Net Income Per Share

6 Months Ended

Jun. 30, 2022

NET INCOME (LOSS) PER SHARE

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


	Three Months Ended June 30,				Six Months Ended June 30,
(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)	2022		2021		2022		2021
Net Income (Loss)
Net income (loss) attributable to IFF shareholders	$	107	$	28	$	351	$	(14)
Adjustment related to (increase) decrease in redemption value of redeemable noncontrolling interests in excess of earnings allocated	2		1		2		—
Net income (loss) available to IFF shareholders	$	109	$	29	$	353	$	(14)
Shares
Weighted average common shares outstanding (basic)(1)	255		254		255		230
Adjustment for assumed dilution(2):

SPC portion of TEUs	—		1		—		—
Weighted average shares assuming dilution (diluted)	255		255		255		230

Net Income (Loss) per Share
Net income (loss) per share - basic	$	0.43	$	0.11	$	1.38	$	(0.06)
Net income (loss) per share - diluted	0.43		0.11		1.38		(0.06)

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(1)On September 15, 2021, additional shares of IFF's common stock were issued in settlement of the stock purchase contract (“SPC”) portion of the tangible equity units (“TEUs”). For the three and six months ended June 30, 2021, the TEUs were assumed to be outstanding at the minimum settlement amount for basic earnings per share (“EPS”). See below for additional information.

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

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 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 $0.79 and $0.77 per share for the three months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, the Company declared quarterly dividends to its shareholders totaling $1.58 and $1.54, respectively.

There were no stock options or stock-settled appreciation rights (“SSARs”) excluded from the computation of diluted net income per share for the three and six months ended June 30, 2022 and three months ended June 30, 2021.

There were approximately one million potentially dilutive securities excluded from the computation of diluted net income (loss) per share for the six months ended June 30, 2021 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.

The Company issued 16,500,000 TEUs, consisting of a prepaid SPC and a senior amortizing note, for net proceeds of $800 million on September 17, 2018. On September 14, 2021, the Company notified holders of the TEUs that the final settlement rate in respect of each SPC was 0.330911 shares of IFF's common stock. On September 15, 2021, 5,460,031 shares of IFF's common stock were issued in settlement of the SPCs. The SPC conversion factor is based on the 20 day volume-weighted average price (“VWAP”) per share of the Company’s common stock. For purposes of calculating basic net income (loss) per share, the minimum settlement rate of 0.313400 shares per SPC on June 30, 2021 was used. For purposes of calculating diluted earnings per share, the SPCs were assumed to be settled at a conversion factor not to exceed 0.341100 shares per SPC on June 30, 2021.

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 net income (loss) per share for both unrestricted common shareholders and PRSU shareholders for the three and six months ended June 30, 2022 and 2021. The difference between diluted net income per share for both unrestricted common shareholders and PRSU shareholders for the three and six months ended June 30, 2022 and three months ended June 30, 2021 was less than $0.01 per share and there was no difference between diluted net income (loss) per share for both unrestricted common shareholders and PRSU shareholders for the six months ended June 30, 2021. In addition, the number of PRSUs outstanding as of June 30, 2022 and 2021 was not material. Net income allocated to such PRSUs was not material for the three and six months ended June 30, 2022 and three months ended June 30, 2021. Net loss allocated to such PRSUs was not material for the six months ended June 30, 2021.