring related compliance obligations and requires expanded disclosures regarding the nature and use of such credits. The amendments are effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company does not expect this guidance to have a significant impact on its Consolidated Financial Statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832)”. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The amendments introduce two permitted approaches for asset-related grants: a deferred income approach or a cost accumulation approach. The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09 to amend the guidance in “Derivatives and Hedging” (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures.
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In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal use Software (Subtopic 350-40): Targeted improvements to the Accounting for Internal-use Software”. The ASU was issued to modernize the accounting for internal-use software by eliminating the accounting consideration of software project development stages and clarifying the threshold applied to begin capitalizing costs. This guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. Public business entities are permitted to adopt the ASU prospectively or retrospectively. The Company is currently evaluating the impact of this guidance on its Consolidated Financial Statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides a practical expedient to measure credit losses on accounts receivable and contract assets. This guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company has adopted the ASU prospectively and has determined that there is no material impact of this guidance on its Consolidated Financial Statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The ASU was issued to improve the disclosures about a public business entity’s expenses, primarily through disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Public business entities are permitted to adopt the ASU prospectively or retrospectively. The Company is currently evaluating the impact that this guidance will have on its Consolidated Financial Statements and related disclosures.
NOTE 2. NET INCOME (LOSS) PER SHARE
A reconciliation of the shares used in the computation of basic and diluted net income (loss) per share is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Income | |||||||||||||||||||||||
| Net income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
| Net income (loss) from discontinued operations | ( | ||||||||||||||||||||||
| Net income (loss) | ( | ||||||||||||||||||||||
| Net income from continuing operations noncontrolling interests | |||||||||||||||||||||||
| Net income from discontinued operations noncontrolling interests | |||||||||||||||||||||||
| Net income (loss) available to IFF shareholders | $ | $ | $ | $ | ( | ||||||||||||||||||
| Shares | |||||||||||||||||||||||
| Average number of shares outstanding - basic | |||||||||||||||||||||||
| Adjustment for assumed dilution: | |||||||||||||||||||||||
| Stock options and restricted stock awards | |||||||||||||||||||||||
| Weighted average shares assuming dilution (diluted) | |||||||||||||||||||||||
| Net Income (loss) per Share | |||||||||||||||||||||||
| Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Net income (loss) per share - basic | $ | $ | $ | $ | ( | ||||||||||||||||||
| Continuing operations | $ | $ | $ | $ | |||||||||||||||||||
| Discontinued operations | ( | ||||||||||||||||||||||
| Net income (loss) per share - diluted | $ | $ | $ | $ | ( | ||||||||||||||||||
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The Company declared a quarterly dividend to its shareholders of $0.40 0.80
For the three and six months ended June 30, 2026 and June 30, 2025, there were approximately 0.2 0.3
NOTE 3. DISCONTINUED OPERATIONS
Food Ingredients Disposal Group
On May 29, 2026, the Company announced that it had entered into a definitive agreement to sell its Food Ingredients disposal group, which was included in the Food Ingredients segment, to CVC Capital Partners. As part of the transaction, the Company will retain an approximate 10 % equity interest in the business.
The Company determined estimated proceeds of $3.832 billion less remaining costs to sell of $98 million. As this exceeds the carrying value of the net assets of the Food Ingredients disposal group, including amounts in Accumulated Other Comprehensive Income, there was not a loss on classification of the disposal group as held for sale as of June 30, 2026.
The transaction is expected to close by the end of the second quarter of 2027, subject to customary closing conditions and receipt of regulatory approvals. The sale consideration is subject to certain post-closing adjustments, which are primarily related to working capital balances and other adjustments per the transaction agreement.
The Company determined that the sale of the Food Ingredients disposal group, combined with the SCL disposal group comprised a single disposal plan to sell the majority of the Food Ingredients segment and represented a strategic shift and met the held for sale and discontinued operations accounting criteria during the second quarter of 2026. Accordingly, the Company is separately reporting the results of this disposal plan for the combined SCL disposal group and Food Ingredients disposal group as discontinued operations in its Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and Consolidated Balance Sheets for all periods presented. Cash flows from discontinued operations have not been shown separately in the Consolidated Statements of Cash Flows for all periods presented.
Soy Crush, Concentrates & Lecithin Disposal Group
On August 5, 2025, the Company announced it had entered into a definitive agreement to divest its Soy Crush, Concentrates, and Lecithin business, which was included in the Food Ingredients segment, and is now included within discontinued operations. The Company completed the divestiture on March 2, 2026, and results of the SCL disposal group are now presented within discontinued operations for all periods presented. The Company received cash proceeds of approximately $105 million and recognized a pre-tax loss of approximately $7 million in connection with this sale, presented within Income (loss) from discontinued operations before tax on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the six months ended June 30, 2026. This is in addition to the life-to-date loss on assets classified as held for sale of $115 million as of December 31, 2025.
The sale consideration is subject to certain post-closing adjustments in accordance with the transaction agreement.
| (DOLLARS IN MILLIONS) | |||||
| Cash proceeds from the buyer | $ | ||||
| Direct costs to sell | ( | ||||
| Fair value of sale consideration | $ | ||||
Selected Financial Information Related to Discontinued Operations
The following table presents the components of discontinued operations, net of income taxes, in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss):
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| (DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Research and development expenses | |||||||||||||||||||||||
| Selling and administrative expenses | |||||||||||||||||||||||
| Amortization of acquisition-related intangibles | |||||||||||||||||||||||
| Impairment of goodwill | |||||||||||||||||||||||
| Restructuring and other charges | |||||||||||||||||||||||
| Operating profit (loss) | ( | ||||||||||||||||||||||
| Losses on business disposals | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||||||||
| Income (loss) from discontinued operations before tax | ( | ||||||||||||||||||||||
| Provision for income taxes from discontinued operations | |||||||||||||||||||||||
| Net income (loss) from discontinued operations, net of tax | $ | $ | $ | $ | ( | ||||||||||||||||||
The following table presents selected financial information included in cash flows from discontinued operations:
| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Cash flows from operating activities of discontinued operations: | |||||||||||
| Depreciation and amortization | $ | $ | |||||||||
| Losses on business disposal | |||||||||||
| Impairment of goodwill | |||||||||||
| Cash flows from investing activities of discontinued operations: | |||||||||||
| Additions to property, plant and equipment | |||||||||||
| Supplemental Disclosures for discontinued operations: | |||||||||||
| Accrued capital expenditures | $ | $ | |||||||||
The following table presents the assets and liabilities included in discontinued operations as of June 30, 2026 and December 31, 2025, in the Consolidated Balance Sheets.
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| (DOLLARS IN MILLIONS) | June 30, 2026(1) | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Trade receivables, net | $ | $ | |||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets | |||||||||||
| Valuation allowance | ( | ||||||||||
| Total assets of discontinued operations | |||||||||||
| Liabilities | |||||||||||
| Accounts payable | |||||||||||
| Accrued payroll and bonus | |||||||||||
| Other current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Retirement Liabilities | |||||||||||
| Operating Lease Liabilities | |||||||||||
| Deferred Income Taxes | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities of discontinued operations | $ | $ | |||||||||
NOTE 4. ASSETS AND LIABILITIES HELD FOR SALE AND BUSINESS DIVESTITURES
Assets and Liabilities Held for Sale
Sale of CitraSource Business
On June 23, 2026, the Company entered into a definitive agreement to divest the CitraSource business, which is included in the Scent segment. This transaction was closed on July 1, 2026.
The sale does not constitute a strategic shift of the Company’s operations and does not, and will not, have a major effect on the Company’s operations and financial results. Therefore, the transaction does not meet the discontinued operations criteria.
The Company determined that the assets and liabilities of the CitraSource business met the criteria to be presented as “held for sale” during the second quarter of 2026. As a result, as of June 30, 2026, such assets and liabilities were classified as held for sale on the Consolidated Balance Sheets.
The Company determined that the fair value less costs to sell of $41 million of the CitraSource business was less than its net book value. As such, the Company recorded a loss on assets classified as held for sale of $27 million for the three months ended June 30, 2026 to adjust the net book value of this business to its fair value less costs to sell. The Company recorded the loss on classification of held for sale as a valuation allowance on the group of assets held for sale, without allocation to the individual assets or major classes of assets within the group.
Carrying Amount of Assets and Liabilities Held for Sale
Included in the Company’s Consolidated Balance Sheets as of June 30, 2026 are the following carrying amounts of the assets and liabilities held for sale, related to the CitraSource business.
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| (DOLLARS IN MILLIONS) | June 30, 2026 | ||||||||||
| Assets | |||||||||||
| Trade receivables, net | $ | ||||||||||
| Inventories | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Less: Loss recognized on assets held-for-sale | ( | ||||||||||
| Total assets held-for-sale | |||||||||||
| Liabilities | |||||||||||
| Accounts payable | |||||||||||
| Total liabilities held-for-sale | $ | ||||||||||
Business Divestitures
Divestiture of the Pharma Solutions Disposal Group
During March 2024, the Company announced it had entered into an agreement to sell its Pharma Solutions business that is primarily made up of most businesses within the Company’s existing Pharma Solutions reportable operating segment (the “Pharma Solutions disposal group”). The Company completed the divestiture on May 1, 2025, and received gross cash proceeds of $2.581 billion at the time. During the six months ended June 30, 2026, the Company received an additional $97 million of proceeds related to an earnout for 2024 performance and has paid $11 million primarily related to indemnifications payable. The Company and the buyer are still in the process of determining the final earnout amount related to the 2025 performance and other post-closing adjustments, which are primarily related to cash, working capital balances, and other adjustments per the transaction agreement. The fair value estimation of the final earnout amount uses Level 3 unobservable inputs as categorized within the ASC Topic 820 fair value hierarchy, as discussed in Note 3 of the Company’s 2025 Form 10-K. Based on the final calculation of 2025 results and post-closing adjustments, there could be a significant increase or decrease in the total sale consideration.
The following table summarizes the fair value of sale consideration received in connection with the business divestiture:
| (DOLLARS IN MILLIONS) | |||||
| Cash proceeds from the buyer | $ | ||||
| 2024 earnout | |||||
| Receivable for 2025 earnout and other post-closing adjustments | |||||
| Indemnifications and other payable | ( | ||||
| Direct costs to sell | ( | ||||
| Fair value of sale consideration | $ | ||||
The net proceeds received from the business divestiture presented under Cash flows from investing activities represent the cash portion of the sale consideration, reduced by the cash transferred to the buyer as part of the transaction. Amounts paid for direct costs to sell are presented under Cash flows from operating activities.
The following table summarizes the components of net proceeds received from the business divestiture presented under Cash flows from investing activities for the six months ended June 30, 2026 and 2025.
| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Cash proceeds from the buyer | $ | $ | |||||||||
| Cash transferred to the buyer at close | ( | ||||||||||
| Payments to the buyer | ( | ||||||||||
| Net Cash flows from investing activities | $ | $ | |||||||||
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The carrying value of net assets associated with the Pharma Solutions disposal group, adjusted for currency translation adjustment, NCI, and pension adjustments, amounted to approximately $2.799 billion. The major classes of assets and liabilities sold consisted of the following:
| (DOLLARS IN MILLIONS) | May 1, 2025 | ||||
| Assets | |||||
| Cash and cash equivalents | $ | ||||
| Trade receivables, net | |||||
| Inventories | |||||
| Property, plant and equipment, net | |||||
Goodwill(1) | |||||
| Other intangible assets, net | |||||
| Operating lease right-of-use assets | |||||
| Deferred tax assets | |||||
| Other assets | |||||
Less: Loss recognized on assets held-for-sale(2) | ( | ||||
| Total assets | |||||
| Liabilities | |||||
| Accounts payable | $ | ( | |||
| Deferred tax liability | ( | ||||
| Other liabilities | ( | ||||
| Total liabilities | ( | ||||
| Equity | |||||
| Accumulated other comprehensive income - currency translation adjustment | $ | ||||
| Accumulated other comprehensive income - pension adjustment | ( | ||||
| Non-controlling Interests (NCI) | ( | ||||
| Total equity | |||||
| Carrying value of net assets (adjusted for currency translation, pension, and NCI adjustments) | $ | ||||
_______________________
(1) The goodwill presented here is net of the $64 million goodwill impairment charge.
(2) A loss was recorded on assets held-for-sale in the amount of $307 million through March 31, 2025.
As a result of the business divestiture, the Company recognized a pre-tax loss of approximately $121 307 million recognized through March 31, 2025.
Divestiture of the Nitrocellulose Business
During October 2024, the Company entered into an agreement to sell its Nitrocellulose business (including the related industrial park in Germany), which was included within the Company’s existing Pharma Solutions reportable operating segment. The Company completed the divestiture on May 9, 2025, and received cash proceeds of approximately $161 million. The sale consideration is subject to certain post-closing adjustments, which are primarily related to cash, working capital balances, and other adjustments per the transaction agreement. The Company made a payment of $1 million related to post-closing adjustments during the three months ended June 30, 2026.
The following table summarizes the fair value of sale consideration received in connection with the business divestiture:
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| (DOLLARS IN MILLIONS) | |||||
| Cash proceeds from the buyer | $ | ||||
| Direct costs to sell | ( | ||||
| Other post-closing adjustments | ( | ||||
| Fair value of sale consideration | $ | ||||
The net proceeds received from the business divestiture presented under Cash flows from investing activities represent the cash portion of the sale consideration, which was determined as the fair value of sale consideration adjusted by the cash transferred to the buyer as part of the transaction. Amounts paid for direct costs to sell are presented under Cash flows from operating activities.
The following table summarizes the components of net proceeds received from the business divestiture presented under Cash flows from investing activities for the six months ended June 30, 2025.
| (DOLLARS IN MILLIONS) | |||||
| Cash proceeds from the buyer | $ | ||||
| Cash transferred to the buyer at close | ( | ||||
| Net Cash flows from investing activities | $ | ||||
The carrying amount of net assets associated with the Nitrocellulose business, adjusted for currency translation adjustment and pension adjustments, was approximately $148 million. The major classes of assets and liabilities sold consisted of the following:
| (DOLLARS IN MILLIONS) | May 9, 2025 | ||||
| Assets | |||||
| Cash and cash equivalents | $ | ||||
| Trade receivables, net | |||||
| Inventories | |||||
| Property, plant and equipment, net | |||||
| Goodwill | |||||
| Other intangible assets, net | |||||
| Other assets | |||||
| Total assets | |||||
| Liabilities | |||||
| Accounts payable | $ | ( | |||
| Other liabilities | ( | ||||
| Total liabilities | ( | ||||
| Equity | |||||
| Accumulated other comprehensive income - currency translation adjustment | ( | ||||
| Accumulated other comprehensive income - pension adjustment | ( | ||||
| Total equity | ( | ||||
| Carrying value of net assets (adjusted for currency translation and pension adjustments) | $ | ||||
As a result of the business divestiture, the Company recognized a pre-tax gain of approximately $9 million, subject to certain post-closing adjustments. A loss of $1 10
Divestiture of a Tobacco Flavoring Business in North America
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The Company completed the divestiture of the Tobacco Flavoring Business in North America on April 1, 2025, and received gross cash proceeds of approximately $20 million.
As a result of the divestiture, the Company recognized a pre-tax gain of $1
NOTE 5. RESTRUCTURING AND OTHER CHARGES
Restructuring and other charges primarily consist of separation costs for employees including severance, outplacement and other employee benefit costs (“Severance”), charges related to the write-down of fixed assets of plants to be closed (“Fixed asset write-down”) and all other related restructuring (“Other”) costs. All restructuring and other charges are separately stated on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
IFF Productivity Program
In 2024, the Company commenced a productivity enhancement program aimed at improving productivity and optimizing its organizational footprint to align with business needs. This program will involve a series of actions, including ceasing operations in select manufacturing plants, consolidating leased and owned real estate space, and reducing employee headcount. The Company aims to substantially complete this productivity program by December 31, 2026.
The estimated total cost of the program initiatives ranges from $85 million to $100 million. The anticipated cash charges include employee-related costs such as severance, contract terminations costs, and dismantling costs. Additionally, non-cash charges related to assets, such as fixed asset write downs, are expected.
Since the inception of the program, the Company has recognized $78 million in severance costs and $1 million in fixed asset write-downs and site closure expenses. During the three and six months ended June 30, 2026, the Company incurred approximately $6 million and $10 million, respectively, in severance costs in connection with the IFF Productivity Program, including $1 million of non-cash stock compensation acceleration expense. During the three and six months ended June 30, 2025, the Company incurred approximately $20 million and $35 million, respectively, in severance costs in connection with the IFF Productivity Program.
Changes in Restructuring Liabilities
Changes in restructuring liabilities during the six months ended June 30, 2026 were as follows:
| (DOLLARS IN MILLIONS) | Balance at January 1, 2026 | Additional Charges (Reversals), Net | Non-Cash Charges | Cash Payments | Balance at June 30, 2026 | ||||||||||||||||||||||||||||||
| IFF Productivity Program | |||||||||||||||||||||||||||||||||||
| Severance | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Total Restructuring and other charges | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Restructuring liabilities are presented in “Other current liabilities” on the Consolidated Balance Sheets.
Charges by Segment
The following table summarizes the total amount of costs incurred in connection with the restructuring programs and activities by segment:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Taste | $ | $ | $ | $ | |||||||||||||||||||
| Health & Biosciences | |||||||||||||||||||||||
| Scent | |||||||||||||||||||||||
| Total Restructuring and other charges | $ | $ | $ | $ | |||||||||||||||||||
NOTE 6. STOCK COMPENSATION PLANS
The Company has various plans under which its officers, senior management, other key employees and directors may be granted equity-based awards. Equity awards outstanding under the plans include Restricted Stock Units (“RSUs”), Stock-Settled Appreciation Rights (“SSARs”) and Stock Options, and Performance Stock Units (“PSUs”). Liability-based awards outstanding under the plans are cash-settled RSUs.
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Stock-based compensation expense and related tax benefits were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Equity-based awards | $ | $ | $ | $ | |||||||||||||||||||
| Liability-based awards | |||||||||||||||||||||||
| Total stock-based compensation expense | |||||||||||||||||||||||
| Less: Tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| Total stock-based compensation expense, after tax | $ | $ | $ | $ | |||||||||||||||||||
As of June 30, 2026, there was approximately $86 million of total unrecognized compensation cost related to non-vested awards granted under the equity incentive plans.
NOTE 7. SEGMENT INFORMATION
The Company’s reportable segments are: Taste, Health & Biosciences, and Scent. Beginning in the second quarter of 2026, the Company determined that the held for sale and discontinued operations criteria were met for the entirety of the Food Ingredients segment, after certain perimeter adjustments, and classified its results as discontinued operations for the periods presented. Accordingly, the Food Ingredients segment results have been excluded from the segment information herein. Prior to the sale of the Pharma Solutions disposal group in the second quarter of 2025, Pharma Solutions was also a reportable segment.
The Company’s CODM evaluates the performance of these reportable segments based on its Adjusted Operating EBITDA, which is defined as Income from continuing operations before taxes, depreciation and amortization expense, interest expense, restructuring and other charges and certain items that are not related to recurring operations. Certain corporate costs previously allocated to the Food Ingredients business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to the Company’s three remaining segments.
The Company’s CODM uses Adjusted Operating EBITDA to evaluate segment performance in deciding whether to reinvest resources into the segment or into other parts of the entity. Budget versus actual results of Adjusted Operating EBITDA are used in assessing performance of the segment and in establishing certain compensation payouts. The Company’s CODM also uses Adjusted Operating EBITDA in competitive analysis by benchmarking to the Company’s competitors. Adjusted Operating EBITDA excludes results reported as discontinued operations.
The Company’s CODM does not use assets by segment to evaluate segment performance or allocate resources and thus, total assets by segment are not disclosed.
Reportable segment information was as follows:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Taste | Health & Biosciences | Scent | Total | ||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Research & development expenses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Selling & administrative expenses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Depreciation expense add-back (a) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating EBITDA from Continuing Operations | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
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| Reconciliation of Adjusted Operating EBITDA from Continuing Operations: | ||||||||||||||
| Total Adjusted Operating EBITDA from Continuing Operations | $ | |||||||||||||
| Depreciation & Amortization | ( | |||||||||||||
| Interest Expense | ( | |||||||||||||
| Other Expense, net (b) | ( | |||||||||||||
| Restructuring and Other Charges (c) | ( | |||||||||||||
| Losses on Business Disposals (e) | ( | |||||||||||||
| Loss on Assets Classified as Held for Sale (f) | ( | |||||||||||||
| Divestiture Costs (g) | ( | |||||||||||||
| Strategic Initiative Costs (h) | ( | |||||||||||||
| Regulatory Costs (i) | ( | |||||||||||||
| Entity Realignment Costs (k) | ( | |||||||||||||
| Other (l) | ||||||||||||||
| Income from continuing operations before taxes | $ | |||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Taste | Health & Biosciences | Scent | Total | ||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Cost of sales | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Research & development expenses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Selling & administrative expenses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Depreciation expense add-back (a) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating EBITDA from Continuing Operations | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Reconciliation of Adjusted Operating EBITDA from Continuing Operations: | ||||||||||||||
| Total Adjusted Operating EBITDA from Continuing Operations | $ | |||||||||||||
| Depreciation & Amortization | ( | |||||||||||||
| Interest Expense | ( | |||||||||||||
| Other Expense, net (b) | ( | |||||||||||||
| Restructuring and Other Charges (c) | ( | |||||||||||||
| Losses on Business Disposals (e) | ( | |||||||||||||
| Loss on Assets Classified as Held for Sale (f) | ( | |||||||||||||
| Divestiture Costs (g) | ( | |||||||||||||
| Strategic Initiative Costs (h) | ( | |||||||||||||
| Regulatory Costs (i) | ( | |||||||||||||
| Entity Realignment Costs (k) | ( | |||||||||||||
| Other (l) | ||||||||||||||
| Income from continuing operations before taxes | $ | |||||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Taste | Health & Biosciences | Scent | Pharma Solutions | Total | |||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Cost of sales | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Research & development expenses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Selling & administrative expenses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Depreciation expense add-back (a) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating EBITDA from Continuing Operations | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Reconciliation of Adjusted Operating EBITDA from Continuing Operations: | ||||||||||||||
| Total Adjusted Operating EBITDA from Continuing Operations | $ | |||||||||||||
| Depreciation & Amortization | ( | |||||||||||||
| Interest Expense | ( | |||||||||||||
| Other Expense, net (b) | ( | |||||||||||||
| Restructuring and Other Charges (c) | ( | |||||||||||||
| Losses on Business Disposals (e) | ( | |||||||||||||
| Gain on Extinguishment of Debt (j) | ||||||||||||||
| Divestiture Costs (g) | ( | |||||||||||||
| Strategic Initiative Costs (h) | ( | |||||||||||||
| Regulatory Costs (i) | ( | |||||||||||||
| Entity Realignment Costs (k) | ( | |||||||||||||
| Other (l) | ( | |||||||||||||
| Income from continuing operations before taxes | $ | |||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Taste | Health & Biosciences | Scent | Pharma Solutions | Total | |||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Cost of sales | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Research & development expenses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Selling & administrative expenses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Depreciation expense add-back (a) | |||||||||||||||||||||||||||||||||||
| Adjusted Operating EBITDA from Continuing Operations | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
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| Reconciliation of Adjusted Operating EBITDA from Continuing Operations: | ||||||||||||||
| Total Adjusted Operating EBITDA from Continuing Operations | $ | |||||||||||||
| Depreciation & Amortization | ( | |||||||||||||
| Interest Expense | ( | |||||||||||||
| Other Expense, net (b) | ( | |||||||||||||
| Restructuring and Other Charges (c) | ( | |||||||||||||
| Impairment of Goodwill (d) | ( | |||||||||||||
| Losses on Business Disposals (e) | ( | |||||||||||||
| Gain on Extinguishment of Debt (j) | ||||||||||||||
| Divestiture Costs (g) | ( | |||||||||||||
| Strategic Initiative Costs (h) | ( | |||||||||||||
| Regulatory Costs (i) | ( | |||||||||||||
| Entity Realignment Costs (k) | ( | |||||||||||||
| Other (l) | ( | |||||||||||||
| Income from continuing operations before taxes | $ | |||||||||||||
_______________________
| a) | There is depreciation recorded within cost of sales, research & development expenses, and selling & administrative expenses, which is then added back to calculate segment Adjusted Operating EBITDA from continuing operations. This reflects how the CODM reviews Segment results. | |||||||
| b) | Please refer to Note 9 for additional information. | |||||||
| c) | Represents costs related to severance as part of the IFF Productivity Program. | |||||||
| d) | For 2025, represents the impairment of goodwill attributable to the portion of the Food Ingredients reporting unit that is not included within the Food Ingredients or SCL disposal groups. | |||||||
| e) | For 2026, primarily represents losses recognized as part of final settlement adjustments related to the divestiture of the Nitrocellulose business in 2025. For 2025, primarily represents losses recognized as part of the sale of the Pharma Solutions disposal group, offset in part by gains recognized as part of the sale of the Nitrocellulose business. Please refer to Note 4 for additional information. | |||||||
| f) | For 2026, represents the loss on assets classified as held for sale related to the CitraSource business within the Scent segment. | |||||||
| g) | For 2026 and 2025, primarily represents costs related to the Company’s completed and anticipated divestitures, excluding costs related to the planned divestiture of the Food Ingredients disposal group. These costs primarily consisted of external consulting fees, professional and legal fees and salaries of individuals who are fully dedicated to such efforts. | |||||||
| h) | Represents costs related to the Company’s strategic assessment and business portfolio optimization efforts and reorganizing the Global Business Services (GBS) Centers. In 2026, the GBS reorganization has been expanded to include additional functions such as customer service, supply chain and logistics in addition to human resources, accounting and finance, as well as additional efforts to automate processes and expand the use of artificial intelligence (AI) for these functions. These costs primarily consisted of external consulting fees and salaries of individuals who are fully dedicated to such efforts. Costs to develop software and AI are only included to the extent that they do not qualify for capitalization. | |||||||
| i) | For 2026 and 2025, represents costs primarily related to provisions recognized for the ongoing investigations of the fragrance businesses and legal fees incurred. | |||||||
| j) | For 2025, represents the gain recognized on the extinguishment of debt in connection with the completion of tender offers. Please refer to Note 14 for additional information. | |||||||
| k) | Represents primarily consulting costs related to the Company’s implementation of a phased restructuring initiative aimed at optimizing its legal entity framework. | |||||||
| l) | For 2025, represents the net impact of costs related to severance, including accelerated stock compensation expense, for certain executives who have separated from the Company, in addition to consulting costs related to the Company’s implementation of a phased restructuring initiative aimed at optimizing its legal entity framework. | |||||||
Reportable segment capital expenditures consisted as follows:
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| Three Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Taste | $ | $ | |||||||||
| Health and Biosciences | |||||||||||
| Scent | |||||||||||
| Pharma Solutions | |||||||||||
| Consolidated | $ | $ | |||||||||
| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Taste | $ | $ | |||||||||
| Health and Biosciences | |||||||||||
| Scent | |||||||||||
| Pharma Solutions | |||||||||||
| Consolidated | $ | $ | |||||||||
Net sales, which are attributed to individual regions based upon the destination of product delivery, were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Europe, Africa and Middle East | $ | $ | $ | $ | |||||||||||||||||||
| Greater Asia | |||||||||||||||||||||||
| North America | |||||||||||||||||||||||
| Latin America | |||||||||||||||||||||||
| Consolidated | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales related to the U.S. | $ | $ | $ | $ | |||||||||||||||||||
| Net sales attributed to all foreign countries | |||||||||||||||||||||||
No country other than the U.S. had net sales greater than 10
NOTE 8. EMPLOYEE BENEFITS
Pension and other defined contribution retirement plan expenses included the following components:
| (DOLLARS IN MILLIONS) | U.S. Plans | ||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Interest cost on projected benefit obligation(1) | $ | $ | $ | $ | |||||||||||||||||||
| Net amortization and deferrals | |||||||||||||||||||||||
| Net periodic benefit cost - total | $ | $ | $ | $ | |||||||||||||||||||
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| (DOLLARS IN MILLIONS) | Non-U.S. Plans | ||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Service cost for benefits earned(2) | $ | $ | $ | $ | |||||||||||||||||||
Interest cost on projected benefit obligation(1) | |||||||||||||||||||||||
Expected return on plan assets(1) | ( | ( | ( | ( | |||||||||||||||||||
Net amortization and deferrals(1) | |||||||||||||||||||||||
| Net periodic benefit cost - total | $ | $ | $ | $ | |||||||||||||||||||
_______________________
(1)Included as a component of Other expense, net.
(2)Included as a component of Operating profit.
On a total Company basis, the Company expects to contribute a total of $5 million to its U.S. pension plans and a total of $17 million to its non-U.S. pension plans during 2026. During the six months ended June 30, 2026, $2 million of contributions were made with respect to the Company’s non-qualified U.S. pension plans and $8 million of contributions were made to the non-U.S. pension plans.
Expense recognized for post-retirement benefits other than pensions included the following components:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Interest cost on projected benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
| Net amortization and deferrals | ( | ||||||||||||||||||||||
| Postretirement benefit expense - total | $ | $ | $ | $ | |||||||||||||||||||
The Company expects to make $4 million of payments related to its postretirement benefits other than pension plans during 2026. In the six months ended June 30, 2026, $2 million of benefit payments were made.
NOTE 9. OTHER EXPENSE, NET
Other expense, net consisted of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Foreign exchange losses | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Interest income | |||||||||||||||||||||||
| Pension-related benefit | |||||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||
| Other expense, net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
NOTE 10. INCOME TAXES
The effective tax rate for the three months ended June 30, 2026 was 48.4 %, which was primarily driven by increased non-deductible regulatory costs, changes in the mix of earnings as well as tax costs associated with repatriation activities, offset by favorable legislative changes impacting U.S. foreign inclusions.
The effective tax rate for the six months ended June 30, 2026 was 27.7 %, which was primarily driven by increased non-deductible regulatory costs, the entity realignment project, changes in the mix of earnings post business divestitures, offset by favorable legislative changes impact U.S. foreign inclusions.
The effective tax rates for the three and six months ended June 30, 2025 were (25.6 )% and (17.5 )%, respectively, which were primarily driven by the tax benefit resulting from the entity realignment project, offset in part by the impact of business divestitures and changes in the mix of earnings following the divestitures.
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NOTE 11. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consisted of the following amounts:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
| Asset Type | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Machinery and equipment | |||||||||||
| Information technology | |||||||||||
| Construction in process | |||||||||||
| Total Property, plant and equipment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Total Property, plant and equipment, net | $ | $ | |||||||||
Depreciation expense was $72 million and $64 million for the three months ended June 30, 2026 and 2025, respectively, and $140 million and $126 million for the six months ended June 30, 2026 and 2025, respectively.
Interest incurred during the construction period of certain property, plant and equipment is capitalized until the underlying assets are placed in service, at which time straight-line amortization of the capitalized interest begins over the estimated useful lives of the related assets. Capitalized interest was approximately $3 million for the three months ended June 30, 2026 and 2025, and approximately $7 million and $6 million for the six months ended June 30, 2026 and 2025.
NOTE 12. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
Movements in goodwill attributable to each reportable segment for the six months ended June 30, 2026 were as follows:
| (DOLLARS IN MILLIONS) | Taste | Scent | Health & Biosciences | Total | |||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Transferred to assets held for sale | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets
Other intangible assets, net consisted of the following amounts:
| June 30, | December 31, | ||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Asset Type | |||||||||||
| Customer relationships | $ | $ | |||||||||
| Technological know-how | |||||||||||
| Trade names & patents | |||||||||||
| Other | |||||||||||
| Total carrying value | |||||||||||
| Accumulated Amortization | |||||||||||
| Customer relationships | ( | ( | |||||||||
| Technological know-how | ( | ( | |||||||||
| Trade names & patents | ( | ( | |||||||||
| Other | ( | ( | |||||||||
| Total accumulated amortization | ( | ( | |||||||||
| Other intangible assets, net | $ | $ | |||||||||
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Amortization
Amortization expense was $82 166 million and $162 million for the six months ended June 30, 2026 and 2025, respectively.
Amortization expense for the next five years, based on valuations and determinations of useful lives, is expected to be as follows:
| (DOLLARS IN MILLIONS) | Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||
| Estimated future intangible amortization expense | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
NOTE 13. OTHER CURRENT ASSETS AND LIABILITIES, AND OTHER ASSETS
Prepaid expenses and other current assets consisted of the following amounts:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
| Value-added tax receivable | $ | $ | |||||||||
| Prepaid income taxes | |||||||||||
| Packaging materials and supplies | |||||||||||
| Prepaid expenses | |||||||||||
| Earnout and other post-closing adjustments receivable | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
Other assets consisted of the following amounts:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
| Deferred income taxes | $ | $ | |||||||||
| Overfunded pension plans | |||||||||||
| Cash surrender value of life insurance contracts | |||||||||||
| Finance lease right-of-use assets | |||||||||||
| Equity method investments | |||||||||||
Long-term income tax receivables(1) | |||||||||||
Other(2) | |||||||||||
| Total | $ | $ | |||||||||
(1)Primarily relates to long-term tax receivables due to an operating loss carryback and long-term uncertain tax benefits.
(2)Primarily relates to land usage rights in China, long-term value-added tax receivables, and receivables from certain government authorities which the Company has corresponding payables to DuPont in relation to the N&B merger in 2021.
Other current liabilities consisted of the following amounts:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
| Rebates and incentives payable | $ | $ | |||||||||
| Value-added tax payable | |||||||||||
| Interest payable | |||||||||||
| Current pension and other postretirement benefit obligation | |||||||||||
| Accrued restructuring | |||||||||||
| Current operating lease obligation | |||||||||||
| Accrued income taxes | |||||||||||
| Accrued expenses payable | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
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NOTE 14. DEBT
Debt consisted of the following:
| (DOLLARS IN MILLIONS) | Effective Interest Rate | June 30, 2026 | December 31, 2025 | ||||||||||||||
2026 Euro Notes(1) | % | ||||||||||||||||
2027 Notes(1) | % | ||||||||||||||||
2028 Notes(1) | % | ||||||||||||||||
2030 Notes(1) | % | ||||||||||||||||
2040 Notes(1) | % | ||||||||||||||||
2047 Notes(1) | % | ||||||||||||||||
2048 Notes(1) | % | ||||||||||||||||
2050 Notes(1) | % | ||||||||||||||||
Revolving Credit Facility(2) | |||||||||||||||||
Commercial paper(3) | |||||||||||||||||
| Bank overdrafts and other | |||||||||||||||||
| Total debt | |||||||||||||||||
| Less: Short-term borrowings | ( | ( | |||||||||||||||
| Total Long-term debt | $ | $ | |||||||||||||||
_______________________
(1)Amount is net of unamortized discount and debt issuance costs.
(2)Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused borrowings.
(3)The effective interest rate of commercial paper issuances fluctuates as short-term interest rates and demand fluctuate, and deferred debt issuance costs are immaterial. Refer to “Commercial Paper” below.
Delayed Draw Term Loan Facility
On June 23, 2026, the Company entered into a Term Loan Credit Agreement providing for a $1.0 billion senior unsecured delayed draw term loan facility. The facility permits a single borrowing in U.S. dollars through September 25, 2026, and matures on December 31, 2027, with no ability to re-borrow amounts repaid. Proceeds, together with cash on hand, are intended to refinance the Company’s €800 million aggregate principal amount of 1.800 % Senior Notes due September 25, 2026, to pay related fees and expenses incurred in connection with the loan, and for general corporate purposes. Borrowings will bear interest at Term SOFR plus an applicable margin ranging from 0.875 % to 1.500 % per annum, or, at the Company’s option, a base rate plus an applicable margin ranging from 0.000 % to 0.500 % per annum, in each case based on the Company’s public debt ratings. The agreement also requires mandatory prepayment with 100 % of the net cash proceeds from the sale of the Company’s Food Ingredients business. The agreement contains customary representations and warranties, affirmative and negative covenants, including a maximum net debt to consolidated EBITDA ratio of 3.75 to 1.00, and events of default that are substantially consistent with those contained in the Company’s Revolving Credit Facility.
Repayments of Debt
Tender Offers
On May 20, 2025, the Company commenced tender offers to purchase for cash certain of its outstanding series of Senior Notes for an aggregate purchase price, excluding accrued and unpaid interest, of $2.0 billion. The carrying value of this series of Senior Notes purchased as a result of these tender offers was $2.5 billion. The Company also incurred approximately $6 million of banking and legal costs. In connection with the completion of these tender offers, the Company recognized a gain on debt extinguishment of $488 million within the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the period ended June 30, 2025. The tender offers were primarily funded through the proceeds received from the divestiture of the Pharma Solutions disposal group.
Other
For the six months ended June 30, 2025, the Company made debt repayments totaling approximately $413 million on the remaining balance of the 2026 Term Loan Facility. This was done using a portion of the cash proceeds from the divestiture of the Pharma Solutions disposal group in accordance with the terms of the Term Loan Facility agreement.
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Commercial Paper
As of June 30, 2026, the amount of commercial paper outstanding was $50 million with a weighted average interest rate of 4.15 % and a weighted average maturity of 14 days. As of December 31, 2025, the amount of commercial paper outstanding was $314 million with a weighted average interest rate of 4.21 % and a weighted average maturity of 35 days.
For the six months ended June 30, 2026, the Company had gross issuances of $2.731 billion and repayments of $2.995 billion under the commercial paper program. For the six months ended June 30, 2025, the Company had gross issuances of $3.284 billion and repayments of $3.284 billion under the commercial paper program. The commercial paper issued during each of the six months ended June 30, 2026 and 2025 had original maturities of less than three months.
The commercial paper program is backed by the borrowing capacity available under the Revolving Credit Facility. The effective interest rate of commercial paper issuances does not materially differ from short-term interest rates, which fluctuate due to market conditions and as a result may impact the Company’s interest expense.
Revolving Credit Facility
For the six months ended June 30, 2026 and 2025, the Company had no 2 billion Revolving Credit Facility.
Lines of Credit
NOTE 15. LEASES
The Company has leases for corporate offices, manufacturing facilities, research and development facilities and certain transportation and office equipment. The Company’s leases have remaining lease terms of up to 50 years, some of which include options to extend the leases for up to 15 years.
The components of lease expense were as follows:
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||||||||
| (DOLLARS IN MILLIONS) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Operating leases | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Total operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance leases | |||||||||||||||||||||||
| Finance lease cost | $ | $ | $ | $ | |||||||||||||||||||
Supplemental cash flow information related to leases was as follows:
| Six Months Ended | Six Months Ended | ||||||||||
| (DOLLARS IN MILLIONS) | June 30, 2026 | June 30, 2025 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||||||
| Operating cash flows for operating leases | $ | $ | |||||||||
| Operating cash flows for finance leases | |||||||||||
| Financing cash flows for finance leases | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
Operating lease right-of-use assets are presented in “Operating lease right-of-use assets” and finance lease right-of-use assets are presented in “Other assets” on the Consolidated Balance Sheets. Operating lease liabilities are presented in “Operating lease liabilities” and finance lease liabilities are presented in “Other liabilities” on the Consolidated Balance Sheets. Any other current liabilities related to operating and finance lease liabilities are presented in “Other current liabilities” on the Consolidated Balance Sheets.
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NOTE 16. FINANCIAL INSTRUMENTS
Fair Value
Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:
•Level 1 — Quoted prices for identical instruments in active markets.
•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
•Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company also considers counterparty credit risk in its assessment of fair value. The Company determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the Secured Overnight Financing Rate (“Term SOFR”) swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. Instruments classified as Level 3 include the receivable for earnout as discussed in Note 13, as well as instruments held in pension asset trusts as discussed in Note 8 of the Company’s 2025 Form 10-K. These valuations take into consideration the Company’s credit risk and its counterparties’ credit risk.
The carrying values and the estimated fair values of financial instruments at June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
| LEVEL 1 | |||||||||||||||||||||||
Cash and cash equivalents(1) | $ | $ | $ | $ | |||||||||||||||||||
| LEVEL 2 | |||||||||||||||||||||||
Credit facilities and bank overdrafts(2) | |||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
Derivative assets(3) | |||||||||||||||||||||||
Derivative liabilities(3) | |||||||||||||||||||||||
Commercial paper(2) | |||||||||||||||||||||||
| Long-term debt: | |||||||||||||||||||||||
2026 Euro Notes(4) | |||||||||||||||||||||||
2027 Notes(4) | |||||||||||||||||||||||
2028 Notes(4) | |||||||||||||||||||||||
2030 Notes(4) | |||||||||||||||||||||||
2040 Notes(4) | |||||||||||||||||||||||
2047 Notes(4) | |||||||||||||||||||||||
2048 Notes(4) | |||||||||||||||||||||||
2050 Notes(4) | |||||||||||||||||||||||
_______________________
(1)The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments.
(2)The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.
(3)The carrying amount approximates fair value as the instruments are marked-to-market and held at fair value on the Consolidated Balance Sheets.
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(4)The fair value of the Note is obtained from pricing services engaged by the Company, and the Company receives one price for each security. The fair value provided by the pricing services are estimated using pricing models, where the inputs to those models are based on observable market inputs or recent trades of similar securities. The inputs to the valuation techniques applied by the pricing services are typically benchmark yields, benchmark security prices, credit spreads, reported trades and broker-dealer quotes, all with reasonable levels of transparency.
Derivatives
Foreign Currency Forward Contracts
The Company periodically enters into foreign currency forward contracts with the objective of managing its exchange rate risk related to foreign currency denominated monetary assets and liabilities of its operations. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions.
Hedges Related to Issuances of Debt
As of June 30, 2026, the Company had no debt instruments designated as net investment hedges. During the second quarter of 2026, the Company de-designated its Euro Notes as a hedge of a portion of its net European investments. Subsequent changes in the fair value of the debt are recorded in earnings. Amounts previously recorded in accumulated other comprehensive income (“AOCI”) related to the hedge remain in AOCI until the related net investment is substantially liquidated. The Company entered into additional foreign currency forward contracts to hedge the remaining currency fluctuations on the Euro Notes until maturity in September 2026.
Cross Currency Swaps
The Company has twenty-two EUR/USD cross currency swaps with a notional value of $2.4 billion that mature through February 2036. The swaps all qualified as net investment hedges in order to mitigate a portion of the Company’s net European investments from foreign currency risk. As of June 30, 2026, the swaps were in a net liability position with an aggregate fair value of $194 million, of which $11 million were in an asset position presented in “Other assets” and $205 million were in a liability position presented in “Other liabilities” on the Consolidated Balance Sheets. Changes in fair value related to cross currency swaps are recorded in OCI.
The following table shows the notional amount of the Company’s derivative instruments outstanding as of June 30, 2026 and December 31, 2025:
| (DOLLARS IN MILLIONS) | June 30, 2026 | December 31, 2025 | |||||||||
Foreign currency contracts(1) | $ | ( | $ | ( | |||||||
| Cross currency swaps | |||||||||||
(1)Foreign currency contracts are presented net of the outstanding buy/(sell) instruments.
The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected on the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025:
| June 30, 2026 | |||||||||||||||||
| (DOLLARS IN MILLIONS) | Fair Value of Derivatives Designated as Hedging Instruments | Fair Value of Derivatives Not Designated as Hedging Instruments | Total Fair Value | ||||||||||||||
Derivative assets(1) | |||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | ||||||||||||||
| Cross currency swaps | |||||||||||||||||
| Total derivative assets | $ | $ | $ | ||||||||||||||
Derivative liabilities(2) | |||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | ||||||||||||||
| Cross currency swaps | |||||||||||||||||
| Total derivative liabilities | $ | $ | $ | ||||||||||||||
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| December 31, 2025 | |||||||||||||||||
| (DOLLARS IN MILLIONS) | Fair Value of Derivatives Designated as Hedging Instruments | Fair Value of Derivatives Not Designated as Hedging Instruments | Total Fair Value | ||||||||||||||
Derivative assets(1) | |||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | ||||||||||||||
| Cross currency swaps | |||||||||||||||||
| Total derivative assets | $ | $ | $ | ||||||||||||||
Derivative liabilities(2) | |||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | ||||||||||||||
| Cross currency swaps | |||||||||||||||||
| Total derivative liabilities | $ | $ | $ | ||||||||||||||
(1)Derivative assets are recorded to Prepaid expenses and other current assets on the Consolidated Balance Sheets.
(2)Derivative liabilities are recorded to Other current liabilities and Other liabilities on the Consolidated Balance Sheets.
The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025:
| Amount of Gain (Loss) Recognized in Income on Derivative Settlements | Amount of Gain (Loss) Recognized in Income on Changes in Fair Value | Location of Gain (Loss) Recognized in Income on Derivative | ||||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Foreign currency forward contracts(1) | $ | ( | $ | $ | ( | $ | Other expense, net | |||||||||||||||||||
| Amount of Gain (Loss) Recognized in Income on Derivative Settlements | Amount of Gain (Loss) Recognized in Income on Changes in Fair Value | Location of Gain (Loss) Recognized in Income on Derivative | ||||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Foreign currency forward contracts(1) | $ | ( | $ | $ | ( | $ | Other expense, net | |||||||||||||||||||
_______________________
(1)The foreign currency contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods.
The following table shows the effect of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedging instruments, net of tax, on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025:
| Amount of Gain (Loss) Recognized in OCI on Derivative and Non-Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (“AOCI”) into Income (Effective Portion) | Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||||||||||||||
| Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships: | |||||||||||||||||||||||||||||
| Commodity contracts | $ | ( | $ | Income (loss) from Discontinued Operations | $ | $ | |||||||||||||||||||||||
Interest rate swaps(1) | Interest expense | ( | |||||||||||||||||||||||||||
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| Derivatives in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
| Cross currency swaps | ( | ( | N/A | ||||||||||||||||||||||||||
| Non-Derivatives in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
| 2026 Euro Notes | ( | ( | N/A | ||||||||||||||||||||||||||
| Tax benefit | |||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||
| Amount of Gain (Loss) Recognized in OCI on Derivative and Non-Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | |||||||||||||||||||||||||||
| Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships: | |||||||||||||||||||||||||||||
| Commodity contracts | $ | $ | ( | Income (loss) from Discontinued Operations | $ | $ | |||||||||||||||||||||||
Interest rate swaps(1) | Interest expense | ( | |||||||||||||||||||||||||||
| Derivatives in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
| Cross currency swaps | ( | N/A | |||||||||||||||||||||||||||
| Non-Derivatives in Net Investment Hedging Relationships: | |||||||||||||||||||||||||||||
| 2026 Euro Notes | ( | N/A | |||||||||||||||||||||||||||
| Tax (expense) benefit | ( | ||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
_______________________
(1) Interest rate swaps were entered into as pre-issuance hedges for the Company’s bond offerings.
The ineffective portion of the above noted net investment hedges was approximately $6 million and $3 million for the three months ended June 30, 2026 and 2025, respectively, and $11 million and $7 million for the six months ended June 30, 2026 and 2025, respectively, and was recorded as a reduction to Interest expense on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
At June 30, 2026, based on current market rates, the Company does not expect any material derivative losses (net of tax), included in AOCI, to be reclassified into earnings within the next 12 months.
NOTE 17. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following tables present changes in the accumulated balances for each component of other comprehensive loss, including current period other comprehensive income (loss) and reclassifications out of accumulated other comprehensive loss, for the three and six months ended June 30, 2026 and 2025:
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| (DOLLARS IN MILLIONS) | Foreign Currency Translation Adjustments | Gains (Losses) on Derivatives Qualifying as Hedges | Pension and Postretirement Liability Adjustment | Total | |||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of April 1, 2026 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| OCI before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of June 30, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| (DOLLARS IN MILLIONS) | Foreign Currency Translation Adjustments | Gains (Losses) on Derivatives Qualifying as Hedges | Pension and Postretirement Liability Adjustment | Total | |||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of January 1, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| OCI before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of June 30, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| (DOLLARS IN MILLIONS) | Foreign Currency Translation Adjustments | Gains (Losses) on Derivatives Qualifying as Hedges | Pension and Postretirement Liability Adjustment | Total | |||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of April 1, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| OCI before reclassifications | ( | ||||||||||||||||||||||
| Reclassifications due to business divestitures | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | |||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of June 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| (DOLLARS IN MILLIONS) | Foreign Currency Translation Adjustments | Gains (Losses) on Derivatives Qualifying as Hedges | Pension and Postretirement Liability Adjustment | Total | |||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of January 1, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| OCI before reclassifications | ( | ( | |||||||||||||||||||||
| Reclassifications due to business divestitures | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | |||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Accumulated other comprehensive loss, net of tax, as of June 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The following table provides details about reclassifications out of Accumulated other comprehensive loss to the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss):
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| Three Months Ended June 30, | Affected Line Item in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) | ||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||||||||
| Prior service cost | $ | $ | (1) | ||||||||||||||
| Actuarial losses (gains) | ( | (1) | |||||||||||||||
| Total | $ | $ | ( | Total, net of income taxes | |||||||||||||
| Six Months Ended June 30, | Affected Line Item in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) | ||||||||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||||||||
| Prior service cost | $ | $ | (1) | ||||||||||||||
| Actuarial losses (gains) | ( | (1) | |||||||||||||||
| Total | $ | $ | ( | Total, net of income taxes | |||||||||||||
_______________________
NOTE 18. COMMITMENTS AND CONTINGENCIES
Guarantees and Letters of Credit
The Company has various bank guarantees, letters of credit and surety bonds which are used to support its ongoing business operations, satisfy governmental requirements associated with pending litigation in various jurisdictions and the payment of customs duties. The amounts disclosed below represent commitments and guarantees that include both continuing and discontinued operations.
As of June 30, 2026, the Company had a total of approximately $239 million of available bank guarantees, commercial guarantees, standby letters of credit and surety bonds with various financial institutions. There was a total of approximately $55 million outstanding under the bank guarantees, standby letters of credit and commercial guarantees as of June 30, 2026.
In order to challenge certain assessments in Brazil, the Company has been required to, and has separately pledged assets, principally property, plant and equipment, to cover assessments in the amount of approximately $8 million as of June 30, 2026.
Litigation
The Company assesses contingencies related to litigation and/or other matters to determine the degree of probability and range of possible loss if reasonably estimable. A loss contingency is accrued in the Company’s Consolidated Financial Statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly sensitive and requires judgments about future events and any assessments or the related decisions on accruals could be inaccurate. On at least a quarterly basis, the Company reviews contingencies related to litigation to determine the adequacy of accruals. The amount of ultimate loss may substantially differ from these estimates and the amounts accrued, and further events may require the Company to increase or decrease the amounts it has accrued on any matter.
Periodically, the Company assesses its insurance coverage for all known claims, where applicable, taking into account aggregate coverage by occurrence, limits of coverage, self-insured retentions and deductibles, historical claims experience and claims experience with its insurance carriers. The probable liabilities are recorded at management’s best estimate of the probable outcome of the lawsuits and claims where reasonably estimable, taking into consideration the facts and circumstances of the individual matters as well as past experience on similar matters. At each balance sheet date, management assesses whether it is probable that a loss as to asserted or unasserted claims has been incurred and if so, whether the amount of loss can be reasonably estimated. The Company records the expected liability with respect to claims in Other current liabilities or Other liabilities and expected recoveries from its insurance carriers in Other current assets or Other assets. The Company recognizes a receivable when it believes that realization of the insurance receivable is probable under the terms of the insurance policies and its payment experience to date.
Litigation Matters
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A motion to approve a securities class action was filed in the Tel Aviv District Court, Israel, in August 2019, alleging, among other things, false and misleading statements largely in connection with IFF’s acquisition of Frutarom and improper payments made by Frutarom businesses operating principally in Russia and Ukraine to representatives of customers. The motion (“Oman”) (following an initial amendment) asserted claims under the Israeli Securities Act-1968 against IFF, its former Chairman and CEO, and its former CFO, and against Frutarom and certain former Frutarom officers and directors, as well as claims under the Israeli Companies Act-1999 against certain former Frutarom officers and directors. On July 14, 2022, the court approved the parties’ motion to mediate the dispute, which postponed all case deadlines until after the mediation. The parties held mediation meetings on September 13, 2022, November 22, 2022, March 1, 2023, November 2023, March 3, 2024 and April 1, 2024. In November 2024, the court granted extensions to the parties’ joint filings of the responses to the Oman motion and for the evidential hearings, for the parties to exhaust the mediation proceeding. In the second quarter of 2025, the parties finalized a settlement agreement and submitted it to the court for approval. The settlement, approved by the court in November 2025, resolves all claims against Frutarom and its former officers and directors, and was made to avoid the cost, distraction and uncertainty of prolonged litigation. The settlement agreement states the settlement payment, fees and expenses totaling 24 million New Israel Shekel (approximately $7 million) will be paid by the respondents’ insurers. As of May 2026, the full settlement amount was received by the distribution trustee.
On October 29, 2019, IFF and Frutarom filed a claim in the Tel Aviv District Court, Israel, against Ori Yehudai, the former President and CEO of Frutarom, and against certain former directors of Frutarom, challenging the bonus of $20 million granted to Yehudai in 2018. IFF and Frutarom allege, among other things, that Yehudai was not entitled to receive the bonus because he breached his fiduciary duty by, among other things, knowing of the above-mentioned improper payments and failing to prevent them from being made. The parties agreed, pursuant to the court’s recommendation, to attempt to resolve the dispute through mediation, and a court decision is pending with regard to the order in which this claim and the class action described below will be heard.
On March 11, 2020, an IFF shareholder filed a motion to approve a class action in Israel against, among others, Frutarom, Yehudai, and Frutarom’s former board of directors, alleging that former minority shareholders of Frutarom were harmed as a result of the US $20 million bonus paid to Yehudai. The court held an evidentiary hearing on the motion to approve a class action in March 2024. In September 2025, the court issued a decision granting the motion to certify a class action. In December 2025, Frutarom submitted its motion for rehearing of that decision. Frutarom’s motion remains pending.
Since March 2023, various putative class action lawsuits have been filed against IFF, Firmenich International SA, Givaudan SA, and Symrise AG and/or certain affiliates thereof in the Quebec Superior Court, the Federal Court of Canada, Ontario Superior Court, the Supreme Court of British Columbia and, in several cases, the United States District Court for the District of New Jersey. These actions allege violations of the Canadian Competition Act and the Sherman Act, as applicable, and other related claims, and seek damages and other relief. IFF announced on October 17, 2025, that it entered into a settlement agreement which will be a full settlement of the multiple civil class actions brought by direct purchasers of fragrance products in the United States. On November 17, 2025, the U.S. District Court granted the motion for preliminary approval of this settlement and IFF then contributed $26 million to a settlement fund to resolve all class claims related to this direct purchaser class. On March 16, 2026 and April 6, 2026, IFF entered into respective settlement agreements with the end-user plaintiffs and the indirect purchaser plaintiffs, respectively. After preliminary approval from the U.S. District Court, IFF contributed $6 million to a settlement with indirect purchaser plaintiffs on June 25, 2026, and contributed $11 million to a settlement with end-user plaintiffs on May 6, 2026. Notices are being published for the plaintiffs in each of the three class action settlements; the notice periods have not yet closed. During the twelve months ended December 31, 2025, the Company recognized a total provision of $43 million within “Selling and Administrative Expenses” in connection with the U.S. class action lawsuits, based on estimated potential settlement amount inclusive of the amounts noted above related to settlements with direct purchasers, indirect purchasers and end-user plaintiffs. This provision does not include any potential liabilities that may arise from other civil proceedings not encompassed by the U.S. class action lawsuits. On January 27, 2026, an additional class action complaint was filed in the District of New Jersey on behalf of a class of purchasers in the United States of consumer goods containing fragrance products that were purchased outside the United States. A settlement agreement has also been reached in this class action. This settlement will not require a payment from the Company. On July 7, 2026, the Ontario Superior Court denied the plaintiff’s motion to certify the action as a Canadian national class action. IFF may face additional civil suits, in the United States, Canada, United Kingdom, European Union or in other countries, relating to such alleged conduct. At this time, IFF is unable to predict the potential outcome of these lawsuits or any potential effect they may have on the Company’s results of operations, liquidity or financial condition. The resolution of any of these items could have a material adverse effect on IFF’s results of operation, financial condition and overall business.
Investigations
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On June 3, 2020, the Israel Police’s National Fraud Investigation Unit and the Israeli Securities Authority commenced an investigation into Frutarom and certain of its former executives, based on suspected bribery of foreign officials, money laundering, and violations of the Israeli Securities Act-1968. On February 26, 2024, the Israeli authorities informed Frutarom that the authorities decided to close the criminal investigation.
On March 7, 2023, the European Commission (“EC”) and the United Kingdom Competition and Markets Authority (“CMA”) carried out unannounced inspections of certain of IFF’s facilities. IFF understands the EC, CMA and the Swiss Competition Commission are investigating potential anticompetitive conduct as it relates to IFF’s fragrance businesses. On the same day, IFF was served with a grand jury subpoena by the Antitrust Division of the U.S. Department of Justice (“DOJ”). The Mexican Competition Commission has also announced that it is investigating potential anticompetitive conduct in the fragrance and fragrance ingredients industries. On February 5, 2026, IFF received a letter from DOJ confirming the closing of its investigation (such decision is independent of the other related civil or regulatory matters). The Company has applied for leniency in a number of jurisdictions. Leniency, if obtained in a jurisdiction, would generally carry significant benefits by, for example, reducing or eliminating monetary liability in that jurisdiction. Since March 7, 2023, other investigations have been underway or threatened in other jurisdictions related to claimed anti-competitive conduct. While these investigations are confidential, the Company is cooperating and/or seeking leniency in those jurisdictions, as well. IFF has been and intends to continue actively cooperating with these investigations, as well as any other present or future inquiries from governmental authorities.
During 2026, additional investigations have been initiated in Singapore and India relating to employment practices in the fragrance industry. As with the other investigations, IFF is cooperating with the regulators in these investigations.
As of June 30, 2026, IFF has recognized provisions based on its best estimates related to the pending investigations. IFF is currently unable to predict or determine the duration or outcome of the investigations, or whether the outcome of the investigations will materially impact the Company’s results of operations, liquidity or financial condition. An adverse judgment or other outcome or settlement with respect to any proceedings discussed above could result in significant fines or payments by IFF. The resolution of any of these items could have a material adverse effect on IFF’s results of operations, financial condition, and overall business.
Environmental Proceedings
Effective March 22, 2024, the Solae, LLC Memphis site (“Solae”) signed an Administrative Order on Consent (the “Consent Order”) resolving violations and penalties pertaining to the Administrative Order and Assessment received from the City of Memphis on May 27, 2022 related to alleged wastewater discharge violations. In view of the Consent Order, Solae withdrew its previously filed appeal. Pursuant to the Consent Order, Solae is completing its capital project efforts in accordance with the agreed schedule for attaining compliance with current wastewater permit requirements. This matter is not expected to have a material adverse effect on the Company’s financial position, cash flows or results of operations.
Other Contingencies
The Company has contingencies involving third parties (such as labor, contract, technology or product-related claims or litigation) as well as government-related items in various jurisdictions in which it operates pertaining to such items as value-added taxes, other indirect taxes, customs and duties and sales and use taxes. It is possible that cash flows or results of operations, in any period, could be materially affected by the unfavorable resolution of one or more of these contingencies.
The most significant government-related contingencies exist in Brazil. With regard to the Brazilian matters, the Company believes it has valid defenses for the underlying positions under dispute; however, in order to pursue these defenses, the Company is required to, and has provided, bank guarantees and pledged assets in the aggregate amount of approximately $20 million. The Brazilian matters take an extended period of time to proceed through the judicial process and there are a limited number of rulings to date.
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Other
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and have not been fully resolved. Due to the inherent subjectivity and unpredictability of outcomes of legal proceedings, the Company is unable to determine, with certainty, the probability of the outcome of these matters or the range of reasonably possible losses, if any.
Other Matters
On February 20, 2026, the Supreme Court of the United States ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the imposition of tariffs, effectively invalidating IEEPA‑based tariffs that had been in effect since February 2025. On April 20, 2026, U.S. Customs and Border Protection (“CBP”) launched an online portal that may be used to submit requests for refunds of IEEPA tariffs previously assessed. All refund requests are subject to CBP review and approval prior to the issuance of any refunds.
As of June 30, 2026, the Company had recorded approximately $18 million of tariff refunds received, net of amounts expected to be remitted to customers, related to refunds of previously paid tariffs. The Company will continue to evaluate new information and will recognize additional tariff refunds and any related obligations when the applicable recognition criteria under ASC 450, Contingencies, are met.
NOTE 19. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Revision of Previously Issued Financial Statements
In preparing the Consolidated Financial Statements as of and for the three and nine months ended September 30, 2025, Management identified certain income tax-related adjustments that primarily relate to the understatement of income tax expense due to errors in the accounting for transfer pricing, the correction of deferred tax liabilities on goodwill recorded in purchase accounting, and other income tax entries that impacted prior interim and annual financial statements. Management also identified certain other errors that were concluded to be immaterial, individually and in the aggregate, to the Company’s consolidated financial statements as of and for the relevant periods. These include an adjustment to the Pharma Solutions disposal group loss on business disposal which should have been recognized upon the initial classification of the disposal group as held for sale, tax adjustments identified in prior periods primarily related to deferred taxes, balance sheet misclassifications to correct the netting of value added tax receivables and payables and uncertain tax provisions and benefits, an error in the classification of uncertain tax provisions recognized as deferred tax liabilities, an adjustment to record the right of use asset and lease liability related to a lease upon lease commencement that was incorrectly omitted, and a cash flow adjustment to correct the classification of cash paid/received on foreign currency forward contracts from operating activities to investing activities.
Management assessed the materiality of the errors on prior period interim and annual consolidated financial statements in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, in consideration of both quantitative and qualitative factors, management determined that the related impacts of the errors were not material to any previously issued interim or annual financial statements. However, if the corrections were recorded in the three months ended September 30, 2025, they would be material to that period. As such, management revised the prior period amounts presented in these financial statements to correct the errors.
In preparing the Consolidated Financial Statements for the year ended December 31, 2025, management identified an additional error related to tax expense on business disposals that affects the interim consolidated financial statements for the three months and six months ended June 30, 2025 and nine months ended September 30, 2025 reported within our Quarterly Reports on Form 10-Q for the fiscal periods ended June 30, 2025 and September 30, 2025. Management revised the prior interim periods to correct this error, as noted in our 2025 Form 10-K. The error had no impact on our Consolidated Financial Statements as of and for the year ended December 31, 2025.
The following tables include the revisions to previously filed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and Consolidated Statements of Cash Flows for the periods ended June 30, 2025. The applicable notes to the accompanying financial statements have also been corrected to reflect the impact of the revisions of the previously filed consolidated interim financial statements. The following tables further present a reconciliation to the revised and recast interim consolidated financial statements reflecting discontinued operations.
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Impacts to Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
| Six Months Ended June 30, 2025 | |||||||||||||||||
| (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | As Previously Reported | Adjustments | As Revised | Discontinued Operations Reclassification Impacts | As Revised and Recast | ||||||||||||
| Net sales | $ | $ | $ | $ | ( | $ | |||||||||||
| Cost of sales | ( | ||||||||||||||||
| Gross profit | ( | ||||||||||||||||
| Research and development expenses | ( | ||||||||||||||||
| Selling and administrative expenses | ( | ||||||||||||||||
| Amortization of acquisition-related intangibles | ( | ||||||||||||||||
| Impairment of goodwill | ( | ||||||||||||||||
| Restructuring and other charges | ( | ||||||||||||||||
| Losses on sale of assets | |||||||||||||||||
| Operating profit (loss) | ( | ( | |||||||||||||||
| Interest expense | |||||||||||||||||
| Gain on extinguishment of debt | ( | ( | ( | ||||||||||||||
| Losses on business disposals | |||||||||||||||||
| Other expense, net | |||||||||||||||||
| Income (loss) from continuing operations before taxes | ( | ( | ( | ||||||||||||||
| (Benefit) Provision for income taxes | ( | ( | ( | ( | ( | ||||||||||||
| Net income (loss) from continuing operations | ( | ( | ( | ||||||||||||||
| Income (loss) from discontinued operations before tax | ( | ( | |||||||||||||||
| Provision (Benefit) for income taxes from discontinued operations | |||||||||||||||||
| Net income (loss) from discontinued operations | ( | ( | |||||||||||||||
| Net loss | ( | ( | ( | ( | |||||||||||||
| Net income attributable to non-controlling interests from continuing operations | |||||||||||||||||
| Net loss attributable to IFF shareholders | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||
| Income (loss) per share - basic | |||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||
| Discontinued operations | ( | ( | |||||||||||||||
| Net income (loss) per share – basic | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||
| Income (loss) per share - diluted | |||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||
| Discontinued operations | ( | ( | |||||||||||||||
| Net income (loss) per share – diluted | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||
| Comprehensive income (loss) | $ | $ | ( | $ | $ | $ | |||||||||||
| Comprehensive income attributable to non-controlling interests | |||||||||||||||||
| Comprehensive income (loss) attributable to IFF shareholders | $ | $ | ( | $ | $ | $ | |||||||||||
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| Three Months Ended June 30, 2025 | |||||||||||||||||
| (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | As Previously Reported | Adjustments | As Revised | Discontinued Operations Reclassification Impacts | As Revised and Recast | ||||||||||||
| Net sales | $ | $ | $ | $ | ( | $ | |||||||||||
| Cost of sales | ( | ||||||||||||||||
| Gross profit | ( | ||||||||||||||||
| Research and development expenses | ( | ||||||||||||||||
| Selling and administrative expenses | ( | ||||||||||||||||
| Amortization of acquisition-related intangibles | ( | ||||||||||||||||
| Restructuring and other charges | ( | ||||||||||||||||
| Losses on sale of assets | |||||||||||||||||
| Operating profit (loss) | ( | ||||||||||||||||
| Interest expense | |||||||||||||||||
| Gain on extinguishment of debt | ( | ( | ( | ||||||||||||||
| Losses on business disposals | |||||||||||||||||
| Other expense, net | |||||||||||||||||
| Income (loss) before income taxes | ( | ( | |||||||||||||||
| (Benefit) for income taxes | ( | ( | ( | ( | ( | ||||||||||||
| Net income (loss) from continuing operations | ( | ( | |||||||||||||||
| Income (loss) from discontinued operations before tax | |||||||||||||||||
| Provision (Benefit) for income taxes from discontinued operations | |||||||||||||||||
| Net income (loss) from discontinued operations | |||||||||||||||||
| Net income (loss) | ( | ||||||||||||||||
| Net income (loss) attributable to IFF shareholders | $ | $ | ( | $ | $ | $ | |||||||||||
| Income (loss) per share - basic | |||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | $ | ||||||||||
| Discontinued operations | |||||||||||||||||
| Net income (loss) per share – basic | $ | $ | ( | $ | $ | $ | |||||||||||
| Income (loss) per share - diluted | |||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | $ | ||||||||||
| Discontinued operations | |||||||||||||||||
| Net income (loss) per share – diluted | $ | $ | ( | $ | $ | $ | |||||||||||
| Comprehensive income (loss) | $ | $ | ( | $ | $ | $ | |||||||||||
| Comprehensive income (loss) attributable to IFF shareholders | $ | $ | ( | $ | $ | $ | |||||||||||
Impacts to Interim Consolidated Statements of Cash Flows
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| (DOLLARS IN MILLIONS) | As Previously Reported | Adjustments | As Revised | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||||||||||||||
| Adjustments to reconcile to net cash provided by operating activities: | |||||||||||||||||||||||
| Deferred income taxes | ( | ( | ( | ||||||||||||||||||||
| Losses on business disposals | |||||||||||||||||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||||||||||||||
| Other assets/liabilities, net | ( | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | $ | $ | ||||||||||||||||||||
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NOTE 20. SUBSEQUENT EVENTS
Sale of Portfolio of Botanical Extracts, Vitamins & Minerals and Food Enhancement Products
On July 20, 2026, the Company announced that it had entered into a definitive agreement to divest its portfolio of Botanical Extracts, Vitamins & Minerals, and Food Enhancement Products, which are primarily included in the Health & Biosciences and Taste segments. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2026. The Company expects the transaction to result in a pre-tax loss on the sale in the range of approximately $200 million to $300 million, inclusive of any related goodwill impairment.
Enhanced Share Repurchase Authorization
On August 4, 2026, the Company announced that its Board of Directors has authorized an enhanced share repurchase authorization with a total value of $2.5 billion; this amount included approximately $400 million remaining on its prior authorization. Under the program, the Board of Directors also authorized an accelerated share repurchase of $500 million, which the Company expects to execute in the second half of 2026. The remaining $2.0 billion share repurchase is expected to be executed following the closing of the Food Ingredients disposal group divestiture, with an expected completion of the program by the end of 2027. The Board will review the share repurchase program periodically and may authorize adjustments of its term and size. The Company plans to fund repurchases from cash provided by operating activities, short-term debt and net cash proceeds provided by the divestiture of the Food Ingredients disposal group.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(UNLESS INDICATED OTHERWISE, DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
The following management’s discussion and analysis should be read in conjunction with the management’s discussion and analysis of financial condition and results of operations, liquidity and capital resources included in our 2025 Annual Report on Form 10-K, filed on February 27, 2026 with the SEC (“2025 Form 10-K”).
OVERVIEW
Company Background
We are organized into three reportable operating segments: Taste, Health & Biosciences, and Scent.
Our Taste segment consists of the development and production of a range of flavor compounds and natural taste solutions that are ultimately used by our customers in a diverse variety of products, including savory products (soups, sauces, meat, fish, poultry, snacks, etc.), beverages (juice drinks, carbonated or flavored beverages, spirits, etc.), sweets (bakery products, candy, cereal, chewing gum, etc.), and dairy products (yogurt, ice cream, cheese, etc.). Taste also includes value-added spices and seasoning ingredients for meat, food service, convenience, alternative protein and culinary products.
Our Health & Biosciences segment consists of the development and production of an advanced biotechnology-derived portfolio of enzymes, food cultures, probiotics and specialty ingredients for food and non-food applications. Among many other applications, our portfolio includes cultures for use in fermented foods such as yogurt, cheese and fermented beverages, probiotic strains, household detergents, animal feed, ethanol production and brewing. Health & Biosciences is comprised of Health, Food Biosciences, Home & Personal Care, Animal Nutrition and Grain Processing.
Our Scent segment creates fragrance compounds and fragrance ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. Consumer insights, science and creativity are at the heart of our Scent business, along with our unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, and customer intimacy. The Scent segment is comprised of Fragrance Compounds and Fragrance Ingredients.
On May 29, 2026, we announced that we entered into a definitive agreement to divest our Food Ingredients disposal group. We determined that the held for sale and discontinued operations criteria have been met during the second quarter of 2026 and the Company has classified the results of operations of its Food Ingredients disposal group, as well as the results of the SCL disposal group, as discontinued operations. Our Food Ingredients disposal group consists of a diversified portfolio across natural, artificial and plant-based specialty food ingredients that provide functional properties solutions for food and beverage products, as well as specialty soy protein with value-added formulations, emulsifiers and sweeteners.
We completed the divestiture of our Pharma Solutions disposal group, which included certain adjacent businesses, on May 1, 2025 and we divested our Nitrocellulose business, which was within our Pharma Solutions segment, on May 9, 2025. Our former Pharma Solutions segment produced, among other things, a vast portfolio of cellulosics and seaweed-based pharmaceutical excipients, used in prescription and over-the-counter pharmaceuticals and dietary supplements.
Financial Performance Overview of Continuing Operations
Sales
Sales in the second quarter of 2026 increased $35 million, or 2% on a reported basis, to $1.954 billion compared to $1.919 billion in the 2025 period. On a comparable currency neutral basis, sales in the second quarter of 2026 increased 6% compared to the 2025 period. Exchange rate variations had a favorable impact of 2%. The effect of exchange rates can vary by business and region, depending upon the mix of sales priced in U.S. dollars as compared to other currencies. Comparable portfolio results exclude divestiture impacts of approximately $107 million from the sale of the Pharma Solutions disposal group, the Nitrocellulose disposal group and Rene Laurent business in France.
Gross Profit
Gross profit in the second quarter of 2026 increased $29 million, or 4%, to $853 million (43.7% of sales) compared to $824 million (42.9% of sales) in the 2025 period. The increase in gross profit was primarily driven by volume increases and productivity gains and the benefit of tariff refunds received and recognized during the quarter offset in part by the change in business portfolio mix due to divestitures.
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RESULTS OF CONTINUING OPERATIONS
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||||||||||||||
| (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Net sales | $ | 1,954 | $ | 1,919 | 2 | % | $ | 3,860 | $ | 3,969 | (3) | % | |||||||||||||||||||||||
| Cost of sales | 1,101 | 1,095 | 1 | % | 2,178 | 2,293 | (5) | % | |||||||||||||||||||||||||||
| Gross profit | 853 | 824 | 4 | % | 1,682 | 1,676 | — | % | |||||||||||||||||||||||||||
| Research and development (R&D) expenses | 170 | 170 | — | % | 324 | 325 | — | % | |||||||||||||||||||||||||||
| Selling and administrative (S&A) expenses | 437 | 409 | 7 | % | 771 | 799 | (4) | % | |||||||||||||||||||||||||||
| Amortization of acquisition-related intangibles | 82 | 82 | — | % | 166 | 162 | 2 | % | |||||||||||||||||||||||||||
| Impairment of goodwill | — | — | NMF | — | 34 | NMF | |||||||||||||||||||||||||||||
| Restructuring and other charges | 6 | 20 | (70) | % | 10 | 35 | (71) | % | |||||||||||||||||||||||||||
| Losses on sale of assets | — | 1 | NMF | — | 1 | NMF | |||||||||||||||||||||||||||||
| Operating profit | 158 | 142 | 11 | % | 411 | 320 | 28 | % | |||||||||||||||||||||||||||
| Interest expense | 46 | 61 | (25) | % | 90 | 132 | (32) | % | |||||||||||||||||||||||||||
| Gain on extinguishment of debt | — | (488) | NMF | — | (488) | NMF | |||||||||||||||||||||||||||||
| Losses on business disposals | 1 | 111 | (99) | % | 1 | 111 | (99) | % | |||||||||||||||||||||||||||
| Loss on assets classified as held for sale | 27 | — | NMF | 27 | — | NMF | |||||||||||||||||||||||||||||
| Other expense, net | 20 | 20 | — | % | 33 | 39 | (15) | % | |||||||||||||||||||||||||||
| Income from continuing operations before taxes | 64 | 438 | (85) | % | 260 | 526 | (51) | % | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 31 | (112) | (128) | % | 72 | (92) | (178) | % | |||||||||||||||||||||||||||
| Net income from continuing operations | $ | 33 | $ | 550 | (94) | % | $ | 188 | $ | 618 | (70) | % | |||||||||||||||||||||||
| Income (loss) from discontinued operations before tax | 31 | 66 | (53) | % | 44 | (1,016) | (104) | % | |||||||||||||||||||||||||||
| Provision for income taxes from discontinued operations | 13 | 17 | (24) | % | 11 | 20 | (45) | % | |||||||||||||||||||||||||||
| Net income (loss) from discontinued operations | 18 | 49 | (63) | % | 33 | (1,036) | (103) | % | |||||||||||||||||||||||||||
| Net income (loss) | 51 | 599 | (91) | % | 221 | (418) | (153) | % | |||||||||||||||||||||||||||
| Net income attributable to non-controlling interests from continuing operations | — | — | NMF | 1 | 1 | — | % | ||||||||||||||||||||||||||||
| Net income attributable to non-controlling interests from discontinued operations | 1 | — | NMF | 1 | — | NMF | |||||||||||||||||||||||||||||
| Net income (loss) attributable to IFF shareholders | $ | 50 | $ | 599 | (92) | % | $ | 219 | $ | (419) | (152) | % | |||||||||||||||||||||||
| Income (loss) per share - basic | |||||||||||||||||||||||||||||||||||
| Continuing operations | $ | 0.13 | $ | 2.15 | (94) | % | $ | 0.73 | $ | 2.41 | (70) | % | |||||||||||||||||||||||
| Discontinued operations | 0.07 | 0.19 | (65) | % | 0.13 | (4.05) | (103) | % | |||||||||||||||||||||||||||
| Net income (loss) per share - basic | $ | 0.20 | $ | 2.34 | (92) | % | $ | 0.86 | $ | (1.64) | (152) | % | |||||||||||||||||||||||
| Income (loss) per share - diluted | |||||||||||||||||||||||||||||||||||
| Continuing operations | $ | 0.13 | $ | 2.14 | (94) | % | $ | 0.73 | $ | 2.40 | (70) | % | |||||||||||||||||||||||
| Discontinued operations | 0.07 | 0.19 | (65) | % | 0.12 | (4.03) | (103) | % | |||||||||||||||||||||||||||
| Net income (loss) per share - diluted | $ | 0.20 | $ | 2.33 | (91) | % | $ | 0.85 | $ | (1.63) | (152) | % | |||||||||||||||||||||||
| Gross margin | 43.7 | % | 42.9 | % | 80 | bps | 43.6 | % | 42.2 | % | 140 | bps | |||||||||||||||||||||||
| R&D as a percentage of sales | 8.7 | % | 8.9 | % | (20) | bps | 8.4 | % | 8.2 | % | 20 | bps | |||||||||||||||||||||||
| S&A as a percentage of sales | 22.4 | % | 21.3 | % | 110 | bps | 20.0 | % | 20.1 | % | (10) | bps | |||||||||||||||||||||||
| Operating margin | 8.1 | % | 7.4 | % | 70 | bps | 10.6 | % | 8.1 | % | 250 | bps | |||||||||||||||||||||||
| Effective tax rate | 48.4 | % | (25.6) | % | NMF | 27.7 | % | (17.5) | % | NMF | |||||||||||||||||||||||||
| Segment net sales | |||||||||||||||||||||||||||||||||||
| Taste | $ | 688 | $ | 654 | 5 | % | $ | 1,368 | $ | 1,304 | 5 | % | |||||||||||||||||||||||
| Health & Biosciences | 601 | 559 | 8 | % | 1,176 | 1,079 | 9 | % | |||||||||||||||||||||||||||
| Scent | 665 | 603 | 10 | % | 1,316 | 1,217 | 8 | % | |||||||||||||||||||||||||||
| Pharma Solutions | — | 103 | (100) | % | — | 369 | (100) | % | |||||||||||||||||||||||||||
| Consolidated | $ | 1,954 | $ | 1,919 | 2 | % | $ | 3,860 | $ | 3,969 | (3) | % | |||||||||||||||||||||||
NMF: Not meaningful
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Cost of sales includes the cost of materials and manufacturing expenses. R&D expenses include expenses related to the development of new and improved products and technical product support. S&A expenses include expenses necessary to support our commercial activities and administrative expenses supporting our overall operating activities including compliance with governmental regulations.
SECOND QUARTER 2026 IN COMPARISON TO SECOND QUARTER 2025
Sales performance by segment was as follows:
| % Change in Sales - Second Quarter 2026 vs. Second Quarter 2025 | |||||||||||||||||
| Reported | Currency Neutral(2) | Comparable Currency Neutral(1)(2) | |||||||||||||||
| Taste | 5 | % | 4 | % | 4 | % | |||||||||||
| Health & Biosciences | 8 | % | 5 | % | 5 | % | |||||||||||
| Scent | 10 | % | 8 | % | 8 | % | |||||||||||
| Pharma Solutions | -100 | % | -100 | % | 0 | % | |||||||||||
| Total | 2 | % | 0 | % | 6 | % | |||||||||||
Comparable currency neutral reported performance by segment was as follows:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net Sales | |||||||||||
| Taste | $ | 679 | $ | 650 | |||||||
| Health & Biosciences | 587 | 559 | |||||||||
| Scent | 650 | 603 | |||||||||
Impact of Business Divestitures(1) | — | 107 | |||||||||
Impact of Currency Fluctuations(2) | 38 | $ | — | ||||||||
| Total | $ | 1,954 | $ | 1,919 | |||||||
_______________________
(1)Impact of business divestitures in 2025 includes results of the Rene Laurent business (divested December 1, 2025), and the Pharma Solutions disposal group and Nitrocellulose business (divested May 1, 2025 and May 9, 2025, respectively).
(2)Currency neutral sales are calculated by translating current year invoiced sale amounts at the exchange rates for the corresponding prior year period.
Taste
Taste sales in 2026 increased $34 million, or 5% on a reported basis, to $688 million compared to $654 million in the prior year period. On a comparable currency neutral basis, Taste sales increased 4% in 2026 compared to the prior year period primarily driven by volume and price increases in the Flavors business unit. Exchange rate variations had a favorable impact of 1%. Comparable portfolio results exclude the impact of the divestiture of the Rene Laurent business with a sales impact of approximately $4 million.
Health & Biosciences
Health & Biosciences sales in 2026 increased $42 million, or 8% on a reported basis, to $601 million compared to $559 million in the prior year period. On a comparable currency neutral basis, Health & Biosciences sales increased 5% in 2026 compared to the prior year period primarily driven by volume increases across various business units. Exchange rate variations had a favorable impact of 3%.
Scent
Scent sales in 2026 increased $62 million, or 10% on a reported basis, to $665 million compared to $603 million in the prior year period. On a comparable currency neutral basis, Scent sales increased 8% in 2026 compared to the prior year period primarily driven by volume increases in Fragrance Compounds, partially offset by volume decreases in Fragrance Ingredients. Exchange rate variations had a favorable impact of 2%.
Pharma Solutions
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The Company completed the divestiture of the Pharma Solutions disposal group on May 1, 2025, and the Nitrocellulose business on May 9, 2025. Accordingly, there were no Pharma Solutions segment results reported for the second quarter of 2026.
Cost of Sales
Cost of sales increased $6 million to $1.101 billion (56.3% of sales) in the second quarter of 2026 compared to $1.095 billion (57.1% of sales) in the second quarter of 2025. The increase in cost of sales was primarily driven by volume increases offset in part by the impact of divestitures of approximately $69 million and the benefit of tariff refunds recognized during the quarter.
Research and Development (“R&D”) Expenses
R&D expenses were flat at $170 million in the second quarter of 2026 (8.7% of sales) and in the second quarter of 2025 (8.9% of sales).
Selling and Administrative (“S&A”) Expenses
S&A expenses increased $28 million to $437 million (22.4% of sales) in the second quarter of 2026 compared to $409 million (21.3% of sales) in the second quarter of 2025. The increase in S&A expenses was primarily driven by higher incentive compensation expense and regulatory costs, partially offset by lower consulting fees incurred in relation to business divestitures.
Amortization of Acquisition-Related Intangibles
Amortization expenses were flat at $82 million in the second quarter of 2026 and 2025. See Note 12 for additional information.
Restructuring and Other Charges
Restructuring and other charges decreased to $6 million in the second quarter of 2026 compared to $20 million in the second quarter of 2025. The decrease was primarily driven by lower severance expense. Higher severance costs were incurred in 2025 at the beginning of the Productivity program. See Note 5 for additional information.
Interest Expense
Interest expense decreased to $46 million in the second quarter of 2026 compared to $61 million in the second quarter of 2025. The decrease in interest expense was due to lower debt outstanding. See Note 14 for additional information.
Gain on Extinguishment of Debt
Gain on extinguishment of debt was $488 million in the second quarter of 2025 due to the repurchase of approximately $2.5 billion of notes for approximately $2.0 billion in cash, using the proceeds from the divestitures. See Note 14 for additional information.
Losses on Business Disposals
Losses on business disposals was $1 million in the second quarter of 2026 compared to $111 million in the second quarter of 2025. The net loss in 2025 was primarily driven by the Pharma Solutions disposal group and Nitrocellulose business divestitures. See Note 4 for additional information.
Loss on Assets Classified as Held for Sale
There was a $27 million loss on assets classified as held for sale in the second quarter of 2026 related to the CitraSource business. See Note 4 for additional information.
Other Expense, Net
Other expense, net, remained flat at $20 million in the second quarter of 2026 and 2025. See Note 9 for additional information.
Income Taxes
The effective tax rate for the three months ended June 30, 2026 increased to 48.4% compared to (25.6)% for the three months ended June 30, 2025. The increase was primarily driven by increased non-deductible regulatory costs, the entity realignment project in 2025, business divestitures and changes in the mix of earnings.
Segment Adjusted Operating EBITDA Results by Business Unit
The Company uses Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. Segment Adjusted Operating EBITDA is defined as Income Before Taxes before depreciation and amortization expense,
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interest expense, restructuring and other charges and certain items that are not related to recurring operations. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our Chief Operating Decision Maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products and services we provide.
Adjusted Operating EBITDA performance by segment was as follows:
| % Change in Adjusted Operating EBITDA - Second Quarter 2026 vs. Second Quarter 2025 | |||||||||||
| Reported | Comparable Currency Neutral Adjusted(1)(2)(3) | ||||||||||
| Taste | 6 | % | 6 | % | |||||||
| Health & Biosciences | 8 | % | 6 | % | |||||||
| Scent | 11 | % | 5 | % | |||||||
| Pharma Solutions | -100 | % | — | % | |||||||
| Total | 2 | % | 6 | % | |||||||
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Comparable Currency Neutral Adjusted Operating EBITDA by segment was as follows:
| Three Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Segment Adjusted Operating EBITDA from Continuing Operations: | |||||||||||
| Taste | $ | 122 | $ | 115 | |||||||
| Health & Biosciences | 146 | 138 | |||||||||
| Scent | 126 | 120 | |||||||||
Impact of Business Divestitures(2) | — | 26 | |||||||||
Impact of Currency Fluctuations(3) | 14 | — | |||||||||
| Total | 408 | 399 | |||||||||
| Depreciation & Amortization | (154) | (146) | |||||||||
| Interest Expense | (46) | (61) | |||||||||
| Other Expense, net | (20) | (20) | |||||||||
| Restructuring and Other Charges | (6) | (20) | |||||||||
| Losses on Business Disposals | (1) | (111) | |||||||||
| Loss on Assets Classified as Held for Sale | (27) | — | |||||||||
| Divestiture Costs | (10) | (26) | |||||||||
| Strategic Initiative Costs | (9) | (6) | |||||||||
| Regulatory Costs | (71) | (53) | |||||||||
| Gain on Debt Extinguishment | — | 488 | |||||||||
| Entity Realignment Costs | (1) | (4) | |||||||||
| Other | 1 | (2) | |||||||||
| Income from continuing operations before taxes | $ | 64 | $ | 438 | |||||||
| Segment Adjusted Operating EBITDA margin: | |||||||||||
| Taste | 18.0 | % | 17.7 | % | |||||||
| Health & Biosciences | 24.9 | % | 24.7 | % | |||||||
| Scent | 19.4 | % | 19.9 | % | |||||||
| Consolidated | 20.9 | % | 20.8 | % | |||||||
_______________________
(1)Refer to Note 7 for a reconciliation of Adjusted Operating EBITDA to Income (Loss) Before Taxes from continuing operations.
(2)Comparable portfolio results for 2025 exclude the impact of divestitures.
(3)Currency neutral amounts are calculated by translating current year transaction amounts at the exchange rates for the corresponding prior year period.
Following the completed divestitures of the Pharma Solutions disposal group on May 1, 2025 and the Nitrocellulose business on May 9, 2025, the Company reallocated certain corporate costs previously attributed to the Pharma Solutions segment. These costs have been redistributed across the Taste, Health & Biosciences, and Scent segments for comparability purposes.
| Three Months Ended June 30, 2025 | ||||||||||||||
| Selling & Administrative Expenses | Total EBITDA Impact | |||||||||||||
| Taste | $ | 1 | $ | (1) | ||||||||||
| Health & Biosciences | 1 | (1) | ||||||||||||
| Scent | 1 | (1) | ||||||||||||
| Total | $ | 3 | $ | (3) | ||||||||||
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Taste Segment Adjusted Operating EBITDA
Taste Segment Adjusted Operating EBITDA increased $7 million, or 6% on a reported basis, to $124 million in the second quarter of 2026 (18.0% of segment sales) from $117 million (17.9% of segment sales) in the comparable 2025 period. On a comparable currency neutral basis, Taste Segment Adjusted Operating EBITDA increased 6% in 2026 compared to the prior year period led primarily by volume growth and favorable net pricing.
Health & Biosciences Segment Adjusted Operating EBITDA
Health & Biosciences Segment Adjusted Operating EBITDA increased $11 million, or 8% on a reported basis, to $150 million in the second quarter of 2026 (25.0% of segment sales) from $139 million in the comparable 2025 period (24.9% of segment sales). On a comparable currency neutral basis, Health & Biosciences Segment Adjusted Operating EBITDA increased 6% in 2026 compared to the prior year period driven by volume growth and favorable net pricing.
Scent Segment Adjusted Operating EBITDA
Scent Segment Adjusted Operating EBITDA increased $13 million, or 11% on a reported basis, to $134 million in the second quarter of 2026 (20.2% of segment sales) from $121 million (20.1% of segment sales) in the comparable 2025 period. On a comparable currency neutral basis, Scent Segment Adjusted Operating EBITDA increased 5% in 2026 compared to the prior year period led primarily by volume growth and favorable net pricing.
Pharma Solutions Segment Adjusted Operating EBITDA
The Company completed the divestiture of the Pharma Solutions disposal group on May 1, 2025, and the Nitrocellulose business on May 9, 2025. Accordingly, there were no Pharma Solutions segment results reported for the second quarter of 2026.
FIRST SIX MONTHS 2026 IN COMPARISON TO FIRST SIX MONTHS 2025
Sales
Sales for the first six months of 2026 decreased $109 million, or 3% on a reported basis, to $3.860 billion compared to $3.969 billion in the 2025 period. On a comparable currency neutral basis, sales for the first six months of 2026 increased 4% compared to the 2025 period. Exchange rate variations had a favorable impact on net sales in the first six months of 2026 of 3%. The effect of exchange rates can vary by business and region, depending upon the mix of sales priced in U.S. dollars as compared to other currencies. Comparable portfolio results exclude the impact of divestitures which was approximately $379 million.
Sales Performance by Segment
| % Change in Sales - First Six Months 2026 vs. First Six Months 2025 | |||||||||||||||||
| Reported | Currency Neutral(1) | Comparable Currency Neutral(1)(2) | |||||||||||||||
| Taste | 5 | % | 3 | % | 3 | % | |||||||||||
| Health & Biosciences | 9 | % | 5 | % | 5 | % | |||||||||||
| Scent | 8 | % | 5 | % | 5 | % | |||||||||||
| Pharma Solutions | -100 | % | -100 | % | — | % | |||||||||||
| Total | -3 | % | -6 | % | 4 | % | |||||||||||
Comparable currency neutral reported performance by segment was as follows:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net Sales | |||||||||||
| Taste | $ | 1,337 | $ | 1,294 | |||||||
| Health & Biosciences | 1,134 | 1,079 | |||||||||
| Scent | 1,272 | 1,217 | |||||||||
Impact of Business Divestitures(1) | — | 379 | |||||||||
Impact of Currency Fluctuations(2) | 117 | — | |||||||||
| Total | $ | 3,860 | $ | 3,969 | |||||||
_______________________
(1)Impact of business divestitures in 2025 includes results of the Rene Laurent business (divested December 1, 2025), and the Pharma Solutions disposal group and Nitrocellulose business (divested May 1, 2025 and May 9, 2025, respectively).
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(2)Currency neutral sales are calculated by translating current year invoiced sale amounts at the exchange rates for the corresponding prior year period.
Taste
Taste sales in 2026 increased $64 million, or 5% on a reported basis, to $1.368 billion compared to $1.304 billion in the prior year period. On a comparable currency neutral basis, Taste sales increased 3% in 2026 compared to the prior year period. Exchange rate variations had a favorable impact of 2%. Comparable portfolio results exclude the impact of the divestiture of the Rene Laurent business with a sales impact of approximately $10 million.
Health & Biosciences
Health & Biosciences sales in 2026 increased $97 million, or 9% on a reported basis, to $1.176 billion compared to $1.079 billion in the prior year period. On a comparable currency neutral basis, Health & Biosciences sales increased 5% in 2026 compared to the prior year period driven by volume increases. Exchange rate variations had a favorable impact of 4%.
Scent
Scent sales in 2026 increased $99 million, or 8% on a reported basis, to $1.316 billion compared to $1.217 billion in the prior year period. On a comparable currency neutral basis, Scent sales increased 5% in 2026 compared to the prior year period driven by volume increases in the Fragrance Compounds business unit, partially offset by decreases across other business units. Exchange rate variations had a favorable impact of 3%.
Pharma Solutions
The Company completed the divestiture of the Pharma Solutions disposal group on May 1, 2025, and the Nitrocellulose business on May 9, 2025. Accordingly, there were no Pharma Solutions segment results reported for the first six months of 2026.
Cost of sales
Cost of sales decreased $115 million to $2.178 billion (56.4% of sales) in the first six months of 2026 compared to $2.293 billion (57.8% of sales) in the 2025 period. The decrease in cost of sales was primarily driven by the impact of divestitures of approximately $250 million and the benefit of tariff refunds recognized during the period, partially offset in part by volume increases in sales.
Research and Development (“R&D”) Expenses
R&D expenses decreased $1 million to $324 million (8.4% of sales) in the first six months of 2026 compared to $325 million (8.2% of sales) in the 2025 period. The decrease in R&D expenses was primarily driven by the impact of divestitures of approximately $9 million, offset by an increase in employee related costs and operating expenses for R&D related activities.
Selling and Administrative (“S&A”) Expenses
S&A expenses decreased $28 million to $771 million (20.0% of sales) in the first six months of 2026 compared to $799 million (20.1% of sales) in the 2025 period. The decrease in S&A expenses was primarily driven by lower consulting fees incurred in relation to business divestitures, and impact of divestitures of approximately $24 million, offset by an increase in incentive compensation expense and regulatory costs.
Amortization of Acquisition-Related Intangibles
Amortization expenses increased to $166 million in the first six months of 2026 compared to $162 million in the 2025 period. The increase in amortization expense was primarily driven by the impact of foreign currency exchange rates. See Note 12 for additional information.
Impairment of Goodwill
The impairment of goodwill of $34 million in the 2025 period represents the impairment of goodwill attributable to the portion of the Food Ingredients reporting unit that is not included within the Food Ingredients or SCL disposal groups. See Note 7 for additional information.
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Restructuring and Other Charges
Restructuring and other charges decreased to $10 million in the first six months of 2026 compared to $35 million in the 2025 period. The decrease was driven by higher severance costs incurred as part of the IFF Productivity Program in 2025. See Note 5 for additional information.
Interest Expense
Interest expense decreased to $90 million in the first six months of 2026 compared to $132 million in the 2025 period. The decrease in interest expense was due to lower debt outstanding. See Note 14 for additional information.
Gain on Extinguishment of Debt
Gain on extinguishment of debt was $488 million in the first six months of 2025 due to the repurchase of approximately $2.5 billion of notes for approximately $2.0 billion in cash, using the proceeds from the divestitures. See Note 14 for additional information.
Losses on Business Disposals
Losses on business disposals was $1 million in the first six months of 2026 compared to $111 million in the 2025 period. The net loss in 2025 was primarily driven by the Pharma Solutions disposal group and Nitrocellulose business divestitures. See Note 4 for additional information.
Loss on Assets Classified as Held for Sale
There was a $27 million loss on assets classified as held for sale in the first six months of 2026 related to the CitraSource business. See Note 4 for additional information.
Other Expense, Net
Other expense, net, was $33 million in the first six months of 2026 compared to $39 million in the 2025 period. The decrease was primarily due to decreased foreign exchange losses, partially offset by increased pension-related benefit. See Note 9 for additional information.
Income Taxes
The effective tax rate for the six months ended June 30, 2026 was 27.7% compared to (17.5)% for the six months ended June 30, 2025. The increase was primarily driven by increased non-deductible regulatory costs, the entity realignment project in 2025, business divestitures and changes in the mix of earnings.
Segment Adjusted Operating EBITDA Results by Business Unit
The Company uses Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. Segment Adjusted Operating EBITDA is defined as Income Before Taxes before depreciation and amortization expense, interest expense, restructuring and other charges and certain items that are not related to recurring operations. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our Chief Operating Decision Maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products and services we provide.
Adjusted Operating EBITDA performance by segment was as follows:
| % Change in Adjusted Operating EBITDA - First Six Months 2026 vs. First Six Months 2025 | |||||||||||
| Reported | Comparable Currency Neutral Adjusted(1)(2)(3) | ||||||||||
| Taste | 12 | % | 14 | % | |||||||
| Health & Biosciences | 11 | % | 8 | % | |||||||
| Scent | 6 | % | 2 | % | |||||||
| Pharma Solutions | -100 | % | — | % | |||||||
| Total | — | % | 8 | % | |||||||
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Comparable Currency Neutral Adjusted Operating EBITDA by segments was as follows:
| Six Months Ended June 30, | |||||||||||
| (DOLLARS IN MILLIONS) | 2026 | 2025 | |||||||||
| Segment Adjusted Operating EBITDA from Continuing Operations: | |||||||||||
| Taste | $ | 268 | $ | 236 | |||||||
| Health & Biosciences | 277 | 256 | |||||||||
| Scent | 258 | 253 | |||||||||
Impact of Business Divestitures(2) | — | 98 | |||||||||
Impact of Currency Fluctuations(3) | 38 | — | |||||||||
| Total | 841 | 843 | |||||||||
| Depreciation & Amortization | (306) | (288) | |||||||||
| Interest Expense | (90) | (132) | |||||||||
| Other Expense, net | (33) | (39) | |||||||||
| Restructuring and Other Charges | (10) | (35) | |||||||||
| Impairment of Goodwill | — | (34) | |||||||||
| Losses on Business Disposals | (1) | (111) | |||||||||
| Loss on Assets Classified as Held for Sale | (27) | — | |||||||||
| Divestiture Costs | (15) | (77) | |||||||||
| Strategic Initiative Costs | (18) | (14) | |||||||||
| Gain on Debt Extinguishment | — | 488 | |||||||||
| Regulatory Costs | (81) | (64) | |||||||||
| Entity Realignment Costs | (2) | (5) | |||||||||
| Other | 2 | (6) | |||||||||
| Income from continuing operations before taxes | $ | 260 | $ | 526 | |||||||
| Segment Adjusted Operating EBITDA margin: | |||||||||||
| Taste | 20.0 | % | 18.2 | % | |||||||
| Health & Biosciences | 24.4 | % | 23.7 | % | |||||||
| Scent | 20.3 | % | 20.8 | % | |||||||
| Consolidated | 21.8 | % | 21.2 | % | |||||||
(1)Refer to Note 7 for a reconciliation of Adjusted Operating EBITDA to Income (Loss) Before Taxes from continuing operations.
(2)Comparable portfolio results for 2025 exclude the impact of divestitures.
(3)Currency neutral amounts are calculated by translating current year transaction amounts at the exchange rates for the corresponding prior year period.
Following the completed divestitures of the Pharma Solutions disposal group on May 1, 2025 and the Nitrocellulose business on May 9, 2025, the Company reallocated certain corporate costs previously attributed to the Pharma Solutions segment. These costs have been redistributed across the Taste, Health & Biosciences, and Scent segments for comparability purposes.
| Six Months Ended June 30, 2025 | |||||||||||||||||
| Selling & Administrative Expenses | Total EBITDA Impact | ||||||||||||||||
| Taste | $ | 6 | $ | (6) | |||||||||||||
| Health & Biosciences | 6 | (6) | |||||||||||||||
| Scent | 6 | (6) | |||||||||||||||
| Total | $ | 18 | $ | (18) | |||||||||||||
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Taste Segment Adjusted Operating EBITDA
Taste Segment Adjusted Operating EBITDA increased $30 million, or 12% on a reported basis, to $276 million in the first six months of 2026 (20.2% of segment sales) from $246 million (18.9% of segment sales) in the comparable 2025 period. On a comparable currency neutral basis, Taste Segment Adjusted Operating EBITDA increased 14% in 2026 compared to the prior year period primarily driven by volume increases and productivity gains.
Health & Biosciences Segment Adjusted Operating EBITDA
Health & Biosciences Segment Adjusted Operating EBITDA increased $28 million, or 11% on a reported basis, to $290 million in the first six months of 2026 (24.7% of segment sales) from $262 million in the comparable 2025 period (24.3% of segment sales). On a comparable currency neutral basis, Health & Biosciences Segment Adjusted Operating EBITDA increased 8% in 2026 compared to the prior year period primarily driven by productivity gains and volume increases.
Scent Segment Adjusted Operating EBITDA
Scent Segment Adjusted Operating EBITDA increased $16 million, or 6% on a reported basis, to $275 million in the first six months of 2026 (20.9% of segment sales) from $259 million (21.3% of segment sales) in the comparable 2025 period. On a comparable currency neutral basis, Scent Segment Adjusted Operating EBITDA increased 2% in 2026 compared to the prior year period primarily driven by productivity gains and volume increases.
Pharma Solutions Segment Adjusted Operating EBITDA
The Company completed the divestiture of the Pharma Solutions disposal group on May 1, 2025, and the Nitrocellulose business on May 9, 2025. Accordingly, there were no Pharma Solutions segment results reported for the six months ended June 30, 2026.
Liquidity
Cash and Cash Equivalents
We had cash and cash equivalents of $569 million at June 30, 2026 compared to $590 million on the Consolidated Balance Sheets, at December 31, 2025. A portion of this balance was held outside the United States. Cash balances held in foreign jurisdictions are, in most circumstances, available to be repatriated to the United States.
Effective utilization of the cash generated by our international operations is a critical component of our strategy. We regularly repatriate cash from our non-U.S. subsidiaries to fund financial obligations in the U.S. As we repatriate these funds to the U.S., there will be required income taxes payable in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of June 30, 2026, we had a deferred tax liability of approximately $150 million for the effect of repatriating the funds to the U.S., attributable to various non-U.S. subsidiaries. There is no deferred tax liability associated with non-U.S. subsidiaries where we intend to indefinitely reinvest the earnings to fund local operations and/or capital projects.
Cash Flows Provided By Operating Activities
Cash flows provided by operating activities for the six months ended June 30, 2026 were $679 million, compared to $368 million for the six months ended June 30, 2025. The increase in cash flows from operating activities during 2026 was primarily driven by the decrease in working capital, largely related to inventories, accounts payables and a smaller incentive compensation payout made in 2026 related to 2025 results compared to the prior year, partially offset by an increase in accounts receivable in the current year.
Cash Flows (Used In) Provided By Investing Activities
Cash flows used in investing activities for the six months ended June 30, 2026 were $133 million, compared to cash flows provided by investing activities of $2.541 billion in the prior year period. Cash flows provided by investing activities during 2025 were primarily comprised of net proceeds of $2.707 billion received in the prior year period from the divestitures of the Pharma Solutions disposal group, the Nitrocellulose business and the Tobacco Flavoring business in North America. Investing cash outflows in the current year were primarily driven by $301 million of additions to property, plant and equipment, partially offset by $201 million of net proceeds from the divestiture of the SCL disposal group and the collection of an earnout related to the prior year divestiture of the Pharma Solutions disposal group.
We have evaluated and re-prioritized our capital projects and expect that capital spending in 2026 will be approximately 6.0% of total company sales (net of potential grants and other reimbursements from government authorities), up from approximately 5.5% in 2025.
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Cash Flows Used In Financing Activities
Cash flows used in financing activities for the six months ended June 30, 2026 were $565 million, compared to $2.654 billion in the prior year period. The decrease in cash flows used in financing activities was primarily driven by the Company’s prior year purchase for cash of certain of its outstanding series of Senior Notes for an aggregate purchase price, excluding accrued and unpaid interest, of $2.0 billion. This decrease was partially offset by increased net repayments of commercial paper of $264 million during the six months ended June 30, 2026, in addition to $71 million of common stock repurchases under the share repurchase program that began on October 1, 2025.
We paid dividends totaling $204 million in the 2026 period. We declared a cash dividend per share of $0.40 in the second quarter of 2026 that was paid on July 10, 2026 to all shareholders of record as of June 18, 2026.
Our capital allocation strategy seeks to maintain investment grade ratings while investing in the business, continuing to pay dividends, repurchasing outstanding shares and repaying debt. We make capital investments in our businesses to support our operational needs and strategic long-term plans. We are committed to maintaining our history of paying a dividend to investors which is determined by our Board of Directors at its discretion based on various factors.
Share Repurchase Authorization
On August 4, 2026, the Company announced that its Board of Directors has authorized an enhanced share repurchase authorization with a total value of $2.5 billion, including approximately $400 million remaining on its prior authorization. Under the program, the Board of Directors also authorized an accelerated share repurchase of $500 million, which the Company expects to execute in the second half of 2026. The remaining $2.0 billion share repurchase is expected to be executed following the closing of the Food Ingredients disposal group divestiture, with an expected completion of the program by the end of 2027. The Board will review the share repurchase program periodically and may authorize adjustments of its term and size.
Capital Resources
Operating cash flow provides the primary source of funds for capital investment needs, dividends paid to shareholders and debt service repayments. We anticipate that cash flows from operations, cash proceeds generated from planned business divestitures and availability under our existing credit facilities will be sufficient to meet our investing and financing needs, including our debt service requirements for the foreseeable future. We regularly assess our capital structure, including both current and long-term debt instruments, as compared to our cash generation and investment needs in order to provide ample flexibility and to optimize our leverage ratios. See Note 14 for additional information.
Revolving Credit Facility
Our Revolving Credit Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including the requirement for us to maintain, at the end of each fiscal quarter, a ratio of net debt to credit adjusted EBITDA in respect of the previous 12-month period. Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused borrowings.
On June 25, 2025, the Company, with its lenders, entered into the Fourth Amended and Restated Credit Agreement (“Revolving Credit Agreement”), which amended and restated the most recent Amendment No. 4 to the Third Amended and Restated Credit Agreement dated September 19, 2023. This amendment and restatement, among other things, extended the termination date to June 25, 2030, as well as removed the financial covenant relief period and associated restrictions.
The Fourth Amended and Restated Credit Agreement states that from the effective date through September 30, 2025, our net debt to credit adjusted EBITDA ratio shall not exceed 4.00x, and shall not exceed 3.75x thereafter, with a temporary step-up to 4.25x permitted for three fiscal quarters following an acquisition exceeding $500 million in paid consideration.
As of June 30, 2026, we had no outstanding borrowings under our $2 billion Revolving Credit Facility. The amount that we are able to draw down under the Revolving Credit Facility is limited by financial covenants as described in more detail below. As of June 30, 2026, our available capacity was $2 billion under the Revolving Credit Facility.
Refer to Note 14 of this Form 10-Q and Part IV, Item 15, “Exhibits and Financial Statement Schedules,” Note 14 of our 2025 Form 10-K for additional information.
Debt Covenants
At June 30, 2026, we were in compliance with all financial and other covenants, including the net debt to credit adjusted EBITDA(1) ratio. At June 30, 2026, our net debt to credit adjusted EBITDA(1) ratio was 2.51 to 1.0 as defined by the credit facility agreements, which is below the relevant level provided by our financial covenants of existing outstanding debt.
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(1)Credit adjusted EBITDA and net debt, which are non-GAAP measures used for these covenants, are calculated in accordance with the definition in the debt agreements. In this context, these measures are used solely to provide information on the extent to which we are in compliance with debt covenants and may not be comparable to credit adjusted EBITDA and net debt used by other companies. Reconciliations of credit adjusted EBITDA to net income and of net debt to total debt are as follows:
| (DOLLARS IN MILLIONS) | Twelve Months Ended June 30, 2026 | ||||
| Net income | $ | 254 | |||
| Interest expense | 187 | ||||
| Income taxes | 98 | ||||
| Depreciation and amortization | 948 | ||||
Specified items(1) | 341 | ||||
Non-cash items(2) | 228 | ||||
Credit Adjusted EBITDA(3) | $ | 2,056 | |||
_______________________
(1)Specified items consisted of restructuring and other charges, impairment of goodwill, divestiture costs, strategic initiative costs, regulatory costs, gain on debt extinguishment, entity realignment costs and other costs that are not related to recurring operations.
(2)Non-cash items consisted of losses (gains) on sale of assets, losses (gains) on business disposals, loss on assets classified as held for sale, pension termination losses, and stock-based compensation.
(3)Credit Adjusted EBITDA presented includes results from continuing and discontinued operations.
| (DOLLARS IN MILLIONS) | June 30, 2026 | ||||
Total debt(1) | $ | 5,735 | |||
| Adjustments: | |||||
| Cash and cash equivalents | 569 | ||||
| Net debt | $ | 5,166 | |||
(1)Total debt used for the calculation of net debt consisted of short-term debt, long-term debt, short-term finance lease obligations and long-term finance lease obligations.
Senior Notes
As of June 30, 2026, we had $5.611 billion aggregate principal amount outstanding in senior unsecured notes, with $914 million principal amount denominated in EUR and $4.697 billion principal amount denominated in USD. The notes bear effective interest rates ranging from 1.56% per year to 5.12% per year, with maturities from September 25, 2026 to December 1, 2050. See Note 14 for additional information.
Contractual Obligations
On a total Company basis, we expect to contribute a total of $5 million to our U.S. pension plans and a total of $17 million to our non-U.S. pension plans during 2026. During the six months ended June 30, 2026, $8 million of contributions were made to the non-U.S. pension plans and $2 million of contributions were made with respect to the non-qualified U.S. pension plans. We also expect to contribute $4 million to our postretirement benefits other than pension plans during 2026. During the six months ended June 30, 2026, $2 million of benefit payments were made to postretirement benefits other than pension plans.
As discussed in Note 18 to the Consolidated Financial Statements, at June 30, 2026, we had entered into various guarantees and had undrawn outstanding letters of credit from financial institutions. These arrangements reflect ongoing business operations, including commercial commitments, and governmental requirements associated with audits or litigation that are in process with various jurisdictions. Based on the current facts and circumstances, these arrangements are not reasonably likely to have a material impact on our consolidated financial condition, results of operations or cash flows.
New Accounting Standards
Refer to Note 1 to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.
Non-GAAP Financial Measures
We use non-GAAP financial measures in this Form 10-Q, including: (i) comparable currency neutral metrics, (ii) adjusted operating EBITDA, comparable currency neutral adjusted operating EBITDA, (iii) adjusted operating EBITDA margin, and (iv) net debt to credit adjusted EBITDA. We also provide the non-GAAP measure net debt solely for the purpose of providing
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information on the extent to which the Company is in compliance with debt covenants contained in its debt agreements. Our non-GAAP financial measures are defined below.
These non-GAAP financial measures are intended to provide additional information regarding our underlying operating results and comparable year-over-year performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. In discussing our historical and expected future results and financial condition, we believe it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparable basis, financial amounts both including and excluding these identified items, as well as the impact of exchange rate fluctuations. These non-GAAP measures should not be considered in isolation or as substitutes for analysis of the Company’s results under GAAP and may not be comparable to other companies’ calculation of such metrics.
Currency Neutral metrics eliminate the effects that result from translating non-U.S. currencies to U.S. dollars. We calculate currency neutral numbers by translating current year invoiced sale amounts at the exchange rates used for the corresponding prior year period. We use currency neutral results in our analysis of segment performance. We also use currency neutral numbers when analyzing our performance against our competitors.
Comparable results for the second quarter and first six months of 2026 exclude the impact of divestitures.
Adjusted operating EBITDA and adjusted operating EBITDA margin exclude depreciation and amortization, interest expense, other expense, net, and certain non-recurring or unusual items that are not part of recurring operations such as impairment of goodwill, restructuring and other charges, losses (gains) on business disposals, loss on assets classified as held for sale, divestiture costs, strategic initiative costs, regulatory costs, gain on debt extinguishment, and other costs that are not related to recurring operations.
Net debt to credit adjusted EBITDA is the leverage ratio used in our credit agreements and defined as net debt (which is debt for borrowed money less cash and cash equivalents) divided by the trailing 12-month credit adjusted EBITDA. Credit adjusted EBITDA is defined as income (loss) before interest expense, income taxes, depreciation and amortization, specified items and non-cash items.
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
This Form 10-Q includes statements that are not historical facts and are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current assumptions, estimates and expectations, including with respect to our financial and operational outlook (sales, adjusted operating EBITDA and cash flow), portfolio optimization initiatives (including the pending divestiture of the Food Ingredients disposal group), pricing, productivity and cost-discipline actions, capital allocation, future operations, growth potential, strategic investments and the expected effects of foreign exchange. These statements reflect management’s present views, are based on a series of expectations, assumptions, estimates and projections about the Company, are subject to change, and involve uncertainties that could cause actual results to differ materially. Certain of such forward-looking information may be identified by such terms as “expect”, “anticipate”, “believe”, “intend”, “outlook”, “may”, “will”, “would”, “estimate”, “should”, “predict”, “plan”, “project”, “could”, “potential”, “seek”, “target”, “continue”, “future”, and similar terms or variations thereof. These statements are not guarantees of future performance and are subject to risks and uncertainties that could lead to materially different outcomes. Such risks, uncertainties and other factors include, among others, the following:
•demand trends, competitive dynamics and customer concentration in our end markets;
•execution of our strategic transformation and other strategic transactions, divestitures, acquisitions, collaborations and joint ventures;
•working capital and inventory management;
•outcomes of legal claims, disputes, regulatory investigations and litigation;
•tariffs and trade actions, supply chain disruptions and macro events, including geopolitical developments, climate events, natural disasters, public health crises; volatility in input costs (such as raw materials, transportation and energy);
•attraction, retention and turnover of key employees and executives; product innovation, time-to-market, product safety and quality;
•cybersecurity incidents, artificial intelligence related risks, data privacy and compliance with data protection laws;
•exposure to emerging markets, foreign currency fluctuations and international regulatory and political risks;
•capital allocation, dividend policy and potential impairments of tangible or intangible assets; our indebtedness, credit rating, liquidity, and access to capital;
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•pension and postretirement obligations;
•compliance with federal, state, local and international rules and regulations, and regulatory, environmental, anti-corruption and sanctions laws and related ethical business practices;
•protection and enforcement of intellectual property;
•changes in tax laws and policies, tax audits and outcomes, including potential tax liabilities related to prior transactions; and changes in federal, state, local and international rules and regulations.
The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. Important factors are described under “Risk Factors” in our 2025 Form 10-K and in our subsequent filings with the SEC.
We intend our forward-looking statements to speak only as of the time of such statements and do not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results, whether as a result of new information, future events or otherwise. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this report or included in our other periodic reports filed with the SEC could materially and adversely impact our operations and our future financial results.
Any public statements or disclosures made by us following this report that modify or impact any of the forward-looking statements contained in or accompanying this report will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There are no material changes in market risk from the information provided in our 2025 Form 10-K, except for the cross currency swap agreements.
We use derivative instruments as part of our interest rate risk management strategy. We have entered into certain cross currency swap agreements in order to mitigate a portion of our net European investments from foreign currency risk. As of June 30, 2026, these swaps were in a net liability position with an aggregate fair value of $194 million. Based on a hypothetical decrease or increase of 10% in the value of the U.S. dollar against the Euro, the estimated fair value of our cross currency swaps would change by approximately $252 million.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures
The Chief Executive Officer and Chief Financial Officer, with the assistance of other members of our management, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q.
We have established controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control over Financial Reporting
The Chief Executive Officer and Chief Financial Officer have also concluded that there have not been any changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
For information that updates the disclosures set forth under Part I, Item 3. “Legal Proceedings” in the “2025 Form 10-K”, refer to Note 18 to the “Consolidated Financial Statements” in this Form 10-Q.
ITEM 1A. RISK FACTORS.
Refer to Part I, Item 1A, “Risk Factors,” of our 2025 Form 10-K and the information contained in this Quarterly Report on Form 10-Q and our other reports and registration statements filed with the SEC. There have been no material changes with respect to the risk factors disclosed in our 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table summarizes information with respect to the Company’s purchase of its common stock during the three months ended June 30, 2026, reported on a settlement date basis.
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(1) | Approximate dollar value of shares that may yet be purchased under the plans or programs(1) (Dollars in Millions) | |||||||||||||||||||
| April 1-30, 2026 | 174,816 | $ | 72.05 | 174,816 | $ | 415 | |||||||||||||||||
| May 1-31, 2026 | 147,744 | 75.10 | 147,744 | 404 | |||||||||||||||||||
| June 1-30, 2026 | 159,968 | 75.61 | 159,968 | 392 | |||||||||||||||||||
| Total | 482,528 | $ | 74.17 | 482,528 | $ | 392 | |||||||||||||||||
(1)As announced on August 5, 2025, our Board of Directors authorized a repurchase plan of up to $500 million of common stock. The program began on October 1, 2025 and does not have a specified term or termination date. Subject to market conditions, we expect to repurchase all shares under this authorization, in open market or privately negotiated transactions, including pursuant to Rule 10b5-1 under the Exchange Act, and in block trades, or a combination of the foregoing. On August 4, 2026, the Company announced that its Board of Directors has authorized an enhanced share repurchase authorization with a total value of $2.5 billion, including approximately $400 million remaining on its prior authorization. Under the program, the Board of Directors also authorized an accelerated share repurchase of $500 million, which the Company expects to execute in the second half of 2026. The remaining $2.0 billion share repurchase is expected to be executed following the closing of the Food Ingredients disposal group divestiture, with an expected completion of the program by the end of 2027. The Board will review the share repurchase program periodically and may authorize adjustments of its term and size.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the quarter ended June 30, 2026, none of our directors or executive officers adopted terminated
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ITEM 6. EXHIBITS.
| 10.1 | Term Loan Credit Agreement, dated as of June 23, 2026 between International Flavors & Fragrances, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto | |||||||
| 31.1 | Certification of J. Erik Fyrwald pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2 | Certification of Michael DeVeau pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32 | Certification of J. Erik Fyrwald and Michael DeVeau pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | XBRL Instance Document | |||||||
| 101.SCH | XBRL Taxonomy Extensions Schema | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |||||||
| 104 | Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: | August 4, 2026 | By: | /s/ J. Erik Fyrwald | ||||||||||||||
| J. Erik Fyrwald | |||||||||||||||||
| Chief Executive Officer and Director (Principal Executive Officer) | |||||||||||||||||
| Dated: | August 4, 2026 | By: | /s/ Michael DeVeau | ||||||||||||||
| Michael DeVeau | |||||||||||||||||
| Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |||||||||||||||||
| Dated: | August 4, 2026 | By: | /s/ Marc Birenkrant | ||||||||||||||
| Marc Birenkrant | |||||||||||||||||
| Controller & Chief Accounting Officer (Principal Accounting Officer) | |||||||||||||||||
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