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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Ingredion Incorporated · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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See the discussion set forth in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of the manner in which we address risks with respect to raw material and energy costs, interest rates, and foreign currencies. Other than the arrangement below, there have been no material changes in the information provided with respect to those risks during the second quarter of 2026.
In connection with our pending acquisition of Tate & Lyle, we entered into financial derivative instruments to mitigate exposure to British pound sterling for the cash consideration related to the pending acquisition, which we expect to complete in the second half of 2027. On June 5, 2026, we entered into two option contracts to purchase or sell £2,793 million British pound sterling on or before February 8, 2028. We do not designate these derivative instruments as cash flow hedging instruments for accounting purposes; therefore, net changes to the derivative instruments’ fair value are included in Financing costs in our Condensed Consolidated Statements of Income. Based on our British pound sterling exposure at June 30, 2026, we estimate that a 10 percent decline in the value of the U.S. dollar against the British pound sterling would result in a foreign exchange gain for the derivative instruments of approximately $265 million in Financing costs, excluding the $47 million year-to-date loss recorded in Financing costs through June 30, 2026 in our Condensed Consolidated Statements of Income.