Ingredion Inc - Quarter Report: 2024 September (Form 10-Q)

Balance as of January 1, 2024$ $ $ $ $ Amortization of prior service cost

Net periodic cost (a)

$ $ $ $

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(a)The service cost component of net periodic cost is presented within either Cost of sales or Operating expenses on the Condensed Consolidated Statements of Income. The interest cost, expected return on plan assets, amortization of prior service costs and amortization of actuarial losses are presented within Other non-operating expense on the Condensed Consolidated Statements of Income.

million shares of our outstanding common stock until December 31, 2025. We may repurchase shares from time to time in the open market, in privately negotiated transactions, or otherwise, at prices we deem appropriate. We are not obligated to repurchase any shares under the authorization, and the repurchase program may be suspended, discontinued, or modified at any time, for any reason and without notice. The parameters of our stock repurchase program are not established solely with reference to the dilutive impact of shares issued under our stock incentive plan. However, we expect that, over time, share repurchases will offset the dilutive impact of shares issued under the stock incentive plan.

During the third quarter and year-to-date 2024, we repurchased thousand and thousand outstanding shares of common stock in open market transactions at a net cost of $ million and $ million. During the third quarter and year-to-date 2023, we repurchased million outstanding shares of common stock in open market transactions at a net cost of $ million.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

$ $ $ Income tax benefit Stock option expense, net of income taxes Restricted stock units (“RSUs”):Pre-tax compensation expense Income tax benefit() ()()RSUs, net of income taxes Performance shares and other share-based awards:Pre-tax compensation expense Income tax benefit () ()Performance shares and other share-based compensation expense, net of income taxes Total share-based compensation:Pre-tax compensation expense Income tax benefit()()()()Total share-based compensation expense, net of income taxes$ $ $ $

Stock Options: Under our stock incentive plan, stock options are granted at exercise prices that equal the market value of the underlying common stock on the date of grant. The options have a term and are exercisable upon vesting, which occurs over a period at the anniversary dates of the date of grant. We generally recognize compensation expense on a straight-line basis for all awards over the employee’s vesting period. We estimate a forfeiture rate at the time of grant and update the estimate throughout the vesting period of the stock options within the amount of compensation costs recognized in each period.

We granted non-qualified options to purchase thousand shares and thousand shares for year-to-date 2024 and 2023.

Risk-free interest rate%%Expected volatility%%Expected dividend yield%%

The expected life of options represents the weighted average period that we expect options granted to be outstanding giving consideration to vesting schedules and our historical exercise patterns. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date for the period corresponding to the expected life of the options. Expected volatility is based on historical volatilities of our common stock, and dividend yields are based on our dividend yield at the date of issuance.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

$ $ Granted Exercised() Cancelled() Outstanding as of September 30, 2024$ $ Exercisable as of September 30, 2024$ $

For year-to-date 2024, cash received from the exercise of stock options was approximately $ million. As of September 30, 2024, the unrecognized compensation cost related to non-vested stock options totaled $ million, which we expect to amortize over the weighted-average period of approximately years.

$ $ $ Total intrinsic value of stock options exercised

Restricted Stock Units: We have granted restricted stock units (“RSUs”) to certain key employees. The RSUs are primarily subject to cliff vesting, generally after , provided the employee remains in our service. The fair value of the RSUs is determined based upon the number of shares granted and the quoted market price of our common stock at the grant date.

$ Granted Vested() Cancelled() Non-vested as of September 30, 2024$

As of September 30, 2024, the total remaining unrecognized compensation cost related to RSUs was $ million, which will be amortized on a weighted-average basis over approximately years.

Performance Shares: We have a long-term incentive plan for senior management in the form of performance shares. The vesting of the performance shares is generally based on performance metrics. percent of the performance shares awarded vest based on our total shareholder return as compared to the total shareholder return of our peer group, and the remaining percent vest based on the calculation of our average Adjusted Return on Invested Capital (“Adjusted ROIC”) against an established ROIC target.

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

to percent of the grant depending on our total shareholder return as compared to the total shareholder return of our peer group. The share award vesting will be calculated at the end of the period and is subject to approval by management and the People, Culture, and Compensation Committee (“Compensation Committee”) of the Board of Directors. Compensation expense is based on the fair value of the performance shares at the grant date, established using a Monte Carlo simulation model. We amortize the total compensation expense for these awards over a graded vesting schedule.

For the 2024 performance shares awarded based on Adjusted ROIC, the number of shares that ultimately vest can range from to percent of the grant depending on our Adjusted ROIC performance against the target. The share award vesting will be calculated at the end of the period and is subject to approval by management and the Compensation Committee. We base compensation expense on the market price of our common stock on the grant date and the final number of shares that ultimately vest. We estimate the potential share vesting at least annually to adjust the compensation expense for these awards over the vesting period to reflect our estimated Adjusted ROIC performance against the target. We amortize the total compensation expense for these awards over a graded vesting schedule.

For year-to-date 2024, we awarded thousand performance shares at a weighted average fair value of $ per share. As of September 30, 2024, the unrecognized compensation cost related to these awards was $ million, which we will amortize over the remaining service period of years. The 2021 performance share awards that vested in February 2024 achieved a percent payout of the granted performance shares. As of September 30, 2024, we estimated the 2022 performance share awards will pay out at percent. For year-to-date 2024, thousand shares were cancelled.

)$()$()$()Other comprehensive income (loss) before reclassification adjustments () ()Loss reclassified from AOCL Tax (provision) () ()Net other comprehensive income Balance as of September 30, 2024$()$()$()$()

Cumulative Translation Adjustment

Hedging Activities

Pension and Other Post-employment Benefits

AOCL

Balance as of December 31, 2022

()

Other comprehensive (loss) before reclassification adjustments

()

Loss reclassified from AOCL

Tax benefit

Net other comprehensive (loss)

()

Balance as of September 30, 2023

()

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

Supplemental Information:

$ $()$()$ $ $ $ Net income attributable to Ingredion— — — — — — — — Net income attributable to non-controlling interests— — — — — — — —

Dividends declared, common stock ($/share)

— — — — — ()— — — Repurchases of common stock, net— — — ()— — — — — Share-based compensation, net of issuance— — — — — — ()— Other comprehensive (loss)— — — — ()— — — — ()Balance as of March 31, 2024$— $ $ $()$()$ $ $ $ Net income attributable to Ingredion— — — — — — — — — Net income (loss) attributable to non-controlling interests— — — — — — — ()

Dividends declared, common stock ($/share)

— — — — — ()— — — Dividends declared, non-controlling interests— — — — — — ()— — Repurchases of common stock, net— — — ()— — — — — Share-based compensation, net of issuance— — — — — — Fair market value adjustment to non-controlling interests— — ()— — — — — Purchases of non-controlling interests— — — — — — — — ()Other comprehensive (loss)— — — — ()— — — — Balance as of June 30, 2024$— $ $ $()$()$ $ $ $ Net income attributable to Ingredion— — — — — — — — Net income (loss) attributable to non-controlling interests— — — — — — — ()

Dividends declared, common stock ($/share)

— — — — — ()— — — Dividends declared, non-controlling interests— — — — — — ()— — Repurchases of common stock, net— — — ()— — — — — Share-based compensation, net of issuance— — — — — — Other comprehensive income— — — — — — Balance as of September 30, 2024$— $ $ $()$()$ $ $ $

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

$ $()$()$ $ $ $ Net income attributable to Ingredion— — — — — — — — — Net income attributable to non-controlling interests— — — — — — — —

Dividends declared, common stock ($/share)

— — — — — ()— — — Share-based compensation, net of issuance— — — — — ()— Other comprehensive (loss)— — — — ()— ()— — Balance as of March 31, 2023$— $ $ $()$()$ $ $ $ Net income attributable to Ingredion— — — — — — — — — Net income attributable to non-controlling interests— — — — — — — —

Dividends declared, common stock ($/share)

— — — — — ()— — — Dividends declared, non-controlling interests— — — — — — ()— — Share-based compensation, net of issuance— — — — — — Fair market value adjustment to non-controlling interests— — — — — — — ()Restructuring and resegmentation costs() () Other matters ()()Impairment charges()()()()Total operating income$ $ $ $

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

$ Food & Industrial Ingredients - LATAM Food & Industrial Ingredients - U.S./Canada

All Other (a)

Total Property, plant and equipment, net$ $

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(a)For purposes of presentation, All Other includes Corporate assets.

million income tax benefit in 2022. As of September 30, 2024 and December 31, 2023, we had $ million and $ million of remaining tax incentives. A portion of these credits are expected to be used within one year. As of September 30, 2024, $ million was recorded in Accounts receivable, net and $ million in Other non-current assets in the Condensed Consolidated Balance Sheets.

$ Accounts receivable - other $ Allowance for credit losses()$()Total accounts receivable, net$ $

There were no significant contract assets or contract liabilities associated with our customers as of September 30, 2024 or December 31, 2023. Liabilities for volume discounts and incentives were also not significant as of September 30, 2024 or December 31, 2023.

Inventories

$ Raw materials Manufacturing supplies Total inventories$ $

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Ingredion Incorporated

Notes to Condensed Consolidated Financial Statements

(dollars in millions, except per share data, unless otherwise noted)

million in connection with the property, plant and equipment at that manufacturing plant.

Supply Chain Finance Programs

Under supply chain finance programs administered by third-party banks, our suppliers have the opportunity to sell receivables due from us to participating financing institutions and receive earlier payment at a discount. Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether such supplier sells its receivable to a financial institution. The payment terms we negotiate with a supplier are independent of whether such supplier participates in a supply chain finance program, and participation in any such program by a supplier has no effect on our income or cash flows.

As of September 30, 2024 and December 31, 2023, participating financial institutions held $ million and $ million of our liabilities recorded in Accounts payable and Accrued liabilities and liabilities held for sale on our Condensed Consolidated Balance Sheets. As of September 30, 2024, supply chain finance programs existed for operations in Brazil, Mexico, certain PureCircle entities, Colombia, Peru, Thailand and China.

Invoices added during the year Invoices paid during the year() Cumulative translation adjustment()

Outstanding as of September 30, 2024

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “the Company,” “Ingredion,” “we,” “us,” and “our” and similar terms refer to Ingredion Incorporated and its consolidated subsidiaries. This discussion should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and related notes included elsewhere in this report and with the audited Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained or implied in any forward-looking statements. See “Forward-Looking Statements” at the end of this discussion.

Overview

We are a leading global ingredients solutions provider that transforms grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing and industrial markets. Our innovative ingredient solutions help customers stay on trend with simple ingredients and other in-demand ingredients.

During the third quarter of 2024, operating income, net income and diluted earnings per share increased when compared to the same quarter last year while net sales decreased. Net sales decreased primarily due to price mix from lower pass-through of raw material costs to customers as well as volumes associated with the sale of our South Korea business in 2024. Operating income increased during the third quarter primarily due to lower raw material and input costs. Net income and diluted earnings per share increased primarily due to lower financing costs and lower raw material and input costs, partially offset by a higher effective tax rate for the third quarter of 2024 compared to the third quarter of 2023.

Results of Operations

The following discusses our results for our three reportable segments consisting of Texture & Healthful Solutions (“T&HS”), Food & Industrial Ingredients (“F&II”) - Latin America (“LATAM”), and F&II - U.S./Canada. In addition, we discuss the results of All Other. Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries’ net sales and expenses. For most of our foreign subsidiaries, the local foreign currency is the functional currency. Accordingly, net sales and expenses denominated in the functional currencies of these subsidiaries are translated into U.S. dollars at the applicable average exchange rates for the period.

Third Quarter of 2024

With Comparatives to Third Quarter of 2023

Net sales. Net sales decreased 8 percent to $1,870 million for the third quarter of 2024 compared to $2,033 million for the third quarter of 2023. The decrease was due primarily due to price mix primarily from lower raw material costs and lost sales volume from the sale of our South Korea business, partially offset by volume increases.

Cost of sales. Cost of sales decreased 14 percent to $1,391 million for the third quarter of 2024 compared to cost of sales of $1,612 million for the third quarter of 2023. The decrease was due primarily to lower raw material and input costs which decreased at a faster rate than sales leading to gross profit margin increasing to 26 percent for the third quarter of 2024 compared to 21 percent for the third quarter of 2023.

Operating expenses. Operating expenses decreased 3 percent to $198 million for the third quarter of 2024 compared to $203 million for the third quarter of 2023. Operating expenses as a percentage of net sales were 11 percent for the third quarter of 2024 and 10 percent for the third quarter of 2023.

Other operating expense (income). Other operating expense was $1 million for the third quarter of 2024 compared to other operating (income) of $(5) million for the third quarter of 2023. The change was primarily due to insurance recoveries in the third quarter of 2023, whereas there were no such recoveries in the third quarter of 2024.

Restructuring and impairment charges. Restructuring and impairment charges were $12 million for the third quarter of 2024 compared to $10 million for the third quarter of 2023. During the third quarter of 2024, we recorded an impairment charge related to property, plant and equipment associated with manufacturing operations in the United Kingdom, where

we plan to stop production in the first quarter of next year. During the third quarter of 2023, we recorded an impairment charge on an equity method investment.

Financing costs. Financing costs decreased 96 percent to $1 million for the third quarter of 2024 compared to $26 million for the third quarter of 2023. The decrease was primarily due to lower average outstanding debt balances for the third quarter of 2024 compared to the third quarter of 2023, as well as favorable foreign exchange impacts.

Net gain on sale of business. Net gain on sale of business was $8 million for the third quarter of 2024 to reflect the working capital true-up associated with the sale of our South Korea business, which was completed on February 1, 2024. There was no such gain recorded in the third quarter of 2023.

Provision for income taxes. Our effective income tax rate was 30.8 percent for the third quarter of 2024 and 13.5 percent for the third quarter of 2023. The increase was primarily due to an adverse ruling that generated a multi-year tax contingency in the third quarter of 2024, as well as lapping a prior year retroactive law change to claim certain foreign tax credits against U.S. taxes, and the change in the value of the Mexican peso against the U.S. dollar. These impacts were partially offset by the tax treatment on the sale of our South Korea business during 2024.

Net income attributable to Ingredion. Net income attributable to Ingredion for the third quarter of 2024 increased to $188 million from $158 million for the third quarter of 2023. The increase was primarily due to lower input costs and reduced financing costs, partially offset by a less favorable effective tax rate.

Segment Results

Texture & Healthful Solutions

Net sales. T&HS net sales remained flat at $600 million for the third quarter of 2024 compared to $599 million for the third quarter of 2023. An increase in volume of 11 percent were offset by unfavorable price mix of 11 percent.

Operating income. T&HS operating income increased 12 percent to $96 million for the third quarter of 2024 from $86 million for the third quarter of 2023. The increase was primarily due to lower input costs and recovering volumes, partially offset by unfavorable price mix.

Food & Industrial Ingredients - LATAM

Net sales. F&II - LATAM net sales decreased 6 percent to $620 million for the third quarter of 2024 from $658 million for the third quarter of 2023. The decrease was primarily due to unfavorable price mix of 4 percent and unfavorable foreign exchange impacts of 3 percent, partially offset by an increase of 1 percent in volume.

Operating income. F&II - LATAM operating income increased 26 percent to $131 million for the third quarter of 2024 from $104 million for the third quarter of 2023. The increase was primarily due to lower input costs and catch-up pricing on multi-year contracts.

Food & Industrial Ingredients - U.S./Canada

Net sales. F&II - U.S./Canada net sales decreased 9 percent to $548 million for the third quarter of 2024 from $599 million for the third quarter of 2023. The decrease was due to unfavorable price mix of 9 percent.

Operating income. F&II - U.S./Canada operating income increased 25 percent to $99 million for the third quarter of 2024 from $79 million for the third quarter of 2023. The increase was primarily due to lower raw material and input costs, partially offset by price mix.

All Other

Net sales. All Other net sales decreased 42 percent to $102 million for the third quarter of 2024 from $177 million for the third quarter of 2023. The decrease is due to the sale of our South Korea business during 2024. Excluding the sale of our South Korea business, net sales increased 8 percent.

Operating (loss). All Other operating (loss) was $(4) million for the third quarter of 2024 compared to $(1) million for the third quarter of 2023. The decrease was primarily due to the sale of our South Korea business.

Year-to-Date 2024

With Comparatives to Year-to-Date 2023

Net sales. Net sales decreased 10 percent to $5,630 million for year-to-date 2024 compared to $6,239 million for year-to-date 2023. The decrease was primarily due to price mix from lower raw material costs and lost sales volume from the sale of our South Korea business, partially offset by increased volumes in the rest of the business.

Cost of sales. Cost of sales decreased 12 percent to $4,288 million for year-to-date 2024 compared to $4,890 million for year-to-date 2023. The decrease was primarily due to lower raw material and input costs which decreased at a faster rate than sales leading to an increase in gross profit margin to 24 percent for year-to-date 2024 compared to 22 percent for year-to-date 2023.

Operating expenses. Operating expenses were flat at $578 million for year-to-date 2024 compared to $578 million for year-to-date 2023. Operating expenses as a percentage of net sales were 10 percent for year-to-date 2024 and 9 percent for year-to-date 2023.

Other operating expense. Other operating expense was $5 million for year-to-date 2024 compared to $6 million for year-to-date 2023.

Restructuring and impairment charges. Restructuring and impairment charges were $38 million for year-to-date 2024 compared to $10 million for year-to-date 2023. The increase was due primarily to an $18 million impairment charge on an equity method investment, a $8 million impairment charge related to property, plant and equipment associated with manufacturing operations in the United Kingdom and $8 million related to our Cost2Compete program that began on January 1, 2024.

Financing costs. Financing costs decreased 66 percent to $30 million for year-to-date 2024 compared to $88 million for year-to-date 2023. The decrease was primarily due to lower average outstanding debt balances during the year-to-date 2024 compared to year-to-date 2023, as well as foreign exchange impacts.

Net gain on sale of business. Net gain on sale of business was $90 million for year-to-date 2024 to reflect the sale of our South Korea business, which was completed on February 1, 2024. There was no such gain recorded year-to-date 2023.

Provision for income taxes. Our effective income tax rate for year-to-date 2024 increased to 28.5 percent from 21.9 percent for year-to-date 2023. The increase was primarily due to the change in value of the Mexican peso against the U.S. dollar and an adverse ruling that generated a multi-year tax contingency in the third quarter of 2024. These impacts were partially offset by the tax treatment on the sale of our South Korea business during the first quarter of 2024.

Net income attributable to Ingredion. Net income attributable to Ingredion for year-to-date 2024 increased to $552 million from $512 million for year-to-date 2023. The increase was primarily due to the gain on the sale of our South Korea business and reduced financing costs, partially offset by a less favorable effective tax rate.

Segment Results

T&HS

Net sales. T&HS net sales decreased 5 percent to $1,785 million for year-to-date 2024 from $1,882 million for year-to-date 2023. The decrease was primarily due to unfavorable price mix of 11 percent, partially offset by increased volumes of 6 percent.

Operating income. T&HS operating income decreased 19 percent to $256 million for year-to-date 2024 from $318 million for year-to-date 2023. The decrease was primarily due to unfavorable price mix and the carry-forward of higher cost inventory, partially offset by improved volumes.

F&II - LATAM

Net sales. F&II - LATAM net sales decreased 6 percent to $1,866 million for year-to-date 2024 from $1,991 million for year-to-date 2023. The decrease was primarily due to unfavorable price mix of 7 percent, partially offset by increased volumes of 1 percent.

Operating income. F&II - LATAM operating income increased 11 percent to $362 million for year-to-date 2024 from $327 million for year-to-date 2023. The increase was primarily due to lower input costs and catch-up pricing on multi-year contracts.

F&II - U.S./Canada

Net sales. F&II - U.S./Canada net sales decreased 9 percent to $1,644 million for year-to-date 2024 from $1,811 million for year-to-date 2023. The decrease was primarily due to unfavorable price mix of 8 percent and unfavorable volume of 1 percent.

Operating income. F&II - U.S./Canada operating income increased 16 percent to $291 million for year-to-date 2024 from $251 million for year-to-date 2023. The increase was primarily due to lower raw material and input costs, partially offset by price mix.

All Other

Net sales. All Other net sales decreased 40 percent to $335 million for year-to-date 2024 from $555 million for year-to-date 2023. Excluding the sale of our South Korea business, net sales were up 1 percent.

Operating (loss). All Other operating (loss) increased 200 percent to $(18) million for year-to-date 2024 compared to $(6) million for year-to-date 2023. The increase was primarily due to the sale of our South Korea business in 2024.

Liquidity and Capital Resources

As of September 30, 2024, we had total available liquidity of $2.5 billion. Domestic liquidity of $1.3 billion consisted of $289 million in cash and cash equivalents and $1.0 billion available through our commercial paper program. The commercial paper program is backed by $1.0 billion of borrowing availability under a five-year revolving credit agreement.

As of September 30, 2024, we had international liquidity of $1.2 billion, consisting of $588 million of cash and cash equivalents and $7 million of short-term investments held by our operations outside the U.S., as well as $642 million of unused operating lines of credit in foreign countries where we operate. As the parent company, we guarantee certain obligations of our consolidated subsidiaries. These guarantees totaled $40 million as of September 30, 2024. We believe that those consolidated subsidiaries will be able to meet their financial obligations as they become due.

As of September 30, 2024, we had total debt outstanding of $1.8 billion, or $1.7 billion excluding other short-term borrowings. Of our outstanding debt, $1.7 billion consists of senior notes that do not require principal repayment until 2026 through 2050. The weighted average interest rate on our total indebtedness was approximately 4.0 percent for year-to-date 2024 and approximately 4.4 percent for year-to-date 2023.

The principal source of our liquidity is our internally generated cash flow, which we supplement as necessary with our ability to borrow under our credit facilities and commercial paper program and to raise funds in the capital markets. We currently expect that our available cash balances, future cash flow from operations, access to debt markets and borrowing capacity under our revolving credit facility and commercial paper program will provide us with sufficient liquidity to fund our anticipated capital expenditures, dividends and other operating, investing and financing activities for at least the next twelve months and for the foreseeable future thereafter. Our future cash flow needs will depend on many factors, including our rate of revenue growth, cost of raw materials, changing working capital requirements, the timing and extent of our expansion into new markets, the timing of introductions of new products, potential acquisitions of complementary businesses and technologies, continuing market acceptance of our new products and general economic and market conditions. We may need to raise additional capital or incur indebtedness to fund our needs for less predictable strategic initiatives, such as acquisitions.

Net Cash Flows

Our cash provided by operating activities was $1.0 billion for year-to-date 2024 compared to cash provided by operating activities of $647 million for year-to-date 2023. The increase was primarily due to a $371 million change in working capital due to decreases in inventory and trade accounts receivable, and increases in accounts payable and accrued liabilities.

We used $170 million of cash for capital expenditures and mechanical stores purchases to update, expand and improve our facilities during year-to-date 2024 compared to $233 million that we paid during year-to-date 2023 for the same purposes. Capital investment commitments for the remainder of 2024 are anticipated to be between $310 million and $330 million.

We used $601 million of cash for financing activities during year-to-date 2024 compared to cash used for financing activities of $301 million for year-to-date 2023. The difference was primarily due to a net $327 million reduction of our commercial paper borrowings during year-to-date 2024 from $57 million net borrowings of commercial paper during year-to-date 2023.

We declare and pay cash dividends to our common stockholders of record on a quarterly basis. Dividends paid, including those to non-controlling interests, was $156 million during year-to-date 2024 compared to $143 million during year-to-date 2023. The increase in dividend payments was due to an increase in our quarterly dividend to $0.78 per share during year-to-date 2024 from $0.71 per share during year-to-date 2023.

During the third quarter and year-to-date 2024, we repurchased 185 thousand and 762 thousand outstanding shares of common stock in open market transactions at a net cost of $21 million and $87 million. During the third quarter and year-to-date 2023, we repurchased 1.0 million outstanding shares of common stock at a net cost of $101 million. During year-to-date 2024, we purchased shares in our subsidiary PureCircle from minority shareholders for $40 million, which increased our ownership to 98 percent as of September 30, 2024.

We have not provided foreign withholding taxes, state income taxes and federal and state taxes on foreign currency gains/losses on accumulated undistributed earnings of certain foreign subsidiaries because these earnings are considered to be permanently reinvested. It is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings. We do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no changes to our critical accounting policies and estimates during year-to-date 2024.

New Accounting Pronouncements

The information called for by this section is incorporated herein by reference to Note 1 to the Condensed Consolidated Financial Statements included in this report.

Forward-Looking Statements

This Form 10-Q contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Ingredion Incorporated intends these forward-looking statements to be covered by the safe harbor provisions for such statements.

Forward-looking statements include, among others, any statements regarding our prospects, future operations, or future financial condition, earnings, net sales, tax rates, capital expenditures, cash flows, expenses or other financial items, including management’s plans or strategies and objectives for any of the foregoing and any assumptions, expectations or beliefs underlying any of the foregoing.

These statements can sometimes be identified by the use of forward-looking words such as “may,” “will,” “should,” “anticipate,” “assume,” “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “continue,” “pro forma,” “forecast,”

“outlook,” “propels,” “opportunities,” “potential,” “provisional,” or other similar expressions or the negative thereof. All statements other than statements of historical facts therein are “forward-looking statements.”

These statements are based on current circumstances or expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and beyond our control. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, investors are cautioned that no assurance can be given that our expectations will prove correct.

Actual results and developments may differ materially from the expectations expressed in or implied by these statements, based on various risks and uncertainties, including geopolitical conflicts and actions arising from them, including the impacts on the availability and prices of raw materials and energy supplies, supply chain interruptions, and volatility in foreign exchange and interest rates; changing consumer consumption preferences that may lessen demand for products we make; the effects of global economic conditions and the general political, economic, business, and market conditions that affect customers and consumers in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products, and the impact these factors may have on our sales volumes, the pricing of our products and our ability to collect our receivables from customers; future purchases of our products by major industries which we serve and from which we derive a significant portion of our sales, including, without limitation, the food, animal nutrition, beverage and brewing industries; the risks associated with pandemics; the uncertainty of acceptance of products developed through genetic modification and biotechnology; our ability to develop or acquire new products and services at rates or of qualities sufficient to gain market acceptance; increased competitive and/or customer pressure in the corn-refining industry and related industries, including with respect to the markets and prices for our primary products and our co-products, particularly corn oil; price fluctuations, supply chain disruptions, and shortages affecting inputs to our production processes and delivery channels, including raw materials, energy costs and availability and cost of freight and logistics; our ability to contain costs, achieve budgets and realize expected synergies, including with respect to our ability to complete planned maintenance and investment projects on time and on budget as well as with respect to freight and shipping costs and hedging activities; operating difficulties at our manufacturing facilities and liabilities relating to product safety and quality; the effects of climate change and legal, regulatory, and market measures to address climate change; our ability to successfully identify and complete acquisitions, divestitures, or strategic alliances on favorable terms as well as our ability to successfully conduct due diligence, integrate acquired businesses or implement and maintain strategic alliances and achieve anticipated synergies with respect to all of the foregoing; economic, political and other risks inherent in conducting operations in foreign countries and in foreign currencies; the failure to maintain satisfactory labor relations; our ability to attract, develop, motivate, and maintain good relationships with our workforce; the impact on our business of natural disasters, war, threats or acts of terrorism, or the occurrence of other significant events beyond our control; the impact of impairment charges on our goodwill or long-lived assets; changes in government policy, law, or regulation and costs of legal compliance, including compliance with environmental regulation; changes in our tax rates or exposure to additional income tax liability; increases in our borrowing costs that could result from increased interest rates; our ability to raise funds at reasonable rates and other factors affecting our access to sufficient funds for future growth and expansion; interruptions, security incidents, or failures with respect to information technology systems, processes, and sites; volatility in the stock market and other factors that could adversely affect our stock price; risks affecting the continuation of our dividend policy; and our ability to maintain effective internal control over financial reporting.

Our forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see “Risk Factors” and other information included in our Annual Report on Form 10-K for the year ended December 31, 2023 and in our subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the discussion set forth in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the manner in which we address risks with respect to interest rates, raw material and energy costs and foreign currencies. There have been no material changes in the information provided with respect to those risks during year-to-date 2024.

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and our Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures (a) are effective in providing reasonable assurance that all information required to be disclosed in the reports that we file or submit under the Exchange Act has been recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (b) are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during the third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of the date of this report, there have been no material developments in the environmental proceedings related to our Bedford Park, Illinois manufacturing facility discussed in Part I, Item 3. Legal Proceedings in our Annual Report on Form 10-K for the year ended December 31, 2023.

In addition to the foregoing matter, we are currently subject to claims and suits arising in the ordinary course of business, including those relating to labor matters, certain environmental proceedings, and commercial claims. We also routinely receive inquiries from regulators and other government authorities relating to various aspects of our business, including with respect to compliance with laws and regulations relating to the environment, and at any given time, we have matters at various stages of resolution with the applicable governmental authorities. The outcomes of these matters are not within our complete control and may not be known for prolonged periods of time. We do not believe that the results of currently known legal proceedings and inquires will be material to us. There can be no assurance, however, that such claims, suits, or investigations or those arising in the future, whether taken individually or in the aggregate, will not have a material adverse effect on our financial condition or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of common stock:

The following table presents information regarding our repurchase of shares of our common stock during the third quarter of 2024:


(shares in thousands)	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs at End of Period
July 1 – July 31, 2024	185	112.94	185	4,238
August 1 – August 31, 2024	—	—	—	4,238
September 1 – September 30, 2024	—	—	—	4,238
Total	185	112.94	185

On September 26, 2022, the Board of Directors approved a stock repurchase program permitting us to purchase up to 6.0 million shares of our outstanding common stock until December 31, 2025. As of September 30, 2024, we had 4.2 million shares available for repurchase under the stock repurchase program.

ITEM 5. OTHER INFORMATION

, , , Food & Industrial Ingredients, LATAM and U.S./Canada, an existing written plan that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The original plan was adopted on February 29, 2024, and provided for the sale of up to shares of our common stock between May 30, 2024 and February 1, 2026. As of the date of termination, Mr. Ritchie had sold 1,195 shares of common stock pursuant to the terms of the plan.

, , , a written plan for the sale of up to shares of our common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. The plan commences on November 29, 2024 and will expire on , or any earlier date on which all of the shares have been sold.

ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

a) Exhibits

We hereby file or furnish the exhibits listed below:


Exhibit No.			Description

10.1			Ingredion Incorporated Executive Severance Pay Plan (incorporated by reference to Exhibit 10.1 to Ingredion’s Current Report on Form 8-K dated July 23, 2024, filed on July 25, 2024) (File No. 1-13397).

10.2			Ingredion Incorporated Executive Change in Control Severance Pay Plan (incorporated by reference to Exhibit 10.2 to Ingredion’s Current Report on Form 8-K dated July 23, 2024, filed on July 25, 2024) (File No. 1-13397).

10.3†			Form of Amendment to Executive Severance Agreements entered into by certain executive officers of Ingredion to the agreements filed as Exhibits 10.17 and 10.18 to Ingredion’s Quarterly Report on Form 10-Q for the quarter ended Jun e 30, 2018, filed on August 3, 2018) (File No. 1-13397).

31.1†			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2†			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1††			Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2††			Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS†			XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH†			Inline XBRL Taxonomy Extension Schema Document.

101.CAL†			Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF†			Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB†			Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE†			Inline XBRL Taxonomy Extension Presentation Linkbase Document.



104†			Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document, which is contained in Exhibit 101).

_____________________


†			Filed with this report.

††			Furnished with this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	INGREDION INCORPORATED

Date: November 8, 2024	By:	/s/ James D. Gray
	James D. Gray
	Executive Vice President and Chief Financial Officer

Date: November 8, 2024	By:	/s/ Davida M. Gable
	Davida M. Gable
	Vice President, Corporate Controller, Finance and Environmental, Social and Governance

Ingredion Inc - Quarter Report: 2024 September (Form 10-Q)

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