Ingredion Inc (INGR)

CIK: 0001046257. SIC: 2040 Grain Mill Products. Latest 10-K as of: 2026-02-17.

SIC breadcrumb: Manufacturing > Food And Kindred Products > SIC 2040 Grain Mill Products

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1046257. Latest filing source: 0001628280-26-008603.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-17. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001046257.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001046257.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-032703.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

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

Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms the “Company,” “Ingredion,” “we,” “us,” and “our” and similar terms refer to Ingredion Incorporated and its consolidated subsidiaries. This discussion should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and related notes included elsewhere in this report and with the audited Condensed Consolidated Financial Statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained or implied in any forward-looking statements. See “Forward-Looking Statements” at the end of this discussion.

Overview

We are a leading global ingredients solutions provider that transforms grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing and industrial markets. Our innovative ingredient solutions help customers stay on trend with simple ingredients and other in-demand ingredients. We are organized into three reportable segments that consist of Texture & Healthful Solutions (“T&HS”), Food & Industrial Ingredients (“F&II”)–Latin America (“LATAM”), and F&II–U.S./Canada, as well as All Other.

Net income attributable to Ingredion for the first quarter of 2026 decreased to $142 million from $197 million for the first quarter of 2025. Operating income decreased 26 percent to $203 million for the first quarter of 2026 from $276 million for the first quarter of 2025, which included lower gross profit and increased operating expenses. Gross profit decreased 14 percent to $401 million for the first quarter of 2026 from $466 million for the first quarter of 2025, primarily from lower fixed cost absorption from lower volumes. Net sales decreased 1 percent to $1,792 million for the first quarter of 2026 from $1,813 million for the first quarter of 2025.

Results of Operations

We have significant operations globally. Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries’ net sales and expenses. For most of our foreign subsidiaries, the local foreign currency is the functional currency. Accordingly, net sales and expenses denominated in the functional currencies of these subsidiaries are translated into U.S. dollars at the applicable average exchange rates for the period.

First Quarter of 2026

With Comparatives to First Quarter of 2025

Net sales. Net sales decreased 1 percent to $1,792 million for the first quarter of 2026 compared to $1,813 million for the first quarter of 2025. The decrease was primarily driven by lower volume and less favorable mix in the F&II–U.S./Canada business, partially offset by higher net sales in T&HS and favorable foreign exchange impacts.

Cost of sales. Cost of sales increased 3 percent to $1,391 million for the first quarter of 2026 compared to $1,347 million for the first quarter of 2025. The increase was due primarily to increased operating costs in the F&II–U.S./Canada business. Gross profit margin decreased to 22 percent for the first quarter of 2026 from 26 percent for the first quarter of 2025 due to lower fixed cost absorption from lower volumes.

Operating expenses. Operating expenses increased 4 percent to $200 million for the first quarter of 2026 compared to $193 million for the first quarter of 2025. Operating expenses as a percentage of net sales was 11 percent for both the first quarter of 2026 and 2025. The increase in operating expenses was primarily attributable to increased employee costs.

Other operating (income), net. Other operating (income), net was $(13) million for the first quarter of 2026 compared to $(10) million for the first quarter of 2025.

Restructuring/impairment charges. Restructuring/impairment charges were $11 million for the first quarter of 2026 compared to $7 million for the first quarter of 2025, and were primarily related to estimated legal entity restructuring costs in the current quarter.

Financing costs. Financing costs of $9 million for the first quarter of 2026 were unchanged from the first quarter of 2025.

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Provision for income taxes. Our effective income tax rate for the first quarter of 2026 was 25.8 percent compared to 25.5 percent for the first quarter of 2025. The increase in the effective tax rate was primarily driven by the impact estimated costs related to a legal entity restructuring in the quarter. This impact was partially offset by the change in value of the Mexican peso relative to the U.S. dollar.

Net income attributable to Ingredion. Net income attributable to Ingredion for the first quarter of 2026 decreased to $142 million from $197 million for the first quarter of 2025. The decrease was primarily due to the decrease in operating income, partially offset by a lower provision for income taxes.

Segment Results

Texture & Healthful Solutions

Net sales. T&HS net sales increased to $617 million for the first quarter of 2026 from $602 million for the first quarter of 2025. The increase was primarily due to higher volumes and favorable foreign exchange impacts, partially offset by unfavorable price mix.

Segment operating income. T&HS operating income increased 1 percent to $100 million for the first quarter of 2026 compared to $99 million for the first quarter of 2025. The increase was primarily due to foreign exchange impacts.

Food & Industrial Ingredients–LATAM

Net sales. F&II–LATAM net sales increased 1 percent to $579 million for the first quarter of 2026 from $573 million for the first quarter of 2025. The increase was primarily due to favorable foreign exchange impacts, partially offset by lower volumes and product mix.

Segment operating income. F&II–LATAM operating income decreased 9 percent to $115 million for the first quarter of 2026 compared to $127 million for the first quarter of 2025. The decrease was driven primarily by Mexico transactional currency impacts and softer volumes.

Food & Industrial Ingredients–U.S./Canada

Net sales. F&II–U.S./Canada net sales decreased 9 percent to $475 million for the first quarter of 2026 from $520 million for the first quarter of 2025. The decrease was primarily due to lower volumes and unfavorable price mix partly offset by favorable foreign exchange impacts.

Segment operating income. F&II–U.S./Canada operating income decreased 63 percent to $34 million for the first quarter of 2026 from $92 million for the first quarter of 2025. The decrease resulted primarily from production challenges at our Argo facility and softer volumes and mix.

All Other

Net sales. All Other net sales increased 3 percent to $121 million for the first quarter of 2026 from $118 million for the first quarter of 2025. The increase was primarily due to improved price mix.

Segment operating income. All Other operating income was $3 million for the first quarter of 2026 and zero for the first quarter of 2025, reflecting improvements in the plant-based protein business.

Liquidity and Cash

As of March 31, 2026, we had total available liquidity of $3.8 billion. Domestic liquidity of $1.5 billion consisted of $546 million in cash and cash equivalents and $1.0 billion available through our commercial paper program. The commercial paper program is backed by $1.0 billion of borrowing availability under a five-year revolving credit agreement.

As of March 31, 2026, we had international liquidity of $2.3 billion, consisting of $368 million of cash and cash equivalents and $4 million of short-term investments held by our operations outside the U.S., as well as $1.9 billion of unused operating lines of credit in foreign countries where we operate. As the parent company, we guarantee certain obligations of our consolidated subsidiaries, which totaled $39 million as of March 31, 2026. We believe that our consolidated subsidiaries will be able to meet their financial obligations as they become due.

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As of March 31, 2026, we had total debt outstanding of $1.8 billion. Our outstanding debt consists primarily of senior notes under which repayment at maturity will occur in various years commencing in 2026 through 2050. We classify senior notes due in 2026 as long-term as we have the intent and ability to refinance the principal amount on a long-term basis. The weighted average interest rate on our total indebtedness was 4.1 percent for the first quarter of 2026 and 4.0 percent for the first quarter of 2025.

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

Net Cash Flows

Our cash provided by operating activities was $33 million for the first quarter of 2026 compared to cash provided by operating activities of $77 million for the first quarter of 2025. The decrease was primarily attributable to a decrease in net income of $55 million partly off by a $26 million change in working capital primarily driven by decreased inventories.

We used $110 million of cash for capital expenditures and mechanical stores purchases to update, expand and improve our facilities during the first quarter of 2026 compared to $92 million of cash we applied during the first quarter of 2025 for the same purposes. Capital investment commitments for the remainder of 2026 are anticipated to be between $400 million and $440 million.

We used $48 million of cash for financing activities during the first quarter of 2026 compared to cash used for financing activities of $166 million during the first quarter of 2025. The difference primarily reflected proceeds from net borrowings of $35 million during the first quarter of 2026 compared to $48 million of net repayments of borrowings during the first quarter of 2025. In addition, during the first quarter of 2026, we repurchased 120 thousand outstanding shares of common stock in open market transactions at a net cost of $14 million, compared to the first quarter of 2025 when we repurchased 409 thousand outstanding shares of common stock at a net cost of $55 million.

We declare and pay cash dividends to our common stockholders of record on a quarterly basis. Dividends paid, including those to non-controlling interests, was $52 million during the first quarter of 2026 and 2025. This reflects an increase in our quarterly dividend rate to $0.82 per share in 2026 from $0.80 per share in 2025, offset by a decrease in our outstanding common shares.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are descr

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-17. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “the Company,” “Ingredion,” “we,” “us,” and “our” and similar terms refer to Ingredion Incorporated and its consolidated subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those expressed or implied in any forward-looking statements. See “Forward-Looking Statements” above.

Overview

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

While we identify the impacts on our results of divestitures, acquisitions and investments, including investments in joint ventures that we account for as equity method investments, our discussion below also addresses results of operations excluding those impacts, where appropriate, to provide a more comparable and meaningful analysis.

Results of Operations

We have three reportable business segments: Texture & Healthful Solutions (“T&HS”), Food & Industrial Ingredients–LATAM (“F&II–LATAM”) and Food & Industrial Ingredients–U.S./Canada (“F&II–U.S./Canada”). In addition, operating segments that are not individually or collectively a reportable segment are grouped and classified as “All Other.”

Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries’ net sales and expenses. For most of our foreign subsidiaries, the local foreign currency is the functional currency. Accordingly, net sales and expenses denominated in the functional currencies of these subsidiaries are translated into U.S. dollars at the applicable average exchange rates for the period.

In 2025, Ingredion continued to optimize its global operations and lower corn costs to deliver healthy solutions to our customers. As a result, Net income attributable to Ingredion for 2025 was $729 million, which represented an increase of 13 percent from $647 million, a year which included a $90 million gain on the February 2024 sale of our South Korea operations. Diluted earnings per share were $11.18 for 2025, compared to $9.71 for 2024. Our operating income of $1,016 million for 2025 increased by 15 percent from operating income of $883 million for 2024. The results from 2024 included impairment charges for the cessation of operations at our manufacturing facilities in Vanscoy, Canada; Goole, United Kingdom; and Alcantara, Brazil. For 2025, net sales decreased 3 percent to $7.2 billion from 2024, which was primarily due to unfavorable price mix, including the pass through of lower corn costs, and lower volumes.

For the Year Ended December 31, 2025

With Comparatives for the Year Ended December 31, 2024

Net sales. Net sales decreased 3 percent to $7.2 billion for 2025 compared to $7.4 billion for 2024. The decrease in net sales was driven by lower volume from each of the F&II segments and price mix, primarily from lower raw material costs, partially offset by T&HS favorable volumes.

Cost of sales. Cost of sales decreased 4 percent to $5.4 billion for 2025 compared to $5.6 billion for 2024. The decrease in cost of sales was primarily due to lower raw material and input costs. As a result, our gross profit margin increased to 25 percent in 2025 compared to 24 percent in 2024.

Operating expenses. Operating expenses increased 4 percent to $815 million for 2025 compared to $782 million for 2024. The increase in operating expenses was primarily attributable to increased employee costs. Operating expenses as a percentage of net sales was 11 percent in 2025 and 2024.

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Other operating (income), net. Other operating (income), net was $24 million for 2025 compared to $1 million for 2024. The increase was primarily attributable to reduced fees from the sale of our receivables, indirect tax benefits recognized in Brazil, and higher income from our equity method investments.

Restructuring/impairment charges. Restructuring and impairment charges decreased to $21 million for 2025 compared to $127 million for 2024. The 2024 charges were primarily related to impairments due to the cessation of operations at our manufacturing facilities in Vanscoy, Canada; Goole, United Kingdom; and Alcantara, Brazil, in addition to restructuring costs from our January 1, 2024 resegmentation. In 2025, we recorded impairment charges for equity investments and decommissioning costs for previously announced plant closures and restructuring activities that occurred during the year.

Financing costs. Financing costs decreased 5 percent to $37 million for 2025 compared to $39 million for 2024. The decrease was primarily due to lower interest expense on lower average outstanding debt balances during 2025 in comparison to 2024, partially offset by foreign exchange losses in 2025 compared to foreign exchange gains in 2024.

Net (gain) on sale of business. Net (gain) on sale of business was $90 million for 2024 to reflect the sale of our South Korea business. There was no such gain recorded in 2025.

Other non-operating expense. Other non-operating expense increased to $5 million for 2025 compared to $3 million for 2024.

Provision for income taxes. Our effective income tax rates were 24.4 percent for 2025 and 29.8 percent for 2024. The decrease in the effective tax rate was primarily driven by the change in value of the Mexican peso against the U.S. dollar in 2025, an unfavorable ruling by tax authorities that generated a multi-year tax contingency in 2024, and the impairment of an equity method investment during 2024. These impacts were partially offset by the change in our permanent reinvestment status of a certain foreign affiliate in 2025 and the favorable tax treatment in 2024 on the sale of our South Korea business.

Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was flat at $7 million for both 2025 and 2024.

Net income attributable to Ingredion. Net income attributable to Ingredion for 2025 increased to $729 million compared to $647 million for 2024. The increase in net income was primarily due to higher operating income, lower financing costs and lower taxes in 2025.

Texture & Healthful Solutions

Net sales. T&HS net sales increased 1 percent to $2,397 million for 2025 compared to $2,366 million for 2024. The increase was primarily driven by increased volumes for starches and clean label solutions, partially offset by lower price mix.

Operating income. T&HS operating income increased 16 percent to $405 million for 2025 compared to $350 million for 2024. The increase was driven by lower raw material and input costs, as well as improved volumes, partially offset by an unfavorable price mix and higher operating expenses.

Food & Industrial Ingredients–LATAM

Net sales. F&II–LATAM net sales decreased 4 percent to $2,341 million for 2025 compared to $2,450 million for 2024. The decrease was primarily driven by lower volume demand.

Operating income. F&II–LATAM operating income increased 2 percent to $493 million for 2025 compared to $483 million for 2024. The increase was driven by lower raw material costs and Mexico currency hedges, partially offset by lower volume demand.

Food & Industrial Ingredients–U.S./Canada

Net sales. F&II–U.S./Canada net sales decreased 7 percent to $2,013 million for 2025 compared to $2,155 million for 2024. The decrease was primarily driven by lower volumes from the beverage and food industries and lower price mix from pass through of lower corn costs.

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Operating income. F&II–U.S./Canada operating income decreased 16 percent to $315 million for 2025 compared to $373 million for 2024. The decrease was primarily driven by lower volumes and production challenges at one of our large manufacturing facilities.

All Other

Net sales. All Other net sales increased 2 percent to $468 million for 2025 compared to $459 million for 2024. The increase was primarily due to an increase in volumes in our Sugar Reduction businesses and an increase in price mix in our Pakistan business, partially offset by lost volumes from the sale of our South Korea business on February 1, 2024.

Operating loss. All Other operating loss improved to a loss of $2 million for 2025 compared to a loss of $22 million for 2024. The improvement was primarily due to improvements in our Protein Fortification business partly offset by lower operating profits in our Pakistan business.

For the Year Ended December 31, 2024

With Comparatives for the Year Ended December 31, 2023

A discussion of the year-over-year comparison of results for 2024 and 2023 is not included in this report and can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in Ingredion’s annual report on Form 10-K for the fiscal year ended December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2025, we had total available liquidity of $3.9 billion. Domestic liquidity of $1.6 billion consisted of $641 million in cash and cash equivalents and $1.0 billion available through our commercial paper program that had no outstanding borrowings. The commercial paper program is backed by $1.0 billion of borrowing availability under a revolving credit facility that we obtained on August 27, 2025, as described below.

As of December 31, 2025, we had international liquidity of $2.3 billion, consisting of $389 million of cash and cash equivalents and $3 million of short-term investments held by our operations outside the U.S., as well as $1.9 billion of unused operating lines of credit in foreign countries where we operate. As the parent company, we guarantee certain obligations of our consolidated subsidiaries. As of December 31, 2025, our guarantees aggregated $39 million. We believe that those consolidated subsidiaries will be able to meet their financial obligations as they become due.

On August 27, 2025, we entered into a new revolving credit agreement for an unsecured revolving credit facility in an aggregate principal amount of $1.0 billion outstanding at any time, which will mature on August 27, 2030. Loans under the facility accrue interest at a per annum rate equal, at our option, to either a specified Secured Overnight Financing Rate (“SOFR”) 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 SOFR plus 1.00 percent) plus an applicable margin. We are 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 (as defined for purposes of the revolving credit agreement) to consolidated net interest expense of 3.5 to 1.0, with each financial covenant calculated for the most recently completed four-quarter period. As of December 31, 2025, we were in compliance with these financial covenants.

Our commercial paper program allows us to issue senior unsecured notes of short maturities up to a maximum aggregate principal amount of $1.0 billion outstanding at any time. The notes may be sold from time to time on customary terms in the U.S. commercial paper market. We intend to use note proceeds for general corporate purposes. During 2025, there was no activity related to this program. The amount of commercial paper outstanding under this program in 2026 is expected to fluctuate.

As of December 31, 2025, we had total debt outstanding of $1.8 billion. Our outstanding debt consists primarily of senior notes under which repayment at maturity will occur in various years commencing in 2026 through 2050. We classify senior notes due in 2026 as long-term as we have the intent and ability to refinance the principal amount on a long-term basis. The weighted average interest rate on our total indebtedness was 4.0 percent for both 2025 and 2024.

On November 17, 2025, we entered into a lease for a new Global Innovation headquarters facility that will be built in Bridgewater, New Jersey, where we currently lease another facility for research and operations. When the Global Innovation headquarters construction is substantially complete and ready for our use, which we estimate will be in the first

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half of 2028, subject to environmental conditions, structural dependencies and regulatory approvals, we will begin lease payments for a term of 25 years. Lease payments will be primarily based on the cost to construct the facility, which we estimate will be approximately $145 million.

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

Net Cash Flows

Our cash provided by operating activities decreased to $944 million in 2025 from $1,436 million in 2024. The decrease was primarily due to a reduction of $490 million in cash from working capital. We used $73 million of cash in 2025 for working capital, compared to cash provided by working capital of $417 million in 2024, primarily for increases in customer receivables and inventory.

Our cash used for investing activities increased to $444 million in 2025 from $47 million in 2024, which reflected proceeds from the sale of our South Korea business of $255 million in February 2024. In 2025, we used $433 million for capital expenditures and mechanical stores purchases to update, expand and improve our facilities, compared to $295 million in capital expenditures in 2024 for the same purposes. Capital investment commitments for 2026 are anticipated to be approximately $400 million to $440 million.

We used $491 million for financing activities in 2025 compared to cash used for financing activities of $765 million in 2024, primarily because we did not borrow under our commercial paper program in 2025, while we repaid $327 million of commercial paper borrowings during 2024. Cash used for financing activities also includes cash dividends that we pay to our common stockholders of record on a quarterly basis, including those to non-controlling interests, which were $211 million during 2025 and $210 million during 2024. During 2025, we also repurchased 1.8 million outstanding shares of our common stock in open market transactions at a net cost of $224 million.

Key Financial Performance Metrics

We use certain key financial performance metrics to monitor our progress towards achieving our long-term strategic business objectives. These metrics relate to our ability to drive profitability, create value for stockholders and monitor our financial leverage. We assess whether we are achieving our profitability and value creation objectives by measuring our Adjusted Return on Invested Capital (“Adjusted ROIC”). We monitor our financial leverage by regularly reviewing our ratio of net debt to adjusted earnings before interest, taxes, depreciation, amortization and other items (“Net Debt to Adjusted EBITDA”). We believe these metrics provide valuable information to help us run our business and are useful to investors.

The metrics Adjusted ROIC and Net Debt to Adjusted EBITDA include certain financial measures (Adjusted operating income, net of tax, and Adjusted EBITDA) that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). We also have presented below the most comparable financial measures calculated using components determined in accordance with GAAP. Management uses these non-GAAP financial measures internally for strategic decision-making, forecasting future results and evaluating current performance. Management believes that the non-GAAP financial measures provide a more consistent comparison of our operating results and trends for the periods presented. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our business. The non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

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In accordance with our long-term strategy, we set certain objectives relating to these key financial performance metrics that we strive to meet. We cannot provide assurance, however, that we will continue to meet our financial performance metric targets. See Item 1A. Risk Factors and Item 7A. Quantitative and Qualitative Disclosures About Market Risk for a discussion of factors that could affect our ability to meet those targets. The objectives reflect our current aspirations in light of our present plans and existing circumstances. We may change these objectives from time to time to address new opportunities or changing circumstances as appropriate to meet our long-term needs and those of our stockholders.

A reconciliation of non-GAAP historical financial measures to the most comparable GAAP measure is presented below.

Adjusted ROIC

Adjusted ROIC is a financial performance ratio not defined under GAAP, and it should be considered in addition to, and not as a substitute for, GAAP financial measures. We define Adjusted ROIC as Adjusted operating income, net of tax, divided by average end-of-year balances for current year and prior year Total net debt and equity. Similarly named measures may not be defined and calculated by other companies in the same manner. We believe Adjusted ROIC is meaningful to investors as it focuses on profitability and value-creating potential, taking into account the amount of capital invested. The most comparable measure calculated using components determined in accordance with GAAP is ROIC, which we define as Net income, divided by average end-of-year balances for current year and prior year Total net debt and equity, as shown in the following table.

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Year Ended December 31,

Return on Invested Capital (dollars in millions)

2025

2024

Net income (a)

$

736 

$

654 

Adjusted for:

Provision for income taxes

238 

277 

Other non-operating expense

5 

3 

Financing costs

37 

39 

Restructuring and resegmentation costs (i)

13 

18 

Net (gain) on sale of business (ii)

— 

(90)

Impairment charges (iii)

8 

109 

Other matters (iv)

(9)

6 

Income taxes (at adjusted effective rates of 25.8% and 26.4%, respectively) (v)

(265)

(268)

Adjusted operating income, net of tax (b)

763 

748 

Short-term debt

48 

44 

Long-term debt

1,742 

1,787 

Less: Cash and cash equivalents

(1,030)

(997)

Short-term investments

(3)

(11)

Total net debt

757 

823 

Share-based payments subject to redemption

64 

60 

Total redeemable non-controlling interests

7 

7 

Total equity

4,295 

3,823 

Total net debt and equity

$

5,123 

$

4,713 

Average current and prior year Total net debt and equity (c)

$

4,918 

$

5,071 

Return on Invested Capital (a ÷ c)

15.0 

%

12.9 

%

Adjusted Return on Invested Capital (b ÷ c)

15.5 

%

14.8 

%

_____________________

(i)In 2025, we recorded $13 million of pre-tax restructuring charges primarily related to accelerated depreciation and decommissioning costs for previously announced plant closures and restructuring activities that occurred during the year. In 2024, we recorded $18 million of pre-tax restructuring and resegmentation charges primarily related to restructuring activities that occurred during the year and the resegmentation of the business that was effective January 1, 2024.

(ii)In 2024, we recorded a pre-tax gain of $90 million on the sale of our South Korea business. There was no such gain in 2025.

(iii)In 2025, we recorded $10 million of pre-tax impairment charges that primarily related impairment charges on our equity investments and equipment impairments due to restructuring activities. This was reduced by $2 million as it was included in Other non-operating expense. In 2024, we recorded $109 million of pre-tax impairment charges that primarily related to our plans to cease operations at our manufacturing facilities in Vanscoy, Canada; Alcantara, Brazil; and Goole, United Kingdom, and impairment charges on our equity method investments.

(iv)In 2025, we recorded $9 million of pre-tax benefits related to insurance recoveries and a favorable judgment related to certain indirect taxes. In 2024, this primarily related to tornado damage incurred at a U.S. warehouse.

(v)Adjusted effective tax rates were calculated as follows:

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Year Ended

Year Ended

December 31, 2025

December 31, 2024

(dollars in millions)

Income before Income Taxes (a)

Provision for Income Taxes (b)

Effective Income

Tax Rate (b/a)

Income before Income Taxes (a)

Provision for Income Taxes (b)

Effective Income

Tax Rate (b/a)

As Reported

$

974 

$

238 

24.4%

$

931 

$

277 

29.8%

Adjustments:

Restructuring and resegmentation costs

13 

2 

18 

5 

Net (gain) on sale of business

— 

— 

(90)

(4)

Impairment charges

10 

3 

109 

— 

Other matters

(9)

(2)

6 

1 

Tax item–Mexico

— 

14 

— 

(18)

Other tax matters

— 

— 

— 

(4)

Adjusted Non-GAAP

$

988 

$

255 

25.8%

$

974 

$

257 

26.4%

Our long-term objective is to maintain an Adjusted ROIC in excess of 10.0 percent. For 2025, we achieved an Adjusted ROIC of 15.5 percent as compared to 14.8 percent for 2024.

Net Debt to Adjusted EBITDA

Net Debt to Adjusted EBITDA is a financial performance ratio that is not defined under GAAP, and should be considered in addition to, and not as a substitute for, GAAP financial measures. We define this measure as Short-term and Long-term debt less Cash and cash equivalents and Short-term investments, divided by Adjusted EBITDA. Similarly named measures may not be defined and calculated by other companies in the same manner. We believe Total net debt to Adjusted EBITDA is meaningful to investors as it focuses on our leverage on a comparable Adjusted EBITDA basis and helps investors better understand the time required to pay back our outstanding debt. The most comparable ratio calculated using components determined in accordance with GAAP is Total net debt to Income before income taxes, calculated as Short-term and Long-term debt less Cash and cash equivalents and Short-term investments, divided by Income before income taxes, as shown in the following table.

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Year Ended December 31,

Net Debt to Adjusted EBITDA ratio

2025

2024

Short-term debt

$

48 

$

44 

Long-term debt

1,742 

1,787 

Less: Cash and cash equivalents

(1,030)

(997)

Short-term investments

(3)

(11)

Total net debt (a)

757 

823 

Income before income taxes (b)

974 

931 

Adjusted for:

Depreciation and amortization

222 

214 

Financing costs

37 

39 

Other non-operating expense

5 

3 

Restructuring and resegmentation costs (i)

7 

18 

Net (gain) on sale of business (ii)

— 

(90)

Impairment charges (iii)

8 

109 

Other matters (iv)

(9)

6 

Adjusted EBITDA (c)

$

1,244 

$

1,230 

Net Debt to Income before income tax ratio (a ÷ b)

0.8 

0.9 

Net Debt to Adjusted EBITDA ratio (a ÷ c)

0.6 

0.7 

_____________________

(i)In 2025, we recorded $13 million of pre-tax restructuring charges primarily related to accelerated depreciation and decommissioning costs for previously announced plant closures and restructuring activities that occurred during the year. This was reduced by $6 million as it included depreciation expense that was already included in the depreciation and amortization line. In 2024, we recorded $18 million of pre-tax restructuring and resegmentation charges primarily related to restructuring activities that occurred during the year and the resegmentation of the business that was effective January 1, 2024.

(ii)In 2024, we recorded a pre-tax gain of $90 million on the sale of our South Korea business. There was no such gain in 2025.

(iii)In 2025, we recorded $10 million of pre-tax impairment charges that primarily related to impairment charges on our equity investments and equipment impairments due to restructuring activities. This was reduced by $2 million as it was included in Other non-operating expense. In 2024, we recorded $109 million of pre-tax impairment charges that primarily related to our plans to cease operations at our manufacturing facilities in Vanscoy, Canada, Alcantara, Brazil, and Goole, United Kingdom, and impairment charges on our equity method investments.

(iv)In 2025, we recorded $9 million of pre-tax benefits related to insurance recoveries and a favorable judgment related to certain indirect taxes. In 2024, this primarily related to tornado damage incurred at a U.S. warehouse.

Our long-term objective is to target a ratio of Net Debt to Adjusted EBITDA of 2.5 or less. As of December 31, 2025 and 2024, the ratio was 0.6 and 0.7.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions and conditions.

We have identified below the most critical accounting policies upon which the financial statements are based and that involve our most complex and subjective decisions and assessments. Our senior management has discussed the development, selection and disclosure of these policies with members of the Audit Committee of our Board of Directors. These accounting policies are described in the Notes to the Consolidated Financial Statements. The discussion that follows

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should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this annual report on Form 10-K.

Property, Plant and Equipment and Definite-Lived Intangible Assets

We have substantial investments in property, plant and equipment (“PP&E”) and definite-lived intangible assets. For PP&E, we recognize the cost of depreciable assets in operations over the estimated useful life of the assets and evaluate the recoverability of these assets whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. For definite-lived intangible assets, we recognize the cost of these amortizable assets in operations over their estimated useful life and evaluate the recoverability of the assets whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The carrying values of PP&E and definite-lived intangible assets at December 31, 2025 were $2.5 billion and $204 million, respectively.

In assessing the recoverability of the carrying value of PP&E and definite-lived intangible assets, we may have to make projections regarding future cash flows. In developing these projections, we make a variety of important assumptions and estimates that have a significant impact on our assessments of whether the carrying values of PP&E and definite-lived intangible assets should be adjusted to reflect impairment. Among these are assumptions and estimates about the future growth and profitability of the related asset group, anticipated future economic, regulatory and political conditions in the asset group’s market, and estimates of terminal or disposal values.

To optimize our operations, we continually review whether to further consolidate our manufacturing facilities or redeploy assets for other uses when we believe we can achieve a higher return on our investment. This review may result in the closure or sale of certain manufacturing facilities, which could have a significant negative impact on our results of operations, financial position and cash flows in the period in which we decide to close or sell the facility.

The future occurrence of a potential indicator of impairment, such as a significant adverse change in the business climate that would require a change in our assumptions or strategic decisions made in response to economic or competitive conditions, could require us to perform tests of recoverability in the future.

Indefinite-Lived Intangible Assets and Goodwill

We have certain indefinite-lived intangible assets in the form of trade names and trademarks. Our methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill is measured as the excess of the cost of an acquired business over the fair value assigned to identifiable assets acquired and liabilities assumed. The carrying value of indefinite-lived intangible assets and goodwill at December 31, 2025 was $143 million and $922 million, respectively, compared to $143 million and $906 million, respectively, at December 31, 2024.

We assess indefinite-lived intangible assets and goodwill for impairment as of July 1 each year (or more frequently if impairment indicators arise such as the resegmentation that occurred on January 1, 2024). We first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is impaired, which include net sales derived from these intangibles and certain market and industry conditions. After assessing the qualitative factors, if we determine that it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is greater than its carrying amount, then we are not required to compute the fair value of the indefinite-lived intangible asset. If the qualitative assessment leads us to conclude otherwise, then we are required to determine the fair value of the indefinite-lived intangible assets and perform a quantitative impairment test in accordance with ASC subtopic 350-30, Intangibles – Goodwill and Other. Based on our assessment’s results, we concluded that as of July 1, 2025 there were no impairments in our indefinite-lived intangible assets.

In testing goodwill for impairment, we first assess qualitative factors in determining whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. After assessing the qualitative factors, if we determine that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, then we do not perform an impairment test. If we conclude otherwise, then we perform the impairment test. Under this impairment test, the fair value of the reporting unit is compared to its carrying value. If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not considered impaired, and no further testing is required. If the carrying value of the net assets exceeds the fair value of the reporting unit, then an impairment exists for the difference between the fair value and carrying value of the reporting unit. This difference may not exceed the goodwill recorded at the reporting unit.

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When we test goodwill for impairment, we make certain estimates and judgments, which include identifying reporting units and determining the reporting units’ fair values based on both discounted cash flow analyses and an analysis of market multiples. To determine the fair value of reporting units, we use significant assumptions and estimates for discount and long-term net sales growth rates, in addition to operating and capital expenditure requirements. We consider changes in discount rates for the reporting units based on current market interest rates and specific risk factors within each geographic region. We also evaluate qualitative factors, such as legal, regulatory or competitive forces, in estimating the impact to the fair value of the reporting units, noting no significant changes that would result in any reporting unit failing the impairment test. Changes in assumptions concerning projected results or other underlying assumptions could have a significant impact on the fair value of the reporting units in the future. Based on the results of the annual assessment, we concluded that as of July 1, 2025 there were no impairments in our reporting units.

New Accounting Standards

For information related to our new accounting standards, see Note 1 of the Notes to the Consolidated Financial Statements.