Net Income Per Share

3 Months Ended

Mar. 31, 2021

NET (LOSS) INCOME PER SHARE

A reconciliation of the shares used in the computation of basic and diluted net (loss) income per share is as follows:


	Three Months Ended March 31,
(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)	2021		2020
Net (Loss) Income
Net (loss) income attributable to IFF stockholders	$	(42)	$	124
Adjustment related to (increase) decrease in redemption value of redeemable noncontrolling interests in excess of earnings allocated	(1)		6
Net (loss) income available to IFF stockholders	$	(43)	$	130
Shares
Weighted average common shares outstanding (basic)(1)	206		112
Adjustment for assumed dilution(2):

SPC portion of TEUs	—		1
Weighted average shares assuming dilution (diluted)	206		113

Net (Loss) Income per Share (3)
Net (loss) income per share - basic	$	(0.21)	$	1.16
Net (loss) income per share - diluted	(0.21)		1.15

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(1)For the three months ended March 31, 2021 and 2020, the tangible equity units (“TEUs”) were assumed to be outstanding at the minimum settlement amount for basic earnings per share. See below for details.

(2)Effect of dilutive securities includes dilution under stock plans and incremental impact of TEUs. See below for details.

(3)Diluted net (loss) income per share attributable to IFF for the three months ended March 31, 2021 excluded one million potentially dilutive securities because there was a net loss attributable to IFF for the period and, as such, the inclusion of these securities would have been anti-dilutive.

As of the effective time of the Merger, each issued and outstanding share of common stock of N&B (except for shares of common stock of N&B held by N&B as treasury stock or by DuPont, which were canceled and ceased to exist and no consideration was delivered in exchange therefor) was converted into the right to receive one share of common stock of IFF. The Merger was completed in exchange for 141,740,461 shares of IFF common stock, par value $0.125 per share (or cash payment in lieu of fractional shares), which had been approved in the special shareholder meeting that occurred on August 27, 2020 where IFF shareholders voted to approve the issuance of shares of IFF common stock in connection with the N&B Transaction, pursuant to an Agreement and Plan of Merger (the "Merger Agreement"). The shares issued in the Merger represented approximately 55.4% of the common stock of IFF on a fully diluted basis, after giving effect to the Merger, as of February 1, 2021.

The Company declared a quarterly dividend to its shareholders of $0.77 and $0.75 per share for the three months ended March 31, 2021 and 2020, respectively.

There were no stock options or stock-settled appreciation rights (“SSARs”) excluded from the computation of diluted net (loss) income per share for the three months ended March 31, 2020.

The Company issued 16,500,000 TEUs, consisting of a prepaid stock purchase contract ("SPC") and a senior amortizing note, for net proceeds of $800 million on September 17, 2018. For purposes of calculating basic net income (loss) per share, the SPCs were assumed to be settled at the minimum settlement amount of 0.3134 shares per SPC on March 31, 2021 and 2020. For purposes of calculating diluted earnings per share, the SPCs were assumed to be settled at a conversion factor not to exceed 0.3665 and 0.3839 on March 31, 2021 and 2020, respectively. The SPC conversion factor is based on the 20 day volume-weighted average price (“VWAP”) per share of the Company’s common stock. Per the TEU agreement, the maximum settlement amount is 0.3839 shares per SPC.

The Company has issued shares of purchased restricted common stock units (“PRSUs”) which contain rights to nonforfeitable dividends while these shares are outstanding and thus are considered participating securities. Such securities are required to be included in the computation of basic and diluted earnings per share pursuant to the two-class method. The Company did not present the two-class method since there was no difference between basic and diluted net (loss) income per share for both unrestricted common shareholders and PRSU shareholders for the three months ended March 31, 2021 and the difference for the three months ended March 31, 2020 was less than $0.01 per share. The number of PRSUs outstanding as of March 31, 2021 and 2020 was not material. Net loss allocated to such PRSUs was not material for the three months ended March 31, 2021 and net income allocated to such PRSUs was also not material for the three months ended March 31, 2020.