Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)(1) FINANCIAL STATEMENTS: The following consolidated financial statements, related notes, and independent registered public accounting firm’s report are included in this Form 10-K:
Report of Independent Registered Public Accounting Firm			56
Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2020, 2019 and 2018			58
Consolidated Balance Sheet as of December 31, 2020 and 2019			59
Consolidated Statement of Cash Flows for the years ended December 31, 2020, 2019 and 2018			60
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018			61
Notes to Consolidated Financial Statements			62
(a)(3) EXHIBITS			108
(a)(2) FINANCIAL STATEMENT SCHEDULES
Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2020, 2019 and 2018			S-1

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of International Flavors & Fragrances Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of International Flavors & Fragrances Inc. and its subsidiaries (the “Company”) as of January 1, 2021 and January 3, 2020, and the related consolidated statements of income and comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended January 1, 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of January 1, 2021, based on criteria established in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 1, 2021 and January 3, 2020, and the results of its operations and its cash flows for each of the three years in the period ended January 1, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 1, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment - Savory and Natural Product Solutions Reporting Units

As described in Notes 1 and 5 to the consolidated financial statements, the Company’s consolidated goodwill balance was $5.6 billion as of January 1, 2021, and the goodwill associated with the Savory and Natural Products Solutions Reporting Units (“the Reporting Units”) was $1.21 billion and $851.4 million, respectively. Management tests goodwill for impairment at the reporting unit level as of November 30 every year or more frequently if events or changes in circumstances indicate the asset might be impaired. Fair value is estimated by management using a discounted cash flow model. Management determines the fair value of reporting units, including the Reporting Units, using key assumptions including revenue growth rates, profit margins and the specific weighted-average cost of capital used to discount future cash flows.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Reporting Units is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement of the Reporting Units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating audit evidence relating to management’s significant assumptions related to the revenue growth rates, profit margins and the specific weighted-average cost of capital used to discount future cash flows; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Reporting Units. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate; (ii) evaluating the appropriateness of the discounted cash flow model; (iii) testing the completeness and accuracy of underlying data used in the model; and (iv) evaluating the significant assumptions used by management related to the revenue growth rates, profit margins and the specific weighted-average cost of capital used to discount future cash flows. Evaluating management’s assumptions related to the revenue growth rates and profit margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Reporting Units; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and the specific weighted-average cost of capital assumption used to discount future cash flows.

/s/ PricewaterhouseCoopers LLP
New York, New York
February 22, 2021

We have served as the Company’s auditor since 1957.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

			Year Ended December 31,
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)			2020						2019						2018
Net sales			$	5,084,239					$	5,140,084					$	3,977,539
Cost of goods sold			2,998,373						3,027,336						2,294,832
Gross profit			2,085,866						2,112,748						1,682,707
Research and development expenses			356,863						346,128						311,583
Selling and administrative expenses			948,833						876,121						707,461
Restructuring and other charges, net			17,295						29,765						5,079
Amortization of acquisition-related intangibles			192,607						193,097						75,879
Losses (gains) on sale of fixed assets			3,784						2,367						(1,177)
Operating profit			566,484						665,270						583,882
Interest expense			131,802						138,221						132,558
Loss on extinguishment of debt			—						—						38,810
Other income, net			(6,689)						(30,403)						(35,243)
Income before taxes			441,371						557,452						447,757
Taxes on income			73,999						97,184						107,976
Net income			367,372						460,268						339,781
Net income attributable to noncontrolling interests			4,144						4,395						2,479
Net income attributable to IFF stockholders			363,228						455,873						337,302
Other comprehensive income:
Foreign currency translation adjustments			88,132						23,953						(99,580)
(Losses) gains on derivatives qualifying as hedges			(8,938)						(2,678)						15,078
Pension and postretirement liability adjustment			(59,841)						(35,942)						19,757
Comprehensive income attributable to IFF stockholders			$	382,581					$	441,206					$	272,557
Net income per share — basic			$	3.25					$	4.05					$	3.81
Net income per share — diluted			$	3.21					$	4.00					$	3.79
Average number of shares outstanding - basic			112,162						111,966						87,551
Average number of shares outstanding - diluted			113,630						113,307						88,121

See Notes to Consolidated Financial Statements

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED BALANCE SHEET

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
ASSETS
Current Assets:
Cash and cash equivalents			$	649,541					$	606,823
Restricted cash			7,295						17,122
Receivables:
Trade			950,350						892,625
Allowance for doubtful accounts			(21,008)						(16,428)
Inventories			1,131,856						1,123,068
Prepaid expenses and other current assets			341,765						319,334
Total Current Assets			3,059,799						2,942,544
Property, plant and equipment, net			1,458,185						1,386,920
Goodwill			5,593,252						5,497,596
Other intangible assets, net			2,727,175						2,851,935
Other assets			717,260						608,416
Total Assets			$	13,555,671					$	13,287,411
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Bank borrowings, overdrafts and current portion of long-term debt			$	634,159					$	384,958
Accounts payable			555,687						510,372
Dividends payable			82,315						80,038
Other current liabilities			631,565						576,822
Total Current Liabilities			1,903,726						1,552,190
Other Liabilities:
Long-term debt			3,779,359						3,997,438
Retirement liabilities			326,495						265,370
Deferred income taxes			593,369						641,456
Other liabilities			532,135						502,366
Total Other Liabilities			5,231,358						5,406,630
Commitments and Contingencies (Note 20)
Redeemable noncontrolling interests			97,552						99,043
Shareholders’ Equity:
Common stock 12 1/2¢ par value; 500,000,000 shares authorized; 128,526,137 and 128,526,137 shares issued as of December 31, 2020 and December 31, 2019, respectively; and 106,937,990 and 106,787,299 shares outstanding as of December 31, 2020 and December 31, 2019, respectively			16,066						16,066
Capital in excess of par value			3,853,401						3,823,152
Retained earnings			4,156,168						4,117,804
Accumulated other comprehensive loss:
Cumulative translation adjustments			(284,911)						(373,043)
Accumulated (losses) gains on derivatives qualifying as hedges			(6,870)						2,068
Pension and postretirement liability adjustment			(405,760)						(345,919)
Treasury stock, at cost (21,588,147 and 21,738,838 shares as of December 31, 2020 and December 31, 2019, respectively)			(1,016,941)						(1,022,824)
Total Shareholders’ Equity			6,311,153						6,217,304
Noncontrolling interest			11,882						12,244
Total Shareholders’ Equity including Noncontrolling interest			6,323,035						6,229,548
Total Liabilities and Shareholders’ Equity			$	13,555,671					$	13,287,411

See Notes to Consolidated Financial Statements

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

			Year Ended December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Cash flows from operating activities:
Net income			$	367,372					$	460,268					$	339,781
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization			325,360						323,330						173,792
Deferred income taxes			(67,718)						(59,279)						19,402
(Gains) losses on sale of assets			3,784						2,367						(1,177)
Stock-based compensation			35,798						34,482						29,401
Loss on extinguishment of debt			—						—						38,810
Gain on deal contingent derivatives			—						—						(12,505)
Pension contributions			(24,227)						(23,714)						(22,433)
Changes in assets and liabilities, net of acquisitions:
Trade receivables			(60,979)						59,555						(49,958)
Inventories			17,924						(62,129)						(117,641)
Accounts payable			27,923						55,464						55,136
Accruals for incentive compensation			44,151						(22,357)						(2,289)
Other current payables and accrued expenses			57,341						5,488						(5,279)
Other assets			14,709						(66,650)						(19,219)
Other liabilities			(27,340)						(7,860)						11,754
Net cash provided by operating activities			714,098						698,965						437,575
Cash flows from investing activities:
Cash paid for acquisitions, net of cash received			—						(49,065)						(4,857,343)
Additions to property, plant and equipment			(191,794)						(235,978)						(170,094)
Additions to intangible assets			—						(6,070)						(3,326)
Proceeds from disposal of assets			17,189						42,112						8,176
Proceeds from disposal of subsidiaries, net of cash held			—						—						10,157
Proceeds from unwinding of cross currency swap derivative instruments			—						25,900						—
Contingent consideration paid			—						(4,655)						—
Maturity of net investment hedges			(14,597)						—						(2,642)
Proceeds from life insurance contracts			1,739						1,890						1,837
Net cash used in investing activities			(187,463)						(225,866)						(5,013,235)
Cash flows from financing activities:
Cash dividends paid to shareholders			(322,584)						(313,510)						(230,218)
Decrease in revolving credit facility and short term borrowing			(429)						(1,021)						(927)
Deferred financing costs			(3,205)						—						(33,668)
Repayments of debt			(347,001)						(155,261)						(376,625)
Purchases of redeemable noncontrolling interest			(21,566)						—						—
Proceeds from issuance of long-term debt			200,000						—						3,256,742
Proceeds from sales of equity securities, net of issuance costs			—						—						2,268,094
Contingent consideration paid			(8,684)						(24,478)						—
Gain on pre-issuance hedges			—						—						12,505
Employee withholding taxes paid			(8,101)						(10,787)						(9,725)
Purchase of treasury stock			—						—						(15,475)
Net cash (used in) provided by financing activities			(511,570)						(505,057)						4,870,703
Effect of exchange rate changes on cash, cash equivalents and restricted cash			20,862						7,381						(14,567)
Net change in cash, cash equivalents and restricted cash			35,927						(24,577)						280,476
Cash, cash equivalents and restricted cash at beginning of year			623,945						648,522						368,046
Cash, cash equivalents and restricted cash at end of year			$	659,872					$	623,945					$	648,522
Supplemental Disclosures:
Interest paid, net of amounts capitalized			$	127,553					$	133,739					$	117,581
Income taxes paid			132,789						126,172						116,138
Accrued capital expenditures			$	40,608					$	39,466					$	33,844

See Notes to Consolidated Financial Statements

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(DOLLARS IN THOUSANDS)			Common stock						Capital in excess of par value						Retained earnings						Accumulated other comprehensive (loss) income						Treasury stock												Non-controlling interest						Total
Shares						Cost
Balance at December 31, 2017			$	14,470					$	162,827					$	3,870,621					$	(637,482)					(36,910,809)						$	(1,726,234)					$	5,092					$	1,689,294
Net income															337,302																								2,404						339,706
Adoption of ASU 2014-09															2,068																														2,068
Cumulative translation adjustment																					(99,580)																								(99,580)
Gains on derivatives qualifying as hedges; net of tax $2,011																					15,078																								15,078
Pension liability and postretirement adjustment; net of tax ($5,052)																					19,757																								19,757
Cash dividends declared ($2.84 per share)															(253,577)																														(253,577)
Stock options/SSARs									2,152																		46,474						2,188												4,340
Impact of Frutarom acquisition									1,346,229																		14,901,445						701,111						3,700						2,051,040
Vested restricted stock units and awards									(10,650)																		164,064						7,692												(2,958)
Stock-based compensation									29,401																																				29,401
Treasury share repurchases																											(108,109)						(15,475)												(15,475)
Tangible equity units			1,596						2,266,498																																				2,268,094
Redeemable NCI									(2,848)																																				(2,848)
Dividends on noncontrolling interest and other															(193)																								(773)						(966)
Balance at December 31, 2018			$	16,066					$	3,793,609					$	3,956,221					$	(702,227)					(21,906,935)						$	(1,030,718)					$	10,423					$	6,043,374
Net income															455,873																								3,729						459,602
Adoption of ASU 2016-02															23,094																														23,094
Adoption of ASU 2017-12															(981)						981																								—
Cumulative translation adjustment																					22,972																								22,972
Losses on derivatives qualifying as hedges; net of tax ($505)																					(2,678)																								(2,678)
Pension liability and postretirement adjustment; net of tax ($7,559)																					(35,942)																								(35,942)
Cash dividends declared ($2.96 per share)															(315,770)																														(315,770)
Stock options/SSARs									6,966																		14,346						677												7,643
Vested restricted stock units and awards									(9,808)																		153,751						7,217												(2,591)
Stock-based compensation									34,482																																				34,482
Redeemable NCI									(2,097)																																				(2,097)
Dividends on noncontrolling interest and other															(633)																								(1,908)						(2,541)
Balance at December 31, 2019			$	16,066					$	3,823,152					$	4,117,804					$	(716,894)					(21,738,838)						$	(1,022,824)					$	12,244					$	6,229,548
Net income															363,228																								1,330						364,558
Cumulative translation adjustment																					88,132																								88,132
Losses on derivatives qualifying as hedges; net of tax $1,400																					(8,938)																								(8,938)
Pension liability and postretirement adjustment; net of tax ($9,185)																					(59,841)																								(59,841)
Cash dividends declared ($3.04 per share)															(324,861)																														(324,861)
Stock options/SSARs									759																		57,652						2,743												3,502
Vested restricted stock units and awards									(8,111)																		93,039						3,140												(4,971)
Stock-based compensation									35,798																																				35,798
Redeemable NCI									1,803																																				1,803
Dividends on noncontrolling interest and other															(3)																								(1,692)						(1,695)
Balance at December 31, 2020			$	16,066					$	3,853,401					$	4,156,168					$	(697,541)					(21,588,147)						$	(1,016,941)					$	11,882					$	6,323,035

See Notes to Consolidated Financial Statements

INTERNATIONAL FLAVORS & FRAGRANCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 taste, scent and complementary adjacent products, including cosmetic active and natural health ingredients, which are used in a wide variety of consumer products. Our products are sold principally to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, cleaning products, dairy, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, dietary supplements, infant and elderly nutrition, functional food, and pharmaceutical and oral care products.

Fiscal Year End The Company has historically operated on a 52/53 week fiscal year generally ending on the Friday closest to the last day of the year. For ease of presentation, December 31 is used consistently throughout the financial statements and notes to represent the period-end date. The 2020 fiscal year was a 52 week period, the 2019 fiscal year was a 53 week period and the 2018 fiscal year was a 52 week period. For the 2020, 2019 and 2018 fiscal years, the actual closing dates were January 1, January 3, and December 28, respectively.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from estimates.

Principles of Consolidation The consolidated financial statements include the accounts of International Flavors & Fragrances Inc. and those of its subsidiaries. Significant intercompany balances and transactions have been eliminated. To the extent a subsidiary is not wholly owned, any related noncontrolling interests are included as a separate component of Shareholders’ Equity.

Revenue Recognition Revenue from contracts with customers is recognized when the contract or purchase order has received approval and commitment from both parties, has the rights of the parties and payment terms (which can vary by customer) identified, has commercial substance, and collectability of consideration is probable.

For the Company's Flavors and Fragrances Compounds products, revenue is recognized for the majority of contracts when the Company satisfies its performance obligation by transferring control of the goods to the customer. Revenue is recognized over time for a small number of contracts, and the amount of revenue recognized is based on the extent of progress towards completion of the promised goods, using the output method. With respect to a small number of contracts for the sale of compounds, the Company has an “enforceable right to payment for performance to date” and as the products do not have an alternative use, the Company recognizes revenue for these contracts over time and records a contract asset using the output method.

For the Company's Flavors and Fragrances Ingredients products, revenue is recognized for the majority of contracts when the Company satisfies its performance obligation by transferring control of the goods to the customer.

Sales are reduced, at the time revenue is recognized, for applicable discounts, rebates and sales allowances based on historical experience. Related accruals are included in Other current liabilities in the accompanying Consolidated Balance Sheet. The Company considers shipping and handling activities undertaken after the customer has obtained control of the related goods as a fulfillment activity. Net sales include shipping and handling charges billed to customers. Cost of goods sold includes all costs incurred in connection with shipping and handling. See Note 11 for a further discussion on revenue recognition. See Note 11 for a further discussion on contract assets.

Foreign Currency Translation The Company translates the assets and liabilities of non-U.S. subsidiaries into U.S. dollars at year-end exchange rates. Income and expense items are translated at average exchange rates during the year. Cumulative translation adjustments are shown as a separate component of Shareholders’ Equity.

Research and Development Research and development (“R&D”) expenses relate to the development of new and improved tastes or scents, technical product support and compliance with governmental regulation. All research and development costs are expensed as incurred.

Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with maturities of three months or less at date of purchase.

Restricted Cash Restricted cash is comprised of cash or cash equivalents which has been placed into an account that is restricted for a specific use and from which the Company cannot withdraw the cash on demand.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Company's statement of cash flows periods ended December 31, 2020 and December 31, 2019 to the amounts reported in the Company's balance sheet as at December 31, 2020, December 31, 2019 and December 31, 2018.

(DOLLARS IN THOUSANDS)			December 31, 2020						December 31, 2019						December 31, 2018
Current assets
Cash and cash equivalents			$	649,541					$	606,823					$	634,897
Restricted cash			7,295						17,122						13,625
Noncurrent assets
Restricted cash included in Other assets			3,036						—						—
Cash, cash equivalents and restricted cash			$	659,872					$	623,945					$	648,522

Accounts Receivable During 2019, the Company entered into certain factoring agreements in the U.S. and The Netherlands under which it can factor up to approximately $100 million of its trade receivables. The factoring agreements supplement the Company's existing factoring programs that are 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 Sheet when the cash proceeds are received by the Company. As of December 31, 2020, 2019 and 2018, the Company had sold receivables pursuant to these factoring programs of approximately $248.8 million, $205.7 million and $168.3 million, respectively. Participation in the various programs increased cash provided by operations by approximately $43.1 million, $37.7 million and $13.6 million in 2020, 2019 and 2018, respectively. The cost of participating in these programs was approximately $4.4 million, $7.1 million, and $3.4 million in 2020, 2019, and 2018, respectively and is included as a component of interest expense.

Inventories Inventories are stated at the lower of cost (on a weighted-average basis) or net realizable value. The Company's inventories consisted of the following:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Raw materials			$	565,521					$	565,071
Work in process			38,496						44,532
Finished goods			527,839						513,465
Total			$	1,131,856					$	1,123,068

Leases During the year ended December 31, 2019, the Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires most leases to be recognized on the balance sheet. The Company adopted the standard using the modified retrospective approach with an effective date of December 29, 2018, the beginning of its 2019 fiscal year. Prior year financial statements were not recast. The Company elected various transition provisions available for expired or existing contracts, which allows the Company to carryforward historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs.

The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset.

When the Company determines the arrangement is a lease, or contains a lease, at inception, it then determines whether the lease is an operating lease or a finance lease at the commencement date.

The Company leases property and equipment, principally under operating leases. In accordance with ASU 2016-02, the Company records a right of use asset and related obligation at the present value of lease payments and, over the term of the lease, depreciates the right of use asset and accretes the obligation to future value. Some of the leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company has elected not to separate non-lease components from lease components for all classes of leased assets.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value, however, most of the Company's leases do not provide a readily determinable implicit rate and the Company calculates the applicable incremental borrowing rate to discount the lease payments based on the term of the lease at lease commencement. The incremental borrowing rate is determined based on the Company's credit rating, currency and lease terms.

Upon adoption of the new guidance, the Company recorded a right-of-use asset of $308.3 million and total operating lease liabilities of $313.3 million. Additionally, the Company recorded a net increase to retained earnings of approximately $23.1 million related to the recognition of deferred gains on certain sale-leaseback transactions that occurred in prior years.

Long-Lived Assets

Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is calculated on a straight-line basis, principally over the following estimated useful lives: buildings and improvements, 10 to 40 years; machinery and equipment, 3 to 20 years; information technology hardware and software, 3 to 7 years; and leasehold improvements which are included in buildings and improvements, the estimated life of the improvements or the remaining term of the lease, whichever is shorter.

Finite-Lived Intangible Assets Finite-lived intangible assets include customer relationships, patents, trade names, technological know-how and other intellectual property valued at acquisition and amortized on a straight-line basis over the following estimated useful lives: customer relationships, 11 - 23 years; patents, 11 - 15 years; trade names, 14 - 28 years; and technological know-how, 5 - 28 years.

The Company reviews long-lived assets for impairment when events or changes in business conditions indicate that their carrying value may not be recovered. An estimate of undiscounted future cash flows produced by an asset or group of assets is compared to the carrying value to determine whether impairment exists. If assets are determined to be impaired, the loss is measured based on an estimate of fair value using various valuation techniques, including a discounted estimate of future cash flows.

Goodwill Goodwill represents the difference between the total purchase price and the fair value of identifiable assets and liabilities acquired in business acquisitions.

The Company tests goodwill for impairment at the reporting unit level as of November 30 every year or more frequently if events or changes in circumstances indicate the asset might be impaired. A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded.

The Company identifies their reporting units by assessing whether the components of their reporting segments constitute businesses for which discrete financial information is available and management of each reporting unit regularly reviews the operating results of those components. The Company has identified eight reporting units under the Taste and Scent Segments: (1) Flavor Compounds (which includes the Taste reporting unit that was previously included in the former Frutarom segment, as well as Legacy IFF Flavor Compounds), (2) Fragrance Compounds, (3) Fragrance Ingredients, (4) Cosmetic Active Ingredients, (5) Savory, (6) Natural Product Solutions, (7) Fine and Specialty Ingredients ("FSI") and (8) Inclusions. These reporting units were determined based on the level at which the performance is measured and reviewed by segment management.

When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If the Company elects to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value of a reporting unit exceeds its fair value, the Company performs a quantitative goodwill impairment test.

Under the quantitative goodwill impairment test, if a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge based on that difference, and the impairment charge will be limited to the amount of goodwill allocated to that reporting unit.

Income Taxes The Company accounts for taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and tax return bases of assets and liabilities, based on enacted tax rates and other provisions of the tax law. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized as income in the period in which such change is enacted. Future tax benefits are recognized to the extent that the realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes may not be realized.

The Company recognizes uncertain tax positions that it has taken or expects to take on a tax return. Pursuant to accounting requirements, the Company first determines whether it is “more likely than not” its tax position will be sustained if the relevant tax authority were to audit the position with full knowledge of all the relevant facts and other information. For those tax positions that meet this threshold, the Company measures the amount of tax benefit based on the largest amount of tax benefit that it has a greater than 50% chance of realizing in a final settlement with the relevant authority. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard. The Company maintains a cumulative risk portfolio relating to all of its uncertainties in income taxes in order to perform this analysis, but the evaluation of its tax positions requires significant judgment and estimation in part because, in certain cases, tax law is subject to varied interpretation, and whether a tax position will ultimately be sustained may be uncertain.

Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

Retirement Benefits Current service costs of retirement plans and postretirement health care and life insurance benefits are accrued. Prior service costs resulting from plan improvements are amortized over periods ranging from 10 to 20 years.

Financial Instruments Derivative financial instruments are used to manage interest and foreign currency exposures. The gain or loss on the hedging instrument is recorded in earnings at the same time as the transaction being hedged is recorded in earnings. The associated asset or liability related to the open hedge instrument is recorded in Prepaid expenses and Other current assets or Other current liabilities, as applicable.

The Company records all derivative financial instruments on the balance sheet at fair value. Changes in a derivative’s fair value are recognized in earnings unless specific hedge criteria are met. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in Net income. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in Accumulated other comprehensive income ("AOCI") in the accompanying Consolidated Balance Sheet and are subsequently recognized in Net income when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges, if any, are recognized as a charge or credit to earnings.

Software Costs The Company capitalizes direct internal and external development costs for certain significant projects associated with internal-use software and amortizes these costs over 7 years. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. Costs related to projects that are not significant are expensed as incurred.

Net Income Per Share Under the two-class method, earnings are adjusted by accretion of amounts to redeemable noncontrolling interests recorded at redemption value. The adjustments represent in-substance dividend distributions to the noncontrolling interest holders as the holders have a contractual right to receive a specified amount upon redemption. As a result, earnings are adjusted to reflect this in-substance distribution that is different from other common shareholders. In addition, the Company has unvested share based payment awards with a right to receive nonforfeitable dividends and thus are considered participating securities which are required to be included in the computation of basic and diluted earnings per share.

Basic earnings (loss) per share represents the amount of earnings for the period available to each share of common stock outstanding during the period. Basic earnings (loss) per share includes the effect of issuing shares of common stock assuming (i) the prepaid stock purchase contracts (“SPC”) are converted into the minimum number of shares of common stock under the if-converted method, and (ii) an adjustment to earnings (loss) to reflect adjustments made to record the redeemable value of redeemable noncontrolling interests. Diluted earnings (loss) per share also includes the effect of issuing shares of common stock, assuming (i) stock options and warrants are exercised, (ii) restricted stock units are fully vested under the treasury stock method, and (iii) the incremental effect of the prepaid SPC converted into the maximum number of shares of common stock under the if-converted method.

Stock-Based Compensation Compensation cost of all stock-based awards is measured at fair value on the date of grant and recognized over the service period for which awards are expected to vest. The cost of such stock-based awards is principally recognized on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures.

Financing Costs Costs incurred in the issuance of debt are deferred and amortized as part of interest expense over the stated life of the applicable debt instrument. Unamortized deferred financing costs relating to debt are presented as a reduction in the amount of debt outstanding on the Consolidated Balance Sheet. Unamortized deferred financing costs relating to the revolving credit facility are recorded in Other assets on the Consolidated Balance Sheet.

Redeemable Noncontrolling Interests Noncontrolling interests in subsidiaries that are redeemable for cash or other assets outside of the Company’s control are classified as mezzanine equity, outside of equity and liabilities, at the greater of the carrying value or the redemption value. The increases or decreases in the estimated redemption amount are recorded with corresponding adjustments against Capital in excess of par value and are reflected in the computation of earnings per share using the two-class method.

Recent Accounting Pronouncements

In October 2020, the FASB issued Accounting Standards Updates ("ASU") 2020-09, "Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762" and 2020-10, "Codification Improvements." ASU 2020-09 is intended to amend and supersede various SEC paragraphs pursuant to the issuance of SEC Release No. 33-10762 and is effective on January 4, 2021. ASU 2020-10 is intended to improve the consistency of the FASB Accounting Standards Codification ("Codification") and clarify guidance by including all disclosure guidance in the appropriate Disclosure Section of the Codification to help reduce the likelihood that disclosure requirements would be missed. ASU 2020-10 is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted for any annual or interim period within those fiscal years. The Company has determined that both guidance will not have an impact on its Consolidated Financial Statements and will have a minimal impact on its disclosures.

In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU is intended to simplify various aspects related to the cessation of reference rates in certain financial markets that would otherwise create modification accounting or changes in estimate. This guidance is effective for the period from March 12, 2020 to December 31, 2022. The Company has not adopted any of the optional expedients or exceptions through December 31, 2020 but will continue to evaluate the possible adoption of any such expedients or exceptions during the effective period as circumstances evolve.

In December 2019, the FASB issued Accounting Standards Update ("ASU") 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The ASU is intended to simplify various aspects related to accounting for income taxes. This guidance is effective for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance, but does not expect this guidance to have a material impact on its Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal - Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance was effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The Company adopted the guidance effective the first day of its 2020 fiscal year. The adoption did not have an impact on its consolidated financial statements but may impact the Company in the future as and when it enters into cloud computing arrangements.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans (Subtopic 715-20)", which modifies the disclosure requirements on company-sponsored defined benefit plans. The ASU is effective for fiscal years beginning after December 15, 2020 on a retrospective basis to all periods presented. Early adoption is permitted. The Company has determined that this guidance will not have an impact on its Consolidated Financial Statements and will have a minimal impact on its disclosures.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)", which modifies, removes and adds certain disclosure requirements on fair value measurements. The ASU was effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company has determined that this guidance did not have an impact on its Consolidated Financial Statements, as the Company has no applicable fair value measurements that are affected by the guidance.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", with subsequent amendments, which requires issuers to measure expected credit losses for financial assets based on historical experience, current conditions and reasonable and supportable forecasts. As such, an entity will use forward-looking information to estimate credit losses. The Company adopted the guidance effective the first day of its 2020 fiscal year and performed an evaluation of the applicable criteria, including the aging of its trade receivables, recent write-off history and other factors related to future macroeconomic conditions. As a result of the evaluation, the Company determined that no adjustment was required to the level of its allowances for bad debts or to the carrying value of any other financial asset. The Company is exposed to credit losses primarily through its sales of products. To determine the appropriate allowance for expected credit losses, the Company considers certain credit quality indicators, such as aging, collection history, and creditworthiness of debtors. Regional and Global Credit committees review and approve specific customer allowance reserves. The allowance for expected credit losses is primarily based on two factors: i) the aging of the different categories of trade

receivables, and ii) a specific reserve for accounts identified as uncollectable. The Company also considers current and future economic conditions in the determination of the allowance. At December 31, 2020, the Company reported $929.3 million of trade receivables, net of allowances of $21.0 million. Based on the aging analysis as of December 31, 2020, approximately 85% of our accounts receivable were current based on the payment terms of the invoice. Receivables that are past due by over 365 days account for approximately 1% of our accounts receivable.

The following is a rollforward of the Company's allowances for bad debts for the year of 2020:

(DOLLARS IN THOUSANDS)			Allowance for Bad Debts
Balance at December 31, 2019			16,428
Bad debt expense			5,918
Write-offs			(825)
Foreign exchange			(513)
Balance at December 31, 2020			21,008

The Company adjusted the amount of the allowances for bad debts as of December 31, 2019 to reflect the correct classification of amounts between the allowances for bad debts and Trade Receivables. The adjustment was for $8.2 million and had the effect of increasing both the allowances for bad debts and Trade Receivables.

Reclassifications and Updates

Certain prior year disclosure amounts have been reclassified or updated to conform to current year presentation.

NOTE 2. RESTRUCTURING AND OTHER CHARGES

Restructuring and other charges primarily consist of separation costs for employees including severance, outplacement and other benefit ("Severance") costs as well as costs related to plant closures, principally related to fixed assets write-downs ("Fixed asset write-down") and all other related restructuring ("Other") costs. All restructuring and other charges, net expenses are separately stated on the Consolidated Statement of Income and Comprehensive Income.

Frutarom Integration Initiative

In connection with the acquisition of Frutarom, the Company began to execute an integration plan that, among other initiatives, seeks to optimize its manufacturing network. As part of the Frutarom Integration Initiative, the Company expects to close approximately 35 manufacturing sites with most of the closures targeted to occur by the end of 2022 due to delays as a result of COVID-19. During 2019, the Company announced the closure of ten sites, of which six sites were in Europe, Africa and Middle East, two sites were in Latin America, and one site was in each of North America and Greater Asia regions. During 2020, the Company announced the closure of eleven sites, of which five sites were in Europe, Africa and Middle East, four sites were in North America and two sites were in Greater Asia region. Since the inception of the initiative through 2020, the Company has expensed $26.7 million. Total costs for the program are expected to be approximately $63 million including cash and non-cash charges through 2022.

2019 Severance Program

During 2019, the Company incurred severance charges related to approximately 190 headcount reductions, excluding those previously mentioned under the Frutarom Integration Initiative. The headcount reductions primarily related to the Scent business unit with additional amounts related to headcount reductions in all business units associated with the establishment of a new shared service center in Europe. Since the inception of the program, the Company has expensed $20.5 million. As of December 31, 2020, the program is largely completed.

2017 Productivity Program

In connection with 2017 Productivity Program, the Company recorded $24.2 million of charges related to personnel costs and lease termination costs since the program's inception. As of December 31, 2020, the program is largely completed.

Other Restructuring Charges

During 2020, the Company incurred charges of approximately $2.7 million principally related to the severance costs in connection with the closure of a facility in Germany.

Changes in Restructuring Liability

Movements in severance-related accruals during 2018, 2019 and 2020 are as follows:

(DOLLARS IN THOUSANDS)			Balance at January 1, 2018						Additional Charges (Reversals), Net						Non-Cash Charges						Cash Payments						Balance at December 31, 2018
2017 Productivity Program
Severance			7,539						3,884						—						(7,298)						4,125
Other			418						1,195						(418)						(120)						1,075
Total restructuring			$	7,957					$	5,079					$	(418)					$	(7,418)					$	5,200

(DOLLARS IN THOUSANDS)			Balance at January 1, 2019						Additional Charges, Net						Non-Cash Charges						Cash Payments						Balance at December 31, 2019
2017 Productivity Program
Severance			$	4,125					$	(1,947)					$	—					$	(1,072)					$	1,106
Other			1,075						—						—						(987)						88
Frutarom Integration Initiative
Severance			—						6,110						—						(2,072)						4,038
Fixed asset write down			—						534						(534)						—						—
Other			—						3,726						(145)						(1,096)						2,485
2019 Severance Program
Severance			—						20,871						—						(7,974)						12,897
Other			—						471						—						—						471
Total restructuring			$	5,200					$	29,765					$	(679)					$	(13,201)					$	21,085

(DOLLARS IN THOUSANDS)			Balance at January 1, 2020						Additional Charges (Reversals), Net						Non-Cash Charges						Cash Payments						Balance at December 31, 2020
2017 Productivity Program
Severance			$	1,106					$	(917)					$	—					$	(189)					$	—
Other			88						—						—						(88)						—
Frutarom Integration Initiative
Severance			4,038						2,476						—						(3,477)						3,037
Fixed asset write down			—						11,356						(11,356)						—						—
Other			2,485						2,488						(100)						(1,956)						2,917
2019 Severance Program
Severance			12,897						(793)						—						(6,057)						6,047
Other			471						—						—						—						471
Other Restructuring Charges
Severance			—						2,685						—						(270)						2,415
Total restructuring			$	21,085					$	17,295					$	(11,456)					$	(12,037)					$	14,887

Other includes supplier contract termination costs, consulting and advisory fees.

Charges by Segment

The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Taste			$	16,878					$	10,045					$	1,646
Scent			2,791						12,093						3,433
Shared IT & Corporate Costs(1)			(2,374)						7,627						—
Total Restructuring and other charges, net			$	17,295					$	29,765					$	5,079

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(1) The 2020 amount represents a reversal to the Shared IT & Corporate Costs.

NOTE 3. ACQUISITIONS

Transaction with Nutrition & Biosciences, Inc.

On February 1, 2021 (the "Closing Date"), the Company completed the combination of IFF and DuPont de Nemours, Inc's. ("DuPont") nutrition and biosciences business (the "N&B Business") which had been transferred to Nutrition & Biosciences, Inc., a Delaware corporation and wholly owned subsidiary of DuPont ("N&B") in a Reverse Morris Trust transaction. The N&B Business is an innovation-driven and customer-focused business that provides solutions for the global food and beverage, dietary supplements, home and personal care, energy, animal nutrition and pharma markets. IFF acquired 100% interest of N&B pursuant to definitive agreements, including an Agreement and Plan of Merger (the "Merger Agreement") entered into on December 15, 2019. The transaction was made in order to strengthen IFF's customer base and market presence, with an enhanced position in the food & beverage, home & personal care and health & wellness markets.

On the Closing Date, a wholly owned subsidiary of IFF merged with and into N&B, with N&B surviving as a wholly owned subsidiary of IFF (the "Merger"). As of the effective time of the Merger, each issued and outstanding share of common stock of N&B (except for shares of common stock of N&B held by N&B as treasury stock or by DuPont, which were canceled and ceased to exist and no consideration was delivered in exchange therefor) was converted into the right to receive one share of common stock of IFF. The Merger was completed in exchange for 141,740,461 shares of IFF common stock, par value $0.125 per share (or cash payment in lieu of fractional shares), which had been approved in the special shareholder meeting that occurred on August 27, 2020 where IFF shareholders voted to approve the issuance of shares of IFF common stock in connection with the N&B Transaction pursuant to the Merger Agreement. In connection with the N&B Transaction, DuPont received a one-time $7.3 billion special cash payment (the “Special Cash Payment”). The shares issued in the Merger represented approximately 55.4% of the common stock of IFF on a fully diluted basis, after giving effect to the Merger, as of February 1, 2021.

The acquisition will be accounted for using the purchase method of accounting, and N&B's assets, liabilities and results of operations will be included in the Company's financial statements from the Closing Date.

On December 15, 2019, IFF and N&B entered into a commitment letter which provided $7.5 billion in an aggregate principal amount of senior unsecured bridge term loans (the "Bridge Loans"). On January 17, 2020, N&B entered into a term loan credit agreement, as amended on August 25, 2020, providing for unsecured term loan facilities in an aggregate principal amount of $1.25 billion (the “N&B Term Loan Facilities”), which reduced the commitments under the Bridge Loans commitment letter by a corresponding amount. On September 16, 2020, N&B issued $6.25 billion of senior unsecured notes (the “N&B Notes”), which reduced the remaining commitments under the Bridge Loans commitment letter in their entirety. The Bridge Loans commitment letter was also terminated as of such date. On the Closing Date, N&B borrowed $1.25 billion under the N&B Term Loan Facilities. The N&B Notes, together with the N&B Term Loan Facilities, were used to finance the Special Cash Payment and to pay related fees and expenses. Following the consummation of the N&B Transaction, all obligations of N&B with respect to the N&B Term Loan Facilities and the N&B Notes have been guaranteed by IFF. In lieu of IFF continuing to provide these guarantees, IFF intends to assume all of N&B obligations under the Term Loan Facilities and the N&B Notes and accordingly, these amounts will be reflected as long term debt in the accompanying Consolidated Balance Sheet.

Due to the limited time between the Closing Date and IFF's filing of this Annual Report on Form 10-K for the fiscal year ended December 31, 2020, the valuation report and initial accounting for the business combination is not yet available and the Company is unable to disclose certain information required by ASC Topic 805, Business Combinations. The Company plans to provide preliminary purchase price allocation information in IFF's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

2019 Acquisition Activity

During the second quarter of 2019, the Company acquired the remaining 50% interest in an equity method investee located in Canada. The purchase of the additional interest increased the Company's ownership of the investee to 100%, and the acquired entity is managed under the Taste segment. The purchase price for the remaining 50% was approximately $37 million, including cash and an accrual for the amount expected to be paid in contingent consideration. The Company began to consolidate the results of the acquired entity from the date on which it acquired the remaining 50% interest during the second quarter of 2019. Goodwill of approximately $30 million and intangible assets of $20 million were recorded in connection with the acquisition.

During the first quarter of 2019, the Company acquired 70% of a company in Europe and increased its ownership of an Asian company from 49% to 60%. The two acquired entities, which manufacture flavor products, are managed under the Taste segment. The total purchase price for the two acquisitions made in the first quarter of 2019 was $52 million, excluding cash acquired and including $19 million of contingent consideration and deferred payments. The purchase price allocations have been performed and resulted in goodwill of approximately $47 million and intangible assets of $28 million.

During the first quarter of 2020, the Company completed the purchase price allocations for all three of the transactions that were made during 2019. As a result of finalizing the purchase price allocations, adjustments were recorded to increase fixed assets by $13 million, customer relationships and other intangible assets by $5 million and approximately $3 million related to deferred tax liabilities and to decrease goodwill by $15 million. The income statement impact of the finalization of purchase accounting was not material.

Pro forma information has not been presented as the entities acquired in 2019 are not material.

Frutarom

On October 4, 2018 (the "Frutarom Closing"), the Company completed its acquisition of 100% of Frutarom Industries Ltd. (“Frutarom”), which was accounted for using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations, with IFF identified as the acquirer.

The Company paid approximately $7.0 billion for the acquisition, including $4.3 billion in cash and $2.0 billion in equity. At the Frutarom Closing, each issued and outstanding Frutarom ordinary share was exchanged for $71.19 in cash and 0.2490 of a share of the Company's common stock. A portion of Frutarom’s existing debt was repaid concurrent with the Frutarom Closing. Frutarom's debt, which was not legally assumed by IFF but was paid at the Frutarom Closing, was approximately $695.0 million. This made up the remainder of the purchase consideration. To finance the acquisition, the Company used cash on hand and borrowed approximately $3.3 billion of additional debt, consisting of $2.8 billion of senior unsecured notes, $350.0 million in term loans and $139.5 million of tangible equity units ("TEUs"). See Notes 8 and 9 for further details. The Company issued 14.9 million shares as a portion of the purchase consideration resulting in former Frutarom shareholders holding approximately 14% of the Company's outstanding common stock as of the Frutarom Closing. Additionally, the Company issued 16,500,000 TEUs in an underwritten public offering for net proceeds of approximately $665.1 million.

NOTE 4. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consisted of the following amounts:

(DOLLARS IN THOUSANDS)			December 31,
2020						2019
Asset Type
Land			$	84,205					$	73,170
Buildings and improvements			932,256						831,579
Machinery and equipment			1,524,574						1,366,041
Information technology			251,157						231,858
Construction in process			136,139						188,120
Total Property, Plant and Equipment			2,928,331						2,690,768
Accumulated depreciation			(1,470,146)						(1,303,848)
Total Property, Plant and Equipment, Net			$	1,458,185					$	1,386,920

Depreciation expense was $130.7 million for the year ended December 31, 2020, and $130.2 million and $89.1 million for the years ended December 31, 2019 and 2018, respectively.

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

Movements in goodwill during the years ended December 31, 2018, 2019 and 2020 were as follows:

(DOLLARS IN THOUSANDS)			Goodwill
Balance at January 1, 2018			$	1,156,288
Acquisitions(a)			4,253,541
Disposals			(19,069)
Foreign exchange			(12,372)
Balance at December 31, 2018			5,378,388
Acquisitions(b)			98,411
Frutarom measurement period adjustment			30,876
Foreign exchange			(10,079)
Balance at December 31, 2019			5,497,596
Measurement period adjustments(c)			(15,283)
Foreign exchange			110,939
Balance at December 31, 2020			$	5,593,252

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(a)Primarily relates to the Company's acquisition of Frutarom.

(b)Additions primarily relate to the 2019 Acquisition Activity. See Note 3 for details.

(c)Measurement period adjustments relate to adjustments recorded in connection with completing the purchase price allocation related to the 2019 Acquisition Activity. See Note 3 for details.

Reallocation of goodwill

In the first quarter of 2020, in connection with the reorganization of the Company's reporting structure, certain entities were moved between reporting units. As a result of the movements, Goodwill was reallocated between reporting units as follows:

(DOLLARS IN THOUSANDS)			Increase (decrease) to Goodwill
Cosmetic Active Ingredients			85,235
Natural Product Solutions			(57,102)
Fine Ingredients			(25,256)
Taste			(2,877)
Total			—

See Note 15 for further information on the reorganization.

Goodwill by segment was as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Taste			$	4,859,531					$	4,788,988
Scent			733,721						708,608
Total			$	5,593,252					$	5,497,596

Annual Goodwill Impairment Test

For the annual impairment test as of November 30, 2020, the Company utilized Step 0 of the guidance in ASC Topic 350, Intangibles – Goodwill and Other, which allows for the assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Based on a review of qualitative factors, the Company determined that for four of the reporting units, a quantitative (Step 1) impairment analysis was not necessary to determine if the carrying values of the reporting unit exceeded their fair values. For the other four reporting units (Savory, Natural Product Solutions, FSI, and Inclusions), the Company determined that a Step 1 test was necessary.

The Company assessed the fair value of the reporting units primarily using an income approach. Under the income approach, the Company determines the fair value by using a discounted cash flow method at a rate of return that reflects the relative risk of the projected future cash flows of each reporting unit, as well as a terminal value. The Company uses the most current actual and forecasted operating data available. Key estimates and assumptions used in these valuations include revenue growth rates and profit margins based on internal forecasts and historical operating trends of the Company, and a specific weighted-average cost of capital used to discount future cash flows.

In performing the quantitative impairment test, the Company determined that the fair value of the four reporting units exceeded their carrying values and, taken together with the results of the qualitative test, we determined that there was no impairment of goodwill at any of the Company's eight reporting units in 2020. Based on the quantitative impairment test performed at November 30, 2020, the Company determined that the excess of fair values over their respective carrying values ranged from 35% to 105% for two reporting units (FSI and Inclusions). The remaining two reporting units (Savory and Natural Product Solutions) had less than 10% excess fair value over carrying value.

As of November 30, 2020, the Savory reporting unit had excess fair value over carrying value of approximately 5% and goodwill of $1.21 billion, and the Natural Product Solutions reporting unit had excess fair value over carrying value of approximately 1% and goodwill of $851.4 million. While management believes that the assumptions used in the impairment test were reasonable, changes in key assumptions, including, lower revenue growth, lower operating margin, lower terminal growth rates or increasing discount rates could result in a future impairment.

If current long-term projections for these reporting units are not realized or materially decrease, the Company may be required to write-off all or a portion of the goodwill. Such charge could have a material effect on the Consolidated Statements of Operations and Balance Sheets.

Other Intangible Assets

Other intangible assets, net consisted of the following amounts:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Asset Type
Customer relationships			$	2,728,100					$	2,653,446
Technological know-how			479,254						468,256
Trade names & patents			186,716						178,968
Other			38,431						40,362
Total carrying value			3,432,501						3,341,032
Accumulated Amortization
Customer relationships			(470,514)						(302,047)
Technological know-how			(168,069)						(135,269)
Trade names & patents			(37,935)						(27,213)
Other			(28,808)						(24,568)
Total accumulated amortization			(705,326)						(489,097)
Other intangible assets, net			$	2,727,175					$	2,851,935

Amortization expense was $192.6 million for the year ended December 31, 2020, and $193.1 million and $75.9 million for the years ended December 31, 2019 and 2018, respectively. Amortization expense for the next five years and thereafter, based on valuations and determinations of useful lives, is expected to be as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2021						2022						2023						2024						2025
Estimated future intangible amortization expense			$	196,358					$	192,303					$	192,180					$	192,180					$	191,679

NOTE 6. OTHER ASSETS AND LIABILITIES, CURRENT AND NONCURRENT

Other current assets consisted of the following amounts:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Value-added tax receivable			$	92,550					$	78,526
Income tax receivable			99,924						69,284
Prepaid expenses			100,336						110,768
Other			48,955						60,756
Total			$	341,765					$	319,334

Other assets consisted of the following amounts:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Operating lease right-of-use assets			$	299,266					$	287,870
Finance lease right-of-use assets			7,773						4,792
Deferred income taxes			196,950						125,552
Overfunded pension plans			101,243						85,657
Cash surrender value of life insurance contracts			49,386						47,578
Other(a)			62,642						56,967
Total			$	717,260					$	608,416

---

(a)Includes land usage rights in China and long term deposits.

Other current liabilities consisted of the following amounts:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Accrued payrolls and bonuses			$	132,608					$	102,704
Rebates and incentives payable			64,383						49,938
Value-added tax payable			19,940						20,729
Interest payable			29,398						32,417
Current pension and other postretirement benefit obligation			12,804						11,972
Accrued insurance (including workers’ compensation)			10,603						9,960
Earn outs payable			13,855						12,961
Restructuring and other charges			14,887						21,085
Short term operating lease obligation			40,515						37,744
Short term financing lease obligation			3,107						1,931
Accrued income taxes			42,414						42,141
Other			247,051						233,240
Total			$	631,565					$	576,822

NOTE 7. LEASES

The Company has leases for corporate offices, manufacturing facilities, research and development facilities, and certain transportation and office equipment, the majority of which are operating leases. The Company's leases have remaining lease terms of up to 40 years, some of which include options to extend the leases for up to 5 years.

The components of lease expense were as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Operating lease cost			$	61,624					$	52,213
Financing lease cost			3,984						2,235

The total rental expense, as calculated prior to the adoption of ASU 2016-02, for 2018 was approximately $42.4 million.

Supplemental cash flow information related to leases was as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow for operating leases			$	52,013					$	51,444
Operating cash flow for finance leases			167						64
Financing cash flow for finance leases			3,667						2,204
Right-of-use assets obtained in exchange for lease obligations
Operating leases			62,609						29,823
Finance leases			6,073						2,833

Supplemental balance sheet information related to leases was as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Operating Leases
Operating lease right-of-use assets(1)			$	299,266					$	287,870
Other current liabilities(2)			40,515						37,744
Operating lease liabilities(3)			264,717						253,367
Total operating lease liabilities			305,232						291,111
Financing Leases
Financing lease right-of-use assets(1)			7,773						4,792
Other current liabilities(2)			3,107						1,931
Financing lease liabilities(3)			3,923						2,525
Total financing lease liabilities			7,030						4,456

---

(1)Presented in Other assets in the Consolidated Balance Sheet.

(2)Presented in Other current liabilities in the Consolidated Balance Sheet.

(3)Presented in Other liabilities in the Consolidated Balance Sheet.

Weighted average remaining lease term and discount rate were as follows:

			December 31,
			2020						2019
Weighted average remaining lease term in years
Operating leases			10.5						11.3
Finance leases			2.9						3.3
Weighted average discount rate
Operating leases			3.82		%				3.89		%
Finance leases			1.81		%				1.69		%

Maturities of lease liabilities were as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Operating Leases
Less than 1 Year			$	48,873					$	49,199
1-3 Years			83,679						81,829
3-5 Years			63,788						60,489
After 5 years			176,041						178,231
Less: Imputed Interest			(67,149)						(78,637)
Total			$	305,232					$	291,111
Financing Leases
Less than 1 Year			$	3,127					$	2,036
1-3 Years			3,691						2,073
3-5 Years			642						486
After 5 years			5						26
Less: Imputed Interest			(435)						(165)
Total			$	7,030					$	4,456

Right-of-use assets by region were as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Operating Leases
North America			$	132,330					$	143,556
Europe, Africa and Middle East			130,812						110,552
Greater Asia			16,307						20,492
Latin America			19,817						13,270
Consolidated			$	299,266					$	287,870
Financing Leases
North America			$	130					$	246
Europe, Africa and Middle East			4,994						3,221
Greater Asia			1,472						516
Latin America			1,177						809
Consolidated			$	7,773					$	4,792

NOTE 8. TANGIBLE EQUITY UNITS

On September 17, 2018, the Company issued and sold 16,500,000, 6.00% TEUs at $50 per unit and received proceeds of $800.2 million, net of discounts and issuance costs of $24.8 million. Each TEU is comprised of: (i) a prepaid SPC to be settled by delivery of a specified number of shares of the Company's common stock, and (ii) a senior amortizing note (“Amortizing Note”), with an initial principal amount of $8.45 and a final installment payment date of September 15, 2021. The Company pays equal quarterly cash installments of $0.75 per Amortizing Note on March 15, June 15, September 15, and December 15 of each year, with the exception of the first installment payment of $0.7333 per Amortizing Note which was due on December 15, 2018. In the aggregate, the annual quarterly cash installments will be equivalent to 6.00% per year. Each installment payment constitutes a payment of interest and a partial repayment of principal, computed at an annual rate of 3.79%. Each TEU may be separated by a holder into its constituent SPC and Amortizing Note after the initial issuance date of the TEUs, and the separate components may be combined to create a TEU after the initial issuance date, in accordance with the terms of the SPC. The TEUs are listed on the New York Stock Exchange under the symbol “IFFT”.

The proceeds from the issuance of the TEUs were allocated to equity and debt based on the relative fair value of the respective components of each TEU as follows:

(IN MILLIONS, EXCEPT FAIR VALUE PER TEU)						SPC						Amortizing Note						Total
Fair Value per TEU						$	41.5					$	8.5					$	50.0
Gross Proceeds						$	685.5					$	139.5					$	825.0
Less: Issuance costs						20.4						4.4						24.8
Net Proceeds						$	665.1					$	135.1					$	800.2

The net proceeds of the SPCs were recorded as additional paid in capital, net of issuance costs. The net proceeds of the Amortizing Notes were recorded as debt, with deferred financing costs recorded as a reduction of the carrying amount of the debt in the Company's consolidated balance sheet. Deferred financing costs related to the Amortizing Notes are amortized through the maturity date using the effective interest rate method.

Unless settled early at the holder’s or the Company's election, each SPC will automatically settle on September 15, 2021 for a number of shares of common stock per SPC based on the 20 day volume-weighted average price (“VWAP”) of the Company's common stock as follows:

VWAP of IFF Common Stock						Common Stock Issued
Equal to or greater than $159.54						0.3134 shares (minimum settlement rate)
Less than $159.54, but greater than $130.25						$50 divided by VWAP
Less than or equal to $130.25						0.3839 shares (maximum settlement rate)

At any time prior to the second scheduled trading day immediately preceding September 15, 2021, any holder of an SPC may settle any or all of its SPCs early, and the Company will deliver 0.3134 shares of its common stock for each SPC, subject to adjustment. Additionally, the SPCs may be redeemed in the event of a fundamental change as defined in the SPC.

NOTE 9. DEBT

Debt consisted of the following at December 31:

(DOLLARS IN THOUSANDS)			Effective Interest Rate						2020						2019
2020 Notes(1)			3.69		%				$	—					$	299,381
2021 Euro Notes(1)			0.82		%				368,234						334,561
2023 Notes(1)			3.30		%				299,311						299,004
2024 Euro Notes(1)			1.88		%				613,564						558,124
2026 Euro Notes(1)			1.93		%				978,134						890,183
2028 Notes(1)			4.57		%				397,006						396,688
2047 Notes(1)			4.44		%				493,992						493,571
2048 Notes(1)			5.12		%				786,216						785,996
2018 Term Loan Facility(1)			3.65		%				239,817						239,621
2022 Term Loan Facility (1)			1.73		%				199,377						—
Amortizing Notes(1)			6.09		%				36,250						82,079
Bank overdrafts and other									1,560						3,131
Deferred realized gains on interest rate swaps									57						57
Total debt									$	4,413,518					$	4,382,396
Less: Short term borrowings(2)									(634,159)						(384,958)
Total Long-term debt									$	3,779,359					$	3,997,438

---

(1)Amount is net of unamortized discount and debt issuance costs.

(2)Includes bank borrowings, overdrafts and current portion of long-term debt.

2018 Term Loan Facility

On June 6, 2018, the Company entered into a Term Loan Credit Agreement (as amended on July 13, 2018, January 17, 2020 and August 25, 2020, the "2018 Term Loan Credit Agreement") with Morgan Stanley Senior Funding, Inc., as the administrative agent, and the lenders party thereto, pursuant to which the lenders thereunder committed to provide, a senior unsecured term loan facility in an original aggregate principal amount of up to $350 million (the "2018 Term Loan Facility"), maturing on October 1, 2021.

Loans under the 2018 Term Loan Credit Agreement bear interest, at the Company’s option, at a per annum rate equal to either (x) an adjusted LIBOR rate plus an applicable margin varying from 0.75% to 2.00% or (y) a base rate plus an applicable margin varying from 0.00% to 1.00%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company. Loans under the 2018 Term Loan Credit Agreement will amortize quarterly at a per annum rate of 10.0% of the aggregate principal amount of the loans made under the 2018 Term Loan Credit Agreement on the funding date, commencing December 31, 2018, with the balance payable on October 1, 2021. The Company may voluntarily prepay the term loans without premium or penalty. The 2018 Term Loan Credit Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum ratio of net debt to Consolidated EBITDA of 4.0x as of December 31, 2020, increasing to 4.75x on and after the closing of the N&B Transaction, with step-downs to 3.50x over time. As of December 31, 2020, the Company was in compliance with all covenants under this 2018 Term Loan Facility. In 2019, the Company made payments of $110 million on the 2018 Term Loan Facility.

2022 Term Loan Facility

On May 15, 2020, the Company entered into a Term Loan Agreement (as amended on August 25, 2020, the "2022 Term Loan Agreement") with China Construction Bank Corporation, New York Branch, as administrative agent, and the lenders party thereto, pursuant to which the lenders thereunder have committed to provide a senior unsecured two year term loan facility in an aggregate principal amount of up to $200 million (the "2022 Term Loan Facility"). The loans under the 2022 Term Loan Agreement bear interest, at the Company's option, at a per annum rate equal to either (x) an adjusted LIBOR rate plus an applicable margin varying from 1.225% to 2.475% or (y) a base rate plus an applicable margin varying from 0.225% to 1.475%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company. The Company may voluntarily prepay the term loans without premium or penalty, with the balance payable on the second anniversary of the funding date. There is no required amortization under the 2022 Term Loan Agreement.

As of December 31, 2020, the Company had $200 million outstanding in borrowings under the 2022 Term Loan Facility. The 2022 Term Loan Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum ratio of net debt to Consolidated EBITDA of 4.0x as of December 31, 2020, increasing to 4.75x on and after the closing of the N&B Transaction, with step-downs to 3.50x over time. As of December 31, 2020, the Company was in compliance with all covenants under this 2022 Term Loan Facility.

Revolving Credit Facility

On August 25, 2020, the Company entered into (i) the Second Amended and Restated Revolving Credit Agreement (the "Revolving Credit Agreement" and together with the 2018 Term Loan Credit Agreement and 2022 Term Loan Agreement, the “Credit Agreements”), which amended and restated the Credit Agreement dated as of November 9, 2011, as previously amended and restated as of December 2, 2016, and further amended as of May 21, 2018, June 6, 2018, July 13, 2018 and January 17, 2020 among the Company, certain of its subsidiaries, the lenders party thereto and Citibank, N.A. as administrative agent, providing for a senior unsecured revolving loan credit facility maturing June 6, 2023 (the “Revolving Credit Facility”).

The interest rate on the Revolving Credit Facility is, at the applicable borrower’s option, a per annum rate equal to either (x) an adjusted LIBOR rate plus an applicable margin varying from 1.25% to 2.50% or (y) a base rate plus an applicable margin varying from 0.25% to 1.50%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company.

The Revolving Credit Facility is available for general corporate purposes of each borrower and its subsidiaries. The obligations under the Revolving Credit Facility are unsecured and the Company has guaranteed the obligations of each other borrower under the Revolving Credit Facility. The Company pays a commitment fee on the aggregate unused commitments; such fee is not material. The Revolving Credit Agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum ratio of net debt to Consolidated EBITDA of 4.0x as of December 31, 2020, increasing to 4.75x on and after the closing of the N&B Transaction, with step-downs to 3.50x over time.

In connection with the Revolving Credit Facility, the Company incurred $0.7 million of debt issuance costs. As of December 31, 2020, the Company was in compliance with all covenants under this Revolving Credit Facility. As of December 31, 2020, total availability under the Revolving Credit Facility was $1.0 billion, with no outstanding borrowings. Under the amended terms of the Revolver Credit Agreement, the Revolving Credit Facility increased from $1 billion to $2 billion upon completion of the N&B Transaction. As the Revolving Credit Facility is a multi-year revolving credit agreement, the Company classifies as long-term debt the portion that it has the intent and ability to maintain outstanding longer than 12 months.

2018 Senior Unsecured Notes

On September 26, 2018, the Company issued $300 million aggregate principal amount of senior unsecured notes that matured on September 25, 2020 (the “2020 Notes”). The 2020 Notes bear interest at a rate of 3.40% per year, payable semi-annually on March 25 and September 25 of each year, beginning March 25, 2019. Total proceeds from the issuance of the 2020 Notes, net of underwriting discounts and offering costs, were $298.9 million. During the third quarter of 2020, the Company repaid the 2020 Notes resulting in a payment of $300 million of which approximately $200 million was from the net proceeds received under the 2022 Term Loan Agreement.

On September 25, 2018 the Company issued €300 million aggregate principal amount of senior unsecured notes that mature on September 25, 2021 (the “2021 Euro Notes”). The 2021 Notes bear interest at a rate of 0.5% per year, payable annually on September 25 of each year, beginning September 25, 2019. Total proceeds from the issuance of the 2021 Notes, net of underwriting discounts and offering costs, were €297.7 million ($349.5 million in USD).

On September 25, 2018, the Company issued €800 million aggregate principal amount of senior unsecured notes that mature on September 25, 2026 (the “2026 Euro Notes”). The 2026 Notes bear interest at a rate of 1.8% per year, payable annually on September 25 of each year, beginning September 25, 2019. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and offering costs, were €794.1 million ($932.2 million in USD).

On September 26, 2018, the Company issued $400 million aggregate principal amount of senior unsecured notes that mature on September 26, 2028 (the “2028 Notes”). The 2028 Notes bear interest at a rate of 4.45% per year, payable semi-annually on March 26 and September 26 of each year, beginning March 26, 2019. Total proceeds from the issuance of the 2028 Notes, net of underwriting discounts and offering costs, were $397.0 million.

On September 26, 2018, the Company issued $800 million aggregate principal amount of senior unsecured notes that mature on September 26, 2048 (the “2048 Notes” and collectively with the 2021 Euro Notes, 2026 Euro Notes, 2020 Notes, 2028 Notes, the "2018 Senior Unsecured Notes"). The 2048 Notes bear interest at a rate of 5.0% per year, payable semi-annually on March 26 and September 26 of each year, beginning March 26, 2019. Total proceeds from the issuance of the 2048 Notes, net of underwriting discounts and offering costs, were $787.2 million.

As discussed in Note 17, the 2021 Euro Notes and 2026 Euro Notes have been designated as a hedge of the Company's net investment in certain subsidiaries.

Tangible Equity Units - Senior Unsecured Amortizing Notes

On September 17, 2018, in connection with the issuance of the TEUs, the Company issued $139.5 million aggregate principal amount of Amortizing Notes. The Amortizing Notes mature on September 15, 2021. Each quarterly cash installment payment of $0.75 (or, in the case of the installment payment due on December 15, 2018, $0.73333) per Amortizing Note will constitute a partial repayment of principal and a payment of interest, computed at an annual rate of 3.79%. Interest will be calculated on the basis of a 360 day year consisting of twelve 30 day months. Payments will be applied first to the interest due and payable and then to the reduction of the unpaid principal amount, allocated as set forth in the amortization schedule in the indenture governing the Amortizing Notes. See Note 8 for further information on the TEUs.

There are no covenants or provisions in the indenture related to the TEUs that would afford the holders of the amortizing notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving the Company that may adversely affect such holders. If a fundamental change occurs, or if the Company elects to settle the SPCs early, then the holders of the Amortizing Notes will have the right to require the Company to repurchase the Amortizing Notes at a repurchase price equal to the principal amount of the Amortizing Notes as of the repurchase date plus accrued and unpaid interest. The indenture also contains customary events of default which would permit the holders of the Amortizing Notes to declare the notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely installment payments on the notes or other material indebtedness, failure to give notice of a fundamental change and specified events of bankruptcy and insolvency.

2047 Notes

On May 18, 2017, the Company issued $500.0 million face amount of 4.375% Senior Notes ("2047 Notes") due 2047 at a discount of $1.8 million. The Company received proceeds related to the issuance of these 2047 Notes of $493.9 million which was net of the $1.8 million discount and $4.4 million in underwriting fees (recorded as deferred financing costs). In addition, the Company incurred $0.9 million in legal and professional costs associated with the issuance and such costs were recorded as deferred financing costs. In connection with the debt issuance, the Company entered into pre-issuance hedging transactions that were settled upon issuance of the debt and resulted in a loss of approximately $5.3 million. The discount, deferred financing costs and pre-issuance hedge loss are being amortized as interest expense over the 30 year term of the debt. The 2047 Notes bear interest at a rate of 4.375% per annum, with interest payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2017. The 2047 Notes will mature on June 1, 2047.

2024 Euro Notes

On March 14, 2016, the Company issued €500.0 million face amount of 1.75% Senior Notes ("2024 Euro Notes") due 2024 at a discount of €0.9 million. The Company received proceeds related to the issuance of these 2024 Euro Notes of €496.0 million which was net of the €0.9 million discount and €3.1 million underwriting discount (recorded as deferred financing costs). In addition, the Company incurred $1.3 million of other deferred financing costs in connection with the debt issuance. In connection with the debt issuance, the Company entered into pre-issuance hedging transactions that were settled upon issuance of the debt and resulted in a loss of approximately $3.2 million. The discount, deferred financing costs and pre-issuance hedge loss are being amortized as interest expense over the eight year term of the debt. The 2024 Euro Notes bear interest at a rate of 1.75% per annum, with interest payable on March 14 of each year, commencing on March 14, 2017. The 2024 Euro Notes will mature on March 14, 2024.

As discussed in Note 17, the 2024 Euro Notes have been designated as a hedge of the Company's net investment in certain subsidiaries.

2023 Notes

On April 4, 2013, the Company issued $300.0 million face amount of 3.20% Senior Notes (“2023 Notes”) due 2023 at a discount of $0.3 million. The Company received proceeds related to the issuance of these 2023 Notes of $297.8 million which was net of the $0.3 million discount and a $1.9 million underwriting discount (recorded as deferred financing costs). In addition, the Company incurred $0.9 million of other deferred financing costs in connection with the debt issuance. The discount and deferred financing costs are being amortized as interest expense over the term of the 2023 Notes. The 2023 Notes bear interest at a rate of 3.20% per year, with interest payable on May 1 and November 1 of each year, commencing on November 1, 2013. The 2023 Notes mature on May 1, 2023.

Redemption Provisions

The 2018 Senior Unsecured Notes, 2023 Notes, 2024 Euro Notes and 2047 Notes (collectively, the "Notes") share the same redemption provisions. Upon 30 days’ notice to holders of the Notes, the Company may redeem the Notes for cash in whole, at any time, or in part, from time to time, prior to maturity, at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture governing the Notes. However, no make-whole premium will be paid for redemptions of each note on or after the following date:

Note						Redemption Date
2021 Euro Notes						August 25, 2021
2023 Notes						February 1, 2023
2024 Euro Notes						December 14, 2023
2026 Euro Notes						June 25, 2026
2028 Notes						June 26, 2028
2047 Notes						December 1, 2046
2048 Notes						March 26, 2048

The indenture of each note provides for customary events of default and contains certain negative covenants that limit the ability of the Company and its subsidiaries to grant liens on assets, or to enter into sale-leaseback transactions. In addition, subject to certain limitations, in the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of the Notes below investment grade rating by both Moody’s Investors Services, Inc., Standard & Poor’s Ratings Services and Fitch Ratings Inc. within a specified time period, the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of repurchase.

Outstanding Borrowings

The following table shows the contractual maturities of the Company's long-term debt as of December 31, 2020.

			Payments Due by Period
(DOLLARS IN THOUSANDS)			Total						Less than 1 Year						1-3 Years						3-5 Years						More than 5 Years
Total Outstanding Borrowings			$	4,444,112					$	645,372					$	500,000					$	614,900					$	2,683,840

NOTE 10. INCOME TAXES

Earnings before income taxes consisted of the following:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
U.S. loss before taxes			$	(141,428)					$	(110,363)					$	(99,125)
Foreign income before taxes			582,799						667,815						546,882
Total income before taxes			$	441,371					$	557,452					$	447,757

The income tax provision consisted of the following:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Current tax provision
Federal			$	(8,813)					$	9,979					$	(11,568)
State and local			1,149						429						1,709
Foreign			149,381						146,055						98,433
Total current tax provision			141,717						156,463						88,574
Deferred tax provision
Federal			(7,943)						(41,126)						(8,287)
State and local			(2,057)						7,598						(7,092)
Foreign			(57,718)						(25,751)						34,781
Total deferred tax (benefit) provision			(67,718)						(59,279)						19,402
Total taxes on income			$	73,999					$	97,184					$	107,976

Effective Tax Rate Reconciliation

Reconciliation between the U.S. federal statutory income tax rate to the actual effective tax rate was as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Statutory tax rate			21.0		%				21.0		%				21.0		%
Difference in effective tax rate on foreign earnings and remittances			(6.9)						(6.8)						(6.1)
Tax benefit from supply chain optimization			(5.0)						(1.0)						(3.0)
Unrecognized tax benefit, net of reversals			5.7						3.4						2.9
U.S. tax reform			—						—						(1.8)
Deferred taxes on deemed repatriation			(0.2)						0.8						10.1
Global intangible low-taxed income			5.3						—						1.8
U.S. foreign tax credit - general limitation			(1.9)						(1.2)						(1.1)
Acquisition costs			1.0						0.5						1.3
Establishment (release) of valuation allowance on state deferred			(0.4)						1.7						(1.5)
State and local taxes			(0.6)						(0.8)						0.6
Other, net			(1.2)						(0.2)						(0.1)
Effective tax rate			16.8		%				17.4		%				24.1		%

The effective tax rate reflects the impact of a favorable mix of earnings and lower repatriation costs, partially offset by loss provisions and the cost of global intangible low-taxed income ("GILTI").

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revised the U.S. tax code effective January 1, 2018. The Tax Act created significant international tax provisions, including GILTI. The Company has elected to treat GILTI as a current period cost if and when incurred. This tax position resulted in a net $23.3 million income tax expense for the year ended December 31, 2020, which includes a provision to return adjustment.

The U.S. consolidated group has historically generated taxable income after the inclusion of foreign dividends which has allowed the Company to realize its federal deferred tax assets. Foreign dividends are subject to a 100% dividends received deduction under the Tax Act and do not serve as a source of federal taxable income. However, as of December 31, 2020 the U.S. consolidated group is in a cumulative income position, and is expected to continue to be in a cumulative income position principally due to the inclusion of global intangible low-taxed income and expects to realize tax benefits for the reversal of temporary differences. The corresponding U.S. federal taxable income is sufficient to realize $127.3 million in deferred tax assets as of December 31, 2020.

Further, as of December 31, 2020 the Company has maintained a valuation allowance of $12.6 million on certain state tax attributes based on a state taxable income forecast. The main inputs into the forecast are the 2020 taxable income projections. Changes in the performance of the North American business, the Company’s transfer pricing policies and adjustments to the Company’s U.S. tax profile could impact the estimate.

Deferred Taxes

The deferred tax assets and liabilities consisted of the following amounts:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Employee and retiree benefits			$	108,119					$	87,924
Credit and net operating loss carryforwards			270,699						220,156
Intangible assets			9,759						8,477
Amortizable R&D expenses			30,027						15,477
Gain on foreign currency translation			46,071						3,285
Interest limitation			50,978						39,867
Inventory			14,384						14,396
Lease obligations			53,339						53,751
Other, net			21,806						14,351
Gross deferred tax assets			605,182						457,684
Property, plant and equipment, net			(59,727)						(49,158)
Intangible assets			(585,635)						(621,044)
Right-of-use assets			(52,605)						(53,555)
Loss on foreign currency translation			(99)						—
Deferred taxes on deemed repatriation			(47,144)						(46,066)
Gross deferred tax liabilities			(745,210)						(769,823)
Valuation allowance			(257,171)						(203,765)
Total net deferred tax liabilities			$	(397,199)					$	(515,904)

Net operating loss carryforwards were $246.1 million and $207.9 million at December 31, 2020 and 2019, respectively. If unused, $42.1 million will expire between 2021 and 2040. The remainder, totaling $204.0 million, may be carried forward indefinitely. Tax credit carryforwards were $27.9 million and $18.5 million at December 31, 2020 and 2019, respectively. If unused, the $27.9 million will expire between 2021 and 2040.

Of the $274.0 million deferred tax asset for net operating loss carryforwards and credits at December 31, 2020, the Company considers it unlikely that a portion of the tax benefit will be realized. Accordingly, a valuation allowance of $225.8 million of net operating loss carryforwards and $10.0 million of tax credits has been established against these deferred tax assets.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Balance of unrecognized tax benefits at beginning of year			$	74,799					$	50,953					$	38,162
Gross amount of increases in unrecognized tax benefits as a result of positions taken during a prior year			10,445						20,361						9,751
Gross amount of decreases in unrecognized tax benefits as a result of positions taken during a prior year			(274)						(2,241)						(5,362)
Gross amount of increases in unrecognized tax benefits as a result of positions taken during the current year			24,400						13,274						14,677
The amounts of decreases in unrecognized benefits relating to settlements with taxing authorities			(1,736)						(3,575)						(4,550)
Reduction in unrecognized tax benefits due to the lapse of applicable statute of limitation			(8,739)						(3,973)						(1,725)
Balance of unrecognized tax benefits at end of year			$	98,895					$	74,799					$	50,953

At December 31, 2020, 2019 and 2018, there were $98.2 million, $73.6 million, and $47.3 million, respectively, of unrecognized tax benefits recorded to Other liabilities and $0.7 million, $1.2 million and $3.6 million recorded to Other current liabilities for 2020, 2019 and 2018, respectively. If these unrecognized tax benefits were recognized, all the benefits and related interest and penalties would be recorded as a benefit to income tax expense.

For the year ended December 31, 2020, the Company increased its liabilities for interest and penalties by $3.4 million, net, increased its liabilities for interest and penalties by $11.0 million, net for the year ended 2019, and reduced its liabilities for interest and penalties by $1.1 million, net for the year ended 2018. At December 31, 2020, 2019 and 2018, the Company had accrued $17.3 million, $14.0 million and $3.0 million, respectively, of interest and penalties classified as Other liabilities, and $0.1 million to Other current liabilities for 2020. No such liabilities were accrued for the year ended December 31, 2019 and 2018.

As of December 31, 2020, the Company’s aggregate provision for unrecognized tax benefits, including interest and penalties, was $116.3 million, associated with various tax positions principally asserted in foreign jurisdictions, none of which is individually material.

Other

Tax benefits credited to Shareholders’ equity were $0.1 million for the years ended December 31, 2020 and 2019, and de minimis for the year ended December 31, 2018 associated with stock option exercises and PRSU dividends.

The Company regularly repatriates earnings from non-U.S. subsidiaries. As the Company repatriates these funds to the U.S. they will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of December 31, 2020, the Company had a deferred tax liability of $47.1 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.

The Company has ongoing income tax audits and legal proceedings which are at various stages of administrative or judicial review, of which the material items are discussed below. In addition, the Company has other ongoing tax audits and legal proceedings that relate to indirect taxes, such as value-added taxes, capital tax, sales and use and property taxes, which are discussed in Note 20.

The Company also has several other tax audits in process and has open tax years with various taxing jurisdictions that range primarily from 2010 to 2019. Based on currently available information, the Company does not believe the ultimate outcome of any of these tax audits and other tax positions related to open tax years, when finalized, will have a material impact on its financial position.

NOTE 11. REVENUE RECOGNITION

On December 30, 2017, the first day of our 2018 fiscal year, the Company adopted ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". Under Topic 606 (the "Revenue Standard"), revenue is recognized to reflect the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The Company adopted the Revenue Standard using the modified retrospective method effective the first day of its 2018 fiscal year.

The Company recognizes revenue when control of the promised goods is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods. Sales, value added, and other taxes the Company collects are excluded from revenues. The Company receives payment in accordance with standard customer terms.

The following table presents the Company's revenues disaggregated by product categories:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Taste
Flavor Compounds			$	2,737,079					$	2,827,681					$	1,990,985
Flavor Ingredients			372,702						372,839						100,650
Total Taste			3,109,781						3,200,520						2,091,635
Scent
Fragrance Compounds			1,577,528						1,544,654						1,496,493
Fragrance Ingredients			396,930						394,910						389,411
Total Scent			1,974,458						1,939,564						1,885,904
Total revenues			$	5,084,239					$	5,140,084					$	3,977,539

The following table presents the Company's revenues disaggregated by region, based on the region of its customers:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Europe, Africa and Middle East			$	1,987,398					$	2,081,758					$	1,396,316
Greater Asia			1,161,660						1,162,992						991,015
North America			1,228,243						1,170,497						1,010,126
Latin America			706,938						724,837						580,082
Total revenues			$	5,084,239					$	5,140,084					$	3,977,539

Flavor and Fragrance Compounds Revenues

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties and payment terms (which vary by customer) are identified, the contract has commercial substance, and collectability of consideration is probable. Consistent with the Company's past practice, the amount of revenue recognized is adjusted at the time of sale for expected discounts and rebates (“Variable Consideration”).

The Company generates revenues primarily by manufacturing customized taste and scent compounds for the exclusive use of our customers. The Company combines the shipment of goods with their manufacture to account for both shipment and manufacture as the sole performance obligation.

With respect to the vast majority of the Company’s contracts for Compounds products, the Company recognizes a sale at the point in time when it ships the product from its manufacturing facility to its customer, as this is the time when control of the goods has transferred to the customer. The amount of consideration received and revenue recognized is impacted by the Variable Consideration the Company has agreed with its customers. The Company estimates Variable Consideration amounts for each customer based on the specific agreement, an analysis of historical volumes and the current activity with that customer. The Company reassesses its estimates of Variable Consideration at each reporting date throughout the contract period and updates the estimate until the uncertainty is resolved. During the current period, changes to estimates of Variable Consideration have been immaterial.

With respect to a small number of contracts for the sale of Compounds products, the Company recognizes revenue over time as it manufactures customized compounds that do not have an alternative use and for which the contracts provide the Company with an enforceable right to payment, including a reasonable profit, at all times during the contract term commencing with the manufacturing of the goods. When revenue is recognized over time, the amount of revenue recognized is based on the

extent of progress towards completion of the promised goods. The Company generally uses the output method to measure progress for its contracts as this method reflects the transfer of goods to the customer. Once customization begins, the manufacturing process is generally completed within a two week period. Due to the short time frame for production, there is little estimation uncertainty in the process. In addition, due to the customized nature of the Company's products, returns are not material.

Flavor and Fragrance Ingredients Revenues

The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties and payment terms (which vary by customer) are identified, the contract has commercial substance, and collectability of consideration is probable.

The Company generates revenues primarily by manufacturing Ingredients products for the use of our customers. The Company combines the shipment of goods with their manufacture to account for both shipment and manufacture as the sole performance obligation.

Generally, the Company recognizes a sale at the time when it ships the product from its manufacturing facility to its customer, as this is the point when control of the goods or services has transferred to the customer. The amount of consideration received and revenue recognized is impacted by discounts offered to its customers. The Company estimates discounts based on an analysis of historical experience and current activity. The Company assesses its estimates of discounts at each reporting date throughout the contract period and updates its estimates until the uncertainty has been resolved. During the current period, changes to estimates of discounts have been immaterial.

Contract Asset and Accounts Receivable

With respect to a small number of contracts for the sale of compounds, the Company has an “enforceable right to payment for performance to date” and as the products do not have an alternative use, the Company recognizes revenue for these contracts over time and records a contract asset using the output method. The output method recognizes revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract.

The following table reflects the balances in the Company's contract assets, accounts receivable and contract liabilities for the periods ended December 31, 2020 and December 31, 2019:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Receivables (included in Trade receivables)			$	950,350					$	892,625
Contract asset - Short term			1,086						2,736
Contract liabilities - Short term			4,944						11,107

NOTE 12. NET INCOME PER SHARE

Basic and diluted net income per share is based on the weighted average number of shares outstanding. A reconciliation of shares used in the computation of basic and diluted net income per share is as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Net Income
Net income attributable to IFF stockholders			$	363,228					$	455,873					$	337,302
Adjustment related to (increase) decrease in redemption value of redeemable noncontrolling interests in excess of earnings allocated			1,803						(2,097)						(2,848)
Net income available to IFF stockholders			$	365,031					$	453,776					$	334,454
Shares
Weighted average common shares outstanding (basic)(1)			112,162						111,966						87,551
Adjustment for assumed dilution(2):
Stock options and restricted stock awards			305						356						303
SPC portion of the TEUs			1,163						985						267
Weighted average shares assuming dilution (diluted)			113,630						113,307						88,121
Net Income per Share
Net income per share - basic			$	3.25					$	4.05					$	3.81
Net income per share - dilutive			3.21						4.00						3.79

---

(1)For the year ended December 31, 2020 and 2019, the TEUs were assumed to be outstanding at the minimum settlement amount for weighted-average shares for basic earnings per share. See below for details.

(2)Effect of dilutive securities includes dilution under stock plans and incremental impact of TEUs. See below for details.

As discussed in Note 8, the Company issued 16,500,000 TEUs, consisting of a prepaid SPC and a senior amortizing note, for net proceeds of approximately $800.2 million on September 17, 2018. For the periods outstanding, the SPC portion of the TEUs were assumed to be settled at the minimum settlement amount of 0.3134 shares per SPC for weighted-average shares for basic earnings per share. For diluted earnings per share, the shares were assumed to be settled at a conversion factor based on the VWAP per share of the Company’s common stock not to exceed 0.3839 shares per SPC as of December 31, 2020 and 2019.

The Company has issued shares of Purchased Restricted Stock ("PRS") and Purchased Restricted Stock Units (“PRSUs”) which contain nonforfeitable rights to dividends and thus are considered participating securities which are required to be included in the computation of basic and diluted earnings per share pursuant to the two-class method. The two-class method was not presented since the difference between basic and diluted net income per share for both common shareholders, PRS and PRSU holders was less than $0.04 per share as of December 31, 2020 and less than $0.01 per share as of December 31, 2019 and 2018, and for each year the number of PRS and PRSUs outstanding as of December 31, 2020, 2019 and 2018 was immaterial. Net income allocated to such PRS and PRSUs during 2020, 2019 and 2018 was approximately $1.0 million each year.

An immaterial amount of Stock-Settled Appreciation Rights (“SSARs”) were excluded from the computation of diluted net income per share at December 31, 2020, 2019 and 2018.

NOTE 13. SHAREHOLDERS’ EQUITY

Dividends

Cash dividends declared per share were $3.04, $2.96 and $2.84 for the years ended December 31, 2020, 2019 and 2018, respectively. The Consolidated Balance Sheet reflects $82.3 million of dividends payable at December 31, 2020. This amount relates to a cash dividend of $0.77 per share declared in December 2020 and paid in January 2021. Dividends declared, but not paid as of December 31, 2019 and December 31, 2018 were $80.0 million ($0.75 per share) and $77.8 million ($0.73 per share), respectively.

Share Repurchases

In December 2012, the Board of Directors authorized a $250.0 million share repurchase program, which commenced in the first quarter of 2013. In August 2015, the Board of Directors approved an additional $250.0 million share repurchase authorization and extension through December 31, 2017. Based on the total remaining amount of $56.1 million available under the amended repurchase program as of October 31, 2017, the Board of Directors re-approved on November 1, 2017 a $250.0

million share repurchase authorization and extension for a total value of $300.0 million available under the program, which expires on November 1, 2022.

A summary of the stock repurchase activity under the stock repurchase program, reported based on the trade date, is summarized as follows:

(DOLLARS IN THOUSANDS)						Shares Repurchased						Weighted- Average Price per Share						Dollar Amount Repurchased
Year Ended December 31, 2018						108,109						$	143.15					$	15,475

Based on the total remaining amount of $279.7 million available under the repurchase program, 2,569,517 shares, or 2.3% of shares outstanding (based on the market price and weighted average shares outstanding as of December 31, 2020) could be repurchased under the program as of December 31, 2020.

As of May 7, 2018, the Company has suspended its share repurchases.

NOTE 14. STOCK COMPENSATION PLANS

The Company has various equity plans under which its officers, senior management, other key employees and Board of Directors may be granted options to purchase IFF common stock or other forms of stock-based awards. Beginning in 2004, the Company granted Restricted Stock Units (“RSUs”) as the principal element of its equity compensation for all eligible U.S.-based employees and a majority of eligible overseas employees. Vesting of the RSUs is solely time based; the vesting period is primarily 3 years from date of grant. For a small group of employees, primarily overseas, the Company granted stock options prior to 2008.

The cost of all employee stock-based awards are principally recognized on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures. Total stock-based compensation expense included in the Consolidated Statement of Income and Comprehensive Income was as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Equity-based awards			$	35,798					$	34,482					$	29,401
Liability-based awards			3,865						4,128						2,517
Total stock-based compensation			39,663						38,610						31,918
Less tax benefit			(7,381)						(7,305)						(6,556)
Total stock-based compensation, net of tax			$	32,282					$	31,305					$	25,362

The shareholders of the Company approved the Company’s 2015 Stock Award and Incentive Plan (the “2015 Plan”) on May 6, 2015. The 2015 Plan replaced the Company’s 2010 Stock Award and Incentive Plan (the “2010 Plan”) and provides the source for future deferrals of cash into deferred stock under the Company’s Deferred Compensation Plan (with the Deferred Compensation Plan being deemed a subplan under the 2015 Plan for the sole purpose of funding deferrals under the IFF Share Fund).

Under the 2015 Plan, a total of 1,500,000 shares are authorized for issuance in addition to 1,552,694 shares remaining available under the 2010 plan that were rolled into the 2015 Plan. At December 31, 2020, 986,105 shares were subject to outstanding awards and 967,650 shares remained available for future awards under all of the Company’s equity award plans, including the 2015 Plan (excluding shares not yet issued under open cycles of the Company’s Long-Term Incentive Plan).

The Company offers a Long-Term Incentive Plan (“LTIP”) for senior management. The targeted payout is 50% cash and 50% IFF common stock at the end of the three-year cycle.

Up to and including the 2018-2020 cycle, the LTIP awards were earned based upon the achievement of: (i) defined Economic Profit ("EP") targets (representing approximately one-third of the award value), and (ii) the Company's performance ranking of Total Shareholder Return as a percentile of the S&P 500 ("Relative TSR") (representing approximately two-thirds of the award value). With respect to the 2019-2021 cycle, the LTIP awards are earned based upon the achievement of: (i) Relative TSR targets (now representing one-half of the award value), and (ii) the Company's achievement of a defined Leverage Ratio (representing one-half of the award value). ). For the 2020-2022 cycle, the LTIP awards are earned based on the achievement of: (i) an annual Leverage Ratio for 2020 (representing one-sixth of the award value), (ii) a 2-year cumulative Leverage Ratio for 2021-2022 (representing one-third of the award value), and (iii) Relative TSR targets (representing one-half of the award value).

EP measures operating profitability after considering (i) all operating costs, (ii) income taxes and (iii) a charge for the capital employed in the business. The Leverage Ratio measures Net debt as compared to a measure profitability. When the award is granted, 50% of the target dollar value of the award is converted to a number of “notional” shares based on the closing price at the beginning of the cycle. For those shares whose payout is based on Relative TSR, compensation expense is recognized using a graded-vesting attribution method, while compensation expense for the remainder of the performance shares (EP or Leverage Ratio targets for the applicable cycle) is recognized on a straight-line basis over the vesting period based on the probable outcome of the performance condition.

The 2016-2018 cycle concluded at the end of 2018 and an aggregate 25,394 shares of common stock were issued in March 2019. The 2017-2019 cycle concluded at the end of 2019 and an aggregate 14,579 shares of common stock were issued in March 2020. The 2018-2020 cycle concluded at the end of 2020 and an aggregate 7,484 shares of common stock will be issued in March 2021.

In 2006, the Board of Directors approved the Equity Choice Program (the “Program”) for senior management. This program continues under the 2015 Plan. Eligible employees can choose from among three equity alternatives and will be granted such equity awards up to certain dollar awards depending on the participant’s employment grade level. A participant may choose among (1) SSARs, (2) RSUs or (3) PRSUs.

SSARs and Options

SSARs are a contractual right to receive the value, in shares of Company stock, of the appreciation in our stock price from the grant date to the date the SSARs are exercised by the participant. SSARs granted become exercisable on the third anniversary of the grant date and have a maximum term of 7 years. SSARs do not require a financial investment by the SSARs grantee. Stock options require the participant to pay the exercise price at the time they exercise their stock options. No stock options were granted in 2020, 2019 or 2018.

SSARs and options activity was as follows:

(SHARE AMOUNTS IN THOUSANDS)			Shares Subject to SSARs/Options						Weighted Average Exercise Price						SSARs/ Options Exercisable
December 31, 2019			15						$	138.73					1
Granted			27						133.10
Exercised			—						—
Canceled			—						—
December 31, 2020			42						$	135.01					1

The weighted average exercise price of SSARs and options exercisable at December 31, 2020, 2019 and 2018 were $118.10, $118.10 and $64.96, respectively.

SSARs and options outstanding at December 31, 2020 was as follows:

Price Range			Number Outstanding (in thousands)						Weighted Average Remaining Contractual Life (in years)						Weighted Average Exercise Price						Aggregate Intrinsic Value (in thousands)
Over $115			42						5.71						$	135.01					$	—

SSARs and options exercisable as of December 31, 2020 was as follows:

Price Range			Number Exercisable (in thousands)						Weighted Average Remaining Contractual Life (in years)						Weighted Average Exercise Price						Aggregate Intrinsic Value (in thousands)
Over $115			1						1.34						$	118.10					$	—

The total intrinsic value of options/SSARs exercised during 2019 and 2018 totaled $0.2 million and $0.1 million, respectively.

As of December 31, 2020, there was $0.4 million of total unrecognized compensation cost related to non-vested SSARs granted; such cost is expected to be recognized over a period of 0.9 years.

Restricted Stock Units

The Company has granted RSUs to eligible employees and members of the Board of Directors. Such RSUs are subject to forfeiture if certain conditions are not met. RSUs principally vest 100% at the end of 3 years and contain no performance criteria provisions. An RSU’s fair value is calculated based on the market price of the Company's stock at date of grant, with an adjustment to reflect the fact that such awards do not participate in dividend rights. The aggregate fair value is amortized to expense ratably over the vesting period.

RSU activity was as follows:

			Number of Shares (in thousands)						Weighted Average Grant Date Fair Value Per Share
December 31, 2019			497						$	130.24
Granted			212						121.55
Vested			(161)						130.99
Forfeited			(23)						128.29
December 31, 2020			525						$	126.62

The total fair value of RSUs that vested during the year ended December 31, 2020 was $19.5 million.

As of December 31, 2020, there was $26.4 million of total unrecognized compensation cost related to non-vested RSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of 1.7 years.

Purchased Restricted Stock and Purchased Restricted Stock Units

In 2014, the grant of awards under the Equity Choice program provided for eligible employees to purchase restricted shares of IFF common stock and deposit them into an escrow account. For each share deposited in escrow by the eligible employee, the Company matched with a grant of a share of restricted stock or, for non-U.S. participants, a restricted stock unit. The shares of restricted stock and restricted stock units generally vest on the third anniversary of the grant date, are subject to continued employment and other specified conditions, and pay dividends if and when paid by the Company. Holders of restricted stock have, in most instances, all of the rights of stockholders, except that they may not sell, assign, pledge or otherwise encumber such shares. The PRSUs provide no such rights. During 2015, the Company modified the program so that all participants, including U.S. participants, began to receive a restricted stock unit instead of a share of restricted stock. Restricted stock units pay dividend equivalents and do not have voting rights.

The following table summarizes the Company's PRSU activity for the years ended December 31, 2020, 2019 and 2018:

(DOLLARS IN MILLIONS)			Issued Shares												Aggregate Purchase Price												Covered Shares
2020			66,160												$	8.7											33,080
2019			61,991												8.5												30,996
2018			66,674												9.3												33,337

PRSU activity was as follows:

(SHARE AMOUNTS IN THOUSANDS)			Number of Shares						Weighted Average Grant Date Fair Value Per Share
December 31, 2019			168						$	138.96
Granted			66						131.31
Vested			(41)						138.83
Forfeited			—						—
December 31, 2020			193						$	136.37

The total fair value of PRSUs that vested during the year ended December 31, 2020 was $4.0 million.

As of December 31, 2020, there was $10.1 million of total unrecognized compensation cost related to non-vested PRSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of 1.6 years.

Liability Awards

The Company has granted cash-settled RSUs ("Cash RSUs") to eligible employees that are paid out 100% in cash upon vesting. Such RSUs are subject to forfeiture if certain conditions are not met. Cash RSUs principally vest 100% at the end of three years and contain no performance criteria provisions. A Cash RSU's fair value is calculated based on the market price of the Company's stock at the date of the closing period and is accounted for as a liability award. The aggregate fair value is amortized to expense ratably over the vesting period.

Cash RSU activity was as follows:

(SHARE AMOUNTS IN THOUSANDS)			Cash RSUs						Weighted Average Fair Value Per Share
December 31, 2019			95						$	126.35
Granted			50						108.84
Vested			(30)						131.93
Forfeited			(4)						120.15
December 31, 2020			111						$	108.84

The total fair value of Cash RSUs that vested during the year ended December 31, 2020 was $3.8 million.

As of December 31, 2020, there was $5.5 million of total unrecognized compensation cost related to non-vested Cash RSUs granted under the equity incentive plans; such cost is expected to be recognized over a weighted average period of 1.9 years. The aggregate compensation cost will be adjusted based on changes in the Company’s stock price.

NOTE 15. SEGMENT INFORMATION

During the first quarter of 2020, the Company reorganized its reporting structure and combined substantially all of the components of the former Frutarom reportable operating segment into the former Taste reportable operating segment. Prior year amounts have been recast to conform to the current year reporting structure. As a result of the reorganization, the Company is organized into two reportable operating segments, Taste and Scent; these segments align with the internal structure used to manage these businesses.

Taste is comprised of a diversified portfolio across flavor compounds, savory solutions, inclusions and nutrition and specialty ingredients. Flavor compounds provide unique flavors that are ultimately used by IFF's customers in savory products, beverages, sweets, and dairy products. Savory solutions include marinades or powder blends of flavors, natural colors, seasonings, functional ingredients and natural anti-oxidants that are primarily designed for the meat and fish industry. Inclusions provide taste and texture by, among other things, combining flavorings with fruit, vegetables, and other natural

ingredients for a wide range of food products, such as health snacks, baked goods, cereals, pastries, ice cream and other dairy products. Nutrition and specialty ingredients primarily consist of natural health ingredients, natural food protection, natural colors and flavor ingredients. The flavor ingredients market includes natural flavor extracts, specialty botanical extracts, distillates, essential oils, citrus products, aroma chemicals, and natural gums and resins. Such ingredients are used for food, beverage, and flavors and are often sold directly to food and beverage manufacturers who use them in producing consumer products.

Scent is comprised of (1) Fragrance Compounds, which are ultimately used by our customers in two broad categories: Fine Fragrances, including perfumes and colognes, and Consumer Fragrances, including fragrance compounds for personal care (e.g., soaps), household products (e.g., detergents and cleaning agents) and beauty care, including toiletries; (2) Fragrance Ingredients, consisting of synthetic and natural ingredients that can be combined with other materials to create unique fine fragrance and consumer compounds; and (3) Cosmetic Active Ingredients, consisting of active and functional ingredients, botanicals and delivery systems to support our customers’ cosmetic and personal care product lines. Major fragrance customers include the cosmetics industry, including perfume and toiletries manufacturers, and the household products industry, including manufacturers of soaps, detergents, fabric care, household cleaners and air fresheners.

The Company's Chief Operating Decision Maker evaluates the performance of these reportable operating segments based on segment profit which is defined as operating profit before restructuring, global expenses (as discussed below) and certain non-recurring items, Interest expense, Other income (expense), net and Taxes on income.

The Global expenses caption represents corporate and headquarter-related expenses which include legal, finance, human resources, certain incentive compensation expenses and other R&D and administrative expenses that are not allocated to individual reportable operating segments.

Reportable segment information is as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Net sales
Taste			$	3,109,781					$	3,200,520					$	2,091,635
Scent			1,974,458						1,939,564						1,885,904
Consolidated			$	5,084,239					$	5,140,084					$	3,977,539

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Segment assets
Taste			$	10,356,936					$	10,319,779
Scent			3,056,211						2,757,491
Global assets			142,524						210,141
Consolidated			$	13,555,671					$	13,287,411

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018
Segment profit:
Taste			$	436,387					$	482,394					$	419,264
Scent			357,281						349,445						325,901
Global expenses			(63,982)						(38,759)						(67,799)
Operational Improvement Initiatives (a)			—						(2,267)						(2,169)
Acquisition Related Costs (b)			—						—						1,289
Frutarom Integration Related Costs (c)			(9,849)						(55,160)						(7,188)
Restructuring and Other Charges, net (d)			(17,295)						(29,765)						(4,086)
(Losses) gains on Sale of Assets			(3,784)						(2,367)						1,177
Employee Separation Costs (e)			(2,813)						—						—
FDA Mandated Product Recall (f)			—						(250)						7,125
Frutarom Acquisition Related Costs (g)			(1,465)						(5,940)						(89,632)
Compliance Review & Legal Defense Costs (h)			(3,278)						(11,314)						—
N&B Transaction Related Costs (i)			(28,100)						(20,747)						—
N&B Integration Related Costs (j)			(96,618)						—						—
Operating Profit			566,484						665,270						583,882
Interest expense			(131,802)						(138,221)						(132,558)
Loss on extinguishment of debt			—						—						(38,810)
Other income, net			6,689						30,403						35,243
Income before taxes			$	441,371					$	557,452					$	447,757
Profit margin:
Taste			14.0		%				15.1		%				20.0		%
Scent			18.1		%				18.0		%				17.3		%
Consolidated			11.1		%				12.9		%				14.7		%

(a)			Represents accelerated depreciation related to plant relocations in India and China.
(b)			Represents adjustments to the fair value for an equity method investment in Canada which we began consolidating in the second quarter of 2019.
(c)			Represents costs related to the integration of the Frutarom acquisition. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards. For 2019, costs principally related to advisory services.
(d)			For 2020, represents costs primarily related to the Frutarom Integration Initiative. For 2019, represents costs primarily related to the Frutarom Integration Initiative and the 2019 Severance Program.

(e)			Represents costs related to severance liabilities for two executives who have announced their retirement.
(f)			Represents additional claims that management paid to co-packers.
(g)			Represents transaction-related costs and expenses related to the acquisition of Frutarom. For 2020, amount primarily includes earn-out payments, net of adjustments, amortization for inventory "step-up" costs and transaction costs principally related to the 2019 Acquisition Activity. For 2019, amount primarily includes amortization for inventory "step-up" costs and transaction costs.
(h)			Costs related to reviewing the nature of inappropriate payments and review of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.
(i)			Represents transaction costs and expenses related to the transaction with N&B, principally related to legal and professional fees for capital raising activities.
(j)			Represents costs primarily related to advisory services for the integration of the transaction with N&B, principally consulting fees.

The Company has not disclosed revenues at a lower level than provided herein, such as revenues from external customers by product, as it is impracticable for it to do so.

The Company had no customers that accounted for greater than 10% of consolidated net sales in 2020, 2019 and 2018. The Company's largest customer had net sales of $342.2 million, $336.1 million and $356.8 million in 2020, 2019 and 2018, respectively. The majority of these sales were in the Scent reportable operating segment.

Long-lived assets, net, by country, consisted as follows:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
United States			$	389,335					$	382,659
Netherlands			88,090						91,313
Singapore			63,446						68,751
China			172,442						188,194
Other			744,872						656,003
Consolidated			$	1,458,185					$	1,386,920

Segment capital expenditures and depreciation and amortization consisted as follows:

			Capital Expenditures																		Depreciation and Amortization
(DOLLARS IN THOUSANDS)			2020						2019						2018						2020						2019						2018
Taste			$	107,322					$	135,421					$	82,712					$	244,704					$	247,791					$	101,224
Scent			77,192						92,279						82,400						73,801						69,225						65,066
Global assets			7,280						8,278						4,982						6,855						6,314						7,502
Consolidated			$	191,794					$	235,978					$	170,094					$	325,360					$	323,330					$	173,792

Net sales are attributed to individual regions based upon the destination of product delivery and are as follows:

			Net Sales by Geographic Area
(DOLLARS IN THOUSANDS)			2020						2019						2018
Europe, Africa and Middle East			$	1,987,398					$	2,081,758					$	1,396,316
Greater Asia			1,161,660						1,162,992						991,015
North America			1,228,243						1,170,497						1,010,126
Latin America			706,938						724,837						580,082
Consolidated			$	5,084,239					$	5,140,084					$	3,977,539

			Net Sales by Geographic Area
(DOLLARS IN THOUSANDS)			2020						2019						2018
Net sales related to the U.S.			$	1,093,031					$	1,052,654					$	952,550
Net sales attributed to all foreign countries			3,991,208						4,087,430						3,024,989

No non-U.S. country had net sales in any period presented greater than 6% of total consolidated net sales.

NOTE 16. EMPLOYEE BENEFITS

The Company has pension and/or other retirement benefit plans covering approximately one-fifth of active employees. In 2007, the Company amended its U.S. qualified and non-qualified pension plans under which accrual of future benefits was suspended for all participants that did not meet the rule of 70 (age plus years of service equal to at least 70 as of December 31, 2007). Pension benefits are generally based on years of service and compensation during the final years of employment. Plan assets consist primarily of equity securities and corporate and government fixed income securities. Substantially all pension benefit costs are funded as accrued; such funding is limited, where applicable, to amounts deductible for income tax purposes. Certain other retirement benefits are provided by general corporate assets.

The Company sponsors a qualified defined contribution plan covering substantially all U.S. employees. Under this plan, the Company matches 100% of participants’ contributions up to 4% of compensation and 75% of participants’ contributions from over 4% to 8%. Employees that are still eligible to accrue benefits under the pension plans are limited to a 50% match of up to 6% of the participants’ compensation.

In addition to pension benefits, certain health care and life insurance benefits are provided to qualifying U.S. employees upon retirement from IFF. Such coverage is provided through insurance plans with premiums based on benefits paid. The Company does not generally provide health care or life insurance coverage for retired employees of foreign subsidiaries; such benefits are provided in most foreign countries by government-sponsored plans, and the cost of these programs is not material.

The Company offers a non-qualified Deferred Compensation Plan ("DCP") for certain key employees and non-employee directors. Eligible employees and non-employee directors may elect to defer receipt of salary, incentive payments and Board of Directors’ fees into participant-directed investments which are generally invested by the Company in individual variable life insurance contracts it owns that are designed to informally fund savings plans of this nature. The cash surrender value of life insurance is based on the net asset values of the underlying funds available to plan participants. At December 31, 2020 and December 31, 2019, the Consolidated Balance Sheet reflects liabilities of $58.8 million and $50.9 million, respectively, related to the DCP in Other liabilities and $28.6 million and $28.2 million, respectively, included in Capital in excess of par value related to the portion of the DCP that will be paid out in IFF shares.

The total cash surrender value of life insurance contracts the Company owns in relation to the DCP and post-retirement life insurance benefits amounted to $49.4 million and $47.6 million at December 31, 2020 and 2019, respectively, and are recorded in Other assets in the Consolidated Balance Sheet.

The plan assets and benefit obligations of the defined benefit pension plans are measured at December 31 of each year.

			U.S. Plans																		Non-U.S. Plans
(DOLLARS IN THOUSANDS)			2020						2019						2018						2020						2019						2018
Components of net periodic benefit cost
Service cost for benefits earned(1)			$	1,283					$	1,378					$	1,971					$	23,952					$	19,319					$	18,738
Interest cost on projected benefit obligation(2)			17,261						21,954						19,393						12,767						17,775						17,704
Expected return on plan assets(2)			(28,322)						(27,927)						(30,994)						(45,919)						(43,480)						(50,546)
Net amortization of deferrals(2)			7,939						5,464						6,592						15,322						11,654						11,798
Settlements and curtailments(2)			—						—						—						4,473						189						—
Net periodic benefit cost			(1,839)						869						(3,038)						10,595						5,457						(2,306)
Defined contribution and other retirement plans			12,428						9,363						10,527						7,344						9,001						6,859
Total expense			$	10,589					$	10,232					$	7,489					$	17,939					$	14,458					$	4,553
Changes in plan assets and benefit obligations recognized in OCI
Net actuarial (gain) loss			$	(1,204)					$	(3,140)											$	69,945					$	61,865
Recognized actuarial loss			(7,883)						(5,421)												(20,437)						(12,479)
Prior service cost			102						—												367						—
Recognized prior service (cost) credit			(56)						(43)												642						636
Currency translation adjustment			—						—												27,605						6,584
Total (gain) loss recognized in OCI (before tax effects)			$	(9,041)					$	(8,604)											$	78,122					$	56,606

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(1)Included as a component of Operating Profit.

(2)Included as a component of Other Income (Expense), net.

			Postretirement Benefits
(DOLLARS IN THOUSANDS)			2020						2019						2018
Components of net periodic benefit cost
Service cost for benefits earned			$	603					$	568					$	755
Interest cost on projected benefit obligation			1,781						2,265						2,460
Net amortization and deferrals			(4,655)						(4,919)						(5,497)
Total credit			$	(2,271)					$	(2,086)					$	(2,282)
Changes in plan assets and benefit obligations recognized in OCI
Net actuarial loss			$	4,944					$	3,941
Recognized actuarial loss			(1,309)						(1,132)
Recognized prior service credit			5,964						6,051
Total recognized in OCI (before tax effects)			$	9,599					$	8,860

The weighted-average actuarial assumptions used to determine expense at December 31 of each year are:

			U.S. Plans																		Non-U.S. Plans
2020						2019						2018						2020						2019						2018
Discount rate			3.26		%				4.31		%				3.69		%				1.49		%				2.22		%				2.15		%
Expected return on plan assets			5.60		%				5.60		%				6.20		%				4.62		%				4.87		%				5.19		%
Rate of compensation increase			3.25		%				3.25		%				3.25		%				2.46		%				1.93		%				1.98		%

Changes in the postretirement benefit obligation and plan assets, as applicable, are detailed in the following table:

			U.S. Plans												Non-U.S. Plans												Postretirement Benefits
(DOLLARS IN THOUSANDS)			2020						2019						2020						2019						2020						2019
Benefit obligation at beginning of year			$	620,654					$	562,043					$	1,099,084					$	957,935					$	64,174					$	59,625
Service cost for benefits earned			1,283						1,378						23,952						19,319						603						568
Interest cost on projected benefit obligation			17,261						21,954						12,767						17,775						1,781						2,265
Actuarial (gain) loss			76,749						68,839						108,945						119,891						4,944						3,941
Plan amendments			102						—						367						—						—						—
Adjustments for expense/tax contained in service cost			—						—						(1,293)						(1,333)						—						—
Plan participants’ contributions			—						—						2,848						2,803						374						437
Benefits paid			(34,402)						(33,560)						(27,822)						(28,977)						(3,241)						(2,662)
Curtailments / settlements			—						—						(11,125)						(3,455)						—						—
Translation adjustments			—						—						85,774						13,935						—						—
Other			(24)						—						747						1,191						—						—
Benefit obligation at end of year			$	681,623					$	620,654					$	1,294,244					$	1,099,084					$	68,635					$	64,174
Fair value of plan assets at beginning of year			$	602,408					$	532,381					$	1,005,283					$	896,782
Actual return on plan assets			106,255						99,904						83,625						100,163
Employer contributions			3,710						3,683						21,123						20,031
Participants’ contributions			—						—						2,848						2,803
Benefits paid			(34,402)						(33,560)						(27,822)						(28,977)
Settlements			—						—						(11,125)						(3,455)
Translation adjustments			—						—						70,282						16,982
Other			58						—						748						954
Fair value of plan assets at end of year			$	678,029					$	602,408					$	1,144,962					$	1,005,283
Funded status at end of year			$	(3,594)					$	(18,246)					$	(149,282)					$	(93,801)

The amounts recognized in the balance sheet are detailed in the following table:

			U.S. Plans												Non-U.S. Plans
(DOLLARS IN THOUSANDS)			2020						2019						2020						2019
Other assets			$	54,330					$	35,239					$	46,913					$	50,418
Other current liabilities			(4,260)						(4,193)						(1,357)						(1,179)
Retirement liabilities			(53,664)						(49,292)						(194,838)						(143,040)
Net amount recognized			$	(3,594)					$	(18,246)					$	(149,282)					$	(93,801)

The amounts recognized in AOCI are detailed in the following table:

			U.S. Plans												Non-U.S. Plans												Postretirement Benefits
(DOLLARS IN THOUSANDS)			2020						2019						2020						2019						2020						2019
Net actuarial loss			$	133,741					$	142,828					$	454,420					$	376,991					$	19,071					$	15,436
Prior service cost (credit)			154						108						(2,474)						(3,087)						(21,174)						(27,138)
Total AOCI (before tax effects)			$	133,895					$	142,936					$	451,946					$	373,904					$	(2,103)					$	(11,702)

			U.S. Plans												Non-U.S. Plans
(DOLLARS IN THOUSANDS)			2020						2019						2020						2019
Accumulated Benefit Obligation — end of year			$	679,957					$	618,486					$	1,243,461					$	1,062,515
Information for Pension Plans with an ABO in excess of Plan Assets:
Projected benefit obligation			$	60,313					$	55,714					$	813,026					$	656,574
Accumulated benefit obligation			60,012						55,671						762,308						620,087
Fair value of plan assets			2,389						2,229						616,830						512,356
Weighted-average assumptions used to determine obligations at December 31
Discount rate			2.51		%				3.26		%				0.85		%				1.50		%
Rate of compensation increase			3.25		%				3.25		%				2.55		%				2.48		%

(DOLLARS IN THOUSANDS)			U.S. Plans						Non-U.S. Plans						Postretirement Benefits
Estimated Future Benefit Payments
2021			$	38,308					$	29,364					$	3,737
2022			38,888						29,406						3,748
2023			39,373						30,150						3,735
2024			39,761						31,243						3,840
2025			39,552						32,774						3,900
2026 - 2030			192,040						180,230						19,351
Contributions
Required Company Contributions in Following Year (2021)			$	4,364					$	24,964					$	3,737

The Company considers a number of factors in determining and selecting assumptions for the overall expected long-term rate of return on plan assets. The Company considers the historical long-term return experience of its assets, the current and expected allocation of its plan assets and expected long-term rates of return. The Company derives these expected long-term rates of return with the assistance of its investment advisors. The Company bases its expected allocation of plan assets on a diversified portfolio consisting of domestic and international equity securities, fixed income, real estate and alternative asset classes. The asset allocation is monitored on an ongoing basis.

The Company considers a variety of factors in determining and selecting its assumptions for the discount rate at December 31. For the U.S. plans, the discount rate was based on the internal rate of return for a portfolio of high quality bonds rated Aa or higher by either Moody’s or Standard & Poor's with maturities that are consistent with the projected future benefit payment obligations of the plan. For the Non-U.S. Plans, the discount rates were determined by region and are based on high quality long-term corporate bonds. Consideration has been given to the duration of the liabilities in each plan when selecting the bonds to be used in determining the discount rate. The rate of compensation increase for all plans and the medical cost trend rate for the applicable U.S. plans are based on plan experience.

The percentage of assets in the Company's pension plans, by type, is as follows:

			U.S. Plans												Non-U.S. Plans
			2020						2019						2020						2019
Cash and cash equivalents			1		%				1		%				3		%				1		%
Equities			29		%				13		%				10		%				14		%
Fixed income			70		%				86		%				38		%				37		%
Property			—		%				—		%				8		%				8		%
Alternative and other investments			—		%				—		%				41		%				40		%

With respect to the U.S. plans, the expected return on plan assets was determined based on an asset allocation model using the current target allocation, real rates of return by asset class and an anticipated inflation rate. The target investment allocation is 20% equity securities and 80% fixed income securities.

The expected annual rate of return for the non-U.S. plans employs a similar set of criteria adapted for local investments, inflation rates and in certain cases specific government requirements. The target asset allocation, for the non-U.S. plans, consists of approximately: 35% in fixed income securities; 35% in alternative investments; 15% in equity securities; and 15% in real estate.

The following tables present the Company's plan assets for the U.S. and non-U.S. plans using the fair value hierarchy as of December 31, 2020 and 2019. The plans’ assets were accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and their placement within the fair value hierarchy levels. For more information on a description of the fair value hierarchy, see Note 17.

			U.S. Plans for the Year Ended
			December 31, 2020
(DOLLARS IN THOUSANDS)			Level 1						Level 2						Level 3						Total
Cash Equivalents			$	—					$	3,799					$	—					$	3,799
Fixed Income Securities
Government & Government Agency Bonds			—						19,002						—						19,002
Corporate Bonds			—						104,064						—						104,064
Municipal Bonds			—						6,480						—						6,480
Assets measured at net asset value**(1)**			—						—						—						543,687
Total			$	—					$	133,345					$	—					$	677,032
Receivables																					$	997
Total																					$	678,029

			U.S. Plans for the Year Ended
			December 31, 2019
(DOLLARS IN THOUSANDS)			Level 1						Level 2						Level 3						Total
Cash Equivalents			$	—					$	4,431					$	—					$	4,431
Fixed Income Securities
Government & Government Agency Bonds			—						19,427						—						19,427
Corporate Bonds			—						112,137						—						112,137
Municipal Bonds			—						8,460						—						8,460
Assets measured at net asset value**(1)**			—						—						—						456,606
Total			$	—					$	144,455					$	—					$	601,061
Receivables																					$	1,347
Total																					$	602,408

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(1)Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheet. The total amount

measured at net asset value includes approximately $200.8 million and $80.4 million in pooled equity funds and $342.9 million and $376.0 million in fixed income mutual funds for the years ended December 31, 2020 and 2019, respectively.

			Non-U.S. Plans for the Year Ended
			December 31, 2020
(DOLLARS IN THOUSANDS)			Level 1						Level 2						Level 3						Total
Cash			$	12,730					$	18,864					$	—					$	31,594
Equity Securities
U.S. Large Cap			57,461						7,557						—						65,018
U.S. Mid Cap			5						—						—						5
Non-U.S. Large Cap			26,162						—						—						26,162
Non-U.S. Mid Cap			1,213						—						—						1,213
Non-U.S. Small Cap			872						—						—						872
Emerging Markets			25,391						—						—						25,391
Fixed Income Securities
U.S. Treasuries/Government Bonds			97						—						—						97
U.S. Corporate Bonds			—						43,119						—						43,119
Non-U.S. Treasuries/Government Bonds			162,947						—						—						162,947
Non-U.S. Corporate Bonds			33,596						138,920						—						172,516
Non-U.S. Asset-Backed Securities			—						50,717						—						50,717
Non-U.S. Other Fixed Income			2,636						—						—						2,636
Alternative Types of Investments
Insurance Contracts			—						247,426						274						247,700
Derivative Financial Instruments			—						91,225						—						91,225
Absolute Return Funds			4,086						92,785						—						96,871
Other			11,191						2,565						18,837						32,593
Real Estate
Non-U.S. Real Estate			—						—						94,286						94,286
Total			$	338,387					$	693,178					$	113,397					$	1,144,962

			Non-U.S. Plans for the Year Ended
			December 31, 2019
(DOLLARS IN THOUSANDS)			Level 1						Level 2						Level 3						Total
Cash			$	5,921					$	—					$	—					$	5,921
Equity Securities
U.S. Large Cap			58,926						25,616						—						84,542
Non-U.S. Large Cap			24,720						—						—						24,720
Non-U.S. Mid Cap			956						—						—						956
Non-U.S. Small Cap			738						—						—						738
Emerging Markets			27,374						—						—						27,374
Fixed Income Securities
U.S. Treasuries/Government Bonds			108						—						—						108
U.S. Corporate Bonds			—						32,013						—						32,013
Non-U.S. Treasuries/Government Bonds			117,890						—						—						117,890
Non-U.S. Corporate Bonds			33,320						150,034						—						183,354
Non-U.S. Asset-Backed Securities			—						33,654						—						33,654
Non-U.S. Other Fixed Income			2,553						—						—						2,553
Alternative Types of Investments
Insurance Contracts			—						152,025						266						152,291
Derivative Financial Instruments			—						65,016						—						65,016
Absolute Return Funds			3,431						154,463						—						157,894
Other			—						2,330						30,183						32,513
Real Estate
Non-U.S. Real Estate			—						—						83,746						83,746
Total			$	275,937					$	615,151					$	114,195					$	1,005,283

Cash and cash equivalents are primarily held in registered money market funds which are valued using a market approach based on the quoted market prices of identical instruments. Other cash and cash equivalents are valued daily by the fund using a market approach with inputs that include quoted market prices for similar instruments.

Equity securities are primarily valued using a market approach based on the quoted market prices of identical instruments. Pooled funds are typically common or collective trusts valued at their net asset values (NAVs).

Fixed income securities are primarily valued using a market approach with inputs that include broker quotes and benchmark yields.

Derivative instruments are valued by the custodian using closing market swap curves and market derived inputs.

Real estate values are primarily based on valuation of the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market comparable data.

Hedge funds are valued based on valuation of the underlying securities and instruments within the funds. Quoted market prices are used when available and NAVs are used for unquoted securities within the funds.

Absolute return funds are actively managed funds mainly invested in debt and equity securities and are valued at their NAVs.

The following table presents a reconciliation of Level 3 non-U.S. plan assets held during the year ended December 31, 2020:

			Non-U.S. Plans
(DOLLARS IN THOUSANDS)			Real Estate												Hedge Funds						Total
Ending balance as of December 31, 2019			$	84,013											$	30,182					$	114,195
Actual return on plan assets			8,677												1,658						10,335
Purchases, sales and settlements			1,871												(13,004)						(11,133)
Ending balance as of December 31, 2020			$	94,561											$	18,836					$	113,397

The following weighted average assumptions were used to determine the postretirement benefit expense and obligation for the years ended December 31:

			Expense												Liability
			2020						2019												2020						2019
Discount rate			3.30		%				4.30		%										2.60		%				3.30		%
Current medical cost trend rate			7.25		%				7.50		%										7.00		%				7.25		%
Ultimate medical cost trend rate			4.75		%				4.75		%										4.75		%				4.75		%
Medical cost trend rate decreases to ultimate rate in year			2030						2030												2030						2030

The following table presents the sensitivity of disclosures to changes in selected assumptions for the year ended December 31, 2020:

(DOLLARS IN THOUSANDS)			U.S. Pension Plans						Non-U.S. Pension Plans						Postretirement Benefit Plan
25 Basis Point Decrease in Discount Rate
Change in PBO			18,716						69,107						N/A
Change in ABO			18,657						66,092						2,180
Change in pension expense			(219)						3,705						265
25 Basis Point Decrease in Long-Term Rate of Return
Change in pension expense			1,266						2,663						N/A

The Company contributed $21.1 million to its non-U.S. pension plans in 2020. No contributions were made to the Company's qualified U.S. pension plans in 2020. The Company made $3.6 million in benefit payments with respect to its non-qualified U.S. pension plan. In addition, $3.2 million of payments were made with respect to the Company's other postretirement plans.

NOTE 17. 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 determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the London Interbank Offer Rate (“LIBOR”) 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. The Company does not have any instruments classified as Level 3, other than those included in pension asset trusts included in Note 16. These valuations take into consideration the Company's credit risk and its counterparties’ credit risk.

The carrying value and the estimated fair values of financial instruments at December 31 consisted of the following:

			2020												2019
(DOLLARS IN THOUSANDS)			Carrying Value						Fair Value						Carrying Value						Fair Value
LEVEL 1
Cash and cash equivalents(1)			$	649,541					$	649,541					$	606,823					$	606,823
LEVEL 2
Credit facilities and bank overdrafts(2)			1,560						1,560						3,131						3,131
Derivatives
Derivative assets(3)			1,321						1,321						3,575						3,575
Derivative liabilities(3)			29,203						29,203						7,415						7,415
Long-term debt:(4)
2020 Notes			—						—						299,381						302,700
2021 Euro Notes			368,234						369,825						334,561						338,244
2023 Notes			299,311						315,570						299,004						305,580
2024 Euro Notes			613,564						647,902						558,124						586,825
2026 Euro Notes			978,134						1,060,816						890,183						945,306
2028 Notes			397,006						472,194						396,688						441,500
2047 Notes			493,992						607,975						493,571						526,106
2048 Notes			786,216						1,059,131						785,996						919,040
2018 Term Loan Facility(2)			239,817						240,000						239,621						240,000
2022 Term Loan Facility(2)			199,377						200,000						—						—
Amortizing Notes(5)			36,250						36,609						82,079						84,430

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(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 Sheet.

(4)The fair value of the Company's long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on its own credit risk.

(5)The fair value of the Amortizing Notes of the TEUs is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviation in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 8 for additional information on the TEUs.

Derivatives

Forward Currency Forward Contracts

The Company periodically enters into foreign currency forward contracts with the objective of reducing exposure to cash flow volatility associated with its intercompany loans, foreign currency receivables and payables and anticipated purchases of certain raw materials used in 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.

Cash Flow Hedges

During the year ended December 31, 2017, the Company entered into several forward currency contracts which qualified as cash flow hedges. The objective of these hedges is to protect against the currency risk associated with forecasted U.S. dollar ("USD") denominated raw material purchases made by Euro ("EUR") functional currency entities which result from changes in the EUR/USD exchange rate. The effective portions of cash flow hedges are recorded in OCI as a component of Gains/(Losses) on derivatives qualifying as hedges in the accompanying Consolidated Statement of Income and Comprehensive Income. Realized gains/(losses) in AOCI related to cash flow hedges of raw material purchases are recognized as a component of Cost of goods sold in the accompanying Consolidated Statement of Income and Comprehensive Income in the same period as the related costs are recognized.

Hedges Related to Issuances of Debt

Subsequent to the issuance of the 2021 Euro Notes and 2026 Euro Notes during the third quarter of 2018, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statement of Income and Comprehensive Income.

Subsequent to the issuance of the 2024 Euro Notes during the first quarter of 2016, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statement of Income and Comprehensive Income.

During the first quarter of 2016, the Company entered into and terminated two Euro interest rate swap agreements to hedge the anticipated issuance of fixed-rate debt. These swaps were designated as cash flow hedges. The effective portions of cash flow hedges are recorded in OCI as a component of Losses on derivatives qualifying as hedges in the accompanying Consolidated Statement of Income and Comprehensive Income. The Company incurred a loss of €2.9 million ($3.2 million) due to the termination of these swaps. The loss is being amortized as interest expense over the life of the 2024 Euro Notes as discussed in Note 9.

During the fourth quarter of 2016 and the first quarter of 2017, the Company entered into interest rate swap agreements to hedge the anticipated issuance of fixed-rate debt, which are designated as cash flow hedges. The various hedge instruments were settled upon issuance of the debt on May 18, 2017 and resulted in a loss of approximately $5.3 million. As discussed in Note 9, the loss is being amortized as interest expense over the life of the 2047 Notes.

Cross Currency Swaps

During the third quarter of 2019, the Company entered into a transaction to unwind the four cross currency swaps designated as net investment hedges issued in the fourth quarter of 2018 and received proceeds of $33.6 million, including $7.7 of interest income. The gain arising from the termination of the swaps has been included as a component of Accumulated other comprehensive loss. Following the termination of the existing swaps, (during the third quarter of 2019,) the Company entered into four new EUR/USD cross currency swaps that mature through May 2023. 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. During the third quarter of 2020, the Company entered into a transaction to unwind two of the swaps issued in the third quarter of 2019 and paid proceeds of $14.6 million, net of accrued interest receivable of $2.2 million. The loss arising from the termination of the swaps has been included as a component of accumulated other comprehensive loss. As of December 31, 2020, the two remaining swaps were in a net liability position with an aggregate fair value of $23.4 million which was classified as other current liabilities. 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 December 31, 2020 and December 31, 2019:

			December 31,
(DOLLARS IN THOUSANDS)			2020						2019
Foreign currency contracts			$	220,804					$	473,600
Cross currency swaps			300,000						600,000

The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy) as reflected in the Consolidated Balance Sheet as of December 31, 2020 and December 31, 2019:

			December 31, 2020
(DOLLARS IN THOUSANDS)			Fair Value of Derivatives Designated as Hedging Instruments						Fair Value of Derivatives Not Designated as Hedging Instruments						Total Fair Value
Derivative assets(a)
Foreign currency contracts			$	391					$	930					$	1,321
Derivative liabilities(b)
Foreign currency contracts			5,411						383						5,794
Cross currency swaps			23,409						—						23,409
Total derivative liabilities			$	28,820					$	383					$	29,203

			December 31, 2019
(DOLLARS IN THOUSANDS)			Fair Value of Derivatives Designated as Hedging Instruments						Fair Value of Derivatives Not Designated as Hedging Instruments						Total Fair Value
Derivative assets(a)
Foreign currency contracts			$	1,310					$	2,265					$	3,575
Derivative liabilities(b)
Foreign currency contracts			$	797					$	2,431					$	3,228
Interest rate swaps			4,187						—						4,187
Total derivative liabilities			$	4,984					$	2,431					$	7,415

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(a)Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet.

(b)Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet.

The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2020 and December 31, 2019:

(DOLLARS IN THOUSANDS)			Amount of Gain (Loss) For the year ended December 31,												Location of Gain (Loss) Recognized in Income on Derivative
2020						2019
Foreign currency contracts			$	9,319					$	557					Other (income) expense, net

These net gains (losses) mostly 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 instruments designated as cash flow and net investment hedging instruments, net of tax, in the Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2020 and December 31, 2019 (in thousands):

			Amount of Gain (Loss) Recognized in OCI on 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)
			For the years ended December 31,															For the years ended December 31,
			2020						2019									2020						2019
Derivatives in Cash Flow Hedging Relationships:
Foreign currency contracts			$	(9,796)					$	(3,535)					Cost of goods sold						$	4,720					$	8,504
Interest rate swaps (1)			858						857						Interest expense						(858)						(857)
Derivatives in Net Investment Hedging Relationships:
Cross currency swaps			(13,450)						—						N/A						—						—
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes			(41,806)						5,440						N/A						—						—
2021 Euro Notes & 2026 Euro Notes			(91,974)						11,969						N/A						—						—
Total			$	(156,168)					$	14,731											$	3,862					$	7,647

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(1)Interest rate swaps were entered into as pre-issuance hedges for the Company's bond offerings.

The ineffective portion of the above noted cash flow hedges and net investment hedges was not material for the years ended December 31, 2020 and 2019.

The Company expects approximately $4.1 million (net of tax), of derivative gains included in AOCI at December 31, 2020, based on current market rates, will be reclassified into earnings within the next twelve months. The majority of this amount will vary due to fluctuations in foreign currency exchange rates.

NOTE 18. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present changes in the accumulated balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income:

(DOLLARS IN THOUSANDS)			Foreign Currency Translation Adjustments						(Losses) Gains on Derivatives Qualifying as Hedges						Pension and Postretirement Liability Adjustment						Total
Accumulated other comprehensive loss, net of tax, as of December 31, 2019			$	(373,043)					$	2,068					$	(345,919)					$	(716,894)
OCI before reclassifications			88,132						(5,076)						(73,735)						9,321
Amounts reclassified from AOCI			—						(3,862)						13,894						10,032
Net current period other comprehensive income (loss)			88,132						(8,938)						(59,841)						19,353
Accumulated other comprehensive loss, net of tax, as of December 31, 2020			$	(284,911)					$	(6,870)					$	(405,760)					$	(697,541)

(DOLLARS IN THOUSANDS)			Foreign Currency Translation Adjustments						(Losses) Gains on Derivatives Qualifying as Hedges						Pension and Postretirement Liability Adjustment						Total
Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2018			$	(396,996)					$	4,746					$	(309,977)					$	(702,227)
OCI before reclassifications			23,953						4,969						(45,599)						(16,677)
Amounts reclassified from AOCI			—						(7,647)						9,657						2,010
Net current period other comprehensive income (loss)			23,953						(2,678)						(35,942)						(14,667)
Accumulated other comprehensive loss, net of tax, as of December 31, 2019			$	(373,043)					$	2,068					$	(345,919)					$	(716,894)

(DOLLARS IN THOUSANDS)			Foreign Currency Translation Adjustments						(Losses) Gains on Derivatives Qualifying as Hedges						Pension and Postretirement Liability Adjustment						Total
Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2017			$	(297,416)					$	(10,332)					$	(329,734)					$	(637,482)
OCI before reclassifications			(99,580)						8,011						9,717						(81,852)
Amounts reclassified from AOCI			—						7,067						10,040						17,107
Net current period other comprehensive income (loss)			(99,580)						15,078						19,757						(64,745)
Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2018			$	(396,996)					$	4,746					$	(309,977)					$	(702,227)

The following table provides details about reclassifications out of AOCI to the Consolidated Statement of Comprehensive Income:

			Year Ended December 31,
(DOLLARS IN THOUSANDS)			2020						2019						2018						Affected Line Item in the Consolidated Statement of Comprehensive Income
(Losses) gains on derivatives qualifying as hedges
Foreign currency contracts			$	5,394					$	9,719					$	(7,089)					Cost of goods sold
Interest rate swaps			(858)						(857)						(864)						Interest expense
Tax			(674)						(1,215)						886						Provision for income taxes
Total			$	3,862					$	7,647					$	(7,067)					Total, net of income taxes
(Losses) gains on pension and postretirement liability adjustments
Prior service cost			$	6,550					$	6,644					$	7,752					(a)
Actuarial losses			(29,629)						(19,032)						(20,645)						(a)
Tax			9,185						2,731						2,853						Provision for income taxes
Total			$	(13,894)					$	(9,657)					$	(10,040)					Total, net of income taxes

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(a)The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 16 to the Consolidated Financial Statements for additional information regarding net periodic benefit cost.

NOTE 19. CONCENTRATIONS OF CREDIT RISK

The Company does not have significant concentrations of risk in financial instruments. Temporary investments are made in a well-diversified portfolio of high-quality, liquid obligations of government, corporate and financial institutions. There are also limited concentrations of credit risk with respect to trade receivables because the Company has a large number of customers who are spread across many industries and geographic regions. The Company’s larger customers are each spread across many sub-categories of its segments and geographical regions. The Company had no customer that accounted for more than 10% of its consolidated net sales for the years ended 2020, 2019 and 2018.

NOTE 20. COMMITMENTS AND CONTINGENCIES

Guarantees and Letters of Credit

The Company has various bank guarantees and letters of credit which are available for use to support its ongoing business operations and to satisfy governmental requirements associated with pending litigation in various jurisdictions.

At December 31, 2020, the Company had total bank guarantees and standby letters of credit of approximately $48.7 million with various financial institutions. Included in the above aggregate amount is a total of $14.6 million for other assessments in Brazil for various income tax and indirect tax disputes related to fiscal years 1998-2011. There were no material amounts utilized under the standby letters of credit as of December 31, 2020.

In order to challenge the assessments in these cases 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 $7.7 million as of December 31, 2020.

Lines of Credit

The Company has various lines of credit which are available to support its ongoing business operations. As of December 31, 2020, the Company had available lines of credit of $106.4 million with various financial institutions, in addition to the $626.9 million of capacity under the Credit Facility. There were no material amounts drawn down pursuant to these lines of credit as of December 31, 2020.

Litigation

The Company assesses contingencies related to litigation and/or other matters to determine the degree of probability and range of possible loss. 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.

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 differ from these estimates 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 liabilities are recorded at management’s best estimate of the probable outcome of the lawsuits and claims, taking into consideration the facts and circumstances of the individual matters as well as past experience on similar matters. At each balance sheet date, the key issues that management assesses are 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 liabilities and expected recoveries from its insurance carriers in 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

On August 12, 2019, Marc Jansen filed a putative securities class action against IFF, its Chairman and CEO, and its then-CFO, in the United States District Court for the Southern District of New York. The lawsuit was filed after IFF disclosed that preliminary results of investigations indicated that Frutarom businesses operating principally in Russia and Ukraine had made improper payments to representatives of customers. On December 26, 2019, the Court appointed a group of six investment funds as lead plaintiff and Pomerantz LLP as lead counsel. On March 16, 2020, lead plaintiff filed an amended complaint, which added Frutarom and certain former officers of Frutarom as defendants. The amended complaint alleges, among other things, that defendants made materially false and misleading statements or omissions concerning IFF’s acquisition of Frutarom, the integration of the two companies, and the companies’ financial reporting and results. The amended complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and under the Israeli Securities Act-1968, against all defendants, and under Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants, on behalf of a putative class of persons and entities who purchased or otherwise acquired IFF securities on the New York Stock Exchange between May 7, 2018 and August 12, 2019 and persons and entities who purchased or otherwise acquired IFF securities on the Tel Aviv Stock Exchange between October 9, 2018 and August 12, 2019. The amended complaint seeks an award of unspecified compensatory damages, costs, and expenses. IFF, its officers, and Frutarom filed a motion to dismiss the case on June 26, 2020.

Two motions to approve securities class actions were filed in the Tel Aviv District Court, Israel, in August 2019, similarly alleging, among other things, false and misleading statements largely in connection with IFF’s acquisition of Frutarom and the above-mentioned improper payments. One motion ("Borg") asserts claims under the U.S. federal securities laws against IFF, its Chairman and CEO, and its former CFO. On November 8, 2020 IFF and its officers filed their response to the Borg motion. The other motion ("Oman") (following an initial amendment) asserted claims under the Israeli Securities Act-1968 against IFF, its 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 October 4, 2020, the Oman plaintiff filed a motion to remove IFF and its officers from the motion and to add factual allegations from the U.S. amended complaint. Responses to the motion to amend the Oman motion were filed during November 2020. The court granted the motion to amend the Oman motion on February 17, 2021.

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 US $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, which is still ongoing, during which the proceedings relating to this claim are stayed.

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 parties to this motion agreed to attempt to resolve the dispute through mediation to take place regarding the aforesaid claim against Yehudai, which as noted is still ongoing, during which the proceedings relating to this motion are stayed.

Investigation

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. The National Fraud Investigation Unit and the Israeli Securities Authority have provided IFF and Frutarom with various orders. IFF is working to ensure compliance with such orders, all in accordance with, and subject to, Israeli law.

China Facilities

Hangzhou Ingredients plant

As previously disclosed, in 2014 the Company agreed to relocate an ingredients facility in Hangzhou, China to Jiande, China. In connection with such relocation, the Company entered into a land swap and relocation agreement with the local authority pursuant to which the Company agreed to transfer ownership of the land underlying the facility in exchange for various elements of compensation, including cash and land use rights for the new facility. The Company initially determined that the gain, if any, would be recognized upon final transfer of ownership. During the fourth quarter of 2019, the Company completed the final environmental cleanup activities and transferred ownership of the land to the local authority. The amount of the gain ultimately recognized in the fourth quarter of 2019 was $4.4 million. The amount has been recorded as a component of Other income, net.

The net book value of the plant in Jiande, China was approximately $68 million as of December 31, 2020.

Guangzhou Taste plant

During the fourth quarter of 2016, the Company was notified that certain governmental authorities have begun to evaluate a change in the zoning of the Guangzhou Taste plant. The zoning, if changed, would prevent the Company from continuing to manufacture product at the existing plant. The ultimate outcome of any change that the governmental authorities may propose, the timing of such a change, and the nature of any compensation arrangements that might be provided to the Company are uncertain. To address the governmental authorities' requirements, the Company has begun to transfer certain production capabilities from the Guangzhou Taste plant to a newly built facility in Zhangjiagang.

The net book value of the plant in Guangzhou was approximately $62 million as of December 31, 2020.

Guangzhou Scent plant

During the second quarter of 2019, the Company was notified that certain governmental authorities had changed the zoning where the Guangzhou Scent plant is located. The zoning change did not affect the current operations but prevents expansions or other increases in the operating capacity of the plant. The Company believes that it is possible that the zoning may be enforced in the future such that it would not be able to continue manufacturing at the existing site. The ultimate outcome of any change that the governmental authorities may propose, the timing of such a change, and the nature of any compensation arrangements that might be provided to the Company are uncertain.

The net book value of the existing plant was approximately $9 million as of December 31, 2020.

Zhejiang Ingredients plant

In the fourth quarter of 2017, the Company concluded discussions with the government regarding the relocation of its Fragrance Ingredients plant in Zhejiang and, based on the agreements reached, expects to receive total compensation payments up to approximately $50 million. The relocation compensation will be paid to the Company over the period of the relocation which is expected to be through the end of 2022. The Company received payments totaling $30 million through the end of 2019. In the third quarter of 2020, the Company received a payment of approximately $13 million. A final payment is expected to be received upon completion of the final environmental inspection.

Production at the facility ceased during 2019. In the second quarter of 2020, the Company transferred ownership of the site to the government. The land remediation activities are in progress and are expected to be completed in the second half of 2022. During the second quarter of 2020, the remaining net book value of the plant was written off. Products previously manufactured at the Zhejiang Ingredients plant are now being produced at the Company's Ingredients plant in Jiande.

Total China Operations

The total net book value of all seven plants in China was approximately $212 million as of December 31, 2020.

If the Company is required to close a plant, or operate one at significantly reduced production levels on a permanent basis, the Company may be required to record charges that could have a material impact on its consolidated financial results of operations, financial position and cash flows in future periods.

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 $22.4 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.

FDA-Mandated Product Recall

The Company periodically incurs product liability claims based on product that is sold to customers that may be defective or otherwise not in accordance with the customer’s requirements. In the first quarter of 2017, the Company was made aware of a claim for product that was subject to an FDA-mandated product recall. In December 31, 2019, the Company had recorded total charges of approximately $17.5 million with respect to this claim, of which $5.0 million was recorded in the three months ended March 31, 2018. The Company settled the claim with the customer in the first quarter of 2018 for a total of $16.0 million, of which $3.0 million was paid in the fourth quarter of 2017 and $13.0 million was paid during the three months ended March 31, 2018.

For the year ended 2018, the Company received $13.1 million for the full and final settlement of its claim from the supplier and insurer for the affected product, which has been recorded as a reduction of cost of sales on the Consolidated Statement of Income and Comprehensive Income.

Brazil Tax Credits

In 2017 the Brazilian Supreme Court (“BSC”) ruled that Brazilian tax authorities should not include a value added tax known as "ICMS" in the calculation of certain indirect taxes ("PIS/COFINS"). By removing the ICMS from the calculation of the indirect tax base, the Court effectively eliminated a “tax on tax”. The Brazilian tax authorities filed an appeal seeking clarification of certain matters, including the amount of ICMS to which taxpayers would be entitled in order to reduce their indirect tax base (i.e. the gross rate or the net rate.)

In light of the BSC's decision, in November 2017, the Company filed suit consistent with the BSC decision to require that ICMS be excluded from the PIS/COFINS calculation and received a favorable preliminary decision that was confirmed by the BSC in September 2018. This preliminary ruling granted the Company the right to prospectively exclude ICMS amounts from the PIS/COFINS calculation, but left open the issue of whether the Company could recover the gross or net amount of ICMS amounts paid on PIS/COFINS for the period from November 2011 to December 2018.

In January 2020, the Company was informed of a favorable ruling from the Brazilian tax authorities confirming that the Company was entitled to recover the overpayments of certain indirect taxes (known as PIS/COFINS) for the period from November 2011 to December 2018, plus interest on the amount of the overpayments. The overpayments arose from the inclusion of a value added tax known as ICMS in the calculation of the PIS/COFINS tax. The ruling did not, however, settle the question of whether the Company is eligible to recover overpayments based on the gross or the net amount of ICMS amounts paid on PIS/COFINS. The Company calculated the amount of overpayments using the gross method which yields a higher amount than the application of the net method. A final ruling on the gross versus net amount issued is still pending.

In addition to the $8.0 million recognized in the fourth quarter of 2019, during the first quarter of 2020 the Company recognized $3.5 million as an additional recovery on the existing claim. During 2020, the Company also recognized $2.7 million related to a claim from another of its subsidiaries in Brazil. The income is recognized as a reduction in Selling and Administrative expenses.

Other

The Company determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that either a loss is reasonably possible or a loss in excess of accrued amounts is reasonably possible and the amount of losses or range of losses is determinable. For all third party contingencies (including labor, contract, technology, tax, product-related claims and business litigation), the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $28.3 million. The estimates included in this amount are based on the Company’s analysis of currently available information and, as new information is obtained, these estimates may change. Due to the inherent subjectivity of the assessments and the unpredictability of outcomes of legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the matters in question. Thus, the Company’s exposure and ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued or the range disclosed above.

NOTE 21. REDEEMABLE NONCONTROLLING INTERESTS

Through certain subsidiaries of the Company's Frutarom acquisition, there are certain noncontrolling interests that carry redemption features. The noncontrolling interest holders have the right, over a stipulated period of time, to sell their respective interests to Frutarom, and Frutarom has the option to purchase these interests (subject to the same timing). These options carry, in most cases, identical price and conditions of exercise, and will be settled based on a pre-agreed formula based, in most cases, on a multiple of the average EBITDA of consecutive quarters to be achieved during the period ending prior to the exercise date.

The following table sets forth the details of the Company's redeemable noncontrolling interests:

(DOLLARS IN THOUSANDS)						Redeemable Noncontrolling Interests
Balance at December 31, 2018						$	81,806
Acquired through acquisitions during 2019						23,594
Impact of foreign exchange translation						(126)
Share of profit or loss attributable to redeemable noncontrolling interests						666
Redemption value adjustment for the current period						2,097
Measurement period adjustments						5,391
Dividends paid						(753)
Exercises of redeemable noncontrolling interests						(13,632)
Balance at December 31, 2019						$	99,043
Impact of foreign exchange translation						12,864
Share of profit or loss attributable to redeemable noncontrolling interests						2,814
Redemption value adjustment for the current period						(1,803)
Measurement period adjustments						(1,426)
Dividends paid						(2,017)
Exercises of redeemable noncontrolling interests						(11,923)
Balance at December 31, 2020						$	97,552

For 2019, the increase in redeemable noncontrolling interests was primarily due to the interests acquired through acquisitions during the first quarter of 2019, as discussed in Note 3.

During 2020, the Company paid $13.9 million related to the purchase of certain noncontrolling interests where the option related to the purchase had been exercised in the fourth quarter of 2019.

(a)(3) EXHIBITS

Exhibit Number			Description
2.1			Agreement and Plan of Merger, dated May 7, 2018, by and among the Registrant, Frutarom Industries Ltd. and Icon Newco Ltd., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on May 9, 2018.
2.2			Amendment No. 1 to Agreement and Plan of Merger, dated August 25, 2018, by and among International Flavors & Fragrances, Inc., Frutarom Industries Ltd. and Icon Newco Ltd. incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on August 27, 2018.
2.3			Agreement and Plan of Merger, dated December 15, 2019, by and among DuPont de Nemours Inc., Nutrition & Biosciences, Inc., International Flavors & Fragrances Inc. and Neptune Merger Sub I Inc., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on December 18, 2019.
2.4			Separation and Distribution Agreement, dated as of December 15, 2019, by and among DuPont de Nemours Inc., Nutrition & Biosciences, Inc. and International Flavors & Fragrances Inc., incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed on December 18, 2019.
3.1			Restated Certificate of Incorporation of the Registrant, incorporated by reference to Exhibit 10(g) to the Registrant’s Quarterly Report on Form 10-Q filed on August 12, 2002.
3.2			Bylaws of International Flavors & Fragrances Inc., effective as of October 29, 2019, incorporated by reference to Exhibit 3(ii) to the Registrant's Current Report on Form 8-K filed on October 30, 2019.
4.1			Indenture, dated as of April 4, 2013, between the Registrant and U.S. Bank National Association, as Trustee (including the form of Notes), incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 4, 2013.
4.2			Indenture, dated as of March 2, 2016, between the Registrant and U.S. Bank National Association, as Trustee (including the form of Debt Security), incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-209889) filed on March 2, 2016.
4.3			First Supplemental Indenture, dated as of March 14, 2016, between the Registrant and U.S. Bank National Association, as Trustee (including the form of Notes), incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K filed on March 14, 2016.
4.4			Second Supplemental Indenture, dated as of May 18, 2017, between the Registrant and U.S. Bank National Association, as Trustee (including the form of Notes), incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K filed on May 18, 2017.
4.5			Third Supplemental Indenture, dated as of September 17, 2018, between International Flavors & Fragrances Inc. and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed on September 17, 2018.
4.6			Form of Amortizing Note, incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed on September 17, 2018.
4.7			Purchase Contract Agreement, dated September 17, 2018, between International Flavors & Fragrances Inc. and U.S. Bank National Association, as purchase contract agent, as attorney-in-fact for holders of the purchase contracts referred to therein and as trustee under the indenture referred to therein, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2018.
4.8			Form of Unit, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2018.
4.9			Form of Purchase Contract, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on September 17, 2018.
4.10			Fourth Supplemental Indenture, dated as of September 25, 2018, between International Flavors & Fragrances Inc. and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 25, 2018.
4.11			Form of Global Note for the 2021 Notes, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 25, 2018.
4.12			Form of Global Note for the 2026 Notes, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 25, 2018.
4.13			Fifth Supplemental Indenture, dated as of September 26, 2018, between International Flavors & Fragrances Inc. and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 26, 2018.
4.14			Form of Global Note for the 2020 Notes, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 26, 2018.
4.15			Form of Global Note for the 2028 Notes, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 26, 2018.

Exhibit Number			Description
4.16			Form of Global Notes for the 2048 Notes, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on September 26, 2018.
4.17			Indenture, dated as of September 16, 2020, between the N&B and U.S. Bank National Association, as Trustee (including the form of Notes), incorporated by reference to Exhibit 99.16 to the Registrant’s Registration Statement on Form S-4 (Registration No. 333-238072) filed on October 5, 2020.
4.18			First Supplemental Indenture, dated as of February 1, 2021, among Nutrition & Biosciences, Inc., International Flavors & Fragrances Inc. and U.S. Bank National Association, as Trustee. Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on February 4, 2021.
4.19			Description of Securities, incorporated by reference to Exhibit 4.17 to the Registrant's Annual Report on Form 10-K filed on March 3, 2020.
*10.1			Letter Agreement, dated as of May 26, 2014, between the Registrant and Andreas Fibig, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 28, 2014.
*10.2			Supplemental Retirement Plan, incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K filed on February 27, 2008.
*10.3			2010 Stock Award and Incentive Plan, as amended and restated as of May 6, 2015, incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.4			Form of U.S. Stock Settled Appreciation Rights Agreement under the 2010 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2012.
*10.5			Form of Restricted Stock Units Agreement - Non-Employee Director under the 2010 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2012.
*10.6			Form of Long-Term Incentive Plan Award Agreement under the 2010 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K filed on February 25, 2014.
*10.7			Form of Restricted Stock Units Award Agreement under the 2010 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 6, 2014.
*10.8			Form of Equity Choice Program Award Agreement under the 2010 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on May 6, 2014.
*10.9			2015 Stock Award and Incentive Plan, as amended and restated February 7, 2017, incorporated by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2017.
*10.10			Form of Annual Incentive Plan Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.11			Form of Long-Term Incentive Plan Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.12			Form of Equity Choice Program Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.13			Form of Restricted Stock Units Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.14			Form of Non-Employee Director Restricted Stock Units Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed on May 12, 2015.
*10.15			Form of Equity Choice Program Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 9, 2015.
*10.16			Form of Long-Term Incentive Plan Award Agreement under the 2015 Stock Award and Incentive Plan, incorporated by reference to Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K filed on March 1, 2016.
*10.17			Amended and Restated Executive Severance Policy, as amended through and including November 1, 2017, incorporated by reference to Exhibit 10.17 to the Registrant's Annual Report on Form 10-K filed on February 27, 2018 (the "Executive Severance Policy").

Exhibit Number			Description
*10.18			Amendment to the Executive Severance Policy dated November 3, 2020.
*10.19			Form of Director/Officer Indemnification Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 28, 2008.
*10.20			Form of Executive Death Benefit Program - Plan Agreement, incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2012.
*10.21			Deferred Compensation Plan, as amended and restated December 12, 2011, incorporated by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K filed on February 28, 2012 (the "Deferred Compensation Plan").
*10.22			First Amendment to the Deferred Compensation Plan dated as of December 31, 2020.
10.23(i)			Credit Agreement, dated as of November 9, 2011, amended and restated as of December 2, 2016, among the Registrant, International Flavors & Fragrances (Luxembourg) S.à.r.l., International Flavors & Fragrances (Nederland) Holding B.V., International Flavors & Fragrances I.F.F. (Nederland) B.V. and International Flavors & Fragrances (Greater Asia) PTE. Ltd., as borrowers, the banks, financial institutions and other institutional lenders party thereto, and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.28 to the Registrant’s Current Report on Form 8-K filed on December 5, 2016.
10.23(ii)			Amendment No. 1 to Credit Agreement, dated as of May 21, 2018, among the Registrant, International Flavors & Fragrances (Nederland) Holding B.V., International Flavors & Fragrances I.F.F. (Nederland) B.V. and International Flavors & Fragrances (Greater Asia) PTE. Ltd., as borrowers, the lenders signatory thereto and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 24, 2018.
10.23(iii)			Amendment No. 2 to Credit Agreement, dated as of June 6, 2018, among the Registrant, International Flavors & Fragrances (Nederland) Holding B.V., International Flavors & Fragrances I.F.F. (Nederland) B.V. and International Flavors & Fragrances (Greater Asia) PTE. Ltd., as borrowers, the lenders signatory thereto and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 8, 2018.
10.23(iv)			Amendment No. 3 to Credit Agreement, dated as of July 13, 2018, among the Registrant, International Flavors & Fragrances (Nederland) Holding B.V., International Flavors & Fragrances I.F.F. (Nederland) B.V. and International Flavors & Fragrances (Greater Asia) PTE. Ltd., as borrowers, the lenders signatory thereto and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on August 7, 2018.
10.23(v)			Amendment No. 4 to Credit Agreement, dated as of January 17, 2020 among International Flavors & Fragrances Inc., International Flavors & Fragrances (Nederland) Holding B.V., International Flavors & Fragrances I.F.F. (Nederland) B.V. and International Flavors & Fragrances (Greater Asia) PTE. Ltd., as borrowers, the lenders signatory thereto and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 22, 2020.
10.23(vi)			Second Amended and Restated Credit Agreement, dated as of August 25, 2020 among International Flavors & Fragrances Inc., International Flavors & Fragrances (Nederland) Holding B.V. and International Flavors & Fragrances I.F.F. (Nederland) B.V., as borrowers, the lenders signatory thereto and Citibank, N.A. as administrative agent, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 28, 2020.
10.24(i)			Term Loan Credit Agreement, dated as of June 6, 2018, among the Registrant, as borrower, the lenders signatory thereto and Morgan Stanley Senior Funding, Inc. as administrative agent, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 8, 2018.
10.24(ii)			Amendment No 1 to Term Loan Credit Agreement, dated as of July 13, 2018, among the Registrant, as borrower, the lenders signatory thereto and Morgan Stanley Senior Funding, Inc. as administrative agent, incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed on August 7, 2018.
10.24(iii)			Amendment No. 2 to Term Loan Credit Agreement, dated as of January 17, 2020 among International Flavors & Fragrances Inc., as borrower, the lenders signatory thereto and Morgan Stanley Senior Funding, Inc. as administrative agent, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report filed on Form 8-K filed on January 22, 2020.
10.24(iv)			Amendment No. 3 to Credit Agreement, dated as of August 25, 2020 among International Flavors & Fragrances Inc., as borrower, the lenders signatory thereto and Morgan Stanley Senior Funding, Inc. as administrative agent, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on August 28, 2020.
10.25			Employee Matters Agreement, dated as of December 15, 2019, by and among DuPont de Nemours Inc., Nutrition & Biosciences, Inc. and International Flavors & Fragrances Inc, incorporated by reference to the Registrant's Current Report on Form 8-K filed on December 18, 2019.

Exhibit Number			Description
10.26(i)			Term Loan Credit Agreement, dated as of May 15, 2020 among International Flavors & Fragrances Inc., as borrower, the lenders signatory thereto and China Construction Bank Corporation, New York Branch, as administrative agent, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 21, 2020.
10.26(ii)			Amendment No. 1 to Credit Agreement, dated as of August 25, 2020, among the Company, as borrower, the lenders signatory thereto and China Construction Bank Corporation, New York Branch as administrative agent, incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on August 28, 2020.
21			List of Principal Subsidiaries.
23			Consent of PricewaterhouseCoopers LLP.
31.1			Certification of Andreas Fibig pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of Rustom Jilla pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32			Certification of Andreas Fibig and Rustom Jilla 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

____________________

*Management contract or compensatory plan or arrangement