Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-13397 | |
Entity Registrant Name | Ingredion Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3514823 | |
Entity Address, Address Line One | 5 Westbrook Corporate Center | |
Entity Address, City or Town | Westchester | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60154 | |
City Area Code | 708 | |
Local Phone Number | 551-2600 | |
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Trading Symbol | INGR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 66,535,932 | |
Entity Central Index Key | 0001046257 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Income | ||||
Net sales | $ 1,763 | $ 1,502 | $ 5,139 | $ 4,394 |
Cost of sales | 1,440 | 1,176 | 4,098 | 3,474 |
Gross profit | 323 | 326 | 1,041 | 920 |
Operating expenses | 164 | 155 | 484 | 456 |
Other (income) expense, net | (1) | 2 | (29) | 4 |
Restructuring/impairment charges and related adjustments | (12) | 16 | 362 | 41 |
Operating income | 172 | 153 | 224 | 419 |
Financing costs, net | 20 | 22 | 58 | 59 |
Other, non-operating (income), net | (1) | (2) | (4) | (3) |
Income before income taxes | 153 | 133 | 170 | 363 |
Provision for income taxes | 34 | 40 | 113 | 125 |
Net income | 119 | 93 | 57 | 238 |
Less: Net income attributable to non-controlling interests | 1 | 1 | 7 | 5 |
Net income attributable to Ingredion | $ 118 | $ 92 | $ 50 | $ 233 |
Weighted average common shares outstanding: | ||||
Basic | 67 | 67.2 | 67.2 | 67.2 |
Diluted | 67.6 | 67.6 | 67.8 | 67.6 |
Earnings per common share of Ingredion: | ||||
Basic | $ 1.76 | $ 1.37 | $ 0.74 | $ 3.47 |
Diluted | $ 1.75 | $ 1.36 | $ 0.74 | $ 3.45 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 119 | $ 93 | $ 57 | $ 238 |
Other comprehensive income: | ||||
Gains (losses) on cash flow hedges, net of income tax effect of $9, $4, $56 and $12, respectively | 26 | 12 | 155 | (38) |
(Gains) losses on cash flow hedges reclassified to earnings, net of income tax effect of $15, $8, $45 and $14, respectively | (45) | 23 | (125) | 42 |
Currency translation adjustment | 248 | 13 | 226 | (105) |
Comprehensive income | 348 | 141 | 313 | 137 |
Less: Comprehensive (loss) income attributable to non-controlling interests | (2) | 3 | 6 | 5 |
Comprehensive income attributable to Ingredion | $ 350 | $ 138 | $ 307 | $ 132 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Gains (losses) on cash flow hedges, income tax effect | $ (9) | $ (4) | $ (56) | $ 12 |
(Gains) losses on cash flow hedges reclassified to earnings, income tax benefit | $ 15 | $ (8) | $ 45 | $ (14) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 434 | $ 665 |
Short-term investments | 4 | |
Accounts receivable, net | 1,128 | 1,011 |
Inventories | 1,093 | 917 |
Prepaid expenses | 74 | 54 |
Total current assets | 2,733 | 2,647 |
Property, plant and equipment, net of accumulated depreciation of $3,225 and $3,175, respectively | 2,369 | 2,455 |
Goodwill | 916 | 902 |
Other intangible assets, net of accumulated amortization of $244 and $229 | 424 | 444 |
Operating lease assets | 191 | 173 |
Deferred income tax assets | 17 | 23 |
Other assets | 336 | 214 |
Total assets | 6,986 | 6,858 |
Current liabilities: | ||
Short-term borrowings | 398 | 438 |
Accounts payable and accrued liabilities | 1,059 | 1,020 |
Total current liabilities | 1,457 | 1,458 |
Other non-current liabilities | 226 | 227 |
Long-term debt | 1,748 | 1,748 |
Non-current operating lease liabilities | 152 | 136 |
Deferred income tax liabilities | 200 | 217 |
Total liabilities | 3,783 | 3,786 |
Share-based payments subject to redemption | 32 | 30 |
Redeemable non-controlling interests | 68 | 70 |
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, 2021 and December 31, 2020, respectively | 1 | 1 |
Additional paid-in capital | 1,155 | 1,150 |
Less: Treasury stock (common stock: 11,295,044 and 10,795,346 shares at September 30, 2021 and December 31, 2020, respectively) at cost | (1,072) | (1,024) |
Accumulated other comprehensive loss | (877) | (1,133) |
Retained earnings | 3,877 | 3,957 |
Total Ingredion stockholders' equity | 3,084 | 2,951 |
Non-redeemable non-controlling interests | 19 | 21 |
Total equity | 3,103 | 2,972 |
Total liabilities and equity | $ 6,986 | $ 6,858 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Property, plant and equipment, Accumulated depreciation | $ 3,225 | $ 3,175 |
Other intangible assets - accumulated amortization (in dollars) | $ 244 | $ 229 |
Preferred stock, authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued (in shares) | 77,810,875 | 77,810,875 |
Treasury stock (in shares) | 11,295,044 | 10,795,346 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at beginning of period at Dec. 31, 2019 | $ 1 | $ 1,137 | $ (1,040) | $ (1,158) | $ 3,780 | $ 21 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 75 | 3 | |||||
Dividends declared | (42) | ||||||
Share-based compensation, net of issuance | 5 | 12 | |||||
Other comprehensive income (loss) | (164) | (3) | |||||
Balance at end of period at Mar. 31, 2020 | 1 | 1,142 | (1,028) | (1,322) | 3,813 | 21 | |
Balance at beginning of period at Dec. 31, 2019 | 1 | 1,137 | (1,040) | (1,158) | 3,780 | 21 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 233 | 7 | |||||
Dividends declared | (129) | (5) | |||||
Share-based compensation, net of issuance | 8 | 13 | |||||
Other comprehensive income (loss) | (101) | (2) | |||||
Balance at end of period at Sep. 30, 2020 | 1 | 1,145 | (1,027) | (1,259) | 3,884 | 21 | |
Balance at beginning of period at Mar. 31, 2020 | 1 | 1,142 | (1,028) | (1,322) | 3,813 | 21 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 66 | 1 | |||||
Dividends declared | (43) | (3) | |||||
Share-based compensation, net of issuance | 1 | 1 | |||||
Other comprehensive income (loss) | 15 | 1 | |||||
Balance at end of period at Jun. 30, 2020 | 1 | 1,143 | (1,027) | (1,307) | 3,836 | 20 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 92 | 3 | |||||
Dividends declared | (44) | (2) | |||||
Share-based compensation, net of issuance | 2 | ||||||
Other comprehensive income (loss) | 48 | ||||||
Balance at end of period at Sep. 30, 2020 | 1 | 1,145 | (1,027) | (1,259) | 3,884 | 21 | |
Balance at beginning of period at Dec. 31, 2020 | 1 | 1,150 | (1,024) | (1,133) | 3,957 | 21 | $ 2,972 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (246) | 4 | |||||
Dividends declared | (44) | ||||||
Repurchases of common stock, net | (14) | ||||||
Share-based compensation, net of issuance | 5 | 16 | |||||
Other comprehensive income (loss) | (31) | 1 | |||||
Balance at end of period at Mar. 31, 2021 | 1 | 1,155 | (1,022) | (1,164) | 3,667 | 26 | |
Balance at beginning of period at Dec. 31, 2020 | 1 | 1,150 | (1,024) | (1,133) | 3,957 | 21 | 2,972 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 50 | 10 | |||||
Dividends declared | (130) | (10) | |||||
Repurchases of common stock, net | (68) | ||||||
Share-based compensation, net of issuance | 5 | 20 | |||||
Other comprehensive income (loss) | 256 | (2) | |||||
Balance at end of period at Sep. 30, 2021 | 1 | 1,155 | (1,072) | (877) | 3,877 | 19 | 3,103 |
Balance at beginning of period at Mar. 31, 2021 | 1 | 1,155 | (1,022) | (1,164) | 3,667 | 26 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 178 | 3 | |||||
Dividends declared | (43) | (7) | |||||
Repurchases of common stock, net | (10) | ||||||
Share-based compensation, net of issuance | (1) | 3 | |||||
Other comprehensive income (loss) | 58 | ||||||
Balance at end of period at Jun. 30, 2021 | 1 | 1,154 | (1,029) | (1,106) | 3,802 | 22 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 118 | 3 | |||||
Dividends declared | (43) | (3) | |||||
Repurchases of common stock, net | (44) | ||||||
Share-based compensation, net of issuance | 1 | 1 | |||||
Other comprehensive income (loss) | 229 | (3) | |||||
Balance at end of period at Sep. 30, 2021 | $ 1 | $ 1,155 | $ (1,072) | $ (877) | $ 3,877 | $ 19 | $ 3,103 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Redeemable Equity $ in Millions | USD ($) |
Share-based Payments Subject to Redemption, Beginning Balance at Dec. 31, 2019 | $ 31 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | (8) |
Share-based Payments Subject to Redemption, Ending Balance at Mar. 31, 2020 | 23 |
Share-based Payments Subject to Redemption, Beginning Balance at Dec. 31, 2019 | 31 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 1 |
Share-based Payments Subject to Redemption, Ending Balance at Sep. 30, 2020 | 32 |
Increase (Decrease) in Temporary Equity | |
Net income (loss) attributable to non-controlling interests | (2) |
Acquisition of redeemable non-controlling interests | 74 |
Other comprehensive (loss) income | 2 |
Redeemable Non-Controlling Interests, Ending Balance at Sep. 30, 2020 | 74 |
Share-based Payments Subject to Redemption, Beginning Balance at Mar. 31, 2020 | 23 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 4 |
Share-based Payments Subject to Redemption, Ending Balance at Jun. 30, 2020 | 27 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 5 |
Share-based Payments Subject to Redemption, Ending Balance at Sep. 30, 2020 | 32 |
Increase (Decrease) in Temporary Equity | |
Net income (loss) attributable to non-controlling interests | (2) |
Acquisition of redeemable non-controlling interests | 74 |
Other comprehensive (loss) income | 2 |
Redeemable Non-Controlling Interests, Ending Balance at Sep. 30, 2020 | 74 |
Share-based Payments Subject to Redemption, Beginning Balance at Dec. 31, 2020 | 30 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | (9) |
Share-based Payments Subject to Redemption, Ending Balance at Mar. 31, 2021 | 21 |
Redeemable Non-Controlling Interests, Beginning Balance at Dec. 31, 2020 | 70 |
Increase (Decrease) in Temporary Equity | |
Net income (loss) attributable to non-controlling interests | (1) |
Other comprehensive (loss) income | 1 |
Redeemable Non-Controlling Interests, Ending Balance at Mar. 31, 2021 | 70 |
Share-based Payments Subject to Redemption, Beginning Balance at Dec. 31, 2020 | 30 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 2 |
Share-based Payments Subject to Redemption, Ending Balance at Sep. 30, 2021 | 32 |
Redeemable Non-Controlling Interests, Beginning Balance at Dec. 31, 2020 | 70 |
Increase (Decrease) in Temporary Equity | |
Net income (loss) attributable to non-controlling interests | (3) |
Other comprehensive (loss) income | 1 |
Redeemable Non-Controlling Interests, Ending Balance at Sep. 30, 2021 | 68 |
Share-based Payments Subject to Redemption, Beginning Balance at Mar. 31, 2021 | 21 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 7 |
Share-based Payments Subject to Redemption, Ending Balance at Jun. 30, 2021 | 28 |
Redeemable Non-Controlling Interests, Beginning Balance at Mar. 31, 2021 | 70 |
Redeemable Non-Controlling Interests, Ending Balance at Jun. 30, 2021 | 70 |
Increase (Decrease) in Temporary Equity | |
Share-based compensation, net of issuance | 4 |
Share-based Payments Subject to Redemption, Ending Balance at Sep. 30, 2021 | 32 |
Increase (Decrease) in Temporary Equity | |
Net income (loss) attributable to non-controlling interests | (2) |
Redeemable Non-Controlling Interests, Ending Balance at Sep. 30, 2021 | $ 68 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash provided by operating activities | ||
Net income | $ 57 | $ 238 |
Non-cash charges to net income: | ||
Depreciation and amortization | 155 | 158 |
Mechanical stores expense | 40 | 39 |
Deferred income taxes | (25) | (1) |
Charge for fair value markup of acquired inventory | 3 | |
Impairment on disposition of assets | 340 | |
Other | 4 | 46 |
Changes in working capital: | ||
Accounts receivable and prepaid expenses | (126) | 36 |
Inventories | (226) | (10) |
Accounts payable and accrued liabilities | 94 | 54 |
Margin accounts | (34) | 6 |
Other | (20) | (7) |
Cash provided by operating activities | 259 | 562 |
Cash used for investing activities | ||
Capital expenditures and mechanical stores purchases, net of proceeds on disposals | (186) | (250) |
Payments for acquisitions, net of cash acquired of $2 and $14, respectively | (40) | (208) |
Investment in non-consolidated affiliates | (8) | (6) |
Short-term investments | (4) | 4 |
Cash used for investing activities | (238) | (460) |
Cash (used for) provided by financing activities | ||
Proceeds from borrowings | 804 | 1,527 |
Payments on debt | (1,194) | (1,186) |
Commercial paper borrowings, net | 350 | |
Payments for debt issuance costs | (9) | |
Repurchases of common stock, net | (68) | |
Issuances of common stock for share-based compensation, net of settlements | 10 | 2 |
Dividends paid, including to non-controlling interests | (138) | (132) |
Cash (used for) provided by financing activities | (236) | 202 |
Effects of foreign exchange rate changes on cash | (16) | (15) |
(Decrease) increase in cash and cash equivalents | (231) | 289 |
Cash and cash equivalents, beginning of period | 665 | 264 |
Cash and cash equivalents, end of period | $ 434 | $ 553 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Cash Flows | ||
Cash acquired from acquisition | $ 2 | $ 14 |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
Sep. 30, 2021 | |
Interim Financial Statements | |
Interim Financial Statements | 1. Interim Financial Statements References to the “Company” are to Ingredion Incorporated (“Ingredion”) and 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 Annual Report on Form 10-K for the year ended December 31, 2020. The unaudited Condensed Consolidated Financial Statements as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 included herein were prepared by management on the same basis as the Company’s audited Consolidated Financial Statements for the year ended December 31, 2020 and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Equity and Redeemable Equity, and Condensed Consolidated Statements of Cash Flows. The results for the interim period are not necessarily indicative of the results expected for the full year or any other future period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Standards and Policies | 2. Summary of Significant Accounting Standards and Policies For detailed information about the Company’s significant accounting standards and policies, see Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Except for the matters discussed below, there have been no other material changes to the Company’s significant accounting standards and policies for the nine months ended September 30, 2021. Significant Accounting Policies Goodwill and Indefinite-lived intangible assets: The original carrying value of goodwill and accumulated impairment charges by reportable business segment at September 30, 2021 was as follows: North South Asia- (in millions) America America Pacific EMEA Total Goodwill before impairment charges $ 622 $ 50 $ 316 $ 69 $ 1,057 Accumulated impairment charges (1) (33) (121) — (155) Balance at January 1, 2021 621 17 195 69 902 Acquisitions 1 — 3 20 24 Currency translation — (1) (6) (3) (10) Balance at September 30, 2021 $ 622 $ 16 $ 192 $ 86 $ 916 The following table summarizes the balances of the Company’s indefinite-lived intangible assets at the dates presented: (in millions) As of September 30, 2021 As of December 31, 2020 Trademarks/tradenames (indefinite-lived) $ 143 $ 143 The Company assesses goodwill and indefinite-lived intangible assets for impairment annually (or more frequently if impairment indicators arise). Based on the results of the Company’s assessment as of July 1, 2021, there were no impairments in its goodwill or indefinite-lived intangible assets. |
Acquisitions and Equity Method
Acquisitions and Equity Method Investments | 9 Months Ended |
Sep. 30, 2021 | |
Acquisitions and Equity Method Investments | |
Acquisitions | 3. Acquisitions and Equity Method Investments Acquisitions On April 1, 2021, the Company 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, the Company made a total cash payment of $40 million, net of $2 million of cash acquired, which it funded from cash on hand. The results of KaTech are reported on a one-month lag within the Company’s Condensed Consolidated Financial Statements during the integration process of the companies. KaTech’s operational results are recorded in the Company’s Europe, Middle East and Africa (“EMEA”) reportable business segment. On November 3, 2020, the Company acquired the remaining 80% of the outstanding shares of Verdient Foods, Inc. (“Verdient”), as well as the leased land and buildings not owned by Verdient. To complete the closing, the Company made a total cash payment of CAD $33 million (USD $26 million), which it funded from cash on hand. The Company had previously entered into an equity method investment with Verdient by acquiring 20% of its outstanding shares. Verdient is a Canada-based producer of pulse-based protein concentrates and flours from peas, lentils, and fava beans for human food applications. The results of the acquired operation are included in the Company’s consolidated results from the acquisition date within the North America reportable business segment. The acquisitions of KaTech and Verdient added a total of $36 million of goodwill and $35 million of tangible assets as of their respective acquisition dates. The purchase accounting for the assets acquired and liabilities assumed for KaTech and Verdient is preliminarily recorded based on available information and incorporating management’s best estimates. On July 1, 2020, the Company completed its acquisition of a controlling interest in PureCircle Limited (“PureCircle”). PureCircle is one of the leading producers and innovators of plant-based stevia sweeteners for the global food and beverage industries. To complete the closing, the Company made a total cash payment of $208 million, net of $14 million of cash acquired, which it funded from cash on hand. After the closing, the Company owns 75% of PureCircle, with the remaining 25% owned by former PureCircle shareholders. PureCircle is consolidated by Ingredion for financial reporting purposes, with a corresponding redeemable non-controlling interest of $74 million recorded for the portion not owned by the Company at the time of acquisition. The results of PureCircle are reported on a one-month lag within the Company’s Condensed Consolidated Financial Statements during the integration process of the companies. The results of the acquired operations are included in the Company’s consolidated results from the acquisition date within the Asia-Pacific reportable 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 in the transaction for each acquisition were generally recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisitions were expensed as incurred. The purchase accounting for the assets acquired and liabilities assumed for PureCircle was completed during the three months ended September 30, 2021. 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 acquisition. The goodwill related to PureCircle is not tax-deductible due to the structure of the acquisition. The following table summarizes the purchase price allocations for the PureCircle acquisition as of September 30, 2021: (in millions) PureCircle Working capital (excluding cash) $ 68 Property, plant and equipment 91 Other, net (33) Identifiable intangible assets 68 Goodwill 88 Total fair value, net of cash 282 Less: Non-redeemable non-controlling interests 74 Total purchase price, net of cash $ 208 The identifiable intangible assets for the acquisition of a controlling interest in PureCircle include customer relationships, tradenames, 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. For more information on the fair value hierarchy, see Note 6 of the Notes to the Condensed Consolidated Financial Statements. 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 Intangible Asset Fair Value Valuation Technique Useful Life Proprietary technology $ 32 Relief-from-royalty method 12 years Trade names 18 Relief-from-royalty method 15 years Customer relationships 18 Multi-period excess earnings method 12 years The fair values of proprietary technology, trade names, and customer relationships were determined through the valuation techniques described above using various judgmental assumptions such as discount rates, royalty rates, and customer attrition rates, as applicable. The fair values of property, plant and equipment associated with the acquisitions were determined to be Level 3 under the fair value hierarchy. Property, plant and equipment values were estimated using either the cost or market approach. Pro-forma results of operation for any of the foregoing acquisitions have not been presented as the effect of each acquisition individually and in the aggregate with other acquisitions would not be material to the Company’s results of operations for any periods presented. The Company incurred an insignificant amount and $5 million of pre-tax acquisition and integration costs for the three and nine months ended September 30, 2021, respectively. The Company incurred $5 million and $8 million of pre-tax acquisition and integration costs for the three and nine months ended September 30, 2020, respectively. Equity Method Investments On June 1, 2021, the Company and certain of its subsidiaries entered into an agreement with Amyris, Inc. (“Amyris”) for certain exclusive commercialization rights to Amyris’ rebaudioside M by fermentation (“Reb M by fermentation”) product; the exclusive licensing of Amyris’ Reb M by fermentation manufacturing technology; and a 31% ownership stake in a Reb M by fermentation joint venture. In exchange for its ownership interest in the Amyris joint venture, Ingredion contributed $28 million of total consideration including $10 million of cash and non-exclusive intellectual property licenses and other consideration valued at $18 million. The transaction resulted in $8 million of Other (income) expense, net recorded in the Condensed Consolidated Statements of Income during the nine months ended September 30, 2021. The $8 million gain includes $18 million of other income related to non-exclusive intellectual property licenses and other consideration contributed by Ingredion for the Company’s stake in the Amyris joint venture, offset by a $10 million cash payment made by a subsidiary of Ingredion to Amyris for the exclusive right to the Reb M by fermentation manufacturing technology license from Amyris. On February 12, 2021, the Company signed an agreement with an affiliate of Grupo Arcor, an Argentine food company, to establish Ingrear Holding S.A. (the “Arcor joint venture”), a joint venture to combine and 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, the Company and Grupo Arcor completed all closing conditions to finalize the transaction and formally establish the Arcor joint venture. The Arcor joint venture is managed by a jointly appointed team of executives. The Company obtained an equity method investment in the Arcor joint venture as a result of the transaction. In exchange for transferring certain assets and liabilities from its Argentina, Chile and Uruguay operations for a total fair value of $71 million, the Company received 49 percent of the outstanding shares of the Arcor joint venture valued at $64 million, and $7 million of consideration, including cash, from Grupo Arcor as of August 2, 2021. The transaction resulted in an impairment more fully described in Note 5 of the Notes to the Condensed Consolidated Financial Statements. The Company incurred $3 million of pre-tax direct transaction costs to acquire the Arcor 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 direct transaction costs to acquire the Arcor joint venture and Amyris investments during the nine months ended September 30, 2021. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Revenue Recognition | 4. Revenue Recognition The Company applies the provisions of ASC 606-10, Revenue from Contracts with Customers The Company identifies customer purchase orders, which in some cases are governed by a master sales agreement, as the contracts with its customers. For each contract, the Company considers the transfer of products, each of which is distinct, to be the identified performance obligation. In determining the transaction price for the performance obligation, the Company evaluates whether the price is subject to adjustment to determine the consideration to which the Company expects to be entitled. The pricing model can be fixed or variable within the contract. The variable pricing model is based on historical commodity pricing and is determinable prior to completion of the performance obligation. Additionally, the Company has certain sales adjustments for volume incentive discounts and other discount arrangements that reduce the transaction price. The reduction of the transaction price is estimated using the expected value method based on an analysis of historical volume incentives or discounts, over a period of time considered adequate to account for current pricing and business trends. Historically, actual volume incentives and discounts relative to those estimated and included when determining the transaction price have not materially differed. Volume incentives and discounts are accrued at the satisfaction of the performance obligation and accounted for in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. These amounts were not significant as of September 30, 2021 or December 31, 2020. The product price as specified in the contract, net of any discounts, is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Payment is received shortly after the performance obligation is satisfied; therefore, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. Revenue is recognized when the Company’s performance obligation is satisfied and control is transferred to the customer, which occurs at a point in time, either upon delivery to an agreed upon location or to the customer. Further, in determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Shipping and handling activities related to contracts with customers represent fulfillment costs and are recorded in Cost of sales. Taxes assessed by governmental authorities and collected from customers are accounted for on a net basis and excluded from revenues. The Company applies a practical expedient to expense costs to obtain a contract as incurred as most contracts are one year or less. These costs primarily include the Company’s internal sales force compensation. Under the terms of these programs, such costs are generally earned and recognized at the time the revenue is recognized. From time to time, the Company may enter into long-term contracts with its customers. Historically, the contracts entered into by the Company do not result in significant contract assets or liabilities. Any such arrangements are accounted for in Other assets or Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. There were no significant contract assets or liabilities as of September 30, 2021 or December 31, 2020. 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 EMEA. The nature, amount, timing and uncertainty of the Company’s Net sales are managed by the Company primarily based on its geographic segments. Each region’s product sales are unique to each region and have unique risks. Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 Net sales to unaffiliated customers: North America $ 1,083 $ 928 $ 3,096 $ 2,739 South America 260 224 801 643 Asia-Pacific 245 207 728 583 EMEA 175 143 514 429 Total net sales $ 1,763 $ 1,502 $ 5,139 $ 4,394 |
Restructuring and Impairment Ch
Restructuring and Impairment Charges | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Impairment Charges | |
Restructuring and Impairment Charges | 5. Restructuring and Impairment Charges For the three and nine months ended September 30, 2021, the Company recorded $12 million of net pre-tax restructuring and impairment income and $362 million of pre-tax restructuring and impairment charges, respectively. During the three months ended September 30, 2021, the Company recorded a $20 million adjustment to its estimated final impairment of the net assets contributed to the Arcor joint venture as described in Note 3 of the Notes to the Condensed Consolidated Financial Statements and below, based upon the final transaction terms, working capital, and foreign exchange impacts. This adjustment was partially offset by pre-tax restructuring charges of $8 million primarily related to the Company’s Cost Smart program. For the nine months ended September 30, 2021, the Company recorded total impairment charges of $340 million related to the net assets contributed to the Arcor joint venture, and pre-tax restructuring charges of $22 million primarily related to the Company’s Cost Smart program. For the three months and nine months ended September 30, 2020, the Company recorded $16 million and $41 million of pre-tax restructuring and impairment charges, respectively. For the three months ended September 30, 2020, these charges included pre-tax restructuring charges of $6 million primarily related to the Company’s Cost Smart program and an other-than-temporary impairment of $10 million on its equity method investment in Verdient Foods Inc. For the nine months ended September 30, 2020, the Company recorded pre-tax restructuring charges of $31 million primarily related to its Cost Smart program and an other-than-temporary impairment of $10 million on its equity method investment in Verdient Foods Inc. Impairment Charges On February 12, 2021, the Company signed an agreement with an affiliate of Grupo Arcor, an Argentine food company, to establish Ingrear Holding S.A., a joint venture to combine and 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, the Company and Grupo Arcor completed all closing conditions to finalize the transaction and formally establish the Arcor joint venture. The Arcor joint venture is managed by a jointly appointed team of executives. At the announcement of the agreement, during the three months ended March 31, 2021, the Company recorded the assets and liabilities expected to be contributed as held for sale. The Company recorded an impairment of $360 million based upon the estimated fair value of the assets and liabilities classified as held for sale. Upon completion of the transaction, the Company disposed of the assets and liabilities from its Argentina, Chile and Uruguay operations, that were previously accounted for as held for sale, and transferred them to the Arcor joint venture in exchange for an equity share in the venture. The Company has accounted for its share of the venture as an equity method investment, as discussed in Note 3 of the Notes to the Condensed Consolidated Financial Statements. Upon disposal, the Company valued the assets and liabilities transferred at fair value. This resulted in a $20 million favorable adjustment to the estimated impairment charge. The favorable adjustment was recorded during the three months ended September 30, 2021. The total net impairment charge was $340 million for the nine months ended September 30, 2021, 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 to fair value of the contributed net assets to fair value. The Company recorded the impairment within Restructuring/impairment charges and related adjustments in the Condensed Consolidated Statements of Income during the nine months ended September 30, 2021. Restructuring Charges For the three months ended September 30, 2021, the Company recorded $8 million of pre-tax restructuring related charges, consisting of $4 million of employee-related and other costs, including professional services, associated with its Cost Smart selling, general, and administrative expense (“SG&A”) program and $3 million of restructuring related charges primarily in North America as a part of its Cost Smart Cost of sales program. The Company also recorded $1 million of restructuring charges related to disposition of the assets contributed to the Arcor joint venture transaction described above. For the nine months ended September 30, 2021, the Company recorded $22 million of pre-tax restructuring related charges, consisting of $13 million of employee-related and other costs, including professional services, associated with its Cost Smart SG&A program and $11 million of restructuring related charges as part of its Cost Smart Cost of sales program, primarily in North America. The Cost Smart Cost of sales program charges were partly offset by a $5 million gain on the sale of the Stockton, California land and building during the period. The Company also recorded $3 million of restructuring charges related to disposition of the assets contributed to the Arcor joint venture transaction described above. For the three and nine months ended September 30, 2020, the Company recorded a total of $6 million and $31 million of pre-tax restructuring related charges, respectively. For the three and nine months ended September 30, 2020, the Company recorded $2 million and $17 million of pre-tax restructuring charges for its Cost Smart Cost of sales program, respectively. During the three months ended September 30, 2020, the Company recorded $1 million of other restructuring costs related to the closure of the Lane Cove, Australia manufacturing facility and $1 million of other costs related to the closure of the Stockton, California manufacturing facility. During the nine months ended September 30, 2020, the Company recorded $10 million of restructuring charges related to the closure of the Lane Cove, Australia manufacturing facility, $6 million related to the closure of the Stockton, California manufacturing facility and $1 million of other restructuring costs. The Lane Cove, Australia facility restructuring costs consisted of $6 million of asset write-offs, $3 million of other costs, and $1 million of accelerated depreciation. The Stockton, California facility restructuring costs consisted of $4 million of accelerated depreciation, $1 million of employee-related severance, and $1 million of other costs. Additionally, the Company recorded pre-tax restructuring charges of $4 million and $14 million during the three and nine months ended September 30, 2020, respectively, for its Cost Smart SG&A program. During the three months ended September 30, 2020, the Company recorded $4 million of pre-tax restructuring charges, consisting primarily of other costs, including professional services, in North America. During the nine months ended September 30, 2020, the Company recorded pre-tax restructuring costs of $14 million primarily in North America, consisting of $12 million of other costs, including professional services, and $2 million of employee-related severance. A summary of the Company’s employee-related severance accrual as of September 30, 2021 is as follows (in millions): Balance in severance accrual as of December 31, 2020 $ 12 Joint venture related 1 Cost Smart Cost of sales and SG&A 1 Payments made to terminated employees (10) Balance in severance accrual as of September 30, 2021 $ 4 The entire $4 million severance accrual as of September 30, 2021 is expected to be paid in the next 12 months. During the year ended December 31, 2020, the Company identified property, plant and equipment assets within the Stockton, California and Lane Cove, Australia locations that met the held for sale criteria totaling $8 million. During the nine months ended September 30, 2021, the Company sold the Stockton, California land and building for $11 million, resulting in a gain of $5 million. The remaining assets held for sale totaled $2 million as of September 30, 2021. The assets held for sale are reported within Other assets on the Condensed Consolidated Balance Sheets. |
Financial Instruments, Derivati
Financial Instruments, Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Financial Instruments, Derivatives and Hedging Activities | |
Financial Instruments, Derivatives and Hedging Activities | 6. Financial Instruments, Derivatives and Hedging Activities The Company 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 actively manages its exposure to these market risks by entering into various hedging transactions, authorized under established policies that place controls on these activities. These transactions utilize exchange-traded derivatives or over-the-counter derivatives with investment grade counterparties. Derivative financial instruments used by the Company consist of commodity-related futures, options and swap contracts, foreign currency-related forward contracts, interest rate swaps, and treasury locks (“T-Locks”). Commodity price hedging : The Company’s principal use of derivative financial instruments is to manage commodity price risk relating to anticipated purchases of corn and natural gas to be used in the manufacturing process, generally over the next 12 to 24 months . The Company maintains 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 corn futures and option contracts that trade on regulated commodity exchanges to lock-in corn costs associated with fixed-priced customer sales contracts. The Company also uses over-the-counter natural gas swaps in North America to hedge a portion of its natural gas usage. These derivative financial instruments limit the impact that volatility resulting from fluctuations in market prices will have on corn and natural gas purchases. The Company’s natural gas derivatives and the majority of its corn derivatives have been designated as cash flow hedging instruments. The Company enters into certain corn derivative instruments that are not designated as hedging instruments as defined by ASC 815, Derivatives and Hedging For commodity hedges designated as cash flow hedges, unrealized gains and losses associated with marking the commodity hedging contracts to market (fair value) are recorded as a component of other comprehensive loss (“OCL”) and included in the equity section of the Condensed Consolidated Balance Sheets as part of Accumulated other comprehensive loss (“AOCL”). These amounts are subsequently 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 a hedge is determined to be ineffective. The Company 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. Gains and losses from cash flow hedging instruments reclassified from AOCL to earnings are reported as Cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. As of September 30, 2021, the Company had outstanding futures and option contracts that hedged the forecasted purchase of approximately 79 million bushels of corn and outstanding swap contracts that hedged the forecasted purchase of approximately 32 million mmbtu’s of natural gas. Foreign currency hedging Derivatives and Hedging The Company hedges certain assets using foreign currency derivatives not designated as hedging instruments, which had a notional value of $385 million and $410 million as of September 30, 2021 and December 31, 2020, respectively. The Company also hedges certain liabilities using foreign currency derivatives not designated as hedging instruments, which had a notional value of $225 million and $224 million as of September 30, 2021 and December 31, 2020, respectively. The Company hedges certain assets using foreign currency cash flow hedging instruments, which had a notional value of $543 million and $401 million as of September 30, 2021 and December 31, 2020, respectively. The Company also hedges certain liability positions using foreign currency cash flow hedging instruments, which had a notional value of $761 million and $542 million as of September 30, 2021 and December 31, 2020, respectively. Interest rate hedging The Company periodically enters into interest rate swaps to hedge its exposure to interest rate changes. The changes in 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 gains or losses (the changes in fair value) of the hedged debt instruments that are attributable to changes in interest rates (the hedged risk), which are also recognized in earnings. As of September 30, 2021 and December 31, 2020, the Company did not have any outstanding interest rate swaps. During the year ended December 31, 2020, the Company had an outstanding interest rate swap agreement that converted the interest rates on $200 million of its $400 million 4.625% senior notes due November 1, 2020, to variable rates. The Company redeemed these notes in July 2020 and settled the outstanding interest rate swap in the second quarter of 2020. The Company periodically enters into T-Locks to hedge its exposure to interest rate changes. The T-Locks are designated as hedges of 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 the T-Locks are recorded to AOCL until the consummation of the underlying debt offering, at which time any realized gain (loss) is amortized to earnings over the life of the debt. The Company did not have outstanding T-locks as of September 30, 2021 or December 31, 2020. The derivative instruments designated as cash flow hedges included in AOCL as of September 30, 2021 and December 31, 2020 are reflected below: Amount of Gains Derivatives in Cash Flow Hedging Relationships (Losses) included in AOCL (in millions) September 30, 2021 December 31, 2020 Commodity contracts, net of income tax effect of $27 and $16, respectively $ 77 $ 47 Foreign currency contracts, net of income tax effect of $ — (1) (1) Interest rate contracts, net of income tax effect of $1 (4) (4) Total $ 72 $ 42 The fair value and balance sheet location of the Company’s derivative instruments, presented gross in the Condensed Consolidated Balance Sheets, are reflected below: Fair Value of Hedging Instruments as of September 30, 2021 Designated Hedging Instruments (in millions) Non-Designated Hedging Instruments (in millions) Balance Sheet Location Commodity Contracts Foreign Currency Contracts Total Commodity Contracts Foreign Currency Contracts Total Accounts receivable, net $ 71 $ 10 $ 81 $ 3 $ 7 $ 10 Other assets 15 7 22 — 3 3 Assets 86 17 103 3 10 13 Accounts payable and accrued liabilities 6 22 28 1 — 1 Non-current liabilities 3 5 8 — — — Liabilities 9 27 36 1 — 1 Net (Liabilities)/Assets $ 77 $ (10) $ 67 $ 2 $ 10 $ 12 Fair Value of Hedging Instruments as of December 31, 2020 Designated Hedging Instruments (in millions) Non-Designated Hedging Instruments (in millions) Balance Sheet Location Commodity Contracts Foreign Currency Contracts Total Commodity Contracts Foreign Currency Contracts Total Accounts receivable, net $ 50 $ 7 $ 57 $ 3 $ 4 $ 7 Other assets 4 — 4 — 1 1 Assets 54 7 61 3 5 8 Accounts payable and accrued liabilities 4 12 16 1 8 9 Non-current liabilities 2 — 2 — 2 2 Liabilities 6 12 18 1 10 11 Net (Liabilities)/Assets $ 48 $ (5) $ 43 $ 2 $ (5) $ (3) Additional information relating to the Company’s derivative instruments is presented below: Derivatives in Cash Flow Gains (Losses) Recognized Income Gains (Losses) Reclassified Hedging Relationships Three Months Ended September 30, Statement Three Months Ended September 30, (in millions) 2021 2020 Location 2021 2020 Commodity contracts $ 36 $ 21 Cost of sales $ 62 $ (30) Foreign currency contracts (1) (5) Net sales/Cost of sales (2) (1) Interest rate contracts — — Financing costs, net — — Total $ 35 $ 16 $ 60 $ (31) Derivatives in Cash-Flow Gains (Losses) Recognized Income Gains (Losses) Reclassified Hedging Relationships Nine Months Ended September 30, Statement Nine Months Ended September 30, (in millions) 2021 2020 Location 2021 2020 Commodity contracts $ 212 $ (36) Cost of sales $ 171 $ (54) Foreign currency contracts (1) (9) Net sales/Cost of sales (1) (1) Interest rate contracts — (5) Financing costs, net — (1) Total $ 211 $ (50) $ 170 $ (56) Derivatives in Fair Value Hedging Income Statement Location of Gains (Losses) Recognized in Income Income Statement Gains (Losses) Recognized in Income Relationships Derivatives Designated as Three Months Ended September 30, Location Three Months Ended September 30, (in millions) Hedging Instruments 2021 2020 of Hedged Items 2021 2020 Interest rate contracts Financing costs, net $ — $ — Financing costs, net $ — $ — Derivatives in Fair Value Income Statement Location of Gains (Losses) Recognized in Income Income Statement Gains (Losses) Recognized in Income Hedging Relationships Derivatives Designated as Nine Months Ended September 30, Location Nine Months Ended September 30, (in millions) Hedging Instruments 2021 2020 of Hedged Items 2021 2020 Interest rate contracts Financing costs, net $ — $ (1) Financing costs, net $ — $ 1 As of September 30, 2021, AOCL included $60 million of net gains (net of income taxes of $22 million) on commodities-related derivatives instruments, foreign currency hedges, and T-Locks designated as cash flow hedges that are expected to be reclassified into earnings during the next 12 months. Fair Value Measurements: As of September 30, 2021 As of December 31, 2020 (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 $ 12 $ 12 $ — $ — $ 11 $ 11 $ — $ — Derivative assets 116 28 88 — 69 53 16 — Derivative liabilities 37 7 30 — 29 3 26 — Long-term debt 1,925 — 1,925 — 1,751 — 1,751 — (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 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. 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 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 debt is estimated based on quotations of major securities dealers who are market makers in the securities. As of September 30, 2021, the carrying value and fair value of the Company’s Long-term debt was approximately $1.7 billion and $1.9 billion, respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Debt | 7. Debt Presented below are the Company’s debt carrying amounts, net of related discounts, premiums, and debt issuance costs as of September 30, 2021 and December 31, 2020: As of As of (in millions) September 30, 2021 December 31, 2020 2.900% senior notes due June 1, 2030 $ 594 $ 594 3.200% senior notes due October 1, 2026 498 497 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 13 14 Total long-term debt 1,748 1,748 Term loan credit agreement due April 12, 2021 — 380 Commercial paper 350 — Other short-term borrowings 48 58 Total short-term borrowings 398 438 Total debt $ 2,146 $ 2,186 On March 16, 2021, the Company amended and restated its term loan credit agreement (the “Amended Term Loan Credit Agreement”). As of September 30, 2021, the Company repaid in full the $380 million of borrowings outstanding under the Amended Term Loan Credit Agreement. The Amended Term Loan Credit Agreement restated the previous agreement by extending the maturity date of the borrowings under the previous agreement until March 15, 2022. No new borrowings under the Amended Term Loan Credit Agreement were incurred in connection with the amendment and restatement. Borrowings under the Amended Term Loan Credit Agreement bore interest at a variable annual rate based on a London Interbank Offering Rate (“LIBOR”) or a base rate, at the Company’s election, subject to the terms and conditions thereof, plus, in each case, an applicable margin. The Amended Term Loan Credit Agreement The Company was required to pay a fee on the unused availability under the Amended Term Loan Credit Agreement. The Amended Term Loan Credit Agreement contained customary representations, warranties, covenants and events of default, including covenants restricting the incurrence of liens, the incurrence of indebtedness by the Company’s subsidiaries and certain fundamental changes involving the Company and its subsidiaries, subject to certain exceptions in each case. The Company also had to maintain a specified maximum consolidated leverage ratio and a specified minimum consolidated interest coverage ratio. On June 30, 2021, the Company entered into a new revolving credit agreement (the “Revolving Credit Agreement”) to replace the previous revolving credit agreement, which was terminated. The Revolving Credit Agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of $1 billion outstanding at any time. The facility will mature on June 30, 2026. Loans under the facility will accrue interest at a per annum rate equal, at the Company’s option, to either a LIBOR rate plus an applicable margin, or a base rate (generally determined according to the highest of the prime rate, the federal funds rate or the specified LIBOR rate plus 1.00% ) plus an applicable margin. The Revolving Credit Agreement contains customary affirmative and negative covenants that, among other matters, specify customary reporting obligations, and that, subject to exceptions, restrict the incurrence of additional indebtedness by the Company’s subsidiaries, the incurrence of liens and the consummation of certain mergers, consolidations and sales of assets. The Company is subject to compliance, as of the end of each quarter, with a maximum leverage ratio of 3.5 to 1.0 and a minimum ratio of consolidated EBITDA to consolidated net interest expense of 3.5 to 1.0, as each such financial covenant is calculated for the most recently completed four-quarter period. As of September 30, 2021, the Company was in compliance with these covenants. On July 27, 2021, the Company established a commercial paper program under which the Company 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 U.S. commercial paper market. The Company intends to use the note proceeds for general corporate purposes. During the three months ended September 30, 2021, the average amount of commercial paper outstanding during the period was $401 million. As of September 30, 2021, $350 million of commercial paper was outstanding. The commercial paper outstanding has a weighted average interest rate of 0.28% over a weighted average maturity of 76 days . The amount of commercial paper outstanding under this program in 2021 is expected to fluctuate. Other short-term borrowings as of September 30, 2021 and December 31, 2020, primarily include amounts outstanding under various unsecured local country operating lines of credit. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | 8. Leases The Company determines if an arrangement is a lease at inception of the agreement. Operating leases are included in operating lease assets, and current and non-current operating lease liabilities in the Company’s Condensed Consolidated Balance Sheets. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease asset value includes in its calculation any prepaid lease payments made and any lease incentives received from the arrangement as a reduction of the asset. The Company’s lease terms may include options to extend or terminate the lease, and the impact of these options is included in the lease liability and lease asset calculations when the exercise of the option is at the Company’s sole discretion and it is reasonably certain that the Company will exercise that option. The Company will not separate lease and non-lease components for its leases when it is impracticable to separate the two, such as for leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company has operating leases for certain rail cars, office space, warehouses, and machinery and equipment. The commencement date used for the calculation of the lease obligations recorded is the latter of the commencement date of the new standard (January 1, 2019) or the lease start date. Certain of the leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of the Company and it is reasonably certain that the Company will exercise the option. The Company has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from the Company’s balance sheet presentation and expensed as incurred. The Company currently has no finance leases. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense were as follows for the periods presented: Three Months Ended Nine Months Ended Lease Cost September 30, September 30, (in millions) 2021 2020 2021 2020 Operating lease cost $ 14 $ 14 $ 43 $ 40 Variable operating lease cost 6 8 21 23 Short term lease cost 1 1 3 3 Lease cost $ 21 $ 23 $ 67 $ 66 The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities and the related operating lease assets as presented on the Condensed Consolidated Balance Sheet as of September 30, 2021. Operating Leases As of (in millions) September 30, 2021 2021 (Excluding the nine months ended September 30, 2021) $ 14 2022 51 2023 41 2024 30 2025 21 Thereafter 67 Total future lease payments 224 Less imputed interest 25 Present value of future lease payments 199 Less current lease liabilities 47 Non-current operating lease liabilities $ 152 Operating lease assets $ 191 Additional information related to the Company’s operating leases is listed below. Three Months Ended Nine Months Ended Other Information September 30, September 30, ($ in millions) 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14 $ 14 $ 43 $ 40 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 18 $ 24 $ 57 $ 45 As of As of September 30, 2021 December 31, 2020 Weighted average remaining lease term: Operating leases 6.7 years 5.5 years Weighted average discount rate: Operating leases 4.2 % 4.9 % |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Taxes | |
Taxes | 9. Taxes The Company’s effective tax rate for the three months ended September 30, 2021 decreased to 22.2 percent from 30.1 percent for the three months ended September 30, 2020. The decrease in the effective income tax rate was driven by the utilization of U.S. foreign tax credits for which a benefit had not been previously recognized compared to a valuation allowance recorded for the three months ended September 30, 2020. The remaining decrease in the effective tax rate was driven by a $20 million impairment adjustment on the net assets contributed to the Arcor joint venture, as described in Note 5 of the Notes to the Condensed Consolidated Financial Statements, with no corresponding income tax expense recorded with respect to the impairment, a change in mix of earnings, including the consolidation of PureCircle, and certain other items in the prior year. These items were partially offset by a decrease in the value of the Mexican peso against the U.S. dollar during the three months ended September 30, 2021, as compared to an increase during the three months ended September 30, 2020 and a valuation allowance on net operating losses compared to the utilization of net operating losses for which a benefit had not been previously recognized for the three months ended September 30, 2020. The effective tax rate for the nine months ended September 30, 2021 was 66.5 percent compared to 34.4 percent for the nine months ended September 30, 2020. The primary cause of the increase in the effective tax rate was a $340 million impairment charge related to the net assets contributed to the Arcor joint venture. There was no corresponding income tax benefit recorded with respect to the impairment. This item was partially offset by a tax benefit of $30 million due to the reversal of an accrual for withholding tax on the unremitted earnings of a foreign subsidiary. The remaining change in the effective income tax rate was primarily driven by a decrease in the value of the Mexican peso against the U.S. dollar. The decrease in the value of the Mexican peso against the U.S. dollar produced taxable translation gains on net-U.S.-dollar-monetary assets held in Mexico for which there was no corresponding gain in pre-tax income. Consequently, the Company recorded a tax expense of $16 million in the nine months ended September 30, 2020, as compared to $4 million in the nine months ended September 30, 2021. In January 2019, the Company’s Brazilian subsidiary received a favorable decision from the Federal Court of Appeals in Sao Paulo, Brazil, related to certain indirect taxes collected in prior years. The Company finalized its calculation of the amount of the credits and interest due from the favorable decision, concluding that the Company could be entitled to approximately $66 million of credits spanning a period from 2005 to 2018. The Department of Federal Revenue of Brazil, however, issued an Internal Ruling in which it charged that the Company is entitled to only $22 million of the calculated indirect tax credits and interest for the period from 2005 to 2014. The Brazil National Treasury filed a motion for clarification with the Brazilian Supreme Court, asking the Court, among other things, to modify the lower court’s decision to approve the Internal Ruling, which could impact the decision in favor of the Company. During the year ended December 31, 2020, the Company received another favorable court judgment that clarified the calculation of the Company’s benefit, allowing the Company to claim gross treatment within the indirect tax claim calculation and a larger indirect tax claim against the government. As a result of the decision, the Company recorded an additional $35 million pre-tax benefit in the Consolidated Income Statement in Other income for the year ended December 31, 2020, related to the open period of 2005 to 2014. In May 2021, the Brazilian Supreme Court issued its ruling related to the calculation of certain indirect taxes, which affirmed the lower court rulings that the Company had received in previous years and affirmed that the Company is entitled to the previously recorded tax credits. The Supreme Court ruling ensures that the Company will be entitled to $15 million of additional credits from the period of 2015 to 2018 that was previously unrecorded pending a final court ruling. The Company recorded the $15 million of additional credits during the three months ended June 30, 2021 within Other Income (expense), net in the Condensed Consolidated Income Sheet. As of September 30, 2021, the Company has $51 million of remaining tax credits recorded in Other assets and Prepaid expenses on the Condensed Consolidated Balance Sheets that result in deferred income taxes of $17 million. The Company will use the tax offsets to eliminate its Brazilian federal tax payments in 2021 and future years, including the income tax payable with respect to the indirect taxes recovered. |
Net Periodic Pension and Postre
Net Periodic Pension and Postretirement Benefit Costs | 9 Months Ended |
Sep. 30, 2021 | |
Net Periodic Pension and Postretirement Benefit Costs | |
Net Periodic Pension and Postretirement Benefit Costs | 10. Net Periodic Pension and Postretirement Benefit Costs 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) 2021 2020 2021 2020 2021 2020 2021 2020 Service cost $ 1 $ 2 $ 1 $ 1 $ 3 $ 4 $ 3 $ 3 Interest cost 2 2 2 2 6 8 7 8 Expected return on plan assets (4) (5) (2) (2) (13) (16) (6) (6) Amortization of actuarial loss (1) — 1 1 (1) — 2 2 Net periodic benefit cost (a) $ (2) $ (1) $ 2 $ 2 $ (5) $ (4) $ 6 $ 7 The Company currently anticipates that it will make approximately $4 million in cash contributions to its pension plans in 2021, consisting of contributions of $3 million to its non-U.S. pension plans and $1 million to its U.S. pension plans. For the nine months ended September 30, 2021, 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) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 1 — 2 2 Amortization of prior service credit — — (1) (1) Net periodic benefit cost (a) $ 1 $ — $ 1 $ 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. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventories | |
Inventories | 11. Inventories Inventories are summarized as follows: As of As of (in millions) September 30, 2021 December 31, 2020 Finished and in process $ 627 $ 584 Raw materials 361 236 Manufacturing supplies and other 105 97 Total inventories $ 1,093 $ 917 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity | |
Equity | 12. Equity Treasury stock During the three and nine months ended September 30, 2021, the Company 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. During the three and nine months ended September 30, 2020, the Company did not repurchase shares of common stock. Share-based payments: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 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 2 3 8 9 Income tax benefit — — (1) (1) RSUs, net of income taxes 2 3 7 8 Performance shares and other share-based awards: Pre-tax compensation expense 1 2 4 6 Income tax benefit — (1) — (1) Performance shares and other share-based compensation expense, net of income taxes 1 1 4 5 Total share-based compensation: Pre-tax compensation expense 4 6 15 18 Income tax benefit — (1) (1) (2) Total share-based compensation expense, net of income taxes $ 4 $ 5 $ 14 $ 16 Stock Options: Under the Company’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 executive level employees. The Company 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 granted non-qualified options to purchase 358 thousand shares and 336 thousand shares for the nine months ended September 30, 2021 and 2020, 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 at the date of grant: Nine Months Ended September 30, 2021 2020 Expected life (in years) 5.5 5.5 Risk-free interest rate 0.6 % 1.4 % Expected volatility 23.2 % 19.8 % Expected dividend yield 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 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 common stock. Dividend yield is based on current dividend payments at the date of grant. Stock option activity for the nine months ended September 30, 2021 was as follows: 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, 2020 2,238 $ 86.55 5.15 $ 14 Granted 358 87.12 Exercised (200) 58.10 Cancelled (102) 90.72 Outstanding as of September 30, 2021 2,294 $ 89.15 5.36 $ 18 Exercisable as of September 30, 2021 1,725 $ 89.50 4.19 $ 17 For the nine months ended September 30, 2021 , cash received from the exercise of stock options was approximately $12 million. As of September 30, 2021, the unrecognized compensation cost related to non-vested stock options totaled $3 million, which is expected to be amortized over the weighted-average period of approximately 1.7 years. Additional information pertaining to stock option activity is as follows for the periods presented: Three Months Ended Nine Months Ended September 30, September 30, (dollars in millions, except per share) 2021 2020 2021 2020 Weighted average grant date fair value of stock options granted (per share) $ — $ — $ 12.31 $ 11.48 Total intrinsic value of stock options exercised $ — $ — $ 6 $ 4 Restricted Stock Units: The Company 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 period of the RSUs within the amount of compensation costs recognized in each period. The fair value of the RSUs is determined based upon the number of shares granted and the market price of the Company’s common stock on the date of the grant. The following table summarizes RSU activity for the nine months ended September 30, 2021: (RSUs in thousands) Number of Restricted Shares Weighted Average Fair Value per Share Non-vested as of December 31, 2020 418 $ 96.45 Granted 228 87.42 Vested (90) 124.16 Cancelled (69) 89.87 Non-vested as of September 30, 2021 487 $ 88.07 As of September 30, 2021, the total remaining unrecognized compensation cost related to RSUs was $21 million, which will be amortized over a weighted average period of approximately 1.9 years. Performance Shares: The Company has a long-term incentive plan for senior management in the form of performance shares . Historically these performance shares vested based solely on the Company’s total shareholder return as compared to the total shareholder return of its peer group over the three-year vesting period. Beginning with the 2019 performance share grants, the vesting of the performance shares is based on two performance metrics. Fifty percent of the performance shares awarded will vest based on the Company’s total shareholder return as compared to the total shareholder return of its peer group, and the remaining fifty percent will vest based on the calculation of the Company’s three-year average Adjusted Return on Invested Capital (“Adjusted ROIC”) against an established Adjusted ROIC target. The 2021 performance shares were granted in two tranches. Vesting for the first tranche was split evenly between the Company’s total shareholder return and Adjusted ROIC against the applicable target. The second tranche of performance share awards will vest 100% based on the calculation of Adjusted ROIC against the applicable target. For the 2021 performance shares awarded based on the Company’s total shareholder return, the number of shares that ultimately vest can range from zero to 200% of the grant depending on the Company’s total shareholder return as compared to the total shareholder return of its peer group. 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 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. For the 2021 performance shares awarded based on Adjusted ROIC, the number of shares that ultimately vest can range from zero to 200% of the grant depending on the Company’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 the Company’s common stock on the date of the grant and the final number of shares that ultimately vest. The Company will estimate the potential share vesting at least annually to adjust the compensation expense for these awards over the vesting period to reflect the Company’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, 2021, the Company awarded 108 thousand performance shares at a weighted average fair value of $100.29 per share. As of September 30, 2021, the unrecognized compensation cost related to these awards was $7 million, which will be amortized over the remaining requisite service period of 2.1 years. The 2018 performance share awards vested during the nine months ended September 30, 2021, achieving a zero percent payout of the granted performance shares. Additionally, there were 26 thousand performance share cancellations during the nine months ended September 30, 2021. 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 nine months ended September 30, 2021 and 2020: (in millions) Cumulative Translation Adjustment Hedging Activities Pension and Postretirement Adjustment Accumulated Other Comprehensive Loss Balance, December 31, 2020 $ (1,114) $ 42 $ (61) $ (1,133) Other comprehensive (loss) gain before reclassification adjustments (85) 211 — 126 Loss (gain) reclassified from accumulated OCL 311 (170) — 141 Tax (provision) — (11) — (11) Net other comprehensive income 226 30 — 256 Balance, September 30, 2021 $ (888) $ 72 $ (61) $ (877) (in millions) Cumulative Translation Adjustment Hedging Activities Pension and Postretirement Adjustment Accumulated Other Comprehensive Loss Balance, December 31, 2019 $ (1,089) $ (9) $ (60) $ (1,158) Other comprehensive (loss) before reclassification adjustments (105) (50) — (155) Loss reclassified from accumulated OCL — 56 — 56 Tax (provision) — (2) — (2) Net other comprehensive (loss) income (105) 4 — (101) Balance, September 30, 2020 $ (1,194) $ (5) $ (60) $ (1,259) Supplemental Information : The following Condensed Consolidated Statements of Equity and Redeemable Equity provide the dividends per share for common stock for the periods presented: 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 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 (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 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 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, 2019 $ — $ 1 $ 1,137 $ (1,040) $ (1,158) $ 3,780 $ 21 $ 31 $ — Net income attributable to Ingredion 75 Net income attributable to non-controlling interests 3 Dividends declared, common stock ($0.63/share) (42) Share-based compensation, net of issuance 5 12 (8) Other comprehensive loss (164) (3) Balance, March 31, 2020 $ — $ 1 $ 1,142 $ (1,028) $ (1,322) $ 3,813 $ 21 $ 23 $ — Net income attributable to Ingredion 66 Net income attributable to non-controlling interests 1 Dividends declared, common stock ($0.63/share) (43) Dividends declared, non-controlling interests (3) Share-based compensation, net of issuance 1 1 4 Other comprehensive income (loss) 15 1 Balance, June 30, 2020 $ — $ 1 $ 1,143 $ (1,027) $ (1,307) $ 3,836 $ 20 $ 27 $ — Net income attributable to Ingredion 92 Net income attributable to non-controlling interests 3 (2) Dividends declared, common stock ($0.64/share) (44) Dividends declared, non-controlling interests (2) Acquisition of redeemable non-controlling interests 74 Share-based compensation, net of issuance 2 5 Other comprehensive income (loss) 48 2 Balance, September 30, 2020 $ — $ 1 $ 1,145 $ (1,027) $ (1,259) $ 3,884 $ 21 $ 32 $ 74 Supplemental Information: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 (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 $ 118 67.0 $ 1.76 $ 92 67.2 $ 1.37 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 0.6 0.4 Diluted EPS $ 118 67.6 $ 1.75 $ 92 67.6 $ 1.36 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 (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 $ 50 67.2 $ 0.74 $ 233 67.2 $ 3.47 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 0.6 0.4 Diluted EPS $ 50 67.8 $ 0.74 $ 233 67.6 $ 3.45 For the three and nine months ended September 30, 2021, approximately 1.6 million and 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 the three and nine months ended September 30, 2020, approximately 1.7 million and 1.4 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Segment Information | 13. 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 EMEA. Its North America segment includes businesses in the U.S., Mexico, and Canada. The Company’s South America segment includes businesses in Brazil, Colombia, Ecuador, and the Southern Cone of South America, which includes Argentina, Peru, Chile, and Uruguay. Its Asia-Pacific segment includes businesses in South Korea, Thailand, China, Australia, Japan, Indonesia, Singapore, the Philippines, India, Malaysia, New Zealand, and Vietnam. The Company’s EMEA segment includes businesses in Pakistan, Germany, the United Kingdom, South Africa, and Kenya. The Company has aggregated the PureCircle operating segment into the Asia-Pacific reportable segment. 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) 2021 2020 2021 2020 Net sales to unaffiliated customers: North America $ 1,083 $ 928 $ 3,096 $ 2,739 South America 260 224 801 643 Asia-Pacific 245 207 728 583 EMEA 175 143 514 429 Total net sales $ 1,763 $ 1,502 $ 5,139 $ 4,394 Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 Operating income: North America $ 120 $ 132 $ 403 $ 358 South America 35 29 108 68 Asia-Pacific 21 18 70 60 EMEA 23 25 86 73 Corporate (36) (25) (95) (86) Subtotal 163 179 572 473 Acquisition/integration costs — (5) (5) (8) Equity method acquisition charges (3) — 4 — Restructuring/impairment charges (8) (16) (22) (41) Impairment on disposition of assets 20 — (340) — Other matters — — 15 — Charge for fair value markup of acquired inventory — (3) — (3) North America storm damage — (2) — (2) Total operating income $ 172 $ 153 $ 224 $ 419 As of As of (in millions) September 30, 2021 December 31, 2020 Assets: North America (a) $ 4,204 $ 4,231 South America 852 818 Asia-Pacific 1,333 1,255 EMEA 597 554 Total assets $ 6,986 $ 6,858 For purposes of presentation, North America includes Corporate assets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Indefinite-lived intangible assets and goodwill | Goodwill and Indefinite-lived intangible assets: The original carrying value of goodwill and accumulated impairment charges by reportable business segment at September 30, 2021 was as follows: North South Asia- (in millions) America America Pacific EMEA Total Goodwill before impairment charges $ 622 $ 50 $ 316 $ 69 $ 1,057 Accumulated impairment charges (1) (33) (121) — (155) Balance at January 1, 2021 621 17 195 69 902 Acquisitions 1 — 3 20 24 Currency translation — (1) (6) (3) (10) Balance at September 30, 2021 $ 622 $ 16 $ 192 $ 86 $ 916 The following table summarizes the balances of the Company’s indefinite-lived intangible assets at the dates presented: (in millions) As of September 30, 2021 As of December 31, 2020 Trademarks/tradenames (indefinite-lived) $ 143 $ 143 The Company assesses goodwill and indefinite-lived intangible assets for impairment annually (or more frequently if impairment indicators arise). Based on the results of the Company’s assessment as of July 1, 2021, there were no impairments in its goodwill or indefinite-lived intangible assets. |
Summary of Significant Accoun_3
Summary of Significant Accounting Standards and Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of goodwill | North South Asia- (in millions) America America Pacific EMEA Total Goodwill before impairment charges $ 622 $ 50 $ 316 $ 69 $ 1,057 Accumulated impairment charges (1) (33) (121) — (155) Balance at January 1, 2021 621 17 195 69 902 Acquisitions 1 — 3 20 24 Currency translation — (1) (6) (3) (10) Balance at September 30, 2021 $ 622 $ 16 $ 192 $ 86 $ 916 |
Schedule of indefinite-lived intangible assets | (in millions) As of September 30, 2021 As of December 31, 2020 Trademarks/tradenames (indefinite-lived) $ 143 $ 143 |
Acquisitions and Equity Metho_2
Acquisitions and Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Acquisitions and Equity Method Investments | |
Summarizes the preliminary purchase price allocations for the PureCircle acquisition | (in millions) PureCircle Working capital (excluding cash) $ 68 Property, plant and equipment 91 Other, net (33) Identifiable intangible assets 68 Goodwill 88 Total fair value, net of cash 282 Less: Non-redeemable non-controlling interests 74 Total purchase price, net of cash $ 208 |
Schedule of fair values, valuation techniques and estimated remaining useful life of acquired intangible assets | 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 Intangible Asset Fair Value Valuation Technique Useful Life Proprietary technology $ 32 Relief-from-royalty method 12 years Trade names 18 Relief-from-royalty method 15 years Customer relationships 18 Multi-period excess earnings method 12 years |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Schedule of disaggregation of net sales | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 Net sales to unaffiliated customers: North America $ 1,083 $ 928 $ 3,096 $ 2,739 South America 260 224 801 643 Asia-Pacific 245 207 728 583 EMEA 175 143 514 429 Total net sales $ 1,763 $ 1,502 $ 5,139 $ 4,394 |
Restructuring and Impairment _2
Restructuring and Impairment Charges (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Impairment Charges | |
Summary of restructuring reserve | A summary of the Company’s employee-related severance accrual as of September 30, 2021 is as follows (in millions): Balance in severance accrual as of December 31, 2020 $ 12 Joint venture related 1 Cost Smart Cost of sales and SG&A 1 Payments made to terminated employees (10) Balance in severance accrual as of September 30, 2021 $ 4 |
Financial Instruments, Deriva_2
Financial Instruments, Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Financial Instruments, Derivatives and Hedging Activities | |
Schedule of cash flow hedges included in AOCI | Amount of Gains Derivatives in Cash Flow Hedging Relationships (Losses) included in AOCL (in millions) September 30, 2021 December 31, 2020 Commodity contracts, net of income tax effect of $27 and $16, respectively $ 77 $ 47 Foreign currency contracts, net of income tax effect of $ — (1) (1) Interest rate contracts, net of income tax effect of $1 (4) (4) Total $ 72 $ 42 |
Schedule of location and amount of assets and liabilities reported in balance sheet | Fair Value of Hedging Instruments as of September 30, 2021 Designated Hedging Instruments (in millions) Non-Designated Hedging Instruments (in millions) Balance Sheet Location Commodity Contracts Foreign Currency Contracts Total Commodity Contracts Foreign Currency Contracts Total Accounts receivable, net $ 71 $ 10 $ 81 $ 3 $ 7 $ 10 Other assets 15 7 22 — 3 3 Assets 86 17 103 3 10 13 Accounts payable and accrued liabilities 6 22 28 1 — 1 Non-current liabilities 3 5 8 — — — Liabilities 9 27 36 1 — 1 Net (Liabilities)/Assets $ 77 $ (10) $ 67 $ 2 $ 10 $ 12 Fair Value of Hedging Instruments as of December 31, 2020 Designated Hedging Instruments (in millions) Non-Designated Hedging Instruments (in millions) Balance Sheet Location Commodity Contracts Foreign Currency Contracts Total Commodity Contracts Foreign Currency Contracts Total Accounts receivable, net $ 50 $ 7 $ 57 $ 3 $ 4 $ 7 Other assets 4 — 4 — 1 1 Assets 54 7 61 3 5 8 Accounts payable and accrued liabilities 4 12 16 1 8 9 Non-current liabilities 2 — 2 — 2 2 Liabilities 6 12 18 1 10 11 Net (Liabilities)/Assets $ 48 $ (5) $ 43 $ 2 $ (5) $ (3) |
Schedule of amount of gains and losses recognized in OCI and location and income statement location | Derivatives in Cash Flow Gains (Losses) Recognized Income Gains (Losses) Reclassified Hedging Relationships Three Months Ended September 30, Statement Three Months Ended September 30, (in millions) 2021 2020 Location 2021 2020 Commodity contracts $ 36 $ 21 Cost of sales $ 62 $ (30) Foreign currency contracts (1) (5) Net sales/Cost of sales (2) (1) Interest rate contracts — — Financing costs, net — — Total $ 35 $ 16 $ 60 $ (31) Derivatives in Cash-Flow Gains (Losses) Recognized Income Gains (Losses) Reclassified Hedging Relationships Nine Months Ended September 30, Statement Nine Months Ended September 30, (in millions) 2021 2020 Location 2021 2020 Commodity contracts $ 212 $ (36) Cost of sales $ 171 $ (54) Foreign currency contracts (1) (9) Net sales/Cost of sales (1) (1) Interest rate contracts — (5) Financing costs, net — (1) Total $ 211 $ (50) $ 170 $ (56) |
Schedule of location and amount of gain (loss) recognized in income | Derivatives in Cash-Flow Gains (Losses) Recognized Income Gains (Losses) Reclassified Hedging Relationships Nine Months Ended September 30, Statement Nine Months Ended September 30, (in millions) 2021 2020 Location 2021 2020 Commodity contracts $ 212 $ (36) Cost of sales $ 171 $ (54) Foreign currency contracts (1) (9) Net sales/Cost of sales (1) (1) Interest rate contracts — (5) Financing costs, net — (1) Total $ 211 $ (50) $ 170 $ (56) |
Schedule of fair value of financial instruments and derivatives | As of September 30, 2021 As of December 31, 2020 (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 $ 12 $ 12 $ — $ — $ 11 $ 11 $ — $ — Derivative assets 116 28 88 — 69 53 16 — Derivative liabilities 37 7 30 — 29 3 26 — Long-term debt 1,925 — 1,925 — 1,751 — 1,751 — (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 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. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Schedule of debt | As of As of (in millions) September 30, 2021 December 31, 2020 2.900% senior notes due June 1, 2030 $ 594 $ 594 3.200% senior notes due October 1, 2026 498 497 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 13 14 Total long-term debt 1,748 1,748 Term loan credit agreement due April 12, 2021 — 380 Commercial paper 350 — Other short-term borrowings 48 58 Total short-term borrowings 398 438 Total debt $ 2,146 $ 2,186 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Summary of components of lease expense | Three Months Ended Nine Months Ended Lease Cost September 30, September 30, (in millions) 2021 2020 2021 2020 Operating lease cost $ 14 $ 14 $ 43 $ 40 Variable operating lease cost 6 8 21 23 Short term lease cost 1 1 3 3 Lease cost $ 21 $ 23 $ 67 $ 66 |
Reconciliation of future undiscounted cash flows to the operating lease liabilities and the related ROU assets | Operating Leases As of (in millions) September 30, 2021 2021 (Excluding the nine months ended September 30, 2021) $ 14 2022 51 2023 41 2024 30 2025 21 Thereafter 67 Total future lease payments 224 Less imputed interest 25 Present value of future lease payments 199 Less current lease liabilities 47 Non-current operating lease liabilities $ 152 Operating lease assets $ 191 |
Summary of other lease information | Three Months Ended Nine Months Ended Other Information September 30, September 30, ($ in millions) 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14 $ 14 $ 43 $ 40 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 18 $ 24 $ 57 $ 45 As of As of September 30, 2021 December 31, 2020 Weighted average remaining lease term: Operating leases 6.7 years 5.5 years Weighted average discount rate: Operating leases 4.2 % 4.9 % |
Net Periodic Pension and Post_2
Net Periodic Pension and Postretirement Benefit Costs (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Pension Plan, Defined Benefit [Member] | |
Pension and postretirement benefit plans | |
Components of net periodic benefit cost | 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) 2021 2020 2021 2020 2021 2020 2021 2020 Service cost $ 1 $ 2 $ 1 $ 1 $ 3 $ 4 $ 3 $ 3 Interest cost 2 2 2 2 6 8 7 8 Expected return on plan assets (4) (5) (2) (2) (13) (16) (6) (6) Amortization of actuarial loss (1) — 1 1 (1) — 2 2 Net periodic benefit cost (a) $ (2) $ (1) $ 2 $ 2 $ (5) $ (4) $ 6 $ 7 |
Other Postretirement Benefit Plan, Defined Benefit [Member] | |
Pension and postretirement benefit plans | |
Components of net periodic benefit cost | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2021 2020 2021 2020 Service cost $ — $ — $ — $ — Interest cost 1 — 2 2 Amortization of prior service credit — — (1) (1) Net periodic benefit cost (a) $ 1 $ — $ 1 $ 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. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventories | |
Components of inventories | As of As of (in millions) September 30, 2021 December 31, 2020 Finished and in process $ 627 $ 584 Raw materials 361 236 Manufacturing supplies and other 105 97 Total inventories $ 1,093 $ 917 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity | |
Schedule of stock based compensation expense | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 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 2 3 8 9 Income tax benefit — — (1) (1) RSUs, net of income taxes 2 3 7 8 Performance shares and other share-based awards: Pre-tax compensation expense 1 2 4 6 Income tax benefit — (1) — (1) Performance shares and other share-based compensation expense, net of income taxes 1 1 4 5 Total share-based compensation: Pre-tax compensation expense 4 6 15 18 Income tax benefit — (1) (1) (2) Total share-based compensation expense, net of income taxes $ 4 $ 5 $ 14 $ 16 |
Schedule of valuation assumptions for stock options | Nine Months Ended September 30, 2021 2020 Expected life (in years) 5.5 5.5 Risk-free interest rate 0.6 % 1.4 % Expected volatility 23.2 % 19.8 % Expected dividend yield 2.9 % 2.9 % |
Schedule of stock option transactions | 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, 2020 2,238 $ 86.55 5.15 $ 14 Granted 358 87.12 Exercised (200) 58.10 Cancelled (102) 90.72 Outstanding as of September 30, 2021 2,294 $ 89.15 5.36 $ 18 Exercisable as of September 30, 2021 1,725 $ 89.50 4.19 $ 17 |
Schedule of additional information pertaining to stock option activity | Three Months Ended Nine Months Ended September 30, September 30, (dollars in millions, except per share) 2021 2020 2021 2020 Weighted average grant date fair value of stock options granted (per share) $ — $ — $ 12.31 $ 11.48 Total intrinsic value of stock options exercised $ — $ — $ 6 $ 4 |
Schedule of restricted unit activity | (RSUs in thousands) Number of Restricted Shares Weighted Average Fair Value per Share Non-vested as of December 31, 2020 418 $ 96.45 Granted 228 87.42 Vested (90) 124.16 Cancelled (69) 89.87 Non-vested as of September 30, 2021 487 $ 88.07 |
Summary of net changes in accumulated other comprehensive loss | (in millions) Cumulative Translation Adjustment Hedging Activities Pension and Postretirement Adjustment Accumulated Other Comprehensive Loss Balance, December 31, 2020 $ (1,114) $ 42 $ (61) $ (1,133) Other comprehensive (loss) gain before reclassification adjustments (85) 211 — 126 Loss (gain) reclassified from accumulated OCL 311 (170) — 141 Tax (provision) — (11) — (11) Net other comprehensive income 226 30 — 256 Balance, September 30, 2021 $ (888) $ 72 $ (61) $ (877) (in millions) Cumulative Translation Adjustment Hedging Activities Pension and Postretirement Adjustment Accumulated Other Comprehensive Loss Balance, December 31, 2019 $ (1,089) $ (9) $ (60) $ (1,158) Other comprehensive (loss) before reclassification adjustments (105) (50) — (155) Loss reclassified from accumulated OCL — 56 — 56 Tax (provision) — (2) — (2) Net other comprehensive (loss) income (105) 4 — (101) Balance, September 30, 2020 $ (1,194) $ (5) $ (60) $ (1,259) |
Schedule of stockholders equity and redeemable equity | 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 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 (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 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 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, 2019 $ — $ 1 $ 1,137 $ (1,040) $ (1,158) $ 3,780 $ 21 $ 31 $ — Net income attributable to Ingredion 75 Net income attributable to non-controlling interests 3 Dividends declared, common stock ($0.63/share) (42) Share-based compensation, net of issuance 5 12 (8) Other comprehensive loss (164) (3) Balance, March 31, 2020 $ — $ 1 $ 1,142 $ (1,028) $ (1,322) $ 3,813 $ 21 $ 23 $ — Net income attributable to Ingredion 66 Net income attributable to non-controlling interests 1 Dividends declared, common stock ($0.63/share) (43) Dividends declared, non-controlling interests (3) Share-based compensation, net of issuance 1 1 4 Other comprehensive income (loss) 15 1 Balance, June 30, 2020 $ — $ 1 $ 1,143 $ (1,027) $ (1,307) $ 3,836 $ 20 $ 27 $ — Net income attributable to Ingredion 92 Net income attributable to non-controlling interests 3 (2) Dividends declared, common stock ($0.64/share) (44) Dividends declared, non-controlling interests (2) Acquisition of redeemable non-controlling interests 74 Share-based compensation, net of issuance 2 5 Other comprehensive income (loss) 48 2 Balance, September 30, 2020 $ — $ 1 $ 1,145 $ (1,027) $ (1,259) $ 3,884 $ 21 $ 32 $ 74 |
Schedule of basic and diluted earnings per common share | Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 (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 $ 118 67.0 $ 1.76 $ 92 67.2 $ 1.37 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 0.6 0.4 Diluted EPS $ 118 67.6 $ 1.75 $ 92 67.6 $ 1.36 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 (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 $ 50 67.2 $ 0.74 $ 233 67.2 $ 3.47 Effect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 0.6 0.4 Diluted EPS $ 50 67.8 $ 0.74 $ 233 67.6 $ 3.45 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Schedule of net sales to unaffiliated customers by country of origin | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 Net sales to unaffiliated customers: North America $ 1,083 $ 928 $ 3,096 $ 2,739 South America 260 224 801 643 Asia-Pacific 245 207 728 583 EMEA 175 143 514 429 Total net sales $ 1,763 $ 1,502 $ 5,139 $ 4,394 |
Schedule of segment reporting of net sales, operating income and total assets | Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2021 2020 2021 2020 Operating income: North America $ 120 $ 132 $ 403 $ 358 South America 35 29 108 68 Asia-Pacific 21 18 70 60 EMEA 23 25 86 73 Corporate (36) (25) (95) (86) Subtotal 163 179 572 473 Acquisition/integration costs — (5) (5) (8) Equity method acquisition charges (3) — 4 — Restructuring/impairment charges (8) (16) (22) (41) Impairment on disposition of assets 20 — (340) — Other matters — — 15 — Charge for fair value markup of acquired inventory — (3) — (3) North America storm damage — (2) — (2) Total operating income $ 172 $ 153 $ 224 $ 419 |
Schedule of long-lived assets (excluding intangible assets) by country | As of As of (in millions) September 30, 2021 December 31, 2020 Assets: North America (a) $ 4,204 $ 4,231 South America 852 818 Asia-Pacific 1,333 1,255 EMEA 597 554 Total assets $ 6,986 $ 6,858 For purposes of presentation, North America includes Corporate assets. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Indefinite-lived intangible assets and goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 143 | $ 143 |
Goodwill | 916 | 902 |
Trademarks/tradenames | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 143 | $ 143 |
Summary of Significant Accoun_5
Summary of Significant Accounting Standards and Policies - Goodwill and accumulated impairment (Details) - USD ($) $ in Millions | Jul. 01, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying value of goodwill | |||
Goodwill before impairment charges | $ 1,057 | ||
Accumulated impairment charges | (155) | ||
Balance at the beginning of the period | $ 902 | ||
Acquisitions | 24 | ||
Currency translation | (10) | ||
Balance at the end of the period | 916 | ||
Indefinite-lived intangible assets impairment | $ 0 | ||
Goodwill impairment | $ 0 | ||
North America Segment | |||
Carrying value of goodwill | |||
Goodwill before impairment charges | 622 | ||
Accumulated impairment charges | (1) | ||
Balance at the beginning of the period | 621 | ||
Acquisitions | 1 | ||
Balance at the end of the period | 622 | ||
South America Segment | |||
Carrying value of goodwill | |||
Goodwill before impairment charges | 50 | ||
Accumulated impairment charges | (33) | ||
Balance at the beginning of the period | 17 | ||
Currency translation | (1) | ||
Balance at the end of the period | 16 | ||
Asia Pacific Segment | |||
Carrying value of goodwill | |||
Goodwill before impairment charges | 316 | ||
Accumulated impairment charges | (121) | ||
Balance at the beginning of the period | 195 | ||
Acquisitions | 3 | ||
Currency translation | (6) | ||
Balance at the end of the period | 192 | ||
EMEA Segment | |||
Carrying value of goodwill | |||
Goodwill before impairment charges | $ 69 | ||
Balance at the beginning of the period | 69 | ||
Acquisitions | 20 | ||
Currency translation | (3) | ||
Balance at the end of the period | $ 86 |
Acquisitions and Equity Metho_3
Acquisitions and Equity Method Investments - KaTech (Details) - USD ($) $ in Millions | Apr. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Acquisitions | |||
Payment for acquisition, net of cash acquired | $ 40 | $ 208 | |
KaTech | |||
Acquisitions | |||
Payment for acquisition, net of cash acquired | $ 40 | ||
Cash acquired | $ 2 | ||
Lag period over which financial results will be reported during the integration process | 1 month |
Acquisitions and Equity Metho_4
Acquisitions and Equity Method Investments - Verdient (Details) $ in Millions, $ in Millions | Nov. 03, 2020CAD ($) | Nov. 03, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2018 |
Verdient Foods, Inc. | |||||
Acquisitions | |||||
Percentage acquired | 20.00% | ||||
Equity method investment, Other than temporary impairment | $ 10 | $ 10 | |||
Verdient Foods, Inc. | |||||
Acquisitions | |||||
Additional percentage of outstanding shares acquired | 80.00% | 80.00% | |||
Cash consideration | $ 33 | $ 26 |
Acquisitions and Equity Metho_5
Acquisitions and Equity Method Investments - KaTech and Verdient (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||
Goodwill | $ 916 | $ 902 |
KaTech And Verdient | ||
Business Acquisition [Line Items] | ||
Goodwill | 36 | |
Tangible assets | $ 35 |
Acquisitions and Equity Metho_6
Acquisitions and Equity Method Investments - PureCircle (Details) - USD ($) $ in Millions | Jul. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Acquisitions | ||||||
Payment for acquisition, net of cash acquired | $ 40 | $ 208 | ||||
Redeemable non-controlling interests | $ 68 | $ 74 | $ 70 | $ 70 | $ 70 | |
PureCircle Limited | ||||||
Acquisitions | ||||||
Ownership percentage by parent | 75.00% | |||||
PureCircle Limited | Former PureCircle Shareholders | ||||||
Acquisitions | ||||||
Ownership percentage by noncontrolling owners | 25.00% | |||||
PureCircle Limited | ||||||
Acquisitions | ||||||
Payment for acquisition, net of cash acquired | $ 208 | |||||
Cash acquired | 14 | |||||
Redeemable non-controlling interests | $ 74 | |||||
Lag period over which financial results will be reported during the integration process | 1 month |
Acquisitions and Equity Metho_7
Acquisitions and Equity Method Investments - Purchase price and Integration costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Purchase price allocation | |||||
Goodwill | $ 916 | $ 916 | $ 902 | ||
Pre-tax acquisition and integration costs | 5 | $ 5 | 5 | $ 8 | |
Proprietary technology | |||||
Purchase price allocation | |||||
Identifiable intangible assets | 32 | $ 32 | |||
Estimated useful life | 12 years | ||||
Trade names | |||||
Purchase price allocation | |||||
Identifiable intangible assets | 18 | $ 18 | |||
Estimated useful life | 15 years | ||||
Customer relationships | |||||
Purchase price allocation | |||||
Identifiable intangible assets | 18 | $ 18 | |||
Estimated useful life | 12 years | ||||
KaTech And Verdient | |||||
Purchase price allocation | |||||
Tangible assets | 35 | $ 35 | |||
Goodwill | 36 | 36 | |||
PureCircle Limited | |||||
Purchase price allocation | |||||
Working capital (excluding cash) | 68 | 68 | |||
Property, plant and equipment | 91 | 91 | |||
Other, net | (33) | (33) | |||
Identifiable intangible assets | 68 | 68 | |||
Goodwill | 88 | 88 | |||
Total fair value, net of cash | 282 | 282 | |||
Less: Non-redeemable non-controlling interests | 74 | 74 | |||
Total purchase price, net of cash | $ 208 | $ 208 |
Acquisitions and Equity Metho_8
Acquisitions and Equity Method Investments - Equity Method Investments (Details) $ in Millions | Aug. 02, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Feb. 12, 2021facility |
Equity Method Investments | ||||||
Income from equity method investment agreement | $ 4 | |||||
Impairment on disposition of assets | $ (20) | $ (20) | 340 | |||
Transaction costs | 4 | |||||
Arcor joint venture | ||||||
Equity Method Investments | ||||||
Number of manufacturing facilities to be operated | facility | 5 | |||||
Amyris' Brazilian Manufacturing Facility | ||||||
Equity Method Investments | ||||||
Ownership percentage in equity method investment | 31.00% | |||||
Total consideration under equity method investment agreement | $ 28 | |||||
Cash consideration | 10 | |||||
Non-exclusive license and other consideration | 18 | |||||
Income from equity method investment agreement | 8 | $ 8 | 8 | |||
Arcor joint venture | ||||||
Equity Method Investments | ||||||
Fair value of assets and liabilities transferred | $ 71 | |||||
Ownership percentage in equity method investment | 49.00% | |||||
Value of shares received as consideration for assets contributed | $ 64 | |||||
Impairment on disposition of assets | $ 340 | |||||
Transaction costs | $ 3 | |||||
Arcor joint venture | Grupo Arcor | ||||||
Equity Method Investments | ||||||
Cash and other considerations received from joint venture in return of assets and liabilities transferred | $ 7 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Disaggregation of revenue | ||||
Revenue, practical expedient, incremental cost of obtaining contract | true | |||
Number of reportable business segments | segment | 4 | |||
Total net sales | $ 1,763 | $ 1,502 | $ 5,139 | $ 4,394 |
North America Segment | ||||
Disaggregation of revenue | ||||
Total net sales | 1,083 | 928 | 3,096 | 2,739 |
South America Segment | ||||
Disaggregation of revenue | ||||
Total net sales | 260 | 224 | 801 | 643 |
Asia Pacific Segment | ||||
Disaggregation of revenue | ||||
Total net sales | 245 | 207 | 728 | 583 |
EMEA Segment | ||||
Disaggregation of revenue | ||||
Total net sales | $ 175 | $ 143 | $ 514 | $ 429 |
Restructuring and Impairment _3
Restructuring and Impairment Charges - Charges (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring and impairment charges | |||||
Restructuring/impairment charges and related adjustments | $ (12) | $ 16 | $ 362 | $ 41 | |
Impairment on disposition of assets | $ (20) | (20) | 340 | ||
Restructuring charges | 8 | 6 | 31 | ||
Verdient Foods, Inc. | |||||
Restructuring and impairment charges | |||||
Equity method investment, Other than temporary impairment | 10 | 10 | |||
Cost Smart Cost of Sales and SG&A Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 8 | 6 | 22 | 31 | |
Cost Smart Cost of Sales Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 3 | 2 | $ 11 | 17 | |
Cost Smart SG&A Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 4 | $ 14 |
Restructuring and Impairment _4
Restructuring and Impairment Charges - Impairment Charges (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Feb. 12, 2021facility | |
Restructuring and impairment charges | |||||
Impairment on disposition of assets | $ (20) | $ (20) | $ 340 | ||
Arcor joint venture | |||||
Restructuring and impairment charges | |||||
Impairment on disposition of assets | 340 | ||||
Impairment charge - Cumulative translation adjustment | 311 | ||||
Impairment charge - Write-down of contributed net assets | $ 29 | ||||
Disposal Group, Held for Sale, Not Discontinued Operations | South American Subsidiaries, PP&E | |||||
Restructuring and impairment charges | |||||
Impairment on disposition of assets | $ 360 | ||||
Reverse impairment charge | $ 20 | ||||
Arcor joint venture | |||||
Restructuring and impairment charges | |||||
Number of manufacturing facilities to be operated | facility | 5 |
Restructuring and Impairment _5
Restructuring and Impairment Charges - Other Charges (Details) - USD ($) $ in Millions | Jul. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Restructuring and impairment charges | |||||
Restructuring/impairment charges | $ (12) | $ 16 | $ 362 | $ 41 | |
Restructuring charges | 8 | 6 | 31 | ||
Indefinite-lived intangible assets impairment | $ 0 | ||||
Cost Smart Cost of Sales and SG&A Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 8 | 6 | 22 | 31 | |
Cost Smart Cost of Sales and SG&A Program | Employee-related severance costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | ||||
Cost Smart Cost of Sales Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 3 | 2 | 11 | 17 | |
Cost Smart Cost of Sales Program | Other restructuring costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Australia | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | 10 | |||
Cost Smart Cost of Sales Program, Production facility closure, Australia | Asset write-off | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 6 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Australia | Accelerated depreciation | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Australia | Other restructuring costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 3 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Stockton, California | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | 6 | |||
Gain on the sale of land and building | 5 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Stockton, California | Accelerated depreciation | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 4 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Stockton, California | Employee-related severance costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | ||||
Cost Smart Cost of Sales Program, Production facility closure, Stockton, California | Other restructuring costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 1 | ||||
Cost Smart SG&A Program | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 4 | 14 | |||
Cost Smart SG&A Program | Other restructuring costs, including professional services | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 4 | 12 | |||
Cost Smart SG&A Program | Employee-related severance costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 2 | ||||
Cost Smart SG&A Program | Employee-related and other costs, including professional services | |||||
Restructuring and impairment charges | |||||
Restructuring charges | 4 | 13 | |||
Arcor joint venture restructuring | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 1 | 3 | |||
Arcor joint venture restructuring | Employee-related severance costs | |||||
Restructuring and impairment charges | |||||
Restructuring charges | $ 1 |
Restructuring and Impairment _6
Restructuring and Impairment Charges - Employee-related severance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring accrual | ||||
Restructuring charges | $ 8 | $ 6 | $ 31 | |
Employee-related severance costs | ||||
Restructuring accrual | ||||
Balance in severance accrual at beginning of period | $ 12 | |||
Payments made to terminated employees | (10) | |||
Balance in severance accrual at end of period | 4 | 4 | ||
Cost Smart Cost of Sales and SG&A Program | ||||
Restructuring accrual | ||||
Restructuring charges | 8 | $ 6 | 22 | $ 31 |
Cost Smart Cost of Sales and SG&A Program | Employee-related severance costs | ||||
Restructuring accrual | ||||
Restructuring charges | 1 | |||
Arcor joint venture restructuring | ||||
Restructuring accrual | ||||
Restructuring charges | $ 1 | 3 | ||
Arcor joint venture restructuring | Employee-related severance costs | ||||
Restructuring accrual | ||||
Restructuring charges | $ 1 |
Restructuring and Impairment _7
Restructuring and Impairment Charges - Assets and classified as held-for-sale (Details) - USD ($) $ in Millions | Jul. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Disposal group | ||||||
Restructuring charges | $ 8 | $ 6 | $ 31 | |||
Goodwill impairment | $ 0 | |||||
Indefinite-lived intangible assets impairment | $ 0 | |||||
Stockton, California and Lane Cove, Australia, PP&E | Disposal Group, Held for Sale, Not Discontinued Operations | ||||||
Disposal group | ||||||
Asset held for sale | $ 8 | |||||
Stockton, California and Lane Cove, Australia, PP&E | Other assets | Disposal Group, Held for Sale, Not Discontinued Operations | ||||||
Disposal group | ||||||
Asset held for sale | 2 | $ 2 | ||||
Stockton, California, PP&E | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Disposal group | ||||||
Consideration for the sale of assets | $ 11 | 11 | ||||
Gain on the sale of land and building | $ 5 |
Financial Instruments, Deriva_3
Financial Instruments, Derivatives and Hedging Activities - Commodity price hedging (Details) bu in Millions, MMBTU in Millions | 9 Months Ended |
Sep. 30, 2021MMBTUbu | |
Commodity Contract [Member] | Minimum [Member] | |
Financial instruments, derivatives and hedging activities | |
Maturity period of price risk derivative | 12 months |
Commodity Contract [Member] | Maximum [Member] | |
Financial instruments, derivatives and hedging activities | |
Maturity period of price risk derivative | 24 months |
Corn Commodity [Member] | |
Financial instruments, derivatives and hedging activities | |
Futures contract (in bushels for corn and gallons for ethanol) | bu | 79 |
Natural Gas Commodity [Member] | |
Financial instruments, derivatives and hedging activities | |
Natural gas futures contract (in mmbtu) | MMBTU | 32 |
Financial Instruments, Deriva_4
Financial Instruments, Derivatives and Hedging Activities - Foreign currency hedging (Details) - Foreign Exchange Forward [Member] - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Short [Member] | Not Designated as Hedging Instrument | ||
Financial instruments, derivatives and hedging activities | ||
Derivative notional amount | $ 385 | $ 410 |
Long [Member] | Not Designated as Hedging Instrument | ||
Financial instruments, derivatives and hedging activities | ||
Derivative notional amount | 225 | 224 |
Cash Flow Hedging [Member] | Short [Member] | Designated as Hedging Instrument [Member] | ||
Financial instruments, derivatives and hedging activities | ||
Derivative notional amount | 543 | 401 |
Cash Flow Hedging [Member] | Long [Member] | Designated as Hedging Instrument [Member] | ||
Financial instruments, derivatives and hedging activities | ||
Derivative notional amount | $ 761 | $ 542 |
Financial Instruments, Deriva_5
Financial Instruments, Derivatives and Hedging Activities - Interest rate hedging (Details) - 4.625% senior notes due November 1, 2020 $ in Millions | Dec. 31, 2020USD ($) |
Financial instruments, derivatives and hedging activities | |
Principal amount | $ 400 |
Debt, fixed interest rate (as a percent) | 4.625% |
Fair Value Hedging [Member] | Interest Rate Swap [Member] | |
Financial instruments, derivatives and hedging activities | |
Principal amount | $ 200 |
Financial Instruments, Deriva_6
Financial Instruments, Derivatives and Hedging Activities - CF Hedges in AOCI (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Loss. | ||
Accumulated other comprehensive income (loss) | $ (877) | $ (1,133) |
Cash Flow Hedging [Member] | ||
Accumulated Other Comprehensive Loss. | ||
Accumulated other comprehensive income (loss) | 72 | 42 |
Cash Flow Hedging [Member] | Commodity Contract [Member] | ||
Accumulated Other Comprehensive Loss. | ||
Accumulated other comprehensive income (loss) | 77 | 47 |
Tax effect on gains (losses) of derivative instruments | (27) | (16) |
Cash Flow Hedging [Member] | Foreign Currency Contracts | ||
Accumulated Other Comprehensive Loss. | ||
Accumulated other comprehensive income (loss) | (1) | (1) |
Cash Flow Hedging [Member] | Interest Rate Contract [Member] | ||
Accumulated Other Comprehensive Loss. | ||
Accumulated other comprehensive income (loss) | (4) | (4) |
Tax effect on gains (losses) of derivative instruments | $ 1 | $ 1 |
Financial Instruments, Deriva_7
Financial Instruments, Derivatives and Hedging Activities - Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Designated as Hedging Instrument [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | $ 103 | $ 61 |
Fair value of derivative instruments, Liabilities | 36 | 18 |
Fair value of derivative instruments, Net Assets/(Liabilities) | 67 | 43 |
Designated as Hedging Instrument [Member] | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 81 | 57 |
Designated as Hedging Instrument [Member] | Other assets | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 22 | 4 |
Designated as Hedging Instrument [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 28 | 16 |
Designated as Hedging Instrument [Member] | Non Current Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 8 | 2 |
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 86 | 54 |
Fair value of derivative instruments, Liabilities | 9 | 6 |
Fair value of derivative instruments, Net Assets/(Liabilities) | 77 | 48 |
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 71 | 50 |
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Other assets | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 15 | 4 |
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 6 | 4 |
Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Non Current Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 3 | 2 |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 17 | 7 |
Fair value of derivative instruments, Liabilities | 27 | 12 |
Fair value of derivative instruments, Net Assets/(Liabilities) | (10) | (5) |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 10 | 7 |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Other assets | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 7 | |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 22 | 12 |
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Non Current Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 5 | |
Not Designated as Hedging Instrument | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 13 | 8 |
Fair value of derivative instruments, Liabilities | 1 | 11 |
Fair value of derivative instruments, Net Assets/(Liabilities) | 12 | (3) |
Not Designated as Hedging Instrument | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 10 | 7 |
Not Designated as Hedging Instrument | Other assets | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 3 | 1 |
Not Designated as Hedging Instrument | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 1 | 9 |
Not Designated as Hedging Instrument | Non Current Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 2 | |
Not Designated as Hedging Instrument | Commodity Contract [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 3 | 3 |
Fair value of derivative instruments, Liabilities | 1 | 1 |
Fair value of derivative instruments, Net Assets/(Liabilities) | 2 | 2 |
Not Designated as Hedging Instrument | Commodity Contract [Member] | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 3 | 3 |
Not Designated as Hedging Instrument | Commodity Contract [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 1 | 1 |
Not Designated as Hedging Instrument | Foreign Exchange Forward [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 10 | 5 |
Fair value of derivative instruments, Liabilities | 10 | |
Fair value of derivative instruments, Net Assets/(Liabilities) | 10 | (5) |
Not Designated as Hedging Instrument | Foreign Exchange Forward [Member] | Accounts Receivable, Net [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | 7 | 4 |
Not Designated as Hedging Instrument | Foreign Exchange Forward [Member] | Other assets | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Assets | $ 3 | 1 |
Not Designated as Hedging Instrument | Foreign Exchange Forward [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | 8 | |
Not Designated as Hedging Instrument | Foreign Exchange Forward [Member] | Non Current Liabilities [Member] | ||
Fair value of derivatives | ||
Fair value of derivative instruments, Liabilities | $ 2 |
Financial Instruments, Deriva_8
Financial Instruments, Derivatives and Hedging Activities - Additional information - CF hedges (Details) - Cash Flow Hedging [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Hedging relationships | ||||
Gains (Losses) Recognized in OCL | $ 35 | $ 16 | $ 211 | $ (50) |
Gains (Losses) Reclassified from AOCL into Income | 60 | (31) | 170 | (56) |
Commodity Contract [Member] | ||||
Hedging relationships | ||||
Gains (Losses) Recognized in OCL | 36 | 21 | 212 | (36) |
Commodity Contract [Member] | Cost of Sales [Member] | ||||
Hedging relationships | ||||
Gains (Losses) Reclassified from AOCL into Income | 62 | (30) | 171 | (54) |
Foreign Currency Contracts | ||||
Hedging relationships | ||||
Gains (Losses) Recognized in OCL | (1) | (5) | (1) | (9) |
Foreign Currency Contracts | Net sales/Cost of sales | ||||
Hedging relationships | ||||
Gains (Losses) Reclassified from AOCL into Income | $ (2) | $ (1) | $ (1) | (1) |
Interest Rate Contract [Member] | ||||
Hedging relationships | ||||
Gains (Losses) Recognized in OCL | (5) | |||
Interest Rate Contract [Member] | Financing Costs [Member] | ||||
Hedging relationships | ||||
Gains (Losses) Reclassified from AOCL into Income | $ (1) |
Financial Instruments, Deriva_9
Financial Instruments, Derivatives and Hedging Activities - Gain (Losses) Recognized in Income (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Hedging relationships | ||
Gains expected to be reclassified into earnings during the next twelve months, net of tax | $ 60 | |
Gains expected to be reclassified into earnings during the next twelve months, income tax effect | $ 22 | |
Fair Value Hedging [Member] | Interest Rate Contract [Member] | Financing Costs [Member] | ||
Hedging relationships | ||
Gains (losses) recognized in income, Hedging instruments | $ (1) | |
Gains (losses) recognized in income, Hedged item | $ 1 |
Financial Instruments, Deriv_10
Financial Instruments, Derivatives and Hedging Activities - FV (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying value | ||
Fair value of assets and liabilities | ||
Long-term debt | $ 1,700 | |
Estimate of Fair Value Measurement [Member] | ||
Fair value of assets and liabilities | ||
Long-term debt | 1,900 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair value of assets and liabilities | ||
Available for sale securities | 12 | $ 11 |
Derivative assets | 116 | 69 |
Derivative liabilities | 37 | 29 |
Long-term debt | 1,925 | 1,751 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair value of assets and liabilities | ||
Available for sale securities | 12 | 11 |
Derivative assets | 28 | 53 |
Derivative liabilities | 7 | 3 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair value of assets and liabilities | ||
Derivative assets | 88 | 16 |
Derivative liabilities | 30 | 26 |
Long-term debt | $ 1,925 | $ 1,751 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 27, 2021 | Dec. 31, 2020 |
Financing Arrangements | ||||||
Long-term debt | $ 1,748 | $ 1,748 | $ 1,748 | |||
Average amount of commercial paper outstanding | 401 | |||||
Commercial paper | 350 | 350 | ||||
Other short-term borrowings | 48 | 48 | 58 | |||
Total short-term borrowings | 398 | 398 | 438 | |||
Total debt | $ 2,146 | 2,146 | $ 2,186 | |||
Payments on debt | 1,194 | $ 1,186 | ||||
Proceeds from Borrowings | $ 804 | $ 1,527 | ||||
2.9% senior notes due June 1, 2030 | ||||||
Financing Arrangements | ||||||
Debt, interest rate (as a percent) | 2.90% | 2.90% | 2.90% | |||
Long-term debt | $ 594 | $ 594 | $ 594 | |||
3.2% senior notes due October 1, 2026 | ||||||
Financing Arrangements | ||||||
Debt, interest rate (as a percent) | 3.20% | 3.20% | 3.20% | |||
Long-term debt | $ 498 | $ 498 | $ 497 | |||
3.9% senior notes due June 1, 2050 | ||||||
Financing Arrangements | ||||||
Debt, interest rate (as a percent) | 3.90% | 3.90% | 3.90% | |||
Long-term debt | $ 390 | $ 390 | $ 390 | |||
6.625% senior notes due April 15, 2037 | ||||||
Financing Arrangements | ||||||
Debt, interest rate (as a percent) | 6.625% | 6.625% | 6.625% | |||
Long-term debt | $ 253 | $ 253 | $ 253 | |||
Revolving credit agreement | ||||||
Financing Arrangements | ||||||
Debt instrument term | 5 years | |||||
Maximum aggregate principal amount | $ 1,000 | |||||
Maximum leverage ratio | 3.5 | |||||
Minimum ratio of consolidated EBIDTA to consolidated net interest expense | 3.5 | |||||
Revolving credit agreement | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Financing Arrangements | ||||||
Basis spread | 1.00% | |||||
Other long-term borrowings | ||||||
Financing Arrangements | ||||||
Long-term debt | $ 13 | 13 | 14 | |||
Term loan credit agreement due April 12, 2021 | ||||||
Financing Arrangements | ||||||
Long-term debt, current | $ 380 | |||||
Payments on debt | $ 380 | |||||
Applicable interest rate (as a percent) | 0.80% | |||||
Amended term loan credit agreement due March 15, 2022 | ||||||
Financing Arrangements | ||||||
Applicable interest rate (as a percent) | 0.75% | 0.75% | ||||
Commercial paper | ||||||
Financing Arrangements | ||||||
Maximum aggregate principal amount | $ 1,000 | |||||
Weighted average interest rate (as a percent) | 0.28% | |||||
Weighted average maturity | 76 days |
Leases - Lease costs (Details)
Leases - Lease costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||||
Finance lease liability | $ 0 | $ 0 | ||
Lease Cost | ||||
Operating lease cost | 14 | $ 14 | 43 | $ 40 |
Variable operating lease cost | 6 | 8 | 21 | 23 |
Short term lease cost | 1 | 1 | 3 | 3 |
Lease cost | $ 21 | $ 23 | $ 67 | $ 66 |
Leases - Operating lease reconc
Leases - Operating lease reconciliation (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Reconciliation of future undiscounted cash flows to the operating lease liabilities and the related ROU assets | ||
2021 (Excluding the nine months ended September 30, 2021) | $ 14 | |
2022 | 51 | |
2023 | 41 | |
2024 | 30 | |
2025 | 21 | |
Thereafter | 67 | |
Total future lease payments | 224 | |
Less imputed interest | 25 | |
Present value of future lease payments | $ 199 | |
Operating Lease, Liability, Statement of Financial Position | Accounts Payable and Accrued Liabilities, Current, Non-current operating lease liabilities | |
Less current lease liabilities | $ 47 | |
Operating Lease, Liability, Current, Statement of Financial Position | Accounts Payable and Accrued Liabilities, Current | |
Non-current operating lease liabilities | $ 152 | $ 136 |
Operating lease assets | $ 191 | $ 173 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Other information | |||||
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | $ 14 | $ 14 | $ 43 | $ 40 | |
Right-of-use assets obtained in exchange for lease liabilities: Operating leases | $ 18 | $ 24 | $ 57 | $ 45 | |
Weighted average remaining lease term (years): Operating leases | 6 years 8 months 12 days | 6 years 8 months 12 days | 5 years 6 months | ||
Weighted average discount rate: Operating leases | 4.20% | 4.20% | 4.90% |
Taxes - Effective tax rate (Det
Taxes - Effective tax rate (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Taxes | |||||
Effective tax rate (as a percent) | 22.20% | 30.10% | 66.50% | 34.40% | |
Impairment on disposition of assets | $ (20) | $ (20) | $ 340 | ||
Income tax expense (benefit) with respect to impairment | $ 0 | 0 | |||
Tax benefit due to reversal of accrual for withholding tax on unremitted earnings of foreign subsidiary | 30 | ||||
Gain (loss) in pre-tax income in relation to taxable translation gains (losses) | 0 | ||||
Discrete tax (benefit) expense, due to foreign currency translation gain (loss) | $ 4 | $ 16 |
Taxes - Contingency (Details)
Taxes - Contingency (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
Contingencies | ||||
Deferred income taxes | $ 23 | $ 17 | ||
Foreign Tax Authority [Member] | BRAZIL | ||||
Contingencies | ||||
Deferred income taxes | 17 | |||
Foreign Tax Authority [Member] | BRAZIL | Other Assets and Prepaid Expenses | ||||
Contingencies | ||||
Future tax credits | $ 51 | |||
Tax years 2005 - 2018 | Indirect tax credits | Foreign Tax Authority [Member] | BRAZIL | Maximum [Member] | ||||
Contingencies | ||||
Amount of indirect tax credits expected to receive | $ 66 | |||
Tax years 2005 - 2014 | Foreign Tax Authority [Member] | BRAZIL | Other operating income, net | ||||
Contingencies | ||||
Additional credits | $ 35 | |||
Tax years 2005 - 2014 | Indirect tax credits | Foreign Tax Authority [Member] | BRAZIL | Minimum [Member] | ||||
Contingencies | ||||
Amount of indirect tax credits expected to receive | $ 22 | |||
Tax years 2015 - 2018 | Foreign Tax Authority [Member] | BRAZIL | Other operating income, net | ||||
Contingencies | ||||
Additional credits | $ 15 |
Net Periodic Pension and Post_3
Net Periodic Pension and Postretirement Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Pension Plan, Defined Benefit [Member] | ||||
Anticipated cash contributions | ||||
Anticipated cash contributions in current year | $ 4 | $ 4 | ||
Pension Plan, Defined Benefit [Member] | UNITED STATES | ||||
Components of Net Periodic Benefit Costs | ||||
Service cost | 1 | $ 2 | 3 | $ 4 |
Interest cost | 2 | 2 | 6 | 8 |
Expected return on plan assets | (4) | (5) | (13) | (16) |
Amortization of actuarial loss | (1) | (1) | ||
Net periodic benefit cost | (2) | (1) | (5) | (4) |
Anticipated cash contributions | ||||
Anticipated cash contributions in current year | 1 | 1 | ||
Employer contributions | ||||
Employer contributions | 1 | |||
Pension Plan, Defined Benefit [Member] | Foreign Pension Plan, Defined Benefit [Member] | ||||
Components of Net Periodic Benefit Costs | ||||
Service cost | 1 | 1 | 3 | 3 |
Interest cost | 2 | 2 | 7 | 8 |
Expected return on plan assets | (2) | (2) | (6) | (6) |
Amortization of actuarial loss | 1 | 1 | 2 | 2 |
Net periodic benefit cost | 2 | $ 2 | 6 | 7 |
Anticipated cash contributions | ||||
Anticipated cash contributions in current year | 3 | 3 | ||
Employer contributions | ||||
Employer contributions | 2 | |||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||
Components of Net Periodic Benefit Costs | ||||
Interest cost | 1 | 2 | 2 | |
Amortization of prior service credit | (1) | (1) | ||
Net periodic benefit cost | $ 1 | $ 1 | $ 1 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Inventories | ||
Finished and in process | $ 627 | $ 584 |
Raw materials | 361 | 236 |
Manufacturing supplies and other | 105 | 97 |
Total inventories | $ 1,093 | $ 917 |
Equity - Treasury stock (Detail
Equity - Treasury stock (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 22, 2018 | |
Treasury stock: | |||||||
Purchase/acquisition of treasury stock (in shares) | 500 | 0 | 765 | 0 | |||
Treasury Stock [Member] | |||||||
Treasury stock: | |||||||
Repurchases of common stock (in dollars) | $ 44 | $ 10 | $ 14 | $ 68 | |||
2018 Stock Repurchase Program | |||||||
Treasury stock: | |||||||
Shares authorized to be repurchased (in shares) | 8,000 |
Equity - Share-based payments (
Equity - Share-based payments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based compensation expense | ||||
Pre-tax compensation expense | $ 4 | $ 6 | $ 15 | $ 18 |
Income tax benefit | (1) | (1) | (2) | |
Total share-based compensation expense, net of income taxes | 4 | 5 | 14 | 16 |
Employee Stock Option [Member] | ||||
Share-based compensation expense | ||||
Pre-tax compensation expense | 1 | 1 | 3 | 3 |
Total share-based compensation expense, net of income taxes | 1 | 1 | 3 | 3 |
Restricted Stock Units (RSUs) [Member] | ||||
Share-based compensation expense | ||||
Pre-tax compensation expense | 2 | 3 | 8 | 9 |
Income tax benefit | (1) | (1) | ||
Total share-based compensation expense, net of income taxes | 2 | 3 | 7 | 8 |
Performance shares and other share-based awards | ||||
Share-based compensation expense | ||||
Pre-tax compensation expense | 1 | 2 | 4 | 6 |
Income tax benefit | (1) | (1) | ||
Total share-based compensation expense, net of income taxes | $ 1 | $ 1 | $ 4 | $ 5 |
Equity - Stock options (Details
Equity - Stock options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Stock options, Number of Options | |||
Outstanding at the beginning of the period (in shares) | 2,238 | ||
Granted (in shares) | 358 | 336 | |
Exercised (in shares) | (200) | ||
Cancelled (in shares) | (102) | ||
Outstanding at the end of the period (in shares) | 2,294 | 2,238 | |
Exercisable at the end of the period (in shares) | 1,725 | ||
Stock options, Weighted Average Exercise Price per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 86.55 | ||
Granted (in dollars per share) | 87.12 | ||
Exercised (in dollars per share) | 58.10 | ||
Cancelled (in dollars per share) | 90.72 | ||
Outstanding at the end of the period (in dollars per share) | 89.15 | $ 86.55 | |
Exercisable at the end of the period (in dollars per share) | $ 89.50 | ||
Additional information pertaining to stock options | |||
Average Remaining Contractual Term, Outstanding | 5 years 4 months 9 days | 5 years 1 month 24 days | |
Average Remaining Contractual Term, Exercisable | 4 years 2 months 8 days | ||
Aggregate Intrinsic Value, Outstanding (in dollars) | $ 18 | $ 14 | |
Aggregate Intrinsic Value, Exercisable (in dollars) | 17 | ||
Cash received from exercise of stock options | $ 12 | ||
Weighted average grant date fair value of stock options granted (per share) | $ 12.31 | $ 11.48 | |
Total intrinsic value of stock options exercised | $ 6 | $ 4 | |
Employee Stock Option [Member] | |||
Share-based compensation | |||
Term of award | 10 years | ||
Period of vesting | 3 years | ||
Required service period | 1 year | ||
Assumptions used to measure the fair value of awards | |||
Expected life | 5 years 6 months | 5 years 6 months | |
Risk-free interest rate (as a percent) | 0.60% | 1.40% | |
Expected volatility (as a percent) | 23.20% | 19.80% | |
Expected dividend yield (as a percent) | 2.90% | 2.90% | |
Additional information pertaining to stock options | |||
Unrecognized compensation cost | $ 3 | ||
Weighted-average period for amortization of unrecognized compensation cost | 1 year 8 months 12 days |
Equity - Restricted stock units
Equity - Restricted stock units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | |||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Other disclosures | ||||||||
Share-based payments subject to redemption | $ 32 | $ 28 | $ 21 | $ 30 | $ 32 | $ 27 | $ 23 | $ 31 |
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based compensation | ||||||||
Vesting terms | 3 years | |||||||
Service period over which compensation expense would be amortized | 1 year | |||||||
Restricted stock unit activity | ||||||||
Non-vested at the beginning of the period (in shares) | 418 | |||||||
Granted (in shares) | 228 | |||||||
Vested (in shares) | (90) | |||||||
Cancelled (in shares) | (69) | |||||||
Non-vested at the end of the period (in shares) | 487 | |||||||
Weighted-average fair value per share | ||||||||
Non-vested at the beginning of the period (in dollars per share) | $ 96.45 | |||||||
Granted (in dollars per share) | 87.42 | |||||||
Vested (in dollars per share) | 124.16 | |||||||
Cancelled (in dollars per share) | 89.87 | |||||||
Non-vested at the end of the period (in dollars per share) | $ 88.07 | |||||||
Other disclosures | ||||||||
Unrecognized compensation cost | $ 21 | |||||||
Weighted-average period for amortization of unrecognized compensation cost | 1 year 10 months 24 days |
Equity - Performance shares (De
Equity - Performance shares (Details) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)item$ / sharesshares | Dec. 31, 2020item | Dec. 31, 2019item | Dec. 31, 2018 | |
Performance Shares | ||||
Share-based compensation | ||||
Vesting terms | 3 years | |||
Number of tranches | item | 2 | 2 | ||
Granted (in shares) | shares | 108 | |||
Weighted-average fair value per share, Granted (in dollars per share) | $ / shares | $ 100.29 | |||
Unrecognized compensation cost | $ | $ 7 | |||
Remaining requisite service period (in years) | 2 years 1 month 6 days | |||
Cancelled (in shares) | shares | 26 | |||
Performance shares, vesting based on TSR | ||||
Share-based compensation | ||||
Vesting terms | 3 years | |||
Percentage of share-based compensation award | 50.00% | 50.00% | ||
Performance shares calculation period (in years) | 3 years | |||
Performance shares, vesting based on TSR | Minimum [Member] | ||||
Share-based compensation | ||||
Performance shares available for vesting (as a percent) | 0.00% | |||
Performance shares, vesting based on TSR | Maximum [Member] | ||||
Share-based compensation | ||||
Performance shares available for vesting (as a percent) | 200.00% | |||
Performance shares, vesting based on Adjusted ROIC | ||||
Share-based compensation | ||||
Vesting terms | 3 years | |||
Percentage of share-based compensation award | 50.00% | 50.00% | ||
Performance shares calculation period (in years) | 3 years | 3 years | 3 years | |
Performance shares, vesting based on Adjusted ROIC | Minimum [Member] | ||||
Share-based compensation | ||||
Performance shares available for vesting (as a percent) | 0.00% | |||
Performance shares, vesting based on Adjusted ROIC | Maximum [Member] | ||||
Share-based compensation | ||||
Performance shares available for vesting (as a percent) | 200.00% | |||
2018 Awards | Performance Shares | ||||
Share-based compensation | ||||
Award pay out achieved (as a percent) | 0.00% | |||
2021 Awards | Performance Shares | ||||
Share-based compensation | ||||
Number of award segments | item | 2 | |||
2021 Award, Segment One | Performance shares, vesting based on TSR | ||||
Share-based compensation | ||||
Percentage of share-based compensation award | 50.00% | |||
2021 Award, Segment One | Performance shares, vesting based on Adjusted ROIC | ||||
Share-based compensation | ||||
Percentage of share-based compensation award | 50.00% | |||
Performance shares calculation period (in years) | 3 years | |||
2021 Award, Segment Two | Performance shares, vesting based on Adjusted ROIC | ||||
Share-based compensation | ||||
Percentage of share-based compensation award | 100.00% |
Equity - AOCL (Details)
Equity - AOCL (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | $ 2,951 | |
Balance at the end of the period | 3,084 | |
Accumulated Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (1,114) | $ (1,089) |
Other comprehensive gain (loss) before reclassification adjustments | (85) | (105) |
(Gain) reclassified from accumulated OCL | 311 | |
Net other comprehensive income (loss) | 226 | (105) |
Balance at the end of the period | (888) | (1,194) |
Hedging Activities | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | 42 | (9) |
Other comprehensive gain (loss) before reclassification adjustments | 211 | (50) |
(Gain) reclassified from accumulated OCL | (170) | 56 |
Tax (provision) benefit | (11) | (2) |
Net other comprehensive income (loss) | 30 | 4 |
Balance at the end of the period | 72 | (5) |
Accumulated Defined Benefit Plans Adjustment [Member] | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (61) | (60) |
Balance at the end of the period | (61) | (60) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (1,133) | (1,158) |
Other comprehensive gain (loss) before reclassification adjustments | 126 | (155) |
(Gain) reclassified from accumulated OCL | 141 | 56 |
Tax (provision) benefit | (11) | (2) |
Net other comprehensive income (loss) | 256 | (101) |
Balance at the end of the period | $ (877) | $ (1,259) |
Equity - Statements of Equity w
Equity - Statements of Equity with dividends per share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Balance at beginning of period | $ 2,972 | $ 2,972 | ||||||
Balance at end of period | $ 3,103 | 3,103 | ||||||
Dividends declared, common stock (in dollars per share) | $ 0.65 | $ 0.64 | $ 0.64 | $ 0.64 | $ 0.63 | $ 0.63 | ||
Common Stock [Member] | ||||||||
Balance at beginning of period | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | 1 | $ 1 |
Balance at end of period | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
Additional Paid-in Capital [Member] | ||||||||
Balance at beginning of period | 1,154 | 1,155 | 1,150 | 1,143 | 1,142 | 1,137 | 1,150 | 1,137 |
Share-based compensation, net of issuance | 1 | (1) | 5 | 2 | 1 | 5 | 5 | 8 |
Balance at end of period | 1,155 | 1,154 | 1,155 | 1,145 | 1,143 | 1,142 | 1,155 | 1,145 |
Treasury Stock [Member] | ||||||||
Balance at beginning of period | (1,029) | (1,022) | (1,024) | (1,027) | (1,028) | (1,040) | (1,024) | (1,040) |
Repurchases of common stock, net | (44) | (10) | (14) | (68) | ||||
Share-based compensation, net of issuance | 1 | 3 | 16 | 1 | 12 | 20 | 13 | |
Balance at end of period | (1,072) | (1,029) | (1,022) | (1,027) | (1,027) | (1,028) | (1,072) | (1,027) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Balance at beginning of period | (1,106) | (1,164) | (1,133) | (1,307) | (1,322) | (1,158) | (1,133) | (1,158) |
Other comprehensive income (loss) | 229 | 58 | (31) | 48 | 15 | (164) | 256 | (101) |
Balance at end of period | (877) | (1,106) | (1,164) | (1,259) | (1,307) | (1,322) | (877) | (1,259) |
Retained Earnings [Member] | ||||||||
Balance at beginning of period | 3,802 | 3,667 | 3,957 | 3,836 | 3,813 | 3,780 | 3,957 | 3,780 |
Net income | 118 | 178 | (246) | 92 | 66 | 75 | 50 | 233 |
Dividends declared, common stock | (43) | (43) | (44) | (44) | (43) | (42) | (130) | (129) |
Balance at end of period | 3,877 | 3,802 | 3,667 | 3,884 | 3,836 | 3,813 | 3,877 | 3,884 |
Noncontrolling Interest [Member] | ||||||||
Balance at beginning of period | 22 | 26 | 21 | 20 | 21 | 21 | 21 | 21 |
Net income | 3 | 3 | 4 | 3 | 1 | 3 | 10 | 7 |
Dividends declared, common stock | (3) | (7) | (2) | (3) | (10) | (5) | ||
Other comprehensive income (loss) | (3) | 1 | 1 | (3) | (2) | (2) | ||
Balance at end of period | $ 19 | $ 22 | $ 26 | $ 21 | $ 20 | $ 21 | $ 19 | $ 21 |
Equity - Statements of Redeemab
Equity - Statements of Redeemable Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Increase (Decrease) in Temporary Equity | ||||||||
Share-based Payments Subject to Redemption, Beginning Balance | $ 28 | $ 21 | $ 30 | $ 27 | $ 23 | $ 31 | $ 30 | $ 31 |
Share-based compensation, net of issuance | 4 | 7 | (9) | 5 | 4 | (8) | 2 | 1 |
Share-based Payments Subject to Redemption, Ending Balance | 32 | 28 | 21 | 32 | $ 27 | $ 23 | 32 | 32 |
Redeemable Non-Controlling Interests, Beginning Balance | 70 | 70 | 70 | 70 | ||||
Net income (loss) attributable to non-controlling interests | (2) | (1) | (2) | (3) | (2) | |||
Acquisition of redeemable non-controlling interests | 74 | 74 | ||||||
Other comprehensive (loss) income | 1 | 2 | 1 | 2 | ||||
Redeemable Non-Controlling Interests, Ending Balance | $ 68 | $ 70 | $ 70 | $ 74 | $ 68 | $ 74 |
Equity - EPS (Details)
Equity - EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Basic EPS: | ||||
Net Income Available to Ingredion - basic | $ 118 | $ 92 | $ 50 | $ 233 |
Weighted average number of shares outstanding, basic | 67 | 67.2 | 67.2 | 67.2 |
Basic earnings per common share of Ingredion (in dollars per share) | $ 1.76 | $ 1.37 | $ 0.74 | $ 3.47 |
Effect of Dilutive Securities: | ||||
Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards | 0.6 | 0.4 | 0.6 | 0.4 |
Diluted EPS: | ||||
Net Income Available to Ingredion - diluted | $ 118 | $ 92 | $ 50 | $ 233 |
Weighted average number of shares outstanding - diluted, Total | 67.6 | 67.6 | 67.8 | 67.6 |
Diluted earnings per common share of Ingredion (in dollars per share) | $ 1.75 | $ 1.36 | $ 0.74 | $ 3.45 |
Antidilutive securities excluded in calculation of diluted EPS: | ||||
Antidilutive securities excluded from computation of earnings per share amount | 1.6 | 1.7 | 1.5 | 1.4 |
Segment Information - Net sales
Segment Information - Net sales (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment information | |||||
Number of reportable business segments | segment | 4 | ||||
Total net sales | $ 1,763 | $ 1,502 | $ 5,139 | $ 4,394 | |
Operating income Subtotal | 163 | 179 | 572 | 473 | |
Acquisition / integration costs | (5) | (5) | (8) | ||
Equity method acquisition (charges) gains | (3) | 4 | |||
Restructuring/impairment charges | (8) | (16) | (22) | (41) | |
Impairment on disposition of assets | $ 20 | 20 | (340) | ||
Other matters | 15 | ||||
Charge for fair value markup of acquired inventory | (3) | (3) | |||
North America storm damage | (2) | (2) | |||
Operating income | 172 | 153 | 224 | 419 | |
Financing costs, net | 20 | 22 | 58 | 59 | |
Other, non-operating (income), net | (1) | (2) | (4) | (3) | |
Income before income taxes | 153 | 133 | 170 | 363 | |
North America Segment [Member] | |||||
Segment information | |||||
Total net sales | 1,083 | 928 | 3,096 | 2,739 | |
South America Segment [Member] | |||||
Segment information | |||||
Total net sales | 260 | 224 | 801 | 643 | |
Asia Pacific Segment [Member] | |||||
Segment information | |||||
Total net sales | 245 | 207 | 728 | 583 | |
EMEA Segment [Member] | |||||
Segment information | |||||
Total net sales | 175 | 143 | 514 | 429 | |
Operating Segments [Member] | North America Segment [Member] | |||||
Segment information | |||||
Operating income Subtotal | 120 | 132 | 403 | 358 | |
Operating Segments [Member] | South America Segment [Member] | |||||
Segment information | |||||
Operating income Subtotal | 35 | 29 | 108 | 68 | |
Operating Segments [Member] | Asia Pacific Segment [Member] | |||||
Segment information | |||||
Operating income Subtotal | 21 | 18 | 70 | 60 | |
Operating Segments [Member] | EMEA Segment [Member] | |||||
Segment information | |||||
Operating income Subtotal | 23 | 25 | 86 | 73 | |
Corporate, Non-Segment [Member] | |||||
Segment information | |||||
Operating income Subtotal | $ (36) | $ (25) | $ (95) | $ (86) |
Segment Information - Assets (D
Segment Information - Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Segment information | ||
Total assets | $ 6,986 | $ 6,858 |
North America Segment [Member] | ||
Segment information | ||
Total assets | 4,204 | 4,231 |
South America Segment [Member] | ||
Segment information | ||
Total assets | 852 | 818 |
Asia Pacific Segment [Member] | ||
Segment information | ||
Total assets | 1,333 | 1,255 |
EMEA Segment [Member] | ||
Segment information | ||
Total assets | $ 597 | $ 554 |