Item 1. FINANCIAL STATEMENTS.

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Item 1. FINANCIAL STATEMENTS.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME

(Unaudited)


	Three Months Ended
	March 31,
(DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS)	2025		2024
Net sales	$	2,843	$	2,899
Cost of sales	1,808		1,875
Gross profit	1,035		1,024
Research and development expenses	164		166
Selling and administrative expenses	461		490
Amortization of acquisition-related intangibles	143		168
Impairment of goodwill	1,153		—

Restructuring and other charges	17		3
Gains on sales of assets	—		(2)
Operating (loss) profit	(903)		199
Interest expense	71		83



Other expense, net	20		1
(Loss) income before taxes	(994)		115
Provision for income taxes	23		54
Net (loss) income	(1,017)		61
Net income attributable to non-controlling interests	1		1
Net (loss) income attributable to IFF shareholders	$	(1,018)	$	60

Net (loss) income per share - basic and diluted	$	(3.98)	$	0.23

Average number of shares outstanding - basic	256		255
Average number of shares outstanding - diluted	256		256


Statements of Comprehensive (Loss) Income
Net (loss) income	$	(1,017)	$	61
Other comprehensive income (loss), after tax:
Foreign currency translation adjustments	404		(293)
Losses on derivatives qualifying as hedges	(1)		(7)
Pension and postretirement liability adjustment	1		5
Other comprehensive income (loss)	404		(295)
Comprehensive loss	(613)		(234)
Comprehensive income attributable to non-controlling interests	1		1
Comprehensive loss attributable to IFF shareholders	$	(614)	$	(235)

The accompanying notes are an integral part of these Consolidated Financial Statements.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS)	March 31, 2025		December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	613	$	469

Trade receivables (net of allowances of $28 and $26, respectively)	1,742		1,624



Inventories	2,249		2,133
Assets held for sale	3,254		3,030
Prepaid expenses and other current assets	775		737
Total Current Assets	8,633		7,993


Property, plant and equipment, net	3,771		3,739
Goodwill	8,030		9,080
Other intangible assets, net	6,383		6,445

Operating lease right-of-use assets	579		573
Other assets	869		837
Total Assets	$	28,265	$	28,667
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term debt and current portion of long-term debt	$	1,689	$	1,413

Accounts payable	1,325		1,283
Accrued payroll and bonus	216		420
Dividends payable	102		102
Liabilities held for sale	443		332
Other current liabilities	832		783
Total Current Liabilities	4,607		4,333
Other Liabilities:
Long-term debt	7,601		7,564

Retirement liabilities	174		167
Deferred income taxes	1,543		1,592
Operating lease liabilities	535		534
Other liabilities	592		566
Total Other Liabilities	10,445		10,423
Commitments and Contingencies (Note 17)

Shareholders’ Equity:
Common stock $0.125 par value; 500.0 shares authorized; 275.7 shares issued as of March 31, 2025 and December 31, 2024; and 255.7 and 255.7 shares outstanding as of March 31, 2025 and December 31, 2024, respectively	35		35
Capital in excess of par value	19,932		19,917
Accumulated deficit	(3,725)		(2,605)
Accumulated other comprehensive loss	(2,123)		(2,527)
Treasury stock, at cost (20.0 and 20.0 shares as of March 31, 2025 and December 31, 2024, respectively)	(942)		(944)
Total Shareholders’ Equity	13,177		13,876
Non-controlling interests	36		35
Total Shareholders’ Equity including Non-controlling interests	13,213		13,911
Total Liabilities and Shareholders’ Equity	$	28,265	$	28,667

The accompanying notes are an integral part of these Consolidated Financial Statements.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)


(DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS)	Common stock				Capital in excess of par value		Accumulated deficit		Accumulated other comprehensive (loss) income		Treasury stock			Non-controlling interest		Total
Shares		Cost	Shares		Cost
Balance at January 1, 2024	275.7		$	35	$	19,874	$	(2,439)	$	(1,896)	(20.4)	$	(963)	$	31	$	14,642
Net (loss) income							60							1		61

Other Comprehensive income (loss)									(295)							(295)


Cash dividends declared(1)							(102)									(102)
Stock options/SSARs					(2)						—	1				(1)

Vested restricted stock units and awards					(1)						—	1				—
Stock-based compensation					18											18


Other														3		3
Balance at March 31, 2024	275.7		$	35	$	19,889	$	(2,481)	$	(2,191)	(20.4)	$	(961)	$	35	$	14,326


(DOLLARS AND SHARES IN MILLIONS EXCEPT PER SHARE AMOUNTS)	Common stock				Capital in excess of par value		Retained earnings		Accumulated other comprehensive (loss) income		Treasury stock			Non-controlling interest		Total
Shares		Cost	Shares		Cost
Balance at January 1, 2025	275.7		$	35	$	19,917	$	(2,605)	$	(2,527)	(20.0)	$	(944)	$	35	$	13,911
Net (loss) income							(1,018)							1		(1,017)

Other Comprehensive income (loss)									404							404


Cash dividends declared(1)							(102)									(102)
Stock options/SSARs					—						—	1				1

Vested restricted stock units and awards					(4)						—	1				(3)
Stock-based compensation					19											19



Other																—
Balance at March 31, 2025	275.7		$	35	$	19,932	$	(3,725)	$	(2,123)	(20.0)	$	(942)	$	36	$	13,213

(1)Cash dividends declared per common share were $0.40 and $0.40 for the three months ended March 31, 2025 and March 31, 2024, respectively.

The accompanying notes are an integral part of these Consolidated Financial Statements.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Cash flows from operating activities:
Net (loss) income	$	(1,017)	$	61
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization	236		278
Deferred income taxes	(61)		(9)

Gains on sales of assets	—		(2)

Stock-based compensation	19		18
Pension contributions	(5)		(7)







Impairment of goodwill	1,153		—


Changes in assets and liabilities, net of acquisitions:
Trade receivables	(116)		(290)
Inventories	(92)		34
Accounts payable	154		83
Accruals for incentive compensation	(246)		(46)

Other assets/liabilities, net	102		(21)
Net cash provided by operating activities	127		99
Cash flows from investing activities:

Additions to property, plant and equipment	(179)		(118)



Proceeds from sale of assets	—		3


Net proceeds received from business disposals	—		37
Cash received on foreign currency forward contracts	22		—
Net cash used in investing activities	(157)		(78)
Cash flows from financing activities:
Cash dividends paid to shareholders	(102)		(207)
Increase (decrease) in revolving credit facility and short-term borrowings	—		250


Net borrowings of commercial paper (maturities less than three months)	292		833

Principal payments of debt	(16)		(833)









Other, net	(5)		(3)
Net cash provided by financing activities	169		40
Effect of exchange rate changes on cash, cash equivalents and restricted cash	40		(25)
Net change in cash, cash equivalents and restricted cash	179		36
Cash, cash equivalents and restricted cash at beginning of year	471		735
Cash, cash equivalents and restricted cash at end of period	$	650	$	771
Supplemental Disclosures:
Interest paid, net of amounts capitalized	$	37	$	61
Income taxes paid, net	86		53
Accrued capital expenditures	58		53

The accompanying notes are an integral part of these Consolidated Financial Statements.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

International Flavors & Fragrances Inc. and its subsidiaries (the “Registrant,” “IFF,” “the Company,” “we,” “us” and “our”) is a leading creator and manufacturer of food, beverage, health & biosciences, scent (and until the recent sale of our Pharma Solutions disposal group, pharma solutions) and complementary adjacent products, including natural health ingredients, which are used in a wide variety of consumer products. Our products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods, grain processors and other foods, personal care products, soaps and detergents, cleaning products, perfumes, dietary supplements, food protection, infant, elderly and animal nutrition, functional food, pharmaceutical and oral care products. As a result, we hold global leadership positions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Tastes, Textures, Scents, Nutrition, Enzymes, Cultures, Soy Proteins, and Probiotics categories.

Basis of Presentation

The accompanying interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the related notes included in our 2024 Annual Report on Form 10-K (“2024 Form 10-K”), filed on February 28, 2025 with the Securities and Exchange Commission (“SEC”).

The interim Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and with the rules and regulations for reporting on Form 10-Q, and are unaudited. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP in the United States of America have been condensed or omitted, if not materially different from the 2024 Form 10-K. The year-end balance sheet data included in this Form 10-Q was derived from the audited financial statements. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim Consolidated Financial Statements, have been made.

Use of Estimates

The preparation of financial statements requires management to make estimates and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The inputs into the Company’s judgments and estimates take into account the ongoing global current events and adverse macroeconomic impacts on our critical and significant accounting estimates, including estimates associated with future cash flows that are used in assessing the risk of impairment of certain assets. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated Net (loss) income.

Effective January 1, 2025, the Company voluntarily implemented a reorganization of its internal structure, which impacted the way the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, allocates resources and assesses financial performance. As a result, the Company has updated its reportable segments beginning with the first quarter of 2025. The Company also adjusted its corporate cost allocations to align with the new organizational structure and updated operating model, consistent with how management assesses performance effective January 1, 2025. As a result, certain segment information for the three months ended March 31, 2024 has been recast to reflect these changes in corporate allocations among the Company’s reportable segments on a comparable basis. Please see Note 6 for more information.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash reported in the Company’s balance sheet as of March 31, 2025, December 31, 2024, March 31, 2024 and December 31, 2023 were as follows:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024		March 31, 2024		December 31, 2023
Current assets
Cash and cash equivalents	$	613	$	469	$	732	$	703
Cash and cash equivalents included in Assets held for sale	37		2		32		26
Restricted cash	—		—		7		6


Cash, cash equivalents and restricted cash	$	650	$	471	$	771	$	735

Accounts Receivable

The Company has various factoring agreements globally under which it can factor up to approximately $320 million of its trade receivables (“Company’s own factoring agreements”). In addition, the Company utilizes factoring agreements sponsored by certain customers. Under all of the arrangements, the Company sells the trade receivables on a non-recourse basis to unrelated financial institutions and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company’s Consolidated Balance Sheets when the cash proceeds are received by the Company.

The Company sold a total of approximately $413 million and $406 million of receivables under the Company’s own factoring agreements and customer sponsored factoring agreements for the three months ended March 31, 2025 and 2024, respectively. The cost of participating in these programs was approximately $6 million for each of the three months ended March 31, 2025 and 2024. These costs are included as a component of interest expense. Although the Company’s own factoring agreements are non-recourse to the Company, the Company has continued responsibility to collect receivables on behalf of the sponsoring banks. Under these agreements, the Company sold approximately $196 million and $191 million of receivables for the three months ended March 31, 2025 and 2024, respectively. The outstanding principal amounts of receivables under the Company’s own factoring agreements amounted to approximately $185 million and $178 million as of March 31, 2025 and December 31, 2024, respectively. The proceeds from the sales of receivables are included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows.

Expected Credit Losses

As of March 31, 2025, the Company reported $1.742 billion of trade receivables, net of allowances of $28 million. Based on the aging analysis as of March 31, 2025, less than 1% of the Company’s accounts receivable were past due by over 365 days based on the payment terms of the invoice.

The following is a roll-forward of the Company’s allowances for bad debts for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Balance at January 1	$	26	$	52
Allowances (reversals) for bad debt expense	1		(5)
Write-offs	—		(9)

Foreign exchange	1		(1)
Balance at March 31	$	28	$	37

Inventories

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


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Raw materials	$	760	$	657
Work in process	380		368
Finished goods	1,109		1,108
Total	$	2,249	$	2,133

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, issued Accounting Standards Update (“ASU”) 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The ASU was issued to improve the disclosures about a public business entity's expenses, primarily through disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Public business entities are permitted to adopt the ASU prospectively or retrospectively. The Company is currently evaluating the impact that this guidance will have on its Consolidated Financial Statements and footnote disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU was issued to further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company expects that the adoption of the standard will impact certain income tax disclosures in the Notes to the Consolidated Financial Statements, but will otherwise not have an impact on the Company’s results of operations.

NOTE 2. NET (LOSS) INCOME PER SHARE

A reconciliation of the shares used in the computation of basic and diluted net (loss) income per share is as follows:


	Three Months Ended March 31,
(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)	2025		2024
Net (Loss) Income


Net (loss) income available to IFF shareholders	$	(1,018)	$	60
Shares
Weighted average common shares outstanding (basic)	256		255
Adjustment for assumed dilution:
Stock options and restricted stock awards	—		1

Weighted average shares assuming dilution (diluted)	256		256

Net (Loss) Income per Share
Net (loss) income per share - basic and diluted(1)	$	(3.98)	$	0.23

(1)For the three months ended March 31, 2024, the basic net income per share cannot be recalculated based on the information presented in the table above due to rounding.

The Company declared a quarterly dividend to its shareholders of $0.40 for each of the three months ended March 31, 2025 and 2024.

There were approximately 1.1 million potentially dilutive securities excluded from the computation of diluted net loss per share for the three months ended March 31, 2025 because there was a net loss attributable to IFF for the period and, as such, the inclusion of these securities would have been anti-dilutive.

For the three months ended March 31, 2025, there were approximately 0.3 million share equivalents that had an anti-dilutive effect and therefore were excluded from the computation of diluted net loss per share in the period. For the three months ended March 31, 2024, there were approximately 0.3 million share equivalents that had an anti-dilutive effect and therefore were excluded from the computation of diluted net income per share in the period.

The Company has issued shares of Purchased Restricted Stock Units (“PRSUs”) which contain rights to non-forfeitable dividends while these shares are outstanding and thus are considered participating securities. Such securities are required to be included in the computation of basic and diluted earnings per share pursuant to the two-class method.

The Company did not present the two-class method since the difference between diluted net income per share for both unrestricted common shareholders and PRSU shareholders for the three months ended March 31, 2025 and 2024 was less than $0.01 per share.

NOTE 3. ASSETS AND LIABILITIES HELD FOR SALE AND BUSINESS DIVESTITURES

Pharma Solutions

During March 2024, the Company announced it had entered into an agreement to sell its Pharma Solutions business that is primarily made up of most businesses within the Company’s existing Pharma Solutions reportable operating segment (the “Pharma Solutions disposal group”). The transaction closed on May 1, 2025.

The sale does not constitute a strategic shift of the Company’s operations and does not, and will not, have major effects on the Company’s operations and financial results. Therefore, the transaction does not meet the discontinued operations criteria.

The Company determined that the assets and liabilities of the Pharma Solutions disposal group met the criteria to be presented as “held for sale” during the second quarter of 2024. As a result, at March 31, 2025, such assets and liabilities were classified as held for sale on the Consolidated Balance Sheets.

The Company engaged an independent third party to assist management with determining the fair value of the Pharma Solutions disposal group for the purposes of calculating loss on assets classified as held for sale. At March 31, 2025, the Company determined that the fair value of the Pharma Solutions disposal group was $2,728 million (fair value of $2,760 million less estimated costs to sell of $32 million). As of March 31, 2025, the life-to-date loss on assets classified as held for sale was $337 million, which was all recorded in 2024. The loss on assets classified as held for sale is recorded as a valuation allowance on the group of assets held for sale, without allocation to the individual assets or major classes of assets within the group.

In addition, pursuant to the terms agreed under the 2026 Term Loan Facility, a portion of the net cash proceeds received from the sale of the Pharma Solutions disposal group, must be used to repay our borrowings under the 2026 Term Loan Facility. Therefore, the Company reclassified the 2026 Term Loan Facility balance from “Long-term debt” to “Short-term debt and current portion of long-term debt”.

Nitrocellulose

During October 2024, the Company entered into an agreement to sell its Nitrocellulose business (including the related industrial park in Germany), which is within the Company’s existing Pharma Solutions reportable operating segment. The transaction is subject to certain customary closing conditions and is expected to close during the second quarter of 2025.

The Company determined that the assets and liabilities of the Nitrocellulose business met the criteria to be presented as “held for sale” during the third quarter of 2024. As a result, at March 31, 2025, such assets and liabilities were classified as held for sale on the Consolidated Balance Sheets. The Company determined that, as of March 31, 2025, the fair value less estimated costs to sell of the Nitrocellulose business exceeded the underlying carrying value.

Tobacco Flavoring Business in North America

During the first quarter of 2025, the Company entered into an agreement to sell certain assets and liabilities of its Tobacco Flavoring business in North America, which is within the Company’s existing Taste reportable operating segment.

The Company determined that the assets and liabilities of the Tobacco Flavoring business in North America met the criteria to be presented as held for “held for sale” during the first quarter of 2025. As a result, at March 31, 2025, such assets and liabilities were classified as held for sale on the Consolidated Balance Sheets. The Company determined that, as of March 31, 2025, the fair value less estimated costs to sell of the Tobacco Flavoring business in North America exceeded the underlying carrying value.

Carrying Amount of Assets and Liabilities Held for Sale

The Company’s Consolidated Balance Sheet as of March 31, 2025 included the carrying amounts of the assets and liabilities of the Pharma Solutions disposal group, Nitrocellulose disposal group, and Tobacco Flavoring Business in North America as held for sale.

The Company’s Consolidated Balance Sheet as of December 31, 2024 included the carrying amounts of the assets and liabilities of the Pharma Solutions disposal group, Nitrocellulose disposal group, and a portion of the Savory Solutions business in Turkey as held for sale. The Company completed the sale of a portion of the Savory Solutions business in Turkey during the three months ended March 31, 2025.


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	37	$	2
Trade receivables, net	233		187
Inventories	305		274
Property, plant and equipment, net	479		451
Goodwill(1)	1,244		1,216
Other intangible assets, net	1,103		1,078
Operating lease right-of-use assets	57		57
Other assets	133		112
Less: Loss recognized on assets held-for-sale(2)	(337)		(347)
Total assets held-for-sale	$	3,254	$	3,030
Liabilities
Accounts payable	$	155	$	90
Deferred tax liability	56		51
Other liabilities	232		191
Total liabilities held-for-sale	$	443	$	332

(1)The goodwill balance in assets held for sale for the Pharma Solutions disposal group is presented net of $64 million of goodwill impairment.

(2)Includes the impact of $87 million, primarily related to losses on foreign currency translation, expected to be reclassified out of accumulated other comprehensive loss upon close of the sales.

Subsequent Events

The sale of the Tobacco Flavoring Business in North America was completed on April 1, 2025, and the Company received gross cash proceeds of $20 million in connection with the transaction.

The sale of the Pharma Solutions disposal group was completed on May 1, 2025. The Company received gross cash proceeds of approximately $2.6 billion in connection with the transaction, reflecting preliminary estimates of closing adjustments. The finalization of these closing adjustments may result in additional cash being received from, or paid to, the buyer. A portion of the proceeds were used to repay the remaining $397 million outstanding under the 2026 Term Loan Facility.

NOTE 4. RESTRUCTURING AND OTHER CHARGES

Restructuring and other charges primarily consist of separation costs for employees including severance, outplacement and other employee benefit costs (“Severance”), charges related to the write-down of fixed assets of plants to be closed (“Fixed asset write-down”) and all other related restructuring (“Other”) costs. All restructuring and other charges are separately stated on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

IFF Productivity Program

Beginning in 2024, the Company began undertaking a productivity enhancement program aimed at enhancing productivity and optimizing its organizational footprint to align with business needs. This program will involve a series of actions, including ceasing operations in select manufacturing plants, consolidating lease and owned real estate space, and reducing employee headcount. The Company aims to substantially complete this productivity program by December 31, 2026. The program will impact the Company’s Taste, Food Ingredients, Health & Biosciences, and Scent segments.

The estimated total cost of the program initiatives ranges from $50 million to $70 million. The anticipated cash charges include employee-related costs such as severance, contract terminations, and dismantling costs. Additionally, non-cash charges related to assets, such as fixed asset write downs, are expected.

During the first quarter of 2025, the Company incurred costs in connection with the IFF Productivity Program, recognizing approximately $17 million in severance costs. As of March 31, 2025, the Company incurred approximately $20 million related to severance costs and approximately $20 million in fixed asset write downs since the inception of this program.

Changes in Restructuring Liabilities

Changes in restructuring liabilities during the three months ended March 31, 2025 were as follows:


(DOLLARS IN MILLIONS)	Balance at January 1, 2025		Additional Charges (Reversals), Net		Non-Cash Charges		Cash Payments		Balance at March 31, 2025






















IFF Productivity Program
Severance	$	3	$	17	$	—	$	(3)	$	17

Total Restructuring and other charges	$	3	$	17	$	—	$	(3)	$	17

Restructuring liabilities are presented in “Other current liabilities” on the Consolidated Balance Sheets.

Charges by Segment

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


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Taste	$	2	$	1
Food Ingredients	3		1
Health & Biosciences	3		1
Scent	9		—


Total Restructuring and other charges	$	17	$	3

NOTE 5. STOCK COMPENSATION PLANS

The Company has various plans under which its officers, senior management, other key employees and directors may be granted equity-based awards. Equity awards outstanding under the plans include PRSUs, Restricted Stock Units (“RSUs”), Stock-Settled Appreciation Rights (“SSARs”) and Long-Term Incentive Plan awards. Liability-based awards outstanding under the plans are cash-settled RSUs.

Stock-based compensation expense and related tax benefits were as follows:


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Equity-based awards	$	19	$	18
Liability-based awards	—		1
Total stock-based compensation expense	19		19
Less: Tax benefit	(4)		(4)
Total stock-based compensation expense, after tax	$	15	$	15

As of March 31, 2025, there was approximately $66 million of total unrecognized compensation cost related to non-vested awards granted under the equity incentive plans.

NOTE 6. SEGMENT INFORMATION

Effective January 1, 2025, the Company implemented a reorganization of its internal structure, which impacted the way the CODM, the Chief Executive Officer, allocates resources and assesses financial performance. As a result, the Company has updated its reportable segments beginning with the first quarter of 2025.

Specifically, the former Nourish segment has been separated into two new reportable segments: Taste and Food Ingredients. The Taste segment (formerly the Flavors business within Nourish) includes flavor compounds and natural taste

solutions used in food and beverage applications. The Food Ingredients segment (formerly the Ingredients business within Nourish) includes a broad portfolio of natural and plant-based specialty ingredients that provide texturizing and food protection capabilities, as well as soy and pea protein solutions, emulsifiers, and sweeteners.

In addition, immaterial business transfers occurred between Food Ingredients and Pharma Solutions, and between Health & Biosciences and Taste. Accordingly, the Company’s reportable segments as of Q1 2025 are: Taste, Food Ingredients, Health & Biosciences, Scent, and Pharma Solutions.

The Company also adjusted its corporate cost allocations to align with the new organizational structure and updated operating model, consistent with how management assesses performance effective January 1, 2025.

Segment information for the three months ended March 31, 2024 has been recast to reflect the updated segment structure and changes in corporate allocations among the Company’s reportable segments on a comparable basis.

The Company’s CODM does not use assets by segment to evaluate segment performance or allocate resources and thus, total assets by segment are not disclosed.

Reportable segment information was as follows:


	Three Months Ended March 31, 2025
	Taste		Food Ingredients		Health & Biosciences		Scent		Pharma Solutions		Total
Net sales	$	627	$	796	$	540	$	614	$	266	$	2,843
Cost of sales	(377)		(609)		(298)		(344)		(180)
Research & development expenses	(40)		(12)		(52)		(55)		(5)
Selling & administrative expenses	(94)		(92)		(81)		(86)		(32)
Depreciation expense add-back (a)	15		28		29		15		5
Adjusted Operating EBITDA	$	131	$	111	$	138	$	144	$	54	$	578


Reconciliation of Adjusted Operating EBITDA:





Total Adjusted Operating EBITDA	$	578
Depreciation & Amortization	(236)
Interest Expense	(71)
Other Expense, net (b)	(20)
Restructuring and Other Charges (c)	(17)
Impairment of Goodwill (d)	(1,153)
Divestiture and Integration Costs (e)	(51)
Strategic Initiative Costs (f)	(8)
Regulatory Costs (g)	(11)
Other (h)	(5)



(Loss) Income Before Taxes	$	(994)


	Three Months Ended March 31, 2024
	Taste		Food Ingredients		Health & Biosciences		Scent		Pharma Solutions		Total
Net sales	$	619	$	856	$	529	$	645	$	250	$	2,899
Cost of sales	(384)		(673)		(286)		(350)		(181)
Research & development expenses	(39)		(20)		(46)		(55)		(6)
Selling & administrative expenses	(96)		(90)		(88)		(88)		(28)
Depreciation expense add-back (a)	17		35		29		16		12
Adjusted Operating EBITDA	$	117	$	108	$	138	$	168	$	47	$	578


Reconciliation of Adjusted Operating EBITDA:





Total Adjusted Operating EBITDA	$	578
Depreciation & Amortization	(278)
Interest Expense	(83)
Other Expense, net (b)	(1)
Restructuring and Other Charges (c)	(3)

Divestiture and Integration Costs (e)	(58)
Strategic Initiatives Costs (f)	(4)
Regulatory Costs (g)	(35)
Other (h)	(1)



Income Before Taxes	$	115


(a)			There is depreciation recorded within cost of sales, research & development expenses, and selling & administrative expenses, so there is an add-back of depreciation to calculate segment Adjusted Operating EBITDA. This reflects how the CODM reviews Segment results.
(b)			Please refer to Note 8 for additional information.
(c)			For 2025, represents costs related to severance as part of the IFF Productivity Program. For 2024, represents costs related to lease impairment and severance as part of the Company's restructuring efforts.
(d)			For 2025, represents the impairment of goodwill related to the Food Ingredients reporting unit.
(e)			For 2025 and 2024, primarily represents costs related to the Company’s planned divestitures. These costs primarily consisted of external consulting fees, professional and legal fees and salaries of individuals who are fully dedicated to such efforts. For the three months ended March 31, 2025, there were approximately $51 million of divestiture costs. For the three months ended March 31, 2024, business divestiture and integration costs were approximately $56 million and $2 million, respectively.
(f)			For 2025 and 2024, primarily represents costs related to the Company’s strategic assessment and business portfolio optimization efforts and reorganizing the Global Shared Services Centers, primarily consulting fees, and strategic initiatives related to the Company’s business unit re-organization efforts.
(g)			For 2025 and 2024, represents costs primarily related to legal fees incurred and provisions recognized for the ongoing investigations of the fragrance business.
(h)			For 2025, represents the net impact of costs related to severance, including accelerated stock compensation expense, for certain executives who have separated from the Company. For 2024, represents costs related to the Company’s entity realignment project to optimize the structure of holding companies, primarily consulting fees.

Segment capital expenditures consisted as follows:


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Taste	$	27	$	12
Food Ingredients	60		47
Health and Biosciences	40		16
Scent	24		15
Pharma Solutions	28		28
Consolidated	$	179	$	118

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


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Europe, Africa and Middle East	$	952	$	977
Greater Asia	670		682
North America	868		866
Latin America	353		374
Consolidated	$	2,843	$	2,899


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Net sales related to the U.S.	$	801	$	811
Net sales attributed to all foreign countries	2,042		2,088

No country other than the U.S. had net sales greater than 10% of total consolidated net sales for each of the three months ended March 31, 2025 and 2024.

NOTE 7. EMPLOYEE BENEFITS

Pension and other defined contribution retirement plan expenses included the following components:


(DOLLARS IN MILLIONS)	U.S. Plans(1)
Three Months Ended March 31,
2025			2024

Interest cost on projected benefit obligation(3)	$	1		$	6
Expected return on plan assets(3)	—			(6)
Net amortization and deferrals(3)	—			1
Net periodic benefit cost	$	1		$	1


(DOLLARS IN MILLIONS)	Non-U.S. Plans
Three Months Ended March 31,
2025			2024
Service cost for benefits earned(2)	$	5		$	6
Interest cost on projected benefit obligation(3)	9			9
Expected return on plan assets(3)	(11)			(13)
Net amortization and deferrals(3)	1			2

Net periodic benefit cost	$	4		$	4

(1)The International Flavors & Fragrances Inc. Pension Plan (the “Plan”) was formally terminated on April 1, 2024, and settlements of the terminated Plan occurred during November 2024. The Company continues to administer several smaller non-qualified U.S. pension plans.

(2)Included as a component of Operating (loss) profit.

(3)Included as a component of Other expense, net.

The Company expects to contribute a total of $5 million to its U.S. pension plans and a total of $17 million to its non-U.S. pension plans during 2025. During the three months ended March 31, 2025, $4 million of contributions were made to the non-U.S. pension plans and $1 million of contributions were made with respect to the Company’s non-qualified U.S. pension plan.

(Income) expense recognized for post-retirement benefits other than pensions included the following components:


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024

Interest cost on projected benefit obligation	$	1	$	1
Net amortization and deferrals	(1)		(1)
Total postretirement benefit (income) expense	$	—	$	—

The Company expects to make $4 million of payments related to its postretirement benefits other than pension plans during 2025. In the three months ended March 31, 2025, $1 million of benefit payments were made.

NOTE 8. OTHER EXPENSE, NET

Other expense, net consisted of the following:


	Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024
Foreign exchange losses	$	(24)	$	(8)
Interest income	4		3


Pension-related benefit	1		1
Other	(1)		3
Other expense, net	$	(20)	$	(1)

NOTE 9. INCOME TAXES

The effective tax rate for the three months ended March 31, 2025 was (2.3)%, which was primarily due to a goodwill impairment charge that is mostly non-taxable, as well as changes in the mix of earnings.

As of March 31, 2025, the Company had approximately $154 million of unrecognized tax benefits recorded in Other liabilities. If these unrecognized tax benefits were recognized, the effective tax rate would be affected.

As of March 31, 2025, the Company had accrued interest and penalties of approximately $57 million classified in Other liabilities.

As of March 31, 2025, the Company’s aggregate provisions for uncertain tax positions, including interest and penalties, was approximately $211 million associated with tax positions asserted in various jurisdictions.

The Company regularly repatriates earnings from non-U.S. subsidiaries. As the Company repatriates these funds to the U.S., there will be required income taxes payable in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of March 31, 2025, the Company had a deferred tax liability of approximately $159 million for the effect of repatriating the funds to the U.S., attributable to various non-U.S. subsidiaries. There is no deferred tax liability associated with non-U.S. subsidiaries where the Company intends to indefinitely reinvest the earnings to fund local operations and/or capital projects.

NOTE 10. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consisted of the following amounts:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Asset Type
Land	$	133	$	136
Buildings and improvements	1,735		1,688
Machinery and equipment	3,555		3,447
Information technology	524		507
Construction in process	384		389
Total Property, plant and equipment	6,331		6,167
Accumulated depreciation	(2,560)		(2,428)
Total Property, plant and equipment, net	$	3,771	$	3,739

Depreciation expense was $93 million and $110 million for the three months ended March 31, 2025 and 2024, respectively.

Interest incurred during the construction period of certain property, plant and equipment is capitalized until the underlying assets are placed in service, at which time straight-line amortization of the capitalized interest begins over the estimated useful lives of the related assets. Capitalized interest was approximately $3 million and $4 million for each of the three months ended March 31, 2025 and 2024, respectively.

NOTE 11. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

Movements in goodwill attributable to each reportable segment for the three months ended March 31, 2025 were as follows:


(DOLLARS IN MILLIONS)	Nourish			Taste		Food Ingredients		Health & Biosciences		Scent		Pharma Solutions		Total
Balance at January 1, 2025	$	3,320		$	—	$	—	$	4,295	$	1,465	$	—	$	9,080
Reallocation of goodwill in segment reorganization	(3,317)			2,178		1,153		(14)		—		—		—



Transferred to assets held for sale	—			(6)		—		—		—		—		(6)

Impairment	—			—		(1,153)		—		—		—		(1,153)
Foreign exchange	—			39		—		60		14		—		113

Other	(3)		—	—		—		—		(1)		—		(4)
Balance at March 31, 2025	$	—		$	2,211	$	—	$	4,341	$	1,478	$	—	$	8,030

Goodwill Impairment Test

Effective January 1, 2025, the Company reorganized its Nourish segment into two new reportable segments: Taste and Food Ingredients, to align with changes in the Company’s internal management reporting structure. As a result of this change, goodwill previously allocated to the Nourish reporting unit was reallocated between the new Taste and Food Ingredients reporting units. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test on the former Nourish reporting unit immediately prior to the change, and separately tested goodwill for the new Taste and Food Ingredients reporting units following the reorganization. Based on the results of the impairment testing, the Company determined that the carrying amount of the Food Ingredients reporting unit exceeded its estimated fair value, and accordingly recognized a goodwill impairment charge of $1.153 billion. This charge is reflected in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the three months ended March 31, 2025.

The Company assessed the fair value of the reporting units using an income approach. Under the income approach, the Company 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. The Company used the most current actual

and forecasted operating data available. Key estimates and assumptions used in these valuations include revenue growth rates, gross margins, adjusted operating EBITDA margins, terminal growth rates and discount rates.

While management believes that the estimates and assumptions used in the impairment test were reasonable, changes in key assumptions, including lower revenue growth, operating margin, terminal growth rates or increase in discount rates could result in a future impairment of the Taste reporting unit. Such charge could have a material effect on the Consolidated Statements of Operations and Balance Sheets. As of March 31, 2025, there is no remaining goodwill attributable to the Food Ingredients reporting unit.

Other Intangible Assets

Other intangible assets, net consisted of the following amounts:


	March 31,		December 31,
(DOLLARS IN MILLIONS)	2025		2024






Asset Type
Customer relationships	$	7,104	$	7,004
Technological know-how	1,967		1,937
Trade names & patents	275		268

Other	24		25
Total carrying value	9,370		9,234
Accumulated Amortization
Customer relationships	(1,891)		(1,765)
Technological know-how	(937)		(875)
Trade names & patents	(138)		(128)

Other	(21)		(21)
Total accumulated amortization	(2,987)		(2,789)

Other intangible assets, net	$	6,383	$	6,445

Amortization

Amortization expense was $143 million and $168 million for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense for the next five years, based on valuations and determinations of useful lives, is expected to be as follows:



(DOLLARS IN MILLIONS)	Remainder of 2025		2026		2027		2028		2029
Estimated future intangible amortization expense	$	426	$	572	$	487	$	474	$	439

NOTE 12. OTHER CURRENT ASSETS AND LIABILITIES, AND OTHER ASSETS

Prepaid expenses and other current assets consisted of the following amounts:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Value-added tax receivable	$	152	$	152
Prepaid income taxes	217		193
Packaging materials and supplies	126		123
Prepaid expenses	213		203

Other	67		66
Total	$	775	$	737

Other assets consisted of the following amounts:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Deferred income taxes	$	259	$	240
Overfunded pension plans	153		144
Cash surrender value of life insurance contracts	52		52
Finance lease right-of-use assets	29		27
Equity method investments	11		10

Long-term receivables(1)	171		171
Other(2)	194		193
Total	$	869	$	837

(1)Primarily relates to receivables from certain government authorities, which the Company has corresponding payables to DuPont in relation to the N&B Transaction in 2021.

(2)Includes deposits and land usage rights in China.

Other current liabilities consisted of the following amounts:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Rebates and incentives payable	$	94	$	111
Value-added tax payable	42		58
Interest payable	79		42
Current pension and other postretirement benefit obligation	13		12


Accrued restructuring	17		3
Current operating lease obligation	86		82




Accrued income taxes	141		131

Accrued expenses payable	226		203
Other	134		141
Total	$	832	$	783

NOTE 13. DEBT

Debt consisted of the following:


(DOLLARS IN MILLIONS)	Effective Interest Rate		March 31, 2025		December 31, 2024





2025 Notes(1)	1.22	%	$	1,000	$	1,000
2026 Euro Notes(1)	1.93	%	864		827
2027 Notes(1)	1.56	%	1,208		1,209
2028 Notes(1)	4.57	%	399		398
2030 Notes(1)	2.21	%	1,507		1,507
2040 Notes(1)	3.04	%	771		771
2047 Notes(1)	4.44	%	495		495
2048 Notes(1)	5.12	%	787		787
2050 Notes(1)	3.21	%	1,567		1,568



2026 Term Loan Facility(1)	4.98	%	397		413

Revolving Credit Facility(2)			—		—
Commercial paper(3)			292		—
Bank overdrafts and other			3		2

Total debt			9,290		8,977
Less: Short-term borrowings			(1,689)		(1,413)
Total Long-term debt			$	7,601	$	7,564

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

(2)The interest rate on the Revolving Credit Facility is, at the applicable borrower’s option, a per annum rate equal to either (x) an eurocurrency rate plus an applicable margin varying from 1.125% to 1.750% or (y) a base rate plus an applicable margin varying from 0.125% to 0.750%, in each case depending on the public debt ratings for non-credit enhanced long-term senior unsecured debt issued by the Company.

(3)The effective interest rate of commercial paper issuances fluctuates as short-term interest rates and demand fluctuate, and deferred debt issuance costs are immaterial. Additionally, the effective interest rate of commercial paper is not meaningful as issuances do not materially differ from short-term interest rates.

Commercial Paper

For the three months ended March 31, 2025, the Company had gross issuances of $2.125 billion and repayments of $1.833 billion under the commercial paper program. For the three months ended March 31, 2024, the Company had gross issuances of $2.099 billion and repayments of $1.263 billion under the commercial paper program. The commercial paper issued during both the three months ended March 31, 2025 and 2024 had original maturities of less than 90 days.

The commercial paper program is backed by the borrowing capacity available under the Revolving Credit Facility. The effective interest rate of commercial paper issuances does not materially differ from short-term interest rates, which fluctuate due to market conditions and as a result may impact our interest expense.

Revolving Credit Facility

For the three months ended March 31, 2025, the Company had no drawdowns or repayments under the Revolving Credit Facility. For the three months ended March 31, 2024, the Company had drawdowns of $250 million under the Revolving Credit Facility. As of March 31, 2025, the available capacity was reduced by approximately $292 million related to issuances of commercial paper. As of March 31, 2025, the Company had $711 million of available capacity under the Revolving Credit Facility.

Lines of Credit

The Company has various lines of credit which are available to support its ongoing business operations. As of March 31, 2025, the Company had a total capacity of approximately $1.8 billion of lines of credit with various financial institutions.

Repayments of Debt

For the three months ended March 31, 2025, the Company made a quarterly debt repayment totaling $16 million related to the 2026 Term Loan Facility.

During the three months ended March 31, 2024, the Company made a $270 million and €500 million (approximately $547 million) debt repayment at maturity related to the 2024 Term Loan Facility and 2024 Euro Notes, respectively, which were primarily funded from commercial paper issuances, which were subsequently repaid using proceeds received from the divestiture of the Cosmetic Ingredients business. The Company also made a quarterly debt repayment of approximately $16 million related to the 2026 Term Loan Facility in accordance with the terms of the debt agreement.

Subsequent Events

On May 1, 2025, the Company received gross cash proceeds from the sale of the Pharma Solutions disposal group of $2.6 billion, which were partially used to repay the remaining borrowings of $397 million under the 2026 Term Loan Facility.

On May 2, 2025, the Company announced the commencement of tender offers to purchase for cash certain of its outstanding series of Senior Notes for an aggregate purchase price, excluding accrued and unpaid interest, of up to $1.8 billion.

NOTE 14. LEASES

The Company has leases for corporate offices, manufacturing facilities, research and development facilities and certain transportation and office equipment. The Company’s leases have remaining lease terms of up to 50 years, some of which include options to extend the leases for up to 15 years.

The components of lease expense were as follows:


	Three Months Ended		Three Months Ended
(DOLLARS IN MILLIONS)	March 31, 2025		March 31, 2024
Operating leases
Operating lease cost	$	26	$	32
Variable lease cost	22		16
Total operating lease cost	$	48	$	48
Finance leases
Finance lease cost	$	3	$	3

Supplemental cash flow information related to leases was as follows:


	Three Months Ended		Three Months Ended
(DOLLARS IN MILLIONS)	March 31, 2025		March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	32	$	28

Financing cash flows for finance leases	3		2
Right-of-use assets obtained in exchange for lease obligations
Operating leases	22		39
Finance leases	3		3

Operating lease right-of-use assets are presented in “Operating lease right-of-use assets” and finance lease right-of-use assets are presented in “Other assets” on the Consolidated Balance Sheets. Operating lease liabilities are presented in “Operating lease liabilities” and finance lease liabilities are presented in “Other liabilities” on the Consolidated Balance Sheets. Any other current liabilities related to operating and finance lease liabilities are presented in “Other current liabilities” on the Consolidated Balance Sheets.

NOTE 15. FINANCIAL INSTRUMENTS

Fair Value

Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.
Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable*.*

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company also considers counterparty credit risk in its assessment of fair value. The Company determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the Secured Overnight Financing Rate (“Term SOFR”) swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. The Company does not have any instruments classified as Level 3, other than those included in pension asset trusts as discussed in Note 8 of the Company’s 2024 Form 10-K.

The carrying values and the estimated fair values of financial instruments at March 31, 2025 and December 31, 2024 consisted of the following:


	March 31, 2025				December 31, 2024
(DOLLARS IN MILLIONS)	Carrying Value		Fair Value		Carrying Value		Fair Value
LEVEL 1
Cash and cash equivalents(1)	$	613	$	613	$	469	$	469
LEVEL 2
Credit facilities and bank overdrafts(2)	3		3		2		2
Derivatives
Derivative assets(3)	8		8		9		9
Derivative liabilities(3)	131		131		129		129
Commercial paper(2)	292		292		—		—
Long-term debt:



2025 Notes(4)	1,000		982		1,000		972
2026 Euro Notes(4)	864		854		827		813
2027 Notes(4)	1,208		1,118		1,209		1,102
2028 Notes(4)	399		396		398		391
2030 Notes(4)	1,507		1,300		1,507		1,274
2040 Notes(4)	771		556		771		536
2047 Notes(4)	495		395		495		392
2048 Notes(4)	787		682		787		686
2050 Notes(4)	1,567		987		1,568		985

2026 Term Loan Facility(5)	397		397		413		413

(1)The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments.

(2)The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.

(3)The carrying amount approximates fair value as the instruments are marked-to-market and held at fair value on the Consolidated Balance Sheets.

(4)The fair value of the Note is obtained from pricing services engaged by the Company, and the Company receives one price for each security. The fair value provided by the pricing services are estimated using pricing models, where the inputs to those models are based on observable market inputs or recent trades of similar securities. The inputs to the valuation techniques applied by the pricing services are typically benchmark yields, benchmark security prices, credit spreads, reported trades and broker-dealer quotes, all with reasonable levels of transparency.

(5)The carrying amount approximates fair value as the Term Loans were assumed at fair value and the interest rate is reset frequently based on current market rates.

Derivatives

Foreign Currency Forward Contracts

The Company periodically enters into foreign currency forward contracts with the objective of managing our exchange rate risk related to foreign currency denominated monetary assets and liabilities of our operations. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions.

Commodity Contracts

The Company utilizes options that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as soybeans.

The Company also utilizes swaps that are designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of natural gas used in our manufacturing process.

Hedges Related to Issuances of Debt

As of March 31, 2025, the Company designated approximately $864 million of Euro Notes as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in Other comprehensive income (“OCI”) as a component of foreign currency translation adjustments in the accompanying Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

Cross Currency Swaps

The Company has twelve EUR/USD cross currency swaps with a notional value of approximately $1.4 billion that mature through November 2030. The swaps all qualified as net investment hedges in order to mitigate a portion of the Company’s net European investments from foreign currency risk. As of March 31, 2025, the twelve swaps were in a liability position with an aggregate fair value of approximately $122 million, which were classified as Other liabilities on the Consolidated Balance Sheets. Changes in fair value related to cross currency swaps are recorded in OCI.

The following table shows the notional amount of the Company’s derivative instruments outstanding as of March 31, 2025 and December 31, 2024:


(DOLLARS IN MILLIONS)	March 31, 2025		December 31, 2024
Foreign currency contracts(1)	$	(1,684)	$	(1,512)
Commodity contracts(1)	22		7
Cross currency swaps	1,400		1,400

(1)Foreign currency contracts and commodity contracts are presented net of contracts bought and sold.

The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected on the Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024:


	March 31, 2025
(DOLLARS IN MILLIONS)	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative assets(1)
Foreign currency forward contracts	$	—	$	8	$	8


Total derivative assets	$	—	$	8	$	8
Derivative liabilities(2)
Foreign currency contracts	$	—	$	9	$	9
Cross currency swaps	122		—		122

Total derivative liabilities	$	122	$	9	$	131


	December 31, 2024
(DOLLARS IN MILLIONS)	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative assets(1)
Foreign currency contracts	$	—	$	8	$	8


Commodity contracts	1		—		1
Total derivative assets	$	1	$	8	$	9
Derivative liabilities(2)
Foreign currency contracts	$	—	$	39	$	39
Cross currency swaps	90		—		90
Total derivative liabilities	$	90	$	39	$	129

(1)Derivative assets are recorded to Prepaid expenses and other current assets on the Consolidated Balance Sheets.

(2)Derivative liabilities are recorded to Other current liabilities and Other liabilities on the Consolidated Balance Sheets.

The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the three months ended March 31, 2025 and 2024:


	Amount of Gain (Loss) Recognized in Income on Derivative Settlements						Amount of Gain (Loss) Recognized in Income on Changes in Fair Value					Location of Gain (Loss) Recognized in Income on Derivative
(DOLLARS IN MILLIONS)	Three Months Ended March 31,						Three Months Ended March 31,
2025			2024			2025			2024
Foreign currency contracts(1)	$	22		$	(2)		$	30		$	(68)	Other expense, net

(1)The foreign currency contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods.

The following table shows the effect of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedging instruments, net of tax, on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the three months ended March 31, 2025 and 2024:


	Amount of Gain (Loss) Recognized in OCI on Derivative and Non-Derivative (Effective Portion)				Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (“AOCI”) into Income (Effective Portion)		Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
	Three Months Ended March 31,					Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2025		2024			2025			2024
Derivatives in Cash Flow Hedging Relationships:
Foreign currency contracts	$	—	$	(7)	N/A		$	—		$	—
Commodity contracts	(1)		—		Cost of sales		—			—

Derivatives in Net Investment Hedging Relationships:

Cross currency swaps	(24)		23		N/A		—			—
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes	—		3		N/A		—			—
2026 Euro Notes	(28)		15		N/A		—			—
Total	$	(53)	$	34			$	—		$	—

The ineffective portion of the above noted net investment hedges was approximately $4 million for each of the three months ended March 31, 2025 and 2024, and was recorded as a reduction to Interest expense on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

At March 31, 2025, based on current market rates, the Company does not expect any material derivative losses (net of tax), included in AOCI, to be reclassified into earnings within the next 12 months.

NOTE 16. ACCUMULATED OTHER COMPREHENSIVE LOSS

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


(DOLLARS IN MILLIONS)	Foreign Currency Translation Adjustments		Gains (Losses) on Derivatives Qualifying as Hedges		Pension and Postretirement Liability Adjustment		Total
Accumulated other comprehensive (loss) income, net of tax, as of January 1, 2025	$	(2,426)	$	(2)	$	(99)	$	(2,527)
OCI before reclassifications	404		(1)		—		403

Amounts reclassified from AOCI	—		—		1		1
Net current period other comprehensive (loss) income	404		(1)		1		404
Accumulated other comprehensive (loss) income, net of tax, as of March 31, 2025	$	(2,022)	$	(3)	$	(98)	$	(2,123)


(DOLLARS IN MILLIONS)	Foreign Currency Translation Adjustments		Gains (Losses) on Derivatives Qualifying as Hedges		Pension and Postretirement Liability Adjustment		Total
Accumulated other comprehensive (loss) income, net of tax, as of January 1, 2024	$	(1,652)	$	1	$	(245)	$	(1,896)
OCI before reclassifications	(293)		(7)		3		(297)

Amounts reclassified from AOCI	—		—		2		2
Net current period other comprehensive (loss) income	(293)		(7)		5		(295)
Accumulated other comprehensive (loss) income, net of tax, as of March 31, 2024	$	(1,945)	$	(6)	$	(240)	$	(2,191)

The following table provides details about reclassifications out of Accumulated other comprehensive loss to the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income:


	Three Months Ended March 31,				Affected Line Item in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
(DOLLARS IN MILLIONS)	2025		2024






Losses on pension and postretirement liability adjustments

Prior service cost	$	—	$	1	(1)
Actuarial losses	(1)		(3)		(1)


Total	$	(1)	$	(2)	Total, net of income taxes

(1)The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 7 for additional information regarding net periodic benefit cost.

NOTE 17. COMMITMENTS AND CONTINGENCIES

Guarantees and Letters of Credit

The Company has various bank guarantees, letters of credit and surety bonds which are used to support its ongoing business operations, satisfy governmental requirements associated with pending litigation in various jurisdictions and the payment of customs duties.

As of March 31, 2025, the Company had a total of approximately $234 million of available bank guarantees, commercial guarantees, standby letters of credit and surety bonds with various financial institutions. Included in the above aggregate amount was a total of approximately $10 million for other assessments in Brazil for various income tax and indirect tax disputes related to fiscal years 1998-2011. There was a total of approximately $57 million outstanding under the bank guarantees, standby letters of credit and commercial guarantees as of March 31, 2025.

In order to challenge the assessments in these cases in Brazil, the Company has been required to, and has separately pledged assets, principally property, plant and equipment, to cover assessments in the amount of approximately $7 million as of March 31, 2025.

Litigation

The Company assesses contingencies related to litigation and/or other matters to determine the degree of probability and range of possible loss if reasonably estimable. A loss contingency is accrued in the Company’s Consolidated Financial Statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly sensitive and requires judgments about future events and any assessments or the related decisions on accruals could be inaccurate. On at least a quarterly basis, the Company reviews contingencies related to litigation to determine the adequacy of accruals. The amount of ultimate loss may differ from these estimates and the amounts accrued, and further events may require the Company to increase or decrease the amounts it has accrued on any matter.

Periodically, the Company assesses its insurance coverage for all known claims, where applicable, taking into account aggregate coverage by occurrence, limits of coverage, self-insured retentions and deductibles, historical claims experience and claims experience with its insurance carriers. The liabilities are recorded at management’s best estimate of the probable outcome of the lawsuits and claims, taking into consideration the facts and circumstances of the individual matters as well as past experience on similar matters. At each balance sheet date, the key issues that management assesses are whether it is probable that a loss as to asserted or unasserted claims has been incurred and if so, whether the amount of loss can be reasonably estimated. The Company records the expected liability with respect to claims in Other liabilities and expected recoveries from its insurance carriers in Other assets. The Company recognizes a receivable when it believes that realization of the insurance receivable is probable under the terms of the insurance policies and its payment experience to date.

Litigation Matters

A motion to approve a securities class action was filed in the Tel Aviv District Court, Israel, in August 2019, alleging, among other things, false and misleading statements largely in connection with IFF’s acquisition of Frutarom and improper payments made by Frutarom businesses operating principally in Russia and Ukraine to representatives of customers. The motion (“Oman”) (following an initial amendment) asserted claims under the Israeli Securities Act-1968 against IFF, its former Chairman and CEO, and its former CFO, and against Frutarom and certain former Frutarom officers and directors, as well as claims under the Israeli Companies Act-1999 against certain former Frutarom officers and directors. On July 14, 2022, the court approved the parties’ motion to mediate the dispute, which postponed all case deadlines until after the mediation. The parties held mediation meetings in September 2022, November 2022, March 2023, November 2023, March 2024 and April 2024. In November 2024, the court granted extensions for the filing of the responses to the Oman motion and for the evidentiary hearings, for the parties to exhaust the mediation proceeding.

On October 29, 2019, IFF and Frutarom filed a claim in the Tel Aviv District Court, Israel, against Ori Yehudai, the former President and CEO of Frutarom, and against certain former directors of Frutarom, challenging the bonus of US $20 million granted to Yehudai in 2018. IFF and Frutarom allege, among other things, that Yehudai was not entitled to receive the bonus because he breached his fiduciary duty by, among other things, knowing of the above-mentioned improper payments and failing to prevent them from being made. The parties agreed, pursuant to the court’s recommendation, to attempt to resolve the dispute through mediation, and a court decision is pending with regard to the order in which this claim and the class action described below will be heard.

On March 11, 2020, an IFF shareholder filed a motion to approve a class action in Israel against, among others, Frutarom, Yehudai, and Frutarom’s former board of directors, alleging that former minority shareholders of Frutarom were harmed as a result of the US $20 million bonus paid to Yehudai. The court held an evidentiary hearing on the motion to approve a class action in March 2024.

Since March 2023, various putative class action lawsuits have been filed against IFF, Firmenich International SA, Givaudan SA, and Symrise AG and/or certain affiliates thereof in the Quebec Superior Court, the Federal Court of Canada, Ontario Superior Court, the Supreme Court of British Columbia and, in several cases, the United States District Court for the District of New Jersey. These actions allege violations of the Canadian Competition Act and the Sherman Act, as applicable, and other related claims, and seek damages and other relief. In December 2023, the Federal Court of Canada proceeding was discontinued in its entirety. IFF may face additional civil suits, in the United States or elsewhere, relating to such alleged conduct. At this time, IFF is unable to predict the potential outcome of these lawsuits or any potential effect they may have on the Company’s results of operations, liquidity or financial condition. The resolution of any of these items could have a material adverse effect on IFF’s results of operations, financial condition, and overall business.

Investigations

On June 3, 2020, the Israel Police’s National Fraud Investigation Unit and the Israeli Securities Authority commenced an investigation into Frutarom and certain of its former executives, based on suspected bribery of foreign officials, money laundering, and violations of the Israeli Securities Act-1968. On February 26, 2024, the Israeli authorities informed Frutarom that the authorities decided to close the criminal investigation.

On March 7, 2023, the European Commission (“EC”) and the United Kingdom Competition and Markets Authority (“CMA”) carried out unannounced inspections of certain of IFF’s facilities. On the same day, IFF was served with a grand jury subpoena by the Antitrust Division of the U.S. Department of Justice (“DOJ”). IFF understands the EC, CMA, DOJ and the Swiss Competition Commission are investigating potential anticompetitive conduct as it relates to IFF’s fragrance businesses. The Mexican Competition Commission has also announced that it is investigating potential anticompetitive conduct in the fragrance and fragrance ingredients industries. The Company has applied for leniency in a number of jurisdictions. Leniency, if obtained in a jurisdiction, would generally carry significant benefits by, for example, reducing or eliminating monetary liability in that jurisdiction. IFF has been and intends to continue actively cooperating with these investigations, as well as any other present or future inquiries from governmental authorities. During the first three months of 2024, IFF recognized a provision of €15.9 million (approximately $17.5 million) in connection with a settlement with the EC, which was paid during the third quarter of 2024. This settlement pertains to a charge related to the deletion of messages relevant to the investigation by a former Scent employee. This settlement does not conclude the ongoing antitrust investigation. IFF is currently unable, however, to predict or determine the scope, duration or outcome of the investigations, or whether the outcome of the investigations will materially impact the Company’s results of operations, liquidity or financial condition. However, an adverse judgment or other outcome or settlement with respect to any proceedings discussed above could result in significant fines or payments by IFF. The resolution of any of these items could have a material adverse effect on IFF's results of operations, financial condition, and overall business.

Environmental Proceedings

The Company is reporting the following environmental matter in compliance with SEC requirements to disclose environmental proceedings where a governmental authority is a party and that involve potential monetary sanctions of $300,000 or greater. Effective March 22, 2024, the Solae, LLC Memphis site (“Solae”) signed an Administrative Order on Consent (the “Consent Order”) resolving violations and penalties pertaining to the Administrative Order and Assessment received from the City of Memphis on May 27, 2022 related to alleged wastewater discharge violations. In view of the Consent Order, Solae withdrew its previously filed appeal. Pursuant to the Consent Order, Solae is completing its capital project efforts in accordance with the agreed schedule for attaining compliance with current wastewater permit requirements. This matter is not expected to have a material adverse effect on the Company’s financial position, cash flows or results of operations.

Other Contingencies

The Company has contingencies involving third parties (such as labor, contract, technology or product-related claims or litigation) as well as government-related items in various jurisdictions in which it operates pertaining to such items as value-added taxes, other indirect taxes, customs and duties and sales and use taxes. It is possible that cash flows or results of operations, in any period, could be materially affected by the unfavorable resolution of one or more of these contingencies.

The most significant government-related contingencies exist in Brazil. With regard to the Brazilian matters, the Company believes it has valid defenses for the underlying positions under dispute; however, in order to pursue these defenses, the Company is required to, and has provided, bank guarantees and pledged assets in the aggregate amount of approximately $17 million. The Brazilian matters take an extended period of time to proceed through the judicial process and there are a limited number of rulings to date.

Other

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and have not been fully resolved. Due to the inherent subjectivity and unpredictability of outcomes of legal proceedings, the Company is unable to determine, with certainty, the probability of the outcome of these matters or the range of reasonably possible losses, if any.

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