INTERNATIONAL FLAVORS & FRAGRANCES INC

Previous wording

Our Health & Biosciences segment consists of the development and production of an advanced biotechnology-derived portfolio of enzymes, food cultures, probiotics and specialty ingredients for food and non-food applications. Among many other applications, this biotechnology-driven portfolio includes cultures for use in fermented foods such as yogurt, cheese and fermented beverages, probiotic strains, many with documented clinical health claims for use as dietary supplements and through industrial fermentation the production of enzymes and microorganisms that provide product and process performance benefits to household detergents, animal feed, ethanol production and brewing. Health & Biosciences is comprised of Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition and Grain Processing.

Current wording

Our Health & Biosciences segment consists of the development and production of an advanced biotechnology-derived portfolio of enzymes, food cultures, probiotics and specialty ingredients for food and non-food applications. Among many other applications, our portfolio includes cultures for use in fermented foods such as yogurt, cheese and fermented beverages, probiotic strains, household detergents, animal feed, ethanol production and brewing. Health & Biosciences is comprised of Health, Food Biosciences, Home & Personal Care, Animal Nutrition and Grain Processing.

Previous wording

Our Scent segment creates fragrance compounds and fragrance ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. Consumer insights, science and creativity are at the heart of our Scent business, and, along with our unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, and customer intimacy, we believe make us a market leader in scent products. The Scent segment is comprised of Fragrance Compounds and Fragrance Ingredients. We completed the divestiture of our Cosmetic Ingredients business, previously within the Scent segment, on April 2, 2024.

Current wording

Our Scent segment creates fragrance compounds and fragrance ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. Consumer insights, science and creativity are at the heart of our Scent business, along with our unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, and customer intimacy. The Scent segment is comprised of Fragrance Compounds and Fragrance Ingredients.

Previous wording

Our Pharma Solutions segment produces, among other things, a vast portfolio of cellulosics and seaweed-based pharmaceutical excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical finished dosage formulations. Our excipients are used in prescription and over-the-counter pharmaceuticals and dietary supplements. Our Pharma Solutions products also serve a variety of other specialty and industrial end-uses including coatings, inks, electronics, agriculture and consumer products. During March 2024, we entered into an agreement to sell the Pharma Solutions business disposal group, that is primarily made up of most businesses within the Company’s existing Pharma Solutions reportable segment as well as certain adjacent businesses. During October 2024, the Company entered into an agreement to sell its nitrocellulose business, which is within the Company’s existing Pharma Solutions reportable operating segment. Both transactions are expected to close in the second quarter of 2025.

Current wording

Our former Pharma Solutions segment produced, among other things, a vast portfolio of cellulosics and seaweed-based pharmaceutical excipients, used in prescription and over-the-counter pharmaceuticals and dietary supplements. We completed the divestiture of our Pharma Solutions disposal group, which included certain adjacent businesses, on May 1, 2025 and we divested our nitrocellulose business, which was within our Pharma Solutions segment, on May 9, 2025.

Previous wording

As previously announced in 2024, effective January 1, 2025, our Nourish segment has been restructured into two newly designated operating segments: Taste and Food Ingredients. With additional minor adjustments, our Flavors business, previously part of Nourish, has been renamed Taste, and our Ingredients business, previously part of Nourish, has been renamed Food Ingredients. Consequently, starting in the first quarter of 2025, our business segments will be as follows: Taste, Food Ingredients, Health & Biosciences, Scent, and Pharma Solutions, until the completion of the sale of the Pharma Solutions business disposal group.

Current wording

Effective January 1, 2025, our former Nourish segment was restructured into two newly designated operating segments: Taste and Food Ingredients. With additional minor adjustments, our Flavors business, was renamed Taste, and our Ingredients business, was renamed Food Ingredients. Consequently, starting in the first quarter of 2025, our business segments were as follows: Taste, Food Ingredients, Health & Biosciences, Scent, and Pharma Solutions. We divested the Pharma Solutions segment in May 2025.

Previous wording

Our financial results include the impact of foreign currency exchange rates. We provide currency neutral calculations in this report to remove the impact of foreign currency exchange rates fluctuations. We calculate currency neutral numbers by translating current year invoiced sale amounts at the exchange rates used for the corresponding prior year period. We use currency neutral results in our analysis of subsidiary and/or segment performance. We also use currency neutral numbers when analyzing our performance against our competitors.

Current wording

Our financial results include the impact of foreign currency exchange rates and business divestitures. We provide currency neutral calculations in this report to remove the impact of foreign currency exchange rates fluctuations and business divestitures. We calculate comparable currency neutral numbers by translating current year transactions amounts at the exchange rates used for the corresponding prior year period and adjust prior year results to exclude businesses divested for the comparable period. We use comparable currency neutral results in our analysis of subsidiary and/or segment performance. We also use comparable currency neutral numbers when analyzing our performance against our competitors. See “Non-GAAP Financial Measures” for further discussion on the comparable currency neutral measure.

Previous wording

During 2024, we determined that the carrying value of the Pharma Solutions disposal group exceeded its fair value and recorded an impairment charge of $64 million in the Consolidated Statements of Income (Loss) and Comprehensive Loss for the year ended December 31, 2024. See Note 4 to the Consolidated Financial Statements for additional information.

Current wording

During 2024, we determined that the carrying value of the Pharma Solutions disposal group exceeded its fair value and recorded an impairment charge of $64 million in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the year ended December 31, 2024.

Previous wording

During 2023, we determined that the carrying value of the Nourish reporting unit exceeded its fair value and recorded an impairment charge of $2.623 billion in the Consolidated Statements of Income (Loss) and Comprehensive Loss for the year ended December 31, 2023.

Current wording

During 2023, we determined that the carrying value of the Nourish reporting unit exceeded its fair value and recorded an impairment charge of $2.623 billion in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the year ended December 31, 2023.

Previous wording

Sales in 2024 of $11.484 billion remained flat compared to sales of $11.479 billion in 2023. On a currency neutral basis, sales in 2024 increased 3% compared to 2023. Exchange rate variations had an unfavorable impact on net sales in 2024 of 3%. The effect of exchange rates can vary by business and region, depending upon the mix of sales priced in U.S. dollars as compared to other currencies. On a comparable basis, currency neutral sales increased 6% driven by volume increases across various business lines. Comparable portfolio results exclude the impact of divestitures of the portion of the Savory Solutions business, Sonarome business, Flavors & Essences UK business (“F&E UK”), Flavors Specialty Ingredients (“FSI”) business, and Cosmetic Ingredients business (“change in business portfolio mix due to divestitures”), which was approximately $360 million.

Current wording

Sales in 2025 of $10.890 billion decreased 5% compared to sales of $11.484 billion in 2024. On a comparable currency neutral basis, sales in 2025 increased 2% compared to 2024. Exchange rates impact on sales was less than 1%. The effect of exchange rates can vary by business and region, depending upon the mix of sales priced in U.S. dollars as compared to other currencies. Comparable portfolio results exclude the impact of divestitures of the Flavors & Essences UK business (“F&E UK”), Rene Laurent business in France, Cosmetic Ingredients business, and the Pharma Solutions disposal group and Nitrocellulose business (“change in business portfolio mix due to divestitures”), which was approximately $757 million.

Previous wording

A key factor for commercial success is our inclusion on strategic customers’ core supplier lists, which provides opportunities to expand and win new business. We are on the core supplier lists of a large majority of our global and strategic customers. In 2024, no customer accounted for 10% or more of sales.

Current wording

A key factor for commercial success is our inclusion on strategic customers’ core supplier lists, which provides opportunities to expand and win new business. We are on the core supplier lists of a large majority of our global and strategic customers. Additionally, a significant portion of our sales comes from a relatively small number of large multinational customers. In 2025, our 25 largest customers, a majority of which were multinational consumer products companies, collectively accounted for approximately 32% of our sales. Beyond large multinational customers, our customer base continues to be diverse. Based on fiscal-year 2025 sales, we had approximately 20,000 customers. Approximately 69% of sales were from small and mid-sized companies. In 2025, no customer accounted for 10% or more of sales.

Previous wording

Gross profit in 2024 increased $443 million, or 12% on a reported basis, to $4.124 billion (35.9% of sales) compared to $3.681 billion (32.1% of sales) in the 2023 period. The increase in gross profit was primarily driven by volume increases and productivity gains, offset in part by the effect of exchange rate variations and the net impact of the change in business portfolio mix due to divestitures of $133 million.

Current wording

Gross profit in 2025 decreased $186 million, or 5% on a reported basis, to $3.938 billion (36.2% of sales) from $4.124 billion (35.9% of sales) in the 2024 period. The decrease in gross profit was primarily driven by the impact of divestitures of $264 million and the effect of exchange rate variations, offset in part by volume increases and productivity gains.

Previous wording

(1)Currency neutral sales are calculated by translating current year invoiced sale amounts at the exchange rates for the corresponding prior year period.

Current wording

(2)Currency neutral sales are calculated by translating current year invoiced sale amounts at the exchange rates for the corresponding prior year period.

Previous wording

The Company uses Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. Segment Adjusted Operating EBITDA is defined as Income (Loss) Before Taxes before depreciation and amortization expense, interest expense, restructuring and other charges and certain items that are not related to recurring operations. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our Chief Operating Decision Maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products and services we provide.

Current wording

We use Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. Segment Adjusted Operating EBITDA is defined as (Loss) Income Before Taxes before depreciation and amortization expense, interest expense, restructuring and other charges and certain items that are not related to recurring operations. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our Chief Operating Decision Maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products we sell.

Previous wording

Health & Biosciences sales in 2024 increased $131 million, or 6% on a reported basis, to $2.212 billion compared to $2.081 billion in 2023. On a currency neutral basis, Health & Biosciences sales increased 8% in 2024 compared to the 2023 period as exchange rate variations had an unfavorable impact. Performance in the Health & Biosciences operating segment was driven by volume increases across various business units and price increases across Cultures & Food Enzymes and Grain Processing business units.

Current wording

Health & Biosciences sales in 2024 increased $132 million, or 6% on a reported basis, to $2.203 billion compared to $2.071 billion in 2023. On a comparable currency neutral basis, Health & Biosciences sales increased 8% in 2024 compared to the 2023 period driven by volume increases across various business units and price increases across Food Biosciences and Grain Processing business units. Exchange rate variations had an unfavorable impact of 2%.

Previous wording

Scent sales in 2024 increased $47 million, or 2% on a reported basis, to $2.440 billion compared to $2.393 billion in 2023. On a currency neutral basis, Scent sales increased 7% in 2024 compared to the 2023 period as exchange rate variations had an unfavorable impact. On a comparable basis, currency neutral sales increased 12% driven by price increases in the Fragrance Compounds business unit and volume increases across all business units. Comparable portfolio results exclude the impact of the divestitures of the FSI business and Cosmetic Ingredients business, with an impact of approximately $116 million.

Current wording

Scent sales in 2024 increased $46 million, or 2% on a reported basis, to $2.439 billion compared to $2.393 billion in 2023. On a comparable currency neutral basis, Scent sales increased 12% in 2024 compared to the 2023 period driven by price increases in the Fragrance Compounds business unit and volume increases across all business units. Exchange rate variations had an unfavorable impact of 5%. Comparable portfolio results exclude the impact of the divestitures of the Flavors Specialty Ingredients business and Cosmetic Ingredients business, with an impact of approximately $116 million.

Previous wording

Pharma Solutions sales in 2024 increased $16 million, or 2% on a reported basis, to $961 million compared to $945 million in 2023. On a currency neutral basis, Pharma Solutions sales also increased 2% in 2024 compared to the 2023 period as the impact of exchange rate variations was flat. Performance in the Pharma Solutions operating segment was driven by volume growth in industrial markets.

Current wording

Pharma Solutions sales in 2024 increased $29 million, or 3% on a reported basis, to $1.049 billion compared to $1.020 billion in 2023. On a comparable currency neutral basis, Pharma Solutions sales also increased 3% in 2024 compared to the 2023 period driven by volume growth in industrial markets. Exchange rates impact on sales was less than 1%. Performance in the Pharma Solutions operating segment was driven by volume growth in industrial markets.

Previous wording

Cost of sales decreased $438 million to $7.360 billion (64.1% of sales) in 2024 compared to $7.798 billion (67.9% of sales) in 2023. The decrease in cost of sales was primarily driven by the change in business portfolio mix due to divestitures which was approximately $227 million, lower raw material costs and manufacturing expenses, lower unfavorable manufacturing absorption compared to the prior year period, increased productivity compared to the prior year period, offset in part by volume increases.

Current wording

Cost of sales decreased $438 million to $7.360 billion (64.1% of sales) in 2024 compared to $7.798 billion (67.9% of sales) in 2023. The decrease in cost of sales was primarily driven by the change in business portfolio mix due to divestitures which was approximately $227 million, lower raw material costs and manufacturing expenses, lower unfavorable manufacturing absorption compared to the prior year period, increased productivity compared to the prior year period, offset in part by volume increases. With the decrease in cost of sales, gross margin increased, reflecting the benefit of lower costs and improved productivity.

Previous wording

(Gains) losses on business disposals increased to $(346) million in 2024 compared to $23 million in 2023. The net gain on business disposals in 2024 primarily relates to the gain recognized on the sale of the Cosmetic Ingredients business, offset in part by the loss recognized on the sale of the F&E UK business. The loss in 2023 primarily relates to the sale of the FSI business, the sale of a portion of the Savory Solutions business, and liquidation of a business in Russia for the sale of the portion of the Savory Solutions business. See Note 4 for additional information.

Current wording

Losses (Gains) on business disposals increased to $(346) million in 2024 compared to $23 million in 2023. The net gain on business disposals in 2024 primarily relates to the gain recognized on the sale of the Cosmetic Ingredients business, offset in part by the loss recognized on the sale of the F&E UK business. The loss in 2023 primarily relates to the sale of the Flavors Specialty Ingredients business, the sale of a portion of the Savory Solutions business, and liquidation of a business in Russia for the sale of the portion of the Savory Solutions business. See Note 3 for additional information.

Previous wording

Loss on assets classified as held for sale was $347 million in 2024. This related to assets classified as held for sale for the Pharma Solutions disposal group and the portion of the Savory Solutions business in Turkey. See Note 4 for additional information.

Current wording

Loss on assets classified as held for sale was $317 million in 2024. This related to assets classified as held for sale for the Pharma Solutions disposal group and a portion of the Savory Solutions business in Turkey. See Note 4 for additional information.

Previous wording

Other expense (income), net, increased $177 million to $182 million in 2024 compared to $5 million in 2023. $153 million of increased expense was driven by increased pension-related expense, $130 million of which was due to a settlement loss that was recognized upon termination of the International Flavors & Fragrances Inc. Pension Plan in 2024. See Note 8 and Note 9 for additional information.

Current wording

Other expense, net, increased $177 million to $182 million in 2024 compared to $5 million in 2023. $153 million of increased expense was driven by increased pension-related expense, $130 million of which was due to a settlement loss that was recognized upon termination of the International Flavors & Fragrances Inc. Pension Plan in 2024. See Note 8 and Note 9 for additional information.

Previous wording

The effective tax rate in 2024 was 11.2% compared to (1.8)% in 2023. The year-over-year increase was primarily driven by an increase in pre-tax income, changes in the mix of earnings, the tax impact of business divestitures and certain non-recurring tax benefits. See Note 10 for additional information.

Current wording

The effective tax rate in 2024 was 13.3% compared to (2.7)% in 2023. The year-over-year increase was primarily driven by an increase in pre-tax income, changes in the mix of earnings, the tax impact of business divestitures and certain non-recurring tax benefits. See Note 10 for additional information.

Previous wording

Nourish Segment Adjusted Operating EBITDA increased $92 million, or 13% on an adjusted basis, to $824 million (14.0% of segment sales) in 2024 from $732 million (12.1% of segment sales) in 2023. On a comparable basis, Nourish Segment Adjusted Operating EBITDA increased 18% in 2024 compared to 2023 led by primarily volume increases and productivity gains. Comparable portfolio results exclude the impact of the divestitures of the portion of the Savory Solutions business, Sonarome business and F&E UK business with an impact of approximately $32 million.

Current wording

Food Ingredients Segment Adjusted Operating EBITDA increased $39 million, or 11% on a reported basis, to $408 million (12.1% of segment sales) in 2024 from $369 million (10.0% of segment sales) in 2023. On a comparable basis, Food Ingredients Segment Adjusted Operating EBITDA increased 18% in 2024 compared to 2023 led by primarily volume increases and favorable net pricing. Comparable portfolio results exclude the impact of the divestiture of a portion of the Savory Solutions business of approximately $23 million.

Previous wording

Scent Segment Adjusted Operating EBITDA increased $57 million, or 12% on a reported basis, to $518 million (21.2% of segment sales) in 2024 from $461 million (19.3% of segment sales) in 2023. On a comparable basis, Scent Segment Adjusted Operating EBITDA increased 25% in 2024 compared to 2023 led by primarily volume increases and productivity gains. Comparable portfolio results exclude the impact of the divestitures of the FSI business and Cosmetic Ingredients business, with an impact of approximately $45 million.

Current wording

Scent Segment Adjusted Operating EBITDA increased $49 million, or 10% on a reported basis, to $545 million (22.3% of segment sales) in 2024 from $496 million (20.7% of segment sales) in 2023. On a comparable basis, Scent Segment Adjusted Operating EBITDA increased 21% in 2024 compared to 2023 led by primarily volume increases and productivity gains. Comparable portfolio results exclude the impact of the divestitures of the Flavors Specialty Ingredients business and Cosmetic Ingredients business of approximately $45 million.

Previous wording

We had cash, cash equivalents and restricted cash of approximately $471 million, inclusive of $2 million currently in Assets held for sale on the Consolidated Balance Sheets, at December 31, 2024 compared to $735 million, inclusive of $26 million in Assets held for sale on the Consolidated Balance Sheets, at December 31, 2023 and of this balance, the majority was held outside the United States. Cash balances held in foreign jurisdictions are, in most circumstances, available to be repatriated to the United States.

Current wording

We had cash, cash equivalents and restricted cash of approximately $590 million on the Consolidated Balance Sheets, at December 31, 2025 compared to $471 million, inclusive of $2 million in Assets held for sale on the Consolidated Balance Sheets, at December 31, 2024. The majority of this balance was held outside the United States. Cash balances held in foreign jurisdictions are, in most circumstances, available to be repatriated to the United States.

Previous wording

Effective utilization of the cash generated by our international operations is a critical component of our strategy. We regularly repatriate cash from our non-U.S. subsidiaries to fund financial obligations in the U.S. As we repatriate these funds to the U.S., we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of December 31, 2024, we had a deferred tax liability of approximately $154 million for the effect of repatriating the funds to the U.S., attributable to various non-U.S. subsidiaries. There is no deferred tax liability associated with non-U.S. subsidiaries where we intend to indefinitely reinvest the earnings to fund local operations and/or capital projects.

Current wording

Effective utilization of the cash generated by our international operations is a critical component of our strategy. We regularly repatriate cash from our non-U.S. subsidiaries to fund financial obligations in the U.S. As we repatriate these funds to the U.S., we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes during the period when such repatriation occurs. Accordingly, as of December 31, 2025, we had a deferred tax liability of approximately 155 million for the effect of repatriating the funds to the U.S., attributable to various non-U.S. subsidiaries. There is no deferred tax liability associated with non-U.S. subsidiaries where we intend to indefinitely reinvest the earnings to fund local operations and/or capital projects.

Previous wording

Cash flows provided by operating activities in 2024 were $1.070 billion, or 9.3% of sales, compared to $1.439 billion, or 12.5% of sales, in 2023. The decrease in cash flows from operating activities from 2023 to 2024 was primarily driven by an increase in working capital, largely related to trade receivables and inventories including amounts held for sale, offset in part by accounts payable and higher cash earnings, excluding the impact of non-cash adjustments.

Current wording

Cash flows provided by operating activities in 2025 were $850 million, or 7.8% of sales, compared to $1.070 billion, or 9.3% of sales, in 2024. The decrease in cash flows from operating activities from 2024 to 2025 was primarily driven by an increase in working capital and a larger incentive compensation payout made in 2025 related to 2024 results, offset in part by an increase in accounts receivables in the prior year.

Previous wording

Cash flows provided by investing activities in 2024 were $326 million compared to $574 million in 2023. The decrease in cash flows from investing activities from 2023 to 2024 was primarily driven by lower net proceeds received from business divestitures compared to the prior year period, offset in part by decreased additions to property, plant and equipment.

Current wording

Cash flows provided by investing activities in 2025 were $2.269 billion compared to $326 million in 2024. The increase in cash flows from investing activities from 2024 to 2025 was primarily driven by higher net proceeds received from business divestitures, including the Pharma Solutions disposal group, the Nitrocellulose business, the Tobacco Flavoring business in North America, and the Rene Laurent business in France, compared to the net proceeds received during 2024 primarily from the divestiture of the Cosmetic Ingredients business. This increase was offset in part by higher spending on property, plant and equipment during 2025 compared to 2024.

Previous wording

We paid dividends totaling $514 million and $826 million in 2024 and 2023, respectively. The cash dividend declared per share in 2024 and 2023 was $1.60 and $3.24, respectively.

Current wording

We paid dividends totaling $409 million and $514 million in 2025 and 2024, respectively. The cash dividends declared was $1.60 per share in both 2025 and 2024.

Previous wording

Our capital allocation strategy is primarily focused on debt repayment to maintain our investment grade rating. We will also prioritize capital investment in our businesses to support the strategic long-term plans. We are also committed to maintaining our history of paying a dividend to investors determined by our Board of Directors at its discretion based on various factors.

Current wording

Our capital allocation strategy seeks to maintain investment grade ratings while investing in the business, continuing to pay dividends, repurchasing shares outstanding and repaying debt. We do not have any rating downgrade triggers that would accelerate the maturity dates of our senior unsecured debt. However, any downgrade in our credit rating may, depending on the extent of such downgrade, negatively impact our ability to raise additional debt capital, our liquidity and capital position, and may increase our cost of borrowing for new capital raises. In addition, our existing Revolving Credit Facility has pricing grids that are based on credit rating, such that our cost of borrowing may increase if our credit rating decreases. We make capital investments in our businesses to support our operational needs and strategic long-term plans. We are committed to maintaining our history of paying a dividend to investors which is determined by our Board of Directors at its discretion based on various factors.

Previous wording

Operating cash flow provides the primary source of funds for capital investment needs, dividends paid to shareholders and debt service repayments. We anticipate that cash flows from operations, cash proceeds generated from planned business divestitures and availability under our existing credit facilities will be sufficient to meet our investing and financing needs, including our debt service requirements, for the foreseeable future. We regularly assess our capital structure, including both current and long-term debt instruments, as compared to our cash generation and investment needs in order to provide ample flexibility and to optimize our leverage ratios. See Note 14 for additional information.

Current wording

Operating cash flow provides the primary source of funds for capital investment needs, dividends paid to shareholders, treasury share repurchases and debt service repayments. We anticipate that cash flows from operations, cash proceeds generated from planned business divestitures and availability under our existing credit facilities will be sufficient to meet our investing and financing needs, including our debt service requirements for the foreseeable future. We regularly assess our capital structure, including both current and long-term debt instruments, as compared to our cash generation and investment needs in order to provide ample flexibility and to optimize our leverage ratios. See Note 14 for additional information.

Previous wording

Our credit agreements contain various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including the requirement for us to maintain, at the end of each fiscal quarter, a ratio of net debt for borrowed money to credit adjusted EBITDA in respect of the previous 12-month period.

Current wording

Our Revolving credit agreement contains various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including the requirement for us to maintain, at the end of each fiscal quarter, a ratio of net debt for borrowed money to credit adjusted EBITDA in respect of the previous 12-month period.

Previous wording

Our Term Loan and Revolving Credit Facility bear interest at a base rate or a rate equal to Term SOFR plus an adjustment of 0.10% per annum or, in the case of euro-denominated loans, the Euro interbank offered rate, plus, in each case, an applicable margin based on our public debt rating. Loans may be prepaid without premium or penalty, subject to customary breakage costs.

Current wording

Our Revolving Credit Facility bears interest at a base rate or a rate equal to Secured Overnight Financing Rate (“Term SOFR”), or, in the case of euro-denominated loans, the Euro interbank offered rate, plus, in each case, an applicable margin based on our public debt rating. Loans may be prepaid without premium or penalty, subject to customary breakage costs.

Previous wording

As of December 31, 2024, we had no outstanding borrowings under our $2 billion Revolving Credit Facility. The amount that we are able to draw down under the Revolving Credit Facility is limited by financial covenants as described in more detail below. As of December 31, 2024, our available capacity was $922 million under the Revolving Credit Facility.

Current wording

As of December 31, 2025, we had no outstanding borrowings under our $2 billion Revolving Credit Facility or other lines of credit. The amount that we are able to draw down under the Revolving Credit Facility is limited by financial covenants as described in more detail below. As of December 31, 2025, our available capacity was $2 billion under the Revolving Credit Facility.

Previous wording

At December 31, 2024, we were in compliance with all financial and other covenants under our credit agreements, including the net debt to credit adjusted EBITDA(1) ratio. At December 31, 2024, our net debt to credit adjusted EBITDA(1) ratio was 3.84 to 1.0 as defined by the credit facility agreements, which is below the relevant level provided by our financial covenants of existing outstanding debt. The most comparable GAAP measure is the total debt to net income ratio, which was 37.06 to 1.0 at December 31, 2024.

Current wording

At December 31, 2025, we were in compliance with all financial and other covenants under our credit agreements, including the net debt to credit adjusted EBITDA(1) ratio. At December 31, 2025, our net debt to credit adjusted EBITDA(1) ratio was 2.59 to 1.0 as defined by the credit facility agreements, which is below the relevant level provided by our financial covenants of existing outstanding debt.

Previous wording

As of December 31, 2024, we had $8.478 billion aggregate principal amount outstanding in senior unsecured notes, with $828 million principal amount denominated in EUR and $7.650 billion principal amount denominated in USD. The notes bear effective interest rates ranging from 1.22% per year to 5.12% per year, with maturities from October 1, 2025 to December 1, 2050. See Note 14 to the Consolidated Financial Statements for additional information.

Current wording

As of December 31, 2025, we had $5.637 billion aggregate principal amount outstanding in senior unsecured notes, with $940 million principal amount denominated in EUR and $4.697 billion principal amount denominated in USD. The notes bear effective interest rates ranging from 1.56% per year to 5.12% per year, with maturities from September 25, 2026 to December 1, 2050. See Note 14 to the Consolidated Financial Statements for additional information.

Previous wording

Compliance with existing governmental requirements regulating the discharge of materials into the environment has not materially affected our operations, earnings or competitive position. In 2024 and 2023, we spent approximately $32 million and $23 million on capital projects and $136 million and $139 million in operating expenses and governmental charges, respectively, for the purpose of complying with such regulations. Expenditures for these purposes will continue for the foreseeable future. In addition, we are party to a number of proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act or similar state statutes. It is expected that the impact of any judgments in or voluntary settlements of such proceedings will not be material to our financial condition, results of operations or liquidity.

Current wording

Compliance with existing governmental requirements regulating the discharge of materials into the environment has not materially affected our operations, earnings or competitive position. In 2025 and 2024, we spent approximately $22 million and $32 million on capital projects and $119 million and $136 million in operating expenses and governmental charges, respectively, for the purpose of complying with such regulations. Expenditures for these purposes will continue for the foreseeable future. In addition, we are party to a number of proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act or similar state statutes. It is expected that the impact of any judgments in or voluntary settlements of such proceedings will not be material to our financial condition, results of operations or liquidity.

Previous wording

The Company believes its balances of cash and cash equivalents, which totaled approximately $471 million as of December 31, 2024, inclusive of approximately $2 million currently in Assets held for sale on the Consolidated Balance Sheets, along with cash generated by ongoing operations and access to the Revolving Credit Facility and Commercial Paper as discussed in Note 14 to the Consolidated Financial Statements, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond. The Company’s material cash requirements include the following contractual and other obligations.

Current wording

We believe our balances of cash and cash equivalents, which totaled approximately $590 million as of December 31, 2025, along with cash generated by ongoing operations and access to the Revolving Credit Facility and unsecured short-term promissory notes (“Commercial Paper”) as discussed in Note 14 to the Consolidated Financial Statements, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond. Our material cash requirements include the following contractual and other obligations.

Previous wording

As of December 31, 2024, the Company had outstanding floating and fixed rate notes with varying maturities for an aggregate principal amount of approximately $8.891 billion (collectively the “Notes”), with approximately $1.413 billion payable within 12 months. Future interest payments associated with the Notes total approximately $2.777 billion, with approximately $256 million payable within 12 months.

Current wording

As of December 31, 2025, we had outstanding fixed rate notes with varying maturities for an aggregate principal amount of approximately $5.637 billion (collectively the “Notes”), with approximately $940 million payable within 12 months. Future interest payments associated with the Notes total approximately $2.268 billion, with approximately $165 million payable within 12 months.

Previous wording

The Company also issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. As of December 31, 2024, the Company had no Commercial Paper outstanding.

Current wording

We also issue Commercial Paper pursuant to a commercial paper program. As of December 31, 2025, we had $314 million of Commercial Paper outstanding.

Previous wording

As of December 31, 2024, the Company had no borrowings outstanding under the Revolving Credit Facility.

Current wording

As of December 31, 2025, we had no borrowings outstanding under the Revolving Credit Facility.

Previous wording

The Company has lease arrangements for certain corporate offices, manufacturing facilities, research and development facilities, and certain transportation and office equipment. As of December 31, 2024, the Company had fixed lease payment obligations of approximately $782 million, with approximately $117 million payable within 12 months. See Note 15 to the Consolidated Financial Statements for a further discussion of our various lease arrangements.

Current wording

We have lease arrangements for certain corporate offices, manufacturing facilities, research and development facilities, and certain transportation and office equipment. As of December 31, 2025, we had fixed lease payment obligations of approximately $811 million, with approximately $131 million payable within 12 months. See Note 15 to the Consolidated Financial Statements for a further discussion of our various lease arrangements.