International Flavors & Fragrances IFF · USD

SEGMENT INFORMATIONEffective 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 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 January 1, 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 year ended December 31, 2024 and 2023 has been recast to reflect the updated segment structure and changes in corporate allocations among the Company’s reportable segments on a comparable basis.Taste is comprised of a range of flavor compounds and natural taste solutions that are ultimately used by IFF's customers in a diverse variety of products, including savory products (soups, sauces, meat, fish, poultry, snacks, etc.), beverages (juice drinks, carbonated or flavored beverages, spirits, etc.), sweets (bakery products, candy, cereal, chewing gum, etc.), and dairy products (yogurt, ice cream, cheese, etc.). Taste also include value-added spices and seasoning ingredients for meat, food service, convenience, alternative protein and culinary products.Food Ingredients is comprised of a diversified portfolio across natural, artificial, and plant-based specialty food ingredients that provide functional properties solutions for food and beverage products, as well as specialty soy and pea protein with value-added formulations, emulsifiers and sweeteners.

COMMITMENTS AND CONTINGENCIESGuarantees and Letters of CreditThe 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 December 31, 2025, the Company had a total capacity of approximately $209 million of 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 $11 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 $50 million outstanding under the bank guarantees, standby letters of credit and commercial guarantees as of December 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 December 31, 2025.LitigationThe Company assesses contingencies related to litigation and/or other matters to determine the degree of probability and range of possible loss if reasonably estimable. A loss contingency is accrued in the Company’s Consolidated Financial Statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly sensitive and requires judgments about future events and any assessments or the related decisions on accruals could be inaccurate. On at least a quarterly basis, the Company reviews contingencies related to litigation to determine the adequacy of accruals. The amount of ultimate loss may substantially differ from these estimates and the amounts accrued, and further events may require the Company to increase or decrease the amounts it has accrued on any matter.Periodically, the Company assesses its insurance coverage for all known claims, where applicable, taking into account aggregate coverage by occurrence, limits of coverage, self-insured retentions and deductibles, historical claims experience and claims experience with its insurance carriers.

DEBTDebt consisted of the following at December 31:(DOLLARS IN MILLIONS)Effective Interest Rate202520242025 Notes(1)(2)1.22 %— 1,000 2026 Euro Notes(1)1.93 %940 827 2027 Notes(1)(2)1.56 %804 1,209 2028 Notes(1)4.57 %399 398 2030 Notes(1)(2)2.21 %1,238 1,507 2040 Notes(1)(2)3.04 %341 771 2047 Notes(1)(2)4.44 %392 495 2048 Notes(1)(2)5.12 %674 787 2050 Notes(1)(2)3.21 %888 1,568 2026 Term Loan Facility(1)4.88 %— 413 Revolving Credit Facility(3)— — Commercial Paper(4)314 — Bank overdrafts and other4 2 Total debt$5,994 $8,977 Less: Short term borrowings(1,254)(1,413)Total Long-term debt$4,740 $7,564 _______________________(1)Amount is net of unamortized discount and debt issuance costs.(2)Included in the tender offers described below. (3)Borrowings under the Revolving Credit Facility are subject to interest at varying spreads above quoted market rates and a commitment fee is paid on the total unused borrowings. (4)The effective interest rate of commercial paper issuances fluctuates as short-term interest rates and demand fluctuate, and deferred debt issuance costs are immaterial. Refer to “Commercial Paper” below. Tender OffersOn May 20, 2025, the Company completed tender offers to purchase for cash certain of its outstanding series of Senior Notes for an aggregate purchase price, excluding accrued and unpaid interest, of $2.0 billion. The carrying value of this series of Senior Notes purchased as a result of these tender offers was $2.5 billion. The Company also incurred approximately $6 million of banking and legal costs. In connection with the completion of these tender offers, the Company recognized a gain on debt extinguishment of $488 million within the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). The tender offers were primarily funded through the proceeds received from the divestiture of the Pharma Solutions disposal group.Term Loan Facility and Senior NotesFollowing the business combination (the “Merger”) of IFF and the nutrition and biosciences business (the “N&B Business”) of DuPont de Nemours, Inc (“DuPont”), the Company assumed the indebtedness incurred by N&B in the debt financings completed prior to the Merger. This indebtedness includes (i) a Term Loan Facility of $1.250 billion pursuant to the term loan credit agreement (the “N&B Term Loan Facility”) and (ii) a series of Senior Notes in the aggregate amount of $6.250 billion with maturities ranging from 2 to 30 years as further described below.

INCOME TAXESEarnings before income taxes consisted of the following: December 31,(DOLLARS IN MILLIONS)202520242023U.S. income (loss) before taxes$(1,421)$(810)$(1,777)Foreign income (loss) before taxes1,009 1,118 (741)Total income (loss) before taxes$(412)$308 $(2,518)The income tax provision consisted of the following: December 31,(DOLLARS IN MILLIONS)202520242023Current tax provisionFederal$(178)$(44)$47 State and local4 9 — Foreign391 399 393 Total current tax provision217 364 440 Deferred tax provisionFederal(144)(203)(161)State and local(16)(28)32 Foreign(110)(92)(242)Total deferred tax benefit(270)(323)(371)Total (benefit) provision for income taxes$(53)$41 $69 Effective Tax Rate ReconciliationAs further described in Note 1, Summary of Significant Accounting Policies, the Company has adopted the guidance in ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, or ASU 2023-09. The following table is a reconciliation of the U.S. federal statutory tax rate of 21% to the Company’s effective tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:Year Ended December 31, 2025Total%Earnings from continuing operations, before income tax expense$(412)U.S. Federal Statutory Tax Rate(87)21.1 %United StatesState and Local Income Taxes (a)(13)3.2 %FederalEffect of Cross-Border Tax LawsGlobal intangible low taxed income36 (8.7)%Other(3)0.7 %Tax CreditsResearch and development credit(20)4.8 %Changes in Valuation Allowances22 (5.3)%Nontaxable or Nondeductible ItemsNon-taxable income28 (6.8)%Tax effects of non-deductible goodwill impairment236 (57.3)%Tax impact on gain on business divestitures115 (27.9)%Other4 (1.0)%Other AdjustmentsEntity Realignment - One-time impact(348)84.4 %Other(11)2.7 %Foreign Tax EffectsBrazil10(2.4)%China22(5.3)%CyprusEffect of rates different than statutory(13)3.2 %Enactment of new tax laws(28)6.8 %Notional interest deduction(12)2.9 %Other(1)0.2 %DenmarkNon-taxable income(28)6.8 %Other15 (3.6)%GermanyGoodwill and intangibles(16)3.9 %LuxembourgChanges in valuation allowances(27)6.5 %Other28 (6.8)%NetherlandsTax benefit from supply chain optimization(13)3.2 %Other10 (2.4)%Singapore(11)2.6 %Other Foreign Jurisdictions63 (15.3)%Changes in Unrecognized Tax Benefits(11)2.7 % Income Tax Expense $(53)12.9 % (a)State taxes in Illinois, Minnesota and Michigan made up the majority of the tax effect of this category.

Our comprehensive Incident Response Plan outlines processes to identify, detect, assess, respond to and recover from threats, including cybersecurity threats. We follow those processes to manage material risks from cybersecurity threats, including risks relating to disruption of business operations or financial reporting systems, intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy laws and other litigation/legal risk; and reputational risk, as part of our overall risk management system and processes.In addition, our Enterprise Risk Management (“ERM”) program is designed to identify and assess our global risks and to develop steps to mitigate and manage risks. As part of our risk management practices, we, under the direction and ownership of the Executive Leadership Team, have established risk champions and ambassadors throughout the organization to identify, assess, map, and mitigate these exposures on a regular basis in discussion with functional risk owners. The Board receives regular reports on the ERM process and the risk mitigation activities, including reports focused on compliance, human capital, cybersecurity, and sustainability risks.Our Chief Information Officer (“CIO”) is responsible for delivering on the Company’s global Information Technology (“IT”) strategy, including infrastructure, data and analytics, application delivery, end user services, cybersecurity risk management and the digital technology transformation program. The IT leadership team leads the implementation of the IT strategy and the day-to-day operations. Under the guidance of the CIO, our Chief Information Security Officer (“CISO”) leads Information Security (“InfoSec”), which includes the Cyber Fusion Center, Infrastructure Security, including network segmentation, firewalls and intrusion detection and prevention systems, Identity and Access Management, Application Security, Data Security and InfoSec Governance, Risk and Compliance. InfoSec is overseen by the InfoSec Steering Committee, comprised of senior leaders representing all corporate functions and business units, and the InfoSec Governance Review Board, comprised of the IT leadership team and the InfoSec leadership team. InfoSec is governed in coordination with IFF’s ERM Committee and is aligned to the U.S. National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.

EMPLOYEE BENEFITSThe Company has pension and/or other retirement benefit plans covering approximately 20% of active employees. In 2007, the Company amended its U.S. qualified and non-qualified pension plans under which accrual of future benefits was suspended for all participants that did not meet the rule of 70 (age plus years of service equal to at least 70 as of December 31, 2007). Pension benefits are generally based on years of service and compensation during the final years of employment. Plan assets consist primarily of equity securities and corporate and government fixed income securities. Substantially all pension benefit costs are funded as accrued; such funding is limited, where applicable, to amounts deductible for income tax purposes. Certain other retirement benefits are provided by general corporate assets.The Company sponsors a qualified defined contribution plan covering substantially all U.S. employees. Under this plan, effective January 1, 2023, the Company matches 100% of the first 6% of participants’ contributions.In addition to pension benefits, certain health care and life insurance benefits are provided to qualifying U.S. employees upon retirement from IFF. Such coverage is provided through insurance plans with premiums based on benefits paid. The Company does not generally provide health care or life insurance coverage for retired employees of foreign subsidiaries; such benefits are provided in most foreign countries by government-sponsored plans, and the cost of these programs is not material.The Company offers a non-qualified Deferred Compensation Plan (“DCP”) for certain key employees and non-employee directors. Eligible employees and non-employee directors may elect to defer receipt of salary, incentive payments and Board of Directors’ fees into participant-directed investments which are generally invested by the Company in individual variable life insurance contracts it owns that are designed to informally fund savings plans of this nature. The cash surrender value of life insurance is based on the net asset values of the underlying funds available to plan participants.

NET (LOSS) INCOME PER SHAREA reconciliation of shares used in the computation of basic and diluted net (loss) income per share is as follows:December 31,(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)202520242023Net (Loss) Income Net (loss) income attributable to IFF shareholders$(361)$263 $(2,591)Adjustment related to decrease in redemption value of redeemable non-controlling interests in excess of earnings allocated— — 2 Net (loss) income available to IFF shareholders$(361)$263 $(2,589)SharesWeighted average common shares outstanding (basic and diluted)256 256 255 Net (Loss) Income per ShareNet (loss) income per share – basic and diluted(1)$(1.41)$1.04 $(10.14)_______________________ (1)For the years ended December 31, 2024 and 2023, the basic and diluted net (loss) income per share cannot be recalculated based on the information presented in the table above due to the effects of rounding.There were approximately 1 million and 0.2 million potentially dilutive securities excluded from the computation of diluted net loss per share for the years ended December 31, 2025 and December 31, 2023, respectively, 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.In addition to the above, for the years ended December 31, 2025, 2024 and 2023, there were approximately 0.3 million, 0.3 million and 0.4 million of share equivalents, respectively, that had an anti-dilutive effect and therefore were excluded from the computation of diluted net (loss) income per share.

SHAREHOLDERS’ EQUITY DividendsCash dividends declared per share were $1.60, $1.60 and $3.24 for the years ended December 31, 2025, 2024 and 2023, respectively. The Consolidated Balance Sheets reflect $102 million of dividends payable at December 31, 2025. This amount relates to a cash dividend of $0.40 per share declared in December 2025 and paid in January 2026. Dividends declared, but not paid as of December 31, 2024 and December 31, 2023 were $102 million ($0.40 per share) and $207 million ($0.81 per share), respectively.Share Repurchase ProgramOn August 5, 2025, the Company announced that its Board of Directors has authorized a new share repurchase program with a total value of $500 million. The program began on October 1, 2025 and does not have a specified term or termination date. Under the program, the Company is authorized to repurchase shares of common stock in privately negotiated transactions, and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, and in block trades, or a combination of the foregoing. The Board will review the share repurchase program periodically and may authorize adjustment of its term and size. The Company plans to fund repurchases from available cash and cash provided by operating activities.During 2025, the Company repurchased approximately 584,000 shares of common stock at a cost of approximately $38 million.