International Flavors & Fragrances (IFF) 10-K risk factor changes: FY2022 vs FY2021

- Inflationary [removed: trends] [added: trends, including] in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial [removed: results.][added: results in the short term and result in uncertainties in the long term.]

- Supply chain disruptions, geopolitical [removed: developments] [added: developments, including the Russia-Ukraine conflict,] or climate change events [added: (including severe weather events)] may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

- The integration of the N&B Business may continue to present significant challenges, and we may not [removed: fully] realize anticipated synergies and other benefits of the N&B Transaction.

- We have a substantial amount of indebtedness that could materially adversely affect our financial [removed: condition.][added: condition and our degree of leverage could adversely affect our credit ratings.]

- [removed: Failure] [added: If we fail] to successfully [removed: establish and] [added: enter into or close strategic transactions or divestments, or successfully] manage acquisitions, collaborations, joint ventures or partnerships, [removed: or the failure to close or delays in closing strategic transactions or divestments,] [added: it] could adversely affect our [removed: growth.][added: business and growth opportunities.]

- Our business is highly competitive, and if we are unable to compete [removed: effectively] [added: effectively,] our sales and results of operations will suffer.

- Natural disasters, public health crises (such as the COVID-19 pandemic), international [removed: conflicts,] [added: conflicts (such as the Russia-Ukraine conflict), geopolitical events,] terrorist acts, labor strikes, political [removed: crisis,] [added: or economic crises (such as the uncertainty related to protracted U.S. federal debt ceiling negotiations),] accidents and other events could adversely affect our business and financial results by disrupting development, manufacturing, distribution or sale of our products.

- The [removed: expected] phase out of the London Interbank [removed: Office] [added: Offered] Rate (“LIBOR”) [removed: could] [added: may] impact the interest rates paid on our variable rate indebtedness and [added: could] cause our interest expense to increase.

- We could be adversely affected by [removed: violations] [added: violations, by us or our counterparties,] of the U.S. Foreign Corrupt Practices [removed: Act or] [added: Act,] similar U.S. or foreign anti-bribery and anti-corruption laws and [removed: regulations or] [added: regulations,] applicable sanctions laws and regulations in the jurisdictions in which we [removed: operate.][added: operate or ethical business practices and related laws and regulations.]

Inflationary [removed: trends] [added: trends, including] in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial [removed: results.][added: results in the short term and result in uncertainties in the long term.]

[removed: We] [added: As a result of the broader inflationary environment and supply chain disruptions we] have experienced, and may continue to experience, volatility and increases in the price of [added: input costs, such as] certain raw materials, transportation and energy [removed: costs as a result of global market and supply chain disruptions and the broader inflationary environment.][added: costs.]

If we are unable to increase the prices [removed: to our customers] of our products to [added: our customers to] offset inflationary cost trends, or if we are unable to achieve cost savings to offset such cost increases, we could fail to meet our cost expectations, and our profits and operating results could be adversely affected.

Increases in prices of our products to customers or the impact of the broader inflationary environment on our customers [removed: and] may lead to declines in demand and sales volumes.

Supply chain disruptions, geopolitical [removed: developments] [added: developments, including the Russia-Ukraine conflict,] or climate-change events [added: (including severe weather events)] may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

In addition, our suppliers, similar to us, are subject to risks, inherent in agriculture, manufacturing and distribution on a global scale, including industrial accidents, environmental events, climate change, strikes and other labor disputes, disruptions in supply chain or information systems, disruption or loss of key research or manufacturing sites, product quality control, safety and environmental compliance issues, licensing requirements and other regulatory issues, as well as natural disasters, global or local health [removed: crisis,] [added: crises,] international conflicts, terrorist acts, geopolitical developments, trade wars, and other external factors over which neither they nor we have control.

These suppliers [removed: also] could [added: also] become insolvent or experience other financial distress.

However, for certain of our ingredients and raw [removed: materials] [added: materials,] we rely on a limited number of suppliers where there are not readily available alternatives.

More generally, as we source many of our raw materials globally to help ensure quality control or to mitigate supply chain disruptions, we are subject to additional risks related to the increases [removed: to] [added: in] energy or transportation costs.

Energy prices are in turn subject to significant volatility caused by, among other things, market fluctuations, supply and [removed: demand,] [added: demand changes,] currency fluctuations, production and transportation disruptions, [removed: geopolitical developments,] and other world events, as well as [added: geopolitical developments and] climate change related conditions discussed above.

[removed: For instance,] [added: Geopolitical developments, such as] the Russia-Ukraine [removed: conflict] [added: conflict,] could adversely impact, among other things, our raw material, energy and transportation costs, as well as certain of our suppliers and local markets, global and local macroeconomic conditions, and cause further supply chain disruptions.

[removed: - *Supply chain-related risks:*] As a result of [removed: disruptions or uncertainty relating to] the [removed: COVID-19 pandemic,] [added: pandemic’s impact on the global supply chain,] we [removed: are experiencing,] [added: have experienced,] and may continue to experience, increased costs, delays or limited availability related to raw materials, strain on shipping and transportation resources, and higher energy prices, which have negatively [removed: impacted,] [added: impacted] and may continue to negatively impact, our margins and operating results.

[removed: - *Customer-related risks:*] We [removed: experienced,] [added: have also experienced] and may experience in the future, changes in the demand and volume for certain of our products, including due to consumption or stocking behavior changes related to the COVID-19 pandemic.

Although we do not currently anticipate any impairment charges related to COVID-19, the continuing effects of a prolonged pandemic could result in increased [removed: risk] [added: risks] to us of asset write-downs and impairments, including, but not limited to, property, plant and equipment, goodwill and other intangibles, and equity investments.

Any of these events [added: or factors] could potentially result in a material adverse impact on our business and results of operations.

We have a substantial amount of indebtedness that could materially adversely affect our financial [removed: condition.][added: condition and our degree of leverage could adversely affect our credit ratings.]

As of December 31, [removed: 2021,] [added: 2022,] our total debt was [removed: $11.400] [added: $10.970] billion.

If we are unable to maintain or improve our current investment grade [removed: rating,] [added: rating or improve our leverage,] it could adversely affect our future cost of funding, liquidity and access to capital markets.

In addition, our current level of leverage could increase our vulnerability to sustained, adverse macroeconomic weakness, limit our ability to obtain further financing, [added: decrease our flexibility in responding to or preparing for changes in the industry in which we operate] and our ability to pursue certain operational and strategic opportunities, including large acquisitions.

Our level of [removed: indebtedness] [added: indebtedness,] as well as our failure to comply with covenants under our debt instruments, could adversely affect our business, results of operation and financial condition or our ability to return capital to our shareholders and [removed: the] additional debt instruments may subject us to additional covenants.

With the completion of the N&B Transaction, our customer base has further increased significantly and, based on [removed: 2021] [added: 2022] sales, we had approximately [removed: 42,000] [added: 40,000] customers, approximately [removed: 59%] [added: 58%] of which are small and mid-sized companies.

[removed: Failure] [added: If we fail] to successfully [removed: establish and] [added: enter into or close strategic transactions or divestments, or successfully] manage acquisitions, collaborations, joint ventures or partnerships, [removed: or the failure to close strategic transactions or divestments,] [added: it] could adversely affect our [removed: growth.][added: business and growth opportunities.]

[removed: From] [added: In addition, from] time to time, we evaluate acquisition candidates that may strategically fit our business and/or growth objectives.

[removed: The] [added: Any] failure to complete or potential delays in closing any such transaction could adversely affect the development of our portfolio optimization strategy [removed: and] [added: as well as] our [removed: future growth.][added: financial condition.]

[removed: Consolidation of] [added: Moreover, there has been increased consolidation among our competitors, and such consolidation] or partnerships among our competitors may exacerbate these risks.

Attracting, developing, and retaining talented employees is essential to the successful delivery of our products and has become more difficult and costly in the current labor [removed: market with historically high employee resignations.][added: market.]

Competition for employees can be intense and if we are unable to successfully integrate, motivate and reward [removed: the acquired Frutarom employees, employees from the N&B Business or] our [removed: current employees in our combined company,] [added: employees,] we may not be able to retain them.

If we are unable to retain [removed: these] [added: our] employees or attract new employees in the future, our ability to effectively compete with our competitors and to grow our business could be adversely affected.

During [removed: 2021,] [added: 2022,] our 25 largest customers, a majority of which were multi-national consumer products companies, collectively accounted for [removed: 29%] [added: 28%] of our sales in the aggregate.

[removed: We currently spend approximately 5% of our sales on research and development; however, this] [added: This] investment level may vary in the future if available resources to invest in research and development are limited due to our ongoing integration and restructuring [removed: efforts.][added: efforts or from adverse macroeconomic or supply chain factors.]

Natural disasters, public health crises (such as the COVID-19 pandemic), international [removed: conflicts,] [added: conflicts (such as the Russia-Ukraine conflict),] geopolitical events, terrorist acts, labor strikes, political [removed: crisis,] [added: or economic crises (such as the uncertainty related to protracted U.S. federal debt ceiling negotiations),] accidents and other events could adversely affect our business and financial [removed: results] [added: results, including] by disrupting development, manufacturing, distribution or sale of our products.

- If we are unable to successfully execute the next phase of our strategic transformation, it may have a material adverse effect on our business, results of operations and financial condition.

- Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on global operations, our customers and our suppliers, which could adversely impact our business and results of operations.

The global economy experienced high rates of inflation in 2022, and such inflationary pressure is expected to generally continue in 2023 despite price decreases for certain materials and services that hit historical highs in 2022.

We might also suffer from supply disruptions from supplier exits as higher costs may become unaffordable for certain suppliers.

The significant spike in energy prices over the course of 2022, especially in Europe, has created cost pressures for us and may continue to impact our financial performance.

In addition, central banks may continue to increase interest rates or conduct other monetary policies to counter inflation, which could negatively affect our borrowing costs and those of our customers and suppliers, as well as exchange rates and other macroeconomic factors.

Increased cost volatility trends may also impact the business and financial situation of our customer or suppliers, which could in turn affect the demand or supply, respectively, by such parties.

Future inflationary and deflationary trends are beyond our control, and we may not be able to sufficiently mitigate any impact on our business and financial situation.

As the Russia-Ukraine conflict has prolonged, it continues to impact our sourcing of certain raw materials for future years, and we continue to look for alternative suppliers or adjust the types of raw materials used in our products.

If we are unable to successfully execute the next phase of our strategic transformation, it may have a material adverse effect on our business, results of operations and financial condition.

In December 2022, we announced our new strategic and financial vision previewing a refreshed strategic plan and new operating model, which among other things, consists of a renewed growth-focus strategy, enhanced cost & productivity initiatives, a redesigned operating model, a reaffirmation of our commitment to our portfolio optimization initiatives and a plan to evolve our Board in line with best-in-class governance standards, as well as certain changes to our Executive Leadership Team.

Implementing such changes can be complex, costly and time-consuming and may also result in unanticipated issues, such as additional expenses, competitive responses, employee turnover or impact on our commercial relationships.

Even if such initiatives are implemented successfully, the full benefits may not be realized or may not be realized within the desired timeframe.

The failure to meet the challenges involved in implementing our strategic transformation could result in a material adverse impact on our business, results of operations and financial condition.

On October 13, 2022, S&P Global Ratings downgraded our Local Currency LT credit rating from “BBB” to “BBB-”.

The Company does not have any rating downgrade triggers that would accelerate the maturity dates of its senior unsecured debt.

However, any downgrade in our credit rating may, depending on the extent of such downgrade, negatively impact our ability to raise additional debt capital, our liquidity and capital position, and may increase our cost of borrowing for new capital raises.

In addition, our existing Amended Revolving Credit Facility and Term Loans have pricing grids that are based on credit rating, such that our cost of borrowing may increase as our credit rating decreases.

From time to time, including as a part of our ongoing strategic transformation and our portfolio optimization strategy as discussed above, we may enter into strategic transactions or we may divest certain non-core assets.

For instance, during the third quarter of 2022, we completed the divestiture of our Microbial Control business and during the fourth quarter of 2022, we announced that we entered into an agreement for the sale our Savory Solutions business, which is expected to close in the second quarter of 2023, subject to customary closing conditions.

In addition, we have announced, as part of our strategic transformation initiatives, certain headcount reductions to re-align our workforce to match strategic and financial objectives and optimize resources for long-term growth.

Such reductions could lead to increased uncertainty, attrition or lower morale amongst those employees who are not directly affected by the headcount reductions as those reductions are being implemented, which may result in decreased productivity or could otherwise impact our results of operation.

In 2022, we spent approximately 5% of our sales on research and development, and as part of our new strategic vision announced in December 2022, we expect to continue investment in research and development and innovation initiatives.

We also may need to devote more resources to enhancing our existing product portfolios.

Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on global operations, our customers and our suppliers, which could adversely impact our business and results of operations.

The continued evolution of COVID-19 and its variants, as well as periodic spikes in infection rates, local outbreaks at our facilities, or supplier, customer or vendor facilities, in spite of safety measures or vaccinations, could cause disruptions to our operations or those of our suppliers, customers or vendors.

Additionally, as new variants of the virus appear, especially variants that are more easily spread, cause more serious outcomes, or are resistant to existing vaccines, new health orders and safety protocols could further impact our on-site operations and our ability to manufacture, ship or deliver products and solutions to customers.

We maintain operations in both Russia and Ukraine and export products to customers in Russia and Ukraine from operations outside the region.

In response to the events in Ukraine, the Company has limited the production and supply of ingredients in and to Russia to only those that meet the essential needs of people, including food, hygiene and medicine.

As a result of changes and uncertainties arising out of the Russia-Ukraine conflict, our operating performance in Russia has declined in 2022 and may not reverse in the near future.

To address the risks to our information technology systems and the associated costs, we maintain an information security program that includes updating technology and information security policies and controls, cybersecurity insurance, cybersecurity governance and compliance, employee/consultant awareness training, table-top exercises, logging and monitoring and routine testing of our information technology systems.

Additionally, continued geopolitical turmoil, including the ongoing conflict between Russia and Ukraine, heightened the risk of cyber incidents.

As we complete integration of N&B’s and Frutarom’s systems with IFF’s systems and prepare for the announced divestitures, we reduce our risk profile.

We have experienced threats to our data and our systems and although we have not experienced a material incident to date, there can be no assurance that these measures will prevent or limit the impact of a future incident.

Along with other macroeconomic uncertainty we are experiencing such as a highly inflationary global environment and supply chain disruptions discussed elsewhere in these risk factors, we have experienced and continue to expect volatility in global foreign currency exchange rates.

The expected continuing increase of interest rates by the Federal Reserve Bank to counter inflationary trends may further impact such exchange rates.

- risks and costs associated with complying with the U.S. Foreign Corrupt Practices Act, similar U.S. or foreign anti-bribery and anti-corruption laws and regulations, applicable sanctions laws and regulations in the jurisdictions in which we operate or ethical business practices and related laws and regulations;

In response, we have committed to a sustainability strategy to better understand the opportunities and risks in our sustainable efforts.

During the year ended December 31, 2022, we recorded a goodwill impairment charge of $2.250 billion, as well as an impairment charge of $120 million allocated on a pro rata basis to intangible assets and property, plant and equipment in the amounts of approximately $92 million and $28 million, respectively, in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

Refer to Part II, Item 7 and Note 1, Note 5 and Note 6 to the Consolidated Financial Statements for additional information.

- The COVID-19 pandemic may materially and adversely impact our operations, financial condition, results of operations and cash flows.

- We may not realize all the synergies and other benefits anticipated from the Frutarom acquisition, which could adversely affect our business.

For example, in 2017, a fire at the manufacturing facility of BASF Group (“BASF”), one of our suppliers, caused them to declare a force majeure event which resulted in industry disruption due to the lack of availability of certain ingredients used in many fragrance compounds.

The COVID-19 pandemic may materially and adversely impact our operations, financial condition, results of operations and cash flows.

On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic.

Since then, government and local authorities, including those in countries where we have manufacturing and other operations, have taken various measures to contain the spread of the pandemic, including the closure of non-essential businesses, reduced travel, the closure of retail establishments, the promotion of social distancing and remote working policies where appropriate.

While increase in vaccination rates and new treatment measures have proven effective to date, the COVID-19 pandemic remains a serious threat to the health of the world's population and certain countries and regions continue to suffer from outbreaks or have seen a resurgence of infections, especially with the emergence of new variants of the virus.

The continuing uncertainty related to the COVID-19 pandemic leads to continued volatility and risk of new government restrictions or market disruptions.

The scope, location and timing of such restrictions or disruptions (if any) are difficult to predict and may materially impact our operations in the future.

The pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks.

The COVID-19 pandemic has subjected and may continue to subject our operations, financial condition and results of operations to a number of risks, including, but not limited to, those discussed below:

For example, ingredients used in products sold mainly in retail outlets, such as fine fragrances or products used in retail food services, experienced a decrease in demand as these outlets closed due to COVID-19 related restrictions.

We received requests for extensions in payment terms from some customers in select markets whose products experienced reduced demand.

While conditions have since improved, any resurgence of COVID-19, new variants, or new government measures imposed, including new vaccine mandates, to manage the spread of the pandemic could further exacerbate this risk.

- *Operations-related risks:* Although our sites have restored operations to historical levels, there is a risk that our operations may be affected if employees are infected at high rates or if new restrictions are reintroduced.

While we are following the requirements of governmental authorities and taking additional protective measures (such as mandatory site guidelines and return-to-workplace protocols) to ensure the safety of our workforce, to the extent that employees in our manufacturing or distribution centers contract COVID-19, we may need to temporarily close those facilities, which may result in reduced production hours, inability to deliver products to our customers and reduced sales.

Additionally, compliance with vaccine mandates to the extent they are imposed in the jurisdictions in which we operate may lead to employee absences, resignations, or labor shortages.

Any such mandates may also affect our suppliers, which could disrupt our access to raw materials and exacerbate supply-chain related risks.

We may not realize all the synergies and other benefits anticipated from the Frutarom acquisition, which could adversely affect our business.

The full benefits of the Frutarom acquisition depend on the continuing realization of cost synergies through global footprint optimization across manufacturing, the realization of procurement synergies, organizational and operational efficiencies in overhead expenses, as well as revenue growth and synergies by leveraging customer relationships across a much broader customer base and cross-selling legacy IFF and Frutarom capabilities.

These benefits and the expected revenue growth may not be achieved within the anticipated time frame or at all.

Further, additional unanticipated costs may be incurred as we continue to work towards achieving the full cost and revenue synergies.

If the anticipated benefits from the Frutarom acquisition are not fully realized, or take longer to realize than expected, the value of our common stock, revenues, levels of expenses and results of operations may be adversely affected.

In addition, from time to time we may enter into other strategic transactions or we may sell or divest certain non-core assets as part of our portfolio optimization strategy, such as the sale of the Microbial Control business which we expect will close in the second quarter of 2022, subject to customary closing conditions.

As we work on integrating N&B’s and Frutarom’s systems with IFF’s systems, these risks may be exacerbated.

Although we have developed systems and processes that are designed to protect our data and customer data and to prevent data loss and other security breaches and expect to continue to expend additional resources to bolster these protections, these security measures cannot provide absolute security and we may be unable to detect or prevent a breach or disruption in the future.

Recently, impacts of the ongoing COVID-19 pandemic have resulted in increased volatility and economic uncertainty, and may lead to significant negative impacts on consumer spending, demand for our products, the ability for our customers to pay or our suppliers to supply, our financial condition and the financial condition of our suppliers or customers.

Even prior to COVID-19, the global economy had experienced significant recessionary pressures and declines in consumer confidence and economic growth, and if those conditions emerge again or the impact of the COVID-19 pandemic continues, our operating results and future growth may be adversely affected.

In response, we have committed to a sustainability strategy through which we continue to assess our combined environmental footprint following the N&B Transaction and the Frutarom acquisition, with the intent of identifying synergies, gaps and opportunities in our sustainability efforts.

As part of our assessment so far, we have been upgrading Frutarom’s sustainability practices to better align them to our legacy IFF practices and we are also integrating the N&B Business’ practices, both of which may require significant costs and time to implement.

Our assessment may reveal additional gaps between the N&B Business or Frutarom operations on the one hand and our sustainability practices and goals on the other hand, which may require significant costs to remedy.

Although certain financial regulators have indicated their preference for SOFR as the preferred replacement rate for LIBOR, it is unclear if other benchmarks may emerge or if other rates will be adopted.

As such, the future of LIBOR is uncertain.

We use a variety of strategies, methodologies and tools to minimize the likelihood of product or process non-compliance with these regulations and standards by (i) monitoring regulatory developments and current product standards, (ii) assessing relative risks in our supply chain, (iii) monitoring internal and external performance and (iv) testing raw materials and finished goods.

In addition, we are also the subject of a putative shareholder class action lawsuit filed in August 2019 after we disclosed that preliminary results of investigations indicated that Frutarom businesses operating principally in Russia and Ukraine had made improper payments to representatives of customers.

For example, we have completed negotiations with the Chinese government concerning the relocation of a second fragrance facility in China.

In December 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 by, among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%, limiting deductibility of interest expense and performance based incentive compensation, transitioning to a territorial system and creating new taxes associated with global operations.

In future periods, we expect that our effective tax rate will be impacted by the lower U.S. corporate tax rate that will initially be offset by the elimination of the deductibility of performance-based incentive compensation, and other provisions of the Tax Act that may impact us prospectively.

As a result of the N&B Transaction, and following our 2018 acquisition of Frutarom Industries Ltd., we have expanded our global leadership positions, which now include high-value ingredients and solutions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Taste, Texture, Scent, Nutrition, Enzymes, Cultures, Soy Proteins, Pharmaceutical [removed: Excipients, Biocides] [added: Excipients] and Probiotics categories.

We are [removed: now] organized [removed: in] [added: into] four segments: Nourish, Health & Biosciences, [removed: Scent,] [added: Scent] and Pharma Solutions.

The Company’s consolidated financial information for the year ended December 31, [removed: 2021] [added: 2022] reflects the results of N&B [removed: effective February 1, 2021,] [added: for the full twelve months of 2022,] whereas the Company’s consolidated financial information for the year ended December 31, [removed: 2020] [added: 2021 reflects the results of N&B for eleven months of 2021,] and [removed: 2019 do] [added: 2020 does] not include [added: any] amounts related to N&B.

Our Health & Biosciences segment consists of [removed: a biotechnology-driven] [added: the development and production of an advanced biotechnology-derived] portfolio of enzymes, food cultures, probiotics and specialty ingredients for [removed: food, home and personal care, and health] [added: food] and [removed: wellness] [added: non-food] applications.

Health & Biosciences is comprised of [removed: six] [added: five] business units: Health, Cultures & Food Enzymes, Home & Personal Care, Animal [removed: Nutrition, Grain Processing] [added: Nutrition] and [removed: Microbial Control.][added: Grain Processing.]

Our Pharma Solutions segment [removed: produces] [added: produces, among other things,] a vast portfolio of cellulosics and seaweed-based [removed: pharma] [added: pharmaceutical] excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical [added: finished dosage] formulations.

[removed: Pharma Solutions is comprised of N&B’s Pharma Solutions business.][added: | Pharma Solutions | | | 20 | | % | | | | NMF | | |]

[removed: Beginning in the first quarter 2021, we elected to change the method in which we] [added: We] calculate currency neutral numbers [removed: to now be calculated] by translating current year invoiced sale amounts at the exchange rates used for the corresponding prior year period.

We use currency neutral results in our analysis of subsidiary [removed: or] [added: and/or] segment performance.

We also use currency neutral numbers when analyzing our performance against our [removed: competitors and believe the change in method better allows us to do so.][added: competitors.]

Due to the Merger with N&B, for the fiscal year [removed: 2021] [added: 2022] we will not be presenting currency neutral impacts for the Nourish, Health & Biosciences and Pharma Solutions operating segments as the performance in these operating segments includes effects of N&B [removed: in 2021,] [added: for the full twelve months of 2022] while the [removed: 2020] [added: 2021] period does [removed: not] [added: not,] and thus the [removed: period’s] [added: periods’] results are not [added: equally] comparable.

The impact that COVID-19 will have on our consolidated results of operations for the remainder of [removed: 2022] [added: 2023] remains uncertain.

Due to the length and severity of [removed: COVID-19,] [added: the COVID-19 pandemic,] there is continued volatility as a result of retail and travel, consumer shopping and consumption behavior.

For more detailed information about risks related to COVID-19, refer to Item 1A, “Risk Factors” - [removed: *The] [added: *Global health crises, such as the] COVID-19 [removed: pandemic may materially] [added: pandemic, have had an impact on our supply chain] and [added: could have a material impact on global operations, our customers and our suppliers, which could] adversely impact our [removed: operations, financial condition,] [added: business and] results of [removed: operations and cash flows.*][added: operations.*]

[removed: 2021] [added: 2022] Financial Performance Overview

Sales in [removed: 2021] [added: 2022] increased [removed: $6.572 billion,] [added: $784 million,] or [removed: 129%] [added: 7%] on a reported basis, to [removed: $11.656] [added: $12.440] billion compared to [removed: $5.084] [added: $11.656] billion in the [removed: 2020] [added: 2021] period.

Our 25 largest customers accounted for approximately [removed: 29%] [added: 28%] of total sales in [removed: 2021.][added: 2022.]

In [removed: 2021,] [added: 2022,] no customer accounted for more than 10% of sales.

Gross profit in [removed: 2021] [added: 2022] increased [removed: $1.649 billion,] [added: $416 million,] or [removed: 79%] [added: 11%] on a reported basis, to [removed: $3.735] [added: $4.151] billion [removed: (32.0%] [added: (33.4%] of sales) compared to [removed: $2.086] [added: $3.735] billion [removed: (41.0%] [added: (32.0%] of sales) in the [removed: 2020] [added: 2021] period.

[removed: *Adjusted Operating EBITDA*][added: | Credit Adjusted EBITDA | | | $ | 2,523 | |]

| *(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| Net sales | | | $ | [removed: 11,656] [added: 12,440] | | | | | $ | [removed: 5,084] [added: 11,656] | | | | | $ | [removed: 5,140] [added: 5,084] | | | | | [removed: 129] [added: 7] | | % | | | | [removed: (1)] [added: 129] | | % |

| Cost of goods sold | | | [removed: 7,921] [added: 8,289] | | | | | | [removed: 2,998] [added: 7,921] | | | | | | [removed: 3,027] [added: 2,998] | | | | | | [removed: 164] [added: 5] | | % | | | | [removed: (1)] [added: 164] | | % |

| Gross profit | | | [removed: 3,735] [added: 4,151] | | | | | | [removed: 2,086] [added: 3,735] | | | | | | [removed: 2,113] [added: 2,086] | | | | | | [removed: 79] [added: 11] | | % | | | | [removed: (1)] [added: 79] | | % |

| Research and development (R&D) expenses | | | [removed: 629] [added: 603] | | | | | | [removed: 357] [added: 629] | | | | | | [removed: 346] [added: 357] | | | | | | [removed: 76] [added: (4)] | | % | | | | [removed: 3] [added: 76] | | % |

| Selling and administrative (S&A) expenses | | | [removed: 1,749] [added: 1,768] | | | | | | [removed: 949] [added: 1,749] | | | | | | [removed: 876] [added: 949] | | | | | | [removed: 84] [added: 1] | | % | | | | [removed: 8] [added: 84] | | % |

| Restructuring and other charges | | | [removed: 41] [added: 12] | | | | | | [removed: 17] [added: 41] | | | | | | [removed: 30] [added: 17] | | | | | | [removed: 141] [added: (71)] | | % | | | | [removed: (43)] [added: 141] | | % |

| Amortization of acquisition-related intangibles | | | [removed: 732] [added: 727] | | | | | | [removed: 193] [added: 732] | | | | | | 193 | | | | | | [removed: 279] [added: (1)] | | % | | | | [removed: —] [added: 279] | | % |

| (Gains) losses on sale of fixed assets | | | [removed: (1)] [added: (3)] | | | | | | [removed: 4] [added: (1)] | | | | | | [removed: 3] [added: 4] | | | | | | [removed: (125)] [added: 200] | | % | | | | [removed: 33] [added: (125)] | | % |

| Operating [added: (loss)] profit | | | [removed: 585] [added: (1,326)] | | | | | | [removed: 566] [added: 585] | | | | | | [removed: 665] [added: 566] | | | | | | [removed: 3] [added: NMF] | | [removed: %] | | | | [removed: (15)] [added: 3] | | % |

| Interest expense | | | [removed: 289] [added: 336] | | | | | | [removed: 132] [added: 289] | | | | | | [removed: 138] [added: 132] | | | | | | [removed: 119] [added: 16] | | % | | | | [removed: (4)] [added: 119] | | % |

| Other income, net | | | [removed: (58)] [added: (37)] | | | | | | [removed: (7)] [added: (58)] | | | | | | [removed: (30)] [added: (7)] | | | | | | [removed: NMF] [added: (36)] | | [added: %] | | | | [removed: (77)] [added: NMF] | | [removed: %] |

| [removed: Income] [added: (Loss) income] before taxes | | | [removed: 354] [added: (1,625)] | | | | | | [removed: 441] [added: 354] | | | | | | [removed: 557] [added: 441] | | | | | | [removed: (20)] [added: NMF] | | [removed: %] | | | | [removed: (21)] [added: (20)] | | % |

| Provision for income taxes | | | [removed: 75] [added: 239] | | | | | | [removed: 74] [added: 75] | | | | | | [removed: 97] [added: 74] | | | | | | [removed: 1] [added: 219] | | % | | | | [removed: (24)] [added: 1] | | % |

| Net [added: (loss)] income | | | [removed: 279] [added: (1,864)] | | | | | | [removed: 367] [added: 279] | | | | | | [removed: 460] [added: 367] | | | | | | [removed: (24)] [added: NMF] | | [removed: %] | | | | [removed: (20)] [added: (24)] | | % |

| Net income attributable to [removed: noncontrolling] [added: non-controlling] interest | | | [removed: 9] [added: 7] | | | | | | [removed: 4] [added: 9] | | | | | | 4 | | | | | | [removed: 125] [added: (22)] | | % | | | | [removed: —] [added: 125] | | % |

| Net [added: (loss)] income attributable to IFF [removed: stockholders] [added: shareholders] | | | $ | [removed: 270] [added: (1,871)] | | | | | $ | [removed: 363] [added: 270] | | | | | $ | [removed: 456] [added: 363] | | | | | [removed: (26)] [added: NMF] | | [removed: %] | | | | [removed: (20)] [added: (26)] | | % |

| Net [added: (loss)] income per share — diluted | | | $ | [removed: 1.10] [added: (7.32)] | | | | | $ | [removed: 3.21] [added: 1.10] | | | | | $ | [removed: 4.00] [added: 3.21] | | | | | [removed: (66)] [added: NMF] | | [removed: %] | | | | [removed: (20)] [added: (66)] | | % |

| Gross margin | | | [removed: 32.0] [added: 33.4] | | % | | | | [removed: 41.0] [added: 32.0] | | % | | | | [removed: 41.1] [added: 41.0] | | % | | | | [removed: NMF] [added: 140] | | [added: bps] | | | | [removed: (10)] [added: NMF] | | [removed: bps] |

| R&D as a percentage of sales | | | [removed: 5.4] [added: 4.8] | | % | | | | [removed: 7.0] [added: 5.4] | | % | | | | [removed: 6.7] [added: 7.0] | | % | | | | [removed: (160)] [added: (60)] | | bps | | | | [removed: 30] [added: (160)] | | bps |

Our Nourish segment consists of an innovative and broad portfolio of natural-based ingredients to enhance nutritional value, texture and functionality in a wide range of beverage, dairy, bakery, confectionery and culinary applications and consists of three business units: Ingredients, Flavors and Food Designs.

Among many other applications, this biotechnology-driven portfolio includes cultures for use in fermented foods such as yogurt, cheese and fermented beverages, probiotic strains, many with documented clinical health claims for use as dietary supplements and through industrial fermentation the production of enzymes and microorganisms that provide product and process performance benefits to household detergents, animal feed, ethanol production and brewing.

On July 1, 2022, we completed the divestiture of our Microbial Control business unit (formerly a part of the Health & Biosciences segment).

Consumer insights science and creativity are at the heart of our Scent business, and, along with our unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, and customer intimacy, we believe make us a market leader in scent products.

Our excipients are used in prescription and over-the-counter pharmaceuticals and dietary supplements.

Our Pharma Solutions products also serve a variety of other specialty and industrial end-uses including coatings, inks, electronics, agriculture, and consumer products.

Impairment of Goodwill

For the third quarter of 2022, we determined that goodwill impairment triggering events occurred for our Nourish, Health & Biosciences and Pharma Solutions reporting units, which required us to complete an interim impairment assessment.

We determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 billion in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the year ended December 31, 2022.

See “Critical Accounting Policies and Use of Estimates” and Note 6 to the Consolidated Financial Statements for additional information.

Impact of the Events in Russia and Ukraine

We maintain operations in both Russia and Ukraine and, additionally, export products to customers in Russia and Ukraine from operations outside the region.

In response to the events in Ukraine, we have limited the production and supply of ingredients in and to Russia to only those that meet the essential needs of people, including food, hygiene and medicine.

In 2021, total sales to Russian customers were approximately 2% of total sales.

For the year ended December 31, 2022, sales to Russian customers were also approximately 2% of total sales.

In 2021, total sales to Ukrainian customers were less than 1% of total sales.

For the year ended December 31, 2022, sales to Ukrainian customers were also less than 1% of total sales.

See Note 1, Note 5 and Note 6 to the Consolidated Financial Statements for additional information.

2023 Restructuring Program

In December 2022, we announced a restructuring program mainly related to headcount reduction to improve our organizational and operating structure, drive efficiencies and achieve cost savings (the “Program”).

Once the Program is finalized we expect to incur one-time costs of approximately $70 million and expect to achieve run-rate savings of approximately $100 million, with approximately $75 million targeted to be realized in 2023.

We expect to complete the program by the end of 2023.

The final amount and timing of this charge will be determined once the plan is finalized.

Sales included approximately $568 million of incremental sales attributable to N&B for the month of January in the 2022 period.

In addition, the increase in sales was primarily driven by price increases across various businesses, offset in part by the net impact of the divestiture of the Microbial Control business unit and acquisition of Health Wright Products, Inc. (“change in business portfolio mix”) and volume decreases across various businesses.

Approximately $179 million of gross profit was attributable to N&B for the month of January in the 2022 period.

The increase in gross profit was primarily driven by favorable net pricing across various businesses and the impact of N&B inventory step-up costs from the prior year period, offset in part by the change in business portfolio mix and volume decreases.

| Impairment of goodwill | | | 2,250 | | | | | | — | | | | | | — | | | | | | NMF | | | | | | NMF | | |

| Impairment of long-lived assets | | | 120 | | | | | | — | | | | | | — | | | | | | NMF | | | | | | NMF | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

2022 IN COMPARISON TO 2021

Sales included approximately $568 million of incremental sales attributable to N&B for the month of January in the 2022 period.

In addition, the increase in sales was primarily driven by price increases across various businesses, offset in part by the change in business portfolio mix and volume decreases across various businesses.

Nourish sales included approximately $293 million of incremental sales attributable to N&B for the month of January in the 2022 period.

In addition, performance in the Nourish operating segment was primarily driven by price increases, particularly in the Ingredients and Food Design business units, offset in part by volume decreases across various business units.

Health & Biosciences sales included approximately $202 million of incremental sales attributable to N&B for the month of January in the 2022 period.

The decrease in Health & Biosciences sales, excluding the impact of N&B for the month of January in the 2022 period, was primarily driven by the change in business portfolio mix, offset in part by price increases across various business units.

Performance in the Scent operating segment was driven by price and volume increases in Fragrance Compounds and price increases in Fragrance Ingredients business units, offset in part by unfavorable impacts from exchange rate variations.

Pharma Solutions sales in 2022 increased $162 million, or 20% on a reported basis, to $971 million compared to $809 million.

Our Nourish segment consists of most of our legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division.

Our Nourish business spans a diversified portfolio across natural and plant-based specialty food ingredients, flavor compounds, and savory solutions and inclusions.

Our Health & Biosciences business comprises N&B’s Health & Biosciences division (except the food protection business which is part of Nourish) in combination with the Natural Product Solutions business of legacy IFF.

Our Scent business consists of our legacy Scent segment as well as our Flavor Ingredients business, formerly part of our legacy Taste business.

Previously we calculated currency neutral numbers by comparing current year results to the prior year results restated at exchange rates in effect for the current year based on the currency of the underlying transaction.

Performance was primarily driven by $6.084 billion of incremental sales that were attributable to the inclusion of N&B, which was merged and consolidated into our results of operations effective February 1, 2021.

In addition, sales performance was driven by volume increases across the Nourish, Health & Biosciences and Scent operating segments and price increases in the Nourish segment.

The increase in gross profit was primarily driven by the inclusion of N&B, along with sales volume increases in the business.

The decrease in gross profit margin, as a percentage of sales, was due to higher input costs and difference in product portfolio mix of the new N&B Business compared to the historical IFF product portfolio mix.

Adjusted operating EBITDA in 2021 increased $1.370 billion, or 130% on a reported basis, to $2.425 billion (20.8% of sales) compared to $1.055 billion (20.8% of sales) in the 2020 period.

The increase in adjusted operating EBITDA was primarily driven by the inclusion of N&B, along with sales volume increases in the business.

Performance was primarily driven by $6.084 billion of incremental sales that was attributable to the inclusion of N&B, which was merged and consolidated into our results of operations effective February 1, 2021.

In addition, sales performance reflected volume increases for the Nourish, Health & Biosciences and Scent operating segments and price increases in the Nourish segment.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Performance in the Nourish operating segment was primarily driven by $3.082 billion of incremental sales that was attributable to the inclusion of N&B, along with volume increases, particularly in Flavors.

Performance in the Health & Biosciences operating segment was primarily driven by $2.193 billion of incremental sales that was attributable to the inclusion of N&B, as the majority of this operating segment consists of the new N&B Business.

In addition, sales performance reflected volume increases in the operating segment.

Sales growth in the Scent operating segment was primarily driven by volume increases in both Fragrance Compounds and Fragrance Ingredients.

Pharma Solutions sales in 2021 was $809 million.

This was a new operating segment of the Company as a result of the Merger with N&B and did not exist in the comparable 2020 period.

Cost of goods sold, as a percentage of sales, increased 9.0% in 2021 to 68.0% compared to 59.0% in 2020, primarily driven by higher input costs, volume increases in the business and impact of the difference in product portfolio mix of the new N&B Business compared to the historical IFF product portfolio mix.

Overall R&D expenses, as a percentage of sales, decreased 1.6% in 2021 to 5.4% compared to 7.0% in 2020.

The decrease, as a percentage of sales, in 2021 was primarily due to the impact of the Merger with N&B.

The increase in S&A expenses was primarily due to the impact of the Merger with N&B and the related transaction and integration costs consisting of legal, professional and consulting fees, as well as business divestiture costs consisting mainly of legal and professional fees and employee separation costs.

Adjusted S&A expense increased by $672 million to $1.480 billion (12.7% as a percentage of sales) in 2021 compared to $808 million (15.9% as a percentage of sales) in 2020.

Amortization expenses increased to $732 million in 2021 compared to $193 million in 2020 primarily due to the intangible assets acquired as part of the Merger with N&B (see Notes 3 and 5 for additional information).

This increase was primarily driven by the debt assumed in the Merger with N&B (see Note 9 for additional information).

Average cost of debt was 2.9% for the 2021 period and 3.0% for the 2020 period.

Other income, net, increased approximately $51 million to $58 million of income in 2021 versus $7 million of income in 2020.

The increase of $51 million includes approximately $17 million in income to correct net income amounts related to certain defined benefit plans in prior years and $13 million in gains from business disposal.

The increase also includes the impact of foreign exchange gains and higher interest income.

The year-over-year increase was largely due to an unfavorable mix of earnings, higher repatriation costs and cost of global intangible low-taxed income (“GILTI”), partially offset by tax benefits related to supply chain optimization and credits.

Excluding the $127 million tax benefit associated with the pre-tax non-GAAP adjustments, the adjusted effective tax rate for 2021 was 20.0%.

For 2020, the adjusted effective tax rate was 17.6% excluding the $33 million tax benefit associated with the pre-tax non-GAAP adjustments.

The year-over-year increase was largely due to an unfavorable mix of earnings, higher repatriation costs and cost of GILTI, partially offset by tax benefits related to supply chain optimization and credits.

Prior period amounts have been recast to reflect these changes in segment profitability measures.

As a result, we added two new reportable segments - Health & Biosciences and Pharma Solutions.

Nourish is composed of most of IFF’s legacy Taste division and N&B’s Food & Beverage division.

The Scent and Health & Biosciences segments include a component of the legacy Taste segment.

For the year ended December 31, [removed: 2021,] [added: 2022,] our exposure to market risk was estimated using sensitivity analyses, which illustrate the change in the fair value of a derivative financial instrument assuming hypothetical changes in foreign exchange rates and interest rates.

At December 31, [removed: 2021,] [added: 2022,] our foreign currency exposures pertaining to derivative contracts exist with the Euro.

Based on a hypothetical decrease or increase of 10% in the applicable balance sheet exchange rates (primarily against the U.S. dollar), the estimated fair value of our foreign currency forward contracts would increase by approximately [removed: less than $1] [added: $18] million.

As of December 31, [removed: 2021,] [added: 2022,] these swaps were in a net liability position with an aggregate fair value of [removed: $5] [added: $37] million.

Based on a hypothetical decrease or increase of 10% in the value of the U.S. dollar against the Euro, the estimated fair value of our cross currency swaps would change by approximately [removed: $32] [added: $141] million.

At December 31, [removed: 2021,] [added: 2022,] the fair value of our EUR fixed rate debt was [removed: $1.545] [added: $1.293] billion.

Based on a hypothetical decrease or increase of 10% in foreign exchange rates, the estimated fair value of our EUR fixed rate debt would change by approximately [removed: $160] [added: $115] million.

At December 31, [removed: 2021,] [added: 2022,] the fair value of our USD fixed rate debt was [removed: $8.603] [added: $6.387] billion.

Based on a hypothetical decrease or increase of 10% in interest rates, the estimated fair value of our US fixed rate debt would change by approximately [removed: $860] [added: $639] million.

We purchase certain commodities, such as natural gas, electricity, [removed: petroleum based] [added: petroleum-based] products and certain crop related items.

As a result, we hold global leadership positions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Tastes, Textures, Scents, Nutrition, Enzymes, Cultures, Soy Proteins, Pharmaceutical [removed: Excipients, Biocides] [added: Excipients] and Probiotics categories.

Sales in [removed: 2021] [added: 2022] were approximately [removed: $11.656] [added: $12.440] billion.

Based on [removed: 2021] [added: 2022] sales, approximately [removed: 41%] [added: 42% of sales] were to global consumer products companies and approximately [removed: 59%] [added: 58% of sales] were to small and mid-sized companies.

During [removed: 2021,] [added: 2022,] our 25 largest customers accounted for [removed: 29%] [added: 28%] of [removed: our] sales.

In [removed: 2021,] [added: 2022,] no customer accounted for more than 10% of sales.

Our business is geographically diverse, with sales in the U.S. representing approximately [removed: 28%] [added: 29%] of sales in [removed: 2021.][added: 2022.]

No other country represented more than [removed: 7%] [added: 6%] of sales.

Our business [added: currently] consists of four segments: Nourish, Health & Biosciences, Scent and Pharma Solutions.

We create products in our regional creative centers which allows us to satisfy local [added: customer] preferences, while also helping to ensure regulatory compliance and production standards.

We develop thousands of different Nourish [removed: offerings for our customers,] [added: offerings,] most of which are tailor-made, and we continually develop new [removed: formulas] [added: ingredients and solutions] to meet changing consumer preferences and customer needs.

Our Health & Biosciences [removed: business] [added: segment] consists of [removed: a biotechnology-driven] [added: the development and production of an advanced biotechnology-derived] portfolio of enzymes, food cultures, probiotics and specialty ingredients for [removed: food, home and personal care, and health] [added: food] and [removed: wellness] [added: non-food] applications.

Health & Biosciences is comprised of [removed: six] [added: five] business units: Health, Cultures & Food Enzymes, Home & Personal Care, Animal [removed: Nutrition, Grain Processing] [added: Nutrition] and [removed: Microbial Control.][added: Grain Processing.]

We expect that the transaction will close in the second quarter of [removed: 2022,] [added: 2023,] subject to customary closing conditions.

Such products contribute to extended shelf [removed: life] [added: life, stability, taste] and [removed: stability] [added: texture,] helping our customers to improve their product offerings.

*Home & Personal Ca*re produces enzymes for laundry and dishwashing detergents, cleaning and textiles to help enhance the product and process performance of products in the fabric and [removed: homecare,] [added: home care,] textiles and industrials and personal care markets.

Our Scent [removed: business] [added: segment] creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products.

Our creative and commercial teams within fragrance compounds are organized into two broad [removed: categories,] [added: categories:] fine fragrances and consumer fragrances.

*Fragrance [removed: Ingredients.* Fragrance ingredients] [added: Ingredients*] are natural and synthetic, and active and functional ingredients that are used internally and sold to third parties, including competitors, for use in the preparation of compounds.

Our Pharma Solutions [removed: business produces] [added: segment produces, among other things,] a vast portfolio [removed: including] [added: of] cellulosics and seaweed-based [removed: pharma] [added: pharmaceutical] excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical finished dosage [removed: formats.][added: formulations.]

As of December 31, [removed: 2021,] [added: 2022,] we employed approximately [removed: 3,400] [added: 3,200] people globally in research and development activities.

Through our global network of creative centers and application laboratories, we create or adapt the basic Nourish, Health & Biosciences, Scent and Pharma Solutions [added: products] that we have developed in the research and development process to commercialize for use in our customers’ consumer products.

As of December 31, [removed: 2021,] [added: 2022,] we purchased approximately [removed: 28,500] [added: 30,000] different raw materials sourced from an extensive network of domestic and international suppliers and distributors.

As of December 31, [removed: 2021,] [added: 2022,] we had approximately [removed: 210] [added: 220] manufacturing facilities, creative centers and application laboratories located in approximately 45 different countries.

Our major manufacturing facilities are located in the United States, The Netherlands, Spain, [removed: Great Britain,] Germany, Indonesia, Turkey, Brazil, Mexico, Slovenia, China, India, Ireland, Finland, Denmark, Belgium and Singapore.

By the completion of this initiative, targeted [removed: for] [added: to occur by] the end of [removed: 2022,] [added: 2023,] we expect to close approximately 30 manufacturing sites.

For more detailed information about risks related to our supply chain, please refer to Item 1A, “Risk Factors” – *Supply chain disruptions, geopolitical [removed: developments] [added: developments, including the Russia-Ukraine conflict,] or [removed: climate-change] [added: climate change] events [added: (including severe weather events)] may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.*

[removed: As a part of our] [added: Following the] integration with [removed: N&B,] [added: Nutrition and Biosciences, Inc. (“N&B”),] we [removed: have developed an ESG] [added: launched a refreshed and comprehensive Environmental, Social, and Governance (“ESG”)] roadmap, the [removed: 2030] ‘Do More Good Plan’ (“the Plan”), which aligns with IFF’s purpose of applying science and creativity for a better world.

To enhance accountability in line with evolving stakeholder expectations, the Company [removed: plans to launch] [added: has launched] ESG metrics tied to executive compensation, while expanding oversight for ESG at the Board of Directors level.

In [removed: 2021,] [added: 2022,] our Company continued to achieve notable recognitions in these areas.

We [removed: were named to] [added: qualified as a constituent of] the Dow Jones Sustainability Indices for the [removed: second] [added: third] consecutive year, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value.

Once again named to both the [removed: 2021] [added: 2022] World Index and the North America Index, this distinction validates IFF’s leadership position in sustainability performance and underscores our commitment to executing on key ESG priorities.

IFF was also recognized by the Human Rights Campaign as a [removed: 2021] [added: 2022] Best Place to Work for LBGTQ Equality and named among the [removed: 2021] [added: 2022] Best Places to Work for Disability Inclusion by Disability:IN, for the [removed: third] [added: fourth] and [removed: second] [added: third] consecutive years, respectively.

[removed: For the first time in 2021,] [added: In 2022,] we were [removed: also recognized by] [added: named to the] CDP [removed: as a triple A list company] [added: “A List”] for corporate transparency and action on climate [removed: change,] [added: change for the eighth consecutive year, and we also maintained a leadership position on CDP’s lists for] water [removed: stewardship] [added: security] and [removed: deforestation.][added: forests.]

IFF continues to be [removed: named one of Barron’s 100 Most Sustainable Companies and] listed in the FTSE4Good Index series as well as in the Euronext Vigeo World 120 Index for ESG performance.

For more detailed information about our ESG programs and performance, please refer to our annual [removed: sustainability] [added: ESG] report.

These agencies include (1) the Food and Drug Administration and equivalent international agencies that regulate flavors, pharmaceutical excipients and other ingredients in consumer products, (2) the Environmental Protection Agency and equivalent international agencies that regulate our manufacturing facilities, as well as fragrance products (including encapsulation [removed: systems) and microbial products,] [added: systems),] (3) the Occupational Safety and Health Administration and equivalent international agencies that regulate the working conditions in our manufacturing, research laboratories and creative centers, (4) local and international agencies that regulate trade and customs, (5) the Drug Enforcement Administration and other local or international agencies that regulate controlled chemicals that we use in our operations, (6) the Chemical Registration/Notification authorities that regulate chemicals that we use in, or transport to, the various countries in which we manufacture and/or market our products, and (7) the U.S. Department of Agriculture and equivalent international authorities with respect to, among other things, labeling of consumer products.

The broader market includes functional foods and food additives, including seasonings, texturizers, spices, [added: cultures,] enzymes, [added: probiotics,] certain food-related commodities, and fortified products, as well as natural ingredients, nutritional ingredients, supplements and active cosmetic ingredients.

Our [removed: recent] acquisitions have also expanded our reach in products within the functional food ingredient market, including ingredients focused on improving the health and wellness characteristics of a consumer good, the dietary supplement, pharmaceutical ingredient, infant nutrition markets and the cosmetic actives market.

Our main competitors consist of (1) other large global companies, such as Givaudan, Firmenich Symrise, [added: DSM,] Kerry, ADM, Novozymes, Chr.

At December 31, [removed: 2021,] [added: 2022,] we had approximately [removed: 24,000] [added: 24,600] employees worldwide, of whom approximately [removed: 5,300] [added: 5,500] are employed in the United States.

As part of our ongoing transformation and business initiatives, we intend to reorganize our segments around end markets: Food & Beverage, Household & Personal Care and Health.

Our Nourish segment consists of an innovative and broad portfolio of natural-based ingredients to enhance nutritional value, texture and functionality in a wide range of beverage, dairy, bakery, confectionery and culinary applications and consists of three business units: Ingredients, Flavors and Food Designs.

During the fourth quarter of 2022, we announced our entry into an agreement to sell the Savory Solutions Group.

Among many other applications, this biotechnology-driven portfolio includes cultures for use in fermented foods such as yogurt, cheese and fermented beverages, probiotic strains, many with documented clinical health claims for use as dietary supplements and through industrial fermentation the production of enzymes and microorganisms that provide product and process performance benefits to household detergents, animal feed, ethanol production and brewing.

On July 1, 2022, we completed the divestiture of our Microbial Control business unit (formerly a part of the Health & Biosciences segment).

Our innovation-based platforms are aligned with key consumer insight-led growth themes: improving home and personal care, empowering wellbeing and healthy lives, transforming food systems and accelerating climate solutions.

As of December 31, 2022, we have 940 granted U.S. patents, and 546 pending U.S. patent applications, as well as numerous other granted patents and pending patent applications around the world.

*Center for Commercial Excellence*

Our recently established Center for Commercial Excellence utilizes a holistic and centralized approach towards commercial execution by, among other things:

- Unlocking value through improved customer experience based on market, customer and pricing insights, digital and advanced analytics, sales enablement, and marketing excellence;

- Building further sales force capability to deliver growth targets, own the end-to-end process, and deliver sales synergies using CRM systems, pricing tools, segmentation models, commercial opportunity management, account plan development, training, and incentive plans;

- Evaluating and driving new business development opportunities, including analyzing potential markets, assessing client needs, and identifying competitor response strategies; and

- Strengthening collaboration across divisions by collecting and disseminating best practices and anchoring business decisions in data-driven insights.

Since inception of the initiative, we completed the closure of 22 sites.

The Plan includes ambitious 2030 goals across four key areas: Environmental, Social, Governance and Sustainable Solutions.

*Environmental: Climate & Planetary Health*

*Social: Equity & Wellbeing*

*Governance: Transparency & Accountability*

We were also awarded the 2022 EcoVadis Platinum sustainability rating for the second time, placing IFF among the top 1% of companies assessed.

In addition, in 2022 IFF further aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) by initiating the first phase of a climate scenario analysis to understand and quantify the potential risks and opportunities related to climate change.

Our workforce plans and talent management programs support our employees to best deliver the business strategy and ensure their development and engagement.

Our robust culture ambassador programs continue to engage a broad portion of the IFF community in building common identity and shared purpose and strengthen engagement and motivation by providing programming on IFF values and providing recognition of individuals who exemplify them.

A full portfolio of proprietary leadership development programs and an overarching talent management system is in place to support growth of leaders and at all levels.

In 2022, the IFF DE&I program continued to grow in reach and impact.

IFF was the first company ever to retain a global “Move” rating from the Edge Certified Foundation, this time across the harmonized company and 27 countries up from 22 countries.

IFF also achieved an Edge Plus rating for intersectionality inclusion.

IFF was also named for the first time to the 2022 Bloomberg Gender Equality Index recognizing, among other things, our commitment to transparency.

The AccessAbilities colleague community continued to push forward awareness and inclusive behaviors for persons with disabilities.

Our safety management system is based on U.S. Occupational Safety and Health Administration (“OSHA”) standards which apply to all of our sites in conjunction with any local regulations.

In response to the novel coronavirus (“COVID-19”) pandemic, and while following the requirements of local authorities, we have developed protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location.

| Ana Paula Mendonça | | | | | | 54 | | | | | | Senior Vice President, Commercial Excellence | | |

Ms. Borg joined IFF from Bunge Limited, where she served as Chief Human Resources and Communications Officer since 2016.

Prior to joining Bunge, she served in a variety of business leadership and Human Resources roles in Australia, Switzerland and the U.S. for Dow Chemical between 2000 and 2015.

She began her career at General Motors Australia.

Previously, Mr. Finzel served as Vice President of Integrated Supply Chain for Honeywell International Performance Materials and Technologies Business Group in Houston since 2020.

Prior to that, he served as Vice President of Integrated Supply Chain for Honeywell International Building Technologies Business Group from July 2017 to March 2020.

He first joined Honeywell in Germany as an operations manager in 1999, and held various roles of increasing responsibility and scope in Europe and the U.S. Prior to joining Honeywell, he worked in research and plant management roles for Hoechst AG.

*Ana Paula Mendonça* has served as our Senior Vice President, Commercial Excellence since December 2022.

Prior to that, she served as Vice President, President Global Ingredients & Regional General Manager, North America, Consumer Fragrances since February 2022, and, before that, as Vice President, Regional General Manager, North America, Consumer Fragrances since January 2016.

Ms. Mendonça joined IFF more than 30 years ago, and her broad experience expands across Category Management (Fine Fragrance, Home, Fabric, and Beauty), Global Marketing, and Product Innovation.

On February 1, 2021, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) with DuPont de Nemours, Inc. (“DuPont”), a wholly owned subsidiary of IFF merged with and into Nutrition & Biosciences, Inc. (“N&B”), a subsidiary of DuPont holding its Nutrition and Biosciences business (the “N&B Business,” and such transaction, the “N&B Transaction”).

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.

Our audited consolidated financial information in this report for 2021 includes the results of the N&B Business effective February 1, 2021, whereas the Company’s consolidated financial information for the prior years do not include amounts related to N&B.

While we are a global leader, our Nourish business operates regionally, with different formulas that reflect local taste preferences.

Our Nourish segment consists of most of our legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division.

Our Nourish business spans a diversified portfolio across natural and plant-based specialty food ingredients, flavor compounds, and savory solutions and inclusions and consists of three business units: Ingredients, Flavors and Food Designs.

Our Health & Biosciences business comprises N&B’s Health & Biosciences division (except the food protection business which is part of Nourish) in combination with the Natural Product Solutions business of legacy IFF.

During the third quarter of 2021, we entered into an agreement to divest the Microbial Control business.

*Microbial Control* produces biocides for controlling microbial populations for oil and gas production, home and personal care and industrial preservation markets.

Our Scent business consists of our legacy Scent segment as well as our Flavor Ingredients business, formerly part of our legacy Taste business.

Pharma Solutions is comprised of N&B’s Pharma Solutions business.

As of December 31, 2021, we have been granted 1,346 patents in the United States, since 2000, and have 608 pending patent applications.

Between 2019 and 2020, the Company completed the closure of 21 sites.

During 2021, the Company completed the closure of one site.

Since the N&B Transaction, we have been working to integrate all aspects of environmental, social and governance (ESG) topics into a combined program.

The Plan includes four key focus areas:

*Environmental*

*Social*

*Governance*

IFF remains on track to increase our transparency in disclosures and key performance indicators.

In 2021, we implemented an employee engagement initiative through our cultural ambassador program to build a common identity and shared purpose, drive positive organizational change, strengthen engagement and motivation.

Cultural ambassadors were nominated by each site and led programs and sessions on promotion of the IFF values and recognition of individuals who exemplified such values.

To date, approximately half of the IFF employees world-wide have attended such sessions.

In 2021, our primary focus was harmonizing the two corresponding DE&I programs from the legacy N&B and IFF organizations.

We reorganized IFF’s DE&I Steering Committee to ensure there was equitable representation of our employee population, including heritage N&B colleagues.

We were also excited to launch our newest communities, such as Asian Colleagues for Equity, Empowerment, & Excellence, IFFers UNIDOS, and AccessAbility.

Our safety management system in each country is based on local regulations.

In the absence of country-specific requirements, IFF guidelines are implemented, which are based on U.S. Occupational Safety and Health Administration (“OSHA”) standards.

In response to the novel coronavirus (“COVID-19”) pandemic, we have been following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce.

Moreover, we have developed return-to-workplace protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location and to promote an orderly and phased return for employees who have been working from home.

| Nicolas Mirzayantz | | | | | | 59 | | | | | | President, Nourish | | |

*Nicolas Mirzayantz* has served as our President, Nourish since September 2021 and, previously, as President, Scent since October 2018.

Mr. Mirzayantz originally joined our Company in 1988 and was our Group President, Fragrances from January 2007 to October 2018.

Mr. Mirzayantz has also served as a member of our Temporary Office of the Chief Executive Officer, our Senior Vice President, Fine Fragrance and Beauty Care and Regional Manager, North America, our Senior Vice President, Fine Fragrance and Beauty Care, and our Vice President Global Fragrance Business Development.

Prior to his current role, Mr. Fortanet held various leadership positions within the Company, including serving as Frutarom Integration lead and Senior Vice President, Operations, Vice President, Global Manufacturing Compounding, Vice President, Global Manufacturing, Regional Director of North America Operations, the Project Manager of a special project in Ireland, and as Plant Manager in Hazlet, New Jersey.

Mr. Fortanet started his career in IFF-Mexico.

From November 2016 to February 2021, Dr. Suarez-Gonzalez served as our Executive Vice President, Chief Human Resources Officer.

From 2014 to 2016, Dr. Suarez-Gonzalez was Senior Vice President, Global Operations & Centers Expertise, Human Resources of Fluor Corporation, an engineering construction company.

Dr. Suarez-Gonzalez began her career at Fluor Corporation in 1991, and during her 25 years with the company, she held various leadership positions across several business groups and functions including construction, marketing, sales, project engineering and human resources.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

The aggregate market value of the voting stock held by non-affiliates of the Registrant was [removed: $37,208,150,825] [added: $30,369,016,357] as of June 30, [removed: 2021.][added: 2022.]

As of February 21, [removed: 2022,] [added: 2023,] there were [removed: 254,684,699] [added: 255,061,711] shares of the registrant’s common stock, par value 12 1/2¢ per share, outstanding.

Portions of the registrant’s proxy statement for the [removed: 2022] [added: 2023] Annual Meeting of Shareholders (the “IFF [removed: 2022] [added: 2023] Proxy Statement”) are incorporated by reference in Part III of this Form 10-K.

| ITEM 1. | | | [removed: [Business](#ibcaddae13181485e82231a8f342b28c7_13)] [added: [Business](#i03de90bde21b4b93bcea41cbf259f7f5_13)] | | | [removed: [3](#ibcaddae13181485e82231a8f342b28c7_13)] [added: [3](#i03de90bde21b4b93bcea41cbf259f7f5_13)] | | |

| ITEM 1A. | | | [Risk [removed: Factors](#ibcaddae13181485e82231a8f342b28c7_16)] [added: Factors](#i03de90bde21b4b93bcea41cbf259f7f5_16)] | | | [removed: [12](#ibcaddae13181485e82231a8f342b28c7_16)] [added: [12](#i03de90bde21b4b93bcea41cbf259f7f5_16)] | | |

| ITEM 1B. | | | [Unresolved Staff [removed: Comments](#ibcaddae13181485e82231a8f342b28c7_19)] [added: Comments](#i03de90bde21b4b93bcea41cbf259f7f5_19)] | | | [removed: [29](#ibcaddae13181485e82231a8f342b28c7_19)] [added: [31](#i03de90bde21b4b93bcea41cbf259f7f5_19)] | | |

| ITEM 2. | | | [removed: [Properties](#ibcaddae13181485e82231a8f342b28c7_22)] [added: [Properties](#i03de90bde21b4b93bcea41cbf259f7f5_22)] | | | [removed: [29](#ibcaddae13181485e82231a8f342b28c7_22)] [added: [31](#i03de90bde21b4b93bcea41cbf259f7f5_22)] | | |

| ITEM 3. | | | [Legal [removed: Proceedings](#ibcaddae13181485e82231a8f342b28c7_25)] [added: Proceedings](#i03de90bde21b4b93bcea41cbf259f7f5_25)] | | | [removed: [29](#ibcaddae13181485e82231a8f342b28c7_25)] [added: [31](#i03de90bde21b4b93bcea41cbf259f7f5_25)] | | |

| ITEM 4. | | | [Mine Safety [removed: Disclosures](#ibcaddae13181485e82231a8f342b28c7_28)] [added: Disclosures](#i03de90bde21b4b93bcea41cbf259f7f5_28)] | | | [removed: [29](#ibcaddae13181485e82231a8f342b28c7_28)] [added: [31](#i03de90bde21b4b93bcea41cbf259f7f5_28)] | | |

| ITEM 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ibcaddae13181485e82231a8f342b28c7_34)] [added: Securities](#i03de90bde21b4b93bcea41cbf259f7f5_34)] | | | [removed: [29](#ibcaddae13181485e82231a8f342b28c7_34)] [added: [31](#i03de90bde21b4b93bcea41cbf259f7f5_34)] | | |

| ITEM 6. | | | [removed: [\[Reserved\]](#ibcaddae13181485e82231a8f342b28c7_37)] [added: [\[Reserved\]](#i03de90bde21b4b93bcea41cbf259f7f5_37)] | | | [removed: [31](#ibcaddae13181485e82231a8f342b28c7_37)] [added: [32](#i03de90bde21b4b93bcea41cbf259f7f5_37)] | | |

| ITEM 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ibcaddae13181485e82231a8f342b28c7_40)] [added: Operations](#i03de90bde21b4b93bcea41cbf259f7f5_40)] | | | [removed: [31](#ibcaddae13181485e82231a8f342b28c7_40)] [added: [32](#i03de90bde21b4b93bcea41cbf259f7f5_40)] | | |

| ITEM 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ibcaddae13181485e82231a8f342b28c7_58)] [added: Risk](#i03de90bde21b4b93bcea41cbf259f7f5_58)] | | | [removed: [46](#ibcaddae13181485e82231a8f342b28c7_58)] [added: [48](#i03de90bde21b4b93bcea41cbf259f7f5_58)] | | |

| ITEM 8. | | | [Financial Statements and Supplementary [removed: Data](#ibcaddae13181485e82231a8f342b28c7_61)] [added: Data](#i03de90bde21b4b93bcea41cbf259f7f5_61)] | | | [removed: [47](#ibcaddae13181485e82231a8f342b28c7_61)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_61)] | | |

| ITEM 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ibcaddae13181485e82231a8f342b28c7_64)] [added: Disclosure](#i03de90bde21b4b93bcea41cbf259f7f5_64)] | | | [removed: [47](#ibcaddae13181485e82231a8f342b28c7_64)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_64)] | | |

| ITEM 9A. | | | [Controls and [removed: Procedures](#ibcaddae13181485e82231a8f342b28c7_67)] [added: Procedures](#i03de90bde21b4b93bcea41cbf259f7f5_67)] | | | [removed: [47](#ibcaddae13181485e82231a8f342b28c7_67)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_67)] | | |

| ITEM 9B. | | | [Other [removed: Information](#ibcaddae13181485e82231a8f342b28c7_70)] [added: Information](#i03de90bde21b4b93bcea41cbf259f7f5_70)] | | | [removed: [48](#ibcaddae13181485e82231a8f342b28c7_70)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_70)] | | |

| ITEM 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#ibcaddae13181485e82231a8f342b28c7_1979)] [added: Inspections](#i03de90bde21b4b93bcea41cbf259f7f5_73)] | | | [removed: [48](#ibcaddae13181485e82231a8f342b28c7_1979)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_73)] | | |

| ITEM 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ibcaddae13181485e82231a8f342b28c7_76)] [added: Governance](#i03de90bde21b4b93bcea41cbf259f7f5_79)] | | | [removed: [48](#ibcaddae13181485e82231a8f342b28c7_76)] [added: [49](#i03de90bde21b4b93bcea41cbf259f7f5_79)] | | |

| ITEM 11. | | | [Executive [removed: Compensation](#ibcaddae13181485e82231a8f342b28c7_79)] [added: Compensation](#i03de90bde21b4b93bcea41cbf259f7f5_82)] | | | [removed: [48](#ibcaddae13181485e82231a8f342b28c7_79)] [added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_82)] | | |

| ITEM 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ibcaddae13181485e82231a8f342b28c7_82)] [added: Matters](#i03de90bde21b4b93bcea41cbf259f7f5_85)] | | | [removed: [49](#ibcaddae13181485e82231a8f342b28c7_82)] [added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_85)] | | |

| ITEM 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#ibcaddae13181485e82231a8f342b28c7_85)] [added: Independence](#i03de90bde21b4b93bcea41cbf259f7f5_88)] | | | [removed: [49](#ibcaddae13181485e82231a8f342b28c7_85)] [added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_88)] | | |

| ITEM 14. | | | [Principal Accountant Fees and [removed: Services](#ibcaddae13181485e82231a8f342b28c7_88)] [added: Services](#i03de90bde21b4b93bcea41cbf259f7f5_91)] | | | [removed: [49](#ibcaddae13181485e82231a8f342b28c7_88)] [added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_91)] | | |

| ITEM 15. | | | [Exhibits and Financial Statement [removed: Schedules](#ibcaddae13181485e82231a8f342b28c7_94)] [added: Schedules](#i03de90bde21b4b93bcea41cbf259f7f5_97)] | | | [removed: [49](#ibcaddae13181485e82231a8f342b28c7_94)] [added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_97)] | | |

| ITEM 16. | | | [Form 10-K [removed: Summary](#ibcaddae13181485e82231a8f342b28c7_223)] [added: Summary](#i03de90bde21b4b93bcea41cbf259f7f5_205)] | | | [removed: [113](#ibcaddae13181485e82231a8f342b28c7_223)] [added: [115](#i03de90bde21b4b93bcea41cbf259f7f5_205)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

| [SIGNATURES](#i03de90bde21b4b93bcea41cbf259f7f5_208) | | | | | | [116](#i03de90bde21b4b93bcea41cbf259f7f5_208) | | |

| [SIGNATURES](#ibcaddae13181485e82231a8f342b28c7_226) | | | | | | [114](#ibcaddae13181485e82231a8f342b28c7_226) | | |

Our principal owned and leased properties as of December 31, [removed: 2021,] [added: 2022,] are as follows:

| Plant | | | [removed: 50] [added: 48] | | | | | | [removed: 13] [added: 20] | | | | | | [removed: 22] [added: 24] | | | | | | [removed: 14] [added: 13] | | | | | | [removed: 26] [added: 22] | | | | | | [removed: 11] [added: 12] | | | | | | [removed: 17] [added: 18] | | | | | | 5 | | |

| Office | | | [removed: 2] [added: 3] | | | | | | [removed: 70] [added: 77] | | | | | | [removed: 2] [added: —] | | | | | | [removed: 13] [added: 7] | | | | | | [removed: 2] [added: 4] | | | | | | [removed: 34] [added: 37] | | | | | | — | | | | | | [removed: 9] [added: 8] | | |

| Laboratory | | | 7 | | | | | | 16 | | | | | | [removed: —] [added: 1] | | | | | | [removed: 11] [added: 15] | | | | | | — | | | | | | [removed: 13] [added: 16] | | | | | | 2 | | | | | | 2 | | |

| Warehouse | | | [removed: —] [added: 1] | | | | | | 12 | | | | | | — | | | | | | [removed: 10] [added: 11] | | | | | | [removed: 3] [added: —] | | | | | | 3 | | | | | | 3 | | | | | | [removed: 9] [added: 11] | | |

| Other | | | [removed: 1] [added: 5] | | | | | | [removed: —] [added: 5] | | | | | | — | | | | | | [removed: —] [added: 8] | | | | | | [removed: 3] [added: 11] | | | | | | [removed: —] [added: 4] | | | | | | [removed: —] [added: 3] | | | | | | 4 | | |

| | | | 64 | | | | | | 130 | | | | | | 25 | | | | | | 54 | | | | | | 37 | | | | | | 72 | | | | | | 26 | | | | | | 30 | | |

| | | | 60 | | | | | | 111 | | | | | | 24 | | | | | | 48 | | | | | | 34 | | | | | | 61 | | | | | | 22 | | | | | | 29 | | |

| Title of Class | | | | | | Number of shareholders of record as of February 21, [removed: 2022] [added: 2023] | | |

| Common stock, par value 12 1/2¢ per share | | | | | | [removed: 3,527] [added: 3,431] | | |

The following graph compares a shareholder’s cumulative total return for the last five fiscal years as if such amounts had been invested in: (i) our common stock; (ii) the stocks included in the S&P 500 Index; [removed: and] (iii) [removed: a customized Peer Group.][added: the stocks included in the S&P 500 Consumer Staples Index; and (iv) the stocks included in the S&P 500 Specialty Chemicals Index.]

The total return assumes that dividends were reinvested daily and is based on a $100 investment on December 31, [removed: 2016.][added: 2017.]

[removed: ][added: ]

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Year-end Data | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | |

| International Flavors & Fragrances | | | $ | 100.00 | | $ | 89.90 | | $ | 88.38 | | $ | 76.59 | | $ | 108.41 | | $ | 77.68 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 95.62 | | $ | 125.72 | | $ | 148.85 | | $ | 191.58 | | $ | 156.88 | |

| S&P 500 Consumer Staples Index | | | $ | 100.00 | | $ | 91.62 | | $ | 116.92 | | $ | 129.48 | | $ | 153.60 | | $ | 152.65 | |

| S&P 500 Specialty Chemicals Index | | | $ | 100.00 | | $ | 94.27 | | $ | 111.49 | | $ | 130.63 | | $ | 168.56 | | $ | 122.29 | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

Due to the international scope and breadth of our business, we believe that a Peer Group comprising international public companies, which are representative of the customer group to which we sell our products, is the most appropriate group against which to compare shareholder returns.

See the table below for the list of companies included in our Peer Group.

| Peer Group Companies | | | | | | | | |

| Campbell Soup Company | | | The Estée Lauder Companies Inc. | | | McCormick & Company, Incorporated | | |

| Church & Dwight Co., Inc. | | | General Mills, Inc. | | | Nestle SA | | |

| The Clorox Company | | | Givaudan SA | | | PepsiCo, Inc. | | |

| The Coca-Cola Company | | | The Hershey Company | | | The Procter & Gamble Company | | |

| Colgate-Palmolive Company | | | Hormel Foods Corporation | | | Symrise AG | | |

| Conagra Brands, Inc. | | | Kellogg Company | | | Unilever N.V. | | |

| Danone SA | | | L'Oreal SA | | | | | |

See index to Consolidated Financial Statements on page [removed: [49](#ibcaddae13181485e82231a8f342b28c7_91).][added: [50](#i03de90bde21b4b93bcea41cbf259f7f5_94).]

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, management determined that, as of December 31, [removed: 2021,] [added: 2022,] our internal control over financial reporting was effective.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] as stated in their report which is included herein.

The information relating to directors and nominees of the Company is set forth in the IFF [removed: 2022] [added: 2023] Proxy Statement and is incorporated by reference herein.

The information relating to Section 16(a) beneficial ownership reporting compliance that appears in the IFF [removed: 2022] [added: 2023] Proxy Statement is also incorporated by reference herein.

The information regarding the Company’s Audit Committee and its designated audit committee financial experts is set forth in the IFF [removed: 2022] [added: 2023] Proxy Statement and such information is incorporated by reference herein.

The information concerning procedures by which shareholders may recommend director nominees is set forth in the IFF [removed: 2022] [added: 2023] Proxy Statement and such information is incorporated by reference herein.

The items required by Part III, Item 11 are incorporated herein by reference from the IFF [removed: 2022] [added: 2023] Proxy Statement to be filed on or before April [removed: 29, 2022.][added: 28, 2023, except as to information required pursuant to Item 402(v) of Regulation S-K relating to pay versus performance.]

The items required by Part III, Item 12 are incorporated herein by reference from the IFF [removed: 2022] [added: 2023] Proxy Statement to be filed on or before April [removed: 29, 2022.][added: 28, 2023.]

The items required by Part III, Item 13 are incorporated herein by reference from the IFF [removed: 2022] [added: 2023] Proxy Statement to be filed on or before April [removed: 29, 2022.][added: 28, 2023.]

The items required by Part III, Item 14 are incorporated herein by reference from the IFF [removed: 2022] [added: 2023] Proxy Statement to be filed on or before April [removed: 29, 2022.][added: 28, 2023.]

| [Report of Independent Registered Public Accounting [removed: Firm](#ibcaddae13181485e82231a8f342b28c7_97)] [added: Firm](#i03de90bde21b4b93bcea41cbf259f7f5_100)] (PCAOB ID: 238) | | | [removed: [50](#ibcaddae13181485e82231a8f342b28c7_97)] [added: [51](#i03de90bde21b4b93bcea41cbf259f7f5_100)] | | |

| [Consolidated [removed: Statement](#ibcaddae13181485e82231a8f342b28c7_100)[s](#ibcaddae13181485e82231a8f342b28c7_100) [of Income] [added: Statements of](#i03de90bde21b4b93bcea41cbf259f7f5_103) [(Loss)](#i03de90bde21b4b93bcea41cbf259f7f5_103) [Income] and [removed: Comprehensive Income] [added: Comprehensive](#i03de90bde21b4b93bcea41cbf259f7f5_103) [(Loss)](#i03de90bde21b4b93bcea41cbf259f7f5_103) [](#i03de90bde21b4b93bcea41cbf259f7f5_103)[Income] for the years ended December 31, [removed: 202](#ibcaddae13181485e82231a8f342b28c7_100)[1](#ibcaddae13181485e82231a8f342b28c7_100)[, 20](#ibcaddae13181485e82231a8f342b28c7_100)[20](#ibcaddae13181485e82231a8f342b28c7_100) [and 20](#ibcaddae13181485e82231a8f342b28c7_100)[19](#ibcaddae13181485e82231a8f342b28c7_100)] [added: 202](#i03de90bde21b4b93bcea41cbf259f7f5_103)[2](#i03de90bde21b4b93bcea41cbf259f7f5_103)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_103)[1](#i03de90bde21b4b93bcea41cbf259f7f5_103) [and](#i03de90bde21b4b93bcea41cbf259f7f5_103) [20](#i03de90bde21b4b93bcea41cbf259f7f5_103)[20](#i03de90bde21b4b93bcea41cbf259f7f5_103)] | | | [removed: [53](#ibcaddae13181485e82231a8f342b28c7_100)] [added: [53](#i03de90bde21b4b93bcea41cbf259f7f5_103)] | | |

| [Consolidated Balance [removed: Sheet](#ibcaddae13181485e82231a8f342b28c7_103)[s](#ibcaddae13181485e82231a8f342b28c7_103) [as] [added: Sheets as] of December 31, [removed: 202](#ibcaddae13181485e82231a8f342b28c7_103)[1](#ibcaddae13181485e82231a8f342b28c7_103) [and](#ibcaddae13181485e82231a8f342b28c7_103) [20](#ibcaddae13181485e82231a8f342b28c7_103)[20](#ibcaddae13181485e82231a8f342b28c7_103)] [added: 202](#i03de90bde21b4b93bcea41cbf259f7f5_106)[2](#i03de90bde21b4b93bcea41cbf259f7f5_106) [and 20](#i03de90bde21b4b93bcea41cbf259f7f5_106)[21](#i03de90bde21b4b93bcea41cbf259f7f5_106)] | | | [removed: [54](#ibcaddae13181485e82231a8f342b28c7_103)] [added: [54](#i03de90bde21b4b93bcea41cbf259f7f5_106)] | | |

| [Consolidated [removed: Statement](#ibcaddae13181485e82231a8f342b28c7_109)[s](#ibcaddae13181485e82231a8f342b28c7_109) [of] [added: Statements of] Cash Flows for the years ended December 31, [removed: 202](#ibcaddae13181485e82231a8f342b28c7_109)[1](#ibcaddae13181485e82231a8f342b28c7_109)[, 20](#ibcaddae13181485e82231a8f342b28c7_109)[20](#ibcaddae13181485e82231a8f342b28c7_109)] [added: 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[2](#i03de90bde21b4b93bcea41cbf259f7f5_112)[2](#i03de90bde21b4b93bcea41cbf259f7f5_112)[, 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[21](#i03de90bde21b4b93bcea41cbf259f7f5_112)] [and [removed: 201](#ibcaddae13181485e82231a8f342b28c7_109)[9](#ibcaddae13181485e82231a8f342b28c7_109)] [added: 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[20](#i03de90bde21b4b93bcea41cbf259f7f5_112)] | | | [removed: [55](#ibcaddae13181485e82231a8f342b28c7_109)] [added: [55](#i03de90bde21b4b93bcea41cbf259f7f5_112)] | | |

| [Consolidated [removed: Statement](#ibcaddae13181485e82231a8f342b28c7_112)[s](#ibcaddae13181485e82231a8f342b28c7_112) [of] [added: Statements of] Shareholders’ Equity for the years ended December 31, [removed: 202](#ibcaddae13181485e82231a8f342b28c7_112)[1](#ibcaddae13181485e82231a8f342b28c7_112)[, 20](#ibcaddae13181485e82231a8f342b28c7_112)[20](#ibcaddae13181485e82231a8f342b28c7_112)] [added: 202](#i03de90bde21b4b93bcea41cbf259f7f5_115)[2](#i03de90bde21b4b93bcea41cbf259f7f5_115)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_115)[1](#i03de90bde21b4b93bcea41cbf259f7f5_115)] [and [removed: 201](#ibcaddae13181485e82231a8f342b28c7_112)[9](#ibcaddae13181485e82231a8f342b28c7_112)] [added: 20](#i03de90bde21b4b93bcea41cbf259f7f5_115)[20](#i03de90bde21b4b93bcea41cbf259f7f5_115)] | | | [removed: [56](#ibcaddae13181485e82231a8f342b28c7_112)] [added: [56](#i03de90bde21b4b93bcea41cbf259f7f5_115)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ibcaddae13181485e82231a8f342b28c7_118)] [added: Statements](#i03de90bde21b4b93bcea41cbf259f7f5_121)] | | | [removed: [57](#ibcaddae13181485e82231a8f342b28c7_118)] [added: [57](#i03de90bde21b4b93bcea41cbf259f7f5_121)] | | |

| [Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, [removed: 202](#ibcaddae13181485e82231a8f342b28c7_229)[1](#ibcaddae13181485e82231a8f342b28c7_229)[, 20](#ibcaddae13181485e82231a8f342b28c7_229)[20](#ibcaddae13181485e82231a8f342b28c7_229)] [added: 202](#i03de90bde21b4b93bcea41cbf259f7f5_211)[2](#i03de90bde21b4b93bcea41cbf259f7f5_211)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_211)[1](#i03de90bde21b4b93bcea41cbf259f7f5_211)] [and [removed: 201](#ibcaddae13181485e82231a8f342b28c7_229)[9](#ibcaddae13181485e82231a8f342b28c7_229)] [added: 20](#i03de90bde21b4b93bcea41cbf259f7f5_211)[20](#i03de90bde21b4b93bcea41cbf259f7f5_211)] | | | [removed: [S-1](#ibcaddae13181485e82231a8f342b28c7_229)] [added: [S-1](#i03de90bde21b4b93bcea41cbf259f7f5_211)] | | |

We have audited the accompanying consolidated balance sheets of International Flavors & Fragrances Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: January 1,] 2021, and the related consolidated statements of [added: (loss)] income and comprehensive [removed: income (loss),] [added: (loss) income,] of shareholders' equity and of cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] 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 December 31, [removed: 2021,] [added: 2022,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: 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 December 31, [removed: 2021] [added: 2022] and [removed: January 1,] 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] 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 December 31, [removed: 2021,] [added: 2022,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the COSO.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: 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 [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

The fair value of [removed: the] intangible assets [removed: is] [added: was] generally determined using an income method (specifically, for customer relationships, the multi-period excess earnings method), which [removed: is] [added: was] based on forecasts of the expected future cash flows attributable to the respective assets.

Significant estimates and assumptions inherent in the valuations [removed: reflect] [added: reflected] a consideration of other market participants, and [removed: include] [added: included] the amount and timing of future cash flows (including revenue growth rates, gross [removed: margins,] [added: margins] and operating expenses), [added: royalty rates used in the relief from royalty method,] customer attrition rates, [added: product obsolescence factors,] a brand’s relative market position and the discount rates applied to the cash flows.

The principal considerations for our determination that performing procedures relating to the [removed: valuation] [added: interim goodwill impairment assessment] of the [removed: customer relationships intangible assets acquired in connection with the merger with N&B] [added: Health & Biosciences reporting unit] is a critical audit matter are (i) the significant judgment by management when [removed: determining] [added: developing] the fair value [added: estimate] of the [removed: customer relationships intangible assets acquired;] [added: Health & Biosciences reporting unit;] (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, gross margins, [removed: customer attrition rates,] [added: EBITDA margins, terminal growth rate,] and [removed: the] discount [removed: rates;] [added: rate;] and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to [removed: the acquisition accounting,] [added: management’s interim goodwill impairment assessment,] including controls over [removed: management’s] [added: the] valuation of the [removed: customer relationships intangible assets.][added: Health & Biosciences reporting unit.]

These procedures also included, among others (i) [removed: reading the merger agreement; (ii)] testing management’s process for [removed: determining] [added: developing] the fair value [added: estimate] of the [removed: customer relationships intangible assets acquired; (iii)] [added: Health & Biosciences reporting unit; (ii)] evaluating the appropriateness of the [removed: multi-period excess earnings] [added: discounted cash flow] method; [removed: (iv)] [added: (iii)] testing the completeness and accuracy of the underlying data used in the [removed: multi-period excess earnings] [added: discounted cash flow] method; and [removed: (v)] [added: (iv)] evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, gross margins, [removed: customer attrition rates,] [added: EBITDA margins, terminal growth rate,] and [removed: the] discount [removed: rates.][added: rate.]

Evaluating management’s significant assumptions related to revenue growth [removed: rates and] [added: rates,] gross [added: margins, and EBITDA] margins involved evaluating whether the [removed: significant] assumptions used by management were reasonable considering (i) the current and past performance of [removed: N&B;] [added: the Health & Biosciences reporting unit;] (ii) the consistency with external market and industry data; and (iii) whether these [removed: significant] assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the [removed: multi-period excess earnings] [added: discounted cash flow] method and (ii) the reasonableness of the significant assumptions related to [removed: customer attrition rates and] the [added: terminal growth rate and] discount [removed: rates.][added: rate.]

[removed: *Goodwill] [added: *Interim Goodwill] Impairment Assessment - [removed: Pharma Solutions] [added: Health & Biosciences] Reporting Unit*

As described in Notes 1 and [removed: 5] [added: 6] to the consolidated financial statements, the Company’s goodwill balance was [removed: $16.414] [added: $13.355] billion as of December 31, [removed: 2021,] [added: 2022,] and the goodwill related to the [removed: Pharma Solutions reporting unit] [added: Health & Biosciences reportable segment] was [removed: $1.282] [added: $4.321] billion.

Management assessed the fair value of the reporting units [removed: primarily] using an income approach.

Under the income approach, management [removed: determines] [added: determined] 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.

Key estimates and assumptions used in these valuations include revenue growth [removed: rates and] [added: rates,] gross [removed: margins based on internal forecasts and historical operating trends of the Company,] [added: margins, EBITDA margins, terminal growth rates] and discount rates.

CONSOLIDATED STATEMENTS OF [added: (LOSS)] INCOME AND COMPREHENSIVE [removed: INCOME (LOSS)][added: (LOSS) INCOME]

| *(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net sales | | | $ | [removed: 11,656] [added: 12,440] | | | | | $ | [removed: 5,084] [added: 11,656] | | | | | $ | [removed: 5,140] [added: 5,084] | |

| Cost of goods sold | | | [removed: 7,921] [added: 8,289] | | | | | | [removed: 2,998] [added: 7,921] | | | | | | [removed: 3,027] [added: 2,998] | | |

| Gross profit | | | [removed: 3,735] [added: 4,151] | | | | | | [removed: 2,086] [added: 3,735] | | | | | | [removed: 2,113] [added: 2,086] | | |

| Research and development expenses | | | [removed: 629] [added: 603] | | | | | | [removed: 357] [added: 629] | | | | | | [removed: 346] [added: 357] | | |

| Selling and administrative expenses | | | [removed: 1,749] [added: 1,768] | | | | | | [removed: 949] [added: 1,749] | | | | | | [removed: 876] [added: 949] | | |

| Restructuring and other charges | | | [removed: 41] [added: 12] | | | | | | [removed: 17] [added: 41] | | | | | | [removed: 30] [added: 17] | | |

| Amortization of acquisition-related intangibles | | | [removed: 732] [added: 727] | | | | | | [removed: 193] [added: 732] | | | | | | 193 | | |

| (Gains) losses on sale of fixed assets | | | [removed: (1)] [added: (3)] | | | | | | [removed: 4] [added: (1)] | | | | | | [removed: 3] [added: 4] | | |

| Operating [added: (loss)] profit | | | [removed: 585] [added: (1,326)] | | | | | | [removed: 566] [added: 585] | | | | | | [removed: 665] [added: 566] | | |

| Interest expense | | | [removed: 289] [added: 336] | | | | | | [removed: 132] [added: 289] | | | | | | [removed: 138] [added: 132] | | |

| Other income, net | | | [removed: (58)] [added: (37)] | | | | | | [removed: (7)] [added: (58)] | | | | | | [removed: (30)] [added: (7)] | | |

| [removed: Income] [added: (Loss) income] before taxes | | | [removed: 354] [added: (1,625)] | | | | | | [removed: 441] [added: 354] | | | | | | [removed: 557] [added: 441] | | |

| Provision for income taxes | | | [removed: 75] [added: 239] | | | | | | [removed: 74] [added: 75] | | | | | | [removed: 97] [added: 74] | | |

| [(a)(3) EXHIBITS](#i03de90bde21b4b93bcea41cbf259f7f5_202) | | | [111](#i03de90bde21b4b93bcea41cbf259f7f5_202) | | |

The Company has determined that the Health & Biosciences segment is also a reporting unit.

For the third quarter of 2022, management determined that a goodwill impairment triggering event occurred for the Health & Biosciences reporting unit.

For the third quarter of 2022, management determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 billion.

| Impairment of goodwill | | | 2,250 | | | | | | — | | | | | | — | | |

| Impairment of long-lived assets | | | 120 | | | | | | — | | | | | | — | | |

| Net income attributable to non-controlling interest | | | 7 | | | | | | 9 | | | | | | 4 | | |

| Statements of Comprehensive (Loss) Income | | | | | | | | | | | | | | | | | |

| Comprehensive (loss) income | | | (2,610) | | | | | | (446) | | | | | | 386 | | |

| Net income attributable to non-controlling interest | | | 7 | | | | | | 9 | | | | | | 4 | | |

| *(DOLLARS IN MILLIONS)* | | | 2022 | | | | | | 2021 | | |

| Non-controlling interest | | | 30 | | | | | | 35 | | |

| Net (loss) income | | | $ | (1,864) | | | | | $ | 279 | | | | | $ | 367 | |

| Gains on business divestiture | | | (11) | | | | | | — | | | | | | — | | |

| Impairment of goodwill | | | 2,250 | | | | | | — | | | | | | — | | |

| Impairment of long-lived assets | | | 120 | | | | | | — | | | | | | — | | |

| Repayments of commercial paper (maturities after three months) | | | (421) | | | | | | — | | | | | | — | | |

| Net borrowings of commercial paper (maturities less than three months) | | | 48 | | | | | | 324 | | | | | | — | | |

| Net loss | | | | | | | | | | | | | | | | | | | | | (1,871) | | | | | | | | | | | | | | | | | | | | | | | | 3 | | | | | | (1,868) | | |

| Purchase of NCI | | | | | | | | | | | | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (6) | | | | | | (5) | | |

| Balance at December 31, 2022 | | | 275,726,629 | | | | | | $ | 35 | | | | | $ | 19,841 | | | | | $ | 955 | | | | | $ | (2,169) | | | | | (20,758,166) | | | | | | $ | (978) | | | | | $ | 30 | | | | | $ | 17,714 | |

| Cash and cash equivalents included in Assets held for sale | | | 52 | | | | | | — | | | | | | — | | |

| Non-current assets | | | | | | | | | | | | | | | | | |

The Company sold approximately $1.030 billion, $668 million and $351 million of receivables in 2022, 2021 and 2020, respectively.

The outstanding principal amounts of receivables under these arrangements amounted to approximately $212 million, $153 million and $57 million, respectively, as of December 31, 2022, 2021 and 2020.

The proceeds from the sales of receivables are included in net cash from operating activities in the Consolidated Statements of Cash Flows.

Expected Credit Losses

| Bad debt expense(2) | | | 19 | | |

(2)The bad debt expense included approximately $11 million related to expected credit losses on receivables from customers located in Russia and Ukraine (for export and domestic sales) due to recent events in those countries.

The Company will continue to evaluate its credit exposure related to Russia and Ukraine.

| *(DOLLARS IN MILLIONS)* | | | 2022 | | | | | | 2021 | | |

| Total | | | $ | 3,151 | | | | | $ | 2,516 | |

*Impairment of Long-Lived Assets*

During the second quarter of 2022, the sales and margins declined for certain entities within Russia due to supply chain issues, reduced product demand and exchange rate volatility.

Additionally, future growth is expected to be limited given operating conditions in Russia, which inhibit the required future investment.

In connection with uncertainties related to the Company’s operations in Russia and Ukraine, the Company updated its analysis of the undiscounted cash flows of the applicable asset groups to determine if the cash flows exceeded the carrying values of the applicable asset groups.

With respect to an asset group in the Nourish segment, that manufactures and sells in Russia and related markets, it was determined that the undiscounted cash flows were insufficient to cover the carrying value and that an impairment charge was required to write-down the long-lived assets to their fair values.

The fair value of such asset group was determined based on a discounted cash flow approach which involved estimating the future cash flows for the business discounted to their present values.

The discount rate used in the determination of such fair value was based on consideration of the risks inherent in the cash flows and market as of the valuation date.

As a result of this assessment, the Company recognized an impairment charge of $120 million in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the year ended December 31, 2022, which was allocated on a pro rata basis to intangible assets and property, plant and equipment within the asset group in the amounts of approximately $92 million and $28 million, respectively.

| [(a)(3) EXHIBITS](#ibcaddae13181485e82231a8f342b28c7_220) | | | [109](#ibcaddae13181485e82231a8f342b28c7_220) | | |

*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.

*Merger with Nutrition & Biosciences, Inc. - Valuation of the Customer Relationships Intangible Assets*

As described in Note 3 to the consolidated financial statements, on February 1, 2021, the Company completed the merger with Nutrition & Biosciences, Inc. (“N&B”) for total purchase consideration of $15.942 billion.

The acquisition resulted in $6.734 billion of customer relationships intangible assets being recorded.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Pharma Solutions reporting unit is a critical audit matter are (i) the significant judgment by management when determining the fair value of the Pharma Solutions reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates and gross margins; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over management’s valuation of the Pharma Solutions reporting unit.

These procedures also included, among others (i) testing management’s process for determining the fair value of the Pharma Solutions reporting unit; (ii) evaluating the appropriateness of the discounted cash flow method; (iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates and gross margins.

Evaluating management’s significant assumptions related to revenue growth rates and gross margins involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of the Pharma Solutions reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow method.

February 28, 2022

| | | | | | | | | | | | | | | | | | |

| Net income attributable to noncontrolling interests | | | 9 | | | | | | 4 | | | | | | 4 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | December 31, | | | | | | | | |

| Accumulated gains (losses) on derivatives qualifying as hedges | | | 1 | | | | | | (7) | | |

| Noncontrolling interest | | | 35 | | | | | | 12 | | |

| Contingent consideration paid | | | (14) | | | | | | (9) | | | | | | (24) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2018 | | | 128,526,137 | | | | | | $ | 16 | | | | | $ | 3,794 | | | | | $ | 3,956 | | | | | $ | (702) | | | | | (21,906,935) | | | | | | $ | (1,031) | | | | | $ | 10 | | | | | $ | 6,043 | |

| Net income | | | | | | | | | | | | | | | | | | | | | 456 | | | | | | | | | | | | | | | | | | | | | | | | 4 | | | | | | 460 | | |

| Adoption of ASU 2016-02 | | | | | | | | | | | | | | | | | | | | | 23 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 23 | | |

| Adoption of ASU 2017-12 | | | | | | | | | | | | | | | | | | | | | (1) | | | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | — | | |

| Gain on derivatives qualifying as hedges; net of tax ($1) | | | | | | | | | | | | | | | | | | | | | | | | | | | 8 | | | | | | | | | | | | | | | | | | | | | | | | 8 | | |

| Pension liability and postretirement adjustment; net of tax ($4) | | | | | | | | | | | | | | | | | | | | | | | | | | | 115 | | | | | | | | | | | | | | | | | | | | | | | | 115 | | |

In the current year, the Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior year disclosed amounts.

The impact of the additional week in 2019 on revenue and net income was not material.

| Noncurrent assets | | | | | | | | | | | | | | | | | |

The impact on cash provided by operations from participating in these programs was an increase of approximately $19 million, $43 million and $38 million in 2021, 2020 and 2019, respectively, compared to each respective prior year period.

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.

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.

In January 2021, the FASB issued the subsequent amendment Accounting Standards Update ("ASU") 2021-01, "Reference Rate Reform (Topic 848): Scope" to the initial guidance.

Alternative reference rates that are more observable or transaction based have been identified and are being transitioned to in numerous jurisdictions globally, such as a receive-variable-rate, pay-variable-rate cross currency interest rate swap.

| | | | Title: | | | *Executive Vice President and Chief Financial [added: & Business Transformation] Officer* | | |

Dated: February [removed: 28, 2022][added: 27, 2023]

| /s/ Frank Clyburn | | | | | | Chief Executive Officer and Director (Principal Executive Officer) | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Glenn Richter | | | | | | Executive Vice President and Chief Financial [added: & Business Transformation] Officer (Principal Financial Officer) | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ [removed: Robert Anderson] [added: Beril Yildiz] | | | | | | Senior Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Dale F. Morrison | | | | | | Chairman of the Board, Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Kathryn J. Boor | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Edward D. Breen | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Barry A. Bruno | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Carol Anthony (John) Davidson | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Roger W. Ferguson, Jr. | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ John F. Ferraro | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Christina Gold | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Matthias Heinzel | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| /s/ Stephen Williamson | | | | | | Director | | | | | | February [removed: 28, 2022] [added: 27, 2023] | | |

| | | | Balance at beginning of period | | | | | | Additions (deductions) charged to costs and expenses | | | | | | Acquisitions | | | | | | Accounts written off | | | | | | Translation adjustments | | | | | | [removed: Other(1)] [added: Other] | | | | | | Balance at end of period | | |

| | | | For the Year Ended December 31, [removed: 2019] [added: 2022] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Balance at beginning of period | | | | | | Additions charged to costs and expenses | | | | | | Acquisitions | | | | | | Accounts written off | | | | | | Translation adjustments | | | | | | [removed: Other(2)] [added: Other(1)] | | | | | | Balance at end of period | | |

| Allowance for doubtful accounts | | | $ | [removed: 9] [added: 46] | | | | | $ | [removed: 1] [added: 19] | | | | | $ | — | | | | | $ | [removed: (2)] [added: —] | | | | | $ | [removed: —] [added: (12)] | | | | | $ | [removed: 8] [added: —] | | | | | $ | [removed: 16] [added: 53] | |

| Valuation allowance on credit and operating loss carryforwards and other net deferred tax assets | | | [removed: 200] [added: 232] | | | | | | [removed: 6] [added: 51] | | | | | | — | | | | | | — | | | | | | [removed: (2)] [added: (21)] | | | | | | — | | | | | | [removed: 204] [added: 262] | | |

| Beril Yildiz | | | | | | | | | | | | | | |

| /s/ Mark Costa | | | | | | Director | | | | | | February 27, 2023 | | |

| Mark Costa | | | | | | | | | | | | | | |

| /s/ Gary Hu | | | | | | Director | | | | | | February 27, 2023 | | |

| Gary Hu | | | | | | | | | | | | | | |

| /s/ Dawn C. Willoughby | | | | | | Director | | | | | | February 27, 2023 | | |

| Dawn C. Willoughby | | | | | | | | | | | | | | |

| Robert Anderson | | | | | | | | | | | | | | |

| /s/ Michael Ducker | | | | | | Director | | | | | | February 28, 2022 | | |

| Michael Ducker | | | | | | | | | | | | | | |

| /s/ Ilene Gordon | | | | | | Director | | | | | | February 28, 2022 | | |

| Ilene Gordon | | | | | | | | | | | | | | |

| /s/ Kåre Schultz | | | | | | Director | | | | | | February 28, 2022 | | |

| Kåre Schultz | | | | | | | | | | | | | | |

(2)The amount relates to an adjustment to reflect the correct classification of amounts between the allowance for bad debts and Trade Receivables.