UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR THE QUARTERLY PERIOD ENDED SEPTEMBER~~For the quarterly period ended September 30, ~~2017~~2022


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

~~COMMISSION FILE NUMBER~~ Commission File Number 1-13397

Ingredion Incorporated

(Exact name of ~~Registrant~~registrant as specified in its charter)

~~DELAWARE~~Delaware

(State or other jurisdiction of incorporation or organization)

22-3514823

(I.R.S. Employer Identification Number)

5 ~~WESTBROOK CORPORATE CENTER~~Westbrook Corporate Center

~~WESTCHESTER, ILLINOIS~~Westchester, Illinois

60154

(Address of principal executive offices)

(Zip Code)

~~(708)~~ (708) 551-2600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

~~(Former name, former address and former fiscal year, if changed since last report)~~


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	INGR	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer ☒		Accelerated filer ☐

Non-accelerated filer ☐ ~~(Do not check if a smaller reporting company)~~		Smaller reporting company ☐

		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.


~~CLASS~~Class		~~OUTSTANDING AT OCTOBER 31, 2017~~Outstanding at November 3, 2022
Common Stock, $.01 par value		~~71,865,000~~65,555,317 shares

Table of Contents

~~PART I FINANCIAL INFORMATION~~

~~ITEM 1~~

~~FINANCIAL STATEMENTS~~2

Table of Contents

Ingredion Incorporated ~~(“Ingredion”)~~

Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share amounts)	2022		2021		2022		2021
Net sales	$	2,023	$	1,763	$	5,959	$	5,139
Cost of sales		1,649		1,440		4,816		4,098
Gross profit		374		323		1,143		1,041

Operating expenses		180		164		528		484
Other operating expense (income)		10		(1)		4		(29)
Restructuring/impairment charges and related adjustments		2		(12)		6		362

Operating income		182		172		605		224

Financing costs		24		20		65		58
Other non-operating (income)		(3)		(1)		(4)		(4)

Income before income taxes		161		153		544		170
Provision for income taxes		52		34		157		113
Net income		109		119		387		57
Less: Net income attributable to non-controlling interests		3		1		9		7
Net income attributable to Ingredion	$	106	$	118	$	378	$	50

Weighted average common shares outstanding:
Basic		65.8		67.0		66.4		67.2
Diluted		66.6		67.6		67.1		67.8

Earnings per common share of Ingredion:
Basic	$	1.61	$	1.76	$	5.69	$	0.74
Diluted	$	1.59	$	1.75	$	5.63	$	0.74

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions, except per share amounts)

2017

2016

2017

2016

Net sales before shipping and handling costs

$
1,574

$
1,569

$
4,653

$
4,537

Less: shipping and handling costs

89

80

258

233

Net sales

1,485

1,489

4,395

4,304

Cost of sales

1,097

1,120

3,282

3,241

Gross profit

388

369

1,113

1,063

Operating expenses

152

149

458

431

Other income, net

(4)

(3)

(7)

(2)

Restructuring/impairment charges

7

2

23

15

Operating income

233

221

639

619

Financing costs, net

16

15

57

48

Income before income taxes

217

206

582

571

Provision for income taxes

48

60

153

172

Net income

169

146

429

399

Less: Net income attributable to non-controlling interests

3

3

9

8

Net income attributable to Ingredion

$
166

$
143

$
420

$
391

Weighted average common shares outstanding:

Basic

71.9

72.5

72.0

72.2

Diluted

73.3

74.3

73.4

74.0

Earnings per common share of Ingredion:

Basic

$
2.31

$
1.98

$
5.83

$
5.42

Diluted

$
2.26

$
1.93

$
5.72

$
5.29

See Notes to Condensed Consolidated Financial Statements

~~PART I FINANCIAL INFORMATION~~

~~ITEM 1~~

~~FINANCIAL STATEMENTS~~3

Table of Contents

Ingredion Incorporated ~~(“Ingredion”)~~

Condensed Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Net income	$	109	$	119	$	387	$	57
Other comprehensive income:
Gains on cash flow hedges, net of income tax effect of $19, $9, $66 and $56, respectively		56		26		188		155
(Gains) on cash flow hedges reclassified to earnings, net of income tax effect of $18, $15, $52 and $45, respectively		(55)		(45)		(149)		(125)
Losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect of $ —		1		—		1		—
Currency translation adjustment		(114)		248		(195)		226
Comprehensive (loss) income		(3)		348		232		313
Less: Comprehensive (loss) income attributable to non-controlling interests		(2)		(2)		(4)		6
Comprehensive (loss) income attributable to Ingredion	$	(1)	$	350	$	236	$	307

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Net income

$
169

$
146

$
429

$
399

Other comprehensive income:

Losses on cash-flow hedges, net of income tax effect of $6, $9, $2, and $9, respectively

(10)

(18)

(2)

(15)

Losses on cash-flow hedges reclassified to earnings, net of income tax effect of $1, $2, $- and $9, respectively

—

4

1

18

Actuarial gains (losses) on pension and other postretirement obligations, settlements and plan amendments, net of income tax effect of $-, $-, $- and $1, respectively

—

—

1

(4)

(Gains) losses related to pension and other postretirement obligations reclassified to earnings, net of income tax effect

—

—

(1)

1

Unrealized gains on investments, net of income tax effect

—

—

1

—

Currency translation adjustment

30

9

62

68

Comprehensive income

189

141

491

467

Less: Comprehensive income attributable to non-controlling interests

3

3

9

8

Comprehensive income attributable to Ingredion

$
186

$
138

$
482

$
459

See Notes to Condensed Consolidated Financial Statements

~~PART I FINANCIAL INFORMATION~~

~~ITEM 1~~

~~FINANCIAL STATEMENTS~~4

Table of Contents

Ingredion Incorporated ~~(“Ingredion”)~~

Condensed Consolidated Balance Sheets

September 30,

December 31,

(in millions, except share and per share amounts)

2017

2016

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$
491

$
512

Short-term investments

14

4

Accounts receivable, net

901

923

Inventories

825

789

Prepaid expenses

35

24

Total current assets

2,266

2,252

Property, plant and equipment, net of accumulated depreciation of $2,980 and $2,826, respectively

2,186

2,116

Goodwill

803

784

Other intangible assets, net of accumulated amortization of $130 and $106, respectively

499

502

Deferred income tax assets

7

7

Other assets

132

121

Total assets

$
5,893

$
5,782

Liabilities and equity

Current liabilities:

Short-term borrowings

$
153

$
106

Accounts payable and accrued liabilities

787

872

Total current liabilities

940

978

Non-current liabilities

180

158

Long-term debt

1,731

1,850

Deferred income tax liabilities

154

171

Share-based payments subject to redemption

30

30

Ingredion stockholders’ equity:

Preferred stock — authorized 25,000,000 shares — $0.01 par value, none issued

—

—

Common stock — authorized 200,000,000 shares — $0.01 par value, 77,810,875 issued at September 30, 2017 and December 31, 2016, respectively

1

1

Additional paid-in capital

1,140

1,149

Less: Treasury stock (common stock: 5,964,226 and 5,396,526 shares at September 30, 2017 and December 31, 2016, respectively) at cost

(504)

(413)

Accumulated other comprehensive loss

(1,009)

(1,071)

Retained earnings

3,203

2,899

Total Ingredion stockholders’ equity

2,831

2,565

Non-controlling interests

27

30

Total equity

2,858

2,595

Total liabilities and equity

$
5,893

$
5,782


	September 30,		December 31,
(in millions, except share and per share amounts)	2022		2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	294	$	328
Short-term investments		4		4
Accounts receivable, net		1,406		1,130
Inventories		1,500		1,172
Prepaid expenses		64		63
Total current assets		3,268		2,697

Property, plant and equipment, net of accumulated depreciation of $3,256 and $3,232, respectively		2,308		2,423
Intangible assets, net of accumulated amortization of $264 and $253, respectively		1,286		1,348
Other assets		541		531
Total assets	$	7,403	$	6,999

Liabilities and equity
Current liabilities:
Short-term borrowings	$	709	$	308
Accounts payable and accrued liabilities		1,240		1,204
Total current liabilities		1,949		1,512

Long-term debt		1,739		1,738
Other non-current liabilities		536		524
Total liabilities		4,224		3,774

Share-based payments subject to redemption		43		36
Redeemable non-controlling interests		56		71

Ingredion stockholders’ equity:
Preferred stock — authorized 25,000,000 shares — $0.01 par value, none issued		—		—
Common stock — authorized 200,000,000 shares — $0.01 par value, 77,810,875 issued at September 30, 2022 and December 31, 2021		1		1
Additional paid-in capital		1,133		1,158
Less: Treasury stock (common stock: 12,258,900 and 11,154,203 shares at September 30, 2022 and December 31, 2021, respectively) at cost		(1,159)		(1,061)
Accumulated other comprehensive loss		(1,052)		(897)
Retained earnings		4,143		3,899
Total Ingredion stockholders’ equity		3,066		3,100
Non-redeemable non-controlling interests		14		18
Total equity		3,080		3,118
Total liabilities and equity	$	7,403	$	6,999

See Notes to Condensed Consolidated Financial Statements

~~PART I FINANCIAL INFORMATION~~

~~ITEM 1~~

~~FINANCIAL STATEMENTS~~5

Table of Contents

Ingredion Incorporated ~~(“Ingredion”)~~

Condensed Consolidated Statements of Equity and Redeemable Equity

(Unaudited)


	Total Equity
													Non-
													Redeemable		Share-based		Redeemable
					Additional				Accumulated Other				Non-		Payments		Non-
	Preferred		Common		Paid-In		Treasury		Comprehensive		Retained		Controlling		Subject to		Controlling
(in millions)	Stock		Stock		Capital		Stock		Loss		Earnings		Interests		Redemption		Interests
Balance, December 31, 2021	$	—	$	1	$	1,158	$	(1,061)	$	(897)	$	3,899	$	18	$	36	$	71
Net income attributable to Ingredion												378
Net income attributable to non-controlling interests														7				2
Dividends declared												(134)		(4)
Repurchases of common stock, net								(112)
Share-based compensation, net of issuance						4		14								7
Fair market value adjustment to non-controlling interests						(29)												29
Non-controlling interest purchases																		(40)
Other comprehensive (loss)										(155)				(7)				(6)
Balance, September 30, 2022	$	—	$	1	$	1,133	$	(1,159)	$	(1,052)	$	4,143	$	14	$	43	$	56

Total Equity

Share-based

Additional

Accumulated Other

Non-

Payments

Common

Paid-In

Treasury

Comprehensive

Retained

Controlling

Subject to

(in millions)

Stock

Capital

Stock

Loss

Earnings

Interests

Redemption

Balance, December 31, 2016

$
1

$
1,149

$
(413)

$
(1,071)

$
2,899

$
30

$
30

Net income attributable to Ingredion

420

Net income attributable to non-controlling interests

9

Dividends declared

(116)

(12)

Repurchases of common stock

(123)

Share-based compensation, net of issuance

(9)

32

—

Other comprehensive income

62

Balance, September 30, 2017

$
1

$
1,140

$
(504)

$
(1,009)

$
3,203

$
27

$
30


	Total Equity
													Non-
													Redeemable		Share-based		Redeemable
					Additional				Accumulated Other				Non-		Payments		Non-
	Preferred		Common		Paid-In		Treasury		Comprehensive		Retained		Controlling		Subject to		Controlling
(in millions)	Stock		Stock		Capital		Stock		Loss		Earnings		Interests		Redemption		Interests
Balance, December 31, 2020	$	—	$	1	$	1,150	$	(1,024)	$	(1,133)	$	3,957	$	21	$	30	$	70
Net income attributable to Ingredion												50
Net income (loss) attributable to non-controlling interests														10				(3)
Dividends declared												(130)		(10)
Repurchases of common stock, net								(68)
Share-based compensation, net of issuance						5		20								2
Other comprehensive income (loss)										256				(2)				1
Balance, September 30, 2021	$	—	$	1	$	1,155	$	(1,072)	$	(877)	$	3,877	$	19	$	32	$	68

Total Equity

Share-based

Additional

Accumulated Other

Non-

Payments

Common

Paid-In

Treasury

Comprehensive

Retained

Controlling

Subject to

(in millions)

Stock

Capital

Stock

Loss

Earnings

Interests

Redemption

Balance, December 31, 2015

$
1

$
1,160

$
(467)

$
(1,102)

$
2,552

$
36

$
24

Net income attributable to Ingredion

391

Net income attributable to non-controlling interests

8

Dividends declared

(101)

(6)

Share-based compensation, net of issuance

(14)

53

3

Other comprehensive income

78

(10)

Balance, September 30, 2016

$
1

$
1,146

$
(414)

$
(1,024)

$
2,842

$
28

$
27

See Notes to Condensed Consolidated Financial Statements

~~PART I FINANCIAL INFORMATION~~

~~ITEM 1~~

~~FINANCIAL STATEMENTS~~6

Table of Contents

Ingredion Incorporated ~~(“Ingredion”)~~

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
Cash provided by operating activities
Net income	$	387	$	57
Non-cash charges to net income:
Depreciation and amortization		160		155
Mechanical stores expense		42		40
Impairment on disposition of assets		—		340
Deferred income taxes		(3)		(25)
Other non-cash charges		41		4
Changes in working capital:
Accounts receivable and prepaid expenses		(276)		(126)
Inventories		(401)		(226)
Accounts payable and accrued liabilities		99		94
Margin accounts		(11)		(34)
Other		42		(20)
Cash provided by operating activities		80		259

Cash used for investing activities
Capital expenditures and mechanical stores purchases		(203)		(203)
Proceeds from disposal of manufacturing facilities and properties		7		17
Payments for acquisitions, net of cash acquired of $ - and $2, respectively		(7)		(40)
Other		1		(12)
Cash used for investing activities		(202)		(238)

Cash provided by (used for) financing activities
Proceeds from borrowings		376		804
Payments on debt		(342)		(1,194)
Commercial paper borrowings, net		372		350
Repurchases of common stock, net		(112)		(68)
Purchases of non-controlling interests		(40)		—
Issuances of common stock for share-based compensation, net of settlements		1		10
Dividends paid, including to non-controlling interests		(133)		(138)
Cash provided by (used for) financing activities		122		(236)

Effects of foreign exchange rate changes on cash		(34)		(16)

Decrease in cash and cash equivalents		(34)		(231)

Cash and cash equivalents, beginning of period		328		665

Cash and cash equivalents, end of period	$	294	$	434

Nine Months Ended

September 30,

(in millions)

2017

2016

Cash provided by operating activities

Net income

$
429

$
399

Non-cash charges to net income:

Depreciation and amortization

156

146

Charge for fair value markup of acquired inventory

9

—

Other

54

59

Changes in working capital:

Accounts receivable and prepaid expenses

15

(56)

Inventories

(33)

(8)

Accounts payable and accrued liabilities

(92)

18

Decrease in margin accounts

10

1

Other

(24)

(17)

Cash provided by operating activities

524

542

Cash used for investing activities

Capital expenditures, net of proceeds on disposals

(222)

(197)

Short-term investments

(9)

(7)

Payments for acquisitions

(13)

—

Cash used for investing activities

(244)

(204)

Cash used for financing activities

Proceeds from borrowings

1,085

793

Payments on debt

(1,164)

(742)

Debt issuance costs

—

(4)

(Repurchase) issuance of common stock, net

(120)

21

Dividends paid (including to non-controlling interests)

(120)

(103)

Cash used for financing activities

(319)

(35)

Effects of foreign exchange rate changes on cash

18

14

(Decrease) increase in cash and cash equivalents

(21)

317

Cash and cash equivalents, beginning of period

512

434

Cash and cash equivalents, end of period

$
491

$
751

See Notes to Condensed Consolidated Financial Statements

Table of Contents

Ingredion Incorporated

~~INGREDION INCORPORATED (“Ingredion”)~~

Notes to Condensed Consolidated Financial Statements

1. Interim Financial Statements

References to the ~~“Company” are to~~“Company,” “Ingredion,” “we,” “us,” and “our” shall mean Ingredion Incorporated (“Ingredion”) individually and together with its consolidated subsidiaries. These statements should be read in conjunction with the consolidated financial statements and the related notes to those statements contained in ~~the Company’s~~Ingredion’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2021.

The unaudited Condensed Consolidated Financial Statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 included herein were prepared by management on the same basis as ~~the Company’s~~Ingredion’s audited Consolidated Financial Statements for the year ended December 31, ~~2016~~2021 and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) ~~which~~that are, in the opinion of management, necessary for the fair presentation of ~~results~~the Condensed Consolidated Statements of ~~operations~~Income, Condensed Consolidated Statements of Comprehensive (Loss) Income, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Equity and ~~cash flows for the interim periods ended September 30, 2017~~Redeemable Equity, and ~~2016, and the financial position~~Condensed Consolidated Statements of ~~the Company as of September 30, 2017.~~Cash Flows. The results for the interim ~~periods~~period are not necessarily indicative of the results expected for the full ~~years.~~year or any other future period.

2. ~~Recently Adopted~~Summary of Significant Accounting Standards and Policies

For detailed information about Ingredion’s significant accounting standards and policies, see Note 1 of the Notes to the Consolidated Financial Statements included in Ingredion’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to our significant accounting standards and policies for the three and nine months ended September 30, 2022.

New Accounting Standards

~~Recently Adopted Accounting Standards:~~ In ~~July 2015,~~March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. ~~2015-11, Inventory~~2020-04, Reference Rate Reform (Topic ~~330)~~848): ~~Simplifying~~Facilitation of the ~~Measurement~~Effects of ~~Inventory. This Update requires an entity~~Reference Rate Reform on Financial Reporting. The amendments in this update provide optional guidance for a limited time to ~~measure inventory at~~ease the ~~lower of cost and net realizable value, removing~~potential burden in accounting for (or recognizing the ~~consideration of current replacement cost. It is~~effects of) reference rate reform on financial reporting. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. We adopted this Update in the current year and it did not have a material impact on our audited Condensed Consolidated Financial Statements.

~~New Accounting Standards:~~ ~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~ that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The FASB has also issued additional ASUs to provide further updates and clarification to this Update, including ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We plan to adopt the standardall entities as of the effective date. The standard will allow various transition approaches upon adoption. We plan to use the modified retrospective approach for the transition to the new standard. Based on the analysis performed by the Company to date, our assessment is that the adoption of the guidance in this UpdateMarch 12, 2020 through December 31, 2022. This update is not expected to have a material impact on ~~the Company’s revenue recognition timing or amounts, as we have not identified any changes to the recognition of revenue for existing customer contracts.~~Ingredion’s Condensed Consolidated Financial Statements.

In ~~February 2016,~~September 2022, the FASB issued ASU No. ~~2016-02,~~ ~~Leases (Topic 842),~~ ~~which supersedes Topic 840, Leases. This Update increases the transparency and comparability~~2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of ~~organizations by recognizing lease assets and lease liabilities on the balance sheet for leases longer than 12 months and disclosing key~~Supplier Finance Program Obligations. The amendments require buyers to disclose information about ~~leasing arrangements.~~supplier finance programs that is sufficient to allow financial statement users to understand their nature, activity during the period, changes from period to period and potential magnitude. The ~~recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. This Update is~~amendments in this update are effective for annual periods beginning after December 15, 2018, with early adoption permitted. We currently plan to adopt the standard as of the effective date. Adoption will require a modified retrospective approach for the transition. We expect the adoption of the guidance in this Update to have a material impact on our Consolidated Balance Sheet as operating leases will be recognized both as assets and liabilities on the Consolidated Balance Sheet.2022. We are incurrently evaluating the ~~process~~impact of ~~quantifying the magnitude of these changes and assessing the implementation approach for accounting for these changes.~~

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. This Update simplifies the subsequent measurement of Goodwill as the Update eliminates Step 2 from the goodwill impairment test. Instead, under the Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value,

~~with the loss recognized not~~this update to ~~exceed the total amount of goodwill allocated to that reporting unit. This Update is effective for annual periods beginning after December 15, 2019, with early adoption permitted.~~

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~. This Update requires an entity to change the classification of the net periodic benefit cost for pension and postretirement plans within the statement of income by eliminating the ability to net all of the components of the costs together within operating income. The Update will require the service cost component to continue to be presented within operating income, classified within either cost of sales or operating expenses depending on the employees covered within the plan. The remaining components of the net periodic benefit cost, however, must be presented in the statement of income as a non-operating income (loss) below operating income. The Update is effective for annual periods beginning after December 15, 2017, with early adoption permitted only within the first interim period for public entities. We plan to adopt this Update in 2018. When adopted, the new guidance must be applied retrospectively for all income statement periods presented. The Update will reduce the Company’s operating income and will require a new financial statement line item below operating income within theour Condensed Consolidated ~~Statements of Income for the non-operating income (loss) components. Net income within the Condensed Consolidated Statements of Income will not change upon adoption of the Update.~~Financial Statements.

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.~~ ~~This Update~~ modifies accounting guidance for hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess ineffectiveness. The intent is to simplify the application of hedge accounting and increase transparency of information about an entity’s risk management activities. The amended guidance is effective for annual periods beginning after December 15, 2018, with early adoption permitted. ~~We are in the process of assessing the effects of these updates including potential changes to existing hedging arrangement, as well as the implementation approach for accounting for these changes.~~

3. Acquisitions

3. ~~Acquisitions~~

PureCircle Non-Controlling Interests

On March 9, 2017, the Company completed its acquisition of Sun Flour Industry Co., Ltd. (“Sun Flour”) in Thailand for $18 million. Upon closing, the Company paid $13 million in cash and recorded $5 million in accrued liabilities for deferred payments due to the previous owner. The Company funded the acquisition primarily with cash on hand. The acquisition of Sun Flour adds a fourth manufacturing facility to our operations in Thailand. Sun Flour produces rice-based ingredients used primarily in the food industry. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date forward within the Asia Pacific business segment.

On December 29, 2016, the Company completed its acquisition of TIC Gums Incorporated (“TIC Gums”), a privately held, U.S.-based company that provides advanced texture systems to the food and beverage industry, for $396 million, net of cash acquired. The acquisition adds a manufacturing facility in both the U.S. and China. The Company funded the acquisition with proceeds from borrowings under its revolving credit agreement. The results of the acquired operations are included in the Company’s consolidated results from the respective acquisition dates forward within the North America and Asia Pacific business segments.

On November 29, 2016, the Company completed its acquisition of Shandong Huanong Specialty Corn Development Co., Ltd. (“Shandong Huanong”) in China for $12 million in cash. The Company funded the acquisition primarily with cash on hand. The acquisition of Shandong Huanong, located in Shandong Province, adds second manufacturing facility to our operations in China. It produces starch raw material for our plant in Shanghai, which makes value-added ingredients for the food industry. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date forward within the Asia Pacific business segment.

A preliminary allocation of the purchase price to the assets acquired and liabilities assumed was made based on available information and incorporating management’s best estimates. The assets acquired and liabilities assumed for each acquisition in the transactions are generally recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisitions were expensed as incurred.

The purchase accounting for TIC Gums is still open, pending finalization of goodwill and taxes. All of the recorded assets and liabilities, including working capital, property, plant and equipment (“PP&E”), goodwill, and intangibles, are open for performing purchase accounting adjustments for Sun Flour. Purchase accounting adjustments for Shandong Huanong remain open to finalize the valuation of intangible assets.

Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired. The goodwill results from synergies and other operational benefits expected to be derived from the acquisitions. The goodwill related to TIC Gums and Shandong Huanong is tax deductible due to the structure of the acquisitions. The goodwill related to Sun Flour is not tax deductible.

~~The following table summarizes the preliminary purchase price allocation for the acquisition of TIC Gums as of December 29, 2016:~~

Preliminary

(in millions)

TIC Gums

Working capital (excluding cash)

$
49

Property, plant and equipment

37

Identifiable intangible assets

133

Goodwill

177

Total purchase price, net of cash

$
396

The identifiable intangible assets for the acquisition of TIC Gums included items such as customer relationships, trade names, and proprietary technology. The fair values of these intangible assets were determined to be Level 3 under the fair value hierarchy. Level 3 inputs are unobservable inputs for an asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for fair value estimates to be made in situations in which there is little, if any, market activity for an asset or liability at the measurement date. The following table presents the fair values, valuation techniques, and estimated remaining useful life at the acquisition date for these Level 3 measurements (dollars in millions):

Estimated

Fair Value

Valuation Technique

Useful Life
Customer relationships

$
94

Multi-period excess earnings method

20 years
Trade names

35

Relief-from-royalty method

Indefinite
Proprietary technology

4

Relief-from-royalty method

8 years

~~The acquisitions of Sun Flour and Shandong Huanong added $21 million to goodwill and identifiable intangible assets and $9 million to net tangible assets as of their respective acquisition dates.~~

Included in the results of the acquired businesses for the nine months ended September 30, 2017 was an increase in cost of sales of $9 million relating to the sale of inventory that was adjusted to fair value at the acquisition dates for each acquired business in accordance with business combination accounting rules. The fair value adjustments for the three months ended September 30, 2017 had no effect on cost of sales.

Pro-forma results of operations for the acquisitions made in 2017 and 2016 have not been presented as the effect of each acquisition individually and in aggregate would not be material to the Company’s results of operations for any periods presented.

~~The Company incurred $1 million and $3 million of pre-tax acquisition and integration costs for~~During the three and nine months ended September 30, ~~2017, respectively, associated~~2022, Ingredion purchased shares from minority shareholders in PureCircle Limited (“PureCircle”) for $13 million and $40 million, respectively. These purchases increased our ownership percentage in PureCircle from 75 percent as of December 31, 2021, to 85 percent as of September 30, 2022.

Other Acquisitions

On August 1, 2022, Ingredion acquired Amishi Drugs and Chemicals Private Limited (“Amishi”) for $7 million, which added $2 million of goodwill and intangible assets to our Condensed Consolidated Financial Statements. Amishi is an Indian manufacturer of chemically modified starch-based pharmaceutical excipients. Beginning at the

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acquisition date, our Condensed Consolidated Financial Statements reflect the preliminary effects of the acquisition and Amishi’s financial results, which we report in our Asia-Pacific reportable business segment.

On April 1, 2021, Ingredion acquired KaTech, a privately held company headquartered in Germany. KaTech provides advanced texture and stabilization solutions to the food and beverage industry. To complete the closing, Ingredion made a total cash payment of $40 million, net of cash acquired, which we funded from cash on hand. The acquisition added $26 million of goodwill and intangible assets, as well as $14 million of tangible assets, to our Condensed Consolidated Financial Statements. Beginning at the acquisition date, our Condensed Consolidated Financial Statements reflect the effects of the acquisition and KaTech’s financial results, which we report in our Europe, Middle East and Africa (“EMEA”) reportable business segment.

4. Intangible Assets

Goodwill ($883 million and $914 million at September 30, 2022, and December 31, 2021, respectively) represents the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed. Ingredion also had indefinite-lived intangible assets of $143 million at each of September 30, 2022, and December 31, 2021.

The original carrying value of goodwill and accumulated impairment charges by reportable business segment at September 30, 2022, are as follows:


	North		South		Asia-
(in millions)	America		America		Pacific		EMEA		Total
Goodwill before impairment charges	$	624	$	48	$	323	$	74	$	1,069
Accumulated impairment charges		(1)		(33)		(121)		—		(155)
Balance at January 1, 2022		623		15		202		74		914
Acquisitions		—		—		2		4		6
Currency translation		(1)		1		(25)		(12)		(37)
Balance at September 30, 2022	$	622	$	16	$	179	$	66	$	883

The following table summarizes the balances of Ingredion’s indefinite-lived intangible assets at the dates presented:


(in millions)	As of September 30, 2022		As of December 31, 2021
Trademarks/tradenames (indefinite-lived)	$	143	$	143

Ingredion assesses goodwill and indefinite-lived intangible assets for impairment annually (or more frequently if impairment indicators arise). Based on the results of our assessment as of July 1, 2022, there were no impairments in our goodwill or indefinite-lived intangible assets.

5. Investments

Investments consisted of the following as of the dates indicated:



(in millions)	September 30, 2022		December 31, 2021
Equity investments	$	23	$	16
Equity method investments		109		104
Marketable securities		4		12
Total investments	$	136	$	132

Amyris Joint Venture

On June 1, 2021, Ingredion entered into an agreement with ~~its recent acquisitions.~~Amyris, Inc. (“Amyris”) for certain exclusive commercialization rights to Amyris’s rebaudioside M by fermentation product, the exclusive licensing of the product’s manufacturing technology and a 31 percent ownership stake in a joint venture for the products (the “Amyris joint venture”). In ~~2016,~~exchange, we contributed $28 million of total consideration, which included $10 million of cash, as well as non-exclusive intellectual property licenses and other consideration valued at $18 million. The transaction resulted in an

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$8 million gain recorded in Other operating (income) during the ~~Company~~nine months ended September 30, 2021, which included $18 million related to the non-exclusive intellectual property licenses, partly offset by the $10 million cash payment. Beginning on June 1, 2021, Ingredion began accounting for the investment under the equity method.

Argentina Joint Venture

On February 12, 2021, Ingredion entered into an agreement with an affiliate of Grupo Arcor, an Argentine food company, to establish Ingrear Holding S.A. (the “Argentina joint venture”), a joint venture to operate five manufacturing facilities in Argentina to sell value-added ingredients to customers in the food, beverage, pharmaceutical and other industries in Argentina, Chile and Uruguay. On August 2, 2021, Ingredion and Grupo Arcor completed all closing conditions, pending customary antitrust review, to combine the manufacturing facilities, finalize the transaction and formally establish the Argentina joint venture, which is managed by a jointly appointed team of executives and is accounted for under the equity method.

We exchanged certain assets and liabilities with a fair value of $71 million from our Argentina, Chile and Uruguay operations for 49 percent of the outstanding shares of the Argentina joint venture valued at $64 million, as well as $7 million of other consideration, including cash, from Grupo Arcor as of August 2, 2021. The transaction also resulted in an impairment charge for the transferred assets and liabilities more fully described in Note 5.

Beginning on the dates Ingredion entered into the agreements for equity method investees, our share of income from them is included in Other operating (income). Ingredion incurred ~~$2 million~~an insignificant amount of pre-tax acquisition and integration costs ~~for~~during the three and nine months ended September 30, 2022, related to our investments in the Amyris and Argentina joint ventures. Ingredion incurred $3 million of pre-tax acquisition costs to acquire the Argentina joint venture investment during the three months ended September 30, 2021, and $4 million of pre-tax gains, consisting of the $8 million gain related to the Amyris joint venture, partially offset by $4 million of acquisition costs to acquire the Argentina and Amyris joint ventures during the nine months ended September 30, ~~2016 associated with the 2015 acquisitions of Kerr Concentrates, Inc.~~2021.

6. Restructuring and ~~Penford Corporation. Pre-tax acquisition and integration costs incurred for the three months ended September 30, 2016 were not significant.~~Impairment Charges

4. ~~Impairment and Restructuring Charges~~

For the three and nine months ended September 30, ~~2017, the Company~~2022, Ingredion recorded $7an insignificant amount and $4 million ~~and $23 million, respectively,~~ of pre-tax restructuring charges. During the first quarter of 2017, the Company implemented an organizational restructuring effort in Argentina in order to achieve a more competitive cost position. The Company notified the local labor union of a planned reduction in workforce, which resulted in a strike by the labor union and an interruption of manufacturing activities during the second quarter of 2017. The Company finalized a new labor agreement with the labor union in the second quarter, ending the strike on June 1, 2017. For the nine months ended September 30, 2017, the Company recorded total pre-tax restructuring-related charges, ~~in Argentina of $17 million for employee-related severance and other costs. No additional charges were recorded for the three months ended September 30, 2017.~~

During the second quarter of 2017, the Company announced a Finance Transformation initiative in North America for the U.S. and Canada businesses to strengthen organizational capabilities and drive efficiencies to support the growth strategy ~~of the Company.~~respectively. For the three and nine months ended September 30, ~~2017, the Company~~2021, Ingredion recorded $12 million of net pre-tax restructuring and impairment income and $362 million of pre-tax restructuring and impairment charges, respectively.

Restructuring Charges

For the three months ended September 30, 2022, we recorded an insignificant amount of pre-tax restructuring-related charges. For the nine months ended September 30, 2022, we recorded $4 million ~~($3~~of pre-tax restructuring-related charges, which included $3 million of ~~severance~~ costs associated with our Cost Smart selling, general and administrative expense (“SG&A”) program and $1 million of ~~other costs) and $5 million ($3 million~~costs as part of ~~severance costs and $2 million~~our Cost Smart Cost of ~~other costs), respectively, related to this initiative. The Company expects to incur between $~~3 ~~million and $~~5 ~~million of employee-related severance and other costs in the fourth quarter of 2017 and between $1 million and $2 million in 2018 related to this initiative.~~sales program.

~~Additionally, for~~For the three months ended September 30, ~~2017, the Company~~2021, we recorded $8 million of pre-tax restructuring-related charges. These costs included $4 million of costs associated with our Cost Smart SG&A program and $3 million of ~~other pre-tax~~restructuring-related charges as a part of our Cost Smart Cost of sales program. We also recorded $1 million of restructuring ~~costs including employee-related severance costs in North America.~~ charges related to disposition of the assets contributed to the Argentina joint venture.

For the nine months ended September 30, ~~2017, the Company~~2021, we recorded $1$22 million of ~~other~~ pre-tax ~~restructuring~~net restructuring-related charges, ~~including other employee-related severance~~consisting of $13 million of costs ~~in North America~~associated with our Cost Smart SG&A program and $11 million of costs as part of our Cost Smart Cost of sales program. The Cost Smart Cost of sales program charges were partly offset by a ~~refinement~~$5 million gain on the sale of ~~estimates for prior year restructuring activities.~~

~~During~~ the ~~third quarter of 2016, the Company~~Stockton, California land and building. We also recorded $2$3 million of restructuring charges ~~for employee-related severance and other costs due~~related to disposition of the assets contributed to the ~~execution~~Argentina joint venture.

Table of ~~global information technology (“IT”) outsourcing contracts. For~~Contents

A summary of Ingredion’s severance accrual at September 30, 2022, which we expect to fully pay in 2022, is as follows (in millions):


Balance in severance accrual as of December 31, 2021	$	3
Payments made to terminated employees		(2)
Balance in severance accrual as of September 30, 2022	$	1

Impairment Charges

At the announcement of our agreement to invest in the Argentina joint venture during the three months ended March 31, 2021, we reclassified assets and liabilities we expected to contribute to the joint venture as held for sale in Other assets in the Condensed Consolidated Balance Sheets and recorded an impairment charge of $360 million based on our preliminary estimates of their fair value. Upon completion of the transaction, we disposed of the assets and liabilities from our Argentina, Chile and Uruguay operations, which were previously accounted for as held for sale, and transferred them to the Argentina joint venture in exchange for an equity share in the venture. We accounted for our share of the venture as an equity method investment as discussed in Note 5. Upon disposal, we valued the assets and liabilities transferred at fair value. This resulted in a $20 million favorable adjustment to the estimated impairment charge during the three months ended September 30, 2021. The total net impairment charge was $340 million for the nine months ended September 30, ~~2016, the Company recorded $15~~2021, of which $311 million ~~of restructuring charges consisting of $10 million of employee-related severance and other costs due~~was related to the ~~execution~~write-off of ~~global IT outsourcing contracts, $3 million of employee-related severance costs~~the cumulative translation losses associated with the ~~Company’s optimization initiative in South America~~contributed net assets and $2$29 million ~~of costs attributable~~was related to the ~~2015 Port Colborne plant sale.~~

~~A summary~~write-down of the ~~Company’s severance accrual as~~contributed net assets to fair value. We recorded the impairment within Restructuring/impairment charges and related adjustments in the Condensed Consolidated Statements of Income during the nine months ended September 30, ~~2017 is as follows (in millions):~~2021.

Balance in severance accrual as of December 31, 2016

$
7

Restructuring charge for employee-related severance costs:

Argentina

15

North America Finance Transformation

3

Other

2

Prior year restructuring activities

(2)

Payments made to terminated employees

(14)

Balance in severance accrual as of September 30, 2017

$
11

~~Of the $11 million severance accrual as of September 30, 2017, $9 million is expected to be paid in the next 12 months.~~

5. ~~Segment Information~~

The Company is principally engaged in the production and sale of starches and sweeteners for a wide range of industries, and is managed geographically on a regional basis. The Company’s operations are classified into four reportable business segments: North America, South America, Asia Pacific and Europe, Middle East and Africa (“EMEA”). Its North America segment includes businesses in the U.S., Canada and Mexico. The Company’s South America segment includes businesses in Brazil, Colombia, Ecuador and the Southern Cone of South America, which includes Argentina, Chile, Peru and Uruguay. Its Asia Pacific segment includes businesses in South Korea, Thailand, China, Japan, Indonesia, the Philippines, Singapore, Malaysia, India, Australia and New Zealand. The Company’s EMEA segment includes businesses in Germany, the United Kingdom, Pakistan, South Africa and Kenya. The Company does not aggregate its operating segments when determining its reportable segments. Net sales by product are not presented because to do so would be impracticable.

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Net sales to unaffiliated customers:

North America

$
903

$
899

$
2,689

$
2,634

South America

257

276

740

731

Asia Pacific

189

185

555

534

EMEA

136

129

411

405

Total

$
1,485

$
1,489

$
4,395

$
4,304

Operating income:

North America

$
179

$
164

$
520

$
474

South America

26

27

44

59

Asia Pacific

29

29

88

87

EMEA

26

25

83

80

Corporate

(19)

(22)

(61)

(64)

Subtotal

241

223

674

636

Restructuring charges

(7)

(2)

(23)

(15)

Acquisition/integration costs

(1)

—

(3)

(2)

Charge for fair value markup of acquired inventory

—

—

(9)

—

Total

$
233

$
221

$
639

$
619

As of

As of

(in millions)

September 30, 2017

December 31, 2016

Total assets

North America

$
3,699

$
3,796

South America

877

809

Asia Pacific

796

697

EMEA

521

480

Total

$
5,893

$
5,782

6. ~~Financial~~7. Derivative Instruments ~~Derivatives~~ and Hedging Activities

~~The Company~~Ingredion is exposed to market risk stemming from changes in commodity prices (primarily corn and natural gas), foreign currency exchange rates and interest rates. In the normal course of business, ~~the Company~~we actively ~~manages its~~manage our exposure to these market risks by entering ~~into~~ various hedging transactions authorized under established policies that place ~~clear~~ controls on these activities. These transactions utilize exchange-traded derivatives or over-the-counter derivatives with investment grade counterparties. We have no collateral to counterparties under collateral funding arrangements as of September 30, 2022. Derivative financial instruments ~~currently~~ used by ~~the Company~~Ingredion consist primarily of commodity-related futures, options and swap contracts, foreign currency-related forward contracts, interest rate swaps and ~~Treasury lock agreements~~treasury locks (“T-Locks”).

Commodity price hedging: ~~The Company’s~~Ingredion’s principal use of derivative financial instruments is to manage commodity price risk ~~in North America~~ relating to anticipated purchases of corn and natural gas to be used in the manufacturing process, generally over the next 12 to 24 months. We maintain a commodity-price risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by commodity-price volatility. To manage price risk related to corn purchases, primarily in North America, ~~the Company uses~~we use corn futures and ~~options~~option contracts that trade on regulated commodity exchanges to ~~lock-in its~~lock in corn costs associated with ~~firm-priced~~fixed-priced customer sales contracts. ~~The Company~~Ingredion also uses over-the-counter natural gas swaps in North America to hedge a portion of its natural gas ~~usage in North America.~~usage. These derivative financial instruments limit the impact that volatility resulting from fluctuations in market prices will have on corn and natural gas ~~purchases~~purchases. Ingredion’s natural gas derivatives and the majority of its corn derivatives have been designated as ~~cash-flow hedges. The Company also enters into futures contracts~~cash flow hedging instruments for accounting purposes.

For certain corn derivative instruments that are not designated as cash flow hedging instruments for accounting purposes, all realized and unrealized gains and losses from these instruments are recognized in cost of sales during each accounting period. We enter these derivative instruments to ~~hedge~~further mitigate commodity and basis price ~~risk associated with fluctuations in~~risks related to anticipated purchases of corn. During the ~~market price of ethanol. Unrealized~~three and nine months ended September 30, 2022, Ingredion recognized a $3 million gain and $2 million gain, respectively, on non-designated commodity contracts. During the three and nine months ended September 30, 2021, Ingredion recognized an insignificant gain and a $1 million loss, respectively, on non-designated commodity contracts.

For commodity hedges designated as cash flow hedges for accounting purposes, unrealized gains and losses associated with marking the commodity hedging contracts to market (fair value) are recorded as a component of ~~other~~Other comprehensive ~~income~~loss (“~~OCI”~~OCL”) and included in the equity section of the Condensed Consolidated Balance Sheets as part of ~~accumulated~~Accumulated other comprehensive ~~income/~~loss (“~~AOCI”~~AOCL”). These amounts, as well as their related tax effects, are subsequently

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reclassified into earnings in the same line item affected by the hedged transaction and in the same period or periods during which the hedged transaction affects earnings, or in the ~~month~~period a hedge is determined to be ineffective. ~~The Company~~Ingredion assesses the effectiveness of a commodity hedge contract based on changes in the contract’s fair value. The changes in the market value of such contracts have historically been, and are expected to continue to be,

highly effective at offsetting changes in the price of the hedged items. ~~The amounts representing~~Gains and losses from cash flow hedging instruments reclassified from AOCL to earnings are reported as Cash provided by operating activities on the ~~ineffectiveness~~Condensed Consolidated Statements of ~~these cash-flow hedges are not significant.~~Cash Flows.

AtIngredion had outstanding futures and option contracts that hedged the forecasted purchase of approximately 76 million and 135 million bushels of corn as of September 30, ~~2017, AOCI included $5~~2022 and December 31. 2021, respectively. Ingredion also had outstanding swap contracts that hedged the forecasted purchase of approximately 30 million and 35 million mmbtus of ~~losses (net~~natural gas as of ~~income taxes~~September 30, 2022 and December 31, 2021, respectively.

Foreign currency hedging: Due to our global operations, including operations in many emerging markets, Ingredion is exposed to fluctuations in foreign currency exchange rates. As a result, Ingredion has exposure to translational foreign-exchange risk when the results of ~~$4 million), pertaining~~its foreign operations are translated to ~~commodities-related~~U.S. dollars and to transactional foreign-exchange risk when transactions not denominated in the functional currency are revalued. Ingredion’s foreign-exchange risk management strategy uses derivative financial instruments such as foreign currency forward contracts, swaps and options to manage its transactional foreign exchange risk. Ingredion enters into foreign currency derivative instruments that are designated as ~~cash-flow hedges. At~~cash flow hedging instruments as well as instruments not designated as hedging instruments for accounting purposes in order to mitigate transactional foreign-exchange risk. Gains and losses from derivative financial instruments not designated as hedging instruments for accounting purposes are marked to market in earnings during each accounting period.

Ingredion hedges certain assets using foreign currency derivatives not designated as hedging instruments for accounting purposes, which had a notional value of $441 million and $360 million as of September 30, 2022 and December 31, ~~2016, the amount included in AOCI pertaining to these commodities-related~~2021, respectively. Ingredion also hedges certain liabilities using foreign currency derivatives not designated as hedging instruments for accounting purposes, which had a notional value of $282 million and $205 million as of September 30, 2022 and December 31 2021, respectively.

Ingredion hedges certain assets using foreign currency derivative instruments that are designated as ~~cash-flow~~cash flow hedging instruments for accounting purposes, which had a notional value of $782 million and $505 million as of September 30, 2022 and December 31, 2021, respectively. Ingredion also hedges ~~was not significant.~~certain liability positions using foreign currency derivative instruments that are designated as cash flow hedging instruments for accounting purposes, which had a notional value of $914 million and $708 million as of September 30, 2022 and December 31, 2021, respectively.

Interest rate hedging: Ingredion assesses its exposure to variability in interest rates by identifying and monitoring changes in interest rates that may adversely impact future cash flows and the fair value of existing debt instruments and by evaluating hedging opportunities. Ingredion’s risk management strategy is to monitor interest rate risk attributable to both Ingredion’s outstanding and forecasted debt obligations as well as Ingredion’s offsetting hedge positions. Derivative financial instruments that have been used by ~~the Company~~Ingredion to manage its interest rate risk consist of interest rate swaps and T-Locks. ~~The Company has~~

Ingredion periodically enters into interest rate ~~swap agreements that effectively convert the interest rates on $200 million of~~swaps to hedge its ~~$400 million of 4.625 percent senior notes due November 1, 2020,~~exposure to variable rates. These swap agreements call for the Company to receive interest at the fixed coupon rate of the respective notes and to pay interest at a variable rate based on the six-month U.S. dollar LIBOR rate plus a spread. The Company has designated these interest rate ~~swap agreements as hedges of the~~changes under its senior notes. The changes in ~~fair value of the underlying debt obligations attributable to changes in interest rates and accounts for them as fair-value hedges. Changes in the~~ fair value of interest rate swaps designated as hedging instruments that effectively offset the variability in the fair value of outstanding debt obligations are reported in earnings. These amounts offset the ~~gain~~gains or ~~loss~~losses (the ~~change~~changes in fair value) of the hedged debt ~~instrument~~instruments that isare attributable to changes in interest rates (the hedged risk), which isare also recognized in earnings. The fair value of these interest rate swap agreements at September 30, 2017 and December 31, 2016 was $3 million and $3 million, respectively, and is reflected in the Condensed Consolidated Balance Sheets within other assets, with an offsetting amount recorded in long-term debt to adjust the carrying amount of the hedged debt obligations. The CompanyIngredion did not have any ~~T-Locks~~ outstanding atinterest rate swaps as of September 30, ~~2017~~2022 or December 31, ~~2016.~~2021.

~~At September 30, 2017, AOCI included $3 million~~Ingredion periodically enters into T-Locks to hedge its exposure to interest rate changes. The T-Locks are designated as hedges of ~~losses (net~~the variability in cash flows associated with future interest payments caused by market fluctuations in the benchmark interest rate until the fixed interest rate is established and are accounted for as cash flow hedges. Accordingly, changes in the fair value of ~~income taxes~~the T-Locks are recorded to AOCL until the consummation of ~~$2 million), related to settled T-Locks. At December 31, 2016, AOCI included $4 million of losses (net of income taxes of $2 million), related to settled T-Locks. These deferred losses are being~~the underlying debt offering, at which time any realized gain (loss) is amortized to ~~financing costs~~earnings over the ~~terms~~life of the debt. During 2020, Ingredion entered into and settled T-Locks associated with the issuance of senior notes due in 2030 and 2050. The

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realized loss upon settlement of the T-Locks was recorded in AOCL and is amortized into earnings over the term of the senior ~~notes with which they are associated.~~

~~Foreign currency hedging~~: Due to the Company’s global operations, including operations in many emerging markets, it is exposed to fluctuations in foreign currency exchange rates. As a result, the Company has exposure to translational foreign exchange risk when the resultsnotes. Ingredion did not have outstanding T-Locks as of its foreign operations are translated to U.S. dollars and to transactional foreign exchange risk when transactions not denominated in the functional currency are revalued. The Company primarily uses derivative financial instruments such as foreign currency forward contracts, swaps and options to manage its transactional foreign exchange risk. At September 30, ~~2017, the Company had foreign currency forward sales contracts that are~~2022 and December 31, 2021.

The derivative instruments designated as ~~fair value~~cash flow hedges ~~with an aggregate notional amount~~included in AOCL as of ~~$447 million~~September 30, 2022 and ~~foreign currency forward purchase contracts with an aggregate notional amount of $173 million that hedged transactional exposures. At~~ December 31, 2016, the Company had foreign currency forward sales contracts with an aggregate notional amount of $432 million and foreign currency forward purchase contracts with an aggregate notional amount of $227 million that hedged transactional exposures. 2021 are reflected below:


	Amount of Gains
Derivatives in Cash Flow Hedging Relationships	(Losses) included in AOCL
(in millions)	September 30, 2022		December 31, 2021
Commodity contracts, net of income tax effect of $29 and $19, respectively	$	84	$	51
Foreign currency contracts, net of income tax effect of $4 and $ -, respectively		6		—
Interest rate contracts, net of income tax effect of $1		(3)		(3)
Total	$	87	$	48

The Company also has foreign currency derivative instruments that hedge certain foreign currency transactional exposures and are designated as cash-flow hedges. At September 30, 2017, AOCI included an insignificant amount of losses relating to these hedges. At December 31, 2016, AOCI included $3 million of losses, net of tax, relating to these hedges.

The fair value and balance sheet location of the ~~Company’s~~Ingredion’s derivative instruments, presented gross in the Condensed Consolidated Balance Sheets, are reflected below:


	Fair Value of Hedging Instruments as of September 30, 2022 (in millions)
	Designated Hedging Instruments						Non-Designated Hedging Instruments
Balance Sheet Location		Commodity Contracts		Foreign Currency Contracts	Total			Commodity Contracts		Foreign Currency Contracts	Total
Accounts receivable, net	$	82	$	27	$	109	$	3	$	30	$	33
Other assets		7		19		26		—		—		—
Assets		89		46		135		3		30		33
Accounts payable and accrued liabilities		13		20		33		1		10		11
Non-current liabilities		1		18		19		—		—		—
Liabilities		14		38		52		1		10		11
Net Assets/(Liabilities)	$	75	$	8	$	83	$	2	$	20	$	22


	Fair Value of Hedging Instruments as of December 31, 2021 (in millions)
	Designated Hedging Instruments						Non-Designated Hedging Instruments
Balance Sheet Location		Commodity Contracts		Foreign Currency Contracts	Total			Commodity Contracts		Foreign Currency Contracts	Total
Accounts receivable, net	$	45	$	9	$	54	$	4	$	3	$	7
Other assets		7		6		13		—		—		—
Assets		52		15		67		4		3		7
Accounts payable and accrued liabilities		5		12		17		2		4		6
Non-current liabilities		2		6		8		—		1		1
Liabilities		7		18		25		2		5		7
Net Assets/(Liabilities)	$	45	$	(3)	$	42	$	2	$	(2)	$	—

Fair Value of Derivative Instruments

Fair Value

Fair Value

Derivatives designated as

   As of

   As of

   As of

   As of

hedging instruments:

Balance Sheet

September 30,

December 31,

Balance Sheet

September 30,

December 31,

(in millions)

Location

2017

2016

Location

2017

2016

Commodity and foreign currency

Accounts receivable, net

$
14

$
31

Accounts payable and accrued liabilities

$
28

$
25

Commodity, foreign currency, and interest rate contracts

Other assets

7

8

Non-current liabilities

7

2

Total

$
21

$
39

$
35

$
27

~~At September 30, 2017, the Company had outstanding futures and option contracts that hedged the forecasted purchase~~Table of approximately 65 million bushels of corn and 20 million pounds of soybean oil. The Company is unable to directly hedge price risk related to co-product sales; however, it occasionally enters into hedges of soybean oil (a competing product to corn oil) in order to mitigate the price risk of corn oil sales. The Company also had outstanding swap and option contracts that hedged the forecasted purchase of approximately 21 million mmbtu’s of natural gas at September 30, 2017. Additionally at September 30, 2017, the Company had outstanding ethanol futures contracts that hedged the forecasted sale of approximately 8 million gallons of ethanol.Contents

Additional information relating to the ~~Company’s~~Ingredion’s derivative instruments is presented below:


					Location of Gains
	Amount of Gains (Losses)				(Losses)	Amount of Gains (Losses)
Derivatives in Cash-Flow	Recognized in OCI				Reclassified from	Reclassified from AOCI into Income

Derivatives in Cash Flow										Gains (Losses) Recognized in AOCL on Derivatives					Gains (Losses) Reclassified from AOCL into Income
Hedging Relationships	Three Months Ended		Three Months Ended		AOCI	Three Months Ended		Three Months Ended		Three Months Ended September 30,				Income Statement	Three Months Ended September 30,
(in millions, pre-tax)	September 30, 2017		September 30, 2016		into Income	September 30, 2017		September 30, 2016
(in millions)										2022		2021		Location	2022		2021
Commodity contracts	$	(18)	$	(27)	Cost of sales	$	—	$	(5)	$	72	$	36	Cost of sales	$	72	$	62
Foreign currency contracts		2		—	Net sales/Cost of sales		1		—		3		(1)	Net sales/Cost of sales		1		(2)
Interest rate contracts		—		—	Financing costs, net		—		(1)		—		—	Financing costs, net		—		—
Total	$	(16)	$	(27)		$	1	$	(6)	$	75	$	35		$	73	$	60


Derivatives in Cash-Flow	Gains (Losses) Recognized in AOCL on Derivatives					Gains (Losses) Reclassified from AOCL into Income
Hedging Relationships	Nine Months Ended September 30,				Income Statement	Nine Months Ended September 30,
(in millions)	2022		2021		Location	2022		2021
Commodity contracts	$	240	$	212	Cost of sales	$	197	$	171
Foreign currency contracts		14		(1)	Net sales/Cost of sales		4		(1)
Interest rate contracts		—		—	Financing costs, net		—		—
Total	$	254	$	211		$	201	$	170

Location of Gains

Amount of Gains (Losses)

(Losses)

Amount of Gains (Losses)

Derivatives in Cash-Flow

Recognized in OCI

Reclassified from

Reclassified from AOCI into Income

Hedging Relationships

Nine Months Ended

Nine Months Ended

AOCI

Nine Months Ended

Nine Months Ended

(in millions, pre-tax)

September 30, 2017

September 30, 2016

into Income

September 30, 2017

September 30, 2016

Commodity contracts

$
(7)

$
(25)

Cost of sales

$
(1)

$
(25)

Foreign currency contracts

3

1

Net sales/Cost of sales

1

(1)

Interest rate contracts

—

—

Financing costs, net

(1)

(1)

Total

$
(4)

$
(24)

$
(1)

$
(27)

AtAs of September 30, ~~2017, AOCI~~2022, AOCL included $5$86 million of ~~losses~~net gains (net of income taxes of $3$32 million) on commodities-related ~~derivative~~derivatives instruments, foreign currency hedges, and T-Locks designated as ~~cash-flow~~cash flow hedges that are expected to be reclassified into earnings during the next 12 months.

8. Fair Value Measurements

We measure certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, we use various valuation approaches. The ~~Company expects~~hierarchy of those valuation approaches is in three levels based on the ~~losses~~reliability of inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to be offset by changes in the underlying commodities costs. The Company also has $1 million of losses on settled T-Locks (net of income taxes of $1 million) recorded in AOCI at September 30, 2017, which are expected to be reclassified into earnings during the next 12 months. Additionally, at September 30, 2017, AOCI included an insignificant amount of losses related to foreign currency hedges that are expected to be reclassified into earnings during the next 12 months.

~~Presented below are~~ the fair ~~values~~value measurement. Below is a summary of the ~~Company’s financial instruments and derivatives for the periods presented:~~hierarchy levels:

As of September 30, 2017

As of December 31, 2016

(in millions)

Total

Level 1 (a)

Level 2 (b)

Level 3 (c )

Total

Level 1 (a)

Level 2 (b)

Level 3 (c )

Available for sale securities

$
9

$
9

$
—

$
—

$
7

$
7

$
—

$
—

Derivative assets

21

4

17

—

39

6

33

—

Derivative liabilities

35

9

26

—

27

11

16

—

Long-term debt

1,832

—

1,832

—

1,929

—

1,929

—

~~(a)~~

●

Level 1 inputs consist of quoted prices (unadjusted) in active markets for identical assets or liabilities.

~~(b)~~

●

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly for substantially the full term of the financial instrument. Level 2 inputs are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data.

~~(c)~~

●

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs ~~shall be~~are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Assets and liabilities measured at fair value on a recurring basis are presented below:


	As of September 30, 2022								As of December 31, 2021
(in millions)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Available for sale securities	$	4	$	4	$	—	$	—	$	12	$	12	$	—	$	—
Derivative assets		168		110		58		—		74		49		25		—
Derivative liabilities		63		58		5		—		32		22		10		—
Long-term debt		1,523		—		1,523		—		1,957		—		1,957		—

The carrying values of cash equivalents, short-term investments, accounts receivable, accounts payable and short-term borrowings approximate fair values. Commodity futures, options and ~~swap~~swaps contracts are recognized at fair value. Foreign currency forward contracts, swaps and options are also recognized at fair value. The fair value of ~~the Company’s long-term~~Ingredion’s Long-term debt is estimated based on quotations of major securities dealers who are market makers in the securities. At

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9. Financing Arrangements

Presented below are Ingredion’s debt carrying amounts, net of related discounts, premiums, and debt issuance costs as of September 30, ~~2017,~~2022 and December 31, 2021:


	As of		As of
(in millions)	September 30, 2022		December 31, 2021
2.900% senior notes due June 1, 2030	$	595	$	595
3.200% senior notes due October 1, 2026		498		498
3.900% senior notes due June 1, 2050		390		390
6.625% senior notes due April 15, 2037		253		253
Revolving credit agreement		—		—
Other long-term borrowings		3		2
Total long-term debt		1,739		1,738
Commercial paper		622		250
Other short-term borrowings		87		58
Total short-term borrowings		709		308
Total debt	$	2,448	$	2,046

On July 27, 2021, Ingredion established a commercial paper program under which Ingredion may issue senior unsecured notes of short maturities up to a maximum aggregate principal amount of $1 billion outstanding at any time. The notes may be sold from time to time on customary terms in the ~~carrying value~~U.S. commercial paper market. Ingredion intends to use the note proceeds for general corporate purposes. During the nine months ended September 30, 2022, the average amount of commercial paper outstanding was $489 million with an average interest rate of 1.50 percent and ~~fair value~~a weighted average maturity of 18 days. From the inception of the ~~Company’s long-term debt~~program until September 30, 2021, the average amount of commercial paper outstanding was $401 million with an average interest rate of 0.23 percent and a weighted average maturity of 37 days. As of September 30, 2022, $622 million of commercial paper was outstanding with an average interest rate of 3.50 percent and a weighted average maturity of 16 days. As of December 31, 2021, $250 million of commercial paper was outstanding with an average interest rate of 0.35 percent and a weighted average maturity of 40 days. The amount of commercial paper outstanding under this program in 2022 is expected to fluctuate.

Other short-term borrowings as of September 30, 2022 and December 31, 2021, primarily include amounts outstanding under various unsecured local country operating lines of credit.

10. Commitments and Contingencies

In May 2021, the Brazilian Supreme Court (“Court”) issued its ruling related to the calculation of certain indirect taxes, which affirmed the Federal Court of Appeals rulings that Ingredion had received in previous years and affirmed that Ingredion is entitled to previously recorded tax credits. The Court ruling affirmed that Ingredion is entitled to $15 million of additional credits from the period of 2015 to 2018 that were ~~$1,731~~previously unrecorded pending a final Court ruling. As a result, during the nine months ended September 30, 2021, Ingredion recorded the $15 million of additional credits within Other operating expense (income) in the Condensed Consolidated Statements of Income. As of September 30, 2022 and December 31, 2021, Ingredion had $20 million and ~~$1,832~~$41 million, respectively, of remaining indirect tax credits recorded in Other assets and Prepaid expenses on the Condensed Consolidated Balance Sheets. These credits resulted in an insignificant amount and $5 million of deferred income taxes as of September 30, 2022 and December 31, 2021, respectively. We will use the income tax offsets to eliminate our Brazilian federal tax payments in 2022 and future years, including the income tax payable for the indirect taxes recovered.

11. Income Taxes

During the three months ended March 31, 2022, the U.S. Treasury published final foreign tax credit regulations that limit our ability to claim foreign tax credits from certain countries, primarily in South America. As a result, we recorded a provisional tax liability during the three months ended March 31, 2022, and will continue to assess the impact of the regulations on our Condensed Consolidated Financial Statements in future periods.

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12. Pension and Other Postretirement Benefits

The following table sets forth the components of net periodic benefit cost of the U.S. and non-U.S. defined benefit pension plans for the periods presented:


	Three Months Ended September 30,								Nine Months Ended September 30,
	U.S. Plans				Non-U.S. Plans				U.S. Plans				Non-U.S. Plans
(in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Service cost	$	1	$	1	$	1	$	1	$	3	$	3	$	3	$	3
Interest cost		2		2		2		2		6		6		7		7
Expected return on plan assets		(5)		(4)		(2)		(2)		(13)		(13)		(6)		(6)
Amortization of actuarial loss		—		(1)		—		1		—		(1)		—		2
Net periodic (benefit) cost (a)	$	(2)	$	(2)	$	1	$	2	$	(4)	$	(5)	$	4	$	6

We currently anticipate that we will make approximately $4 million in cash contributions to our pension plans in 2022, consisting of contributions of $3 million to our non-U.S. pension plans and $1 million to our U.S. pension plans. For the nine months ended September 30, 2022, we made cash contributions of approximately $2 million to the non-U.S. plans and an insignificant amount to the U.S. plans.

The following table sets forth the components of net postretirement benefit cost for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Service cost	$	—	$	—	$	—	$	—
Interest cost		1		1		2		2
Amortization of prior service cost (credit)		—		—		1		(1)
Net periodic cost (a)	$	1	$	1	$	3	$	1

(a)

The service cost component of net periodic benefit 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 credit, and amortization of actuarial loss components of net periodic benefit cost are presented as Other, non-operating (income) on the Condensed Consolidated Statements of Income.

13. Equity

Treasury stock: On September 26, 2022, the Board of Directors terminated the stock repurchase program it had previously authorized on October 22, 2018, that permitted Ingredion to purchase up to 8 million of its outstanding shares of common stock from November 5, 2018, through December 31, 2023. As of the date of termination, the 2018 repurchase program had approximately 3.8 million shares of common stock remaining for repurchase.

On September 26, 2022, the Board of Directors contemporaneously approved a new stock repurchase program to authorize Ingredion to purchase up to 6 million shares of its outstanding common stock from September 26, 2022, through December 31, 2025. Ingredion may repurchase shares from time to time in the open market, in privately negotiated transactions, or otherwise, at prices Ingredion deems appropriate. Ingredion is not obligated to repurchase any shares under the authorization, and the new repurchase program may be suspended, discontinued, or modified at any time, for any reason and without notice. The parameters of Ingredion’s stock repurchase programs are not established solely with reference to the dilutive impact of shares issued under Ingredion’s stock incentive plan. However, Ingredion expects that, over time, share repurchases will offset the dilutive impact of shares issued under the stock incentive plan.

During the three and nine months ended September 30, 2022, we repurchased 325 thousand and 1,283 thousand outstanding shares of common stock in open market transactions at a net cost of $29 million and $112 million, respectively. During the three and nine months ended September 30, 2021, we repurchased 500 thousand and 765 thousand outstanding shares of common stock in open market transactions at a net cost of $44 million and $68 million, respectively.

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Share-based payments:The following table summarizes the components of Ingredion’s share-based compensation expense for the periods presented:

7. ~~Share-Based Compensation~~


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Stock options:
Pre-tax compensation expense	$	1	$	1	$	3	$	3
Income tax benefit		—		—		—		—
Stock option expense, net of income taxes		1		1		3		3

Restricted stock units ("RSUs"):
Pre-tax compensation expense		4		2		10		8
Income tax benefit		—		—		(1)		(1)
RSUs, net of income taxes		4		2		9		7

Performance shares and other share-based awards:
Pre-tax compensation expense		2		1		9		4
Income tax benefit		—		—		(1)		—
Performance shares and other share-based compensation expense, net of income taxes		2		1		8		4

Total share-based compensation:
Pre-tax compensation expense		7		4		22		15
Income tax benefit		—		—		(2)		(1)
Total share-based compensation expense, net of income taxes	$	7	$	4	$	20	$	14

Stock Options: Under ~~the Company’s~~Ingredion’s 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 10-year term and are exercisable upon vesting, which occurs over a three-year period at the anniversary dates of the date of grant. Compensation expense is generally recognized on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain ~~retirement eligible~~retirement-eligible executive level employees. ~~The Company~~Ingredion estimates a forfeiture rate at the time of grant and updates the estimate throughout the vesting period of the stock options within the amount of compensation costs recognized in each period.

~~The Company~~Ingredion granted non-qualified options to purchase ~~278~~281 thousand shares and ~~329~~358 thousand shares ~~during~~for the first nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, respectively. The fair value of each option grant for the periods presented was estimated using the Black-Scholes option-pricing model with the following assumptions:


	For the Nine Months Ended
	September 30,
	2017		2016

					Nine Months Ended September 30,
					2022		2021
Expected life (in years)	5.5		5.5		5.5		5.5
Risk-free interest rate	1.93	%	1.36	%	2.0	%	0.6	%
Expected volatility	22.50	%	23.40	%	23.8	%	23.2	%
Expected dividend yield	1.68	%	1.80	%	2.9	%	2.9	%

The expected life of options represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and ~~the Company’s~~Ingredion’s 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 ~~the Company’s~~Ingredion’s common stock. Dividend yields are based on ~~current~~Ingredion’s dividend ~~payments.~~yield at the date of issuance.

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Stock option activity for the nine months ended September 30, ~~2017~~2022 was as follows:


		Weighted
		Average		Average	Aggregate
	Number of	Exercise		Remaining	Intrinsic
	Options	Price per		Contractual	Value
	(in thousands)	Share		Term (Years)	(in millions)
Outstanding as of December 31, 2016	2,281	$	61.39	5.93	$	145

							Number of Options (in thousands)	Weighted Average Exercise Price per Share		Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2021							2,154	$	90.39	5.26	$	26
Granted	278		117.65				281		88.66
Exercised	(299)		46.10				(70)		61.56
Cancelled	(21)		87.50				(31)		103.55
Outstanding as of September 30, 2017	2,239	$	70.17	5.94	$	113
Exercisable as of September 30, 2017	1,671	$	58.04	5.33	$	105
Outstanding as of September 30, 2022							2,334	$	90.87	5.22	$	7
Exercisable as of September 30, 2022							1,763	$	91.78	4.10	$	7

For the nine months ended September 30, ~~2017,~~2022, cash received from the exercise of stock options was ~~$14~~approximately $4 million. AtAs of September 30, ~~2017,~~2022, the ~~total remaining~~ unrecognized compensation cost related to non-vested stock options ~~was $5~~totaled $4 million, which ~~will~~is expected to be amortized over ~~a weighted average~~the weighted-average period of approximately ~~1.4~~1.7 years.

Additional information pertaining to stock option activity is as ~~follows:~~follows for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,

									Three Months Ended				Nine Months Ended
									September 30,				September 30,
(dollars in millions, except per share)	2017		2016		2017		2016		2022		2021		2022		2021
Weighted average grant date fair value of stock options granted (per share)	$	—	$	—	$	23.90	$	18.73	$	—	$	—	$	15.04	$	12.31
Total intrinsic value of stock options exercised		11		21		23		45	$	1	$	—	$	2	$	6

Restricted Stock Units: ~~The Company~~ Ingredion has granted restricted stock units (“RSUs”) to certain key employees. The RSUs are primarily subject to cliff vesting, generally after three years, provided the employee remains in the service of the Company. Compensation expense is generally recognized on a straight-line basis for all awards over the employee’s vesting period or over a one-year required service period for certain retirement eligible executive level employees. The Company estimates a forfeiture rate at the time of grant and updates the estimate throughout the vesting of the RSUs within the amount of compensation costs recognized in each period.Ingredion. The fair value of the RSUs is determined based upon the number of shares granted and the quoted market price of ~~the Company’s~~Ingredion’s common stock at the date of the grant.

The following table summarizes RSU activity ~~for the nine months ended~~in 2022:


(RSUs in thousands)	Number of Restricted Shares	Weighted Average Fair Value per Share
Non-vested as of December 31, 2021	486	$	88.34
Granted	207		88.82
Vested	(128)		91.20
Cancelled	(45)		87.04
Non-vested as of September 30, 2022	520	$	87.95

As of September 30, ~~2017:~~

Weighted

Average

Number of

Fair Value

(RSUs in thousands)

RSUs

per Share

Non-vested as of December 31, 2016

429

$
81.04

Granted

121

119.24

Vested

(148)

64.94

Cancelled

(13)

93.70

Non-vested as of September 30, 2017

389

$
99.77

~~At September 30, 2017,~~2022, the total remaining unrecognized compensation cost related to RSUs was ~~$17~~$21 million, which will be amortized on a weighted-average basis over ~~a weighted average period of~~ approximately ~~1.8~~1.5 years.

Performance Shares: ~~The Company~~Ingredion has a long-term incentive plan for senior management in the form of performance shares. The ~~ultimate payments for~~vesting of the performance shares is generally based on two performance metrics. Fifty percent of the performance shares awarded ~~and vested will be~~vest based ~~solely~~ on ~~the Company’s stock performance~~Ingredion’s total shareholder return as compared to the ~~stock performance~~total shareholder return of its peer ~~group. The~~group and the remaining fifty percent vest based on the calculation of Ingredion’s three-year average Adjusted Return on Invested Capital (“Adjusted ROIC”) against an established ROIC target.

For the 2022 performance shares awarded based on Ingredion’s total shareholder return, the number of shares that ultimately vest can range from zero to 200 percent of the ~~awarded~~ grant depending on ~~the Company’s stock performance~~Ingredion’s total shareholder return as compared to the ~~stock performance~~total shareholder return of ~~the~~its peer group. The share award vesting will be calculated at the end of the three-year period and ~~are~~is subject to approval by management and the People, Culture and Compensation ~~Committee.~~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. The total compensation expense for these awards is amortized over a three-year graded vesting schedule.

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For the 2022 performance shares awarded based on Adjusted ROIC, the number of shares that ultimately vest can range from zero to 200 percent of the grant depending on Ingredion’s Adjusted ROIC performance against the target. The share award vesting will be calculated at the end of the three-year period and is subject to approval by management and the People, Culture and Compensation Committee. Compensation expense is based on the market price of our common stock on the date of the grant and the final number of shares that ultimately vest. Ingredion will estimate the potential share vesting at least annually to adjust the compensation expense for these awards over the vesting period to reflect Ingredion’s estimated Adjusted ROIC performance against the target. The total compensation expense for these awards is amortized over a three-year graded vesting schedule.

For the nine months ended September 30, ~~2017, the Company~~2022, Ingredion awarded 3886 thousand ~~share units~~performance shares at a weighted average fair value of ~~$114.08~~$138.85 per ~~share unit.~~

The 2014 performance share award vested in the first quarter of 2017, achieving a 200 percent pay out of the grant, or 115 thousand total vested shares. There were no performance share cancellations during the nine months ended September 30, 2017.

share. As of September 30, ~~2017,~~2022, the unrecognized compensation cost related to these awards was $4$11 million, which will be amortized over the remaining requisite service ~~periods~~period of ~~1.8~~1.9 years. The 2019 performance share awards, whose three-year performance period has ended, achieved a zero percent payout of granted performance shares. There were approximately two thousand performance shares cancelled during 2022.

Accumulated Other Comprehensive Loss: The following ~~table summarizes the components~~is a summary of ~~the Company’s share-based compensation expense:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Stock options:

Pre-tax compensation expense

$
2

$
2

$
6

$
7

Income tax benefit

(1)

(1)

(2)

(3)

Stock option expense, net of income taxes

1

1

4

4

RSUs:

Pre-tax compensation expense

4

3

10

9

Income tax benefit

(2)

(1)

(4)

(3)

RSUs, net of income taxes

2

2

6

6

Performance shares and other share-based awards:

Pre-tax compensation expense

1

2

4

5

Income tax benefit

(1)

(1)

(2)

(2)

Performance shares and other share-based compensation expense, net of income taxes

—

1

2

3

Total share-based compensation:

Pre-tax compensation expense

7

7

20

21

Income tax benefit

(4)

(3)

(8)

(8)

Total share-based compensation expense, net of income taxes

$
3

$
4

$
12

$
13

8. ~~Net Periodic Pension and Postretirement Benefit Costs~~

For detailed information about the Company’s pension and postretirement benefit plans, please refer to Note 10 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-KAccumulated other comprehensive loss for the ~~year ended December 31, 2016.~~

~~The following table sets forth the components of net periodic benefit cost of the U.S. and non-U.S. defined benefit pension plans for the periods presented:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

U.S. Plans

Non-U.S. Plans

U.S. Plans

Non-U.S. Plans

(in millions)

2017

2016

2017

2016

2017

2016

2017

2016

Service cost

$
1

$
2

$
1

$
1

$
4

$
5

$
3

$
2

Interest cost

3

3

3

3

9

10

8

8

Expected return on plan assets

(5)

(5)

(3)

(3)

(15)

(15)

(8)

(8)

Amortization of actuarial loss

—

—

—

—

—

—

1

1

Settlement loss

—

—

—

—

—

—

—

2

Net periodic benefit cost

$
(1)

$
—

$
1

$
1

$
(2)

$
—

$
4

$
5

The Company currently anticipates that it will make approximately $5 million in cash contributions to its pension plans in 2017, consisting of $4 million to its non-U.S. pension plans and $1 million to its U.S. pension plans. For the nine

months ended September 30, ~~2017,cash contributions~~2022 and 2021:


(in millions)	Cumulative Translation Adjustment		Hedging Activities		Pension and Postretirement Adjustment		AOCL
Balance, December 31, 2021	$	(903)	$	48	$	(42)	$	(897)
Other comprehensive (loss) gain before reclassification adjustments		(195)		254		—		59
(Gain) reclassified from accumulated OCL		—		(201)		1		(200)
Tax (provision)		—		(14)		—		(14)
Net other comprehensive (loss) income		(195)		39		1		(155)
Balance, September 30, 2022	$	(1,098)	$	87	$	(41)	$	(1,052)


(in millions)	Cumulative Translation Adjustment		Hedging Activities		Pension and Postretirement Adjustment		AOCL
Balance, December 31, 2020	$	(1,114)	$	42	$	(61)	$	(1,133)
Other comprehensive (loss) gain before reclassification adjustments		(85)		211		—		126
(Gain) reclassified from accumulated OCL		311		(170)		—		141
Tax (provision)		—		(11)		—		(11)
Net other comprehensive (loss) income		226		30		—		256
Balance, September 30, 2021	$	(888)	$	72	$	(61)	$	(877)

Table of ~~approximately $3 million were made to the non-U.S. plans and $1 million to the U.S. plans.~~Contents

Supplemental Information: The following ~~table sets forth~~Condensed Consolidated Statements of Equity and Redeemable Equity present the ~~components of net postretirement benefit cost~~dividends per share for common stock for the periods ~~presented:~~indicated:


	Total Equity
													Non-
									Accumulated				Redeemable		Share-based		Redeemable
					Additional				Other				Non-		Payments		Non-
	Preferred		Common		Paid-In		Treasury		Comprehensive		Retained		Controlling		Subject to		Controlling
(in millions)	Stock		Stock		Capital		Stock		Loss		Earnings		Interests		Redemption		Interests
Balance, December 31, 2021	$	—	$	1	$	1,158	$	(1,061)	$	(897)	$	3,899	$	18	$	36	$	71
Net income attributable to Ingredion												130
Net income attributable to non-controlling interests														3
Dividends declared, common stock ($0.65/share)												(43)
Repurchases of common stock								(39)
Share-based compensation, net of issuance						2		9								(5)
Other comprehensive income (loss)										134				(2)
Balance, March 31, 2022	$	—	$	1	$	1,160	$	(1,091)	$	(763)	$	3,986	$	19	$	31	$	71
Net income attributable to Ingredion												142
Net income attributable to non-controlling interests														2				1
Dividends declared, common stock ($0.65/share)												(43)
Dividends declared, non-controlling interests														(4)
Repurchases of common stock								(44)
Share-based compensation, net of issuance						2		2								6
Fair market value adjustment to non-controlling interests						(29)												29
Non-controlling interest purchases																		(27)
Other comprehensive (loss)										(177)				(2)				(4)
Balance, June 30, 2022	$	—	$	1	$	1,133	$	(1,133)	$	(940)	$	4,085	$	15	$	37	$	70
Net income attributable to Ingredion												106
Net income attributable to non-controlling interests														2				1
Dividends declared, common stock ($0.71/share)												(48)
Repurchases of common stock								(29)
Share-based compensation, net of issuance								3								6
Non-controlling interest purchases																		(13)
Other comprehensive (loss)										(112)				(3)				(2)
Balance, September 30, 2022	$	—	$	1	$	1,133	$	(1,159)	$	(1,052)	$	4,143	$	14	$	43	$	56

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in millions)

2017

2016

2017

2016

Service cost

$
1

$
—

$
1

$
1

Interest cost

—

1

2

2

Amortization of prior service credit

—

(1)

(2)

(3)

Net periodic benefit cost

$
1

$
—

$
1

$
—

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	Total Equity
													Non-
									Accumulated				Redeemable		Share-based		Redeemable
					Additional				Other				Non-		Payments		Non-
	Preferred		Common		Paid-In		Treasury		Comprehensive		Retained		Controlling		Subject to		Controlling
(in millions)	Stock		Stock		Capital		Stock		Loss		Earnings		Interests		Redemption		Interests
Balance, December 31, 2020	$	—	$	1	$	1,150	$	(1,024)	$	(1,133)	$	3,957	$	21	$	30	$	70
Net (loss) attributable to Ingredion												(246)
Net income (loss) attributable to non-controlling interests														4				(1)
Dividends declared, common stock ($0.64/share)												(44)
Repurchases of common stock								(14)
Share-based compensation, net of issuance						5		16								(9)
Other comprehensive (loss) income										(31)				1				1
Balance, March 31, 2021	$	—	$	1	$	1,155	$	(1,022)	$	(1,164)	$	3,667	$	26	$	21	$	70
Net income attributable to Ingredion												178
Net income attributable to non-controlling interests														3
Dividends declared, common stock ($0.64/share)												(43)
Dividends declared, non-controlling interests														(7)
Repurchases of common stock								(10)
Share-based compensation, net of issuance						(1)		3								7
Other comprehensive income										58
Balance, June 30, 2021	$	—	$	1	$	1,154	$	(1,029)	$	(1,106)	$	3,802	$	22	$	28	$	70
Net income attributable to Ingredion												118
Net income (loss) attributable to non-controlling interests														3				(2)
Dividends declared, common stock ($0.65/share)												(43)
Dividends declared, non-controlling interests														(3)
Repurchases of common stock								(44)
Share-based compensation, net of issuance						1		1								4
Other comprehensive income (loss)										229				(3)
Balance, September 30, 2021	$	—	$	1	$	1,155	$	(1,072)	$	(877)	$	3,877	$	19	$	32	$	68

9. ~~Earnings per Common Share~~

Supplemental Information:The following table provides the computation of basic and diluted earnings per common share ("EPS") for the periods presented:


	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021
(in millions, except per share amounts)	Net Income Available to Ingredion		Weighted Average Shares	Per Share Amount		Net Income Available to Ingredion		Weighted Average Shares	Per Share Amount
Basic EPS	$	106	65.8	$	1.61	$	118	67.0	$	1.76

Effect of Dilutive Securities:
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards			0.8					0.6
Diluted EPS	$	106	66.6	$	1.59	$	118	67.6	$	1.75

Three Months Ended September 30, 2017

Three Months Ended September 30, 2016

Net Income

Net Income

Available

Weighted

Per Share

Available

Weighted

Per Share

(in millions, except per share amounts)

to Ingredion

Average Shares

Amount

to Ingredion

Average Shares

Amount

Basic EPS

$
166

71.9

$
2.31

$
143

72.5

$
1.98

Effect of Dilutive Securities:

Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards

1.4

1.8

Diluted EPS

$
166

73.3

$
2.26

$
143

74.3

$
1.93

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	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
(in millions, except per share amounts)	Net Income Available to Ingredion		Weighted Average Shares	Per Share Amount		Net Income Available to Ingredion		Weighted Average Shares	Per Share Amount
Basic EPS	$	378	66.4	$	5.69	$	50	67.2	$	0.74

Effect of Dilutive Securities:
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards			0.7					0.6
Diluted EPS	$	378	67.1	$	5.63	$	50	67.8	$	0.74

Nine Months Ended September 30, 2017

Nine Months Ended September 30, 2016

Net Income

Net Income

Available

Weighted

Per Share

Available

Weighted

Per Share

(in millions, except per share amounts)

to Ingredion

Average Shares

Amount

to Ingredion

Average Shares

Amount

Basic EPS

$
420

72.0

$
5.83

$
391

72.2

$
5.42

Effect of Dilutive Securities:

Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards

1.4

1.8

Diluted EPS

$
420

73.4

$
5.72

$
391

74.0

$
5.29

Approximately 1.6 million and 1.4 million share-based awards of common stock were excluded from the calculation of diluted EPS as the impact of their inclusion would have been anti-dilutive for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, ~~2017,~~2021, approximately ~~0.3~~1.6 million and ~~0.3~~1.5 million share-based awards of common stock, respectively, were excluded from the calculation of diluted EPS as the impact of their inclusion would have been anti-dilutive. ~~For both~~

14. Segment Information

Ingredion is principally engaged in the ~~three~~production and ~~nine months ended~~sale of starches and sweeteners for a wide range of industries and is managed geographically on a regional basis. The nature, amount, timing and uncertainty of Ingredion’s Net sales are managed by Ingredion primarily based on our geographic segments, which we classify and report as North America, South America, Asia-Pacific and EMEA. Our North America segment includes businesses in the U.S., Mexico and Canada. Our South America segment includes businesses and our share of earnings from investments in joint ventures in Brazil, Argentina, Chile, Colombia, Ecuador, Peru and Uruguay. Our Asia-Pacific segment includes the PureCircle operating segment as well as businesses in South Korea, Thailand, China, Australia, Japan, New Zealand, Indonesia, Singapore, the Philippines, Malaysia, India and Vietnam. Our EMEA segment includes businesses in Pakistan, Germany, Poland, the United Kingdom and South Africa. Net sales by product are not presented because to do so would be impracticable.

Presented below are Ingredion’s net sales to unaffiliated customers by reportable segment for the periods indicated:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Net sales to unaffiliated customers:
North America	$	1,262	$	1,083	$	3,720	$	3,096
South America		293		260		835		801
Asia-Pacific		278		245		825		728
EMEA		190		175		579		514
Total net sales	$	2,023	$	1,763	$	5,959	$	5,139

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Presented below are Ingredion’s operating income by reportable segment for the periods indicated:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Operating income:
North America	$	126	$	120	$	443	$	403
South America		48		35		125		108
Asia-Pacific		27		21		70		70
EMEA		30		23		90		86
Corporate		(40)		(36)		(109)		(95)
Subtotal		191		163		619		572
Acquisition/integration costs		—		(3)		(1)		(1)
Restructuring/impairment charges and related adjustments		—		(8)		(4)		(22)
Impairment on assets held for sale		—		20		—		(340)
Other matters		(9)		—		(9)		15
Total operating income	$	182	$	172	$	605	$	224

Presented below are Ingredion’s total assets by reportable segment as of September 30, ~~2016, the number~~2022 and December 31, 2021:


	As of		As of
(in millions)	September 30, 2022		December 31, 2021
Assets:
North America (a)	$	4,576	$	4,203
South America		892		799
Asia-Pacific		1,340		1,403
EMEA		595		594
Total assets	$	7,403	$	6,999

For purposes of ~~share-based awards~~presentation, North America includes Corporate assets.

15. Supplementary Financial Statement Information

Accounts Receivable, Net

Accounts receivable, net are summarized as follows:


	As of		As of
(in millions)	September 30, 2022		December 31, 2021
Accounts receivable, net:
Accounts receivable - trade	$	1,170	$	950
Accounts receivable - other		253		193
Allowance for credit losses		(17)		(13)
Total accounts receivable	$	1,406	$	1,130

There were no significant contract assets or significant contract liabilities associated with our customers as of ~~common stock excluded from the calculation~~September 30, 2022 or December 31, 2021. Liabilities for volume discounts and incentives were also not significant as of ~~diluted EPS was not material.~~September 30, 2022 or December 31, 2021.

Table of Contents

Inventories

~~10.~~ ~~Inventories~~

Inventories are summarized as follows:


	As of		As of
(in millions)	September 30, 2022		December 31, 2021
Finished and in process	$	895	$	688
Raw materials		517		380
Manufacturing supplies and other		88		104
Total inventories	$	1,500	$	1,172

As of September 30,

As of December 31,

(in millions)

2017

2016

Finished and in process

$
497

$
478

Raw materials

274

260

Manufacturing supplies and other

54

51

Total inventories

$
825

$
789

~~11.~~ ~~Debt~~

~~As of September 30, 2017 and December 31, 2016, the Company’s total debt consisted of the following:~~

As of September 30,

As of December 31,

(in millions)

2017

2016

3.2% senior notes due October 1, 2026

$
496

$
496

4.625% senior notes due November 1, 2020

398

398

1.8% senior notes due September 25, 2017

—

299

6.625% senior notes due April 15, 2037

254

254

6.0% senior notes due April 15, 2017

—

200

5.62% senior notes due March 25, 2020

200

200

Term loan credit agreement due April 25, 2019

380

—

Revolving credit facility

—

—

Fair value adjustment related to hedged fixed rate debt instruments

3

3

Long-term debt

$
1,731

$
1,850

Short-term borrowings

153

106

Total debt

$
1,884

$
1,956

~~The $200 million of 6.0 percent senior notes due April 15, 2017 were refinanced with borrowings under the revolving credit facility in April 2017.~~

On August 18, 2017, the Company entered into a new Term Loan Credit Agreement (“Term Loan”) to establish a senior unsecured term loan credit facility. Under the Term Loan, the Company is allowed three borrowings in an amount of up to $500 million total. The Term Loan matures 18 months from the date of the final borrowing. As of September 30, 2017, the Company had initiated two borrowings under the Term Loan totaling $380 million. The proceeds were used to refinance $300 million of 1.8 percent senior notes due September 25, 2017 and pay down borrowings outstanding on the revolving credit facility. On October 25, 2017, the Company initiated its third and final borrowing under the Term Loan of $40 million, bringing the total outstanding Term Loan to $420 million, due April 25, 2019.

All borrowings under the term loan facility will bear interest at a variable annual rate based on the LIBOR or base rate, at the Company’s election, subject to the terms and conditions thereof, plus, in each case, an applicable margin. The Term Loan Credit Agreement contains customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions. The Company must also comply with a leverage ratio and interest coverage ratio. The occurrence of an event of default under the Term Loan Credit Agreement could result in all loans and other obligations being declared due and payable and the term loan credit facility being terminated.

~~12.~~ ~~Accumulated Other Comprehensive Loss~~

~~The following is a summary of net changes in accumulated other comprehensive loss by component and net of tax for the three and nine months ended September 30, 2017 and 2016:~~

Deferred

Unrealized

Accumulated

Cumulative

Gain (Loss)

Pension and

Gain

Other

Translation

on Hedging

Postretirement

on

Comprehensive

(in millions)

Adjustment

Activities

Adjustment

Investment

Loss

Balance, December 31, 2016

$
(1,008)

$
(7)

$
(56)

$
—

$
(1,071)

Other comprehensive income (loss) before reclassification adjustments

62

(4)

1

1

60

Amount reclassified from accumulated OCI

—

1

(1)

—

—

Tax benefit

—

2

—

—

2

Net other comprehensive income (loss)

62

(1)

—

1

62

Balance, September 30, 2017

$
(946)

$
(8)

$
(56)

$
1

$
(1,009)

Deferred

Unrealized

Accumulated

Cumulative

Gain (Loss)

Pension and

Loss

Other

Translation

on Hedging

Postretirement

on

Comprehensive

(in millions)

Adjustment

Activities

Adjustment

Investment

Loss

Balance, December 31, 2015

$
(1,025)

$
(29)

$
(47)

$
(1)

$
(1,102)

Other comprehensive income (loss) before reclassification adjustments

78

(24)

(5)

—

49

Amount reclassified from accumulated OCI

—

27

1

—

28

Tax benefit

—

—

1

—

1

Net other comprehensive income (loss)

78

3

(3)

—

78

Balance, September 30, 2016

$
(947)

$
(26)

$
(50)

$
(1)

$
(1,024)

~~The following table provides detail pertaining to reclassifications from AOCI into net income for the periods presented:~~

Amount

Amount

Reclassified from

Reclassified from

AOCI

AOCI

Three Months Ended

Nine Months Ended

Affected Line Item in

Details about AOCI Components

September 30,

September 30,

Condensed Consolidated

(in millions)

2017

2016

2017

2016

Statements of Income

Gains (losses) on cash-flow hedges:

Commodity contracts

$
—

$
(6)

$
(1)

$
(25)

Cost of sales

Foreign currency contracts

1

—

1

(1)

Net sales/Cost of sales

Interest rate contracts

—

—

(1)

(1)

Financing costs, net

Gains (losses) related to pension and other postretirement obligations

—

—

1

(1)

(a)

Total before-tax reclassifications

$
1

$
(6)

$
—

$
(28)

Tax (provision) benefit

(1)

2

—

9

Total after-tax reclassifications

$
—

$
(4)

$
—

$
(19)

~~(a)~~

~~This component is included in the computation of net periodic benefit cost and affects both cost of sales and operating expenses on the Condensed Consolidated Statements of Income~~.

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ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Overview~~Unless the context indicates otherwise, references to “we,” “us,” “our,” the “Company” and “Ingredion” mean Ingredion Incorporated and its consolidated subsidiaries.

~~We are~~Overview

Ingredion is a ~~major supplier~~leading global ingredients solutions provider that transforms corn, tapioca, potatoes, plant-based stevia, grains, fruits, gums and vegetables into value-added ingredients and biomaterials for the food, beverage, brewing and other industries. Our Purpose is to bring the potential of ~~high-quality food~~people, nature and ~~industrial ingredient solutions~~technology together to ~~customers around the world. We have 44~~make life better. As of September 30, 2022, we had 46 manufacturing ~~plants~~facilities located in North America, South America, ~~Asia Pacific~~Asia-Pacific and Europe, the Middle East and Africa (“EMEA”), and we manage and operate our businesses at a regional level. We believe this approach provides us with a unique understanding of the cultures and product requirements in each of the geographic markets in which we operate, bringing added value to our customers. ~~Our ingredients are used by~~

Ingredion has been navigating evolving global conditions that have varying impacts on our customers, insuppliers, employees, operations and, ultimately, our profitability and cash flows. During the ~~food, beverage, animal feed, paper and corrugating, and brewing industries, among others.~~

Our Strategic Blueprint continues to guide our decision-making and strategic choices with an emphasis on value-added ingredient solutions for our customers. The foundation of our Strategic Blueprint is operating excellence, which includes our focus on safety, quality and continuous improvement. We see growth opportunities in three areas. First is organic growth as we work to expand our current business. Second, we are focused on broadening our ingredient portfolio with on-trend products through internal and external business development. Finally, we look for growth from geographic expansion as we pursue extension of our reach to new locations. The ultimate goal of these strategies and actions is to deliver increased shareholder value.

~~We had a solid third quarter and nine~~ months ended September 30, ~~2017 as~~2022, we continued to achieve strong price mix, which included increased prices for our products to manage the effects of increasing corn and freight costs. Our ability to respond to changing customer demands, increasing inflation, fluctuating foreign exchange rates, and shifting supply chain channels was affected by a variety of factors, including the ongoing, global pandemic with new variants of the coronavirus disease 2019 (“COVID-19”) and the ongoing conflict between Russia and Ukraine.

Our results for the current quarter benefited from strong price mix and that more than offset higher raw material and other input costs. Our net sales of $2,023 million for the third quarter of 2022 were 15 percent higher than our net sales of $1,763 million for the third quarter of 2021 primarily due to stronger price mix, including the pass-through of higher corn and freight costs. The net sales increase contributed to $51 million of higher gross profit during the current period when compared to the third quarter of 2021. Our operating income ~~net~~of $182 million for the third quarter of 2022 increased from operating income of $172 million for the third quarter of 2021. This increase was primarily due to stronger price mix that more than offset higher input and operating expense costs. Net income attributable to Ingredion for the third quarter of 2022 was $106 million, or $1.59 diluted earnings per ~~common~~ share, ~~grew~~which represented a decrease from $118 million, or $1.75 diluted earnings per share, for the comparable 2016 periods. Our earnings growth was driven principally by continued strong operating results in our North America segment during the year, and partially offset by lower earnings in our South America segment due to continued difficult macroeconomic conditions and increased costs in Argentina. The Company implemented an organizational restructuring effort in Argentina during the firstthird quarter of ~~2017 to achieve~~2021. Excluding a more competitive cost position in the region. We notified the local labor union of a planned reduction in workforce, which resulted in a strike by the labor union and an interruption of manufacturing activities during the second quarter of 2017. We finalized a new labor agreement with the labor union in the second quarter, ending the strike on June 1, 2017. The Company recorded total pre-tax employee-related severance and other costs in Argentina of $17$20 million ~~for the nine months ended September 30, 2017, related~~favorable impairment adjustment to the ~~workforce reduction. Operating income also grew in our EMEA and Asia Pacific segments.~~

During the second quarter of 2017, the Company announced a Finance Transformation initiative in the North America for the U.S. and Canada businesses to strengthen organizational capabilities and drive efficiencies to support the growth strategy estimated fair value of the ~~Company. The Company~~net assets contributed to the Argentina joint venture recorded ~~$4 million of employee-related severance and other restructuring costs~~ during the third quarter of 2017 related to this initiative. We expect to incur between $3 million and $5 million of additional employee-related severance and other costs in the fourth quarter of 2017 and between $1 million and $2 million in 2018 related to this initiative.

~~Our cash provided by operating activities decreased to $524 million~~2021, our results for the ~~nine months ended September 30, 2017 from $542 million in the year-earlier~~current period driven by an increase of cash outflow in working capital primarily due to the outflow in accounts payable and accrued liabilities for the $63 million payment made to the Internal Revenue Service (“IRS”) in the third quarter of 2017 to complete the double taxation settlement between the U.S. and Canada. This outflow was partially offset by increased earnings in the period. Our cash used for financing activities increased during the nine months ended September 30, 2017, primarily due to the repurchase of approximately one million shares of our common stock in open market transactions for $123 million during the first quarter of 2017. During the second and third quarters, we also refinanced a total of $500 million of senior notes with borrowings under our revolving credit facility and a new term loan entered into during the third quarter.

On March 9, 2017, the Company completed its acquisition of Sun Flour Industry Co., Ltd. (“Sun Flour”) in Thailand for $18 million. Upon closing, the Company paid $13 million in cash and recorded $5 million in accrued liabilities for deferred payments due to the previous owner. The acquisition of Sun Flour adds a fourth manufacturing facility to our operations in Thailand. Sun Flour produces rice-based ingredients used primarily in the food industry. This transaction will enhance our global supply chain and leverage other capital investments that we have made in Thailand to grow our specialty ingredients and service customers around the world. The acquisition did not have a material impact on our financial condition, results of operations or cash flows in the third quarter of 2017.

~~Looking ahead, we anticipate that our full year 2017 operating income and~~reflected higher net income ~~will grow compared~~attributable to 2016. In North America, we expect full year operating income to increase driven by improved product mix and margins. In South America, we believe that full year operating income will be down compared to 2016 driven by temporary higher-than-normal costs related to the interruption of manufacturing activities in Argentina and the restructuring charges incurred to improve the cost position of the operation in Argentina. We will continue to focus on network optimization and cost improvement in this segment for the remainder of the year. In the longer term, we believe that the underlying business demographics for our South American segment are positive. We expect full-year operating income to grow in EMEA principally driven by improved price/product mix from our specialty ingredient product portfolio, volume growth and effective cost control. In Asia Pacific, we expect full-year operating income to increase, driven by volume growth and effective cost control.Ingredion as well as a higher diluted earnings per share.

Results of Operations

We have significant operations in four reporting segments: North America, South America, ~~Asia Pacific~~Asia-Pacific and EMEA. Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries’ revenues and expenses. For most of our foreign subsidiaries, the local foreign currency is the functional currency. Accordingly, revenues 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. Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries’ revenues and expenses. The impact of foreign currency exchange rate changes, where significant, is provided below.

We acquired ~~Shandong Huanong Specialty Corn Development Co., Ltd. (“Shandong Huanong”), TIC Gums Incorporated (“TIC Gums”)~~Amishi on August 1, 2022, and ~~Sun Flour~~KaTech on ~~November 29, 2016, December 29, 2016~~April 1, 2021, and ~~March 9, 2017, respectively. The~~the results of the acquired businesses are included in our consolidated financial results ~~from~~beginning on the ~~respective~~ acquisition ~~dates forward.~~date, which inclusion affects the comparability of results between years. In addition, we entered into the Argentina joint venture on February 12, 2021, which closed on August 2, 2021, and the Amyris joint venture on June 1, 2021. Our share of results in joint ventures is classified as other operating (income) and comparability between years and between financial statement line items is affected by the timing of and consideration provided to the investments. While we identify fluctuations due to the acquisitions and investments in our discussion below, we also ~~addresses~~address results of operations ~~absent~~excluding the impact of ~~the~~our acquisitions and ~~the results of the acquired businesses,~~investments, where appropriate, to provide a more comparable and meaningful analysis.

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For the Three Months Ended September 30, 2022

With Comparatives for the Three Months Ended September 30, 2021

Net sales. Net sales increased 15 percent to $2,023 million for the three months ended September 30, 2022, compared to $1,763 million for the three months ended September 30, 2021. The increase in net sales was primarily driven by strong price mix.

Cost of sales. Cost of sales increased 15 percent to $1,649 million for the three months ended September 30, 2022, compared to cost of sales of $1,440 million for the three months ended September 30, 2021. The increase in cost of sales primarily reflected higher net corn costs. Our gross profit margin was flat at 18 percent for both the three months ended September 30, 2022, and the three months ended September 30, 2021.

Operating expenses. Operating expenses increased 10 percent to $180 million for the three months ended September 30, 2022, compared to $164 million for the three months ended September 30, 2021, primarily due to cost impacts of higher inflation. Operating expenses as a percentage of net sales was 9 percent for both the three months ended September 30, 2022, and the three months ended September 30, 2021.

Other operating expense (income). Other operating expense (income) was $10 million for the three months ended September 30, 2022, compared to $(1) million for the three months ended September 30, 2021.

Restructuring/impairment charges and related adjustments. Restructuring/impairment charges and related adjustments were $2 million for the three months ended September 30, 2022, compared to $(12) million for the three months ended September 30, 2021. We recognized income during the three months ended September 30, 2021, primarily due to a $20 million favorable adjustment to the estimated fair value of the net assets contributed to the Argentina joint venture.

Financing costs. Financing costs increased 20 percent to $24 million for the three months ended September 30, 2022, compared to $20 million for the three months ended September 30, 2021. The increase was primarily due to higher interest rates and higher average short-term borrowing balances.

Provision for income taxes. Our effective income tax rates for the three months ended September 30, 2022 increased to 32.3 percent from 22.2 percent for the three months ended September 30, 2021. The increase in the effective income tax rate was primarily driven by U.S. international tax implications, including foreign tax credits and a $20 million gain related to net assets contributed to the Argentina joint venture recorded during the three months ended September 30, 2021, that did not have a corresponding income tax expense. These items were partly offset by a change in value of the Mexican peso against the U.S. dollar.

Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $3 million for the three months ended September 30, 2022, compared to $1 million for the three months ended September 30, 2021. The increase in net income attributable to non-controlling interests was due to higher net income for PureCircle during the three months ended September 30, 2022, compared to September 30, 2021.

Net income attributable to Ingredion. Net income attributable to Ingredion for the three months ended September 30, 2022 was $106 million compared to a net income of $118 million for the three months ended September 30, 2021. This decrease was due primarily to a $20 million favorable adjustment to the estimated fair value of net assets contributed to the Argentina joint venture recorded in the prior year. Excluding this impairment adjustment, net income increased due to strong price mix, offset in part by higher corn and input costs.

Segment Results

North America

Net sales. North America’s net sales increased 17 percent to $1,262 million for the three months ended September 30, 2022, compared to $1,083 million for the three months ended September 30, 2021. The increase was primarily driven by a 17 percent improvement in price mix.

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Operating income. North America’s operating income was $126 million for the three months ended September 30, 2022, compared to $120 million for the three months ended September 30, 2021. The increase was primarily due to favorable price mix that more than offset higher corn and input costs.

South America

Net sales. South America’s net sales increased 13 percent to $293 million for the three months ended September 30, 2022, from $260 million for the three months ended September 30, 2021. Excluding the effects of revenues from operations we contributed to the Argentina joint venture, net sales were 21 percent higher than in the same period last year. The increase reflected a 22 percent higher price mix across South America and a 3 percent increase in volume, which were partly offset by a 4 percent unfavorable foreign exchange impact.

Operating income. South America’s operating income increased 37 percent to $48 million for the three months ended September 30, 2022, compared to $35 million for the three months ended September 30, 2021. The increase was primarily driven by favorable price mix and higher volumes that more than offset higher corn and input costs.

Asia-Pacific

Net sales. Asia-Pacific’s net sales increased 13 percent to $278 million for the three months ended September 30, 2022, compared to $245 million for the three months ended September 30, 2021. The increase was driven by a 17 percent higher price mix and a 6 percent increase in volume, the effects of which were partially offset by unfavorable foreign exchange impacts of 10 percent.

Operating income. Asia-Pacific’s operating income increased 29 percent to $27 million for the three months ended September 30, 2022, compared to $21 million for the three months ended September 30, 2021. The increase was primarily driven by favorable price mix that more than offset higher input costs and foreign exchange impacts.

EMEA

Net sales. EMEA’s net sales increased by 9 percent to $190 million for the three months ended September 30, 2022, compared to $175 million for the three months ended September 30, 2021. The increase was driven by a 29 percent increase due to price mix, which was partially offset by unfavorable foreign exchange impacts of 19 percent and a 1 percent decrease in volume.

Operating income. EMEA’s operating income increased 30 percent to $30 million for the three months ended September 30, 2022, compared to $23 million for the three months ended September 30, 2021. The increase was primarily driven by favorable price mix that more than offset higher input costs and foreign exchange impacts.

For the Nine Months Ended September 30, ~~2017~~2022

With Comparatives for the ~~Three and~~ Nine Months Ended September 30, ~~2016~~2021

Net ~~Income attributable to Ingredion~~sales. Net ~~income for the third quarter of 2017~~sales increased by 16 percent to $166 million, or $2.26 per diluted common share, from $143 million, or $1.93 per diluted common share, a year ago. Net income for the nine months ended September 30, 2017 increased by 7 percent to $420 million, or $5.72 per diluted common share, from $391 million, or $5.29 per diluted common share, in the nine months ended September 30, 2016.

Results for the third quarter of 2017 include a tax benefit of $10 million ($0.14 per diluted common share) due to a deductible foreign exchange loss resulting from the tax settlement between the U.S. and Canada, partially offset by after-tax costs of $5 million ($0.07 per diluted common share) of net restructuring costs primarily associated with the Finance Transformation initiative, and $1 million ($0.01 per diluted common share) associated with the integration of acquired operations. Results for the third quarter of 2016 include after-tax costs of $2 million ($0.02 per diluted common share) consisting of employee-related severance and other costs associated with the execution of global information technology (“IT”) outsourcing contracts.

Results for the nine months ended September 30, 2017 include after-tax costs of $21 million ($0.29 per diluted common share) of net restructuring costs primarily associated with our restructuring effort in Argentina and employee-related severance and other costs associated with the Finance Transformation initiative, $6 million ($0.08 per diluted common share) related to the flow-through of costs primarily associated with the sale of TIC Gums inventory that was adjusted to fair value at the acquisition date in accordance with business combination accounting rules, and $2 million ($0.03 per diluted common share) associated with the integration of acquired operations, partially offset by a tax benefit of $10 million ($0.14 per diluted common share) due to a deductible foreign exchange loss resulting from the tax settlement between the U.S. and Canada. Results for the nine months ended September 30, 2016 include after-tax costs of $12 million ($0.16 per diluted common share) consisting of employee-related severance and other costs associated with the execution of IT outsourcing contracts, employee-related severance costs associated with our optimization initiative in South America, and costs attributable to the 2015 sale of the Port Colborne plant~~. Additionally, our results for the nine months ended September 30, 2016 include $1 million ($0.01 per diluted common share) associated with the integration of acquired operations.~~

Without the acquisition and integration, restructuring, inventory markup, and tax settlement, net income for the three and nine months ended September 30, 2017 would have grown 12 percent and 9 percent, respectively, from the comparable prior periods, while diluted earnings per share would have grown 13 percent and 10 percent, respectively, from the comparable prior periods. These increases for the three and nine months ended September 30, 2017 primarily reflect continued strong operating results in our North America segment during the year, partially offset by lower earnings in our South America segment due to continued difficult macroeconomic conditions and increased costs in Argentina. The increase for the nine months ended September 30, 2017 was partially offset by higher net financing costs.

~~Net Sales~~. Net sales for the third quarter of 2017 were flat from $1.49 billion a year ago. Volume growth of 2 percent, which was comprised of 2 percent growth from recent acquisitions, was offset by a 2 percent decrease in price/product mix driven by lower raw material costs. Net sales for the nine months ended September 30, 2017 increased 2 percent to $4.40 billion from $4.30 billion for the nine months ended September 30, 2016. The increase was driven by volume growth of 3 percent, which was comprised of 2 percent growth from recent acquisitions and 1 percent increase in organic volume growth, and favorable currency translation of 1 percent reflecting a stronger Brazilian real, partially offset by a 2 percent decrease in price/product mix.

~~North America’s net sales for the third quarter of 2017 were relatively flat at $903 million from $899 million a year ago.~~Volume growth of 1 percent, which was comprised of 4 percent growth from the TIC Gums acquisition and a 3 percent decline in organic volume due largely to customer shifts in the brewing industry in Mexico and supply chain interruptions caused by natural disasters that affected both our customers and us. This was offset by a 1 percent decrease in price/product mix driven by lower raw material costs. North America’s net sales for the nine months ended September 30, 2017 increased 2 percent to $2.69 billion from $2.63 billion for the nine months ended September 30, 2016.~~This increase was driven by volume growth of 3 percent primarily from the TIC Gums acquisition, partially offset by a 1 percent decrease in price/product mix driven by lower raw material costs.~~

South America’s net sales for third quarter of 2017 decreased 7 percent to $257 million from $276 million a year ago. This decrease was primarily driven by an 8 percent decrease in price/product mix due to lower raw material costs in Brazil and unfavorable currency translation of 2 percent reflecting a weaker Argentine peso in the quarter, partially offset by a volume increase of 3 percent. South America’s net sales for the nine months ended September 30, 2017 increased 1 percent to $740 million from $731$5,959 million for the nine months ended September 30, ~~2016. This increase was driven by favorable currency translation of 5 percent primarily reflecting a stronger Brazilian real, partially offset by a 3 percent decrease in price/product mix due~~2022, compared to ~~lower raw material costs in Brazil and a volume decrease of 1 percent, primarily due to difficult macroeconomic conditions and the interruption of manufacturing activities in Argentina.~~

Asia Pacific’s net sales for the third quarter of 2017 increased 2 percent to $189 million from $185 million a year ago. This increase was driven by volume growth of 8 percent, which was comprised of 7 percent organic volume growth and 1 percent growth from our recent acquisitions in the region, partially offset by a 6 percent decrease in price/product mix due to core customer mix diversification and pass through of lower raw material costs. Asia Pacific’s net sales for the nine months ended September 30, 2017 increased 4 percent to $555 million from $534$5,139 million for the nine months ended September 30, ~~2016. This~~2021. The increase in net sales was driven by ~~volume growth of 9 percent, which was comprised of 8 percent organic volume growth~~strong price mix and ~~1 percent volume increase from our recent acquisitions in the region, and favorable currency translation of 1 percent primarily reflecting a stronger Korean won. The increase in volume was~~ partially offset by ~~a 6 percent decrease in price/product mix due to core customer mix diversification.~~negative foreign exchange impacts.

~~EMEA’s net~~Cost of sales ~~for the third quarter~~. Cost of ~~2017~~sales increased 518 percent to ~~$136~~$4,816 million from $129 million a year ago. This increase was driven by a 2 percent increase in price/product mix, favorable currency translation of 2 percent primarily reflecting a stronger Euro in the quarter, and a volume increase of 1 percent. EMEA’s net sales for the nine months ended September 30, ~~2017 increased 1 percent~~2022, compared to $411 million from $405 million a year ago. This increase was driven by a 2 percent increase in price/product mix and volume growth of 1 percent, partially offset by unfavorable currency translation of 2 percent, primarily reflecting a weaker British Pound sterling.

~~Cost of Sales and Operating Expenses.~~ Cost of sales for the third quarter of 2017 decreased 2 percent to $1.10 billion from $1.12 billion a year ago. Our gross profit margin was 26 percent for the third quarter of 2017, up from 25 percent last year. The decline in cost of sales ~~and improvement in gross profit margin are primarily driven by overall lower raw material costs and improved operational efficiencies. Operating expenses for the third quarter~~ of ~~2017 increased to $152~~$4,098 million ~~from $149 million last year. This increase was primarily driven by the incremental operating expenses of~~

~~acquired operations. Operating expenses, as a percentage of gross profit, were 39 percent for the third quarter of 2017 as compared to 40 percent a year ago.~~

~~Cost of sales~~ for the nine months ended September 30, ~~2017 increased 1 percent to $3.28 billion from $3.24 billion a year ago. This~~2021. The increase ~~was~~in cost of sales primarily ~~driven by an increase of 2 percent in~~reflected higher net ~~sales volume.~~corn costs. Our gross profit margin ~~was 25~~of 19 percent for the nine months ended September 30, ~~2017, flat with 25~~2022 decreased from 20 percent last year. The gross profit margin remained flat due to higher operating costs as a result of the temporary manufacturing interruption in Argentina offset by overall lower raw material cost and improved operational efficiencies in North America. Operating expenses forfrom the nine months ended September 30, ~~2017 increased to $458 million from $431 million last year. This increase~~2021. The decrease in gross margin was primarily driven by ~~the incremental operating~~higher corn and input costs.

Operating expenses ~~of acquired operations.~~. Operating expenses ~~as a percentage of gross profit, were 41 percent for the third quarter of 2017 as compared to 41 percent a year ago.~~

~~Operating Income.~~ ~~Third quarter of 2017 operating income~~ increased 59 percent to $233 million from $221 million a year ago. Operating income for the third quarter of 2017 includes pre-tax net restructuring costs of $7 million consisting of $4 million of other restructuring costs associated with a Finance Transformation initiative and $3 million of other pre-tax restructuring costs including employee-related severance costs in North America. Additionally, the third quarter results include $1 million of costs associated with the integration of acquired operations. Operating income for third quarter of 2016 includes pre-tax costs of $2 million consisting of employee-related severance and other costs associated with the execution of IT outsourcing contracts. Without the restructuring and acquisition-related charges, our ~~third~~ ~~quarter of 2017 operating income would have grown 8 percent from the~~ ~~third~~ quarter of 2016. The increase primarily reflects operating income growth in North America. Currency translation had a net favorable impact of $2 million, reflecting the movements of the Canadian dollar, Brazilian real, and Argentine peso during the quarter.

~~Operating income for the nine months ended September 30, 2017 increased 3 percent to $639 million from $619~~$528 million for the nine months ended September 30, 2016. Operating income for the nine months ended September 30, 2017 includes pre-tax net restructuring costs of $23 million consisting of $17 million of employee-related severance and other costs associated with our restructuring effort in Argentina, $5 million of other restructuring costs associated with a Finance Transformation initiative, and $1 million of other pre-tax restructuring charges that including employee-related severance costs in North America and a refinement of estimates for prior year restructuring activities. Additionally, the nine months ended September 30, 2017 results include $9 million of costs primarily associated with the TIC Gums inventory that was adjusted2022, compared to ~~fair value at the acquisition date, and $3 million of costs associated with the integration of acquired operations. Operating income for the nine months ended September 30, 2016 includes~~ pre-tax costs of $15 million consisting of employee-related severance and other costs associated with the execution of IT outsourcing contracts and $2 million of costs associated with the integration of acquired operations. Without the restructuring and acquisition-related charges, our operating income for the nine months ended September 30, 2017 would have grown 6 percent from the prior year period. The increase primarily reflects operating income growth in North America, partially offset by an operating income decrease in South America. Currency translation had a net favorable impact of $8 million, reflecting the movements of the Brazilian real, Argentine peso, and Canadian dollar.

North America’s third quarter of 2017 operating income increased 9 percent to $179 million from $164 million a year ago. This increase was primarily driven by net margin improvement from favorable raw material costs and operational efficiencies, partially offset by a decrease in price/product mix. North America’s operating income for the nine months ended September 30, 2017 increased 10 percent to $520 million from $474$484 million for the nine months ended September 30, ~~2016. This increase was~~2021, primarily driven by net margin improvement from favorable raw material costs and operational efficiencies, in addition to organic and acquisition-related volume growth compared to the prior period, and partially offset by a decrease in price/product mix.

South America’s third quarter 2017 operating income decreased 4 percent to $26 million from $27 million a year ago. This decrease was primarily driven by a decrease in price/product mix and partially offset by a margin improvement due to ~~favorable raw material costs. South America’s operating income~~cost impacts of higher inflation. Operating expenses as a percentage of net sales were approximately 9 percent for both the nine months ended September 30, ~~2017 decreased 25 percent to $44 million from $59~~2022, and the nine months ended September 30, 2021.

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Other operating expense (income). Other operating expense (income) was $4 million for the nine months ended September 30, ~~2016.~~ This decrease was primarily driven by difficult macroeconomic conditions in the region, interruption of manufacturing activities resulting in temporary higher operating costs in Argentina during the second quarter, and unfavorable price/product mix. This decrease was partially offset by a net margin improvement from favorable raw material costs and an $8 million favorable currency translation impact reflecting the movements of the Brazilian real and Argentine peso.

~~Asia Pacific’s third quarter 2017 operating income was flat from $29 million a year ago. Volume growth and improved operational efficiencies were offset by a decrease in price/product mix due~~2022, compared to ~~core customer mix diversification. Asia Pacific’s operating income for the nine months ended September 30, 2017 increased 1 percent to $88 million from $87~~$(29) million for the nine months ended September 30, 2016. This increase was driven by volume growth, improved operational efficiencies, and a net margin improvement due to favorable raw material costs, offset by a decrease in price/product mix due to core customer mix diversification.

EMEA’s third quarter 2017 operating income increased 4 percent to $26 million from $25 million a year ago. This increase was primarily driven by favorable price/product mix and volume growth during the period, partially offset by increased operating costs. EMEA’s operating income for2021. During the nine months ended September 30, ~~2017 increased 4 percent~~2021, we recorded $(15) million of Other operating expense (income) related to ~~$83~~Brazil indirect tax credits and an $(8) million net gain from ~~$80~~the formation of the Amyris joint venture.

Restructuring and impairment charges. Restructuring and impairment charges were $6 million for the nine months ended September 30, ~~2016. This increase was primarily driven by favorable price/product mix and volume growth, partially offset by increased operational costs and a net margin decrease due~~2022, compared to ~~unfavorable raw material costs.~~

~~Financing Costs, net~~. Financing costs for the third quarter of 2017 increased to $16 million from $15 million in the prior-year period. This increase was primarily driven by higher weighted average short-term borrowing costs and an increase in short-term borrowings.

~~Financing costs for the nine months ended September 30, 2017 increased to $57 million from $48~~$362 million for the nine months ended September 30, ~~2016. This~~2021. During the nine months ended September 30, 2021, we recorded an impairment charge of $340 million for net assets from our Argentina business we contributed to the Argentina joint venture, of which $311 million was related to the write-off of the cumulative translation losses associated with the contributed net assets and $29 million was related to the write-down of the contributed net assets to fair value.

Financing costs. Financing costs increased 12 percent to $65 million for the nine months ended September 30, 2022, compared to $58 million for the nine months ended September 30, 2021. The increase was due to higher ~~weighted~~foreign exchange losses and third-party financing costs in the current year compared to the prior year. The increase in third-party financing costs was primarily due to higher interest rates and higher average short-term borrowing ~~costs and an increase in short-term borrowings. Additionally, an increase in foreign currency transaction losses contributed to the increase.~~balances.

Provision for ~~Income Taxes~~. ~~Our effective~~ income ~~tax rate for the third quarter of 2017 decreased to 22.1 percent from 29.2 percent a year ago.~~taxes. The effective ~~income~~ tax rate for the nine months ended September 30, ~~2017 was 26.3~~2022, decreased to 28.9 percent ~~compared to 30.1~~from 66.5 percent ~~a year ago.~~

We use the U.S. dollar as the functional currency for our subsidiaries in Mexico. For the three and nine months ended September 30, 2017, the effective tax rates were reduced by 1.0 percent and 1.7 percent, respectively, due to the revaluation of the Mexican peso versus the U.S. dollar.

In addition, we increased the valuation allowance on the net deferred tax assets of a foreign subsidiary. As a result, for the three and nine months ended September 30, 2017, the effective tax rates were increased by 2.0 percent and 1.8 percent, respectively.

We had been pursuing relief from double taxation under the U.S.-Canada tax treaty for the years 2004-2013. During the fourth quarter of 2016, a tentative settlement was reached between the U.S. and Canada and, consequently, last year we established a net reserve of $24 million, including interest thereon, recorded as a $70 million liability and a $46 million benefit. In the third quarter of 2017, the two countries finalized the agreement, which eliminated the double taxation, and we paid $63 million to the IRS to settle the liability. As a result of that agreement, we are entitled to deduct a foreign exchange loss of $10 million on our 2017 U.S. federal income tax return. For the three and nine months ended September 30, 2017, the effective tax rates were reduced by 4.9 percent and 1.8 percent, respectively, due to the foreign exchange loss deduction. The foreign exchange loss was not recognized in income before taxes because it arose from the terms of the agreement.

The above discrete tax items were partially offset by individually insignificant discrete items. Without these items, the rate for the three and nine months ended September 30, 2017 would have been approximately 27.3 percent and 28.1 percent, respectively.

Our effective income tax rates for the three and nine months ended September 30, 2016 were increased by 2.3 percent and 2.5 percent, respectively, due to the devaluation of the Mexican peso versus the U.S. dollar. The impact of the Mexican peso was partially offset by individually insignificant factors. Without these items, the rates for the three and nine months ended September 30, 2016 would have been approximately 27.4 percent and 28.3 percent, respectively.

~~Comprehensive Income Attributable to Ingredion~~. Comprehensive income for the third quarter of 2017 increased to $186 million from $138 million a year ago. The increase reflects an increase in net income, favorable variances due to losses resulting from cash-flow hedging activities, and favorable currency translation adjustments.

~~Comprehensive income~~ for the nine months ended September 30, ~~2017 increased~~2021. The primary cause of the decrease was the $340 million impairment charge related to ~~$482~~net assets contributed to the Argentina joint venture during the nine months ended September 30, 2021, that did not have a corresponding income tax benefit. The effect of this charge was partially offset by a discrete tax benefit of $30 million ~~from $459~~recorded during the three months ended June 30, 2021, due to the reversal of an accrual for withholding tax on the unremitted earnings of a foreign subsidiary.

Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $9 million for the nine months ended September 30, ~~2016. This increase reflects an increase in net income, favorable variances due to losses resulting from cash-flow hedging activities, partially offset by unfavorable currency translation adjustments.~~

~~Liquidity~~2022, and ~~Capital Resources~~

Cash provided by operating activities for the nine months ended September 30, 2017 was $524 million, as compared to $542 million a year ago. The decrease in operating cash flow primarily reflects the changes in our working capital, partially offset by an increase in our net income.

~~Capital expenditures of $222~~$7 million for the nine months ended September 30, ~~2017 are~~2021. The increase in ~~line with our capital spending plan~~net income attributable to non-controlling interests was due primarily to higher net income from PureCircle in the current period.

Net Income attributable to Ingredion. Net income attributable to Ingredion for the ~~year. We anticipate that our capital expenditures will be approximately $300~~nine months ended September 30, 2022, was $378 million compared to ~~$325~~a net income of $50 million for ~~2017. During~~ the ~~first quarter of 2017, we repurchased approximately 1 million shares of our common stock in open market transactions for $123 million.~~

On August 18, 2017, the Company entered into a new Term Loan Credit Agreement (“Term Loan”) to establish a senior unsecured term loan credit facility. Under the Term Loan, the Company is allowed three borrowings in an amount of up to $500 million total. The Term Loan matures 18nine months ~~from the date of the final borrowing. As of~~ended September 30, ~~2017,~~2021. The increase was largely attributable to the ~~Company had initiated two borrowings under~~$340 million impairment charge for the ~~Term Loan totaling $380 million.~~Argentina assets contributed to the Argentina joint venture that we recorded during the nine months ended September 30, 2021.

Segment Results

North America

Net sales. North America’s net sales increased 20 percent to $3,720 million for the nine months ended September 30, 2022, compared to $3,096 million for the nine months ended September 30, 2021. The ~~proceeds~~increase was primarily driven by a 19 percent improvement in price mix and a 1 percent increase in volume.

Operating income. North America’s operating income was $443 million for the nine months ended September 30, 2022, compared to $403 million for the nine months ended September 30, 2021. The increase was driven by favorable price mix that more than offset higher corn and input costs.

South America

Net sales. South America’s net sales increased 4 percent to $835 million for the nine months ended September 30, 2022, from $801 million for the nine months ended September 30, 2021. Excluding the effects of revenues from operations we contributed to the Argentina joint venture, net sales were ~~used~~28 percent higher than in the same period last year. The increase reflected 23 percent higher price mix and a 5 percent increase in volume.

Operating income. South America’s operating income increased 16 percent to ~~refinance $300~~$125 million for the nine months ended September 30, 2022, compared to $108 million for the nine months ended September 30, 2021. The increase was primarily driven by favorable price mix and volumes that more than offset higher corn and input costs.

Table of ~~1.8~~Contents

Asia-Pacific

Net sales. Asia-Pacific’s net sales increased 13 percent ~~senior notes~~to $825 million for the nine months ended September 30, 2022, compared to $728 million for the nine months ended September 30, 2021. The increase was driven by a 13 percent higher price mix and an increase in volume of 7 percent, partially offset by unfavorable foreign exchange impacts of 7 percent.

Operating income. Asia-Pacific’s operating income was flat at $70 million for both the nine months ended September 30, 2022, and the nine months ended September 30, 2021. Operating income was flat as higher price mix was fully offset due to higher input costs and foreign exchange impacts.

EMEA

Net sales. EMEA’s net sales increased 13 percent to $579 million for the nine months ended September ~~25, 2017~~30, 2022, compared to $514 million for the nine months ended September 30, 2021. The increase was driven by higher price mix of 23 percent and ~~pay down borrowings outstanding~~an increase in volume of 4 percent, partially due to the purchase of KaTech on April 1, 2021. These items were partially offset by unfavorable foreign exchange impacts of 14 percent.

Operating income. EMEA’s operating income increased 5 percent to $90 million for the ~~revolving credit facility. On October 25, 2017,~~nine months ended September 30, 2022, compared to $86 million for the ~~Company initiated its third~~nine months ended September 30, 2022. The increase was primarily driven by favorable price mix that more than offset higher input costs and ~~final borrowing under the Term Loan of $40 million, bringing the total outstanding Term Loan to $420 million, due April 25, 2019. See also Note 11 of the Condensed Consolidated Financial Statements.~~foreign exchange impacts.

Liquidity and Capital Resources

As of September 30, ~~2017, there~~2022, we had total available liquidity of approximately $1,437 million. Domestic liquidity of $384 million consisted of $6 million in cash and cash equivalents and $378 million of short-term borrowing availability through our $1 billion commercial paper program, under which $622 million of borrowings were ~~borrowings~~outstanding as of ~~$380 million outstanding under the Term Loan Credit Agreement and no borrowings outstanding under the Revolving Credit Facility. In addition to the~~September 30, 2022. The commercial paper program, which we initiated on July 27, 2021, is backed by $1 billion of borrowing availability under a five-year revolving credit agreement that we entered into on June 30, 2021.

We had international liquidity as of September 30, 2022 of approximately $1,053 million, consisting of $288 million of cash and cash equivalents and $4 million of short-term investments held by our operations outside the ~~Revolving Credit Agreement, we have approximately $493~~U.S., as well as $761 million of unused operating lines of credit in the various foreign countries in which we operate. As the parent company, we guarantee certain obligations of our consolidated subsidiaries, which totaled $75 million as of September 30, 2022. We believe that such consolidated subsidiaries will be able to meet their financial obligations as they become due.

As of September 30, ~~2017,~~2022, we had total debt outstanding of ~~$1,884 million, compared to $1,956 million at December 31, 2016. As of September 30, 2017~~approximately $2.4 billion, or $1.7 billion excluding the outstanding commercial paper and other short-term borrowings. Of our ~~total~~outstanding debt, $1.7 billion consists of senior notes that do not require principal repayment until 2026 through 2050. See Note 9 of the ~~following:~~Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our debt.

As of

(in millions)

September 30, 2017

3.2% senior notes due October 1, 2026

$
496

4.625% senior notes due November 1, 2020

398

6.625% senior notes due April 15, 2037

254

5.62% senior notes due March 25, 2020

200

Term loan credit agreement due April 25, 2019

380

Revolving credit facility

—

Fair value adjustment related to hedged fixed rate debt instruments

3

Long-term debt

$
1,731

Short-term borrowings

153

Total debt

$
1,884

The ~~weighted average interest rate on~~principal source of our ~~total indebtedness was approximately 4.1 percent for the nine months ended September 30, 2017, compared~~liquidity is our internally generated cash flow, which we supplement as necessary with our ability to ~~3.9 percent~~borrow under our credit facilities and commercial paper program and to raise funds in the ~~comparable prior-year period.~~

On September 15, 2017, our Board of Directors declared a quarterly cash dividend of $0.60 per share of common stock. This dividend was paid on October 25, 2017 to stockholders of record at the close of business on October 2, 2017.

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 ~~facilities~~facility and commercial paper program, will provide us with sufficient liquidity to fund our anticipated capital expenditures, dividends and other investing and financing activities for at least the next twelve months and for the foreseeable ~~future.~~future thereafter. Our future cash flow needs will depend on many factors, including our rate of revenue growth, the timing and extent of our expansion into new markets, the timing of introductions of and rate of success for 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.

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Net Cash Flows

Our short-term borrowings increased $401 million during the nine months ended September 30, 2022, which we primarily used to invest in capital expenditures and mechanical stores purchases, pay dividends and repurchase shares of common stock. Our cash provided by operating activities was $80 million for the nine months ended September 30, 2022, compared to cash provided by operating activities of $259 million for the nine months ended September 30, 2021. This decrease was primarily due to cash used for working capital. Cash used for working capital increased by $297 million during the nine months ended September 30, 2022, which was primarily attributable to increases in trade accounts receivable and inventory. Cash used for trade accounts receivable increased due to higher pricing and higher freight costs for products sold, and cash used for inventory increased due primarily to higher input costs from raw materials during the nine months ended September 30, 2022.

We used $203 million of cash for capital expenditures and mechanical stores purchases to update, expand and improve our facilities during the nine months ended September 30, 2022, which was identical to the amount for the nine months ended September 30, 2021. Capital investments for full-year 2022 are anticipated to be between $290 million and $320 million.

We declare and pay cash dividends to our common stockholders of record on a quarterly basis. On September 26, 2022, our Board of Directors declared a quarterly cash dividend of $0.71 per share of common stock, which was 9 percent higher than the dividend declared during the prior quarter. This dividend was paid on October 25, 2022, to stockholders of record at the close of business on October 6, 2022. Dividends paid, including those to noncontrolling interests, were $133 million for the nine months ended September 30, 2022, compared to $138 million for the nine months ended September 30, 2021.

During the three months ended September 30, 2022, we repurchased 325 thousand outstanding shares of common stock in open market transactions at a net cost of $29 million, compared to repurchases of 500 thousand outstanding shares of common stock at a net cost of $44 million in the three months ended September 30, 2021. For the nine months ended September 30, 2022, we repurchased 1,300 thousand outstanding shares of common stock in open market transactions at a net cost of $112 million, compared to repurchases of 765 thousand outstanding shares of common stock at a net cost of $68 million for the nine months ended September 30, 2021.

We have not provided foreign withholding taxes, state income taxes and federal and state ~~income~~ 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. Approximately $484 million of the total $505 million of cash and cash equivalents and short-term investments at September 30, 2017 was held by our operations outside of the U.S. We expect that available cash balances and credit facilities in the U.S., along with cash generated from operations and access to debt markets, will be sufficient to meet our operating and other cash needs for the foreseeable future.

~~Hedging~~

We are exposed to market risk stemming from changes in commodity prices (primarily corn and natural gas), foreign currency exchange rates and interest rates. In the normal course of business, we actively manage our exposure to these market risks by entering into various hedging transactions, authorized under established policies that place clear controls on these activities. These transactions utilize exchange-traded derivatives or over-the-counter derivatives with investment grade counterparties. Our hedging transactions may include, but are not limited to, a variety of derivative financial instruments such as commodity-related futures, options and swap contracts, forward currency-related contracts and options, interest rate swap agreements and Treasury lock agreements (“T-Locks”). See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.

~~Commodity Price Risk:~~ Our principal use of derivative financial instruments is to manage commodity price risk in North America relating to anticipated purchases of corn and natural gas to be used in our manufacturing process. We periodically enter into futures, options and swap contracts for a portion of our anticipated corn and natural gas usage, generally over the following 12 to 24 months, in order to hedge price risk associated with fluctuations in market prices. We also enter into futures contracts to hedge price risk associated with fluctuations in the market price of ethanol. We are unable to directly hedge price risk related to co-product sales; however, we occasionally enter into hedges of soybean oil (a competing product to corn oil) in order to mitigate the price risk of corn oil sales. Unrealized gains and losses associated with marking our commodities-based derivative instruments to market are recorded as a component of other comprehensive income (“OCI”). At September 30, 2017, our accumulated other comprehensive loss account (“AOCI”) included $5 million of losses, net of income taxes of $4 million, related to these derivative instruments. It is anticipated that these losses will be reclassified into earnings during the next 12 months. We expect the losses to be offset by changes in the underlying commodities costs.

~~Foreign Currency Exchange Risk:~~ Due to our global operations, including operations in many emerging markets, we are exposed to fluctuations in foreign currency exchange rates. As a result, we have exposure to translational foreign exchange risk when our foreign operations’ results are translated to U.S. dollars and to transactional foreign exchange risk when transactions not denominated in the functional currency of the operating unit are revalued. We primarily use derivative financial instruments such as foreign currency forward contracts, swaps and options to manage our foreign currency transactional exchange risk. At September 30, 2017, we had foreign currency forward sales contracts that are designated as fair value hedges with an aggregate notional amount of $447 million and foreign currency forward purchase contracts with an aggregate notional amount of $173 million that hedged transactional exposures.

We also have foreign currency derivative instruments that hedge certain foreign currency transactional exposures and are designated as cash-flow hedges. At September 30, 2017, AOCI included an insignificant amount of losses, net of income taxes, relating to these hedges.

We have significant operations in Argentina. We utilize the official exchange rate published by the Argentine government for re-measurement purposes. Due to exchange controls put in place by the Argentine government, a parallel market exists for exchanging Argentine pesos to U.S. dollars at rates less favorable than the official rate, although the difference in rates has decreased from past levels.

~~Interest Rate Risk:~~ We occasionally use interest rate swaps and T-Locks to hedge our exposure to interest rate changes, to reduce the volatility of our financing costs, or to achieve a desired proportion of fixed versus floating rate debt, based on current and projected market conditions. We did not have any T-Locks outstanding as of September 30, 2017.

As of September 30, 2017, AOCI included $3 million of losses (net of income taxes of $2 million) related to settled T-Locks. These deferred losses are being amortized to financing costs over the terms of the senior notes with which

~~they are associated. It is anticipated that $1 million of these losses (net of income taxes of $1 million) will be reclassified into earnings during the next 12 months.~~

As of September 30, 2017, we have interest rate swap agreements that effectively convert the interest rates on $200 million of our $400 million of 4.625 percent senior notes due November 1, 2020, to variable rates. These swap agreements call for us to receive interest at the fixed coupon rate of the respective notes and to pay interest at a variable rate based on the six-month U.S. dollar LIBOR rate plus a spread. We have designated these interest rate swap agreements as hedges of the changes in fair value of the underlying debt obligations attributable to changes in interest rates and account for them as fair-value hedges. The fair value of these interest rate swap agreements was $3 million at September 30, 2017 and is reflected in the Condensed Consolidated Balance Sheets within other assets, with an offsetting amount recorded in long-term debt to adjust the carrying amount of the hedged debt obligations.

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 ~~included~~ in our ~~2016~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2021. There have been no material changes to our critical accounting policies and estimates ~~during~~for the nine months ended September 30, ~~2017.~~2022.

New Accounting Pronouncements

The information called for by this section is incorporated herein by reference to Note 2 of the Condensed Consolidated Financial Statements included in this report.

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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 Company~~Ingredion intends these forward-looking statements to be covered by the safe harbor provisions for such statements.

Forward-looking statements include, among ~~other things,~~others, any statements regarding ~~the Company’s~~Ingredion’s prospects orand its future operations, financial condition, earnings, ~~revenues,~~net sales, tax rates, capital expenditures, cash flows, expenses or other financial items, ~~any statements concerning the Company’s prospects or future operations,~~ including management’s plans or strategies and objectives ~~therefor~~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~~forward-looking words such as “may,” “will,” “should,” “anticipate,” ~~“assume”,~~“assume,” “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “continue,” “pro forma,” “forecast,” “outlook,” “propels,” “opportunities,” ~~“potential”~~“potential,” “provisional,” or other similar expressions or the negative thereof. All statements other than statements of historical facts in this report or referred to ~~or incorporated by reference~~ in this report 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 ~~are~~ beyond our control. Although we believe our expectations ~~reflected~~expressed or implied in these forward-looking statements are based on reasonable assumptions, ~~stockholders~~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 ~~factors,~~risks and uncertainties, including the impact of COVID-19 on the demand for our products and our financial results; changing consumption preferences relating to high fructose corn syrup and other products we make; the effects of global economic conditions including, particularly, continuation or worsening of the current economic, currency and political conditions in South America and economic conditions in Europe, and their impact on our sales volumes and pricing of our products, our ability to collect our receivables from customers and our ability to raise funds at reasonable rates; fluctuations in worldwide markets for corn and other commodities, and the associated risks of hedging against such fluctuations; fluctuations in the markets and prices for our co-products, particularly corn oil; fluctuations in aggregate industry supply and market demand; the behavior of financial markets, including foreign currency fluctuations and fluctuations in interest and exchange rates; volatility and turmoil in the capital markets; the commercial and consumer credit environment; general political, economic, business, and market conditions that affect customers and ~~weather conditions~~consumers in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our ~~products;~~products, including, particularly, economic, currency and political conditions in South America and economic and political conditions in Europe, 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 ~~financial performance~~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, ~~and~~ beverage, ~~paper, corrugated~~animal nutrition, and brewing industries; ~~energy costs~~the uncertainty of acceptance of products developed through genetic modification and ~~availability, freight~~biotechnology; our ability to develop or acquire new products and ~~shipping costs,~~services at rates or of qualities sufficient to gain market acceptance; increased competitive and/or customer pressure in the corn-refining industry and ~~changes in regulatory controls regarding quotas, tariffs, duties, taxes~~related industries, including with respect to the markets and ~~income tax rates,~~prices for our primary products and our co-products, particularly ~~United States tax reform; operating difficulties;~~corn oil; the availability of raw materials, including potato starch, tapioca, gum ~~arabic,~~Arabic, and the specific varieties of corn upon which some of our products are ~~based;~~based, and our ability to ~~develop new products~~pass along potential increases in the cost of corn or other raw materials to customers; energy costs and ~~services at a rate or of a quality sufficient to meet expectations;~~availability, including energy issues in Pakistan; ~~boiler reliability;~~ our ability to ~~effectively~~

~~integrate and operate acquired businesses; our ability to~~contain costs, achieve budgets and to realize expected ~~synergies;~~synergies, including with respect to our ability to complete planned maintenance and investment projects ~~successfully~~on time and on ~~budget; labor disputes; genetic~~budget as well as with respect to freight and ~~biotechnology issues; changing consumption preferences~~shipping costs; the effects of climate change and legal, regulatory, and market measures to address climate change; our ability to successfully identify and complete acquisitions or strategic alliances on favorable terms as well as our ability to successfully integrate acquired businesses or implement and maintain strategic alliances and achieve anticipated synergies with respect to all of the foregoing; operating difficulties at our manufacturing facilities; the behavior of financial and capital markets, including ~~those relating~~with respect to ~~high fructose corn syrup; increased competitive and/~~foreign currency fluctuations, fluctuations in interest and exchange rates and market volatility and the associated risks of hedging against such fluctuations; effects of the conflict between Russia and Ukraine, including impacts on the availability and prices of raw materials and energy supplies and volatility in exchange and interest rates; our ability to attract, develop, motivate, and maintain good relationships with our workforce; the impact on our business of natural disasters, war, threats or ~~customer pressure in the corn-refining industry; and~~acts of terrorism, the outbreak or continuation of ~~serious communicable disease~~pandemics such as COVID-19, or ~~hostilities~~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 ~~acts of terrorism. Factors relating~~compliance with environmental regulation; changes in our tax rates or exposure to ~~the acquisition of TIC Gums~~additional income tax liability; increases in our borrowing costs that could ~~cause actual results~~result from increased interest rates; our ability to raise funds at reasonable rates and ~~developments~~other factors affecting our access to ~~differ from expectations include:~~sufficient funds for future growth and expansion; security breaches with respect to information technology systems, processes, and sites; volatility in the ~~anticipated benefits~~stock market and other factors that could adversely affect our stock price; risks affecting the continuation of ~~the acquisition, including synergies, may not be realized;~~our dividend policy; and ~~the integration~~our ability to maintain effective internal control over financial reporting.

Table of ~~TIC Gum’s operations with those of Ingredion may be materially delayed or may be more costly or difficult than expected.~~ Contents

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, ~~2016~~2021, our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 and our subsequent reports on ~~Forms~~Form 10-Q and ~~8-K.~~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 at pages 5041 to 5143 in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021 for a discussion ~~as to how~~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 ~~that would be~~ provided with respect to those disclosures ~~from December 31, 2016 to~~during the nine months ended September 30, ~~2017.~~2022.

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, ~~2017.~~2022. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, 2022, 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 Securities Exchange Act of 1934, as amended, 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 Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

In the fourth quarter of 2016, we acquired Shandong Huanong Specialty Corn Development Co., Ltd. in Pingyuan County, Shandong Province, China (“Shandong Huanong”) and TIC Gums Incorporated (“TIC Gums”). In the first quarter of 2017, we acquired Sun Flour Industry Co., Ltd. (“Sun Flour”) in Thailand. We are currently in the process of evaluating and integrating the acquired operations, processes and internal controls. See Note 3 of the Notes to the Consolidated Financial Statements for additional information regarding the acquisitions. There have been no ~~other~~ changes in our internal control over financial reporting during the ~~nine~~three months ended September 30, ~~2017~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1

LEGAL PROCEEDINGS

~~We are a party to a large number of labor claims~~In 2015 and 2016, Ingredion self-reported certain monitoring and recordkeeping issues relating to ~~our Brazilian operations. We have reserved an aggregate~~environmental regulatory matters involving its Indianapolis, Indiana manufacturing facility. In September 2017, following inspections and the provision by Ingredion of ~~approximately $5 million as~~requested information to the U.S. Environmental Protection Agency (the “EPA"), the EPA issued Ingredion a Notice of ~~September 30, 2017 in respect of these claims.~~Violation, which included additional alleged violations beyond those self-reported by Ingredion. These ~~labor claims~~additional alleged violations primarily relate to ~~dismissals, severance, health~~the results of stack testing at the facility. The allegations in the Notice of Violation, whether from the self-reported information, the inspections or the additional requested information, are not material to us. The EPA has referred the overall matter to the U.S. Department of Justice, Environment and ~~safety, work schedules~~Natural Resources Division (the "DOJ"). The DOJ and ~~salary adjustments.~~Ingredion are engaged in discussions with respect to a resolution of this matter.

We are currently subject to ~~various other~~ claims and suits arising in the ordinary course of business, including those relating to labor matters, certain environmental proceedings and ~~other~~ 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 ~~even if unfavorable to us,~~ 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 1A

RISK FACTORS

We caution readers that our business activities involve risks and uncertainties that could cause actual results to differ materially from those currently expected by management. During 2022, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for 2021 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022.

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ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities:


				~~Maximum Number~~
				~~(or Approximate~~
			~~Total Number of~~	~~Dollar Value) of~~
	~~Total~~	~~Average~~	~~Shares Purchased as~~	~~Shares that may yet~~
	~~Number~~	~~Price~~	~~part of Publicly~~	~~be Purchased Under~~
	~~of Shares~~	~~Paid~~	~~Announced Plans or~~	~~the Plans or Programs~~
~~(shares in thousands)~~	~~Purchased~~	~~per Share~~	~~Programs~~	~~at end of period~~
~~July 1 – July 31, 2017~~	—	—	—	~~3,702 shares~~
~~August 1 – August 31, 2017~~	—	—	—	~~3,702 shares~~
~~September 1 – September 30, 2017~~	—	—	—	~~3,702 shares~~
~~Total~~	—	—	—

The following table presents information regarding our repurchase of shares of our common stock during the three months ended September 30, 2022.


				Maximum Number	Maximum Number
			Total Number	(or Approximate	(or Approximate
		Average	of Shares	Dollar Value) of	Dollar Value) of
	Total	Price	Purchased as	Shares That May Yet	Shares That May Yet
	Number	Paid	Part of Publicly	be Purchased Under	be Purchased Under
	of Shares	per	Announced	the 2018 Stock	the 2022 Stock
(shares in thousands)	Purchased	Share	Programs	Repurchase Program	Repurchase Program
July 1 – July 31, 2022	325	87.56	325	4,133 shares	—
August 1 – August 31, 2022	—	—	—	3,808 shares	—
September 1 – September 25, 2022	—	—	—	3,808 shares	—
September 26 – September 30, 2022	—	—	—	—	6,000 shares
Total	325	87.56	325

On ~~December 12, 2014,~~October 22, 2018, the Board of Directors authorized a stock repurchase program (the “2018 Stock Repurchase Program”) permitting ~~the Company~~us to purchase up to 5an additional 8.0 million shares of ~~its~~our outstanding common ~~shares~~stock from ~~January 1, 2015~~November 5, 2018, through December 31, ~~2019. At~~2023. Effective September ~~30, 2017,~~26, 2022, the Board of Directors terminated the 2018 Stock Repurchase Program. As of its termination date, we ~~have 3.7~~had 3.8 million shares available for repurchase under the 2018 Stock Repurchase Program.

On September 26, 2022, the Board of Directors contemporaneously approved a new stock repurchase ~~program.~~program authorizing us to purchase up to 6.0 million shares of our outstanding common stock during the period from September 26, 2022, through December 31, 2025.

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ITEM 6

EXHIBITS

~~EXHIBITS~~

a) Exhibits

Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index ~~hereto.~~below:

~~All other items hereunder are omitted because either such item is inapplicable or the response is negative.~~

EXHIBIT INDEX


Number		Description of Exhibit
~~Number~~		~~Description of Exhibit~~
~~4.1~~ 3.2†		~~Term Loan Credit Agreement dated~~Amended and Restated By-Laws of Ingredion, as ~~of August 18, 2017, among Ingredion Incorporated, the lenders signatory thereto, Bank of America, N.A., as Administrative Agent,~~amended and ~~Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Bookrunner and Sole Lead Arranger (incorporated by reference to Exhibit 4.1 to the Company’s Current Report~~restated on ~~Form 8-K dated August 18, 2017, filed on August 24, 2016) (File No. 1-13397)~~September 22, 2022.

31.1†		~~CEO~~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 ~~Certification Pursuant to~~of the Sarbanes-Oxley Act of 2002.

31.2†		~~CFO~~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 ~~Certification Pursuant to~~of the Sarbanes-Oxley Act of 2002.

32.1††		~~CEO~~ Certification ~~Pursuant~~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 ~~created by~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2††		~~CFO~~ Certification ~~Pursuant~~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 ~~created by~~adopted pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes Oxley Act of 2002.

~~101~~101.INS†		~~The following financial information from Ingredion Incorporated’s Quarterly Report on Form 10-Q for~~XBRL Instance Document (the instance document does not appear in the ~~quarterly period ended September 30, 2017 formatted~~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 Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Balance Sheets; (iv) the Condensed Consolidated Statements of Equity and Redeemable Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the Condensed Consolidated Financial Statements.Exhibit 101).

HIDDEN_ROW

†

Filed with this report.

††

Furnished with this report.

Table of Contents

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements 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
		~~INGREDION INCORPORATED~~


DATE:	November ~~3, 2017~~7, 2022	By	/s/ James D. Gray
		James D. Gray
		Executive Vice President and Chief Financial Officer


DATE:	November ~~3, 2017~~7, 2022	By	/s/ ~~Stephen K. Latreille~~Davida M. Gable
		~~Stephen K. Latreille~~Davida M. Gable Vice President, Global Controller and Global Shared Services
		~~Vice President and Corporate Controller~~

3136

		Page
Part I

Item 1	Financial Statements	3
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive (Loss) Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Equity and Redeemable Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s discussion and analysis of financial condition and results of operations	25
Item 3	Quantitative and qualitative disclosures about market risk	32
Item 4	Controls and procedures	32

Part II

Item 1	Legal proceedings	33
Item 1A	Risk Factors	33
Item 2	Unregistered sales of equity securities and use of proceeds	34
Item 6	Exhibits	35
Signatures		36


	September 30,		December 31,
(in millions, except share and per share amounts)	2017		2016
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	491	$	512
Short-term investments		14		4
Accounts receivable, net		901		923
Inventories		825		789
Prepaid expenses		35		24
Total current assets		2,266		2,252
Property, plant and equipment, net of accumulated depreciation of $2,980 and $2,826, respectively		2,186		2,116
Goodwill		803		784
Other intangible assets, net of accumulated amortization of $130 and $106, respectively		499		502
Deferred income tax assets		7		7
Other assets		132		121
Total assets	$	5,893	$	5,782

Liabilities and equity
Current liabilities:
Short-term borrowings	$	153	$	106
Accounts payable and accrued liabilities		787		872
Total current liabilities		940		978

Non-current liabilities		180		158
Long-term debt		1,731		1,850
Deferred income tax liabilities		154		171
Share-based payments subject to redemption		30		30

Ingredion stockholders’ equity:
Preferred stock — authorized 25,000,000 shares — $0.01 par value, none issued		—		—
Common stock — authorized 200,000,000 shares — $0.01 par value, 77,810,875 issued at September 30, 2017 and December 31, 2016, respectively		1		1
Additional paid-in capital		1,140		1,149
Less: Treasury stock (common stock: 5,964,226 and 5,396,526 shares at September 30, 2017 and December 31, 2016, respectively) at cost		(504)		(413)
Accumulated other comprehensive loss		(1,009)		(1,071)
Retained earnings		3,203		2,899
Total Ingredion stockholders’ equity		2,831		2,565
Non-controlling interests		27		30
Total equity		2,858		2,595
Total liabilities and equity	$	5,893	$	5,782


	Total Equity												Share-based
			Additional				Accumulated Other				Non-		Payments
	Common		Paid-In		Treasury		Comprehensive		Retained		Controlling		Subject to
(in millions)	Stock		Capital		Stock		Loss		Earnings		Interests		Redemption
Balance, December 31, 2016	$	1	$	1,149	$	(413)	$	(1,071)	$	2,899	$	30	$	30
Net income attributable to Ingredion										420
Net income attributable to non-controlling interests												9
Dividends declared										(116)		(12)
Repurchases of common stock						(123)
Share-based compensation, net of issuance				(9)		32								—
Other comprehensive income								62
Balance, September 30, 2017	$	1	$	1,140	$	(504)	$	(1,009)	$	3,203	$	27	$	30



		Preliminary
(in millions)		TIC Gums
Working capital (excluding cash)	$	49
Property, plant and equipment		37
Identifiable intangible assets		133
Goodwill		177
Total purchase price, net of cash	$	396



				Estimated
	Fair Value		Valuation Technique	Useful Life
Customer relationships	$	94	Multi-period excess earnings method	20 years
Trade names		35	Relief-from-royalty method	Indefinite
Proprietary technology		4	Relief-from-royalty method	8 years


Balance in severance accrual as of December 31, 2016	$	7
Restructuring charge for employee-related severance costs:
Argentina		15
North America Finance Transformation		3
Other		2
Prior year restructuring activities		(2)
Payments made to terminated employees		(14)
Balance in severance accrual as of September 30, 2017	$	11


	As of		As of
(in millions)	September 30, 2017		December 31, 2016
Total assets
North America	$	3,699	$	3,796
South America		877		809
Asia Pacific		796		697
EMEA		521		480
Total	$	5,893	$	5,782


	Fair Value of Derivative Instruments
		Fair Value					Fair Value
Derivatives designated as		As of		As of			As of		As of
hedging instruments:	Balance Sheet	September 30,		December 31,		Balance Sheet	September 30,		December 31,
(in millions)	Location	2017		2016		Location	2017		2016

Commodity and foreign currency	Accounts receivable, net	$	14	$	31	Accounts payable and accrued liabilities	$	28	$	25

Commodity, foreign currency, and interest rate contracts	Other assets		7		8	Non-current liabilities		7		2

Total		$	21	$	39		$	35	$	27


	As of September 30, 2017								As of December 31, 2016
(in millions)	Total		Level 1 (a)		Level 2 (b)		Level 3 (c )		Total		Level 1 (a)		Level 2 (b)		Level 3 (c )
Available for sale securities	$	9	$	9	$	—	$	—	$	7	$	7	$	—	$	—
Derivative assets		21		4		17		—		39		6		33		—
Derivative liabilities		35		9		26		—		27		11		16		—
Long-term debt		1,832		—		1,832		—		1,929		—		1,929		—


	Three Months Ended September 30, 2017					Three Months Ended September 30, 2016
	Net Income					Net Income
	Available		Weighted	Per Share		Available		Weighted	Per Share
(in millions, except per share amounts)	to Ingredion		Average Shares	Amount		to Ingredion		Average Shares	Amount

Basic EPS	$	166	71.9	$	2.31	$	143	72.5	$	1.98

Effect of Dilutive Securities:
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards			1.4					1.8

Diluted EPS	$	166	73.3	$	2.26	$	143	74.3	$	1.93


	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016
	Net Income					Net Income
	Available		Weighted	Per Share		Available		Weighted	Per Share
(in millions, except per share amounts)	to Ingredion		Average Shares	Amount		to Ingredion		Average Shares	Amount

Basic EPS	$	420	72.0	$	5.83	$	391	72.2	$	5.42

Effect of Dilutive Securities:
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards			1.4					1.8

Diluted EPS	$	420	73.4	$	5.72	$	391	74.0	$	5.29


	As of September 30,		As of December 31,
(in millions)	2017		2016
Finished and in process	$	497	$	478
Raw materials		274		260
Manufacturing supplies and other		54		51
Total inventories	$	825	$	789


			Deferred				Unrealized		Accumulated
	Cumulative		Gain (Loss)		Pension and		Gain		Other
	Translation		on Hedging		Postretirement		on		Comprehensive
(in millions)	Adjustment		Activities		Adjustment		Investment		Loss
Balance, December 31, 2016	$	(1,008)	$	(7)	$	(56)	$	—	$	(1,071)
Other comprehensive income (loss) before reclassification adjustments		62		(4)		1		1		60
Amount reclassified from accumulated OCI		—		1		(1)		—		—
Tax benefit		—		2		—		—		2
Net other comprehensive income (loss)		62		(1)		—		1		62
Balance, September 30, 2017	$	(946)	$	(8)	$	(56)	$	1	$	(1,009)