Ingredion Incorporated 2016 Annual Report

Ingredion Incorporated  Annual Report

THE RIGHT INGREDIENTS FOR A CHANGING WORLD

 Annual Report About Ingredion Ingredion Incorporated provides the world with ingredients that make everyday products better. We turn grains, fruits, vegetables and other plant materials into ingredients that make yogurt creamy, candy sweet, crackers crispy, paper strong and nutrition bars high in fiber. We serve more than 60 diverse sectors in the food, beverage, paper and corrugating, brewing and other industries. Headquartered outside of Chicago, Illinois, Ingredion employs approximately 11,000 people worldwide and operates global manufacturing, R&D and sales offices that serve customers in more than 100 countries. At Ingredion, we’re developing the right strengths—the strategic ingredients—to create compelling value for our customers and investors in a changing world. As the pace of change accelerates, we continue to deliver the right ingredient solutions to help customers meet rapidly evolving consumer demands worldwide. For investors, we nimbly execute the Strategic Blueprint that continues to transform our Company and deliver consistent shareholder value.

INGREDION INCORPORATED 1 THE RIGHT INGREDIENTS FOR A CHANGING WORLD

INGREDIENT ONE ‚ Market/Customer Relevance

Ingredion’s Customer Benet Platforms Five key, highly market- and customer-relevant areas of focus guide our specialty ingredient growth strategies:

CLEAN & SIMPLE Helping customers deliver products with fewer and more-familiar ingredients on the label RECIPE FOR AN INGREDIENT

SOLUTIONS LEADER HEALTH & NUTRITION With our Strategic Blueprint as the Helping customers address key consumer trends— weight management, digestive health, sugar and framework, we have built six distinguishing calorie reduction, plant proteins and more strengths—market relevance, innovation, broadening ingredient portfolio, continuous

improvement, sustainability and geographic SENSORY EXPERIENCE diversity—as the strategic ingredients in Helping customers better understand consumer our recipe for global ingredient solutions preferences and develop sensory attributes for leadership and protable long-term growth. competitive advantage

AFFORDABILITY Helping customers rene recipes and improve manufacturing to reduce costs without compromising quality

CONVENIENCE & PERFORMANCE Delivering ingredient solutions that help improve functional performance, process eƒciency, product stability and sustainability

2 INGREDION INCORPORATED THE RIGHT INGREDIENTS FOR A CHANGING WORLD

INGREDIENT TWO Ž INGREDIENT THREE ‘ Innovation Continuous Improvement

Ingredion Idea Labs™ and R&D investment Network optimization We invested approximately $41 million in R&D in 2016. Operating excellence is a key priority and the foundation With more than 350 scientists working in 27 Ingredion of our Strategic Blueprint. We invest signicant resources Idea Labs™ around the world, we're applying well- each year to innovate and continuously improve our established global expertise through insight and manufacturing, corporate and supply chain networks, collaboration to develop innovative, localized solutions driving cost savings and quality enhancements that for our customers. maximize customer value.

INGREDIENT FOUR ’ INGREDIENT FIVE “ Broadening Ingredient Portfolio Sustainability

Acquisitions Growing positive impact As part of Ingredion’s Strategic Blueprint, M&A plays a With corporate social responsibility embedded in our key role in expanding our portfolio to better respond to growth strategy, we strive to be the Company of Choice changing consumer trends. The acquisitions of TIC Gums for a sustainable tomorrow with performance and Incorporated and Shandong Huanong Specialty Corn reduction targets in eight focal areas: Development Co. in 2016 have signicantly strengthened • Safety & Health • Sustainable Sourcing the company’s global specialty ingredients business with increased texture, organic and clean-label capabilities. • Social Accountability • Innovation • Environmental • Community Engagement Conservation • Governance, Integrity • Operational Excellence & Trust

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Partnerships and alliances Beyond M&A, we are always exploring partnerships with strong niche providers to bring new solutions to the marketplace. Examples include our alliances with Alliance Grain Traders Inc. (AGT) to distribute pulse Ÿours and plant protein ingredients and with SweeGen, Inc., where Ingredion is now a global distributor of the unique stevia sweeteners. Please visit www.ingredionincorporated.com/CorporateResponsibility/ sustainability for more detailed information.

INGREDION INCORPORATED 3 Company Headquarters

Production Facility

Ingredion Idea Labs™ Headquarters

Ingredion Idea Labs™ Innovation Center

Sales/Representative Oce

THE RIGHT INGREDIENTS FOR A CHANGING WORLD

INGREDIENT SIX – Geographic Diversity

Ingredion has built a strong presence around the world and in some of the largest and fastest-growing markets. This positions our Company for long-term, protable growth in a number of local, regional and global market environments, while balancing potential risks. UNITED KINGDOM RUSSIA North America Europe, Middle East, Africa –—˜ ™–‚—MM ‚—˜ ™‚—–MM CANADA of net sales of operating of net sales of operating income income WESTCHESTER, IL GERMANY

Large, stable market with Clean-label ingredients remain growth opportunities in in demand in Europe. Rising health and wellness and incomes elsewhere in the region JAPAN clean-label. help bolster core products. UNITED STATES CHINA South America Asia Pacic PAKISTAN SOUTH MEXICO INDIA KOREA ‚š˜ ™š›MM ‚Ž˜ ™‚‚‚MM UNITED ARAB of net sales of operating of net sales of operating EMIRATES income income PHILIPPINES Expanding middle class Population and income VIETNAM supports long-term growth growth fuels continued potential in the region. robust expansion in COLOMBIA MALAYSIA specialty products. SINGAPORE KENYA Company Headquarters INDONESIA Worldwide presence PERU Ingredion’s manufacturing, R&D and sales presence Production Facility BRAZIL across North America, South America, APAC and EMEA Ingredion Idea Labs™ Headquarters creates a solid, long-term foundation for growth. Our global scale and supply chain also o¤er signicant cost Ingredion Idea Labs™ Innovation Center AUSTRALIA eƒciencies that support customer competitiveness. Sales/Representative Oce SOUTH CHILE ARGENTINA AFRICA Local innovation Food is a local business. Our 27 Ingredion Idea Labs™ NEW ZEALAND located throughout the world combine world-class collective expertise with local A nger on the pulse of knowledge to develop new, on-trend A new, innovative sweetener nutrition trends ingredient solutions and help customers get products to market faster and more eƒciently.

UNITED KINGDOM Local on-trend innovations shared Ingredion o¤ers HOMECRAFT® and RUSSIA In response to the growing consumer VITESSENCE™ non-GMO, gluten-free, trends in sugar reduction and health and across key regions clean-label pulse Ÿours and protein wellness, Ingredion launched SWEETIS,™ CANADA concentrates that boost protein and a customized, low-calorie sugar solution ber in snacks and other foods without that o¤ers the taste of sugar without WESTCHESTER, IL a¤ecting taste orGERMANY texture. the calories.

JAPAN UNITED STATES CHINA PAKISTAN SOUTH MEXICO INDIA KOREA 4 INGREDION INCORPORATED UNITED ARAB EMIRATES PHILIPPINES VIETNAM COLOMBIA MALAYSIA SINGAPORE KENYA INDONESIA PERU BRAZIL

AUSTRALIA SOUTH CHILE ARGENTINA AFRICA NEW ZEALAND Company Headquarters

Production Facility

Ingredion Idea Labs™ Headquarters

Ingredion Idea Labs™ Innovation Center

Sales/Representative Oce

THE RIGHT INGREDIENTS FOR A CHANGING WORLD

UNITED KINGDOM RUSSIA

CANADA

WESTCHESTER, IL GERMANY

JAPAN UNITED STATES CHINA PAKISTAN SOUTH MEXICO INDIA KOREA UNITED ARAB EMIRATES PHILIPPINES VIETNAM COLOMBIA MALAYSIA SINGAPORE KENYA INDONESIA PERU BRAZIL

AUSTRALIA SOUTH CHILE ARGENTINA AFRICA NEW ZEALAND

Optimizing our Delivering sustainable solutions Investing in nutrition manufacturing network

Ingredion’s Idea Labs™ are helping We invest heavily in nutrition innovations Ingredion continues to increase our food companies innovate faster with such as our HI-MAIZE® resistant starch capacity for growth, especially in higher- solutions that are trend-aligned. Our and the FDA recently approved a qualied value specialty ingredients, and optimize NOVATION PRIMA® starches deliver the health claim petition for high-amylose our manufacturing network to lower our same functionality of traditional modied maize resistant starch and reduced risk xed-cost base. In ¨©ª«, the Company starches, but with a simple, clean label that of type ¨ diabetes. spent approximately ¬®©© million on plant consumers are now demanding. improvement projects worldwide.

INGREDION INCORPORATED 5 THE RIGHT INGREDIENTS FOR A CHANGING WORLD

Dear Fellow Shareholders

Our Strategic Blueprint continues to guide our transformation from an ingredient manufacturer to a collaborative provider of on-trend ingredient solutions. From clean labels and simple ingredients to added fiber and non-GMO ingredients, evolving trends are fueling rapid change in the consumer products industries. We are well positioned to help customers navigate and adapt to this rapid, ongoing change and develop innovative products that win in the marketplace.

I am pleased to report that 2016 was another excellent year the Penford integration, improved our manufacturing network for Ingredion as we once again delivered outstanding shareholder in North America and were ahead of schedule on our network value. We ended the year with record EPS and operating income optimization plan in Brazil. while generating record operating cash flow. And, return on capital Organic growth is the first pillar of our strategy. Volumes were employed was more than 12 percent, exceeding our stated, long-term flat in 2016 as we faced considerable economic headwinds in parts objective of 10 percent. of South America. However, we realigned the portfolio, which Our success can be attributed largely to our relentless focus on contributed to an improved price mix in both our specialty and executing our Strategic Blueprint for growth. When we developed core ingredients, and a six percent increase in net sales. it more than seven years ago, we knew the world was changing at We continued to grow sales of higher-value specialty ingredients, an unprecedented pace and that we, too, had to change to remain accounting for 26 percent of 2016 revenue. And, we strategically competitive. We also knew that to create long-term value we needed a solid approach that would guide us for a decade or more. Our Strategic Blueprint Our Strategic Blueprint has proven to be extremely effective over Shareholder Value Creation the years. Operating excellence, which enhances our productivity and efficiency, is the foundation of our strategy. Ongoing continuous Organic Broadening Geographic improvement programs that reduce waste, improve efficiencies or Growth Ingredient Scope augment capacity significantly contributed to margin expansion. Portfolio A number of quality upgrades in our facilities improved our competitive advantage. We exceeded synergy cost targets on Operating Excellence

6 INGREDION INCORPORATED THE RIGHT INGREDIENTS FOR A CHANGING WORLD invested to expand specialty capacity, accommodating growing customer demand. The acquisition of the Shandong Huanong corn Long-term investment value facility in China gave us more control of the supply chain while capital We are rapidly progressing in our strategy to build upon our position investments in our manufacturing facilities in the United States, as a global specialty ingredient leader. This is the value we aim to Thailand and Mexico supported local demand for core as well as deliver to our shareholders: strong and sustained growth in total and specialty ingredient sales, margin expansions, return on capital and specialty products. positive earnings. We are on track to achieve our objectives: Addressing the second strategic pillar, we continued to broaden our portfolio of ingredient solutions in alignment with changing consumer trends, including preferences for clean labels and healthy By 2019 ~30% $2B products made with simple ingredients and innovative textures. SPECIALTY SPECIALTY SALES SALES The acquisition of TIC Gums in December expands our higher-value specialty portfolio with even more texture offerings, including non- +2pts* EPS 10% starch hydrocolloids, primarily gums. Additionally, TIC’s expertise MARGIN LOW DOUBLE– RETURN ON customizing advanced texture systems (combinations of several types EXPANSION DIGIT GROWTH CAPITAL (ANNUALLY) EMPLOYED of synergistic texturizers) gives us a competitive edge and expands our customer base into the small to medium-sized companies that * Represents real gross margin absolute dollar growth versus 2014; actual margins vary due to pass-through of changes in raw material costs. are driving innovation in the food and beverage industry. We continued our advancements in sweetness ingredient offerings with a superior-tasting variety of stevia through a distribution and FORTUNE’s World’s Most Admired Companies. And, Forbes agreement with SweeGen. The addition of SweeGen’s products gives magazine identified us as one of the Best Midsize Employers. us even more sweetener solutions to meet customer needs for taste, Our success would not be possible without the talent and performance and value. Plus, we see synergy opportunities with other dedication of our employees and directors; I appreciate their loyalty sweeteners in our current portfolio. and hard work. A special thanks to Jack Fortnum, who will be retiring Our geographic scope, the third pillar of our strategy, sets in the coming months. As CFO, Jack’s leadership has been critical us apart in a couple of ways. First, as a global company with to our transformation and success. While he will be missed, after 33 local management and expertise, we are uniquely positioned to years of dedicated service we wish him all the best in his retirement. quickly adapt to local trends and accommodate the needs of local Finally, I appreciate the confidence that you, our shareholders, customers. Second, our geographic diversity helps shield us against have in Ingredion. We will continue to manage your assets wisely macroeconomic risks. In 2016, economic headwinds from a strong and responsibly, with the goal of creating superior value and return. U.S. dollar and weak economies in Argentina and Brazil were partially offset by stronger performance in other geographies. In South America, we maintained a tight focus on cost and Sincerely, network optimization. Over the longer term, the underlying demographics should favor our business, and we are well positioned to take advantage of an economic recovery when it materializes. Ultimately, our Strategic Blueprint continues to deliver superior Ilene S. Gordon shareholder value, significantly outpacing major indices, such as the Chairman, President and Chief Executive Officer S&P 500. Our record cash flow allowed us to increase the dividend by April 4, 2017 11 percent in 2016, and we will continue to explore value-enhancing acquisitions in an increasingly competitive environment. Ingredion was again recognized for our achievements by various third parties. In 2016, as in years past, we were named to the Ethisphere Institute’s list of the World’s Most Ethical Companies,

INGREDION INCORPORATED 7 Financial Highlights

Dollars in millions, except per share amounts; years ended December ®ª ¨©ª« ³ Change ¨©ª´ ³ Change ¨©ªµ Reported Income Statement Data Net sales $5,704 1% $5,621 (1) % $5,668 Operating income 808 22 660 14 581 Diluted earnings per share 6.55 19 5.51 16 4.74 Balance Sheet and Other Data Cash and cash equivalents 512 434 580 Total assets 5,782 5,074 5,085 Total debt 1,956 1,838 1,821 Total equity (including redeemable equity) 2,625 2,204 2,229 Annual dividends paid per common share 1.85 1.71 1.68 Net debt to capitalization percentageª 34.0 % 37.4 % 33.4 % Net debt to adjusted EBITDA¨ ratioª 1.4 1.6 1.5 Cash provided by operations 771 686 731 Depreciation and amortization 196 194 195 Capital expenditures 284 280 276

COMPOUND ANNUAL SALES žBASED ON Ž—‚– NET SALESŸ REPORTED GROWTH RATES

FOOD “Ž˜ ‚‚˜ BEVERAGE ¡‚“˜ ‚‚˜ PAPER AND CORRUGATING YEAR DILUTED EARNINGS PER SHARE

‚—˜ ANIMAL NUTRITION š˜ BREWING ¡‚‘˜ YEAR CASH FROM OPERATION š˜ OTHER

NET SALES OPERATING INCOME REPORTED DILUTED EARNINGS PER SHARE (in millions) (in millions) (in dollars) ’
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ª See Financial Performance Metrics beginning on page ±¨ of this Annual Report for a reconciliation of these metrics that are not calculated in accordance with Generally Accepted Accounting Principles (GAAP) to the most comparable GAAP measures. ¨ Earnings before interest, taxes, depreciation and amortization. ® See page ±¨ of this Annual Report for a reconciliation of this metric, which is not calculated in accordance with GAAP to the reported diluted earnings per share.

8 INGREDION INCORPORATED UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 
 FORM -K

(Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION  OR (d) OF THE SECURITIES EXCHANGE ACT OF  For the ­scal year ended December ˆ, ‰ or [ ] TRANSITION REPORT PURSUANT TO SECTION  OR (d) OF THE SECURITIES EXCHANGE ACT OF  For the transition period from to Commission ­le number -ˆˆ‹

INGREDION INCORPORATED (Exact Name of Registrant as Speci†ed in Its Charter)

Delaware -ˆ
‘ˆ (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identi†cation No.)

 Westbrook Corporate Center, Westchester, Illinois ‰
(Address of Principal Executive O‘ces) (Zip Code) Registrant’s telephone number, including area code (–—˜) -š›——

Securities registered pursuant to Section š(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered Common Stock, ”. par value per share New York Stock Exchange

Securities registered pursuant to Section š(g) of the Act: NONE

Indicate by check mark if the Registrant is a well-known seasoned issuer, as de†ned in Rule — of the Securities Act. Yes [X] No [ ] Indicate by check mark if the Registrant is not required to †le reports pursuant to Section  or Section (d) of the Act. Yes [ ] No [X] Note – Checking the box above will not relieve any registrant required to †le reports pursuant to Section  or (d) of the Exchange Act from their obligations under those Sections. Indicate by check mark whether the Registrant: () has †led all reports required to be †led by Section  or (d) of the Securities Exchange Act of  during the preceding š months (or for such shorter period that the Registrant was required to †le such reports), and (š) has been subject to such †ling requirements for the past — days. Yes [X] No [ ] Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule — of Regulation S-T (¦šš.— of this chapter) during the preceding š months (or for such shorter period that the Registrant was required to submit and post such †les). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent †lers pursuant to Item — of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in de†nitive proxy or information statements incorporated by reference in Part III of this Form —-K or any amendment to this Form —-K. [ ] Indicate by check mark whether the Registrant is a large accelerated †ler, an accelerated †ler, a non-accelerated †ler, or a small reporting company. See de†nitions of “large accelerated †ler,” “accelerated †ler” and “small reporting company” in Rule šb-š of the Exchange Act. (Check one) Large accelerated †ler [X] Accelerated †ler [ ] Non-accelerated †ler [ ] Smaller reporting company [ ] (Do not check if a smaller reporting company) Indicate by check mark whether the Registrant is a shell company (as de†ned in Rule šb-š of the Exchange Act). Yes [ ] No [X] The aggregate market value of the Registrant’s voting stock held by non-a‘liates of the Registrant (based upon the per share closing price of ªš. on June —, š—›, and, for the purpose of this calculation only, the assumption that all of the Registrant’s directors and executive o‘cers are a‘liates) was approximately ª,—,———,———. The number of shares outstanding of the Registrant’s Common Stock, par value ª.— per share, as of February –, š—–, was –,–—,———. Documents Incorporated by Reference: Information required by Part III (Items —, , š,  and ) of this document is incorporated by reference to certain portions of the Registrant’s de†nitive Proxy Statement (the “Proxy Statement”) to be distributed in connection with its š—– Annual Meeting of Stockholders which will be †led with the Securities and Exchange Commission within š— days after December , š—›.

INGR AR16 financials_Keyline_r1.pdf 1 3/14/17 10:36 PM Table of Contents to Form °±-K

Part I Item . Business ......  Item A. Risk Factors...... ˜ Item B. Unresolved Sta® Comments......  Item . Properties ......  Item ˆ. Legal Proceedings ......  Item
. Mine Safety Disclosures ...... 

Part II Item . Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ......  Item ‰. Selected Financial Data......  Item ‹. Management’s Discussion and Analysis of Financial Condition and Results of Operations......  Item ‹A. Quantitative and Qualitative Disclosures About Market Risk...... š Item ‘. Financial Statements and Supplementary Data ......  Item . Changes In and Disagreements With Accountants on Accounting and Financial Disclosure ...... › Item A. Controls and Procedures...... › Item B. Other Information ...... ›

Part III Item . Directors, Executive O‘cers and Corporate Governance ...... › Item . Executive Compensation ...... › Item . Security Ownership of Certain Bene†cial Owners and Management and Related Stockholder Matters . . . › Item ˆ. Certain Relationships and Related Transactions, and Director Independence ...... › Item 
. Principal Accountant Fees and Services...... ›

Part IV Item . Exhibits and Financial Statement Schedules...... › Signatures ...... ››

INGR AR16 financials_Keyline_r1.pdf 2 3/14/17 10:36 PM Part I

Item . Business and New Zealand. Our EMEA segment includes businesses in the The Company United Kingdom, Germany, South Africa, Pakistan and Kenya. Ingredion Incorporated (“Ingredion”) is a leading global ingredients For purposes of this report, unless the context otherwise requires, solutions provider. We turn corn, tapioca, potatoes and other all references herein to the “Company,” “Ingredion,” “we,” “us,” and vegetables and fruits into value-added ingredients and biomaterials “our” shall mean Ingredion Incorporated and its subsidiaries. for the food, beverage, paper and corrugating, brewing and other Ingredion supplies a broad range of customers in many diverse industries. Ingredion was incorporated as a Delaware corporation in industries around the world, including the food, beverage, paper and – and its common stock is traded on the New York Stock Exchange. corrugating, brewing, pharmaceutical, textile and personal care On December š, š—›, we completed our acquisition of TIC Gums industries, as well as the global animal feed and corn oil markets. Incorporated (“TIC Gums”), a privately held, U.S.-based company that Our product line includes starches and sweeteners, animal feed provides advanced texture systems to the food and beverage industry products and edible corn oil. Our starch-based products include both for ª million, net of cash acquired. Consistent with our Strategic food-grade and industrial starches, and biomaterials. Our sweetener Blueprint for growth, this acquisition enhances our texture capabilities products include glucose syrups, high maltose syrups, high fructose and formulation expertise and provides additional opportunities for us corn syrup (“HFCS”), caramel color, dextrose, polyols, maltodextrins to provide solutions for natural, organic and clean-label demands of and glucose and syrup solids. our customers. TIC Gums utilizes a variety of agriculturally derived Our products are derived primarily from the processing of corn ingredients, such as acacia gum and guar gum, to form the foundation and other starch-based materials, such as tapioca, potato and rice. for innovative texture systems and allow for clean-label reformulation. Our manufacturing process is based on a capital-intensive, TIC Gums operates two production facilities, one in Belcamp, Maryland two-step process that involves the wet milling and processing of and one in Guangzhou, China. TIC Gums also maintains an R&D lab starch-based materials, primarily corn. During the front-end process, within these two production facilities. corn is steeped in a water-based solution and separated into starch On March , š—, we completed our acquisition of Penford and co-products such as animal feed and corn oil. The starch is then Corporation (“Penford”), a manufacturer of specialty starches that was either dried for sale or further processed to make sweeteners, starches headquartered in Centennial, Colorado. The total purchase consider- and other ingredients that serve the particular needs of various ation for Penford was ªš million, which included the extinguishment industries. of ª million in debt in conjunction with the acquisition. The We believe our approach to production and service, which focuses acquisition of Penford provides us with, among other things, an on local management and production improvements of our worldwide expanded specialty ingredient product portfolio consisting of potato operations, provides us with a unique understanding of the cultures starch-based o®erings. Penford had net sales of ª million for the and product requirements in each of the geographic markets in which †scal year ended August , š— and operated six manufacturing we operate, bringing added value to our customers through innovative facilities in the United States, all of which manufacture specialty solutions. At the same time, we believe that our corporate functions starches. allow us to identify synergies and maximize the bene†ts of our global On August , š—, we completed our acquisition of Kerr Concen- presence. trates, Inc. (“Kerr”), a privately-held producer of natural fruit and vegetable concentrates for approximately ª—š million in cash. Kerr Geographic Scope and Operations serves major food and beverage companies, ³avor houses and We are principally engaged in the production and sale of starches ingredient producers from its manufacturing locations in Oregon and and sweeteners for a wide range of industries, and we manage our California. The acquisition of Kerr provides us with the opportunity to business on a geographic regional basis. Our consolidated net sales expand our product portfolio. were ª.–— billion in š—›. Our operations are classi†ed into four We are principally engaged in the production and sale of starches reportable business segments: North America, South America, Asia and sweeteners for a wide range of industries, and are managed Paci†c and EMEA (Europe, Middle East and Africa). In š—›, approxi- geographically on a regional basis. Our operations are classi†ed into mately ›— percent of our net sales were derived from operations in four reportable business segments: North America, South America, North America, while net sales from operations in South America Asia Paci†c and Europe, Middle East and Africa (“EMEA”). Our North represented ˜ percent. Net sales from operations in Asia Paci†c and America segment includes businesses in the United States, Canada EMEA represented approximately š percent and — percent, and Mexico. Our South America segment includes businesses in respectively, of our š—› net sales. See Note  of the Notes to the Brazil, Colombia, Ecuador and the Southern Cone of South America, Consolidated Financial Statements entitled “Segment Information” which includes Argentina, Chile, Peru and Uruguay. Our Asia Paci†c for additional †nancial information with respect to our reportable segment includes businesses in South Korea, Thailand, Malaysia, business segments. China, Japan, Indonesia, the Philippines, Singapore, India, Australia

INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 3 3/14/17 10:36 PM In general, demand for our products is balanced throughout the high quality adhesives for the production of shipping containers, year. However, demand for sweeteners in South America is greater display board and other corrugated applications. The textile indus- in the †rst and fourth quarters (its summer season) while demand try uses starches and specialty starches for sizing (abrasion resistance) for sweeteners in North America is greater in the second and third to provide size and †nishes for manufactured products. Industrial quarters. Due to the o®setting impact of these demand trends, we starches are used in the production of construction materials, textiles, do not experience material seasonal ³uctuations in our net sales adhesives, pharmaceuticals and cosmetics, as well as in mining, on a consolidated basis. water †ltration and oil and gas drilling. Specialty starches are used Our North America segment consists of operations in the US, for biomaterial applications including biodegradable plastics, fabric Canada and Mexico. The region’s facilities include š plants producing softeners and detergents, hair and skin care applications, dusting a wide range of sweeteners, starches and fruit and vegetable powders for surgical gloves and in the production of glass †ber concentrates. and insulation. We are the largest manufacturer of corn-based starches and sweeteners in South America, with sales in Brazil, Colombia and Sweetener Products Our sweetener products represented approximately Ecuador and the Southern Cone of South America, which includes – percent, — percent and  percent of our net sales for š—›, š— Argentina, Chile, Peru and Uruguay. Our South America segment and š—, respectively. includes  plants that produce regular, modi†ed, waxy and tapioca starches, high fructose and high maltose syrups and syrup solids, Glucose Syrups Glucose syrups are fundamental ingredients widely dextrins and maltodextrins, dextrose, specialty starches, caramel used in food products, such as baked goods, snack foods, beverages, color, sorbitol and vegetable adhesives. canned fruits, condiments, candy and other sweets, dairy products, Our Asia Paci†c segment manufactures corn-based products in ice cream, jams and jellies, prepared mixes and table syrups. Glucose South Korea, Australia and China. Also, we manufacture tapioca-based syrups o®er functionality in addition to sweetness to processed foods. products in Thailand, from which we supply not only our Asia Paci†c They add body and viscosity; help control freezing points, crystalliza- segment but the rest of our global network. The region’s facilities tion and browning; add humectancy (ability to add moisture) and include  plants that produce modi†ed, specialty, regular, waxy, ³avor; and act as binders. tapioca and rice starches, dextrins, glucose, high maltose syrup, dextrose, HFCS and caramel color. High Maltose Syrup This special type of glucose syrup is primarily Our EMEA segment includes  plants that produce modi†ed and used as a fermentable sugar in brewing beers. High maltose syrups specialty starches, glucose and dextrose in England, Germany and are also used in the production of confections, canning and some Pakistan. other food processing applications. Our high maltose syrups speed Additionally, we utilize a network of tolling manufacturers in the fermentation process, allowing brewers to increase capacity various regions in the production cycle of certain specialty starches. without adding capital. In general, these tolling manufacturers produce certain basic starches for us, and we in turn complete the manufacturing process of the High Fructose Corn Syrup High fructose corn syrup is used in a variety specialty starches through our †nishing channels. of consumer products including soft drinks, fruit-³avored beverages, We utilize our global network of manufacturing facilities to baked goods, dairy products, confections and other food and beverage support key global product lines. products. In addition to sweetness and ease of use, high fructose corn syrup provides body; humectancy; and aids in browning, freezing point Products and crystallization control. Starch Products Our starch products represented approximately › percent,  percent and  percent of our net sales for š—›, š— Dextrose Dextrose has a wide range of applications in the food and and š—, respectively. Starches are an important component in a wide confection industries, in solutions for intravenous and other pharma- range of processed foods, where they are used for adhesion, clouding, ceutical applications, and numerous industrial applications like dusting, expansion, fat replacement, freshness, gelling, glazing, mouth wallboard, biodegradable surface agents and moisture control agents. feel, stabilization and texture. Cornstarch is sold to cornstarch packers Dextrose functionality in foods, beverages and confectionary includes for sale to consumers. Starches are also used in paper production to sweetness control; body and viscosity; acting as a bulking, drying and create a smooth surface for printed communications and to improve anti-caking agent; serving as a carrier; providing freezing point and strength in recycled papers. Specialty starches are used for enhanced crystallization control; and aiding in fermentation. Dextrose is also a drainage, †ber retention, oil and grease resistance, improved fermentation agent in the production of light beer. In pharmaceutical printability and biochemical oxygen demand control. In the corrugat- applications dextrose is used in IV solutions as well as an excipient ing industry, starches and specialty starches are used to produce suitable for direct compression in tableting.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 4 3/14/17 10:36 PM Polyols These products are sugar-free, reduced calorie sweeteners and energy management. Sweetness: Specialty ingredients that provide primarily derived from starch or sugar for the food, beverage, a®ordable, natural, reduced calorie and sugar-free solutions for our confectionery, industrial, personal and oral care, and nutritional customers. We have a broad portfolio of nutritive and non-nutritive supplement markets. In addition to sweetness, polyols inhibit sweeteners, including high potency sweeteners and naturally based crystallization; provide binding, humectancy and plasticity; add stevia sweeteners. Biomaterial Solutions: Nature-based materials that texture; extend shelf life; prevent moisture migration; and are an help manufacturers become more sustainable by replacing synthetic excipient suitable for tableting. materials in personal care, home care and other industrial segments. Each growth platform addresses multiple consumer trends. To Maltodextrins and Glucose Syrup Solids These products have a demonstrate how Ingredion is positioned to address market trends multitude of food applications, including formulations where liquid and customer needs, we present our internal growth platforms syrups cannot be used. Maltodextrins are resistant to browning, externally as “Bene†t Platforms.” Connecting our capabilities to key provide excellent solubility, have a low hydroscopicity (do not retain trends and customer challenges, these Bene†t Platforms include moisture), and are ideal for their carrier/bulking properties. Glucose products designed to provide: syrup solids have a bland ³avor, remain clear in solution, are easy • A®ordability: reduce formulating and production costs without to handle and provide bulking properties. compromising quality or consumer experience • Clean & Simple: replace undesirable ingredients and simplify Specialty Ingredients We consider certain of our starch and sweetener ingredient labels to give consumers the clean, simple and authentic products to be specialty ingredients. Specialty ingredients comprised products they want approximately š› percent of our net sales for š—›, up from š percent • Health & Nutrition: enhance nutrition bene†ts by fortifying or and š percent in š— and š—, respectively. Our specialty ingredients eliminating ingredients to address broad consumer health and are aligned with growing market and consumer trends such as health wellness needs globally with speci†c solutions for all ages and wellness, clean-label, a®ordability, indulgence and sustainability. • Sensory Experience: deliver a fresh, distinctive multi-sensory We plan to drive growth for our specialty ingredients portfolio by experience in the dimensions of texture, sweetness and taste leveraging the following †ve growth platforms: Wholesome, Texture, for food, beverage and personal care products Nutrition, Sweetness, and Biomaterial Solutions. • Convenience & Performance: help create products for today’s on-the-go lifestyles and that meet user expectations the †rst Wholesome Nutrition Texture time and every time, from start to †nish Clean and simple Nutritional carbohydrates Precise texture solutions ingredients that with bene†ts of digestive designed to optimize the consumers can identify health and energy consumer experience Co-Products and Others Co-products and others accounted for and trust management and build back texture when other components – percent, › percent and ˜ percent of our net sales for š—›, of food are replaced š— and š—, respectively. Re†ned corn oil (from germ) is sold to (e.g. fat, salt, etc). packers of cooking oil and to producers of margarine, salad dressings, Sweetness Biomaterial Solutions shortening, mayonnaise and other foods. Corn gluten feed is sold as Sweetening systems Nature-based materials animal feed. Corn gluten meal is sold as high-protein feed for chick- that provide a®ordable, for selected industrial natural, reduced calorie, segments and customers ens, pet food and aquaculture. and sugar-free solutions that answer demand for sustainable, non- Competition synthetic ingredients The starch and sweetener industry is highly competitive. Many of our Wholesome: Clean and simple specialty ingredients that consumers products are viewed as basic ingredients that compete with virtually can identify and trust. Products include Novation clean label functional identical products and derivatives manufactured by other companies starches, value added pulse-based ingredients and gluten free o®erings. in the industry. The US is a highly competitive market where there Texture: Specialty ingredients that provide precise food texture solutions are other starch processors, several of which are divisions of larger designed to optimize the consumer experience and build back texture. enterprises. Some of these competitors, unlike us, have vertically Include starch systems that replace more expensive ingredients and integrated their starch processing and other operations. Competitors are designed to optimize customer formulation costs, texturizers that include ADM Corn Processing Division (“ADM”) (a division of are designed to create rich, creamy mouth feel, and products that Archer-Daniels-Midland Company), Cargill, Inc., Tate & Lyle Ingredi- enhance texture in healthier o®erings. Nutrition: Specialty ingredients ents Americas, Inc., and several others. Our operations in Mexico that provide nutritional carbohydrates with bene†ts of digestive health and Canada face competition from US imports and local producers and energy management. Our †bers and complementary nutritional including ALMEX, a Mexican joint venture between ADM and Tate & ingredients address the leading health and wellness concerns of Lyle Ingredients Americas, Inc. In South America, Cargill has starch consumers, including digestive health, infant nutrition, weight control processing operations in Brazil and Argentina.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 5 3/14/17 10:36 PM Many smaller local corn and tapioca re†ners also operate in many specialty corn since the necessary seed must be grown in the season of our markets. Competition within our markets is largely based on prior to grain contracting. In order to secure these specialty grains at the price, quality and product availability. time of our anticipated needs, we contract with certain farmers to grow Several of our products also compete with products made from the specialty corn approximately two years in advance of delivery. These raw materials other than corn. HFCS and monohydrate dextrose specialty grains are higher cost due to their more limited supply and compete principally with cane and beet sugar products. Co-products require longer planning cycles to mitigate the risk of supply shortages. such as corn oil and gluten meal compete with products of the corn Due to the competitive nature of our industry and the availability dry milling industry and with soybean oil, soybean meal and other of substitute products not produced from corn, such as sugar from products. Fluctuations in prices of these competing products may cane or beets, end product prices may not necessarily ³uctuate in a a®ect prices of, and pro†ts derived from, our products. manner that correlates to raw material costs of corn. We follow a policy of hedging our exposure to commodity price Customers ³uctuations with commodities futures and options contracts primarily We supply a broad range of customers in over ›— industries worldwide. for certain of our North American corn purchases. We use derivative The following table provides the percentage of total net sales by hedging contracts to protect the gross margin of our †rm-priced industry for each of our segments for š—›: business in North America. Other business may or may not be hedged at any given time based on management’s judgment as to the need Total North South Industries Served Company America America APAC EMEA to †x the costs of our raw materials to protect our pro†tability. Outside Food 52% 50% 46% 65% 58% of North America, we generally enter into short-term commercial sales Beverage 11% 14% 8% 8% 1% contracts and adjust our selling prices based upon the local raw Animal Nutrition 10% 10% 16% 6% 8% material costs. See Item –A, Quantitative and Qualitative Disclosures Paper and Corrugating 11% 12% 8% 14% 4% about Market Risk, in the section entitled “Commodity Costs” for Brewing 8% 8% 15% 3% – additional information. Other 8% 6% 7% 4% 29% Total 100% 100% 100% 100% 100% Research and Development No customer accounted for — percent or more of our net sales in We have a global network of more than — scientists working in š—›, š— or š—. š– Ingredion Idea Labs™ innovation centers with headquarters in Bridgewater, New Jersey. Activities at Bridgewater include plant Raw Materials science and physical, chemical and biochemical modi†cations to food Corn (primarily yellow dent) is the primary basic raw material we use formulations, food sensory evaluation, as well as development of to produce starches and sweeteners. The supply of corn in the United non-food applications, such as starch-based biopolymers. In š—, States has been, and is anticipated to continue to be, adequate for our we expanded our Bridgewater facility with the addition of a lab and domestic needs. The price of corn, which is determined by reference to sensory evaluation space dedicated to our sweeteners portfolio. In prices on the Chicago Board of Trade, ³uctuates as a result of various addition, we have product application technology centers that direct factors including: farmers’ planting decisions, climate, and government our product development teams worldwide to create product policies (including those related to the production of ethanol), livestock application solutions to better serve the ingredient needs of our feeding, shortages or surpluses of world grain supplies, and domestic customers. Product development activity is focused on developing and foreign government policies and trade agreements. We use starch product applications for identi†ed customer and market needs. from potato processors as the primary raw material to manufacture Through this approach, we have developed value-added products for ingredients derived from potato-based starches. We also use tapioca, use by customers in various industries. We usually collaborate with rice, gum and sugar as raw material. customers to develop the desired product application either in the Corn is also grown in other areas of the world, including Canada, customers’ facilities, our technical service laboratories or on a contract Mexico, Europe, South Africa, Argentina, Australia, Brazil, China and basis. These e®orts are supported by our marketing, product technol- Pakistan. Our a‘liates outside the United States utilize both local ogy and technology support sta®. Research and development expense supplies of corn and corn imported from other geographic areas, was approximately ª million in š—›, ª million in š— and including the United States. The supply of corn for these a‘liates is ª– million in š—. also generally expected to be adequate for our needs. Corn prices for our non-US a‘liates generally ³uctuate as a result of the same factors Sales and Distribution that a®ect US corn prices. Our salaried sales personnel, who are generally dedicated to customers We also utilize specialty grains such as waxy and high amylose corn in a geographic region, sell our products directly to manufacturers and in our operations. In general, the planning cycle for our specialty grain distributors. In addition, we have sta® that provide technical support sourcing begins three years in advance of the anticipated delivery of the to our sales personnel on an industry basis. We generally contract

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 6 3/14/17 10:36 PM with trucking companies to deliver our bulk products to customer material. Based on current laws and regulations and the enforcement destinations. In North America, we generally use trucks to ship to and interpretations thereof, we do not expect that the costs of future nearby customers. For those customers located considerable distances environmental compliance will be a material expense, although there from our plants, we use either rail or a combination of railcars and can be no assurance that we will remain in compliance or that the trucks to deliver our products. We generally lease railcars for terms costs of remaining in compliance will not have a material adverse of three to ten years. e®ect on our future †nancial condition and results of operations. During š—›, we spent approximately ª million for environmental Patents, Trademarks and Technical License Agreements control and wastewater treatment equipment to be incorporated into We own more than ˜— patents and patents pending which relate existing facilities and in planned construction projects. We currently to a variety of products and processes, and a number of established anticipate that we will spend approximately ªš million and ª million trademarks under which we market our products. We also have the for environmental facilities and programs in š—– and š—˜, respectively. right to use other patents and trademarks pursuant to patent and trademark licenses. We do not believe that any individual patent or Other trademark is material to our business. There is no currently pending Our Internet address is www.ingredion.com. We make available, free of challenge to the use or registration of any of our signi†cant patents charge through our Internet website, our annual report on Form —-K, or trademarks that would have a material adverse impact on us or quarterly reports on Form —-Q, current reports on Form ˜-K, and our results of operations if decided against us. amendments to those reports †led or furnished pursuant to Section (a) or (d) of the Securities Exchange Act of , as amended. These Employees reports are made available as soon as reasonably practicable after they As of December , š—› we had approximately ,——— employees, are electronically †led with or furnished to the Securities and Exchange of which approximately š,›—— were located in the United States. Commission. Our corporate governance guidelines, board committee Approximately  percent of US and  percent of our non-US charters and code of ethics are posted on our website, the address employees are unionized. of which is www.ingredion.com, and each is available in print to any shareholder upon request in writing to Ingredion Incorporated, Government Regulation and Environmental Matters  Westbrook Corporate Center, Westchester, Illinois ›— Attention: As a manufacturer and marketer of food items and items for use in Corporate Secretary. The contents of our website are not incorporated the pharmaceutical industry, our operations and the use of many of by reference into this report. our products are subject to various federal, state, foreign and local statutes and regulations, including the Federal Food, Drug and Executive O›cers of the Registrant Cosmetic Act and the Occupational Safety and Health Act. We and Set forth below are the names and ages of all of our executive o‘cers, many of our products are also subject to regulation by various indicating their positions and o‘ces with the Company and other government agencies, including the United States Food and Drug business experience. Our executive o‘cers are elected annually by the Administration. Among other things, applicable regulations prescribe Board to serve until the next annual election of o‘cers and until their requirements and establish standards for product quality, purity and respective successors have been elected and have quali†ed unless labeling. Failure to comply with one or more regulatory requirements removed by the Board. can result in a variety of sanctions, including monetary †nes. No such †nes of a material nature were imposed on us in š—›. We may also be Ilene S. Gordon –  required to comply with federal, state, foreign and local laws regulat- Chairman of the Board, President and Chief Executive O‘cer since ing food handling and storage. We believe these laws and regulations May , š——. Ms. Gordon was President and Chief Executive O‘cer have not negatively a®ected our competitive position. of Rio Tinto’s Alcan Packaging, a multinational business unit engaged Our operations are also subject to various federal, state, foreign in ³exible and specialty packaging, from October š——– until she joined and local laws and regulations with respect to environmental matters, the Company on May , š——. From December š——› to October š——–, including air and water quality and underground fuel storage tanks, Ms. Gordon was a Senior Vice President of Alcan Inc. and President and other regulations intended to protect public health and the and Chief Executive O‘cer of Alcan Packaging. Alcan Packaging was environment. We operate industrial boilers that †re natural gas, coal, acquired by Rio Tinto in October š——–. From š—— until December š——›, or biofuels to operate our manufacturing facilities and they are our Ms. Gordon served as President of Alcan Food Packaging Americas, a primary source of greenhouse gas emissions. In Argentina, we are in division of Alcan Inc. From  until Alcan’s December š—— acquisition discussions with local regulators associated with conducting studies of of Pechiney Group, Ms. Gordon was a Senior Vice President of Pechiney possible environmental remediation programs at our Chacabuco plant. Group and President of Pechiney Plastic Packaging, Inc., a global ³exible We are unable to predict the outcome of these discussions; however, packaging business. Prior to joining Pechiney in June , Ms. Gordon we do not believe that the ultimate cost of remediation will be spent – years with Tenneco Inc., where she most recently served as Vice

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 7 3/14/17 10:36 PM President and General Manager, heading up Tenneco’s folding carton University of Illinois at Urbana-Champaign from August š—— to business. Ms. Gordon also serves as a director of International Paper February š——›. Previously, Mr. DeLio served as Corporate Vice President Company, a global paper and packaging company, and Lockheed of Marketing and External Relations of Archer-Daniels-Midland Martin Corporation, a global security and aerospace company. She Company (“ADM”), one of the world’s largest processors of oilseeds, served as a director of Arthur J. Gallagher & Co., an international corn, wheat, cocoa and other agricultural commodities and a leading insurance brokerage and risk management business, from  to manufacturer of protein meal, vegetable oil, corn sweeteners, ³our, May š— and as a director of United Stationers Inc., now Essendant Inc., biodiesel, ethanol and other value-added food and feed ingredients, a wholesale distributor of business products and a provider of marketing from October š——š to October š——. Prior to that Mr. DeLio was and logistics services to resellers, from January š——— to May š——. President of the Protein Specialties and Nutraceutical Divisions of ADM Ms. Gordon also serves as Chairman of The Economic Club of Chicago from September š——— to October š——š and President of the Nutraceu- and as a director of Northwestern Memorial Hospital, The Executives’ tical Division of ADM from June  to September š——. He held Club of Chicago, and World Business Chicago. She is also a trustee of various senior product development positions with Mars, Inc. from The MIT Corporation and a Vice Chair of The Conference Board. ˜— to May . Mr. DeLio holds a Bachelor of Science degree in Ms. Gordon holds a Bachelor’s degree in mathematics from the chemical engineering from Rensselaer Polytechnic Institute. Massachusetts Institute of Technology (MIT) and a Master’s degree in management from MIT’s Sloan School of Management. Jack C. Fortnum – ƒ Executive Vice President and Chief Financial O‘cer since January ›, Christine M. Castellano –  š—. Prior to that Mr. Fortnum served as Executive Vice President and Senior Vice President, General Counsel, Corporate Secretary and Chief President, North America from February , š—š to January , š—. Compliance O‘cer since April , š—. Prior to that Ms. Castellano served Mr. Fortnum previously served as Executive Vice President and as Senior Vice President, General Counsel and Corporate Secretary President, Global Beverage, Industrial and North America Sweetener from October , š—š to March , š—. Ms. Castellano previously Solutions from October , š—— to January , š—š. Prior thereto, served as Vice President International Law and Deputy General Mr. Fortnum served as Vice President from  to September —, Counsel from April š˜, š— to September —, š—š, Associate General š—— and President of the North America Division from May š—— to Counsel, South America and Europe from January , š— to April š–, September —, š——. Mr. Fortnum joined CPC, a predecessor company š—, and as Associate General International Counsel from š—— to to Ingredion, in ˜ and held positions of increasing responsibility December , š——. Prior to that, Ms. Castellano served as Counsel US including serving as President, US/Canadian Region of the Company and Canada from š——š to š——. Ms. Castellano joined CPC Interna- from July š—— to May š——. Mr. Fortnum is a former Chairman of the tional, Inc., now Unilever Bestfoods (“CPC”), as Operations Attorney in Board of the Corn Re†ners Association. Mr. Fortnum is a chartered September › and held that position until š——š. CPC was a world- accountant and holds a Bachelor’s degree in economics from the wide group of businesses, principally engaged in three major industry University of Toronto and completed the Senior Business Administra- segments: consumer foods, baking and corn re†ning. Ingredion tion Course o®ered by McGill University. commenced operations as a spin-o® of CPC’s corn re†ning business. Prior to joining CPC, Ms. Castellano was an income partner in the law Diane J. Frisch – „ †rm McDermott Will & Emery from January , › and had served as Senior Vice President, Human Resources since October , š——. an associate in that †rm from  to December , ›. She serves Ms. Frisch previously served as Vice President, Human Resources, from as a trustee of The John Marshall Law School and the Peggy Notebaert May , š—— to September —, š——. Prior to that, Ms. Frisch served as Nature Museum. She also serves as a member of the board of the Vice President of Human Resources and Communications for the Food Illinois Equal Justice Foundation. Ms. Castellano holds a Bachelor’s Americas and Global Pharmaceutical Packaging businesses of Rio degree in political science from the University of Colorado and a Juris Tinto’s Alcan Packaging, a multinational company engaged in ³exible Doctor degree from the University of Michigan Law School. and specialty packaging, from January š—— to March —, š——. Prior to being acquired by Alcan Packaging, Ms. Frisch served as Vice President Anthony P. DeLio –  of Human Resources for the ³exible packaging business of Pechiney, S.A., Senior Vice President and Chief Innovation O‘cer since January , š—. an aluminum and packaging company with headquarters in Paris and Prior to that Mr. DeLio served as Vice President, Global Innovation Chicago, from January š—— to January š——. Previously, she served as from November , š—— to December , š—, and he served as Vice Vice President of Human Resources for Culligan International Company President, Global Innovation for National Starch from January , š—— to and Vice President and Director of Human Resources for Alumax Mill November , š——, when Ingredion acquired National Starch. Mr. DeLio Products, Inc., a division of Alumax Inc. Ms. Frisch holds a Bachelor of served as Vice President and General Manager, North America, of Arts degree in psychology from Ithaca College, Ithaca, NY, and a National Starch from February š›, š——› to December , š——˜. Prior Master of Science degree in industrial relations from the University to that he served as Associate Vice Chancellor of Research at the of Wisconsin in Madison.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 8 3/14/17 10:36 PM Jorgen Kokke – †‡ for Liquid Resins & Intermediates at The Dow Chemical Company. Senior Vice President and President, Asia-Paci†c and EMEA since Mr. Sonntag served as Global Product Manager for Liquid Resins & January , š—›. Prior to that Mr. Kokke served as Senior Vice President Intermediates and Global Product Marketing Manager for Intermedi- and President, Asia-Paci†c from September ›, š— to December , ates from š—— to š—— and Global Product Manager for Liquid š—. Mr. Kokke previously served as Vice President and General Resins & Intermediates and Converted Epoxy Resins from š——— to Manager, Asia-Paci†c from January ›, š— to September , š—. š——. Previously, Mr. Sonntag, who joined Dow in Stade, Germany in Prior to that, Mr. Kokke served as Vice President and General Manager, ˜ as a Process Design Engineer, held a variety of engineering and EMEA since joining National Starch (acquired by Ingredion in š——) on management positions. Mr. Sonntag holds a Bachelor’s degree in March , š——. Prior to that, he served as a Vice President of CSM NV, chemical engineering from the Hamburg University of Technology a global food ingredients supplier, where he had responsibility for the and is a graduate of the INSEAD Advanced Management Program. global Purac Food & Nutrition business from š——› to š——. Prior thereto, Mr. Kokke was Director of Strategy and Business Development Robert J. Stefansic –  at CSM NV. Prior to that he held a variety of roles of increasing Senior Vice President, Operational Excellence, Sustainability and responsibility in sales, business development, marketing and general Chief Supply Chain O‘cer since May š˜, š—. From January , š— management in Unilever’s Loders Croklaan Group. Mr. Kokke holds a to May š–, š—, Mr. Stefansic served as Senior Vice President, Master’s degree in economics from the University of Amsterdam. Operational Excellence and Environmental, Health, Safety & Sustain- ability. Prior to that, Mr. Stefansic served as Vice President, Operational Stephen K. Latreille – ƒ Excellence and Environmental, Health, Safety and Sustainability from Vice President and Corporate Controller since April , š—›. Prior to August , š— to December , š—. He previously served as Vice that Mr. Latreille served as Vice President, Corporate Finance from President, Global Manufacturing Network Optimization and Environ- August , š— to March , š—›. From August š›, š— to Novem- mental, Health, Safety and Sustainability of National Starch, and ber ˜, š—, Mr. Latreille also led the Company’s Investor Relations subsequently Ingredion, from November , š—— to July , š—. Prior and Corporate Communications function on an interim basis. He to that, he served as Vice President, Global Operations of National previously served as Director, Corporate Finance and Planning from Starch from November , š——› to October , š——. Prior to that, he March , š—, when he joined the Company, to August , š—. Prior served as Vice President, North America Manufacturing of National to that Mr. Latreille was employed by Kraft Foods, Inc., then the world’s Starch from December , š—— to October , š——›. Prior to joining second largest food company, from December  to December š˜, National Starch he held positions of increasing responsibility with The š—š. Kraft Foods was spun o® from Mondelez International on Valspar Corporation, General Chemical Corporation and Allied Signal October , š—š. He served as Senior Director, Finance and Strategy, Corporation. Mr. Stefansic holds a Bachelor degree in chemical North America Customer Service and Logistics from April , š—— to engineering and a Master degree in business administration from December š˜, š—š. Mr. Latreille served as Senior Director, Investor the University of South Carolina. Relations from June ˜, š——– to March , š——. Prior to that, he held several positions of increasing responsibility with Kraft Foods, James P. Zallie –  including Business Unit Finance Director. Prior to his time with Kraft Executive Vice President, Global Specialties and President, Americas Foods, Mr. Latreille held positions of increasing responsibility with since January , š—›. Mr. Zallie previously served as Executive Vice Rand McNally & Company, a leading provider of maps, navigation President, Global Specialties and President, North America and EMEA and travel content, and Price Waterhouse, one of the world’s largest from January ›, š— to December , š—. Prior to that Mr. Zallie accounting †rms. Mr. Latreille holds a Bachelor’s degree in account- served as Executive Vice President, Global Specialties and President, ing from Michigan State University and a Master of Business Adminis- EMEA and Asia-Paci†c from February , š—š to January , š—. tration degree from Northwestern University. He is a member of the Mr. Zallie previously served as Executive Vice President and President, American Institute of Certi†ed Public Accountants. Global Ingredient Solutions from October , š—— to January , š—š. Mr. Zallie previously served as President and Chief Executive O‘cer Martin Sonntag –  of the National Starch business from January š——– to September —, Senior Vice President, Strategy and Global Business Development š—— when it was acquired by Ingredion. Mr. Zallie worked for National since November , š—. Prior to that Mr. Sonntag served as Vice Starch for more than š– years in various positions of increasing President and General Manager, EMEA from February , š— to responsibility, †rst in technical, then marketing and then international October , š—. Prior thereto he served as an executive investment business management positions. Mr. Zallie also serves as a director of partner and portfolio manager at ADCURAM Group AG from April š— Innophos Holdings, Inc., a leading international producer of perfor- to January š—. Previously, Mr. Sonntag served as General Manager of mance-critical and nutritional specialty ingredients with applications Dow Wol® Cellulosics GmbH from July š——– to March š—. From in food, beverage, dietary supplements, pharmaceutical, oral care and October š—— to March š——–, he served as Global Business Director industrial end markets. He is a director of Northwestern Medicine,

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 9 3/14/17 10:36 PM North Region, a not-for pro†t organization. Mr. Zallie holds Masters We operate a multinational business subject to the economic, politi- degrees in food science and business administration from Rutgers cal and other risks inherent in operating in foreign countries and with University and a Bachelor of Science degree in food science from foreign currencies. Pennsylvania State University. We have operated in foreign countries and with foreign currencies Item A. Risk Factors for many years. Our results are subject to foreign currency exchange Our business and assets are subject to varying degrees of risk and ³uctuations. Our operations are subject to political, economic and uncertainty. The following are factors that we believe could cause our other risks. There has been and continues to be signi†cant political actual results to di®er materially from expected and historical results. uncertainty in some countries in which we operate. Economic changes, Additional risks that are currently unknown to us may also impair our terrorist activity and political unrest may result in business interruption business or adversely a®ect our †nancial condition or results of or decreased demand for our products. Protectionist trade measures operations. In addition, forward-looking statements within the meaning and import and export licensing requirements could also adversely a®ect of the federal securities laws that are contained in this Form —-K or in our results of operations. Our success will depend in part on our ability our other †lings or statements may be subject to the risks described to manage continued global political and/or economic uncertainty. below as well as other risks and uncertainties. Please read the cautionary We primarily sell products derived from world commodities. notice regarding forward-looking statements in Item – below. Historically, we have been able to adjust local prices relatively quickly to o®set the e®ect of local currency devaluations, although we cannot Current economic conditions may adversely impact demand for our guarantee our ability to do this in the future. For example, due to products, reduce access to credit and cause our customers and others pricing controls on many consumer products imposed in the recent with whom we do business to su‘er ’nancial hardship, all of which past by the Argentina government, it took longer than it had previ- could adversely impact our business, results of operations, ’nancial ously taken to achieve pricing improvement in response to currency condition and cash “ows. devaluations in that country. The anticipated strength in the US dollar may continue to provide some challenges as it could take an extended Economic conditions in South America, the European Union and period of time to fully recapture the impact of foreign currency many other countries and regions in which we do business have devaluations, particularly in South America. experienced various levels of weakness over the last few years, and We may hedge transactions that are denominated in a currency may remain challenging for the foreseeable future. General business other than the currency of the operating unit entering into the and economic conditions that could a®ect us include the strength of underlying transaction. We are subject to the risks normally attendant the economies in which we operate, unemployment, in³ation and to such hedging activities. ³uctuations in debt markets. While currently these conditions have not impaired our ability to access credit markets and †nance our Raw material and energy price “uctuations, and supply interruptions operations, there can be no assurance that there will not be a further and shortages could adversely a‘ect our results of operations. deterioration in the †nancial markets. There could be a number of other e®ects from these economic Our †nished products are made primarily from corn. Purchased developments on our business, including reduced consumer demand for corn and other raw material costs account for between — percent and products; pressure to extend our customers’ payment terms; insolvency › percent of †nished product costs. Some of our products are based of our customers, resulting in increased provisions for credit losses; upon speci†c varieties of corn that are produced in signi†cantly less decreased customer demand, including order delays or cancellations; volumes than yellow dent corn. These specialty grains are higher-cost and counterparty failures negatively impacting our operations. due to their more limited supply and require planning cycles of up to In connection with our de†ned bene†t pension plans, adverse three years in order for us to receive our desired amount of specialty changes in investment returns earned on pension assets and discount corn. We also manufacture certain starch-based products from rates used to calculate pension and related liabilities or changes in potatoes. Our current potato starch requirements constitute a material required pension funding levels may have an unfavorable impact on portion of the available North American supply. It is possible that, in future pension expense and cash ³ow. the long term, continued growth in demand for potato starch-based In addition, the volatile worldwide economic conditions and ingredients and new product development could result in capacity market instability may make it di‘cult for us, our customers and our constraints. Also, we utilize tapioca in the manufacturing of starch suppliers to accurately forecast future product demand trends, which products primarily in Thailand. With our acquisition of TIC Gums, we could cause us to produce excess products that could increase our now sell products made from acacia gum, approximately half of which inventory carrying costs. Alternatively, this forecasting di‘culty could we purchase in the Sudan. If our raw materials are not available in cause a shortage of products that could result in an inability to satisfy su‘cient quantities or quality, our results of operations could be demand for our products. negatively impacted.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 10 3/14/17 10:36 PM Energy costs represent approximately — percent of our †nished factors such as crop disease and severe weather conditions such as product costs. We use energy primarily to create steam in production drought, ³oods or frost that are di‘cult to anticipate and which we processes and to dry products. We consume coal, natural gas, electricity, cannot control. wood and fuel oil to generate energy. In Pakistan, the overall economy has been slowed by severe energy shortages which both negatively Our pro’tability may be a‘ected by other factors beyond our control. impact our ability to produce sweeteners and starches, and also negatively impact the demand from our customers due to their inability Our operating income and ability to increase pro†tability depend to produce their end products because of the shortage of reliable energy. to a large extent upon our ability to price †nished products at a level The market prices for our raw materials may vary considerably that will cover manufacturing and raw material costs and provide an depending on supply and demand, world economies and other factors. acceptable pro†t margin. Our ability to maintain appropriate price We purchase these commodities based on our anticipated usage and levels is determined by a number of factors largely beyond our control, future outlook for these costs. We cannot assure that we will be able such as aggregate industry supply and market demand, which may to purchase these commodities at prices that we can adequately pass vary from time to time, and the economic conditions of the geographic on to customers to sustain or increase pro†tability. regions in which we conduct our operations. In North America, we sell a large portion of our †nished products derived from corn at †rm prices established in supply contracts We operate in a highly competitive environment and it may be di˜cult typically lasting for periods of up to one year. In order to minimize to preserve operating margins and maintain market share. the e®ect of volatility in the cost of corn related to these †rm-priced supply contracts, we enter into corn futures and options contracts, or We operate in a highly competitive environment. Many of our products take other hedging positions in the corn futures market. Additionally, compete with virtually identical or similar products manufactured by we produce and sell ethanol and enter into swap contracts to hedge other companies in the starch and sweetener industry. In the United price risk associated with ³uctuations in market prices of ethanol. States, there are competitors, several of which are divisions of larger We are unable to directly hedge price risk related to co-product sales; enterprises that have greater †nancial resources than we do. Some of however, we occasionally enter into hedges of soybean oil (a compet- these competitors, unlike us, have vertically integrated their corn ing product to our animal feed and corn oil) in order to mitigate the re†ning and other operations. Many of our products also compete with price risk of animal feed and corn oil sales. These derivative contracts products made from raw materials other than corn, including cane and typically mature within one year. At expiration, we settle the derivative beet sugar. Fluctuation in prices of these competing products may a®ect contracts at a net amount equal to the di®erence between the prices of, and pro†ts derived from, our products. In addition, govern- then-current price of the commodity (corn, soybean oil or ethanol) ment programs supporting sugar prices indirectly impact the price of and the derivative contract price. These hedging instruments are corn sweeteners, especially HFCS. Competition in markets in which subject to ³uctuations in value; however, changes in the value of the we compete is largely based on price, quality and product availability. underlying exposures we are hedging generally o®set such ³uctua- tions. The ³uctuations in the fair value of these hedging instruments Changes in consumer preferences and perceptions may lessen the may a®ect our cash ³ow. We fund any unrealized losses or receive cash demand for our products, which could reduce our sales and pro’tability for any unrealized gains on futures contracts on a daily basis. While the and harm our business. corn futures contracts or hedging positions are intended to minimize the e®ect of volatility of corn costs on operating pro†ts, the hedging Food products are often a®ected by changes in consumer tastes, activity can result in losses, some of which may be material. Outside of national, regional and local economic conditions and demographic North America, sales of †nished products under long-term, †rm-priced trends. For instance, changes in prevailing health or dietary prefer- supply contracts are not material. We also use over-the-counter natural ences causing consumers to avoid food products containing sweet- gas swaps to hedge portions of our natural gas costs, primarily in our ener products, including HFCS, in favor of foods that are perceived North American operations. as being more healthy, could reduce our sales and pro†tability, and such reductions could be material. Increasing concern among Due to market volatility, we cannot assure that we can adequately pass consumers, public health professionals and government agencies potential increases in the cost of corn and other raw materials on to about the potential health concerns associated with obesity and customers through product price increases or purchase quantities of inactive lifestyles (re³ected, for instance, in taxes designed to corn and other raw materials at prices su˜cient to sustain or increase combat obesity which have been imposed recently in North America) our pro’tability. represent a signi†cant challenge to some of our customers, including those engaged in the food and soft drink industries. The price and availability of corn and other raw materials is in³uenced by economic and industry conditions, including supply and demand

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 11 3/14/17 10:36 PM The uncertainty of acceptance of products developed through Our pro’tability could be negatively impacted if we fail to maintain biotechnology could a‘ect our pro’tability. satisfactory labor relations.

The commercial success of agricultural products developed through Approximately  percent of our US and  percent of our non-US biotechnology, including genetically modi†ed corn, depends in part employees are members of unions. Strikes, lockouts or other work on public acceptance of their development, cultivation, distribution stoppages or slowdowns involving our unionized employees could and consumption. Public attitudes can be in³uenced by claims that have a material adverse e®ect on us. genetically modi†ed products are unsafe for consumption or that they pose unknown risks to the environment, even if such claims are Our reliance on certain industries for a signi’cant portion of our sales not based on scienti†c studies. These public attitudes can in³uence could have a material adverse e‘ect on our business. regulatory and legislative decisions about biotechnology. The sale of the Company’s products which may contain genetically modi†ed Approximately š percent of our š—› sales were made to companies corn could be delayed or impaired because of adverse public engaged in the food industry and approximately  percent each perception regarding the safety of the Company’s products and were made to companies in the beverage industry and companies in the potential e®ects of these products on animals, human health the paper and corrugating industry. Additionally, sales to the animal and the environment. nutrition markets and the brewing industry represented approximately — percent and ˜ percent of our š—› net sales, respectively. If our Our information technology systems, processes, and sites may food customers, beverage customers, brewing industry customers, su‘er interruptions or failures which may a‘ect our ability to conduct paper and corrugating customers or animal feed customers were to our business. substantially decrease their purchases, our business might be materially adversely a®ected. Our information technology systems, which are dependent on services provided by third parties, provide critical data connectivity, Natural disasters, war, acts and threats of terrorism, pandemic and information and services for internal and external users. These other signi’cant events could negatively impact our business. interactions include, but are not limited to, ordering and managing materials from suppliers, converting raw materials to †nished products, If the economies of any countries in which we sell or manufacture inventory management, shipping products to customers, processing products or purchase raw materials are a®ected by natural disasters; transactions, summarizing and reporting results of operations, human such as earthquakes, ³oods or severe weather; war, acts of war or resources bene†ts and payroll management, complying with regulatory, terrorism; or the outbreak of a pandemic; it could result in asset legal or tax requirements, and other processes necessary to manage our write-o®s, decreased sales and overall reduced cash ³ows. business. We have put in place security measures to protect ourselves against cyber-based attacks and disaster recovery plans for our critical Government policies and regulations could adversely a‘ect our systems. However, if our information technology systems are breached, operating results. damaged, or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, or Our operating results could be a®ected by changes in trade, monetary cyber-based attacks, and our disaster recovery plans do not e®ectively and †scal policies, laws and regulations, and other activities of United mitigate on a timely basis, we may encounter disruptions that could States and foreign governments, agencies, and similar organizations. interrupt our ability to manage our operations and su®er damage to These conditions include but are not limited to changes in a country’s our reputation, which may adversely impact our revenues, operating or region’s economic or political conditions, modi†cation or termination results and †nancial condition. of trade agreements or treaties promoting free trade, creation of new trade agreements or treaties, trade regulations a®ecting production, Our future growth could be negatively impacted if we fail to introduce pricing and marketing of products, local labor conditions and su˜cient new products and services. regulations, reduced protection of intellectual property rights, changes in the regulatory or legal environment, restrictions on currency While we do not believe that any individual patent or trademark exchange activities, currency exchange rate ³uctuations, burdensome is material to our business, a portion of our growth comes from taxes and tari®s, and other trade barriers. International risks and innovation in products, processes and services. We cannot guarantee uncertainties, including changing social and economic conditions as that our research and development e®orts will result in new products well as terrorism, political hostilities, and war, could limit our ability and services at a rate or of a quality su‘cient to meet expectations. to transact business in these markets and could adversely a®ect our revenues and operating results.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 12 3/14/17 10:36 PM Due to cross-border disputes, our operations could be adversely experienced due to continued slow economic growth, heightened a®ected by actions taken by the governments of countries in which competition, and possible future negative economic growth. we conduct business. Even though it was determined that there was no additional long-lived asset impairment as of October , š—›, the future occurrence Future costs of environmental compliance may be material. of a potential indicator of impairment, such as a signi†cant adverse change in the business climate that would require a change in our Our business could be a®ected in the future by national and global assumptions or strategic decisions made in response to economic or regulation or taxation of greenhouse gas emissions. In the United competitive conditions, could require us to perform an assessment States, the US Environmental Protection Agency (“EPA”) has adopted prior to the next required assessment date of October , š—–. regulations requiring the owners and operators of certain facilities to measure and report their greenhouse gas emission. The US EPA Changes in our tax rates or exposure to additional income tax liabilities has also begun to regulate greenhouse gas emissions from certain could impact our pro’tability. stationary and mobile sources under the Clean Air Act. For example, the US EPA has proposed rules regarding the construction and We are subject to income taxes in the United States and in various operation of coal-†red boilers. California and Ontario are also moving other foreign jurisdictions. Our e®ective tax rates could be adversely forward with various programs to reduce greenhouse gases. Globally, a®ected by changes in the mix of earnings by jurisdiction, changes a number of countries that are parties to the Kyoto Protocol have in tax laws or tax rates, including potential tax reform in the US to instituted or are considering climate change legislation and regula- broaden the tax base, change the tax rate or alter the taxation of tions. Most notable is the European Union Greenhouse Gas Emission o®shore earnings, changes in the valuation of deferred tax assets Trading System. It is di‘cult at this time to estimate the likelihood of and liabilities and material adjustments from tax audits. passage or predict the potential impact of any additional legislation. Signi†cant changes in the tax laws of the US and numerous Potential consequences could include increased energy, transportation foreign jurisdictions in which we do business could result from the and raw materials costs and may require the Company to make base erosion and pro†t shifting (BEPS) project undertaken by the additional investments in its facilities and equipment. Organization for Economic Cooperation and Development (OECD). An OECD-led coalition of  countries is contemplating changes to The recognition of impairment charges on goodwill or long-lived long-standing international tax norms that determine each country’s assets could adversely impact our future ’nancial position and results right to tax cross-border transactions. These contemplated changes, of operations. if †nalized and adopted by countries, would increase tax uncertainty and the risk of double taxation, thereby adversely a®ecting our We have ª. billion of total intangible assets at December , š—›, provision for income taxes. consisting of ª–˜ million of goodwill and ª—š million of other The recoverability of our deferred tax assets, which are predomi- intangible assets. Additionally, we have ªš.š billion of long-lived nantly in Brazil, Canada, Germany, Mexico and the US, is dependent assets at December , š—›. upon our ability to generate future taxable income in these jurisdic- We perform an annual impairment assessment for goodwill and our tions. In addition, the amount of income taxes we pay is subject to inde†nite-lived intangible assets, and as necessary, for other long-lived ongoing audits in various jurisdictions and a material assessment by assets. If the results of such assessments were to show that the fair value a governing tax authority could a®ect our pro†tability and cash ³ows. of these assets were less than the carrying values, we could be required to recognize a charge for impairment of goodwill and/or long-lived Operating di˜culties at our manufacturing plants could adversely assets and the amount of the impairment charge could be material. a‘ect our operating results. Based on the results of the annual assessment, we concluded that as of October , š—›, it was more likely than not that the fair value of all of our Producing starches and sweeteners through corn re†ning is a reporting units was greater than their carrying value and no additional capital intensive industry. We have  plants and have preventive impairment charges were necessary (although the ªš› million of goodwill maintenance and de-bottlenecking programs designed to maintain at our Brazil reporting unit continues to be closely monitored due to and improve grind capacity and facility reliability. If we encounter recent trends and increased volatility experienced in this reporting unit, operating di‘culties at a plant for an extended period of time or such as continued slow economic growth, heightened competition and start-up problems with any capital improvement projects, we may not possible future negative economic growth). Additionally, signi†cant risk be able to meet a portion of sales order commitments and could incur and uncertainty exists around certain manufacturing assets in Argentina signi†cantly higher operating expenses, both of which could adversely and Brazil that we are closely monitoring due to increased volatility a®ect our operating results. We also use boilers to generate steam

INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 13 3/14/17 10:36 PM required in our manufacturing processes. An event that impaired or alliances on favorable terms, if at all. In addition, the process of the operation of a boiler for an extended period of time could have integrating an acquired business (such as TIC Gums), technology, a signi†cant adverse e®ect on the operations of any plant in which service or product into our existing business and operations may result such event occurred. in unforeseen operating di‘culties and expenditures. Integration of an Also, we are subject to risks related to such matters as product acquired company also may require signi†cant management resources safety and quality; compliance with environmental, health and safety that otherwise would be available for ongoing development of our and food safety regulations; and customer product liability claims. The business. Moreover, we may not realize the anticipated bene†ts of any liabilities that could result from these risks may not always be covered acquisition or strategic alliance, and such transactions may not by, or could exceed the limits of, our insurance coverage related to generate anticipated †nancial results. Future acquisitions could also product liability and food safety matters. In addition, negative publicity require us to issue equity securities, incur debt, assume contingent caused by product liability and food safety matters may damage our liabilities or amortize expenses related to intangible assets, any of reputation. The occurrence of any of the matters described above which could harm our business. could adversely a®ect our revenues and operating results. An inability to contain costs could adversely a‘ect our future We may not have access to the funds required for future growth pro’tability and growth. and expansion. Our future pro†tability and growth depends on our ability to contain We may need additional funds to grow and expand our operations. operating costs and per-unit product costs and to maintain and/or We expect to fund our capital expenditures from operating cash implement e®ective cost control programs, while at the same time ³ow to the extent we are able to do so. If our operating cash ³ow is maintaining competitive pricing and superior quality products, insu‘cient to fund our capital expenditures, we may either reduce customer service and support. Our ability to maintain a competitive our capital expenditures or utilize our general credit facilities. For cost structure depends on continued containment of manufacturing, further strategic growth through mergers or acquisitions, we may delivery and administrative costs, as well as the implementation of also seek to generate additional liquidity through the sale of debt or cost-e®ective purchasing programs for raw materials, energy and equity securities in private or public markets or through the sale of related manufacturing requirements. non-productive assets. We cannot provide any assurance that our If we are unable to contain our operating costs and maintain the cash ³ows from operations will be su‘cient to fund anticipated capital productivity and reliability of our production facilities, our pro†tability expenditures or that we will be able to obtain additional funds from and growth could be adversely a®ected. †nancial markets or from the sale of assets at terms favorable to us. If we are unable to generate su‘cient cash ³ows or raise su‘cient Increased interest rates could increase our borrowing costs. additional funds to cover our capital expenditures or other strategic growth opportunities, we may not be able to achieve our desired From time to time we may issue securities to †nance acquisitions, capital operating e‘ciencies and expansion plans, which may adversely expenditures, working capital and for other general corporate purposes. impact our competitiveness and, therefore, our results of operations. An increase in interest rates in the general economy could result in an Our working capital requirements, including margin requirements on increase in our borrowing costs for these †nancings, as well as under open positions on futures exchanges, are directly a®ected by the price any existing debt that bears interest at an unhedged ³oating rate. of corn and other agricultural commodities, which may ³uctuate signi†cantly and change quickly. Volatility in the stock market, “uctuations in quarterly operating results and other factors could adversely a‘ect the market price of our common stock. We may not successfully identify and complete acquisitions or strategic alliances on favorable terms or achieve anticipated synergies The market price for our common stock may be signi†cantly a®ected relating to any acquisitions or alliances, and such acquisitions could by factors such as our announcement of new products or services or result in unforeseen operating di˜culties and expenditures and require such announcements by our competitors; technological innovation signi’cant management resources. by us, our competitors or other vendors; quarterly variations in our operating results or the operating results of our competitors; general We regularly review potential acquisitions of complementary conditions in our or our customers’ markets; and changes in the businesses, technologies, services or products, as well as potential earnings estimates by analysts or reported results that vary materially strategic alliances. We may be unable to †nd suitable acquisition from such estimates. In addition, the stock market has experienced candidates or appropriate partners with which to form partnerships signi†cant price ³uctuations that have a®ected the market prices of or strategic alliances. Even if we identify appropriate acquisition or equity securities of many companies that have been unrelated to the alliance candidates, we may be unable to complete such acquisitions operating performance of any individual company.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 14 3/14/17 10:36 PM No assurance can be given that we will continue to pay dividends. Asia Paci­c Lane Cove, Australia The payment of dividends is at the discretion of our Board of Guangzhou, China Directors and will be subject to our †nancial results and the availability Shandong Province, China of surplus funds to pay dividends. Shanghai, China Ichon, South Korea Item B. Unresolved Staž Comments Inchon, South Korea None Ban Kao Dien, Thailand Kalasin, Thailand Item . Properties Sikhiu, Thailand We own or lease (as noted below), directly and through our consolidated EMEA subsidiaries,  manufacturing facilities. In addition, we lease our Hamburg, Germany corporate headquarters in Westchester, Illinois and our research and Cornwala, Pakistan development facility in Bridgewater, New Jersey. Faisalabad, Pakistan The following list details the locations of our manufacturing Mehran, Pakistan facilities within each of our four reportable business segments: Goole, United Kingdom

North America (a) Facility is leased. Cardinal, Ontario, Canada We believe our manufacturing facilities are su‘cient to meet our London, Ontario, Canada current production needs. We have preventive maintenance and San Juan del Rio, Queretaro, Mexico de-bottlenecking programs designed to further improve grind capacity Guadalajara, Jalisco, Mexico and facility reliability. Mexico City, Edo, Mexico We have electricity co-generation facilities at our plants in London, Oxnard, California, U.S. (a) Ontario, Canada; Stockton, California; Bedford Park, Illinois; Winston- Stockton, California, U.S. Salem, North Carolina; San Juan del Rio and Mexico City, Mexico; Cali, Idaho Falls, Idaho, U.S. Colombia; Cornwala, Pakistan; and Balsa Nova and Mogi-Guacu, Brazil, Bedford Park, Illinois, U.S. that provide electricity at a lower cost than is available from third Mapleton, Illinois, U.S. parties. We generally own and operate these co-generation facilities, Indianapolis, Indiana, U.S. except for the facilities at our Mexico City, Mexico; and Balsa Nova Cedar Rapids, Iowa, U.S. and Mogi-Guacu, Brazil locations, which are owned by, and operated Belcamp, Maryland, U.S. pursuant to co-generation agreements with third parties. We are North Kansas City, Missouri, U.S. constructing a co-generation facility at our plant in Cardinal, Ontario. Winston-Salem, North Carolina, U.S. In recent years, we have made signi†cant capital expenditures to Salem, Oregon, U.S. update, expand and improve our facilities, spending ªš˜ million in Berwick, Pennsylvania, U.S. š—›. We believe these capital expenditures will allow us to operate Charleston, South Carolina, U.S. e‘cient facilities for the foreseeable future. We currently anticipate North Charleston, South Carolina, U.S. that capital expenditures for š—– will approximate ª——-ªš million. Richland, Washington, U.S. Plover, Wisconsin, U.S. Item ˆ. Legal Proceedings South America We are a party to a large number of labor claims relating to our Baradero, Argentina Brazilian operations. We have reserved an aggregate of approximately Chacabuco, Argentina ª million as of December , š—› in respect of these claims. These Balsa Nova, Brazil labor claims primarily relate to dismissals, severance, health and Cabo, Brazil safety, work schedules and salary adjustments. Mogi-Guacu, Brazil We are currently subject to various other claims and suits arising Rio de Janeiro, Brazil in the ordinary course of business, including certain environmental Barranquilla, Colombia proceedings and other commercial claims. We also routinely receive Cali, Colombia inquiries from regulators and other government authorities relating to Lima, Peru various aspects of our business, including with respect to compliance with laws and regulations relating to the environment, and at any

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 15 3/14/17 10:36 PM Part II

given time, we have matters at various stages of resolution with the Item . Market for Registrant’s Common Equity, Related applicable governmental authorities. The outcomes of these matters Stockholder Matters and Issuer Purchases of Equity Securities are not within our complete control and may not be known for Shares of our common stock are traded on the New York Stock prolonged periods of time. We do not believe that the results of Exchange (“NYSE”) under the ticker symbol “INGR.” The number of currently known legal proceedings and inquires, even if unfavorable holders of record of our common stock was ,› at January , š—–. to us, will be material to us. There can be no assurance, however, We have a history of paying quarterly dividends. The amount and that such claims, suits or investigations or those arising in the future, timing of the dividend payment, if any, is based on a number of factors whether taken individually or in the aggregate, will not have a material including estimated earnings, †nancial position and cash ³ow. The adverse e®ect on our †nancial condition or results of operations. payment of a dividend is solely at the discretion of our Board of Directors. Future dividend payments will be subject to our †nancial Item
. Mine Safety Disclosures results and the availability of funds and statutory surplus to pay Not applicable. dividends. The quarterly high and low market prices for our common stock and cash dividends declared per common share for š— and š—› are shown below.

°st Qtr ¹nd Qtr ºrd Qtr »th Qtr ‰ High $108.00 $129.42 $140.00 $137.62 Low 84.57 104.24 128.18 113.92 Per share dividends declared $÷÷0.45 $÷÷0.45 $÷÷0.50 $÷÷0.50  High $÷86.80 $÷83.00 $÷93.87 $÷99.64 Low 75.11 76.26 79.31 85.85 Per share dividends declared $÷÷0.42 $÷÷0.42 $÷÷0.45 $÷÷0.45

Issuer Purchases of Equity Securities: The following table summarizes information with respect to our purchases of our common stock during the fourth quarter of š—›.

Maximum Number (or Total Approximate Number Dollar Value) of Shares of Shares Purchased that may yet as part be Purchased Total of Publicly Under the Number Average Announced Plans or of Shares Price Paid Plans or Programs at (shares in thousands) Purchased per Share Programs end of period Oct.  – Oct. , š—› –––,– shares Nov.  – Nov. —, š—› –––,– shares Dec.  – Dec. , š—› –––,– shares Total –––

On December š, š—, the Board of Directors authorized a new stock repurchase program permitting the Company to purchase up to  million of its outstanding common shares from January , š— through December , š—. At December , š—›, we have .– million shares available for repurchase under the stock repurchase program.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 16 3/14/17 10:36 PM Item ‰. Selected Financial Data added value to our customers. Our ingredients are used by customers Selected †nancial data is provided below. in the food, beverage, animal feed, paper and corrugating, and brewing industries, among others. (in millions, except per share amounts) ¹±°¼ (a) ¹±°½ (b) ¹±°» ¹±°º ¹±°¹ Our Strategic Blueprint continues to guide our decision-making Summary of operations: and strategic choices with an emphasis on value-added ingredients for Net sales $5,704 $5,621 $5,668 $6,328 $6,532 Net income attributable to our customers. The foundation of our Strategic Blueprint is operational Ingredion 485(c) 402(d) 355(e) 396 428(f) excellence, which includes our focus on safety, quality and continuous Net earnings per common improvement. We see growth opportunities in three areas. First is share of Ingredion: organic growth as we work to expand our current business. Second, Basic $÷6.70(c) $÷5.62(d) $÷4.82(e) $÷5.14 $÷5.59(f) we are focused on broadening our ingredient portfolio of on-trend Diluted $÷6.55(c) $÷5.51(d) $÷4.74(e) $÷5.05 $÷5.47(f) Cash dividends declared per products through internal and external business development. Finally, common share of Ingredion $÷1.90 $÷1.74 $÷1.68 $÷1.56 $÷0.92 we look for growth from geographic expansion as we pursue extension Balance sheet data: of our reach to new locations. The ultimate goal of these strategies Working capital $1,274 $1,208 $1,423 $1,394 $1,427 and actions is to deliver increased shareholder value. Property, plant and Critical success factors in our business include managing our equipment – net 2,116 1,989 2,073 2,156 2,193 signi†cant manufacturing costs, including costs for corn, other raw Total assets 5,782 5,074 5,085 5,353 5,583 materials and utilities. In addition, due to our global operations we are Long-term debt 1,850 1,819 1,798 1,710 1,715 Total debt 1,956 1,838 1,821 1,803 1,791 exposed to ³uctuations in foreign currency exchange rates. We use Total equity (g) $2,595 $2,180 $2,207 $2,429 $2,459 derivative †nancial instruments, when appropriate, for the purpose of Shares outstanding, year end 72.4 71.6 71.3 74.3 77.0 minimizing the risks and/or costs associated with ³uctuations in certain Additional data: raw material and energy costs, foreign exchange rates and interest Depreciation and amortization $÷«196 $÷«194 $÷«195 $÷«194 $÷«211 rates. Also, the capital intensive nature of our business requires that we Capital expenditures 284 280 276 298 313 generate signi†cant cash ³ow over time in order to selectively reinvest (a) Includes TIC Gums Incorporated at December º°, ¹±°¼ for balance sheet data only. in our operations and grow organically, as well as through strategic (b) Includes Penford from March °°, ¹±°½ forward and Kerr from August º, ¹±°½ forward. acquisitions and alliances. We utilize certain key †nancial metrics (c) Includes after-tax restructuring charges of ¾°½ million (¾±.¹± per diluted common share) consisting of employee severance-related charges and other costs associated with the execution of global IT relating to return on capital employed and †nancial leverage to monitor outsourcing contracts, severance-related costs attributable to our optimization initiatives in North America and South America, and additional charges pertaining to our ¹±°½ Port Colborne plant sale our progress toward achieving our strategic business objectives (see and after-tax costs of ¾¹ million (¾±.±º per diluted common share) associated with the integration of section entitled “Key Financial Performance Metrics”). acquired operations. Additionally, includes a charge of ¾¹¿ million (¾±.º¼ per diluted common share) associated with an income tax matter. We had a strong year in š—› as net sales, operating income, net (d) Includes after-tax charges for impaired assets and restructuring costs of ¾°À million (¾±.¹½ per diluted common share), after-tax costs of ¾¿ million (¾±.°± per diluted common share) relating to the income and diluted earnings per common share grew from š—. acquisition and integration of both Penford and Kerr, after-tax costs of ¾¼ million (¾±.±Á per diluted This growth was driven principally by signi†cantly improved operating common share) relating to the sale of Penford and Kerr inventory that was adjusted to fair value at the respective acquisition dates in accordance with business combination accounting rules, after-tax costs results in our North America segment. Operating income also grew in of ¾» million (¾±.±¼ per diluted common share) relating to a litigation settlement and an after-tax gain from the sale of a plant of ¾Á million (¾±.°¹ per diluted common share). our Asia Paci†c and EMEA segments, which was partially o®set by (e) Includes a ¾ºº million impairment charge (¾±.»» per diluted common share) to write-o® goodwill at lower results in our South America segment. In North America, our our Southern Cone of South America reporting unit and after-tax costs of ¾°.¿ million (¾±.±¹ per diluted common share) related to the then-pending Penford acquisition. largest segment, operating income for š—› rose š– percent principally (f) Includes a ¾°º million bene†t from the reversal of a valuation allowance that had been recorded against driven by improved product price/mix and operating e‘ciencies in the net deferred tax assets of our Korean subsidiary (¾±.°¼ per diluted common share), after-tax charges for impaired assets and restructuring costs of ¾¹º million (¾±.¹Á per diluted common share), an after-tax segment. South America operating income declined š percent in š—› gain from a change in a North American bene†t plan of ¾º million (¾±.±» per diluted common share), after-tax costs of ¾º million (¾±.±º per diluted common share) relating to the integration of National re³ecting the di‘cult macroeconomic environment in the region. Asia Starch and an after-tax gain from the sale of land of ¾¹ million (¾±.±¹ per diluted common share). Paci†c operating income grew  percent as volume growth and good (g) Includes non-controlling interests. cost control more than o®set the impact of reduced product selling prices and local currency weakness in the segment. Operating income Item ‹. Management’s Discussion and Analysis of Financial in EMEA increased  percent driven by volume growth and lower raw Condition and Results of Operations material and energy costs, which more than o®set the impact of local Overview currency weakness in the segment. We are a major supplier of high-quality food and industrial ingredients Our operating cash ³ow rose to ª–– million in š—› from ª›˜› mil- to customers around the world. We have  manufacturing plants lion in š—, and we continued to advance our Strategic Blueprint by located in North America, South America, Asia Paci†c and Europe, investing in our business, growing our product portfolio and rewarding the Middle East and Africa (“EMEA”), and we manage and operate our shareholders. businesses at a regional level. We believe this approach provides us On December š, š—›, we acquired TIC Gums Incorporated (“TIC with a unique understanding of the cultures and product requirements Gums”), a US-based company that provides advanced texture systems in each of the geographic markets in which we operate, bringing to the food and beverage industry. Consistent with our Strategic

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 17 3/14/17 10:36 PM Blueprint for growth, this acquisition enhances our texture capabilities a stronger US dollar. We anticipate that this improvement will be and formulation expertise and provides additional opportunities for driven primarily from growth in our specialty ingredient product us to provide solutions for natural, organic and clean-label demands portfolio and e®ective cost control. of our customers. TIC Gums utilizes a variety of agriculturally derived We currently expect that our available cash balances, future cash ingredients, such as acacia gum and guar gum, to form the foundation ³ow from operations, access to debt markets and borrowing capacity for innovative texture systems and allow for clean-label reformulation. under our credit facilities will provide us with su‘cient liquidity to TIC Gums operates two production facilities, one in Belcamp, Maryland fund our anticipated capital expenditures, dividends and other and one in Guangzhou, China. TIC Gums also maintains an R&D lab in investing and/or †nancing activities for the foreseeable future. each of these facilities. We funded the ª million acquisition with cash on hand and short-term borrowings. Results of Operations On November š, š—›, we completed our acquisition of Shandong We have signi†cant operations in four reporting segments: North Huanong Specialty Corn Development Co., Ltd. (“Shandong Huanong”) America, South America, Asia Paci†c and EMEA. For most of our foreign in China for ªš million in cash. The acquisition of Shandong Huanong, subsidiaries, the local foreign currency is the functional currency. located in Shandong Province, adds a second manufacturing facility to Accordingly, revenues and expenses denominated in the functional our operations in China. It produces starch raw material for our plant currencies of these subsidiaries are translated into US dollars at the in Shanghai, which makes value-added ingredients for the food applicable average exchange rates for the period. Fluctuations in industry. The transaction represents another step in executing our foreign currency exchange rates a®ect the US dollar amounts of our Strategic Blueprint for growth. We expect it to enhance our capacity foreign subsidiaries’ revenues and expenses. The impact of foreign in the Asia-Paci†c segment with a vertically integrated manufacturing currency exchange rate changes, where signi†cant, is provided below. base for specialty ingredients. The acquisition did not have a material We acquired Penford Corporation (“Penford”) and Kerr Concen- impact on our †nancial condition, results of operations or cash ³ows. trates, Inc. (“Kerr”) on March , š— and August , š—, respectively. On August –, š—›, we announced that we entered into a The results of the acquired businesses are included in our consolidated de†nitive agreement to acquire the rice starch and rice ³our business †nancial results within the North America reporting segment from the from Sun Flour Industry Co, Ltd. based in Banglen, Thailand. This respective acquisition dates forward. While we identify signi†cant pending acquisition supports our global strategy to increase our ³uctuations due to the acquisitions, our discussion below also specialty ingredients business and has been approved by our board of addresses results of operations absent the impact of the acquisitions directors. This transaction should enhance our global supply chain and and the results of the acquired businesses, where appropriate, to leverage other capital investments that we have made in Thailand to provide a more comparable and meaningful analysis. grow our specialty ingredients and service customers around the world. The acquisition is subject to approval by Thailand government ‰ Compared to  authorities as well as to other customary closing conditions. The Net Income Attributable to Ingredion Net income attributable to acquisition is not expected to have a material impact on our †nancial Ingredion for š—› increased to ª˜ million, or ª›. per diluted condition, results of operations or cash ³ows. common share, from ª—š million, or ª. per diluted common share We also re†nanced ª— million of term loan debt and entered in š—. Our results for š—› include a ªš– million charge (ª—.› per into a new ª billion revolving credit facility in š—›. Additionally, we diluted common share) for an income tax settlement (see Note  to increased our quarterly cash dividend by  percent to ª—.— per share the Consolidated Financial Statements for additional information), of common stock. after-tax restructuring costs of ª million (ª—.š— per diluted common Looking ahead, we anticipate that our operating income and net share) consisting of employee severance-related charges and other income will grow in š—– compared to š—›. In North America, we costs associated with the execution of global IT outsourcing contracts, expect operating income to increase driven by improved product mix severance-related costs attributable to optimization initiatives in and margins. In South America, we expect another challenging year. North America and South America and additional charges pertaining We believe that operating income will increase from š—› despite to our š— Port Colborne plant sale. Additionally, our results for š—› continued slow economic growth and local foreign currency weakness. include after-tax costs of ªš million (ª—.— per diluted common share) We intend to continue to maintain a high degree of focus on cost and associated with the integration of acquired operations. Our results network optimization during š—– as we manage through the di‘cult for š— included after-tax charges of ª million (ª—. per diluted macroeconomic environment in this segment. In the longer-term, we common share) for impaired assets and restructuring costs in Brazil believe that the underlying business fundamentals for our South and Canada, after-tax restructuring charges of ª– million (ª—.— per American segment are positive for the future and we believe that we diluted common share) for employee severance-related costs are well-positioned to take advantage of an economic recovery when it associated with the Penford acquisition, after-tax costs of ª– million materializes. We expect operating income growth in Asia Paci†c and (ª—.— per diluted common share) associated with the acquisition and EMEA in š—–, despite anticipated currency headwinds associated with integration of both Penford and Kerr, after-tax costs of ª› million

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INGR AR16 financials_Keyline_r1.pdf 18 3/14/17 10:36 PM (ª—.— per diluted common share) relating to the sale of Penford corn. Currency translation caused cost of sales for š—› to decrease and Kerr inventory that was adjusted to fair value at the respective approximately  percent from š—, re³ecting the impact of the acquisition dates in accordance with business combination accounting stronger US dollar. Our gross pro†t margin for š—› was š percent, rules, after-tax costs of ª million (ª—.—› per diluted common share) compared to šš percent in š—. This increase primarily re³ects relating to a litigation settlement and an after-tax gain of ª million signi†cantly improved gross pro†t margins in North America and, (ª—.š per diluted common share) from the sale of our Port Colborne to a lesser extent, in Asia Paci†c and EMEA. plant. Without the income tax settlement charge, the restructuring, impairment and acquisition-related charges, the gain from the plant Selling, General and Administrative Expenses Selling, general and sale and the litigation settlement costs, our net income and diluted administrative (“SG&A”) expenses for š—› increased to ª– million earnings per share would have grown š percent and š percent, from ª million in š—. The increase primarily re³ects higher respectively, from š—. These increases primarily re³ect signi†cantly compensation-related costs and incremental operating expenses of improved operating income in North America and, to a lesser extent, acquired operations. Favorable translation e®ects associated with the in Asia Paci†c and EMEA, as compared to š—. stronger US dollar partially o®set these increases. Currency translation associated with weaker foreign currencies reduced SG&A expenses Net Sales Net sales for š—› increased to ª.–— billion from for š—› by approximately  percent from š—. SG&A expenses ª.›š billion in š—. represented  percent of gross pro†t in š—›, as compared to A summary of net sales by reportable business segment is  percent of gross pro†t in š—. The decline re³ects our contin- shown below: ued focus on cost control and gross pro†t growth.

Increase (in millions) ¹±°¼ ¹±°½ (Decrease)  Change Other Income – Net Other income-net of ª million for š—› increased North America $3,447 $3,345 $102 3∞ from ª million in š—. South America 1,010 1,013 (3) (0)∞ A summary of other income-net is as follows: Asia Paci†c 709 733 (24) (3)∞ EMEA 538 530 8 2∞ Other Income (Expense) Total $5,704 $5,621 $÷83 1∞ (in millions) Year Ended December º°, ¹±°¼ ¹±°½ The increase in net sales re³ects price/product mix improvement Gain from sale of plant $– $10 of  percent partially o®set by unfavorable currency translation of Litigation settlement – (7)  percent due to the stronger US dollar. Volume was ³at. Organic Expense associated with tax indemni†cation – (4) volume declined approximately š percent primarily re³ecting the Other 4 2 impact of the Port Colborne plant sale. Totals $4 $÷1 Net sales in North America for š—› increased  percent re³ecting price/product mix improvement of  percent, partially o®set by a Operating Income A summary of operating income is shown below:  percent volume decline. Organic volume declined  percent driven primarily by the impact of the Port Colborne plant sale. In South Favorable Favorable (Unfavorable) (Unfavorable) America, net sales for š—› were ³at as unfavorable currency (in millions) ¹±°¼ ¹±°½ Variance  Change translation of – percent and a  percent volume reduction o®set price/ North America $610 $479 $131 27∞ product mix improvement of šš percent. In Asia Paci†c, net sales for South America 89 101 (12) (12)∞ š—› decreased  percent as volume growth of  percent was more Asia Paci†c 111 107 4 4∞ than o®set by a  percent price/product mix decline due to the pass EMEA 106 93 13 14∞ through of lower raw material costs in pricing to our customers and Corporate expenses (86) (75) (11) (15)∞ unfavorable currency translation of š percent. EMEA net sales for š—› Restructuring/ impairment charges (19) (28) 9 32∞ increased š percent as volume growth of › percent more than o®set Acquisition/integration unfavorable currency translation of  percent attributable to weaker costs (3) (10) 7 70∞ local currencies and a  percent price/product mix reduction resulting Gain from sale of plant — 10 (10) NM from the pass through of lower corn costs in pricing to our customers. Charge for fair value markup of acquired inventory — (10) 10 NM Cost of Sales Cost of sales for š—› decreased š percent to ª.— billion Litigation settlement — (7) 7 NM from ª.˜ billion in š—. This reduction primarily re³ects the e®ects Operating income $808 $660 $148 22∞ of currency translation. Gross corn costs per ton for š—› increased approximately  percent from š—, driven by higher market prices for

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INGR AR16 financials_Keyline_r1.pdf 19 3/14/17 10:36 PM Operating income for š—› increased to ª˜—˜ million from ª››— mil- income by approximately ª› million. We anticipate that our business lion in š—. Operating income for š—› includes restructuring charges in South America will continue to be challenged by di‘cult economic of ª million consisting of ª million of employee-related severance conditions and we continue to assess various strategic options to and other costs due to the execution of global IT outsourcing contracts, better optimize our business and improve performance in South ª› million of employee-related severance costs associated with our America. Implementation of certain of these options could result in optimization initiatives in North America and South America, and future asset impairment charges in the segment. Asia Paci†c operating ªš million of costs attributable to the š— Port Colborne plant sale. income increased  percent to ª million from ª—– million in š—. Additionally, the š—› results include ª million of costs associated Volume growth and good cost control more than o®set the impact with our integration of acquired operations. Operating income for š— of reduced product selling prices and local currency weakness in the included a ª— million gain from the sale of our Port Colborne plant, segment. Translation e®ects associated with weaker Asia Paci†c ªš million of charges for impaired assets and restructuring costs currencies negatively impacted operating income by approximately associated with our plant closings in Brazil, a restructuring charge of ª million in the segment. EMEA operating income grew  percent ªš million for estimated severance-related costs associated with the to ª—› million from ª million in š—. The increase was driven by Penford acquisition, costs of ª– million relating to a litigation volume growth and lower raw material and energy costs, which more settlement, a ª million restructuring charge for estimated severance- than o®set the impact of local currency weakness in the segment. related expenses and other costs associated with the sale of the Port Translation e®ects primarily associated with the weaker British Pound Colborne plant, and ª— million of other costs associated with the Sterling and Pakistan Rupee had an unfavorable impact of approxi- acquisitions and integration of the Penford and Kerr businesses. mately ª million on operating income in the segment. An increase in Additionally, the š— results included ª— million of costs associated corporate expenses primarily re³ects increased variable compensation with the sale of Penford and Kerr inventory that was marked up to fair and continued investments in our administrative processes. value at the acquisition date in accordance with business combination accounting rules. Without the restructuring / impairment charges, Financing Costs – Net Financing costs-net increased to ª›› million in acquisition-related expenses, litigation settlement costs and gain from š—› from ª› million in š—. The increase primarily re³ects reduced the plant sale, operating income for š—› would have grown ˜ percent interest income due to lower average cash balances and short-term from š—. This increase primarily re³ects operating income growth in investment rates and an increase in interest expense driven by higher North America and, to a lesser extent, in EMEA and Asia Paci†c. weighted average borrowing costs that more than o®set the impact Unfavorable currency translation attributable to the stronger US dollar of reduced average debt balances. A decline in foreign currency negatively impacted operating income by approximately ª– million as transaction losses partially o®set these increases. compared to š—. Our product pricing actions helped to mitigate the unfavorable impact of currency translation. Provision for Income Taxes Our e®ective tax rate was . percent in North America operating income increased š– percent to ª›— mil- š—›, as compared to .š percent in š—. lion from ª– million in š—. Earnings contributed by the acquired We have been pursing relief from double taxation under the US operations represented approximately š percentage points of the and Canadian tax treaty for the years š——-š—. During the th increase. The remaining organic operating income improvement quarter of š—›, a tentative agreement was reached between the US of š percent for š—› was driven principally by improved product and Canada for the speci†c issues being contested. We established a price/mix and operating e‘ciencies in the segment. Our North net reserve of ªš million or .š percentage points on the e®ective American results included business interruption insurance recoveries tax rate in š—›. In addition, as a result of the settlement, for the of ª– million in both š—› and š— relating to the reimbursement of years š—-š—›, we have established a net reserve for ª– million or costs in those years. Translation e®ects associated with a weaker .— percentage points on the e®ective tax rate in š—›. Of this amount, Canadian dollar negatively impacted operating income by approxi- ª million pertains to š—›. mately ª million in the segment. South America operating income We use the US dollar as the functional currency for our subsidiar- decreased š percent to ª˜ million from ª— million in š—. The ies in Mexico. Because of the continued decline in the value of the decrease re³ects lower earnings in the Southern Cone region of Mexican peso versus the US dollar, our tax provision for š—› and š— South America, which more than o®set earnings growth in the rest was increased by ª˜ million or š. percentage points and ª– million, of the segment. Improved product selling prices were not enough to or š. percentage points, respectively. A primary cause was foreign o®set higher local production costs, reduced volume attributable to currency translation gains for local income tax purposes on net US the di‘cult macroeconomic environment (particularly in the Southern dollar monetary assets held in Mexico for which there is no corre- Cone) and unfavorable impacts of currency devaluations. Translation sponding gain in our pre-tax income. e®ects associated with weaker South American currencies (particularly During š—› we recorded a valuation allowance on the net the Colombian Peso and Brazilian Real) negatively impacted operating deferred tax assets of a foreign subsidiary in the amount of ª– million

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INGR AR16 financials_Keyline_r1.pdf 20 3/14/17 10:36 PM or .— percentage points on the e®ective tax rate in š—›. In addition,  Compared to 
we accrued taxes on unremitted earnings of foreign subsidiaries in Net Income Attributable to Ingredion Net income attributable to the amount of ª.– million or —. percentage points on the e®ective Ingredion for š— increased to ª—š million, or ª. per diluted rate in š—›. common share, from ª million, or ª.– per diluted common share The above items were partially o®set in š—› by ªš million, in š—. Our results for š— include after-tax charges of ª million or —. percentage points of net favorable reversals of previously (ª—. per diluted common share) for impaired assets and restructur- unrecognized tax bene†ts. In addition, foreign tax credits increased ing costs in Brazil and Canada, after-tax restructuring charges of in the amount of ªšš million or .— percentage points. Finally, in the ª– million (ª—.— per diluted common share) for employee severance- second quarter of š—›, we elected to early adopt ASU No. š—›-—, related costs associated with the Penford acquisition, after-tax costs related to stock compensation. The new guidance requires excess of ª– million (ª—.— per diluted common share) associated with the tax bene†ts and tax de†ciencies to be recorded in the provision for acquisition and integration of both Penford and Kerr, after-tax costs income taxes when stock options are exercised or restricted shares of ª› million (ª—.— per diluted common share) relating to the sale of and performance shares vest. Our š—› tax provision includes a Penford and Kerr inventory that was adjusted to fair value at the tax bene†t of ªš million, or .› percentage points, related to the respective acquisition dates in accordance with business combination adoption of this standard. accounting rules, after-tax costs of ª million (ª—.—› per diluted Based on the †nal settlement of an audit matter, in š— we common share) relating to a litigation settlement and an after-tax gain reversed ª million of the ª– million income tax expense and other of ª million (ª—.š per diluted common share) from the sale of our income that was recorded in š—. As a result, our e®ective income Port Colborne plant. Our results for š— include an impairment charge tax rate for š— was reduced by —.– percentage points. Substantial of ª million (ª—. per diluted common share) to write-o® goodwill portions of the sale of Port Colborne, Canada, assets resulted in at our Southern Cone of South America reporting unit (see Note  of favorable tax treatment that reduced the e®ective tax rate by approxi- the Notes to the Consolidated Financial Statements for additional mately —. percentage points. Additionally, the š— tax provision information) and after-tax costs of ªš million (ª—.—š per diluted includes ªš million of net favorable reversals of previously unrecog- common share) related to our then-pending acquisition of Penford. nized tax bene†ts due to the lapsing of the statute of limitations, which Without the gain from the plant sale, the litigation settlement costs reduced the e®ective tax rate by —. percentage points. and the impairment, restructuring and acquisition-related charges, Without the impact of the items described above, our e®ective tax our net income and diluted earnings per share would have grown rates for š—› and š— would have been approximately — percent — percent and  percent, respectively, from š—. These increases and š.– percent, respectively. primarily re³ect signi†cantly improved operating income in North We have signi†cant operations in the US, Canada, Mexico and America for š—, as compared to š—. Our improved diluted earnings Pakistan where the statutory tax rates, including local income taxes per common share for š— also re³ects the favorable impact of our are approximately – percent, š percent, — percent and  percent in share repurchases. š—›, respectively. In addition, our subsidiary in Brazil has a statutory tax rate of  percent, before local incentives that vary each year. Net Sales Net sales for š— decreased to ª.›š billion from ª.›– bil- lion in š—. Net Income Attributable to Non-controlling Interests Net income A summary of net sales by reportable business segment is shown attributable to non-controlling interests was ª million in š—›, up below:

from ª— million in š—. The increase primarily re³ects improved net Increase income at our non-wholly-owned operation in Pakistan. (in millions) ¹±°½ ¹±°» (Decrease)  Change North America $3,345 $3,093 $«252 8∞ Comprehensive Income We recorded comprehensive income of South America 1,013 1,203 (190) (16)∞ Asia Paci†c 733 794 (61) (8)∞ ª— million in š—›, as compared with ª˜š million in š—. The EMEA 530 578 (48) (8)∞ increase in comprehensive income primarily re³ects a ª million Total $5,621 $5,668 $÷(47) (1)∞ favorable variance in the foreign currency translation adjustment and our net income growth. The favorable variance in the foreign currency The businesses acquired from Penford and Kerr contributed translation adjustment re³ects a moderate strengthening in end of ªš˜ million of net sales in š—. The decrease in net sales primarily period foreign currencies relative to the US dollar, as compared to the re³ects unfavorable currency translation of  percent due to the stronger year-ago period when end of period foreign currencies had substan- US dollar, which more than o®set volume growth of – percent that was tially weakened. driven mainly by the operations of the acquired businesses and price/ product mix improvement of  percent. The pass through of lower raw material costs (primarily corn) in our product pricing is re³ected in the

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 21 3/14/17 10:36 PM modest price/product mix improvement. Of the – percent volume subsidiary related to a pre-acquisition period for which we are increase,  percent represented organic volume growth. indemni†ed by Akzo. The costs incurred by the acquired subsidiary Net sales in North America increased ˜ percent, primarily re³ecting were recorded in our provision for income taxes while the reimburse- volume growth of š percent driven largely by the addition of the ment from Akzo under the indemni†cation agreement was recorded as acquired businesses, which more than o®set a š percent price/product other income. In š—, based upon the †nal settlement of the matter, mix decline driven principally by lower raw material costs and we determined that the unfavorable income tax audit amount should unfavorable currency translation of š percent attributable to a weaker be reduced from ª– million to ª million. Accordingly, in š—, we Canadian dollar. Organic volume grew  percent. Net sales in South recognized a ª million income tax bene†t and a charge to other America declined › percent, as a š› percent decline attributable income-net of ª million to reduce our receivable from Akzo associ- to weaker foreign currencies more than o®set price/product mix ated with the indemni†cation agreement. The impact on our net improvement of — percent. Volume in the segment was ³at. Asia income for š— and š— is zero. Other income-net for š— also Paci†c net sales decreased ˜ percent, as unfavorable currency included a ª— million gain from the sale of the Port Colborne plant. translation of – percent and a  percent price/product mix decline, A summary of other income-net is as follows: more than o®set volume growth of š percent. EMEA net sales fell ˜ percent, re³ecting unfavorable currency translation of  percent, Other Income (Expense)

primarily attributable to the weaker Euro and British Pound Sterling. (in millions) Volume grew  percent. Price/product mix in the segment was ³at. Year Ended December º°, ¹±°½ ¹±°» Gain from sale of plant $10 $÷– Cost of Sales Cost of sales for š— decreased  percent to ª.˜ billion Litigation settlement (7) – Income (expense) associated with tax indemni†cation (4) 7 from ª. billion in š—. This reduction primarily re³ects lower raw Gain from sale of investment – 5 material costs and the e®ects of currency translation. Gross corn costs Gain from sale of idled plant – 3 per ton for š— decreased approximately  percent from š—, driven Other 2 9 by lower market prices for corn. Currency translation caused cost of Totals $÷1 $24 sales for š— to decrease approximately — percent from š—, re³ecting the impact of the stronger US dollar. Our gross pro†t margin Operating Income A summary of operating income is shown below: for š— was šš percent, compared to š— percent in š—. Despite Favorable Favorable reduced selling prices driven by lower corn costs, we have generally (Unfavorable) (Unfavorable) maintained per unit gross pro†t levels in US dollars, resulting in the (in millions) ¹±°½ ¹±°» Variance  Change improved gross pro†t margin percentages. North America $479 $375 $104 28∞ South America 101 108 (7) (6)∞ Asia Paci†c 107 103 4 4∞ Selling, General and Administrative Expenses SG&A expenses for š— EMEA 93 95 (2) (2)∞ increased to ª million from ªš million in š—. The increase Corporate expenses (75) (65) (10) (15)∞ primarily re³ects incremental operating expenses of the acquired Impairment/restructuring businesses as well as other costs associated with the acquisition and charges (28) (33) 5 15∞ integration of those businesses. Favorable translation e®ects associ- Gain from sale of plant 10 – 10 NM ated with the stronger US dollar more than o®set higher compensa- Acquisition/integration costs (10) (2) (8) NM tion-related and various other costs. Currency translation associated Charge for fair value with weaker foreign currencies reduced SG&A expenses for š— by markup of approximately ˜ percent from š—. SG&A expenses represented acquired inventory (10) – (10) NM  percent of gross pro†t in š—, as compared to – percent of gross Litigation settlement (7) – (7) NM pro†t in š—. Operating income $660 $581 $÷79 14∞

Operating income for š— increased to ª››— million from Other Income – Net Other income-net of ª million for š— decreased ª˜ million in š—. Operating income for š— included a ª— million from other income-net of ªš million in š—. The decrease for š— gain from the sale of our Port Colborne plant, ªš million of charges for primarily re³ects ª– million of costs relating to a litigation settlement impaired assets and restructuring costs associated with our plant and an ª million unfavorable swing from ª– million of income in š— closings in Brazil, a restructuring charge of ªš million for estimated to ª million of expense in š— associated with a tax indemni†cation severance-related costs associated with the Penford acquisition, costs agreement relating to a subsidiary acquired from Akzo Nobel N.V. of ª– million relating to a litigation settlement, a ª million restructur- (“Akzo”) in š——. In š—, we recognized a charge to our income tax ing charge for estimated severance-related expenses and other costs provision for an expected unfavorable income tax audit result at this associated with the sale of the Port Colborne plant, and ª— million of

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INGR AR16 financials_Keyline_r1.pdf 22 3/14/17 10:36 PM other costs associated with the acquisitions and integration of the plant in Kenya. Translation e®ects primarily associated with the Penford and Kerr businesses. Additionally, the š— results included weaker Euro and British Pound Sterling had an unfavorable impact ª— million of costs associated with the sale of Penford and Kerr of ª— million on operating income in the segment. An increase in inventory that was marked up to fair value at the acquisition date in corporate expenses was driven by an adjustment with respect to accordance with business combination accounting rules. Operating the previously-mentioned Akzo tax indemni†cation that unfavorably income for š— included a ª million charge to write-o® impaired impacted operating income by ª million for š—, as compared goodwill at our Southern Cone of South America reporting unit and to š—. ªš million of costs associated with our then-pending acquisition of Penford. Without the gain from the plant sale, the litigation settlement Financing Costs – Net Financing costs-net was ª› million in š—, costs and the restructuring, impairment and acquisition-related consistent with š—. Lower interest expense and higher interest charges, operating income for š— would have grown  percent from income were o®set by a ª million increase in foreign currency š—. This increase primarily re³ects signi†cantly improved operating transaction losses. The reduction in interest expense re³ects lower income in North America compared to the weaker results of š—. average interest rates driven by the e®ect of our interest rate swaps Unfavorable currency translation attributable to the stronger US dollar and our low-rate term loan borrowing that we arranged in š—, negatively impacted operating income by approximately ª›˜ million as which more than o®set the impact of higher average borrowings. compared to š—. Our product pricing actions helped to mitigate the The increase in interest income was driven primarily by higher unfavorable impact of currency translation. average cash balances. The increase in foreign currency transaction North America operating income increased š˜ percent to ª– mil- losses primarily re³ects the impact of the December devaluation of lion from ª– million in š—. Earnings contributed by the acquired the Argentine peso. Hedge costs spiked in December and prevented operations represented approximately › percentage points of the hedges from o®setting the impact of the devaluation, negatively increase. The remaining organic operating income improvement of a®ecting Argentine peso denominated assets. šš percent for š— primarily re³ects more normal weather conditions, organic volume growth and lower corn, energy and other manufactur- Provision for Income Taxes Our e®ective tax rate was .š percent in ing costs. Our North American results for š— also included ª– million š—, as compared to —.š percent in š—. We use the US dollar as of business interruption insurance recoveries related to the prior year’s the functional currency for our subsidiaries in Mexico. Because of weather. Our š— results were negatively impacted by harsh winter the continued decline in the value of the Mexican peso versus the weather conditions that caused high energy, transportation and US dollar, our tax provision for š— was increased by ª– million, or production costs. Translation e®ects associated with a weaker Canadian š. percentage points. A primary cause was associated with foreign dollar unfavorably impacted operating income by approximately currency transaction gains for local income tax purposes on net US ª million in the segment. South America operating income decreased dollar monetary assets held in Mexico for which there is no corre- › percent to ª— million from ª—˜ million in š—. The decline sponding gain in our pre-tax income. Based on the †nal settlement primarily re³ects weaker results in Brazil driven principally by local of an audit matter, in š— we reversed ª million of the ª– million currency weakness. Improved selling prices for our products helped to income tax expense and other income that was recorded in š— partially o®set the unfavorable impacts of currency devaluation and (see also discussion of Other Income-net presented earlier in this higher local production costs in the segment. Translation e®ects section). As a result, our e®ective income tax rate for š— was reduced associated with weaker South American currencies (particularly the by —.– percentage points. Substantial portions of the sale of Port Brazilian Real, Colombian Peso and the Argentine Peso) negatively Colborne, Canada, assets resulted in favorable tax treatment that impacted operating income by approximately ª› million. We currently reduced the e®ective tax rate by approximately —. percentage points. anticipate that our business in South America will continue to be Additionally, the š— tax provision included ªš million of net favorable challenged by di‘cult economic conditions in š—›. Asia Paci†c reversals of previously unrecognized tax bene†ts due to the lapsing of operating income grew  percent to ª—– million from ª— million in the statute of limitations, which reduced the e®ective tax rate by š—. Volume growth and lower raw material costs helped to mitigate —. percentage points. the impact of local currency weakness in the segment. Translation In the fourth quarter of š— we determined that goodwill in our e®ects associated with weaker Asia Paci†c currencies negatively Southern Cone subsidiaries was impaired and recorded a charge of impacted operating income by approximately ª million in the ª million without a tax bene†t, which increased the š— e®ective segment. EMEA operating income declined š percent to ª million tax rate by .˜ percentage points. We use the US dollar as the from ª million in š—. This decrease primarily re³ects the impact functional currency for our subsidiaries in Mexico. Because of the of currency translation. Cost reductions and improved sales volumes decline in the value of the Mexican peso versus the US dollar, primarily helped to partially o®set this unfavorable impact. Additionally, the late in š—, the Mexican tax provision was increased by approximately prior year results included a ª million gain from the sale of an idled ª– million, or . percentage points in our e®ective tax rate, primarily

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 23 3/14/17 10:36 PM associated with foreign currency transaction gains for local income tax subject to the agreement of the lenders. All committed pro rata purposes on net US dollar monetary assets held in Mexico for which borrowings under the revolving facility will bear interest at a variable there is no corresponding gain in our pre-tax income. The tax provision annual rate based on the LIBOR or base rate, at the Company’s also includes approximately ª– million for an unfavorable audit result election, subject to the terms and conditions thereof, plus, in each at a National Starch subsidiary related to a pre-acquisition period for case, an applicable margin based on the Company’s leverage ratio which we are indemni†ed by Akzo. Additionally, the š— tax provision (as reported in the †nancial statements delivered pursuant to the includes ªš million of net favorable reversals of previously unrecog- Revolving Credit Agreement) or the Company’s credit rating. Subject nized tax bene†ts due to the lapsing of the statute of limitations. to speci†ed conditions, the Company may designate one or more of Without the impact of the items described above, our e®ective tax its subsidiaries as additional borrowers under the Revolving Credit rates for š— and š— would have been approximately š.– percent Agreement provided that the Company guarantees all borrowings and š˜. percent, respectively. See Note  of the Notes to the and other obligations of any such subsidiaries thereunder. Consolidated Financial Statements for additional information. The Revolving Credit Agreement contains customary representa- We have signi†cant operations in the US, Canada, Mexico and tions, warranties, covenants, events of default and other terms and Thailand where the statutory tax rates, including local income taxes conditions, including limitations on liens, incurrence of subsidiary debt are approximately – percent, š percent, — percent and š— percent in and mergers. The Company must also comply with a leverage ratio š—, respectively. In addition, our subsidiary in Brazil has a statutory covenant and an interest coverage ratio covenant. The occurrence of tax rate of  percent, before local incentives that vary each year. an event of default under the Revolving Credit Agreement could result in all loans and other obligations under the agreement being declared Net Income Attributable to Non-controlling Interests Net income due and payable and the revolving credit facility being terminated. attributable to non-controlling interests was ª— million in š—, up We met all covenant requirements as of December , š—›. At from ª˜ million in š—. The increase primarily re³ects improved net December , š—›, there were no borrowings outstanding under income at our non-wholly-owned operation in Pakistan. our Revolving Credit Agreement, as compared to ª million outstand- ing at December , š— under our previously-existing ª billion Comprehensive Income We recorded comprehensive income of revolving credit facility. In addition, we have a number of short-term ª˜š million in š—, as compared with ª› million in š—. The credit facilities consisting of operating lines of credit outside of the decrease in comprehensive income primarily re³ects a ªš million United States. unfavorable variance in the currency translation adjustment, which On September šš, š—›, we issued .š— percent Senior Notes due more than o®set our net income growth. The unfavorable variance October , š—š› in an aggregate principal amount of ª—— million. The in the currency translation adjustment re³ects a greater weakening net proceeds from the sale of the notes of approximately ª– million in end of period foreign currencies relative to the US dollar, as were used to repay ª— million of term loan debt, to repay ªš million compared to a year ago. of borrowings under our previously existing ª billion revolving credit facility and for general corporate purposes. See also Note – of the Liquidity and Capital Resources Notes to the Consolidated Financial Statements. At December , š—›, our total assets were ª.–˜ billion, as compared On July —, š—, we entered into a Term Loan Credit Agreement to to ª.—– billion at December , š—. The increase was driven establish an ˜-month, ª— million multi-currency senior unsecured principally by our net income growth and the impact of the TIC Gums term loan credit facility. All borrowings under the term loan facility acquisition. Total equity increased to ªš.›— billion at December , incurred interest at a variable annual rate based on the LIBOR or š—›, from ªš.˜ billion at December , š—. This increase primarily base rate, at our election, subject to the terms and conditions thereof, re³ects our earnings growth and, to a lesser extent, the issuance of plus, in each case, an applicable margin. Proceeds of ª— million from common stock associated with the exercise of stock options. the Term Loan Credit Agreement were used to repay borrowings On October , š—›, we entered into a new †ve-year, senior, outstanding under our previously-existing ª billion revolving credit unsecured, ª billion revolving credit agreement (the “Revolving Credit facility. The ª— million of term loan borrowings were repaid in Agreement”) that replaced our previously existing ª billion senior September š—› with proceeds from our .š— percent Senior Notes unsecured revolving credit facility that would have matured on o®ering discussed above. October šš, š—–. See also Note – of the Notes to the Consolidated On November š, š—, we repaid our ª— million of .š percent Financial Statements. senior notes at the maturity date with proceeds from our previously- Subject to certain terms and conditions, the Company may existing ª billion revolving credit facility and cash on hand. increase the amount of the revolving facility under the Revolving At December , š—›, we had total debt outstanding of ª.› bil- Credit Agreement by up to ª—— million in the aggregate. The lion, compared to ª.˜ billion at December , š—. At December , Company may also obtain up to two one-year extensions of the š—› our total debt consisted of the following: maturity date of the Revolving Credit Agreement at its requests and

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 24 3/14/17 10:36 PM (in millions) To manage price risk related to corn purchases in North America, .šÃ senior notes due October , š—š› $÷«496 we use derivative instruments (corn futures and options contracts) .›šà senior notes due November , š—š— 398 to lock in our corn costs associated with †rm-priced customer sales .˜Ã senior notes due September š, š—– 299 contracts. We are unable to directly hedge price risk related to ›.›šà senior notes due April , š—– 254 co-product sales; however, we occasionally enter into hedges of ›.—à senior notes due April , š—– 200 soybean oil (a competing product to our animal feed and corn oil) .›šÃ senior notes due March š, š—š— 200 in order to mitigate the price risk of animal feed and corn oil sales. Revolving credit facility maturing October , š—š — Additionally, we enter into futures contracts to hedge price risk Fair value adjustment related to hedged †xed rate debt instruments 3 Long-term debt $1,850 associated with ³uctuations in market prices of ethanol. As the market Short-term borrowings of subsidiaries 106 price of these commodities ³uctuate, our derivative instruments Total debt $1,956 change in value and we fund any unrealized losses or receive cash for any unrealized gains related to outstanding commodity futures and As noted above, we have ªš—— million of ›.— percent Senior option contracts. We plan to continue to use derivative instruments Notes that mature on April , š—– and ª—— million (face amount) to hedge such price risk and, accordingly, we will be required to of .˜ percent Senior Notes that mature on September š, š—–. These make cash deposits to or be entitled to receive cash from our margin borrowings are included in long-term debt in our Consolidated Balance accounts depending on the movement in the market price of the Sheet as we have the ability and intent to re†nance them on a underlying commodity. long-term basis prior to the maturity dates. Listed below are our primary investing and †nancing activities Ingredion Incorporated, as the parent company, guarantees certain for š—›: obligations of its consolidated subsidiaries. At December , š—›, such (in millions) Sources (Uses) of Cash guarantees aggregated ªš million. Management believes that such Payments for acquisitions (net of cash acquired of ª) $÷(407) consolidated subsidiaries will meet their †nancial obligations as they Capital expenditures (284) become due. Payments on debt (874) Historically, the principal source of our liquidity has been our Proceeds from borrowings 1,000 internally generated cash ³ow, which we supplement as necessary Dividends paid (including to non-controlling interests) (141) with our ability to borrow on our bank lines and to raise funds in the capital markets. In addition to borrowing availability under our On December , š—›, our board of directors declared a quarterly Revolving Credit Agreement, we also have approximately ª million cash dividend of ª—.— per share of common stock. This dividend was of unused operating lines of credit in the various foreign countries in paid on January š, š—– to stockholders of record at the close of which we operate. business on December , š—›. The weighted average interest rate on our total indebtedness was We currently anticipate that capital expenditures for š—– will approximately .— percent and . percent for š—› and š—, approximate ª—— million to ªš million. respectively. On December š, š—›, we acquired TIC Gums, a US-based company that provides advanced texture systems to the food and Net Cash Flows beverage industry. Consistent with our Strategic Blueprint for growth, A summary of operating cash ³ows is shown below: this acquisition enhances our texture capabilities and formulation expertise and provides additional opportunities for us to provide (in millions) ¹±°¼ ¹±°½ solutions for natural, organic and clean-label demands of our Net income $496 $412 customers. TIC Gums utilizes a variety of agriculturally derived Depreciation and amortization 196 194 Write-o® of impaired assets – 10 ingredients, such as acacia gum and guar gum, to form the foundation Charge for fair value mark-up of acquired inventory – 10 for innovative texture systems and allow for clean-label reformulation. Gain on sale of plant – (10) TIC Gums operates two production facilities, one in Belcamp, Maryland Deferred income taxes (5) (6) and one in Guangzhou, China. TIC Gums also maintains an R&D lab in Changes in working capital (8) (24) each of these facilities. We funded the ª million acquisition with Other 92 100 cash and short-term borrowings. Cash provided by operations $771 $686 We currently expect that our available cash balances, future cash ³ow from operations, access to debt markets, and borrowing capacity Cash provided by operations was ª–– million in š—›, as compared under our credit facilities will provide us with su‘cient liquidity to with ª›˜› million in š—. The increase in operating cash ³ow primarily fund our anticipated capital expenditures, dividends and other re³ects our net income growth. investing and/or †nancing activities for the foreseeable future.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 25 3/14/17 10:36 PM We have not provided federal and state income taxes on accumu- during the next twelve months. We expect the losses to be o®set lated undistributed earnings of certain foreign subsidiaries because by changes in the underlying commodities cost. these earnings are considered to be permanently reinvested. It is not practicable to determine the amount of the unrecognized deferred Foreign Currency Exchange Risk Due to our global operations, tax liability related to the undistributed earnings. We do not anticipate including many emerging markets, we are exposed to ³uctuations the need to repatriate funds to the United States to satisfy domestic in foreign currency exchange rates. As a result, we have exposure liquidity needs arising in the ordinary course of business, including to translational foreign exchange risk when our foreign operation liquidity needs associated with our domestic debt service require- results are translated to US dollars and to transactional foreign ments. Approximately ª million of our total cash and cash equiva- exchange risk when transactions not denominated in the functional lents and short-term investments of ªšš million at December , š—›, currency of the operating unit are revalued. We primarily use was held by our operations outside of the United States. We expect derivative †nancial instruments such as foreign currency forward that available cash balances and credit facilities in the United States, contracts, swaps and options to manage our foreign currency along with cash generated from operations and access to debt markets, transactional exchange risk. At December , š—›, we had foreign will be su‘cient to meet our operating and other cash needs for the currency forward sales contracts with an aggregate notional amount foreseeable future. of ªš million and foreign currency forward purchase contracts with an aggregate notional amount of ªšš– million that hedged transac- Hedging tional exposures. The fair value of these derivative instruments is an We are exposed to market risk stemming from changes in commodity asset of ª million at December , š—›. prices, foreign currency exchange rates and interest rates. In the We also have foreign currency derivative instruments that hedge normal course of business, we actively manage our exposure to these certain foreign currency transactional exposures and are designated market risks by entering into various hedging transactions, authorized as cash-³ow hedges. The amount included in AOCI relating to these under established policies that place clear controls on these activities. hedges at December , š—› was not signi†cant. These transactions utilize exchange-traded derivatives or over-the- We have signi†cant operations in Argentina. We utilize the counter derivatives with investment grade counterparties. Our hedging o‘cial exchange rate published by the Argentine government for transactions may include, but are not limited to, a variety of derivative re-measurement purposes. Due to exchange controls put in place by †nancial instruments such as commodity futures, options and swap the Argentine government, a parallel market exists for exchanging contracts, forward currency contracts and options, interest rate swap Argentine pesos to US dollars at rates less favorable than the o‘cial agreements and treasury lock agreements. See Note › of the Notes to rate, although the di®erence in rates has recently decreased the Consolidated Financial Statements for additional information. signi†cantly.

Commodity Price Risk Our principal use of derivative †nancial Interest Rate Risk We occasionally use interest rate swaps and Treasury instruments is to manage commodity price risk in North America Lock agreements (“T-Locks”) to hedge our exposure to interest rate relating to anticipated purchases of corn and natural gas to be used in changes, to reduce the volatility of our †nancing costs, or to achieve a the manufacturing process. We periodically enter into futures, options desired proportion of †xed versus ³oating rate debt, based on current and swap contracts for a portion of our anticipated corn and natural and projected market conditions. We did not have any T-Locks gas usage, generally over the following twelve to twenty-four months, outstanding at December , š—› or š—. in order to hedge price risk associated with ³uctuations in market We have interest rate swap agreements that e®ectively convert prices. E®ective with the acquisition of Penford, we now produce and the interest rates on our ›.— percent ªš—— million senior notes due sell ethanol. We now enter into futures contracts to hedge price risk April , š—–, our .˜ percent ª—— million senior notes due Septem- associated with ³uctuations in market prices of ethanol. Our derivative ber š, š—– and on ªš—— million of our ª—— million .›š percent instruments are recognized at fair value and have e®ectively reduced senior notes due November , š—š—, to variable rates. These swap our exposure to changes in market prices for these commodities. We agreements call for us to receive interest at the †xed coupon rate of are unable to directly hedge price risk related to co-product sales; the respective notes and to pay interest at a variable rate based on however, we occasionally enter into hedges of soybean oil (a compet- the six-month US dollar LIBOR rate plus a spread. We have designated ing product to our corn oil) in order to mitigate the price risk of corn these interest rate swap agreements as hedges of the changes in fair oil sales. Unrealized gains and losses associated with marking our value of the underlying debt obligations attributable to changes in commodities-based derivative instruments to market are recorded as a interest rates and account for them as fair-value hedges. The fair value component of other comprehensive income (“OCI”). At December , of these interest rate swap agreements was ª million at December , š—›, our accumulated other comprehensive loss account (“AOCI”) š—› and is re³ected in the Consolidated Balance Sheet within Other related to these derivative instruments was not signi†cant. It is assets, with an o®setting amount recorded in Long-term debt to anticipated that most of the losses will be reclassi†ed into earnings adjust the carrying amount of the hedged debt obligations.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 26 3/14/17 10:36 PM At December , š—›, our accumulated other comprehensive periods presented. These non-GAAP †nancial measures are used loss account included ª million of losses (net of tax of ªš million) in addition to and in conjunction with results presented in accordance related to settled Treasury Lock agreements. These deferred losses are with GAAP and re³ect an additional way of viewing aspects of our being amortized to †nancing costs over the terms of the senior notes operations that, when viewed with our GAAP results, provide a more with which they are associated. It is anticipated that ª million of these complete understanding of factors and trends a®ecting our business. losses (net of tax) will be reclassi†ed into earnings during the next These non-GAAP measures should be considered as a supplement to, twelve months. and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles. Contractual Obligations and Ož Balance Sheet Arrangements Non-GAAP †nancial measures are not prepared in accordance The table below summarizes our signi†cant contractual obligations with GAAP; therefore, the information is not necessarily comparable as of December , š—›. Information included in the table is cross- to other companies. A reconciliation of non-GAAP historical †nancial referenced to the Notes to the Consolidated Financial Statements measures to the most comparable GAAP measure is provided in the elsewhere in this report, as applicable. tables below. Our calculations of these key †nancial metrics for š—› with Payments due by period (in millions) Note Less than ¹ – º » – ½ More than comparisons to the prior year are as follows: Contractual Obligations reference Total ° year years years ½ years Long-term debt 7 $1,850 $500 $÷÷– $÷«600 $÷«750 Return on Capital Employed

Interest on long-term (dollars in millions) ¹±°¼ ¹±°½ debt 7 630 80 125 89 336 Total equity * $2,180 $2,207 Operating lease obligations 8 223 45 77 51 50 Add: Pension and other Cumulative translation adjustment * 1,025 701 postretirement Share-based payments subject to redemption* 24 22 obligations 10 119 78896 Total debt * 1,838 1,821 (a) Purchase obligations 1,114 270 324 268 252 Less: (b) Total $3,936 $902 $534 $1,016 $1,484 Cash and cash equivalents * (434) (580) (a) The purchase obligations relate principally to power supply and raw material sourcing agreements, Capital employed * (a) $4,633 $4,171 including take or pay contracts, which help to provide us with adequate power and raw material supply at certain of our facilities, and IT service agreements. Operating income $÷«808 $÷«660 (b) The above table does not re³ect unrecognized income tax bene†ts of ¾À¼ million, the timing of which is Adjusted for: uncertain. See Note Á of the Notes to the Consolidated Financial Statements for additional information with respect to unrecognized income tax bene†ts. Impairment/restructuring charges 19 28 Acquisition /integration costs 3 10 Key Financial Performance Metrics Charge for fair value mark-up of acquired inventory — 10 Litigation settlement — 7 We use certain key †nancial metrics to monitor our progress towards Gain on sale of plant — (10) achieving our long-term strategic business objectives. These metrics Adjusted operating income $÷«830 $÷«705 relate to our return on capital employed and our †nancial leverage, Income taxes (at e®ective tax rates of š.Ã in each of which is tracked on an ongoing basis. We assess whether we š—› and .˜Ã in š—)** (244) (224) are achieving an adequate return on invested capital by measuring Adjusted operating income, net of tax (b) $÷«586 $÷«481 our “Return on Capital Employed” (“ROCE”) against our cost of capital. Return on Capital Employed (b/a) 12.6% 11.5%

We monitor our †nancial leverage by regularly reviewing our ratio of * Balance sheet amounts used in computing capital employed represent beginning of period balances. net debt to adjusted earnings before interest, taxes, depreciation and ** The e®ective income tax rate for ¹±°¼ and ¹±°½ excludes the impacts of impairment/restructuring charges, acquisition and integration related costs, a litigation settlement cost and a gain on the sale amortization (“Net Debt to Adjusted EBITDA”) and our “Net Debt to of a plant. Including these items, the Company’s e®ective income tax rate for ¹±°¼ and ¹±°½ was ºº.° percent and º°.¹ percent, respectively. Listed below is a schedule that reconciles our e®ective Capitalization” percentage to assure that we are properly †nanced. income tax rate under US GAAP to the adjusted income tax rate.

We believe these metrics provide valuable managerial information to Income before Provision for E®ective Income help us run our business and are useful to investors. (dollars in millions) Income Taxes (a) Income Taxes (b) Tax Rate (bÅa) ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ The metrics below include certain information (including Capital As reported $742 $599 $246 $187 33.1% 31.2% Employed, Adjusted Operating Income, Adjusted EBITDA and Net Add back (deduct): Income tax settlement –– (27) – Debt) that is not calculated in accordance with Generally Accepted Impairment/restructuring charges 19 28 5 10 Accounting Principles (“GAAP”). Management uses non-GAAP †nancial Acquisition/integration costs 3 10 13 Charge for fair value mark-up of measures internally for strategic decision-making, forecasting future acquired inventory – 10 –4 Litigation settlement cost –7 –2 results and evaluating current performance. By disclosing non-GAAP Gain on sale of plant – (10) – (1) †nancial measures, management intends to provide a more meaning- Adjusted-non-GAAP $764 $644 $225 $205 29.4% 31.8% ful, consistent comparison of our operating results and trends for the

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 27 3/14/17 10:36 PM Net Debt to Adjusted EBITDA ratio calculate returns based on the Company’s original investment costs.

(dollars in millions) ¹±°¼ ¹±°½ Our ROCE for š—› improved to š.› percent from . percent in š—, Short-term debt $÷«106 $÷÷«19 re³ecting our operating income growth in š—›. Long-term debt 1,850 1,819 Less: Cash and cash equivalents (512) (434) Net Debt to Adjusted EBITDA Ratio Our long-term objective is to Short-term investments (4) (6) maintain a ratio of net debt to adjusted EBITDA of less than š.š. This Total net debt (a) $1,440 $1,398 ratio was . at December , š—›, down from .› last year and remains Net income attributable to Ingredion $÷«485 $÷«402 below our target. The decline primarily re³ects our earnings growth. Add back: Impairment/restructuring charges 19 28 Net Debt to Capitalization Percentage Our long-term objective is to Acquisition /integration costs 3 10 maintain a Net Debt to Capitalization percentage in the range of š to Charge for fair value mark-up of acquired inventory — 10  percent. At December , š—›, our Net Debt to Capitalization Litigation settlement — 7 Gain on sale of plant — (10) percentage was .— percent, down from –. percent a year ago, Net income attributable to non-controlling interest 11 10 primarily re³ecting a higher capital base driven by the impact of our Provision for income taxes 246 187 š—› net income. Financing costs, net of interest income of ª— and ª, respectively 66 61 Critical Accounting Policies and Estimates Depreciation and amortization 196 194 Our consolidated †nancial statements have been prepared in Adjusted EBITDA (b) $1,026 $÷«899 accordance with accounting principles generally accepted in the Net Debt to Adjusted EBITDA ratio (a Æ b) 1.4 1.6 United States of America. The preparation of these †nancial state- ments requires management to make estimates and assumptions Net Debt to Capitalization Percentage that a®ect the reported amounts of assets and liabilities and the (dollars in millions) ¹±°¼ ¹±°½ disclosure of contingent assets and liabilities at the date of the Short-term debt $÷«106 $÷÷«19 †nancial statements, as well as the reported amounts of revenues Long-term debt 1,850 1,819 and expenses during the reporting period. Actual results may di®er Less: Cash and cash equivalents (512) (434) from these estimates under di®erent assumptions and conditions. Short-term investments (4) (6) We have identi†ed below the most critical accounting policies Total net debt (a) $1,440 $1,398 upon which the †nancial statements are based and that involve our Deferred income tax liabilities $÷«171 $÷«139 most complex and subjective decisions and assessments. Our senior Share-based payments subject to redemption 30 24 management has discussed the development, selection and disclosure Total equity 2,595 2,180 of these policies with members of the Audit Committee of our Board Total capital $2,796 $2,343 Total net debt and capital (b) $4,236 $3,741 of Directors. These accounting policies are provided in the Notes to Net Debt to Capitalization percentage (a/b) 34.0% 37.4% the Consolidated Financial Statements. The discussion that follows should be read in conjunction with the consolidated †nancial statements and related notes included elsewhere in this Annual Commentary on Key Financial Performance Metrics: Report on Form —-K. In accordance with our long-term objectives, we set certain objectives relating to these key †nancial performance metrics that we strive to Business Combinations Our acquisitions in š—› of Shandong Huanong meet. At December , š—›, we had achieved all of our established Specialty Corn Development Co., Ltd. and TIC Gums Incorporated and objectives. However, no assurance can be given that we will continue in š— of Penford Corporation and Kerr Concentrates, Inc. were to meet our †nancial performance metric targets. See Item A “Risk accounted for in accordance with ASC Topic ˜—, Business Combina- Factors” and Item –A “Quantitative and Qualitative Disclosures About tions, as amended. In purchase accounting, identi†able assets acquired Market Risk.” The objectives set out below re³ect our current and liabilities assumed, are recognized at their estimated fair values at aspirations in light of our present plans and existing circumstances. the acquisition date, and any remaining purchase price is recorded as We may change these objectives from time to time in the future to goodwill. In determining the fair values of assets acquired and address new opportunities or changing circumstances as appropriate liabilities assumed, we make signi†cant estimates and assumptions, to meet our long-term needs and those of our shareholders. particularly with respect to long-lived tangible and intangible assets. Critical estimates used in valuing tangible and intangible assets ROCE Our long-term objective is to achieve a ROCE in excess of include, but are not limited to, future expected cash ³ows, discount —.— percent. In determining this performance metric, the negative rates, market prices and asset lives. Although our estimates of fair cumulative translation adjustment is added back to total equity to value are based upon assumptions believed to be reasonable, actual

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 28 3/14/17 10:36 PM results may di®er. See Note  of the Notes to the Consolidated Even though it was determined that there was no additional Financial Statements for more information related to our acquisitions. long-lived asset impairment as of December , š—›, the future occurrence of a potential indicator of impairment, such as a signi†cant Property, Plant and Equipment and De’nite-Lived Intangible Assets We adverse change in the business climate that would require a change in have substantial investments in property, plant and equipment and our assumptions or strategic decisions made in response to economic de†nite-lived intangible assets. For property, plant and equipment, we or competitive conditions, could require us to perform tests of recognize the cost of depreciable assets in operations over the estimated recoverability in the future. We continue to closely monitor certain useful life of the assets and evaluate the recoverability of these assets assets in our South America business due to the volatility and whenever events or changes in circumstances indicate that the challenging economic environment in the segment. carrying value of the assets may not be recoverable. For de†nite-lived intangible assets, we recognize the cost of these amortizable assets in Goodwill and Inde’nite-Lived Intangible Assets Our methodology for operations over their estimated useful life and evaluate the recover- allocating the purchase price of acquisitions is based on established ability of the assets whenever events or changes in circumstances valuation techniques that re³ect the consideration of a number of indicate that the carrying value of the assets may not be recoverable. factors, including valuations performed by third-party appraisers The carrying value of property, plant and equipment and de†nite-lived when appropriate. Goodwill is measured as the excess of the cost of intangible assets at December , š—› was ªš. billion and ª— mil- an acquired entity over the fair value assigned to identi†able assets lion, respectively. acquired and liabilities assumed. We have identi†ed several reporting In assessing the recoverability of the carrying value of property, units for which cash ³ows are determinable and to which goodwill plant and equipment and de†nite-lived intangible assets, we may may be allocated. Goodwill is either assigned to a speci†c reporting have to make projections regarding future cash ³ows. In developing unit or allocated between reporting units based on the relative these projections, we make a variety of important assumptions and excess fair value of each reporting unit. In addition, we have certain estimates that have a signi†cant impact on our assessments of inde†nite-lived intangible assets in the form of trade names and whether the carrying values of property, plant and equipment and trademarks. The carrying value of goodwill and inde†nite-lived de†nite-lived intangible assets should be adjusted to re³ect impair- intangible assets at December , š—› was ª–˜ million and ªš— mil- ment. Among these are assumptions and estimates about the future lion, respectively, compared to ª›— million and ª million a year growth and pro†tability of the related business unit or asset group, ago. The increase in both goodwill and inde†nite-lived intangible asset anticipated future economic, regulatory and political conditions in is mainly due to the acquisition of TIC Gums in š—›, which were the business unit’s or asset group’s market and estimates of terminal identi†ed in purchase accounting and are open to change as the or disposal values. Company †nalizes purchase accounting for the acquisition. See Note  No signi†cant impairment charges for property, plant, and of the Notes to the Consolidated Financial Statements for additional equipment or de†nite-lived intangible assets were recorded in š—›. information related to our acquisition of TIC Gums. However, signi†cant risk and uncertainty exists concerning certain We perform our goodwill and inde†nite-lived intangible asset manufacturing assets in Argentina and Brazil that we are closely impairment tests annually as of October , or more frequently if an monitoring due to increased volatility experienced due to continued event occurs or circumstances change that would more likely than slow economic growth, heightened competition, and possible future not reduce the fair value of a reporting unit below its carrying value. negative economic growth. In testing goodwill for impairment, we †rst assesses qualitative factors In š—, we announced plans to consolidate our manufacturing in determining whether it is more likely than not that the fair value network in Brazil. Plants in Trombudo Central and Conchal have been of a reporting unit is less than its carrying amount. After assessing the closed and production has been moved to plants in Balsa Nova and qualitative factors, if we determine that it is not more likely than not Mogi Guaçu, respectively. In š—, we recorded total pre-tax restructur- that the fair value of a reporting unit is less than its carrying amount, ing-related charges of ªš million related to these plant closures, which then we do not perform the two-step impairment test. If we conclude included a ª— million charge for impaired assets. otherwise, then we perform the †rst step of the two-step impairment Through our continual assessment to optimize our operations, test as described in ASC Topic —. In the †rst step, the fair value of we address whether there is a need for additional consolidation of the reporting unit is compared to its carrying value. If the fair value of manufacturing facilities or to redeploy assets to areas where we can the reporting unit exceeds the carrying value of its net assets, goodwill expect to achieve a higher return on our investment. This review may is not considered impaired and no further testing is required. If the result in the closing or selling of certain of our manufacturing facilities. carrying value of the net assets exceeds the fair value of the reporting The closing or selling of any of the facilities could have a signi†cant unit, a second step of the impairment assessment is performed in negative impact on the results of operations in the year that the order to determine the implied fair value of a reporting unit’s goodwill. closing or selling of a facility occurs. In performing our impairment tests for goodwill, management makes certain estimates and judgments. These estimates and

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 29 3/14/17 10:36 PM judgments include the identi†cation of reporting units and the Of the ª million increase in the valuation allowance from š— to š—›, determination of fair values of reporting units, which management ª– million is attributable to a valuation allowance recorded on the net estimates using both discounted cash ³ow analyses and an analysis of deferred tax assets (including net operating losses) of Argentina. market multiples. Signi†cant assumptions used in the determination We are regularly audited by various taxing authorities, and of fair value for reporting units include estimates for discount and sometimes these audits result in proposed assessments where the long-term net sales growth rates, in addition to operating and capital ultimate resolution may result in us owing additional taxes. We expenditure requirements. We considered changes in discount rates establish reserves when, despite our belief that our tax return for the reporting units based on current market interest rates and positions are appropriate and supportable under local tax law, we speci†c risk factors within each geographic region. We also evaluated believe there is uncertainty with respect to certain positions and qualitative factors, such as legal, regulatory, or competitive forces, in we may not succeed in realizing the tax bene†t. We evaluate these estimating the impact to the fair value of the reporting units noting no unrecognized tax bene†ts and related reserves each quarter and signi†cant changes that would result in any reporting unit failing the adjust the reserves and the related interest and penalties in light of impairment test. Changes in assumptions concerning projected results changing facts and circumstances regarding the probability of realizing or other underlying assumptions could have a signi†cant impact on tax bene†ts, such as the settlement of a tax audit or the expiration of a the fair value of the reporting units in the future. Based on the results statute of limitations. We believe the estimates and assumptions used of the annual assessment, we concluded that as of October , š—›, it to support our evaluation of tax bene†t realization are reasonable. was more likely than not that the fair value of our reporting units was However, †nal determinations of prior-year tax liabilities, either by greater than their carrying value (although the ªš› million of goodwill settlement with tax authorities or expiration of statutes of limitations, at our Brazil reporting unit continues to be closely monitored due to could be materially di®erent than estimates re³ected in assets and recent trends and increased volatility experienced in this reporting liabilities and historical income tax provisions. The outcome of these unit, such as continued slow economic growth, heightened competi- †nal determinations could have a material e®ect on our income tax tion and possible future negative economic growth). provision, net income, or cash ³ows in the period in which that In performing the qualitative annual impairment assessment for determination is made. We believe our tax positions comply with other inde†nite-lived intangible assets, we considered various factors applicable tax law and that we have adequately provided for any in determining if it was more likely than not that the fair value of these known tax contingencies. We have been pursuing relief from double inde†nite-lived intangible assets was greater than their carrying value. taxation under the US and Canadian tax treaty for the years š——- We evaluated net sales attributable to these intangible assets as š—. During the th quarter of š—›, a tentative agreement was compared to original projections and evaluated future projections of reached between the US and Canada for the speci†c issues being net sales related to these assets. In addition, we considered market contested. We have established a net reserve of ªš million including and industry conditions in the reporting units in which these intangible interest, recorded as a ª–— million liability and ª› million bene†t. In assets reside noting no signi†cant changes that would result in a failed addition, as a result of the settlement, for the years š—-š—›, we Step One impairment test as described in ASC Topic —. Based on the established a net reserve of ª– million, recorded as ªš million liability results of this qualitative assessment as of October , š—›, we and ª million bene†t. Our liability for unrecognized tax bene†ts, concluded that it was more likely than not that the fair value of these excluding interest and penalties at December , š—› and š— was inde†nite-lived intangible assets was greater than their carrying value. ª˜› million and ªš million, respectively. The ª– million increase from š— to š—› is primarily attributable to the US Canada process Income Taxes We recognize the expected future tax consequences referenced above, o®set by other reversals in the period. of temporary di®erences between book and tax bases of assets and No taxes have been provided on approximately ªš.– billion of liabilities and provide a valuation allowance when deferred tax assets undistributed foreign earnings that are planned to be inde†nitely are not more likely than not to be realized. We have considered reinvested. If future events, including changes in tax law, material forecasted earnings, future taxable income, the mix of earnings in the changes in estimates of cash, working capital and long-term investment jurisdictions in which we operate and prudent and feasible tax planning requirements, necessitate that these earnings be distributed, an strategies in determining the need for a valuation allowance. In the additional provision for income and withholding taxes may apply, which event we were to determine that we would not be able to realize all could materially a®ect our future e®ective tax rate and cash ³ows. or part of our deferred tax assets in the future, we would increase the valuation allowance and make a corresponding charge to earnings in Retirement Bene’ts The Company and its subsidiaries sponsor the period in which we make such determination. Likewise, if we noncontributory de†ned bene†t pension plans (quali†ed and later determine that we are more likely than not to realize the deferred non-quali†ed) covering a substantial portion of employees in the tax assets, we would reverse the applicable portion of the previously United States and Canada, and certain employees in other foreign provided valuation allowance. We had a valuation allowance of countries. We also provide healthcare and life insurance bene†ts for ªš million and ªš million at December , š—› and š—, respectively. retired employees in the United States, Canada and Brazil. In order

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INGR AR16 financials_Keyline_r1.pdf 30 3/14/17 10:36 PM to measure the expense and obligations associated with these under non-US pension plans for December , š—› and š— was bene†ts, our management must make a variety of estimates and . percent and .– percent, respectively. The weighted average assumptions including discount rates, expected long-term rates of discount rate used to determine our obligations under our postretire- return, rate of compensation increases, employee turnover rates, ment plans for December , š—› and š— was .š percent and retirement rates, mortality rates and other factors. We review our .— percent, respectively. actuarial assumptions on an annual basis as of December  (or more A one-percentage point decrease in the discount rates at Decem- frequently if a signi†cant event requiring remeasurement occurs) and ber , š—› would have increased the accumulated bene†t obligation modify our assumptions based on current rates and trends when it is and projected bene†t obligation by the following amounts (millions): appropriate to do so. The e®ects of modi†cations are recognized In millions immediately on the balance sheet, but are generally amortized into US Pension Plans operating earnings over future periods, with the deferred amount Accumulated bene†t obligation $45 recorded in accumulated other comprehensive income. We believe Projected bene†t obligation $46 the assumptions utilized in recording our obligations under our plans, Non-US Pension Plans which are based on our experience, market conditions, and input from Accumulated bene†t obligation $29 our actuaries, are reasonable. We use third-party specialists to assist Projected bene†t obligation $32 management in evaluating our assumptions and estimates, as well as Postretirement Plans to appropriately measure the costs and obligations associated with Accumulated bene†t obligation $÷8 our retirement bene†t plans. Had we used di®erent estimates and assumptions with respect to these plans, our retirement bene†t We changed our investment approach and related asset allocation obligations and related expense could vary from the actual amounts for the US and Canada plans during š—› to a liability-driven invest- recorded, and such di®erences could be material. Additionally, adverse ment approach by which a higher proportion of investments will be in changes in investment returns earned on pension assets and discount interest-rate sensitive investments (†xed income) under an active- rates used to calculate pension and postretirement bene†t related management approach as compared to the prior investment strategy. liabilities or changes in required funding levels may have an unfavor- The approach seeks to protect the current funded status of the plans able impact on future expense and cash ³ow. Net periodic pension from market volatility with a greater asset allocation to interest-rate and postretirement bene†t cost for all of our plans was ª˜ million in sensitive assets. The greater allocation to interest-rate sensitive assets š—› and ª› million in š—. is expected to reduce volatility in plan funded status by more closely We determine our assumption for the discount rate used to matching movements in asset values to changes in liabilities. measure year-end pension and postretirement obligations based on Our current investment policy for our pension plans is to balance high-quality †xed-income investments that match the duration of the risk and return through diversi†ed portfolios of passively-managed expected bene†t payments, which has been benchmarked using a equity index instruments, †xed income index securities, and short- long-term, high-quality AA corporate bond index. In š—›, we changed term investments. Maturities for †xed income securities are managed the method used to estimate the service and interest cost components such that su‘cient liquidity exists to meet near-term bene†t payment of net periodic bene†t cost for our certain of our de†ned bene†t obligations. The asset allocation is reviewed regularly and portfolio pension and postretirement bene†t plans. Historically, we estimated investments are rebalanced to the targeted allocation when considered the service and interest cost components using a single weighted- appropriate or to raise su‘cient liquidity when necessary to meet average discount rate derived from the yield curve used to measure near-term bene†t payment obligations. For š—– net periodic pension the bene†t obligation at the beginning of the period. Beginning in cost, we assumed an expected long-term rate of return on assets, š—›, we have elected to use a full yield curve approach in the which is based on the fair value of plan assets, of .– percent for US estimation of these components of bene†t cost by applying the plans and approximately .–› percent for Canadian plans. In develop- speci†c spot rates along the yield curve used in the determination of ing the expected long-term rate of return assumption on plan assets, the bene†t obligation to the relevant projected cash ³ows. We have which consist mainly of US and Canadian equity and debt securities, made this change to improve the correlation between projected bene†t management evaluated historical rates of return achieved on plan cash ³ows and the corresponding yield curve spot rates and to provide assets and the asset allocation of the plans, input from our indepen- a more precise measurement of service and interest costs. This change dent actuaries and investment consultants, and historical trends in does not a®ect the measurement of our total bene†t obligations as the long-term in³ation rates. Projected return estimates made by such change in the service cost and interest cost is completely o®set in the consultants are based upon broad equity and bond indices. We also actuarial (gain) loss reported. The weighted average discount rate used maintain several funded pension plans in other international locations. to determine our obligations under US pension plans for December , The expected returns on plan assets for these plans are determined š—› and š— was .— percent and . percent, respectively. The based on each plan’s investment approach and asset allocations. A weighted average discount rate used to determine our obligations hypothetical š basis point decrease in the expected long-term rate

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 31 3/14/17 10:36 PM of return assumption would increase š—– net periodic pension cost for In July š—, the FASB issued ASU No. š—-, Inventory (Topic ): the US and Canada plans by less than ª million each. Simplifying the Measurement of Inventory. This Update requires an entity Healthcare cost trend rates are used in valuing our postretirement to measure inventory at the lower of cost and net realizable value, bene†t obligations and are established based upon actual health care removing the consideration of current replacement cost. It is e®ective cost trends and consultation with actuaries and bene†t providers. At for †scal years, and interim periods within those †scal years, beginning December , š—›, the health care cost trend rate assumptions for after December , š—›, with early adoption permitted. We do not the next year for the US, Canada and Brazil plans were ›.— percent, expect that the adoption of the guidance in this Update will have a ›.— percent and ˜.›› percent, respectively. material impact on our Consolidated Financial Statements. The sensitivities of service cost and interest cost and year-end In January š—›, the FASB issued ASU No. š—›-—, Financial bene†t obligations to changes in healthcare cost trend rates (both Instruments-Overall (Subtopic ƒ„ -†): Recognition and Measurement of initial and ultimate rates) for the postretirement bene†t plans as Financial Assets and Financial Liabilities. This Update requires, among other of December , š—› are as follows: things, that equity investments having readily determinable fair values be measured at fair value with changes recognized in net income rather than In millions ¹±°¼ other comprehensive income. Equity investments that are accounted for One-percentage point increase in trend rates: under the equity method of accounting or result in consolidation of an Increase in service cost and interest cost components ª—.› Increase in year-end bene†t obligations ª–.— investee are not included within the scope of this Update. The amendments One-percentage point decrease in trend rates: in this Update are e®ective for †scal years beginning after December , Decrease in service cost and interest cost components ª—. š—–, including interim periods within those †scal years. The amendments Decrease in year-end bene†t obligations ª›.— in this Update are to be applied using a cumulative-e®ect adjustment to the balance sheet as of the beginning of the year of adoption. We do See Note — of the Notes to the Consolidated Financial Statements not expect that the adoption of the guidance in this Update will have for more information related to our bene†t plans. a material impact on our Consolidated Financial Statements. In February š—›, the FASB issued ASU No. š—›-—š, Leases New Accounting Standards (Topic ƒ‹„), which supersedes Topic ˜—, Leases. This Update increases In May š—, the Financial Accounting Standards Board (“FASB”) the transparency and comparability of organizations by recognizing issued Accounting Standards Update (“ASU”) No. š—-—, Revenue lease assets and lease liabilities on the balance sheet for leases longer from Contracts with Customers (Topic ) that introduces a new than š months and disclosing key information about leasing arrange- †ve-step revenue recognition model in which an entity should ments. The recognition, measurement, and presentation of expenses recognize revenue to depict the transfer of promised goods or services and cash ³ows arising from a lease by a lessee have not signi†cantly to customers in an amount that re³ects the consideration to which the changed. This Update is e®ective for annual periods beginning after entity expects to be entitled in exchange for those goods or services. December , š—˜, with early adoption permitted. We currently plan This ASU also requires disclosures su‘cient to enable users to to adopt the standard as of the e®ective date. Adoption will require a understand the nature, amount, timing, and uncertainty of revenue modi†ed retrospective transition. We expect the adoption of the and cash ³ows arising from contracts with customers, including guidance in this Update to have a material impact on our Consolidated qualitative and quantitative disclosures about contracts with custom- Balance Sheet as operating leases will be recognized both as assets and ers, signi†cant judgments and changes in judgments, and assets liabilities on the balance sheet. We are in the process of quantifying recognized from the costs to obtain or ful†ll a contract. The FASB has the magnitude of these changes and assessing the implementation also issued additional ASUs to provide further updates and clari†cation strategy for accounting for these changes. to the Update, including ASU š—-, ASU š—›-—˜, ASU š—›-—, In January š—–, the FASB issued ASU No. š—–-—, Intangibles – ASU š—›-š, and ASU š—›-š—. This standard is e®ective for †scal Goodwill and Other (Topic  ): Simplifying the Test for Goodwill Impairment. years beginning after December , š—–, including interim periods This Update simpli†es the subsequent measurement of Goodwill as the within that reporting period. We plan to adopt the standard as of the Update eliminates Step š from the goodwill impairment test. Instead, e®ective date. The standard will allow various transition approaches under the Update, an entity should perform its annual, or interim, upon adoption. We plan to use the modi†ed retrospective approach for goodwill impairment test by comparing the fair value of a reporting the transition to the new standard. Based on the analysis performed by unit with its carrying amount. An entity should then recognize an the Company to date, our preliminary assessment is that the adoption impairment charge for the amount by which the carrying amount of this guidance in the Update will not have a material impact on the exceeds the reporting unit’s fair value, with the loss recognized not to Company’s revenue recognition timing or amounts, however, that exceed the total amount of goodwill allocated to that reporting unit. This assessment could change as we complete our analysis. We anticipate Update is e®ective for annual periods beginning after December , that our assessment will be complete by the third quarter of š—–. š—, with early adoption permitted. We do not expect the Update to have a material impact on our Consolidated Financial Statements.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 32 3/14/17 10:36 PM Forward-Looking Statements potato starch, tapioca, acacia gum, guar gum and the speci†c varieties This Form —-K contains or may contain forward-looking statements of corn upon which our products are based; our ability to develop or within the meaning of Section š–A of the Securities Act of , as acquire new products and services at rates or of qualities su‘cient to amended, and Section šE of the Securities Exchange Act of , as meet expectations; energy issues in Pakistan; boiler reliability; our amended. The Company intends these forward-looking statements ability to e®ectively integrate and operate acquired businesses; our to be covered by the safe harbor provisions for such statements. ability to achieve budgets and to realize expected synergies; our ability Forward-looking statements include, among other things, any to complete planned maintenance and investment projects success- statements regarding the Company’s prospects or future †nancial fully and on budget; labor disputes; genetic and biotechnology issues; condition, earnings, revenues, tax rates, capital expenditures, expenses changing consumption preferences including those relating to high or other †nancial items, any statements concerning the Company’s fructose corn syrup; increased competitive and/or customer pressure prospects or future operations, including management’s plans or in the corn-re†ning industry; and the outbreak or continuation of strategies and objectives therefor and any assumptions, expectations serious communicable disease or hostilities including acts of terrorism. or beliefs underlying the foregoing. Factors relating to the acquisition of TIC Gums that could cause actual These statements can sometimes be identi†ed by the use of results and developments to di®er from expectations include: the forward looking words such as “may,” “will,” “should,” “anticipate,” anticipated bene†ts of the acquisition, including synergies, may not “assume”, “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” be realized; and the integration of TIC Gum’s operations with those “continue,” “pro forma,” “forecast,” “outlook,” “propels,” “opportu- of Ingredion may be materially delayed or may be more costly or nity,” “potential” or other similar expressions or the negative thereof. di‘cult than expected. All statements other than statements of historical facts in this report Our forward-looking statements speak only as of the date on which or referred to in or incorporated by reference into this report are they are made and we do not undertake any obligation to update any “forward-looking statements.” forward-looking statement to re³ect events or circumstances after the These statements are based on current circumstances or expecta- date of the statement as a result of new information or future events tions, but are subject to certain inherent risks and uncertainties, many or developments. If we do update or correct one or more of these of which are di‘cult to predict and are beyond our control. Although we statements, investors and others should not conclude that we will believe our expectations re³ected in these forward-looking statements make additional updates or corrections. For a further description of are based on reasonable assumptions, stockholders are cautioned that these and other risks, see Item A-Risk Factors above and subsequent no assurance can be given that our expectations will prove correct. reports on Forms —-Q or ˜-K. Actual results and developments may di®er materially from the expectations expressed in or implied by these statements, based on various factors, including the e®ects of global economic conditions, including, particularly, continuation or worsening of the current economic, currency and political conditions in South America and economic conditions in Europe, and their impact on our sales volumes and pricing of our products, our ability to collect our receivables from customers and our ability to raise funds at reasonable rates; ³uctua- tions in worldwide markets for corn and other commodities, and the associated risks of hedging against such ³uctuations; ³uctuations in the markets and prices for our co-products, particularly corn oil; ³uctuations in aggregate industry supply and market demand; the behavior of †nancial markets, including foreign currency ³uctuations and ³uctuations in interest and exchange rates; volatility and turmoil in the capital markets; the commercial and consumer credit environ- ment; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products; future †nancial performance of major industries which we serve, including, without limitation, the food and beverage, paper, corrugated and brewing industries; energy costs and availability, freight and shipping costs, and changes in regulatory controls regarding quotas; tari®s, duties, taxes and income tax rates; particularly United States tax reform; operating di‘culties; availability of raw materials, including

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 33 3/14/17 10:36 PM Item ‹A. Quantitative and Qualitative Disclosures About six-month US dollar LIBOR rate plus a spread. We have designated Market Risk these interest rate swap agreements as hedges of the changes in fair Interest Rate Exposure We are exposed to interest rate risk on our value of the underlying debt obligations attributable to changes in variable-rate debt and price risk on our †xed-rate debt. As of Decem- interest rates and account for them as fair-value hedges. The fair value ber , š—›, approximately  percent or ª. billion of our borrow- of these interest rate swap agreements approximated ª million at ings are †xed-rate debt and  percent or approximately ª˜—› million December , š—› and is re³ected in the Consolidated Balance Sheets of our debt is subject to changes in short-term rates, which could a®ect within Other assets, with an o®setting amount recorded in long-term our interest costs. We assess market risk based on changes in interest debt to adjust the carrying amount of the hedged debt obligations. rates utilizing a sensitivity analysis that measures the potential change in earnings, fair values and cash ³ows based on a hypothetical  percent- Raw Material, Energy and Other Commodity Exposure Our †nished age point change in interest rates at December , š—›. A hypothetical products are made primarily from corn. In North America, we sell a increase of  percentage point in the weighted average ³oating interest large portion of †nished products at †rm prices established in supply rate would increase our annual interest expense by approximately contracts typically lasting for periods of up to one year. In order to ª˜ million. See Note – of the Notes to the Consolidated Financial minimize the e®ect of volatility in the cost of corn related to these Statements entitled “Financing Arrangements” for further information. †rm-priced supply contracts, we enter into corn futures contracts or At December , š—› and š—, the carrying and fair values of take other hedging positions in the corn futures market. These long-term debt were as follows: contracts typically mature within one year. At expiration, we settle the derivative contracts at a net amount equal to the di®erence ¹±°¼ ¹±°½ Carrying Fair Carrying Fair between the then-current price of corn and the futures contract price. (in millions) Amount Value Amount Value While these hedging instruments are subject to ³uctuations in value, .šÃ senior notes, changes in the value of the underlying exposures we are hedging due October , š—š› $÷«496 $÷«482 $÷÷«– $÷÷«– generally o®set such ³uctuations. While the corn futures contracts or .›šà senior notes, due November , š—š— 398 428 398 420 other hedging positions are intended to minimize the volatility of corn .˜Ã senior notes, due costs on operating pro†ts, occasionally the hedging activity can result September š, š—– 299 301 299 300 in losses, some of which may be material. Outside of North America, ›.›šà senior notes, sales of †nished products under long-term, †rm-priced supply due April , š—– 254 299 254 302 contracts are not material. ›.—à senior notes, due April , š—– 200 202 200 211 .›šÃ senior notes, Energy costs represent approximately — percent of our operating due March š, š—š— 200 217 200 218 costs. The primary use of energy is to create steam in the production U.S. revolving credit facility process and to dry product. We consume coal, natural gas, electricity, due October , š—š –– ––wood and fuel oil to generate energy. The market prices for these U.S. revolving credit facility replaced October š—› ––111 111 commodities vary depending on supply and demand, world economies Term loan repaid September š—› ––350 350 and other factors. We purchase these commodities based on our Fair value adjustment related anticipated usage and the future outlook for these costs. We cannot to hedged †xed rate debt assure that we will be able to purchase these commodities at prices instruments 3– 7– that we can adequately pass on to customers to sustain or increase Total long-term debt $1,850 $1,929 $1,819 $1,912 pro†tability. We use derivative †nancial instruments, such as over-the- A hypothetical change of  percentage point in interest rates counter natural gas swaps, to hedge portions of our natural gas costs would change the fair value of our †xed rate debt at December , generally over the following twelve to twenty-four months, primarily š—› by approximately ª—— million. Since we have no current plans in our North American operations. to repurchase our outstanding †xed-rate instruments before their At December , š—›, we had outstanding futures and option maturities, the impact of market interest rate ³uctuations on our contracts that hedged the forecasted purchase of approximately long-term debt is not expected to have a signi†cant e®ect on our šš million bushels of corn and  million pounds of soybean oil. consolidated †nancial statements. We are unable to directly hedge price risk related to co-product sales; We have interest rate swap agreements that e®ectively convert however, we occasionally enter into hedges of soybean oil (a compet- the interest rates on our ›.— percent ªš—— million senior notes due ing product to corn oil) in order to mitigate the price risk of corn oil April , š—–, our .˜ percent ª—— million senior notes due Septem- sales. We also had outstanding swap and option contracts that hedged ber š, š—– and on ªš—— million of our ª—— million .›š percent the forecasted purchase of approximately š— million mmbtu’s of senior notes due November , š—š—, to variable rates. These swap natural gas at December , š—›. Additionally at December , š—›, agreements call for us to receive interest at the †xed coupon rate of we had outstanding ethanol futures contracts that hedged the the respective notes and to pay interest at a variable rate based on the forecasted sale of approximately — million gallons of ethanol. Based

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 34 3/14/17 10:36 PM on our overall commodity hedge position at December , š—›, a hypothetical — percent decline in market prices applied to the fair value of the instruments would result in a charge to other comprehen- sive income of approximately ª million, net of income tax bene†t. It should be noted that any change in the fair value of the contracts, real or hypothetical, would be substantially o®set by an inverse change in the value of the underlying hedged item.

Foreign Currencies Due to our global operations, we are exposed to ³uctuations in foreign currency exchange rates. As a result, we have exposure to translational foreign exchange risk when our foreign operation results are translated to US dollars and to transactional foreign exchange risk when transactions not denominated in the functional currency of the operating unit are revalued. We selectively use derivative instruments such as forward contracts, currency swaps and options to manage transactional foreign exchange risk. Based on our overall foreign currency transac- tional exposure at December , š—›, we estimate that a hypothetical — percent decline in the value of the US dollar would have resulted in a transactional foreign exchange gain of approximately ªš million. At December , š—›, our accumulated other comprehensive loss account included in the equity section of our Consolidated Balance Sheet includes a cumulative translation loss of approximately ª.— billion. The aggregate net assets of our foreign subsidiaries where the local currency is the functional currency approximated ª. billion at December , š—›. A hypothetical — percent decline in the value of the US dollar relative to foreign currencies would have resulted in a reduction to our cumulative translation loss and a credit to other comprehensive income of approximately ª– million.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 35 3/14/17 10:36 PM Item ‘. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm those policies and procedures that () pertain to the maintenance The Board of Directors and Stockholders of records that, in reasonable detail, accurately and fairly re³ect the Ingredion Incorporated: transactions and dispositions of the assets of the company; (š) provide We have audited the accompanying consolidated balance sheets reasonable assurance that transactions are recorded as necessary to of Ingredion Incorporated and subsidiaries (the Company) as of permit preparation of †nancial statements in accordance with generally December , š—› and š—, and the related consolidated statements accepted accounting principles, and that receipts and expenditures of of income, comprehensive income, equity and redeemable equity, the company are being made only in accordance with authorizations of and cash ³ows for each of the years in the three-year period ended management and directors of the company; and () provide reasonable December , š—›. We also have audited the Company’s internal assurance regarding prevention or timely detection of unauthorized control over †nancial reporting as of December , š—›, based on acquisition, use, or disposition of the company’s assets that could have criteria established in Internal Control – Integrated Framework („†) a material e®ect on the †nancial statements. issued by the Committee of Sponsoring Organizations of the Treadway Because of its inherent limitations, internal control over †nancial Commission (COSO). The Company’s management is responsible for reporting may not prevent or detect misstatements. Also, projections these consolidated †nancial statements, for maintaining e®ective of any evaluation of e®ectiveness to future periods are subject to internal control over †nancial reporting, and for its assessment of the the risk that controls may become inadequate because of changes in e®ectiveness of internal control over †nancial reporting, included in conditions, or that the degree of compliance with the policies or the accompanying Management’s Report on Internal Control over procedures may deteriorate. Financial Reporting. Our responsibility is to express an opinion on these In our opinion, the consolidated †nancial statements referred to consolidated †nancial statements and an opinion on the Company’s above present fairly, in all material respects, the †nancial position of internal control over †nancial reporting based on our audits. Ingredion Incorporated and subsidiaries as of December , š—› and We conducted our audits in accordance with the standards of the š—, and the results of their operations and their cash ³ows for each Public Company Accounting Oversight Board (United States). Those of the years in the three-year period ended December , š—›, in standards require that we plan and perform the audits to obtain conformity with U.S. generally accepted accounting principles. Also reasonable assurance about whether the †nancial statements are in our opinion, the Company maintained, in all material respects, free of material misstatement and whether e®ective internal control e®ective internal control over †nancial reporting as of December , over †nancial reporting was maintained in all material respects. Our š—›, based on criteria established in Internal Control – Integrated audits of the consolidated †nancial statements included examining, Framework („†) issued by the Committee of Sponsoring Organiza- on a test basis, evidence supporting the amounts and disclosures in tions of the Treadway Commission (COSO). the †nancial statements, assessing the accounting principles used The Company acquired Shandong Huanong Specialty Corn and signi†cant estimates made by management, and evaluating the Development Co., LTD.(“Shandong”) and TIC Gums Incorporated overall †nancial statement presentation. Our audit of internal control (“TIC Gums”) during š—›, and management excluded from its over †nancial reporting included obtaining an understanding of assessment of the e®ectiveness of the Company’s internal control internal control over †nancial reporting, assessing the risk that a over †nancial reporting as of December , š—›, Shandong’s and TIC material weakness exists, and testing and evaluating the design and Gums’ internal control over †nancial reporting associated with total operating e®ectiveness of internal control based on the assessed risk. assets of ª million and total net sales of ª—. million included in Our audits also included performing such other procedures as we the consolidated †nancial statements of the Company as of and for considered necessary in the circumstances. We believe that our the year ended December , š—›. Our audit of internal control over audits provide a reasonable basis for our opinions. †nancial reporting of the Company also excluded an evaluation of the A company’s internal control over †nancial reporting is a process internal control over †nancial reporting of Shandong and TIC Gums. designed to provide reasonable assurance regarding the reliability of †nancial reporting and the preparation of †nancial statements for /s/ KPMG LLP external purposes in accordance with generally accepted accounting Chicago, Illinois principles. A company’s internal control over †nancial reporting includes February šš, š—–

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 36 3/14/17 10:36 PM Consolidated Statements of Income

(in millions, except per share amounts) Years Ended December º°, ¹±°¼ ¹±°½ ¹±°» Net sales before shipping and handling costs $6,022 $5,958 $5,998 Less – shipping and handling costs 318 337 330 Net sales 5,704 5,621 5,668 Cost of sales 4,302 4,379 4,553 Gross pro­t 1,402 1,242 1,115 Selling, general and administrative expenses 579 555 525 Other (income) – net (4) (1) (24) Restructuring/impairment charges 19 28 33 594 582 534 Operating income 808 660 581 Financing costs – net 66 61 61 Income before income taxes 742 599 520 Provision for income taxes 246 187 157 Net income 496 412 363 Less – Net income attributable to non-controlling interests 11 10 8 Net income attributable to Ingredion $÷«485 $÷«402 $÷«355

Weighted average common shares outstanding: Basic 72.3 71.6 73.6 Diluted 74.1 73.0 74.9 Earnings per common share of Ingredion: Basic $÷6.70 $÷5.62 $÷4.82 Diluted 6.55 5.51 4.74 See Notes to the Consolidated Financial Statements.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 37 3/14/17 10:36 PM Consolidated Statements of Comprehensive Income

(in millions) Years Ended December º°, ¹±°¼ ¹±°½ ¹±°» Net income $496 $«412 $«363 Other comprehensive income (loss): Losses on cash-³ow hedges, net of income tax e®ect of ª›, ª and ªš, respectively (11) (42) (29) Amount of losses on cash-³ow hedges reclassi†ed to earnings, net of income tax e®ect of ª›, ª and ªš, respectively 33 32 50 Actuarial gain (loss) on pension and other postretirement obligations, settlements and plan amendments, net of income tax e®ect of ª, ª and ª, respectively (10) 13 (12) Losses related to pension and other postretirement obligations reclassi†ed to earnings, net of income tax e®ect of ª–, ª– and ª, respectively 1 1 4 Unrealized gain on investments, net of income tax e®ect 1 – – Currency translation adjustment 7 (324) (212) Comprehensive income $517 $÷«92 $«164 Less: Comprehensive income attributable to non-controlling interests 12 10 8 Comprehensive income attributable to Ingredion $505 $÷«82 $«156 See Notes to the Consolidated Financial Statements.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 38 3/14/17 10:36 PM Consolidated Balance Sheets

(in millions, except share and per share amounts) As of December º°, ¹±°¼ ¹±°½ Assets Current assets: Cash and cash equivalents $÷÷512 $÷÷434 Short-term investments 4 6 Accounts receivable – net 923 775 Inventories 789 715 Prepaid expenses 24 20 Total current assets 2,252 1,950 Property, plant and equipment, at cost Land 183 171 Buildings 704 643 Machinery and equipment 4,055 3,817 4,942 4,631 Less: accumulated depreciation (2,826) (2,642)

Property, plant and equipment – net 2,116 1,989 Goodwill 784 601 Other intangible assets – net of accumulated amortization of ª—› and ª˜š, respectively 502 410 Deferred income tax assets 7 7 Other assets 121 117 Total assets $«5,782 $«5,074

Liabilities and equity Current liabilities: Short-term borrowings $÷÷106 $÷÷÷19 Accounts payable 440 423 Accrued liabilities 432 300 Total current liabilities 978 742 Non-current liabilities 158 170 Long-term debt 1,850 1,819 Deferred income tax liabilities 171 139 Share-based payments subject to redemption 30 24 Ingredion stockholders’ equity Preferred stock – authorized š,———,——— shares-ª—.— par value, none issued – – Common stock – authorized š——,———,——— shares-ª—.— par value, ––,˜—,˜– issued at December , š—› and December , š—, respectively 1 1 Additional paid-in capital 1,149 1,160 Less – Treasury stock (common stock: ,›,š› and ›,,— shares at December , š—› and December , š—, respectively) at cost (413) (467) Accumulated other comprehensive loss (1,071) (1,102) Retained earnings 2,899 2,552 Total Ingredion stockholders’ equity 2,565 2,144 Non-controlling interests 30 36 Total equity 2,595 2,180 Total liabilities and equity $«5,782 $«5,074 See Notes to the Consolidated Financial Statements.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 39 3/14/17 10:36 PM Consolidated Statements of Equity and Redeemable Equity

Total Equity Accumulated Share-based Additional Other Non- Payments Common Paid-In Treasury Comprehensive Retained Controlling Subject (in millions) Stock Capital Stock Income (Loss) Earnings Interests Redemption Balance, December ˆ, ˆ $1 $1,166 $(225) $÷(583) $2,045 $«25 $24 Net income attributable to Ingredion 355 Net income attributable to non-controlling interests 8 Dividends declared (125) (3) Repurchases of common stock (3) (301) Issuance of common stock on exercise of stock options (17) 37 Stock option expense 7 Other share-based compensation 58 (2) Excess tax bene†t on share-based compensation 6 Other comprehensive loss (199) Balance, December ˆ, 
$1 $1,164 $(481) $÷(782) $2,275 $«30 $22 Net income attributable to Ingredion 402 Net income attributable to non-controlling interests 10 Dividends declared (125) (4) Repurchases of common stock (7) (34) Issuance of common stock on exercise of stock options (14) 35 Stock option expense 7 Other share-based compensation 2 13 2 Excess tax bene†t on share-based compensation 8 Other comprehensive loss (320) Balance, December ˆ,  $1 $1,160 $(467) $(1,102) $2,552 $«36 $24 Net income attributable to Ingredion 485 Net income attributable to non-controlling interests 11 Dividends declared (138) (7) Repurchases of common stock (8) Issuance of common stock on exercise of stock options (14) 43 Stock option expense 9 Other share-based compensation 2 11 6 Other comprehensive income 31 (10) Balance, December ˆ, ‰ $1 $1,149 $(413) $(1,071) $2,899 $«30 $30 See Notes to the Consolidated Financial Statements.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 40 3/14/17 10:36 PM Consolidated Statements of Cash Flows

(in millions) Years ended December º°, ¹±°¼ ¹±°½ ¹±°» Cash provided by operating activities: Net income $÷«496 $÷÷412 $«363 Non-cash charges to net income: Depreciation and amortization 196 194 195 Deferred income taxes (5) (6) (11) Write-o® of impaired assets — 10 33 Gain on sale of plant — (10) — Charge for fair value mark-up of acquired inventory — 10 — Other 101 96 68 Changes in working capital: Accounts receivable and prepaid expenses (131) (29) (15) Inventories (19) 9 (6) Accounts payable and accrued liabilities 127 30 66 Margin accounts 15 (34) 39 Other (9) 4 (1) Cash provided by operating activities 771 686 731 Cash used for investing activities: Payments for acquisitions, net of cash acquired of ª, ª›, and ª–, respectively (407) (434) — Capital expenditures (284) (280) (276) Investment in non-consolidated a‘liate (2) — — Short-term investments 1 27 (34) Proceeds from disposal of plants and properties 3 38 5 Proceeds from sale of investment — — 11 Cash used for investing activities (689) (649) (294) Cash provided by (used for) ­nancing activities: Proceeds from borrowings 1,000 1,388 231 Payments on debt (874) (1,366) (213) Debt issuance costs (6) — — Repurchases of common stock (8) (41) (304) Issuance of common stock 29 21 20 Dividends paid (including to non-controlling interests) (141) (126) (128) Excess tax bene†t on share-based compensation — 8 6 Cash used for †nancing activities — (116) (388) E®ects of foreign exchange rate changes on cash (4) (67) (43) Increase (decrease) in cash and cash equivalents 78 (146) 6 Cash and cash equivalents, beginning of period 434 580 574 Cash and cash equivalents, end of period $÷«512 $÷÷434 $«580 See Notes to the Consolidated Financial Statements.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 41 3/14/17 10:36 PM Notes to the Consolidated Financial Statements

Note . Description of the Business related adjustment included in net income. Non-monetary assets Ingredion Incorporated (“the Company”) was founded in —› and and liabilities are translated at historical exchange rates. Although became an independent and public company as of December , –. the Company hedges the predominance of its transactional foreign The Company primarily manufactures and sells sweetener, starches, exchange risk (see Note ›), the Company incurs foreign currency nutrition ingredients and biomaterial solutions derived from the wet transaction gains/losses relating to assets and liabilities that are milling and processing of corn and other starch-based materials to a denominated in a currency other than the functional currency. For wide range of industries, both domestically and internationally. š—›, š— and š—, the Company incurred foreign currency transaction losses of ª million, ª› million and ª million, respectively. Note . Summary of Signi­cant Accounting Policies The Company’s accumulated other comprehensive loss included in Basis of Presentation The consolidated †nancial statements consist equity on the Consolidated Balance Sheets includes cumulative of the accounts of the Company, including all signi†cant subsidiaries. translation losses of approximately ª billion at both December , Intercompany accounts and transactions are eliminated in š—› and š—. consolidation. The preparation of the accompanying consolidated †nancial Cash and Cash Equivalents Cash equivalents consist of all instruments statements in conformity with accounting principles generally purchased with an original maturity of three months or less, and which accepted in the United States of America requires management to have virtually no risk of loss in value. make estimates and assumptions about future events. These estimates and the underlying assumptions a®ect the amounts of assets and Inventories Inventories are stated at the lower of cost or net realizable liabilities reported, disclosures about contingent assets and liabilities, value. Costs are predominantly determined using the weighted and reported amounts of revenues and expenses. Such estimates average method. include the value of purchase consideration, valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived Investments Investments in the common stock of a‘liated compa- assets, legal contingencies, guarantee obligations, and assumptions nies over which the Company does not exercise signi†cant in³uence used in the calculation of income taxes, and pension and other are accounted for under the cost method. In š—›, the Company postretirement bene†ts, among others. These estimates and assump- invested ªš million in SweeGen Inc. which it accounts for under the tions are based on management’s best estimates and judgment. cost method. In š—, the Company sold an investment that it had Management evaluates its estimates and assumptions on an ongoing accounted for under the cost method. The Company received basis using historical experience and other factors, including the ª million in cash and recorded a pre-tax gain of ª million from the current economic environment, which management believes to be sale. Investments that enable the Company to exercise signi†cant reasonable under the circumstances. Management will adjust such in³uence, but do not represent a controlling interest, are accounted estimates and assumptions when facts and circumstances dictate. for under the equity method; such investments are carried at cost, Foreign currency devaluations, corn price volatility, access to di‘cult adjusted to re³ect the Company’s proportionate share of income or credit markets and adverse changes in the global economic environ- loss, less dividends received. The Company did not have any ment have combined to increase the uncertainty inherent in such investments accounted for under the equity method at December , estimates and assumptions. As future events and their e®ects cannot š—› or š—. The Company has equity interests in the CME Group Inc. be determined with precision, actual results could di®er signi†cantly and CBOE Holdings, Inc., which are classi†ed as available for sale from these estimates. Changes in these estimates will be re³ected in securities. The investments are carried at fair value with unrealized the †nancial statements in future periods. gains and losses recorded to other comprehensive income. The Assets and liabilities of foreign subsidiaries, other than those Company would recognize a loss on its investments when there is a whose functional currency is the US dollar, are translated at current loss in value of an investment that is other than temporary. Invest- exchange rates with the related translation adjustments reported in ments are included in Other assets in the Consolidated Balance equity as a component of accumulated other comprehensive income Sheets and are not signi†cant. (loss). The US dollar is the functional currency for the Company’s Mexico subsidiary. Income statement accounts are translated at the Leases The Company leases rail cars, certain machinery and equip- average exchange rate during the period. However, signi†cant ment, and o‘ce space. The Company classi†es its leases as either nonrecurring items related to a speci†c event are recognized at the capital or operating based on the terms of the related lease agreement exchange rate on the date of the signi†cant event. For foreign and the criteria contained in Financial Accounting Standards Board subsidiaries where the US dollar is the functional currency, monetary (“FASB”) Accounting Standards Codi†cation (“ASC”) Topic ˜—, Leases, assets and liabilities are translated at current exchange rates with the and related interpretations.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 42 3/14/17 10:36 PM Property, Plant and Equipment and Depreciation Property, plant and December , š—› and š—, respectively. The carrying amount of equipment (“PP&E”) are stated at cost less accumulated depreciation. goodwill by reportable business segment at December , š—› and Depreciation is generally computed on the straight-line method over š— was as follows: the estimated useful lives of depreciable assets, which range from North South Asia š to — years for buildings and from š to š years for all other assets. (in millions) America America Paci†c EMEA Total Where permitted by law, accelerated depreciation methods are used Balance at December , š— $278 $«78 $÷«97 $82 $«535 for tax purposes. The Company reviews the recoverability of the net Impairment charges – (33) ––(33) book value of PP&E for impairment whenever events or changes in Currency translation – (13) (4) (7) (24) circumstances indicate that the carrying value of an asset may not be Balance at December , š— $278 $«32 $÷«93 $75 $«478 recoverable from estimated future cash ³ows expected to result from Acquisitions 148 –––148 its use and eventual disposition. If this review indicates that the Disposal (2) –––(2) carrying values will not be recovered, the carrying values would be Currency translation – (10) (7) (6) (23) Balance at December , š— $424 $«22 $÷«86 $69 $«601 reduced to fair value and an impairment loss would be recognized. As required under accounting principles generally accepted in the Acquisitions 186 –––186 Currency translation –4(1) (6) (3) United States, the impairment analysis for long-lived assets occurs Balance at December , š—› $610 $«26 $÷«85 $63 $«784 before the goodwill impairment assessment described below. Goodwill before impairment charges $425 $«55 $«207 $69 $«756 Accumulated impairment charges (1) (33) (121) – (155) Goodwill and Other Intangible Assets Goodwill (ª–˜ million and Balance at December , š— $424 $«22 $86 $69 $«601 ª›— million at December , š—› and š—, respectively) represents Goodwill before impairment charges $611 $«59 $«206 $63 $«939 the excess of the cost of an acquired entity over the fair value assigned Accumulated impairment charges (1) (33) (121) – (155) to identi†able assets acquired and liabilities assumed. The Company Balance at December , š—› $610 $«26 $÷«85 $63 $«784 also has other intangible assets of ª—š million and ª— million at

The following table summarizes the Company’s other intangible assets for the periods presented:

As of December º°, ¹±°¼ As of December º°, ¹±°½ Weighted Accumulated Weighted Average Accumulated Average Useful (in millions) Gross Amortization Net Useful Life (years) Gross Amortization Net Life (years) Trademarks/tradenames $143 $÷÷«– $143 – $144 $÷«– $144 – Customer relationships 227 (42) 185 20 235 (32) 203 25 Technology 100 (57) 43 10 99 (45) 54 10 TIC Gums intangible assets (preliminary) 117 – 117 Various – – – – Other 21 (7) 14 16 14 (5) 9 8 Total other intangible assets $608 $(106) $502 17 $492 $(82) $410 19

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 43 3/14/17 10:36 PM On December š, š—›, the Company completed its acquisition of its goodwill, goodwill is deemed impaired and is written down to the TIC Gums Incorporated (“TIC Gums”). A preliminary allocation of the extent of the di®erence. Based on the results of the annual assessment, purchase price to the assets acquired and liabilities assumed was made the Company concluded that as of October , š—›, it was more likely based on available information and incorporating management’s best than not that the fair value of its reporting units was greater than their estimates. The table above includes the preliminary allocation of both carrying value (although the ªš› million of goodwill at the Company’s de†nite –lived and inde†nite intangible assets. See Note  of the Notes Brazil reporting unit continues to be closely monitored due to recent to the Consolidated Financial Statements for additional information. trends and increased volatility experienced in this reporting unit, such For de†nite-lived intangible assets, the Company recognizes the as continued slow economic growth, heightened competition and cost of such amortizable assets in operations over their estimated possible future negative economic growth). useful lives and evaluates the recoverability of the assets whenever The results of the Company’s impairment testing in the fourth events or changes in circumstances indicate that the carrying value of quarter of š— indicated that the estimated fair value of the the assets may not be recoverable. Amortization expense related to Company’s Southern Cone of South America reporting unit was less intangible assets was ªš million in š—›, ªšš million in š—, and than its carrying amount. Therefore, the Company recorded a non-cash ª million in š—. impairment charge of ª million to write-o® the remaining balance of Based on acquisitions completed through December , š—› goodwill for this reporting unit in š—. including the preliminary purchase price allocations for TIC Gums and In testing inde†nite-lived intangible assets for impairment, the Shandong Huanong Specialty Corn Development Co., Ltd., intangible Company †rst assesses qualitative factors to determine whether it is asset amortization expense for the next †ve years is shown below. The more likely than not that the fair value of an inde†nite-lived intangible amortization is subject to change based on †nalization of the purchase asset is impaired. After assessing the qualitative factors, if the accounting for both acquisitions. Company determines that it is not more likely than not that the fair value of an inde†nite-lived intangible asset is less than its carrying (in millions) Amortization Expense amount, then it would not be required to compute the fair value of the Year inde†nite-lived intangible asset. In the event the qualitative assessment š—– $30 š—˜ 29 leads the Company to conclude otherwise, then it would be required š— 29 to determine the fair value of the inde†nite-lived intangible asset and š—š— 27 perform the quantitative impairment test in accordance with ASC š—š 18 subtopic —-—. In performing the qualitative analysis, the Company considers various factors including net sales derived from these The Company assesses goodwill and other inde†nite-lived intangibles and certain market and industry conditions. Based on the intangible assets for impairment annually (or more frequently if results of this qualitative assessment, the Company concluded that as impairment indicators arise). The Company has chosen to perform of October , š—›, it was more likely than not that the fair value of the this annual impairment assessment as of October  of each year. inde†nite-lived intangible assets was greater than their carrying value. In testing goodwill for impairment, the Company †rst assesses qualitative factors in determining whether it is more likely than not that Revenue Recognition The Company recognizes operating revenues at the fair value of a reporting unit is less than its carrying amount. After the time title to the goods and all risks of ownership transfer to the assessing the qualitative factors, if the Company determines that it is customer. This transfer is considered complete when a sales agreement not more likely than not that the fair value of a reporting unit is less is in place, delivery has occurred, pricing is †xed or determinable and than its carrying amount then the Company does not perform the collection is reasonably assured. In the case of consigned inventories, two-step impairment test. If the Company concludes otherwise, then it the title passes and the transfer of ownership risk occurs when the performs the †rst step of the two-step impairment test as described in goods are used by the customer. Taxes assessed by governmental ASC Topic —. In the †rst step, the fair value of the reporting unit is authorities and collected from customers are accounted for on a net compared to its carrying value. If the fair value of the reporting unit basis and excluded from revenues. 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 Hedging Instruments The Company uses derivative †nancial instru- net assets exceeds the fair value of the reporting unit, a second step of ments principally to o®set exposure to market risks arising from the impairment assessment is performed in order to determine the changes in commodity prices, foreign currency exchange rates and implied fair value of a reporting unit’s goodwill. Determining the interest rates. Derivative †nancial instruments used by the Company implied fair value of goodwill requires a valuation of the reporting unit’s consist of commodity futures and option contracts, forward currency tangible and intangible assets and liabilities in a manner similar to the contracts and options, interest rate swap agreements and treasury lock allocation of purchase price in a business combination. If the carrying agreements. The Company enters into futures and option contracts, value of the reporting unit’s goodwill exceeds the implied fair value of which are designated as hedges of speci†c volumes of commodities

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 44 3/14/17 10:36 PM (primarily corn and natural gas) that will be purchased in a future š months. Changes in the fair value of a †xed-to-³oating interest month. These derivative †nancial instruments are recognized in the rate swap agreement that is highly e®ective and that is designated Consolidated Balance Sheets at fair value. The Company has also and quali†es as a fair-value hedge, along with the loss or gain on the entered into interest rate swap agreements that e®ectively convert the hedged debt obligation, are recorded in earnings. The ine®ective interest rate on certain †xed rate debt to a variable interest rate and, portion of the change in fair value of a derivative instrument that on certain variable rate debt, to a †xed interest rate. The Company quali†es as either a cash-³ow hedge or a fair-value hedge is reported periodically enters into treasury lock agreements to lock the bench- in earnings. mark rate for an anticipated †xed-rate borrowing. See also Note › The Company discontinues hedge accounting prospectively when and Note – of the Notes to the Consolidated Financial Statements it is determined that the derivative is no longer e®ective in o®setting for additional information. changes in the cash ³ows or fair value of the hedged item, the On the date a derivative contract is entered into, the Company derivative is de-designated as a hedging instrument because it is designates the derivative as either a hedge of variable cash ³ows to unlikely that a forecasted transaction will occur, or management be paid related to interest on variable rate debt, as a hedge of market determines that designation of the derivative as a hedging instrument variation in the benchmark rate for a future †xed rate debt issue, as a is no longer appropriate. When hedge accounting is discontinued, hedge of foreign currency cash ³ows associated with certain forecast- the Company continues to carry the derivative on the Consolidated ed commercial transactions or loans, as a hedge of certain forecasted Balance Sheet at its fair value, and gains and losses that were included purchases of corn, natural gas or ethanol used in the manufacturing in AOCI are recognized in earnings in the same line item a®ected by process (“a cash-³ow hedge”), or as a hedge of the fair value of certain the hedged transaction and in the same period or periods during debt obligations (“a fair-value hedge”). This process includes linking which the hedged transaction a®ects earnings, or in the month a all derivatives that are designated as fair-value or cash-³ow hedges to hedge is determined to be ine®ective. speci†c assets and liabilities on the Consolidated Balance Sheet, or to The Company uses derivative †nancial instruments such as foreign speci†c †rm commitments or forecasted transactions. For all hedging currency forward contracts, swaps and options to manage the relationships, the Company documents the hedging relationships and transactional foreign exchange risk that is created when transactions its risk-management objective and strategy for undertaking the hedge not denominated in the functional currency of the operating unit are transactions, the hedging instrument, the hedged item, the nature of revalued. The changes in fair value of these derivative instruments and the risk being hedged, how the hedging instrument’s e®ectiveness in the o®setting changes in the value of the underlying non-functional o®setting the hedged risk will be assessed and a description of the currency denominated transactions are recorded in earnings on a method of measuring ine®ectiveness. The Company also formally monthly basis. assesses both, at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are Stock-based Compensation The Company has a stock incentive plan highly e®ective in o®setting changes in cash ³ows or fair values of that provides for stock-based employee compensation, including the hedged items. When it is determined that a derivative is not highly granting of stock options, shares of restricted stock, restricted stock e®ective as a hedge or has ceased to be a highly e®ective hedge, units and performance shares to certain key employees. Compensation the Company discontinues hedge accounting prospectively. expense is recognized in the Consolidated Statements of Income for Changes in the fair value of ³oating-to-†xed interest rate swaps, the Company’s stock-based employee compensation plan. The plan is treasury locks, commodity futures and option contracts or foreign more fully described in Note š of the Notes to the Consolidated currency forward contracts, swaps and options that are highly e®ective Financial Statements. and that are designated and qualify as cash-³ow hedges are recorded in other comprehensive income, net of applicable income taxes. Earnings per Common Share Basic earnings per common share is Realized gains and losses associated with changes in the fair value of computed by dividing net income attributable to Ingredion by the interest rate swaps and treasury locks are reclassi†ed from accumu- weighted average number of shares outstanding, which totaled lated other comprehensive income (“AOCI”) to the Consolidated –š. million for š—›, –.› million for š— and –.› million for š—. Statement of Income over the life of the underlying debt. Gains and Diluted earnings per share (EPS) is computed by dividing net income losses on hedges of foreign currency cash ³ows associated with certain attributable to Ingredion by the weighted average number of shares forecasted commercial transactions or loans are reclassi†ed from AOCI outstanding, including the dilutive e®ect of outstanding stock options to the Consolidated Statement of Income when such transactions or and other instruments associated with long-term incentive compensa- obligations are settled. Gains and losses on commodity hedging tion plans. The weighted average number of shares outstanding for contracts are reclassi†ed from AOCI to the Consolidated Statement of diluted EPS calculations was –. million, –.— million and –. million Income when the †nished goods produced using the hedged item are for š—›, š— and š—, respectively. In š—›, the number of share- sold. The maximum term over which the Company hedges exposures based awards of common stock excluded from the calculation of the to the variability of cash ³ows for commodity price risk is generally weighted average number of shares outstanding for diluted EPS

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 45 3/14/17 10:36 PM because their e®ects were not dilutive was not material. In š— and periods presented in the Company’s consolidated cash ³ows state- š—, approximately —. million and —. million share-based awards of ments since such cash ³ows have historically been presented as a common stock, respectively, were excluded from the calculation of the †nancing activity. weighted average number of shares outstanding for diluted EPS Adoption of the new standard resulted in the recognition of excess because their e®ects were anti-dilutive. tax bene†ts in the Company’s provision for income taxes rather than additional paid-in-capital of ªš million for the year ended Decem- Risks and Uncertainties The Company operates domestically and ber , š—›, as well as an increase of —. million diluted weighted internationally. In each country, the business and assets are subject average common shares outstanding for this period. The adoption of to varying degrees of risk and uncertainty. The Company insures its the new standard impacted the Company’s previously reported results business and assets in each country against insurable risks in a manner for the †rst quarter of š—› as follows: that it deems appropriate. Because of this geographic dispersion, the Three Months Ended March º°, ¹±°¼ Company believes that a loss from non-insurable events in any one (in millions, except share and per share amounts) As reported As adjusted country would not have a material adverse e®ect on the Company’s Consolidated Statement of Income: operations as a whole. Additionally, the Company believes there is no Provision for income taxes $÷÷«56 $÷÷«53 signi†cant concentration of risk with any single customer or supplier Net income $÷«130 $÷«133 whose failure or non-performance would materially a®ect the Net income attributable to Ingredion $÷«127 $÷«130 Company’s results. Basic earnings per common share of Ingredion $÷1.77 $÷1.81 Diluted earnings per common share of Ingredion $÷1.73 $÷1.77 Recently Adopted Accounting Standards In March š—›, the Financial Diluted weighted average common shares outstanding 73.3 73.6 Accounting Standards Board (“FASB”) issued Accounting Standards Consolidated Statement of Cash Flows: Update (“ASU”) No. š—›-—, Compensation – Stock Compensation Cash provided by operating activities $÷÷«96 $÷÷«99 (Topic ’†ƒ): Improvements to Employee Share-Based Payment Accounting, Cash provided by †nancing activities $÷÷÷«9 $÷÷÷«6 a new standard that changes the accounting for certain aspects of Consolidated Balance Sheet: share-based payments to employees. The new guidance requires Additional paid-in capital $1,154 $1,151 excess tax bene†ts and tax de†ciencies to be recorded in the income Retained earnings $2,647 $2,650 statement when the awards vest or are settled. In addition, cash ³ows related to excess tax bene†ts will no longer be separately classi†ed Note ˆ. Acquisitions as a †nancing activity apart from other income tax cash ³ows. The On August , š—, the Company completed its acquisition of Kerr standard also allows us to repurchase more of an employee’s shares Concentrates, Inc. (“Kerr”), a privately held producer of natural fruit for tax withholding purposes without triggering liability accounting, and vegetable concentrates for ª—š million in cash. Kerr serves clari†es that all cash payments made on an employee’s behalf for major food and beverage companies, ³avor houses and ingredient withheld shares should be presented as a †nancing activity on our producers from its manufacturing locations in Oregon and California. cash ³ows statement, and provides an accounting policy election to The acquisition of Kerr provided the Company with the opportunity account for forfeitures as they occur. The new standard is e®ective for to expand its product portfolio. The Company †nalized the purchase us beginning January , š—–, with early adoption permitted. price allocation during the †rst quarter of š—›, which did not have The Company elected to early adopt the new guidance in the a signi†cant impact on previously estimated amounts. second quarter of †scal year š—›. The primary impact of adoption On December š, š—›, the Company completed its acquisition was the recognition of excess tax bene†ts in the Company’s provision of TIC Gums Incorporated (“TIC Gums”), a privately held, U.S.-based for income taxes rather than paid-in capital for all periods in †scal company that provides advanced texture systems to the food and year š—›. The change in tax withholding guidance had no impact to beverage industry for ª million, net of cash acquired. A preliminary retained earnings as of January , š—›, and therefore no cumulative allocation of the purchase price to the assets acquired and liabilities e®ect was required to be recorded. The Company has elected to assumed was made based on available information and incorporating continue to estimate forfeitures expected to occur to determine the management’s best estimates. The assets acquired and liabilities amount of compensation cost to be recognized in each period. assumed in the transactions are generally recorded at their estimated The Company elected to apply the presentation requirements for acquisition date fair values, while transaction costs associated with the cash ³ows related to excess tax bene†ts prospectively, which resulted acquisition were expensed as incurred. All of the recorded assets and in an increase in cash provided by operating activities and a decrease liabilities, including working capital, PP&E, goodwill and intangibles, in cash provided by †nancing activities for the year ended Decem- are open to change as the Company is still in process of performing ber , š—›. No changes in presentation will be made for prior years purchase accounting. The Company funded the acquisition with presented. The presentation requirements for cash ³ows related to proceeds from borrowings under its revolving credit agreement. The employee taxes paid for withheld shares had no impact to any of the results of the acquired operations will be included in the Company’s

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 46 3/14/17 10:36 PM consolidated results from the acquisition date forward within the Shandong Huanong, located in Shandong Province, adds a second North America and Asia Paci†c business segments. manufacturing facility to our operations in China. It produces starch Goodwill represents the amount by which the purchase price raw material for our plant in Shanghai, which makes value-added exceeds the estimated fair value of the net assets acquired. The ingredients for the food industry. The acquisition added ª– million goodwill of ª˜› million and ªš– million for TIC Gums and Kerr, to intangible assets, with ª million allocated to net tangible assets. respectively, result from synergies and other operational bene†ts The purchase accounting is still open to †nalize the valuation of expected to be derived from the acquisitions. The goodwill related the intangibles. to each acquisition is tax deductible due to the structure of the Pro-forma results of operations for the acquisitions made in š—› acquisitions. have not been presented as the e®ect of each acquisition individually The following table summarizes the †nalized purchase price and in aggregate would not be material to the Company’s results of allocation for the acquisition of Kerr and preliminary purchase price operations for any periods presented. allocation for the acquisition of TIC Gums as of August , š— and The Company incurred ª million of pre-tax acquisition and December š, š—›, respectively: integration costs for š—› associated with its recent acquisitions. In š—, the Company incurred ª— million of pre-tax acquisition and Preliminary (in millions) Final Kerr TIC Gums integration costs associated with the š— acquisitions. Working capital (excluding cash) $÷37 $÷50 Property, plant and equipment 8 42 Note
. Sale of Canadian Plant Other assets 1 – On December , š—, the Company sold its manufacturing assets in Identi†able intangible assets 29 117 Port Colborne, Ontario, Canada for ª million in cash. The Company Goodwill 27 186 recorded a pre-tax gain of ª— million on the sale, net of the write-o® Total purchase price $102 $395 of goodwill of ªš million associated with the business. The Company also recorded pre-tax restructuring charges of ª million in š— The identi†able intangible assets for the acquisition of Kerr associated with the sale of the plant as described below. Additionally, included items such as customer relationships, proprietary technology, in š—› the Company recorded pre-tax restructuring charges of trade names, and noncompetition agreements. The fair values of these ªš million related to the Port Colborne plant sale. intangible assets were determined to be Level  under the fair value hierarchy. Level  inputs are unobservable inputs for an asset or Note . Restructuring and Impairment Charges liability. Unobservable inputs are used to measure fair value to the In š—›, the Company recorded ª million of restructuring charges extent that observable inputs are not available, thereby allowing for consisting of ª million of employee-related severance and other costs fair value estimates to be made in situations in which there is little, if due to the execution of global information technology (“IT”) outsourc- any, market activity for an asset or liability at the measurement date. ing contracts, ª› million of employee-related severance costs associated The following table presents the fair values, valuation techniques, and with the Company’s optimization initiatives in North America and South estimated remaining useful life at the acquisition date for these Level  America, and ªš million of costs attributable to the š— Port Colborne measurements (dollars in millions): plant sale. The Company expects to incur approximately ª million of Fair Value Valuation Technique Estimated Useful Life costs associated with the IT outsourcing project in š—–. Customer Multi-period excess On September ˜, š—, the Company announced that it planned Relationships $24 earnings method  years to consolidate its manufacturing network in Brazil. Production at plants Trade Names $÷4 Relief-from-royalty method  years Noncompetition in Trombudo Central and Conchal has ceased and has been moved to Agreements $÷1 Income Approach  years plants in Balsa Nova and Mogi Guaçu, respectively. The Company recorded total pre-tax restructuring-related charges of ªš million The fair value of customer relationships, trade names and related to these plant closures in š—, consisting of a ª— million noncompetition agreements were determined through the valuation charge for impaired assets and ªš million of employee severance- techniques described above using various judgmental assumptions related costs. such as discount rates, royalty rates, and customer attrition rates, as The Company also recorded pre-tax restructuring charges of applicable. The fair values of property, plant and equipment associated ª million in š—, of which ªš million was for estimated employee with the acquisitions were determined to be Level  under the fair severance-related costs, associated with the Port Colborne plant sale. value hierarchy. Property, plant and equipment values were estimated Additionally in š—, the Company recorded a pre-tax restructuring using either the cost or market approach. charge of ªš million for employee severance-related costs associated On November š, š—›, the Company completed its acquisition of with the Penford acquisition. Shandong Huanong Specialty Corn Development Co., Ltd. (“Shandong Huanong”) in China for ªš million in cash. The acquisition of

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 47 3/14/17 10:36 PM A summary of the Company’s severance accrual at December , with †rm-priced customer sales contracts. The Company uses š—› is as follows (in millions): over-the-counter gas swaps to hedge a portion of its natural gas usage in North America. These derivative †nancial instruments limit the Balance in severance accrual at December , š— $«10 impact that volatility resulting from ³uctuations in market prices will Restructuring charge for employee severance costs: have on corn and natural gas purchases and have been designated as IT transformation 6 cash-³ow hedges. E®ective with the acquisition of Penford, the North America and South America employee-related severance 6 Payments made to terminated employees (15) Company now produces and sells ethanol. The Company now enters Balance in severance accrual at December , š—› $÷«7 into futures contracts to hedge price risk associated with ³uctuations in market prices of ethanol. Unrealized gains and losses associated The severance accrual at December , š—› is expected to be with marking the commodity hedging contracts to market (fair value) paid within the next twelve months. are recorded as a component of other comprehensive income (“OCI”) The Company assesses goodwill and other inde†nite-lived and included in the equity section of the Consolidated Balance Sheets intangible assets for impairment annually (or more frequently if as part of AOCI. These amounts are subsequently reclassi†ed into impairment indicators arise) as of October  of each year. No goodwill earnings in the same line item a®ected by the hedged transaction and impairment was recognized in either the fourth quarter of š—› or in the same period or periods during which the hedged transaction š— related to the Company’s annual impairment testing. The results a®ects earnings, or in the month a hedge is determined to be ine®ective. of the Company’s impairment testing in the fourth quarter of š— The Company assesses the e®ectiveness of a commodity hedge indicated that the estimated fair value of the Company’s Southern contract based on changes in the contract’s fair value. The changes Cone of South America reporting unit was less than its carrying in the market value of such contracts have historically been, and are amount. Therefore, the Company recorded a non-cash impairment expected to continue to be, highly e®ective at o®setting changes in the charge of ª million in the fourth quarter of š— to write-o® the price of the hedged items. The amounts representing the ine®ective- remaining balance of goodwill for this reporting unit. ness of these cash-³ow hedges are not signi†cant. At December , š—›, the amount included in AOCI relating to these Note ‰. Financial Instruments, Derivatives and Hedging commodities-related derivative instruments designated as cash-³ow Activities hedges was not signi†cant. At December , š—, AOCI included The Company is exposed to market risk stemming from changes in ªš million of losses (net of tax of ª— million), pertaining to commodities- commodity prices (corn and natural gas), foreign currency exchange related derivative instruments designated as cash-³ow hedges. rates and interest rates. In the normal course of business, the Company actively manages its exposure to these market risks by entering into Interest Rate Hedging The Company assesses its exposure to variability in various hedging transactions, authorized under established policies interest rates by identifying and monitoring changes in interest rates that that place clear controls on these activities. These transactions utilize may adversely impact future cash ³ows and the fair value of existing debt exchange-traded derivatives or over-the-counter derivatives with instruments, and by evaluating hedging opportunities. The Company investment-grade counterparties. Derivative †nancial instruments maintains risk management control systems to monitor interest rate currently used by the Company consist of commodity futures, options risk attributable to both the Company’s outstanding and forecasted and swap contracts, foreign currency forward contracts, swaps and debt obligations as well as the Company’s o®setting hedge positions. options, and interest rate swaps. The risk management control systems involve the use of analytical techniques, including sensitivity analysis, to estimate the expected Commodity Price Hedging The Company’s principal use of derivative impact of changes in interest rates on future cash ³ows and the fair †nancial instruments is to manage commodity price risk in North value of the Company’s outstanding and forecasted debt instruments. America relating to anticipated purchases of corn and natural gas to be Derivative †nancial instruments that have been used by the used in the manufacturing process, generally over the next twelve to Company to manage its interest rate risk consist of Treasury Lock twenty-four months. The Company maintains a commodity-price risk agreements (“T-Locks”) and interest rate swaps. The Company management strategy that uses derivative instruments to minimize periodically enters into T-Locks to †x the benchmark component of signi†cant, unanticipated earnings ³uctuations caused by commodity- the interest rate to be established for certain planned †xed-rate debt price volatility. For example, the manufacturing of the Company’s issuances. The T-Locks are designated as hedges of the variability in products requires a signi†cant volume of corn and natural gas. Price cash ³ows associated with future interest payments caused by market ³uctuations in corn and natural gas cause the actual purchase price ³uctuations in the benchmark interest rate until the †xed interest rate of corn and natural gas to di®er from anticipated prices. is established, and are accounted for as cash-³ow hedges. Accordingly, To manage price risk related to corn purchases in North America, changes in the fair value of the T-Locks are recorded to AOCI until the the Company uses corn futures and options contracts that trade on consummation of the underlying debt o®ering, at which time any regulated commodity exchanges to lock in its corn costs associated realized gain (loss) is amortized to earnings over the life of the debt.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 48 3/14/17 10:36 PM The net gain or loss recognized in earnings during š—›, š— and š— December , š—, the Company had foreign currency forward sales was not signi†cant. The Company also, from time to time, enters into contracts with an aggregate notional amount of ª›—› million and interest rate swap agreements that e®ectively convert the interest rate foreign currency forward purchase contracts with an aggregate notional on certain †xed-rate debt to a variable rate. These swaps call for the amount of ªš˜– million that hedged transactional exposures. The fair Company to receive interest at a †xed rate and to pay interest at a values of these derivative instruments were assets of ª million and variable rate, thereby creating the equivalent of variable-rate debt. The ª— million at December , š—› and š—, respectively. Company designates these interest rate swap agreements as hedges of The Company also has foreign currency derivative instruments that the changes in fair value of the underlying debt obligation attributable hedge certain foreign currency transactional exposures and are to changes in interest rates and accounts for them as fair-value designated as cash-³ow hedges. The amounts included in AOCI relating hedges. Changes in the fair value of interest rate swaps designated as to these hedges at both December , š—› and š— were not signi†cant. hedging instruments that e®ectively o®set the variability in the fair By using derivative †nancial instruments to hedge exposures, the value of outstanding debt obligations are reported in earnings. These Company exposes itself to credit risk and market risk. Credit risk is the amounts o®set the gain or loss (that is, the change in fair value) of the risk that the counterparty will fail to perform under the terms of the hedged debt instrument that is attributable to changes in interest rates derivative contract. When the fair value of a derivative contract is (that is, the hedged risk) which is also recognized in earnings. The positive, the counterparty owes the Company, which creates credit Company did not have any T-Locks outstanding at December , š—› risk for the Company. When the fair value of a derivative contract is or š—. At December , š—› and š—, AOCI included ª million of negative, the Company owes the counterparty and, therefore, it does losses (net of income taxes of ªš million) and ª million of losses (net not possess credit risk. The Company minimizes the credit risk in of income taxes of ªš million), respectively, related to settled T-Locks. derivative instruments by entering into over-the-counter transactions These deferred losses are being amortized to †nancing costs over the only with investment grade counterparties or by utilizing exchange- terms of the senior notes with which they are associated. traded derivatives. Market risk is the adverse e®ect on the value of a In September š—, the Company entered into interest rate swap †nancial instrument that results from a change in commodity prices, agreements that e®ectively convert the interest rates on its ›.— percent interest rates or foreign exchange rates. The market risk associated ªš—— million senior notes due April , š—–, its .˜ percent ª—— mil- with commodity-price, interest rate or foreign exchange contracts is lion senior notes due September š, š—– and on ªš—— million of its managed by establishing and monitoring parameters that limit the ª—— million .›š percent senior notes due November , š—š—, to types and degree of market risk that may be undertaken. variable rates. These swap agreements call for the Company to receive The fair value and balance sheet location of the Company’s interest at the †xed coupon rate of the respective notes and to pay derivative instruments, presented gross in the Consolidated Balance interest at a variable rate based on the six-month US dollar LIBOR rate sheets, are re³ected below:

plus a spread. The Company has designated these interest rate swap Fair Value of Derivative Instruments agreements as hedges of the changes in fair value of the underlying Fair Value Fair Value Derivatives designated Balance At At Balance At At debt obligations attributable to changes in interest rates and accounts as hedging instruments: Sheet Dec. º°, Dec. º°, Sheet Dec. º°, Dec. º°, for them as fair-value hedges. The fair value of these interest rate swap (in millions) Location ¹±°¼ ¹±°½ Location ¹±°¼ ¹±°½ Accounts agreements was ª million and ª– million at December , š—› and payable and š—, respectively, and is re³ected in the Consolidated Balance Sheets Commodity and Accounts accrued foreign currency receivable – net $31 $18 liabilities $25 $38 within Other assets, with an o®setting amount recorded in Long-term Commodity, foreign debt to adjust the carrying amount of the hedged debt obligations. currency, and interest Non-current rate contracts Other assets 8 14 liabilities 24 Foreign Currency Hedging Due to the Company’s global operations, Total $39 $32 $27 $42 including many emerging markets, it is exposed to ³uctuations in At December , š—›, the Company had outstanding futures and foreign currency exchange rates. As a result, the Company has exposure option contracts that hedged the forecasted purchase of approximately to translational foreign exchange risk when the results of its foreign šš million bushels of corn and  million pounds of soybean oil. The operations are translated to US dollars and to transactional foreign Company is unable to directly hedge price risk related to co-product sales; exchange risk when transactions not denominated in the functional however, it occasionally enters into hedges of soybean oil (a competing currency are revalued. The Company primarily uses derivative †nancial product to corn oil) in order to mitigate the price risk of corn oil sales. The instruments such as foreign currency forward contracts, swaps and Company also had outstanding swap and option contracts that hedged options to manage its transactional foreign exchange risk. At Decem- the forecasted purchase of approximately š— million mmbtu’s of natural ber , š—›, the Company had foreign currency forward sales gas at December , š—›. Additionally at December , š—›, the contracts with an aggregate notional amount of ªš million and Company had outstanding ethanol futures contracts that hedged the foreign currency forward purchase contracts with an aggregate notional forecasted sale of approximately — million gallons of ethanol. amount of ªšš– million that hedged transactional exposures. At

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 49 3/14/17 10:36 PM Additional information relating to the Company’s derivative instruments is presented below (in millions, pre-tax):

Amount of Losses Amount of Losses Recognized in OCI Reclassi†ed from AOCI into Income Year Year Year Year Year Year Ended Ended Ended Location of Losses Ended Ended Ended Dec. º°, Dec. º°, Dec. º°, Reclassi†ed from Dec. º°, Dec. º°, Dec. º°, Derivatives in Cash-Flow Hedging Relationships ¹±°¼ ¹±°½ ¹±°» AOCI into Income ¹±°¼ ¹±°½ ¹±°»

Commodity and foreign currency contracts $(17) $(61) $(41) Gross pro†t $(47) $(43) $(70) Interest rate contracts –––Financing costs, net (2) (3) (3) Total $(17) $(61) $(41) $(49) $(46) $(73)

At December , š—›, AOCI included approximately ª million of of corn, natural gas and ethanol. The Company expects the losses to losses (net of tax), on commodities-related derivative instruments be o®set by changes in the underlying commodities cost. Additionally designated as cash-³ow hedges that are expected to be reclassi†ed at December , š—›, AOCI included ª million of losses (net of tax) into earnings during the next twelve months. Transactions and events on settled T-Locks and ª million of losses (net of tax) related to foreign expected to occur over the next twelve months that will necessitate currency hedges, which are expected to be reclassi†ed into earnings reclassifying these derivative losses to earnings include the sale of during the next twelve months. Cash-³ow hedges discontinued during †nished goods inventory that includes previously hedged purchases š—› or š— were not signi†cant. Presented below are the fair values of the Company’s †nancial instruments and derivatives for the periods presented:

As of December º°, ¹±°¼ As of December º°, ¹±°½ (in millions) Total Level ° Level ¹ Level º Total Level ° Level ¹ Level º Available for sale securities $÷÷÷«7 $÷7 $÷÷÷«– $– $÷÷÷«6 $÷6 $÷÷÷«– $– Derivative assets 39 6 33 – 32 2 30 – Derivative liabilities 27 11 16 – 42 21 21 – Long-term debt 1,929 – 1,929 – 1,912 – 1,912 –

Level ° inputs consist of quoted prices (unadjusted) in active markets for identical assets or liabilities. Level ¹ inputs are inputs other than quoted prices included within Level ° that are observable for the asset or liability, either directly or indirectly for substantially the full term of the †nancial instrument. Level ¹ inputs are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data. Level º inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for fair value estimates to be made in situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The carrying values of cash equivalents, short-term investments, ¹±°¼ ¹±°½ accounts receivable, accounts payable and short-term borrowings Carrying Fair Carrying Fair (in millions) amount value amount value approximate fair values. Commodity futures, options and swap .šÃ senior notes due October , š—š› $÷«496 $÷«482 $÷÷÷«– $÷÷÷«– contracts are recognized at fair value. Foreign currency forward .›šà senior notes due November , š—š— 398 428 398 420 contracts, swaps and options are also recognized at fair value. The .˜Ã senior notes due September š, š—– 299 301 299 300 fair value of the Company’s long-term debt is estimated based on ›.›šà senior notes due April , š—– 254 299 254 302 quotations of major securities dealers who are market makers in the ›.—à senior notes due April , š—– 200 202 200 211 securities. Presented below are the carrying amounts and the fair .›šÃ senior notes due March š, š—š— 200 217 200 218 values of the Company’s long-term debt at December , š—› and š—. U.S. revolving credit facility replaced October š—› ––111 111 Term loan repaid September š—› ––350 350 Fair value adjustment related to hedged †xed rate debt instruments 3–7– Total long-term debt $1,850 $1,929 $1,819 $1,912

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 50 3/14/17 10:36 PM Note ‹. Financing Arrangements The Revolving Credit Agreement contains customary representa- The Company had total debt outstanding of ª.› billion and ª.˜ bil- tions, warranties, covenants, events of default, terms and conditions, lion at December , š—› and š—, respectively. Short-term borrowings including limitations on liens, incurrence of subsidiary debt and at December , š—› and š— consist primarily of amounts outstand- mergers. The Company must also comply with a leverage ratio ing under various unsecured local country operating lines of credit. covenant and an interest coverage ratio covenant. The occurrence of Short-term borrowings consist of the following at December : an event of default under the Revolving Credit Agreement could result in all loans and other obligations under the agreement being declared (in millions) ¹±°¼ ¹±°½ due and payable and the revolving credit facility being terminated. Short-term borrowings in various currencies (at rates ranging from à to –à for š—› and At December , š—›, there were no borrowings outstanding šÃ to ›Ã for š—) $106 $19 under the Revolving Credit Agreement. In addition to borrowing availability under its Revolving Credit Agreement, the Company has On September šš, š—›, the Company issued .š percent Senior Notes approximately ª million of unused operating lines of credit in the due October , š—š› in an aggregate principal amount of ª—— million. various foreign countries in which it operates. These notes are unsecured obligations of the Company and rank equally Long-term debt, net of related discounts, premiums and debt with all of the Company’s other existing and future unsecured, senior issuance costs consists of the following at December : indebtedness. Interest on the notes is required to be paid semi-annually in arrears on April  and October  of each year, commencing April , š—–. (in millions) ¹±°¼ ¹±°½ The Company may redeem these notes at its option, at any time in whole .šÃ senior notes due October , š—š› $÷«496 $÷÷÷«– or from time to time in part, at the redemption prices set forth in the .›šà senior notes due November , š—š— 398 398 .˜Ã senior notes due September š, š—– 299 299 supplemental indenture pursuant to which these notes were issued. ›.›šà senior notes due April , š—– 254 254 The net proceeds from the sale of the notes of approximately ª– mil- ›.—à senior notes due April , š—– 200 200 lion were used to repay the ª— million due under the Company’s .›šÃ senior notes due March š, š—š— 200 200 Term Loan Credit Agreement, plus accrued interest, to repay ªš million U.S. revolving credit facility replaced October š—› – 111 of borrowings under the Company’s previously existing ª billion Term loan repaid September š—› – 350 revolving credit facility and for general corporate purposes. Fair value adjustment related to hedged †xed rate On October , š—›, the Company entered into a new †ve-year, debt instrument 3 7 senior, unsecured ª billion revolving credit agreement (the “Revolving Total $1,850 $1,819 Credit Agreement”) that replaced our previously existing ª billion Less: current maturities – – Long-term debt $1,850 $1,819 senior unsecured revolving credit facility that would have matured on October šš, š—–. In the fourth quarter of š—, the Company early adopted the Subject to certain terms and conditions, the Company may provisions of ASU No. š—-—, Interest-Imputation of Interest (Subtopic increase the amount of the revolving facility under the Revolving ˜-—), which requires that debt issuance costs associated with a Credit Agreement by up to ª—— million in the aggregate. The recognized debt liability be presented in the balance sheet as a direct Company may also obtain up to two one-year extensions of the reduction from the carrying amount of that debt in the balance sheet. maturity date of the Revolving Credit Agreement at its requests and Accordingly, at December , š—› and š—, debt issuance costs of subject to the agreement of the lenders. All committed pro rata ª˜ million and ª million, respectively, that otherwise would have been borrowings under the revolving facility will bear interest at a variable reported as Other assets are classi†ed as reductions of the carrying annual rate based on the LIBOR or base rate, at the Company’s values of the related debt obligations. Deferred costs associated with election, subject to the terms and conditions thereof, plus, in each the Company’s Revolving Credit Agreement remain in Other assets. case, an applicable margin based on the Company’s leverage ratio The Company’s long-term debt matures as follows: ª—— million in (as reported in the †nancial statements delivered pursuant to the š—–, ª›—— million in š—š—, ª—— million in š—š›, and ªš— million in Revolving Credit Agreement) or the Company’s credit rating. Subject š—–. The Company’s long-term debt at December , š—› includes to speci†ed conditions, the Company may designate one or more of ªš—— million of ›.— percent Senior Notes that mature on April , š—– its subsidiaries as additional borrowers under the Revolving Credit and ª—— million of .˜ percent Senior Notes that mature on Septem- Agreement provided that the Company guarantees all borrowings ber š, š—–. These borrowings are included in long-term debt at and other obligations of any such subsidiaries thereunder. December , š—› as the Company had the ability and intent to

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 51 3/14/17 10:36 PM re†nance the notes on a long-term basis prior to the respective Deferred income taxes are provided for the tax e®ects of temporary maturity dates. di®erences between the †nancial reporting basis and tax basis of Ingredion Incorporated guarantees certain obligations of its assets and liabilities. Signi†cant temporary di®erences at December , consolidated subsidiaries. The amount of the obligations guaranteed š—›, and š— are summarized as follows: aggregated ªš million and ªš— million at December , š—› and (in millions) ¹±°¼ ¹±°½ š—, respectively. Deferred tax assets attributable to: Employee bene†t accruals $÷39 $÷34 Note ‘. Leases Pensions and postretirement plans 30 30 The Company leases rail cars, certain machinery and equipment, and Derivative contracts 3 14 o‘ce space under various operating leases. Rental expense under Net operating loss carryforwards 18 13 operating leases was ª million, ªš million and ª– million in š—›, Foreign tax credit carryforwards 4 3 š— and š—, respectively. Minimum lease payments due on non- Other 24 38 cancellable leases existing at December , š—› are shown below: Gross deferred tax assets $118 $132 Valuation allowance (21) (12) (in millions) Minimum Lease Payments Net deferred tax assets $÷97 $120 Year Deferred tax liabilities attributable to: š—– $45 Property, plant and equipment $206 $193 š—˜ 41 Identi†ed intangibles 55 59 š— 36 Gross deferred tax liabilities $261 $252 š—š— 28 Net deferred tax liabilities $164 $132 š—š 23 Balance thereafter 50 Of the ª˜ million of tax-e®ected net operating loss carryforwards at December , š—›, approximately ª˜ million are for state loss Note . Income Taxes carryforwards. Income tax accounting requires that a valuation allowance The components of income before income taxes and the provision for be established when it is more likely than not that all or a portion of a income taxes are shown below: deferred tax asset will not be realized. In making this assessment,

(in millions) ¹±°¼ ¹±°½ ¹±°» management considers the level of historical taxable income, scheduled Income before income taxes: reversal of deferred tax liabilities, tax planning strategies, tax carryovers United States $176 $109 $÷83 and projected future taxable income. At December , š—›, the Company Foreign 566 490 437 maintains valuation allowances of ª˜ million for state loss carryforwards, Total $742 $599 $520 ªš million for state credits and ª million for foreign loss carryforwards Provision for income taxes: that management has determined will more likely than not expire prior Current tax expense to realization. In addition, the company maintains valuation allowances US federal $÷95 $÷26 $÷÷8 on foreign subsidiaries net deferred tax assets of ªš million. State and local 8 3 1 A reconciliation of the US federal statutory tax rate to the Company’s Foreign 148 164 159 e®ective tax rate follows: Total current $251 $193 $168 ¹±°¼ ¹±°½ ¹±°» Deferred tax expense (bene†t) US federal $÷13 $÷«(8) $«(16) Provision for tax at US statutory rate 35.00∞ 35.00∞ 35.00∞ State and local 1 (1) (2) Tax rate di®erence on foreign income (5.51) (5.75) (6.26) Foreign (19) 3 7 State and local taxes – net 0.33 0.28 0.13 Total deferred $÷«(5) $÷«(6) $«(11) Nondeductible goodwill impairment – Southern Cone – – 2.18 Total provision for income taxes $246 $187 $157 Tax impact of ³uctuations in Mexican Pesos to US Dollar 2.40 2.87 1.30 Net tax impact of US foreign tax credits (2.33) 0.93 (0.31) Net tax impact of US / Canada settlement 3.17 – – Other items – net 0.06 (2.11) (1.85) Provision at e®ective tax rate 33.12∞ 31.22∞ 30.19∞

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 52 3/14/17 10:36 PM The Company has signi†cant operations in Canada, Mexico and A reconciliation of the beginning and ending amounts of unrecog- Pakistan where the statutory tax rates are š percent, — percent and nized tax bene†ts, excluding interest and penalties, for š—› and š—  percent in š—›, respectively. In addition, the Company’s subsidiary is as follows: in Brazil has a statutory tax rate of  percent, before local incentives (in millions) ¹±°¼ ¹±°½ that vary each year. Balance at January  $12 $«23 The Company uses the US dollar as the functional currency for Additions for tax positions related to prior years 72 – its subsidiaries in Mexico. Because of the decline in the value of the Reductions for tax positions related to prior years (9) (10) Mexican peso versus the US dollar in š—› and š—, the Mexican tax Additions based on tax positions related to the provision includes increased tax expense of approximately ª˜ million current year 12 1 or š. percentage points on the e®ective tax rate in š—›, and Reductions related to a lapse in the statute of limitations (1) (2) ª– million or š.˜– percentage points on the e®ective tax rate in š—. Balance at December  $86 $«12 These impacts are largely associated with foreign currency translation gains for local tax purposes on net US dollar monetary assets held in Of the ª˜› million of unrecognized tax bene†ts at December , š—›, Mexico for which there is no corresponding gain in pre-tax income. ªš million represents the amount that, if recognized, could a®ect the The Company has been pursuing relief from double taxation under e®ective tax rate in future periods. The remaining ª– million includes the US and Canadian tax treaty for the years š—— through š—. During an o®set of ªš million for an income tax receivable and ª million of the fourth quarter of š—›, a tentative agreement was reached between federal bene†t that would be created as part of the Canada and US the US and Canada for the speci†c issues being contested. The process described previously. Company has established a net reserve of ªš million, or .– percent- The Company accounts for interest and penalties related to income age points on the e®ective tax rate in š—›. In addition, as a result of tax matters within the provision for income taxes. The Company has the settlement, for the years š—-š—›, the Company has established accrued ª million of interest expense related to the unrecognized tax a net reserve for ª– million, or —.– percentage points, on the e®ective bene†ts as of December , š—›. The accrued interest expense was tax rate in š—›. Of this amount, ª million pertains to š—›. ª million as of December , š—. During š—, an audit was settled at a National Starch subsidiary The Company is subject to US federal income tax as well as income related to a pre-acquisition period for which we are indemni†ed by tax in multiple state and non-US jurisdictions. The US federal tax Akzo Nobel N.V. (“Akzo”). In the third quarter of š—, the Company returns are subject to audit for the years š— to š—›. In general, the recognized increased tax expense to reserve approximately ª– million Company’s foreign subsidiaries remain subject to audit for years š—— (ª million of tax and ªš million of interest) or . percentage points and later. in the e®ective tax rate for the audit. In the third quarter of š— the It is also reasonably possible that the total amount of unrecognized reserve was reduced by approximately ª million (ª million of tax tax bene†ts including interest and penalties will increase or decrease and ª million of interest) which resulted in a decrease of —.– percent- within twelve months of December , š—›. The Company has age points in the š— e®ective tax rate. These impacts are included in classi†ed ª–š million of the unrecognized tax bene†ts as current the rate reconciliation as “Other”. The ª– million of tax expense and because they are expected to be resolved within the next twelve ª million of reduced tax expense were recorded in the tax provision months. Of the ª–š million, ªš› million represents the amount that if of the subsidiary, while the reimbursement from Akzo under the recognized, could a®ect the e®ective tax rate in future periods. indemnity is recorded as other income, which results in no impact in net income for all periods. Note . Bene­t Plans Provisions are made for estimated US and foreign income taxes, The Company and its subsidiaries sponsor noncontributory de†ned less credits that may be available, on distributions from foreign bene†t pension plans (quali†ed and non-quali†ed) covering a subsidiaries to the extent dividends are anticipated. No provision substantial portion of employees in the United States and Canada, has been made for income taxes on approximately ªš.– billion of and certain employees in other foreign countries. Plans for most undistributed earnings of foreign subsidiaries at December , š—›, salaried employees provide pay-related bene†ts based on years of as such amounts are considered permanently reinvested. It is not service. Plans for hourly employees generally provide bene†ts based practicable to estimate the additional income taxes, including on ³at dollar amounts and years of service. The Company’s general applicable withholding taxes and credits that would be due upon funding policy is to make contributions to the plans in amounts that the repatriation of these earnings. comply with minimum funding requirements and are within the limits

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 53 3/14/17 10:36 PM of deductibility under current tax regulations. Certain foreign countries continue to participate in the plan. As such, the number of eligible allow income tax deductions without regard to contribution levels, employees was signi†cantly reduced. Eligible US salaried employees and the Company’s policy in those countries is to make contributions are provided with access to postretirement medical insurance through required by the terms of the applicable plan. retirement healthcare spending accounts. US salaried employees Included in the Company’s pension obligation are nonquali†ed accrue an account during employment, which can be used after supplemental retirement plans for certain key employees. Bene†ts employment to purchase postretirement medical insurance from the provided under these plans are only partially funded, and payments Company prior to age › and Medigap or Medicare HMO policies to plan participants are made by the Company. after age ›. The accounts are credited with a ³at dollar amount and The Company also provides healthcare and/or life insurance indexed for in³ation annually during employment. These credits bene†ts for retired employees in the United States, Canada and Brazil. ceased after December , š—. The accounts also accrue interest Healthcare bene†ts for retirees outside of the United States, Canada, credits using a rate equal to a speci†ed amount above the yield on and Brazil are generally covered through local government plans. †ve-year US Treasury notes. Employees can use the amounts accumu- On December , š—›, the Company merged its existing US quali†ed lated in these accounts, including credited interest, to purchase pension plans into the Ingredion Incorporated Cash Balance Plan for postretirement medical insurance. Employees became eligible for Salaried Employees. The Ingredion Incorporated Cash Balance Plan for bene†ts when they met minimum age and service requirements. Salaried Employees was renamed the Ingredion Pension Plan (“Com- The Company recognizes the cost of these postretirement bene†ts bined Plan”). Certain US salaried employees are covered by a component by accruing a ³at dollar amount on an annual basis for each eligible of the Combined Plan which provides bene†ts based on service credits US salaried employee. to the participating employees’ accounts of between  percent and — percent of base salary, bonus and overtime. On January , š—–, the Pension Obligation and Funded Status The changes in pension bene†t Company amended this component of the Combined Plan to eliminate obligations and plan assets during š—› and š—, as well as the the service credit percentage increases and freeze them at the January , funded status and the amounts recognized in the Company’s š—– rate for eligible salaried employees. The amendment also impacted Consolidated Balance Sheets related to the Company’s pension plans the nonquali†ed supplemental retirement plans. The plan amendment at December , š—› and š—, were as follows: resulted in a reduction of the bene†t obligation of ª million as of US Plans Non-US Plans December , š—›. The bene†t will be recognized over the remaining (in millions) ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ life of the plan as a prior service cost bene†t. Bene†t obligation In April š—›, the Company performed a pension remeasurement At January  $359 $314 $219 $267 for one of its pension plans in Canada as a result of lump sum Service cost 6834 settlement payments made related to the Port Colborne plant sale. Interest cost 14 14 10 12 This plan settlement resulted in a reduction in the funded status Bene†ts paid (16) (15) (15) (11) of the Plan by ª million. The Company recorded a pension charge Actuarial loss (gain) 10 (26) 6 (4) of ª million as a result of the settlement. Business combinations / transfers – 73 –– During the †rst quarter of š—, the Company amended one Curtailment / settlement / of its pension plans in Canada to eliminate future bene†t accruals amendments (6) (9) (5) (11) for the plan e®ective April —, š—. This plan curtailment resulted in Foreign currency translation ––5(38) an improvement in the funded status of the plan by approximately Bene†t obligation at December  $367 $359 $223 $219 ª million in the †rst quarter. The impact of this plan curtailment on Fair value of plan assets net periodic bene†t cost for the year ended December , š— was At January  $354 $313 $206 $232 not signi†cant. Also during the †rst quarter of š—, the Company Actual return on plan assets 20 (2) 11 16 acquired certain pension and postretirement obligations and related Employer contributions 10 11 75 Bene†ts paid (16) (15) (15) (11) assets as part of the Penford acquisition. Plan settlements – (9) (5) – In the fourth quarter of š—, the Company amended its retiree Business combinations – 56 –– medical plan in the US for salaried employees. This amendment Foreign currency translation ––7(36) provided that employees were required to meet certain age and years Fair value of plan assets at of service requirements through December , š— in order to December  $368 $354 $211 $206 Funded status $÷÷1 $÷«(5) $«(12) $«(13)

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 54 3/14/17 10:36 PM Amounts recognized in the Consolidated Balance Sheets as of For the US plans, the Company estimates that net periodic bene†t December , š—› and š— were as follows: cost for š—– will include approximately ª million relating to the amortization of its accumulated actuarial gain included in accumulated US Plans Non-US Plans (in millions) ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ other comprehensive loss at December , š—›. Non-current asset $«12 $«18 $«29 $«32 For the non-US plans, the Company estimates that net periodic Current liabilities (1) (1) (1) (3) bene†t cost for š—– will include approximately ªš million relating to Non-current liabilities (10) (22) (40) (42) the amortization of its accumulated actuarial loss. Net asset (liability) recognized $÷«1 $÷(5) $(12) $(13) Actuarial gains and losses in excess of — percent of the greater of the projected bene†t obligation or the market-related value of plan Amounts recognized in accumulated other comprehensive loss, assets are recognized as a component of net periodic bene†t cost over excluding tax e®ects, that have not yet been recognized as compo- the average remaining service period of a plan’s active employees for nents of net periodic bene†t cost at December , š—› and š— were active de†ned bene†t pension plans and over the average remaining life as follows: of a plan’s active employees for frozen de†ned bene†t pension plans.

US Plans Non-US Plans Total amounts recorded in other comprehensive income and net (in millions) ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ periodic bene†t cost during š—› was as follows: Net actuarial loss $28 $19 $52 $48 (in millions, pre-tax) US Plans Non-US Plans Transition obligation ––12 Net actuarial loss $10 $«6 Prior service credit (6) (2) (1) (1) New prior service cost (6) (1) Net amount recognized $22 $17 $52 $49 Amortization of actuarial loss (1) (2) The increase in the net amount recognized in accumulated Total recorded in other comprehensive income 3 3 Net periodic bene†t cost 1 6 comprehensive loss at December , š—› for the US plans and Non-US Total recorded in other comprehensive income and plans, as compared to December , š—, is largely due to the e®ect net periodic bene†t cost $÷4 $«9 of the decrease in discount rates used to measure the Company’s obligations under its pension plan, with an o®set in the US plans for The following weighted average assumptions were used to the e®ect of the service cost amendment to the Combined Plan determine the Company’s obligations under the pension plans: described above. US Plans Non-US Plans The accumulated bene†t obligation for all de†ned bene†t pension ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ plans was ª million and ª million at December , š—› and Discount rate 4.30% 4.54% 4.34% 4.57% š—, respectively. Rate of compensation increase 4.54% 4.71% 3.62% 3.73% Information about plan obligations and assets for plans with an accumulated bene†t obligation in excess of plan assets is as follows: The following weighted average assumptions were used to determine the Company’s net periodic bene†t cost for the pension US Plans Non-US Plans (in millions) ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ plans:

Projected bene†t obligation $11 $164 $43 $47 US Plans Non-US Plans Accumulated bene†t obligation 10 158 36 38 ¹±°¼ ¹±°½ ¹±°» ¹±°¼ ¹±°½ ¹±°» Fair value of plan assets – 141 22Discount rate 4.30% 4.00% 4.60% 4.57% 4.47% 5.60% Expected long-term return on Components of net periodic bene†t cost consist of the following for plan assets 5.75% 7.00% 7.25% 5.41% 6.48% 6.82% the years ended December , š—›, š— and š—: Rate of compensation increase 4.71% 4.31% 4.22% 3.73% 3.76% 4.39%

US Plans Non-US Plans For š—– and š—›, the Company has assumed an expected (in millions) ¹±°¼ ¹±°½ ¹±°» ¹±°¼ ¹±°½ ¹±°» long-term rate of return on assets of .– percent in both years for US Service cost $÷«6 $÷«8 $÷«7 $÷«3 $÷«4 $÷«6 plans and approximately .–› percent and .—— percent for Canadian Interest cost 14 14 13 10 12 14 Expected return on plan assets (20) (24) (21) (10) (13) (14) plans, respectively. In developing the expected long-term rate of return Amortization of actuarial loss 111 233 assumption on plan assets, which consist mainly of US and Canadian Settlement loss (gain) – (1) – 1–– equity and debt securities, management evaluated historical rates of Net periodic bene†t cost $÷«1 $÷(2) $÷«– $÷«6 $÷«6 $÷«9 return achieved on plan assets and the asset allocation of the plans,

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 55 3/14/17 10:36 PM input from the Company’s independent actuaries and investment The fair values of the Company’s plan assets at December , š—›, consultants, and historical trends in long-term in³ation rates. Projected by asset category and level in the fair value hierarchy are as follows: return estimates made by such consultants are based upon broad Asset Category Fair Value Measurements at December º°, ¹±°¼ equity and bond indices. The decrease in expected US and Non-US Quoted Prices plan long-term rates of return on assets compared to š— is due to the in Active Signi†cant Signi†cant Markets for Observable Unobservable change in our investment approach and related asset allocation in the Identical Assets Inputs Inputs US and Canada that occurred during š—› to a liability-driven (in millions) (Level °) (Level ¹) (Level º) Total investment approach. As a result, a higher proportion of investments US Plans: are in interest-sensitive investments (†xed income) as compared to Equity index: US (a) $÷70 $÷70 the prior investment strategy for the US and Canada pension plans. International (b) 68 68 The discount rate re³ects a rate of return on high-quality †xed Fixed income index: income investments that match the duration of the expected bene†t Long bond (c) 227 227 payments. The Company has typically used returns on long-term, Cash (d) 3 3 high-quality corporate AA bonds as a benchmark in establishing this Total US Plans $368 $368 assumption. In š—›, we changed the method used to estimate the Non-US Plans: service and interest cost components of net periodic bene†t cost for Equity index: certain of our de†ned bene†t pension and postretirement bene†t US (a) $÷11 $÷11 plans. Historically, we estimated the service and interest cost Canada (e) 21 21 (b) components using a single weighted-average discount rate derived International 49 49 Real estate (f) 5 5 from the yield curve used to measure the bene†t obligation at the Fixed income index: beginning of the period. Beginning in š—›, we have elected to use a Intermediate bond (g) 21 21 full yield curve approach in the estimation of these components of Long bond (h) 72 72 bene†t cost by applying the speci†c spot rates along the yield curve Other (i) 23 23 used in the determination of the bene†t obligation to the relevant Cash (d) 18 9 projected cash ³ows. Total Non-US Plans $1 $210 $211

(a) This category consists of both passively and actively managed equity index funds that track the return Plan Assets The Company’s investment policy for its pension plans of large capitalization US equities. (b) This category consists of both passively and actively managed equity index funds that track an index of is to balance risk and return through diversi†ed portfolios of †xed returns on international developed market equities as well as infrastructure assets. income securities, equity instruments, and short-term investments. (c) This category consists of an actively managed †xed income index fund that invests in a diversi†ed portfolio of †xed-income securities with maturities generally exceeding °± years. Maturities for †xed income securities are managed such that su‘cient (d) This category represents cash or cash equivalents. liquidity exists to meet near-term bene†t payment obligations. In š—›, (e) This category consists of an actively managed equity index fund that tracks against an index of large capitalization Canadian equities. the Company changed our investment approach for the US and (f) This category consists of an actively managed equity index fund that tracks against real estate Canada plans due to the funded nature of the plans to a liability-driven investment trusts and real estate operating companies. (g) This category consists of both passively and actively managed †xed income index funds that track the investment approach. As a result, a higher proportion of investments return of intermediate duration government and investment grade corporate bonds. are in interest rate-sensitive investments (†xed income) as compared (h) This category consists of both passively and actively managed †xed income index funds that track the return of Canada government bonds, investment grade corporate bonds and hedge funds. to the prior investment strategy. For US pension plans, the weighted (i) This category mainly consists of investment products provided by an insurance company that o®ers average target range allocation of assets was š—-— percent in returns that are subject to a minimum guarantee and mutual funds. equities, –-– percent in †xed income and - percent in cash and other short-term investments. The asset allocation is reviewed All signi†cant pension plan assets are held in collective trusts by regularly and portfolio investments are rebalanced to the targeted the Company’s US and non-US plans. The fair values of shares of allocation when considered appropriate. collective trusts are based upon the net asset values of the funds The Company’s weighted average asset allocation as of December , reported by the fund managers based on quoted market prices of the š—› and š— for US and non-US pension plan assets is as follows: underlying securities as of the balance sheet date and are considered to be Level š fair value measurements. This may produce a fair value US Plans Non-US Plans measurement that may not be indicative of net realizable value or Asset Category ¹±°¼ ¹±°½ ¹±°¼ ¹±°½ re³ective of future fair values. Furthermore, while the Company Equity securities 38% 62% 41% 49% believes its valuation methods are appropriate and consistent with Debt securities 61% 37% 44% 38% Cash and other 1% 1% 15% 13% those of other market participants, the use of di®erent methodologies Total 100% 100% 100% 100% could result in di®erent fair value measurements at the reporting date.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 56 3/14/17 10:36 PM In š—›, the Company made cash contributions of ª— million Amounts recognized in accumulated other comprehensive and ª– million to its US and non-US pension plans, respectively. The (income) loss, excluding tax e®ects, that have not yet been recognized Company anticipates that in š—– it will make cash contributions of as components of net periodic bene†t cost at December , š—› and ª million and ªš million to its US and non-US pension plans, respec- š— were as follows: tively. Cash contributions in subsequent years will depend on a (in millions) ¹±°¼ ¹±°½ number of factors including the performance of plan assets. The Net actuarial loss $÷«7 $÷«7 following bene†t payments, which re³ect anticipated future service, Prior service credit (8) (11) as appropriate, are expected to be made: Net amount recognized $÷(1) $÷(4)

(in millions) US Plans Non-US Plans Components of net periodic bene†t cost consisted of the following š—– $÷19 $÷9 š—˜ 19 10 for the years ended December , š—›, š— and š—:

š— 20 10 ¹±°¼ ¹±°½ ¹±°» š—š— 22 11 Service cost $«1 $1 $3 š—š 23 11 Interest cost 2 3 4 Years š—šš – š—š› 123 64 Amortization of prior service credit (2) (2) – Net periodic bene†t cost $«1 $2 $7 The Company and certain subsidiaries also maintain de†ned contribution plans. The Company makes matching contributions to The Company estimates that postretirement bene†t expense for these plans that are subject to certain vesting requirements and are these plans for š—– will include approximately ª million relating to based on a percentage of employee contributions. Amounts charged the amortization of the prior service credit included in accumulated to expense for de†ned contribution plans totaled ªš— million, other comprehensive income at December , š—›. ª– million and ª– million in š—›, š— and š—, respectively. Total amounts recorded in other comprehensive income and net periodic bene†t cost during š—› was as follows: Postretirement Bene’t Plans The Company’s postretirement bene†t plans currently are not funded. The information presented below (in millions, pre-tax) ¹±°¼ ¹±°½ includes plans in the United States, Brazil, and Canada. The changes Net actuarial loss (gain) $2 $(2) in the bene†t obligations of the plans during š—› and š—, and the Amortization of prior service credit 2 2 amounts recognized in the Company’s Consolidated Balance Sheets New prior service cost – 2 at December , š—› and š—, are as follows: Total recorded in other comprehensive income 4 2 Net periodic bene†t cost 1 2 (in millions) ¹±°¼ ¹±°½ Total recorded in other comprehensive income and Accumulated postretirement bene†t obligation net periodic bene†t cost $5 $«4 At January  $«64 $«47 Service cost 1 1 The following weighted average assumptions were used to Interest cost 2 3 determine the Company’s obligations under the postretirement plans: Plan amendment – 1 ¹±°¼ ¹±°½ Actuarial loss (gain) 2 (1) Discount rate 5.42% 5.30% Business combinations/ transfers – 21 Bene†ts paid (4) (3) The following weighted average assumptions were used to Foreign currency translation 2 (5) At December  $«67 $«64 determine the Company’s net postretirement bene†t cost:

Fair value of plan assets – – ¹±°¼ ¹±°½ ¹±°» Funded status $(67) $(64) Discount rate 5.30% 5.70% 6.47%

Amounts recognized in the Consolidated Balance Sheet consist of: The discount rate re³ects a rate of return on high-quality †xed-

(in millions) ¹±°¼ ¹±°½ income investments that match the duration of expected bene†t Current liabilities $÷(4) $÷(4) payments. The Company has typically used returns on long-term, Non-current liabilities (63) (60) high-quality corporate AA bonds as a benchmark in establishing this Net liability recognized $(67) $(64) assumption.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 57 3/14/17 10:36 PM The healthcare cost trend rates used in valuing the Company’s Note . Supplementary Information postretirement bene†t obligations are established based upon actual Balance Sheets

healthcare trends and consultation with actuaries and bene†t providers. (in millions) ¹±°¼ ¹±°½ The following assumptions were used as of December , š—›: Accounts receivable – net: Accounts receivable – trade $751 $672 US Canada Brazil Accounts receivable – other 178 108 š—› increase in per capita cost 6.90% 6.90% 8.66% Allowance for doubtful accounts (6) (5) Ultimate trend 4.50% 4.50% 8.66% Total accounts receivable – net $923 $775 Year ultimate trend reached 2037 2031 2016 Inventories: The sensitivities of service cost and interest cost and year-end Finished and in process $478 $438 Raw materials 260 229 bene†t obligations to changes in healthcare cost trend rates for the Manufacturing supplies 51 48 postretirement bene†t plans as of December , š—› are as follows: Total inventories $789 $715 ¹±°¼ Accrued liabilities: One-percentage point increase in trend rates: Compensation-related costs $107 $÷84 Increase in service cost and interest cost components ª—.› million Income taxes payable 40 46 Increase in year-end bene†t obligations ª–.— million Unrecognized tax bene†ts 72 1 One-percentage point decrease in trend rates: Dividends payable 36 33 Decrease in service cost and interest cost components ª—. million Accrued interest 19 14 Decrease in year-end bene†t obligations ª›.— million Taxes payable other than income taxes 36 34 Other 122 88 The following bene†t payments, which re³ect anticipated future Total accrued liabilities $432 $300 service, as appropriate, are expected to be made under the Company’s Non-current liabilities: postretirement bene†t plans: Employees’ pension, indemnity and postretirement $109 $142 Other 49 28 (in millions) Total non-current liabilities $158 $170 š—– $÷4 š—˜ 4 š— 4 Statements of Income š—š— 4 (in millions) ¹±°¼ ¹±°½ ¹±°» š—š 4 Other income – net: Years š—šš – š—š› $24 Gain from sale of plant $– $10 $÷– Legal settlement – (7) – Multiemployer Plans The Company participates in and contributes Income tax indemni†cation (expense) income (a) – (4) 7 to one multiemployer bene†t plan under the terms of a collective Gain from sale of investment – – 5 bargaining agreement that covers certain union-represented employ- Gain from sale of idled plant – – 3 ees and retirees in the US. The plan covers medical and dental bene†ts Other 4 2 9 for active hourly employees and retirees represented by the United Other income – net $4 $÷1 $24

States Steel Workers Union for certain US locations. (a) Amount fully o®set by ¾» million of bene†t and ¾¿ million of expense recorded in the income tax The risks of participating in this multiemployer plan are di®erent provision for ¹±°½ and ¹±°», respectively.

from single-employer plans. This plan receives contributions from two or (in millions) ¹±°¼ ¹±°½ ¹±°» more unrelated employers pursuant to one or more collective bargaining Financing costs – net: agreements and the assets contributed by one employer may be used to Interest expense, net of fund the bene†ts of all employees covered within the plan. amounts capitalized (a) $«73 $«69 $«73 The Company is required to make contributions to this plan as Interest income (10) (14) (13) determined by the terms and conditions of the collective bargaining Foreign currency transaction losses 3 6 1 agreements and plan terms. For the years ended December , š—›, Financing costs – net $«66 $«61 $«61 š— and š—, the Company made regular contributions of ª mil- (a) Interest capitalized amounted to ¾» million, ¾¹ million and ¾¹ million in ¹±°¼, ¹±°½ and ¹±°», respectively. lion, ªš million and ªš million, respectively, to this multi-employer plan. The Company cannot currently estimate the amount of multiem- ployer plan contributions that will be required in š—– and future years, but these contributions could increase due to healthcare cost trends.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 58 3/14/17 10:36 PM Statements of Cash Flow: shares from the investment bank of ,š,—š shares, representing

(in millions) ¹±°¼ ¹±°½ ¹±°» approximately ˜— percent of the shares anticipated to be repurchased Other non-cash charges to net income: based on current market prices at that time. The ASR was initially Mechanical stores expense (a) $÷57 $÷57 $56 accounted for as an initial stock purchase transaction and a forward Share-based compensation expense 28 21 19 stock purchase contract. The initial delivery of shares resulted in an Other 16 18 (7) immediate reduction in the number of shares used to calculate the Total other non-cash charges to weighted average common shares outstanding for basic and diluted net income $101 $÷96 $68 net earnings per share from the e®ective date of the ASR. On (a) Represents spare parts used in the production process. Such spare parts are recorded in PP&E as part of machinery and equipment until they are utilized in the manufacturing process and expensed December š, š—, the ASR was completed and the Company as a period cost. received ›–,˜š additional shares of its common stock bringing the

(in millions) ¹±°¼ ¹±°½ ¹±°» total amount of repurchases to ,˜š,š shares, based upon the Interest paid $÷59 $÷52 $59 volume-weighted average price of ª–˜. per share over the term Income taxes paid 254 158 94 of the share repurchase agreement. The ASR was funded through a combination of cash on hand and utilization of the Company’s revolving credit agreement. Note . Equity Set forth below is a reconciliation of common stock share activity Preferred stock: for the years ended December , š—›, š— and š—: The Company has authorized š million shares of ª—.— par value Held in preferred stock, none of which were issued or outstanding at (Shares of common stock, in thousands) Issued Treasury Outstanding December , š—› and š—. Balance at December , š— 77,673 3,361 74,312 Issuance of restricted stock units Treasury stock: as compensation 89 (24) 113 On December š, š—, the Board of Directors authorized a new Performance shares and other share-based awards 49 (63) 112 stock repurchase program permitting the Company to purchase up Stock options exercised – (618) 618 to  million of its outstanding common shares from January , š— Purchase/acquisition of common through December š, š—. The Company’s previously authorized stock shares – 3,833 (3,833) stock repurchase program permitting the purchase of up to  million Balance at December , š— 77,811 6,489 71,322 shares has been fully utilized. The parameters of the Company’s stock Issuance of restricted stock units repurchase program are not established solely with reference to the as compensation – (102) 102 Performance shares and other dilutive impact of shares issued under the Company’s stock incentive share-based awards – (75) 75 plan. However, the Company expects that, over time, share repurchas- Stock options exercised – (556) 556 es will o®set the dilutive impact of shares issued under the stock Purchase/acquisition of common incentive plan. stock shares – 439 (439) In š—›, the Company had no share repurchases of common Balance at December , š— 77,811 6,195 71,616 shares in open market transactions. In š—, the Company repurchased Issuance of restricted stock units as compensation – (94) 94  thousand common shares in open market transactions at a cost of Performance shares and other approximately ª million. share-based awards – (70) 70 As part of the previous stock repurchase program, the Company Stock options exercised – (636) 636 entered into an accelerated share repurchase agreement (“ASR”) on Purchase/acquisition of common July —, š— with an investment bank under which the Company stock shares –2(2) Balance at December , š—› 77,811 5,397 72,414 repurchased ª—— million of its common stock. The Company paid the ª—— million on August , š— and received an initial delivery of

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 59 3/14/17 10:36 PM Share-based Payments The fair value of stock option awards was estimated at the grant The following table summarizes the components of the Company’s dates using the Black-Scholes option-pricing model with the following share-based compensation expense for the last three years: assumptions:

(in millions) ¹±°¼ ¹±°½ ¹±°» ¹±°¼ ¹±°½ ¹±°» Stock options: Expected life (in years) 5.5 5.5 5.5 Pre-tax compensation expense $÷«9 $÷7 $÷7 Risk-free interest rate 1.4% 1.4% 1.6% Income tax (bene†t) (3) (3) (3) Expected volatility 23.4% 25.2% 30.3% Stock option expense, net of income taxes 644Expected dividend yield 1.8% 2.0% 2.8% RSUs: Pre-tax compensation expense 12 98 The expected life of options represents the weighted-average Income tax (bene†t) (5) (3) (3) period of time that options granted are expected to be outstanding RSUs, net of income taxes 765giving consideration to vesting schedules and the Company’s Performance shares and other historical exercise patterns. The risk-free interest rate is based on the share-based awards: US Treasury yield curve in e®ect at the time of the grant for periods Pre-tax compensation expense 754corresponding with the expected life of the options. Expected volatility Income tax (bene†t) (3) (2) (1) is based on historical volatilities of the Company’s common stock. Performance shares and other share-based compensation expense, net of income taxes 433Dividend yields are based on historical dividend payments. The Total share-based compensation: weighted average fair value of options granted during š—›, š— and Pre-tax compensation expense 28 21 19 š— was estimated to be ª˜.–, ª›.— and ªš., respectively. Income tax (bene†t) (11) (8) (7) A summary of stock option transactions for the year follows: Total share-based compensation expense, Weighted Average net of income taxes $«17 $13 $12 Average Remaining Aggregate (dollars and options in thousands, Number of Exercise Price Contractual Intrinsic Value The Company has a stock incentive plan (“SIP”) administered by except per share amounts) Options per Share Term (Years) (in millions) the compensation committee of its Board of Directors that provides Outstanding at December , š— 2,651 $52.93 5.96 $114 Granted 329 99.96 for the granting of stock options, restricted stock, restricted stock units Exercised (638) 45.90 and other share-based awards to certain key employees. A maximum Cancelled (61) 63.96 of ˜ million shares were originally authorized for awards under the SIP. Outstanding at December , š—› 2,281 $61.39 5.93 $145 As of December , š—›, . million shares were available for future Exercisable at December , š—› 1,547 $50.80 5.70 $115 grants under the SIP. Shares covered by awards that expire, terminate or lapse will again be available for the grant of awards under the SIP. The intrinsic values of stock options exercised during š—›, š— and š— were approximately ª› million, ªš– million and ªš› million, Stock Options respectively. For the years ended December , š—›, š— and š—, The Company grants nonquali†ed options to purchase shares of the cash received from the exercise of stock options was ªš million, Company’s common stock. The stock options have a ten-year life and ªš million and ªš— million, respectively. The excess income tax bene†t are exercisable upon vesting, which occurs evenly over a three-year realized from share-based compensation was ªš million, ª˜ million period at the anniversary dates of the date of grant. Compensation and ª› million in š—›, š— and š—, respectively. As of December , expense is generally recognized on a straight-line basis for all awards š—›, the unrecognized compensation cost related to non-vested stock over the employee’s vesting period or over a one-year required service options totaled ª million, which is expected to be amortized over the period for certain retirement eligible executive level employees. The weighted-average period of approximately . years. Company estimates a forfeiture rate at the time of grant and updates the estimate within the amount of compensation costs recognized in Restricted Stock Units each period. As of December , š—›, certain of these nonquali†ed In addition to stock options, the Company awards shares of restricted options have been forfeited due to the termination of employees. stock units (“RSUs”) to certain key employees. The RSUs issued under

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 60 3/14/17 10:36 PM the plan are subject to cli® vesting, generally after three years The number of shares that ultimately vest can range from zero to provided the employee remains in the service of the Company. š—— percent of the awarded grant depending on the Company’s stock Compensation expense is generally recognized on a straight-line basis performance as compared to the stock performance of the peer group. for all awards over the employee’s vesting period or over a one-year The weighted average fair value of the shares granted during š—, required service period for certain retirement eligible executive level š— and š— was ª––., ªš.— and ª›–., respectively. employees. The Company estimates a forfeiture rate at the time of The š— performance share award vested in February š—›, grant and updates the estimate within the amount of compensation achieving a š—— percent pay out of the grant, or — thousand total costs recognized in each period. The fair value of the RSUs is deter- vested shares. As of December , š—›, the performance awards mined based upon the number of shares granted and the quoted granted in š— and š— are estimated to pay out at š—— percent. market price of the Company’s common stock at the date of the grant. The š—› granted performance award is estimated to pay out at The following table summarizes RSU activity for the year: ›— percent. There were no share cancellations during the year ended December , š—›. Number of Restricted Weighted Average Fair (shares in thousands) Shares Value per Share As of December , š—›, the unrecognized compensation cost Non-vested at December , š— 439 $÷69.96 relating to these plans was ª million, which will be amortized over Granted 152 101.21 the remaining requisite service periods of .˜ years. Recognized Vested (134) 65.83 compensation cost related to these unvested awards is included in Cancelled (28) 79.66 share-based payments subject to redemption in the Consolidated Non-vested at December , š—› 429 $÷81.04 Balance Sheets and totaled ª million and ª– million at December , š—› and š—, respectively. The total fair value of RSUs that vested in š—›, š— and š— was ª million, ª million and ª million, respectively. Other Share-based Awards Under the SIP At December , š—›, the total remaining unrecognized compen- Under the compensation agreement with the Board of Directors, sation cost related to RSUs was ª million which will be amortized on ª—,——— of a director’s annual retainer and — percent of the a weighted-average basis over approximately .– years. Recognized additional retainers paid to the Lead Director and the Chairmen compensation cost related to unvested RSUs is included in share-based of committees of the Board of Directors are awarded in shares of payments subject to redemption in the Consolidated Balance Sheets common stock or restricted units based on each director’s elections and totaled ªš million and ª– million at December , š—› and š—, to receive his or her compensation or a portion thereof in the form of respectively. restricted units. These restricted units vest immediately, but cannot be transferred until a date not less than six months after the director’s Performance Shares termination of service from the board at which time the restricted The Company has a long-term incentive plan for senior management units will be settled by delivering shares of common stock. The in the form of performance shares. The ultimate payments for compensation expense relating to this plan included in the Consoli- performance shares awarded and eventually paid will be based solely dated Statements of Income was approximately ª million in š—›, on the total shareholder return on the Company’s stock as compared š— and š—. At December , š—›, there were approximately to the total shareholder return on the stock of a peer group. The †nal –,——— restricted units outstanding under this plan at a carrying payments will be calculated at the end of the three year period and value of approximately ª million. are subject to approval by management and the Compensation Committee. Compensation expense is based on the fair value of the performance shares at the grant date, established using a Monte Carlo simulation model. The total compensation expense for these awards is amortized over a three-year graded vesting schedule. For the year ended December , š—›, the Company awarded  thousand performance shares at a weighted average fair value of ª.. The Company awarded – thousand, ˜ thousand, and  thousand performance shares in š—, š— and š—, respectively.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 61 3/14/17 10:36 PM Accumulated Other Comprehensive Loss A summary of accumulated other comprehensive income (loss) for the years ended December , š—, š— and š—› is presented below:

Cumulative Deferred Pension/ Unrealized Accumulated Translation Gain/(Loss) on Postretirement Gain (Loss) on Other (in millions) Adjustment Hedging Activities Adjustment Investments Comprehensive Loss Balance, December , š— $÷«(489) $(40) $(53) $(1) $÷«(583) Losses on cash-³ow hedges, net of income tax e®ect of ªš (29) (29) Amount of losses on cash-³ow hedges reclassi†ed to earnings, net of income tax e®ect of ªš 50 50 Actuarial losses on pension and other postretirement obligations, settlements and plan amendments, net of income tax e®ect of ª (12) (12) Losses related to pension and other postretirement obligations reclassi†ed to earnings, net of income tax e®ect of ª 4 4 Currency translation adjustment (212) (212) Balance, December , š— $÷«(701) $(19) $(61) $(1) $÷«(782) Losses on cash-³ow hedges, net of income tax e®ect of ª (42) (42) Amount of losses on cash-³ow hedges reclassi†ed to earnings, net of income tax e®ect of ª 32 32 Actuarial gains on pension and other postretirement obligations, settlements and plan amendments, net of income tax e®ect of ª 13 13 Losses related to pension and other postretirement obligations reclassi†ed to earnings, net of income tax e®ect 1 1 Currency translation adjustment (324) (324) Balance, December , š— $(1,025) $(29) $(47) $(1) $(1,102) Losses on cash-³ow hedges, net of income tax e®ect of ª› (11) (11) Amount of losses on cash-³ow hedges reclassi†ed to earnings, net of income tax e®ect of ª› 33 33 Actuarial losses on pension and other postretirement obligations, settlements and plan amendments, net of income tax e®ect of ª (10) (10) Losses related to pension and other postretirement obligations reclassi†ed to earnings, net of income tax e®ect 1 1 Unrealized gain on investments, net of income tax e®ect 1 1 Currency translation adjustment 17 17 Balance, December , š—› $(1,008) $÷(7) $(56) $«– $(1,071)

The following table provides detail pertaining to reclassi†cations from AOCI into net income for the periods presented:

A®ected Line Item in Consolidated Amount Reclassi†ed from AOCI Statements of Income (in millions) ¹±°¼ ¹±°½ ¹±°» Details about AOCI Components Losses on cash-³ow hedges: Commodity and foreign currency contracts $(47) $(43) $(70) Gross pro’t Interest rate contracts (2) (3) (3) Financing costs, net Losses related to pension and other postretirement obligations (1) (1) (5) (a) Total before-tax reclassi†cations $(50) $(47) $(78) Income tax bene†t 16 14 24 Total after-tax reclassi†cations $(34) $(33) $(54)

(a) This component is included in the computation of net periodic bene†t cost and a®ects both cost of sales and SG&A expenses on the Consolidated Statements of Income.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 62 3/14/17 10:36 PM The following table provides the computation of basic and diluted earnings per common share (“EPS”) for the periods presented.

¹±°¼ ¹±°½ ¹±°» Net Income Net Income Net Income Available to Weighted Available to Weighted Available to Weighted Ingredion Average Shares Per Share Ingredion Average Shares Per Share Ingredion Average Shares Per Share (in millions, except per share amounts) (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount Basic EPS $484.9 72.3 $6.70 $402.2 71.6 $5.62 $354.9 73.6 $4.82 E®ect of Dilutive Securities: Incremental shares from assumed exercise of dilutive stock options and vesting of dilutive RSUs and other awards 1.8 1.4 1.3 Diluted EPS $484.9 74.1 $6.55 $402.2 73.0 $5.51 $354.9 74.9 $4.74

Note ˆ. Segment Information Total assets: The Company is principally engaged in the production and sale North America $3,796 $3,163 $2,901 of starches and sweeteners for a wide range of industries, and is South America 809 714 923 managed geographically on a regional basis. The Company’s opera- Asia Paci†c 697 716 711 tions are classi†ed into four reportable business segments: North EMEA 480 481 550 America, South America, Asia Paci†c and Europe, Middle East and Total $5,782 $5,074 $5,085 Africa (“EMEA”). Its North America segment includes businesses in Depreciation and amortization: the United States, Canada and Mexico. The Company’s South America North America $÷«130 $÷«123 $÷«111 segment includes businesses in Brazil, Colombia, Ecuador and the South America 26 30 38 Southern Cone of South America, which includes Argentina, Chile, Peru Asia Paci†c 23 23 26 EMEA 17 18 20 and Uruguay. Its Asia Paci†c segment includes businesses in South Total $÷«196 $÷«194 $÷«195 Korea, Thailand, Malaysia, China, Japan, Indonesia, the Philippines, Capital expenditures: Singapore, India, Australia and New Zealand. The Company’s EMEA North America $÷«167 $÷«158 $÷«130 segment includes businesses in the United Kingdom, Germany, South America 56 61 90 South Africa, Pakistan and Kenya. Asia Paci†c 41 36 30

(in millions) ¹±°¼ ¹±°½ ¹±°» EMEA 20 25 26 Total $÷«284 $÷«280 $÷«276 Net sales to una‘liated customers: North America $3,447 $3,345 $3,093 a. For ¹±°», includes a ¾º million gain from the sale of an idled plant in Kenya. b. For ¹±°½, includes ¾» million of expense relating to a tax indemni†cation agreement with o®setting South America 1,010 1,013 1,203 income of ¾» million recorded in the provision for income taxes. For ¹±°», includes ¾¿ million of income Asia Paci†c 709 733 794 relating to this tax indemni†cation agreement with an o®setting expense of ¾¿ million recorded in the provision for income taxes (see Note Á). EMEA 538 530 578 c. For ¹±°¼, includes ¾°° million of employee severance-related and other costs associated with the Total $5,704 $5,621 $5,668 execution of IT outsourcing contracts, ¾¼ million of employee severance-related costs associated with the Company’s optimization initiatives in North America and South America and ¾¹ million of costs Operating income: attributable to the Port Colborne plant sale. For ¹±°½, includes ¾°¹ million of charges for impaired North America $÷«610 $÷«479 $÷«375 assets and restructuring costs in Brazil, ¾°¹ million of restructuring costs associated with the Penford acquisition and ¾» million of restructuring costs in Canada. For ¹±°», includes a ¾ºº million write-o® South America 89 101 108 of impaired goodwill in the Southern Cone of South America. Asia Paci†c 111 107 103 EMEA (a) 106 93 95 The following table presents net sales to una‘liated customers by Corporate (b) (86) (75) (65) country of origin for the last three years: Subtotal 830 705 616 Restructuring / impairment charges (c) (19) (28) (33) Net Sales

Acquisition / integration costs (3) (10) (2) (in millions) ¹±°¼ ¹±°½ ¹±°» Charge for fair value markup of United States $2,117 $1,983 $1,681 acquired inventory – (10) – Mexico 955 945 955 Litigation settlement – (7) – Brazil 522 452 591 Gain from sale of Canadian plant – 10 – Canada 375 417 457 Total $÷«808 $÷«660 $÷«581 Korea 266 276 295 Argentina 201 252 262 Others 1,268 1,296 1,427 Total $5,704 $5,621 $5,668

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 63 3/14/17 10:36 PM The following table presents long-lived assets (excluding intangible Quarterly Financial Data (Unaudited) assets and deferred income taxes) by country at December : Summarized quarterly †nancial data is as follows:

(in millions, except per share amounts) °st Qtr ¹nd Qtr ºrd Qtr »th Qtr* Long-lived Assets ‰ (in millions) ¹±°¼ ¹±°½ ¹±°» Net sales before shipping and United States $÷«955 $÷«920 $÷«803 handling costs $1,434 $1,533 $1,569 $1,484 Mexico 303 292 296 Less: shipping and handling costs 74 78 80 85 Brazil 245 196 294 Net sales $1,360 $1,455 $1,489 $1,399 Canada 147 126 154 Gross pro†t 339 355 369 339 Germany 106 114 133 Net income attributable to Ingredion 130 117 143 94 Thailand 119 111 105 Basic earnings per common share of Korea 84 83 88 Ingredion $÷1.81 $÷1.62 $÷1.98 $÷1.29 Argentina 60 64 82 Diluted earnings per common share Others 218 200 214 of Ingredion $÷1.77 $÷1.58 $÷1.93 $÷1.26 Total $2,237 $2,106 $2,169  Net sales before shipping and handling costs $1,410 $1,536 $1,524 $1,489 Note 
. Commitments and Contingencies Less: shipping and handling costs 80 87 87 84 The Company is a party to a large number of labor claims relating to Net sales $1,330 $1,449 $1,437 $1,405 our Brazilian operations. The Company has reserved an aggregate of Gross pro†t 281 319 330 313 approximately ª million as of December , š—› in respect of these Net income attributable to Ingredion 84 107 108 104 claims. These labor claims primarily relate to dismissals, severance, Basic earnings per common share of Ingredion $÷1.17 $÷1.49 $÷1.51 $÷1.45 health and safety, work schedules and salary adjustments. Diluted earnings per common share The Company is currently subject to various other claims and of Ingredion $÷1.15 $÷1.47 $÷1.48 $÷1.42

suits arising in the ordinary course of business, including certain * Fourth quarter ¹±°¼ includes a charge of ¾¹¿ million (¾±.º¼ per diluted common share) associated with environmental proceedings and other commercial claims. The an income tax settlement, acquisition and integration costs of ¾°.» million (¾±.Á million after-tax, or ¾±.±° per diluted common share) and restructuring costs of ¾».± million (¾¹.½ million after-tax, or Company also routinely receives inquiries from regulators and other ¾±.±º per diluted common share) consisting of employee severance-related costs in North America and employee severance-related and other costs associated with the execution of global IT outsourcing government authorities relating to various aspects of its business, contracts. Fourth quarter ¹±°½ includes a charge of ¾º.À million (¾¹.¼ million after-tax, or ¾±.±» per including with respect to compliance with laws and regulations diluted common share) for restructuring costs in Canada, the United States and Brazil, costs of ¾±.¿ million (¾±.¼ million after-tax, or ¾±.±° per diluted common share) associated with the acquisition relating to the environment, and at any given time, the Company has and integration of Penford and Kerr, costs of ¾°.À million (¾°.° million after-tax, or ¾±.±¹ per diluted common share) relating to the sale of Kerr inventory that was adjusted to fair value at the acquisition matters at various stages of resolution with the applicable governmen- date in accordance with business combination accounting rules, costs of ¾¼.À million (¾».º million after-tax, or ¾±.±¼ per diluted common share) relating to a litigation settlement and a gain of tal authorities. The outcomes of these matters are not within the ¾Á.À million (¾À.Á million after-tax, or ¾±.°¹ per diluted common share) from the sale of our Port Company’s complete control and may not be known for prolonged Colborne, Canada plant. periods of time. The Company does not believe that the results of currently known legal proceedings and inquires, even if unfavorable to the Company, will be material to the Company. There can be no assurance, however, that such claims, suits or investigations or those arising in the future, whether taken individually or in the aggregate, will not have a material adverse e®ect on the Company’s †nancial condition or results of operations.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 64 3/14/17 10:36 PM Item . Changes in and Disagreements With Accountants on Management’s Report on Internal Control over Accounting and Financial Disclosure Financial Reporting Not applicable. Our management is responsible for establishing and maintaining adequate internal control over †nancial reporting. This system of Item A. Controls and Procedures internal controls is designed to provide reasonable assurance that Evaluation of Disclosure Controls and Procedures assets are safeguarded and transactions are properly recorded and Our management, including our Chief Executive O‘cer and our Chief executed in accordance with management’s authorization. Financial O‘cer, performed an evaluation of the e®ectiveness of our Internal control over †nancial reporting includes those policies disclosure controls and procedures as of December , š—›. Based on and procedures that: that evaluation, our Chief Executive O‘cer and our Chief Financial . Pertain to the maintenance of records that, in reasonable detail, O‘cer concluded that our disclosure controls and procedures (a) are accurately and fairly re³ect the transactions and dispositions of e®ective in providing reasonable assurance that all material informa- our assets. tion required to be †led in this report has been recorded, processed, š. Provide reasonable assurance that transactions are recorded summarized and reported within the time periods speci†ed in the as necessary to permit preparation of †nancial statements in SEC’s rules and forms and (b) are designed to ensure that information conformity with accounting principles generally accepted in the required to be disclosed in the reports we †le or submit under the United States, and that our receipts and expenditures are being Securities Exchange Act of , as amended is accumulated and made only in accordance with authorizations of our management communicated to our management, including our principal executive and directors. and principal †nancial o‘cers, as appropriate to allow timely decisions . Provide reasonable assurance regarding prevention or timely regarding required disclosure. detection of unauthorized acquisition, use, or disposition of our In the fourth quarter of š—›, we acquired Shandong Huanong assets that could have a material e®ect on our †nancial statements. Specialty Corn Development Co., Ltd. in Pingyuan County, Shandong Province, China (“Shandong”) and TIC Gums Incorporated (“TIC Gums”). Management conducted an evaluation of the e®ectiveness of In conducting our evaluation of the e®ectiveness of internal control internal control over †nancial reporting based on the framework of over †nancial reporting, we have elected to exclude Shandong and TIC Internal Control – Integrated Framework („†) issued by the Committee Gums from our evaluation as of December , š—›, as permitted by the of Sponsoring Organizations of the Treadway Commission (COSO). The Securities and Exchange Commission. We are currently in the process of scope of the assessment included all of the subsidiaries of the Company evaluating and integrating the acquired operations, processes and except for Shandong and TIC Gums, which were acquired in the fourth internal controls. See Note  of the Notes to the Consolidated Financial quarter of š—›. The consolidated net sales of the Company for the year Statements for additional information regarding the acquisitions. There ended December , š—› were ª.–— billion of which Shandong have been no other changes in our internal control over †nancial represented ª—. million. Our results did not include any sales for TIC reporting during the quarter ended December , š—› that have Gums as that entity was acquired on December š, š—›. The consoli- materially a®ected, or are reasonably likely to materially a®ect, our dated total assets of the Company at December , š—› were internal control over †nancial reporting. ª.–˜ billion of which Shandong and TIC Gums represented ª mil- lion. Based on the evaluation, management concluded that our internal control over †nancial reporting was e®ective as of December , š—›. The e®ectiveness of our internal control over †nancial reporting has been audited by KPMG LLP, an independent registered public account- ing †rm, as stated in their attestation report included herein.

Item B. Other Information None.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 65 3/14/17 10:36 PM Part III Part IV

Item . Directors, Executive O›cers and Corporate Governance Item . Exhibits and Financial Statement Schedules The information contained under the headings “Proposal . Election of Item (a)() Consolidated Financial Statements Directors,” “The Board and Committees” and “Section ›(a) Bene†cial Financial Statements (see Item ˜ of the Table of Contents of Ownership Reporting Compliance” in the Company’s de†nitive proxy this report). statement for the Company’s š—– Annual Meeting of Stockholders (the “Proxy Statement”) is incorporated herein by reference. The Item (a)() Financial Statement Schedules information regarding executive o‘cers called for by Item — of All †nancial statement schedules have been omitted because the Regulation S-K is included in Part  of this report under the heading information either is not required or is otherwise included in the “Executive O‘cers of the Registrant.” The Company has adopted a consolidated †nancial statements and notes thereto. code of ethics that applies to its principal executive o‘cer, principal †nancial o‘cer, and controller. The code of ethics is posted on the Item (a)(ˆ) Exhibits Company’s Internet website, which is found at www.ingredion.com. The following list of exhibits includes both exhibits submitted with this The Company intends to include on its website any amendments to, Form —-K as †led with the SEC and those incorporated by reference or waivers from, a provision of its code of ethics that applies to the from other †lings. Company’s principal executive o‘cer, principal †nancial o‘cer or Exhibit No. Description controller that relates to any element of the code of ethics de†nition enumerated in Item —›(b) of Regulation S-K. ¹.° Agreement and Plan of Merger, dated as of October °», ¹±°», by and among Penford Corporation, a Washington corporation, Prospect Sub, Inc., a Washington corporation and a wholly-owned subsidiary of Item . Executive Compensation the Company, and the Company (incorporated by reference to The information contained under the headings “Executive Compensa- Exhibit ¹.° to the Company’s Quarterly Report on Form °±-Q for the tion,” “Compensation Committee Report,” “Director Compensation” quarter ended September º±, ¹±°», †led on November º, ¹±°») (File and “Compensation Committee Interlocks and Insider Participation” No. °-°ººÁ¿). Certain schedules referenced in the Agreement and Plan in the Proxy Statement is incorporated herein by reference. of Merger have been omitted in accordance with Item ¼±°(b)(¹) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request. Item . Security Ownership of Certain Bene­cial Owners and º.° Amended and Restated Certi†cate of Incorporation of the Company Management and Related Stockholder Matters (incorporated by reference to Exhibit º.° to the Company’s Registration The information contained under the headings “Equity Compensation Statement on Form °± †led on September °Á, °ÁÁ¿) (File No. °-°ººÁ¿). Plan Information as of December , š—›” and “Security Ownership º.¹ Certi†cate of Elimination of Series A Junior Participating Preferred Stock of Certain Bene†cial Owners and Management” in the Proxy State- of Corn Products International, Inc. (incorporated by reference to ment is incorporated herein by reference. Exhibit °±.½ to the Company’s Current Report on Form À-K dated May °Á, ¹±°±, †led on May ¹½, ¹±°±) (File No. °-°ººÁ¿). º.º Amendments to Amended and Restated Certi†cate of Incorporation Item ˆ. Certain Relationships and Related Transactions, and (incorporated by reference to Appendix A to the Company’s Proxy Director Independence Statement for its ¹±°± Annual Meeting of Stockholders †led on April Á, The information contained under the headings “Review and Approval ¹±°±) (File No. °-°ººÁ¿). of Transactions with Related Persons,” “Certain Relationships and º.» Certi†cate of Amendment of Amended and Restated Certi†cate of Related Transactions” and “Independence of Board Members” in the Incorporation of the Company (incorporated by reference to Exhibit º.» Proxy Statement is incorporated herein by reference. to the Company’s Annual Report on Form °±-K for the year ended December º°, ¹±°¹, †led on February ¹À, ¹±°º) (File No. °-°ººÁ¿). º.½ Amended By-Laws of the Company (incorporated by reference to Item 
. Principal Accountant Fees and Services Exhibit º.° to the Company’s Current Report on Form À-K dated The information contained under the heading “š—› and š— Audit December Á, ¹±°¼, †led on December °», ¹±°¼) (File No. °-°ººÁ¿). Firm Fee Summary” in the Proxy Statement is incorporated herein ».° Revolving Credit Agreement dated October °°, ¹±°¼, by and among by reference. Ingredion Incorporated, the lenders signatory thereto, any subsidiary borrowers that may become party thereto from time to time, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Branch Banking and Trust Company, Bank of Montreal, Wells Fargo Bank, National Association, Mizuho Bank, Ltd., HSBC Bank USA, N.A., Citibank, N.A., ING Capital LLC and PNC Bank, National Association, as Co-Documentation Agents (incorporated by reference to Exhibit ».° to the Company’s Current Report on Form À-K dated October °°, ¹±°¼, †led on October °¿, ¹±°¼) (File No. °-°ººÁ¿) .

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 66 3/14/17 10:36 PM ».¹ Private Shelf Agreement, dated as of March ¹½, ¹±°± by and between °±.°* Stock Incentive Plan as e®ective February ¿, ¹±°¿ (incorporated by Corn Products International, Inc. and Prudential Investment Manage- reference to Exhibit °±.° to the Company’s Current Report on Form À-K ment, Inc. (incorporated by reference to Exhibit ».°± to the Company’s dated February ¿, ¹±°¿, †led on February °», ¹±°¿) (File No. °-°ººÁ¿). Quarterly Report on Form °±-Q, for the quarter ended March º°, ¹±°±, °±.¹* Form of Executive Severance Agreement entered into by Ilene S. Gordon †led on May ½, ¹±°±) (File No. °-°ººÁ¿). and Jack C. Fortnum (incorporated by reference to Exhibit °±.½ to the ».º Amendment No. ° to Private Shelf Agreement, dated as of February ¹½, Company’s Quarterly Report on Form °±-Q, for the quarter ended ¹±°° by and between Corn Products International, Inc. and Prudential March º°, ¹±±À, †led on May ¼, ¹±±À) (File No. °-°ººÁ¿). Investment Management, Inc. (incorporated by reference to Exhibit ».°° °±.º* Form of Indemni†cation Agreement entered into by each of the to the Company’s Quarterly Report on Form °±-Q, for the quarter ended members of the Company’s Board of Directors and the Company’s March º°, ¹±°°, †led on May ¼, ¹±°°) (File No. °-°ººÁ¿) . executive o‘cers (incorporated by reference to Exhibit °±.°» to the ».» Amendment No. ¹ to Private Shelf Agreement, dated as of Decem- Company’s Annual Report on Form °±-K for the year ended Decem- ber ¹°, ¹±°¹ by and between Ingredion Incorporated and Prudential ber º°, °ÁÁ¿ †led on March º°, °ÁÁÀ) (File No. °-°ººÁ¿). Investment Management, Inc. (incorporated by reference to Exhibit ».» °±.»* Deferred Compensation Plan for Outside Directors of the Company to the Company’s Annual Report on Form °±-K for the year ended (Amended and Restated as of September °Á, ¹±±°), †led on Decem- December º°, ¹±°¹, †led on February ¹À, ¹±°º) (File No. °-°ººÁ¿). ber ¹°, ¹±±°as Exhibit »(d) to the Company’s Registration Statement on ».½ Indenture Agreement dated as of August °À, °ÁÁÁ between the Form S-À, File No. ººº-¿½À»», as amended by Amendment No. ° dated Company and The Bank of New York, as Trustee (incorporated by December °, ¹±±» (incorporated by reference to Exhibit °±.¼ to the reference to Exhibit ».° to the Company’s Current Report on Form À-K, Company’s Annual Report on Form °±-K for the year ended Decem- †led on August ¹¿, °ÁÁÁ) (File No. °-°ººÁ¿). ber º°, ¹±±», †led on March °°, ¹±±½) (File No. °-°ººÁ¿). ».¼ Third Supplemental Indenture dated as of April °±, ¹±±¿ between Corn °±.½* Supplemental Executive Retirement Plan as e®ective July °À, ¹±°¹ Products International, Inc. and The Bank of New York Trust Company, (incorporated by reference to Exhibit °±.¿ to the Company’s Quarterly N.A., as trustee (incorporated by reference to Exhibit ».º to the Report on Form °±-Q, for the quarter ended September º±, ¹±°¹, †led Company’s Current Report on Form À-K, dated April °±, ¹±±¿, †led on November ¹, ¹±°¹) (File No. °-°ººÁ¿). on April °±, ¹±±¿) (File No. °-°ººÁ¿). °±.¼* Executive Life Insurance Plan (incorporated by reference to Exhib- ».¿ Fourth Supplemental Indenture dated as of April °±, ¹±±¿ between it °±.°¿ to the Company’s Annual Report on Form °±-K for the year Corn Products International, Inc. and The Bank of New York Trust ended December º°, °ÁÁ¿, †led on March º°, °ÁÁÀ) (File No. °-°ººÁ¿). Company, N.A., as trustee (incorporated by reference to Exhibit ».» to °±.¿* Deferred Compensation Plan, as amended by Amendment No. ° the Company’s Current Report on Form À-K dated April °±, ¹±±¿, †led (incorporated by reference to Exhibit °±.¹° to the Company’s Annual on April °±, ¹±±¿) (File No. °-°ººÁ¿). Report on Form °±-K/A for the year ended December º°, ¹±±°, †led ».À Sixth Supplemental Indenture, dated September °¿, ¹±°±, between on June ¹¼, ¹±±¹) (File No. °-°ººÁ¿). Corn Products International, Inc. and The Bank of New York Mellon Trust °±.À* Annual Incentive Plan as e®ective July °À, ¹±°¹ (incorporated by Company, N.A. (as successor trustee to The Bank of New York), as reference to Exhibit °±.° to the Company’s Quarterly Report on trustee (incorporated by reference to Exhibit ».¹ to the Company’s Form °±-Q, for the quarter ended September º±, ¹±°¹, †led on Current Report on Form À-K dated September °», ¹±°±, †led on November ¹, ¹±°¹) (File No. °-°ººÁ¿). September ¹±, ¹±°±) (File No. °-°ººÁ¿). °±.Á* Executive Life Insurance Plan, Compensation Committee Summary ».Á Seventh Supplemental Indenture, dated September °¿, ¹±°±, between (incorporated by reference to Exhibit °±.°» to the Company’s Annual Corn Products International, Inc. and The Bank of New York Mellon Trust Report on Form °±-K for the year ended December º°, ¹±±», †led on Company, N.A. (as successor trustee to The Bank of New York), as March °°, ¹±±½) (File No. °-°ººÁ¿). trustee (incorporated by reference to Exhibit ».º to the Company’s °±.°±* Form of Executive Life Insurance Plan Participation Agreement and Current Report on Form À-K dated September °», ¹±°±, †led on Collateral Assignment entered into by Jack C. Fortnum (incorporated by September ¹±, ¹±°±) (File No. °-°ººÁ¿). reference to Exhibit °±.°½ to the Company’s Annual Report on ».°± Eighth Supplemental Indenture, dated September ¹±, ¹±°¹, between Form °±-K for the year ended December º°, ¹±±», †led on March °°, Ingredion Incorporated and The Bank of New York Mellon Trust ¹±±½) (File No. °-°ººÁ¿). Company, N.A. (as successor trustee to The Bank of New York), as °±.°°* Form of Performance Share Award Agreement for use in connection trustee (incorporated by reference to Exhibit ».° to the Company’s with awards under the Stock Incentive Plan (incorporated by reference Current Report on Form À-K dated September ¹±, ¹±°¹, †led on to Exhibit °±.¹ to the Company’s Current Report on Form À-K dated September ¹°, ¹±°¹) (File No. °-°ººÁ¿). February ¿, ¹±°¿, †led on February °», ¹±°¿) (File No. °-°ººÁ¿). ».°° Ninth Supplemental Indenture, dated as of September ¹¹, ¹±°¼, °±.°¹* Form of Stock Option Award Agreement for use in connection with between the Company and The Bank of New York Mellon Trust awards under the Stock Incentive Plan (incorporated by reference to Company, N.A. (as successor trustee to The Bank of New York), as Exhibit °±.º to the Company’s Current Report on Form À-K dated trustee (incorporated by reference to Exhibit ».° to the Company’s February ¿, ¹±°¿, †led on February °», ¹±°¿) (File No. °-°ººÁ¿). Current Report on Form À-K dated September ¹¹, ¹±°¼, †led on °±.°º* Form of Restricted Stock Units Award Agreement for use in connection September ¹¹, ¹±°¼) (File No. °-°ººÁ¿) with awards under the Stock Incentive Plan (incorporated by reference to Exhibit °±.» to the Company’s Current Report on Form À-K dated February ¿, ¹±°¿, †led on February °», ¹±°¿) (File No. °-°ººÁ¿).

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 67 3/14/17 10:36 PM °±.°» Natural Gas Purchase and Sale Agreement between Corn Products °±.¹¼* Letter of Agreement dated as of September º±, ¹±°½ between the Brasil-Ingredientes Industrias Ltda. and Companhia de Ga de Sao Company and Martin Sonntag (incorporated by reference to Exhib- Paulo-Comgas (incorporated by reference to Exhibit °±.°¿ to the it °±.¹À to the Company’s Quarterly Report on Form °±-Q, for the Company’s Annual Report on Form °±-K for the year ended Decem- quarter ended September º±, ¹±°½, †led on October º±, ¹±°½) ber º°, ¹±±½, †led on March Á, ¹±±¼) (File No. °-°ººÁ¿). (File No. °-°ººÁ¿). °±.°½* Letter of Agreement dated as of April ¹, ¹±±Á between the Company °±.¹¿* Executive Severance Agreement dated as of September º±, ¹±°½ and Ilene S. Gordon (incorporated by reference to Exhibit °±.¹° to the between the Company and Martin Sonntag (incorporated by reference Company’s Quarterly Report on Form °±-Q, for the quarter ended to Exhibit °±.¹Á to the Company’s Quarterly Report on Form °±-Q, for June º±, ¹±±Á, †led on August ¼, ¹±±Á) (File No. °-°ººÁ¿). the quarter ended September º±, ¹±°½, †led on October º±, ¹±°½) °±.°¼* Letter of Agreement dated as of April ¹, ¹±°± between the Company (File No. °-°ººÁ¿). and Diane Frisch (incorporated by reference to Exhibit °±.¹» to the °±.¹À* Letter of Agreement dated as of November °±, ¹±°¼ between the Company’s Quarterly Report on Form °±-Q, for the quarter ended Company and Jorgen Kokke June º±, ¹±°±, †led on August ¼, ¹±°±) (File No. °-°ººÁ¿). °¹.° Computation of Ratio of Earnings to Fixed Charges °±.°¿* Executive Severance Agreement dated as of May °, ¹±°± between the ¹°.° Subsidiaries of the Registrant Company and Diane Frisch (incorporated by reference to Exhibit °±.¹½ ¹º.° Consent of Independent Registered Public Accounting Firm to the Company’s Quarterly Report on Form °±-Q, for the quarter ended ¹».° Power of Attorney June º±, ¹±°±, †led on August ¼, ¹±°±) (File No. °-°ººÁ¿). º°.° CEO Section º±¹ Certi†cation Pursuant to the Sarbanes-Oxley Act °±.°À* Letter of Agreement dated as of September ¹À, ¹±°± between the of ¹±±¹ Company and James Zallie (incorporated by reference to Exhibit °±.º± º°.¹ CFO Section º±¹ Certi†cation Pursuant to the Sarbanes-Oxley Act to the Company’s Annual Report on Form °±-K for the year ended of ¹±±¹ December º°, ¹±°±, †led on February ¹À, ¹±°°) (File No. °-°ººÁ¿). º¹.° CEO Certi†cation Pursuant to Section °º½± of Chapter ¼º of Title °À of °±.°Á* Form of Executive Severance Agreement entered into by James Zallie, the United States Code as created by the Sarbanes-Oxley Act of ¹±±¹ Christine M. Castellano, Anthony P. DeLio and Robert F. Stefansic º¹.¹ CFO Certi†cation Pursuant to Section °º½± of Chapter ¼º of Title °À of (incorporated by reference to Exhibit °±.¹¿ to the Company’s Annual the United States Code as created by the Sarbanes-Oxley Act of ¹±±¹ Report on Form °±-K for the year ended December º°, ¹±°º, †led on °±° The following †nancial information from the Ingredion Incorporated February ¹», ¹±°») (File No. °-°ººÁ¿). Annual Report on Form °±-K for the year ended December º°, ¹±°¼ °±.¹±* Form of Executive Severance Agreement entered into by Jorgen Kokke formatted in Extensible Business Reporting Language (XBRL): (i) the (incorporated by reference to Exhibit °±.ºÁ to the Company’s Quarterly Consolidated Statements of Income; (ii) the Consolidated Statements of Report on Form °±-Q for the quarter ended March º°, ¹±°», †led on Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the May ¹, ¹±°») (File No. °-°ººÁ¿). Consolidated Statements of Equity and Redeemable Equity; (v) the °±.¹°* Con†dentiality and Non-Compete Agreement, dated March ¿, ¹±°», Consolidated Statements of Cash Flows; and (vi) the Notes to the by and between the Company and Cheryl K. Beebe (incorporated by Consolidated Financial Statements.

reference to Exhibit °±.»± to the Company’s Quarterly Report on * Management contract or compensatory plan or arrangement required to be †led as an exhibit to this Form °±-Q for the quarter ended March º°, ¹±°», †led on May ¹, ¹±°») form pursuant to Item °½(b) of this report. (File No. °-°ººÁ¿). °±.¹¹ * Con†dential Separation Agreement and General Release, dated as of Signatures March ¹Á, ¹±°º, by and between the Company and Kimberly A. Hunter Pursuant to the requirements of Section  or (d) of the Securities (incorporated by reference to Exhibit °±.º½ to the Company’s Quarterly Report on Form °±-Q for the quarter ended June º±, ¹±°º, †led on Exchange Act of , the Registrant has duly caused this report to be August ¹, ¹±°º) (File No. °-°ººÁ¿). signed on its behalf by the undersigned, thereunto duly authorized, °±.¹º* Consulting Agreement, dated as of September º, ¹±°º, by and on the ššnd day of February, š—–. between the Company and Julio dos Reis (incorporated by reference to Exhibit °±.º¼ to the Company’s Quarterly Report on Form °±-Q for the Ingredion Incorporated quarter ended September º±, ¹±°º, †led on November °, ¹±°º) (File By: /s/ Ilene S. Gordon No. °-°ººÁ¿). Ilene S. Gordon °±.¹»* Mutual Separation Agreement, dated as of September º, ¹±°º, by and Chairman, President and Chief Executive O‘cer between Ingredion Argentina S.A. and Julio dos Reis (incorporated by reference to Exhibit °±.º¿ to the Company’s Quarterly Report on Pursuant to the requirements of the Securities Exchange Act of , Form °±-Q for the quarter ended September º±, ¹±°º, †led on this Report has been signed below by the following persons on behalf November °, ¹±°º) (File No. °-°ººÁ¿). of the Registrant, in the capacities indicated and on the ššnd day of °±.¹½* Con†dential Separation Agreement and General Release dates as of January °¼, ¹±°½, by and between the Company and John F. Saucier February, š—–. (incorporated by reference to Exhibit °±.¹¼ to the Company’s Quarterly Report on Form °±-Q, for the quarter ended March º°, ¹±°½, †led on May ¼, ¹±°½) (File No. °-°ººÁ¿).

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 68 3/14/17 10:36 PM Signature Title Exhibit . Subsidiaries of the Registrant Chairman, President, Chief Executive O‘cer /s/ Ilene S. Gordon and Director The Registrant’s subsidiaries as of December , š—›, are listed below Ilene S. Gordon showing the percentage of voting securities directly or indirectly owned /s/ Jack C. Fortnum Chief Financial O‘cer by the Registrant. All other subsidiaries, if considered in the aggregate Jack C. Fortnum as a single subsidiary, would not constitute a signi†cant subsidiary. Percentage of voting State or other /s/ Stephen K. Latreille Controller securities directly or indirectly Jurisdiction of incorporation Stephen K. Latreille owned by the Registrant(1) or organization Arrendadora Gefemesa, S.A. de C.V. —— Mexico * Luis Aranguren-Trellez Director Bebidas y Algo Mas S.A. de C.V. —— Mexico Luis Aranguren-Trellez Bedford Construction Company —— New Jersey * David B. Fischer Director Belcamp Realty, LLC —— Maryland David B. Fischer Brunob II B.V. —— The Netherlands Brunob IV B.V. —— The Netherlands * Paul Hanrahan Director Cali Investment Corp. —— Delaware Paul Hanrahan CAS Realty, LLC. —— Maryland * Rhonda L. Jordan Director Colombia Millers Ltd. —— Delaware Rhonda L. Jordan Corn Products Americas Holdings S.à r.l. —— Luxembourg Corn Products Development, Inc. —— Delaware * Gregory B. Kenny Director Corn Products Espana Holding LLC —— Delaware Gregory B. Kenny Corn Products Germany GmbH —— Germany * Barbara A. Klein Director Corn Products Global Holding S.à r.l. —— Luxembourg Corn Products Inc. & Co. KG —— Germany Barbara A. Klein Corn Products Kenya Limited —— Kenya * Victoria J. Reich Director Corn Products Mauritius (Pty) Ltd. —— Mauritius Victoria J. Reich Corn Products Netherlands Holding S.à r.l. —— Luxembourg Corn Products Puerto Rico Inc. —— Delaware * Jorge A. Uribe Director Corn Products Sales LLC —— Delaware Jorge A. Uribe Corn Products Southern Cone S.R.L. —— Argentina * Dwayne A. Wilson Director Corn Products (Thailand) Co., Ltd. —— Thailand Dwayne A. Wilson Corn Products UK Finance LP —— England and Wales Corn Products Venezuela, C.A. —— Venezuela * By: /s/ Christine M. Castellano CPIngredients, LLC d/b/a GTC Nutrition —— Colorado Christine M. Castellano Crystal Car Line, Inc. —— Illinois Attorney-in-fact Feed Products Limited —— New Jersey Globe Ingredients Nigeria Limited —— Nigeria (Being the principal executive o‘cer, the principal †nancial o‘cer, the HAAN Holdings Limited. —— Hong Kong controller and a majority of the directors of Ingredion Incorporated) Hispano-American Company, Inc. —— Delaware ICI Mauritius (Holdings) Limited —— Mauritius Exhibit . Ingredion ANZ Pty Ltd. —— Australia Computation of Ratios of Earnings to Fixed Charges Ingredion Argentina S.R.L —— Argentina Ingredion Brasil Ingredientes Industriais Ltda. —— Brazil (in millions, except ratios) ¹±°¼ ¹±°½ ¹±°» ¹±°º ¹±°¹ Ingredion Canada Corporation —— Nova Scotia, Canada Income before income Ingredion Chile S.A. —— Chile taxes and earnings of Ingredion China Limited —— China non-controlling interests $741.8 $598.6 $520.1 $546.8 $600.6 Ingredion Colombia S.A. —— Colombia Fixed charges 79.2 74.4 76.3 79.9 84.3 Ingredion Ecuador S.A. —— Ecuador Capitalized interest (4.0) (2.3) (2.1) (4.3) (5.6) Ingredion Employee Services S.à r.l. —— Luxembourg Total $817.0 $670.7 $594.3 $622.4 $679.3 Ingredion Espana, S.L.U. —— Spain Ratio of Earnings to Ingredion Germany GmbH —— Germany Fixed Charges 10.32 9.01 7.79 7.79 8.06 Ingredion Holding LLC —— Delaware Fixed Charges: Ingredion India Private Limited —— India Interest expense on debt $÷75.0 $÷68.9 $÷71.3 $÷74.6 $÷79.4 Ingredion Integra, S.A. de C.V. —— Mexico Amortization of discount Ingredion Japan K.K. —— Japan on debt 2.0 3.4 3.4 3.4 3.2 Ingredion Korea Holding LLC —— Nevada Interest portion of rental Ingredion Korea Incorporated —— Korea expense on operating leases 2.2 2.1 1.6 1.9 1.7 Ingredion Malaysia Sdn. Bhd. —— Malaysia Total $÷79.2 $÷74.4 $÷76.3 $÷79.9 $÷84.3 Ingredion Mexico, S.A. de C.V. —— Mexico

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 69 3/14/17 10:36 PM Ingredion Peru S.A. —— Peru Company also excluded an evaluation of internal control over †nancial Ingredion Philippines, Inc. —— Philippines reporting of Shandong Huanong Specialty Corn Development Co., LTD Ingredion Shandong Limited. —— China and TIC Gums Incorporated. Ingredion Singapore Pte. Ltd. —— Singapore Ingredion Southern Holdings, S.L.U. —— Spain Ingredion South Africa (Proprietary) Ltd. —— South Africa /s/ KPMG LLP Ingredion (Thailand) Ltd. —— Thailand Chicago, Illinois Ingredion UK Limited —— England and Wales February šš, š—– Ingredion Uruguay S.A. —— Uruguay Inversiones Latinoamericanas S.A. —— Delaware Exhibit 
. Kerr Concentrates, Inc. —— Oregon Ingredion Incorporated Power of Attorney Kerr FSC, Inc. —— Oregon Laing-National Limited —— England and Wales Form ƒ-K for the Fiscal Year Ended December , „ƒ National Starch & Chemical (Thailand) Ltd —— Thailand KNOW ALL MEN BY THESE PRESENTS, that I, as a director of Ingredion PT Ingredion Indonesia —— Indonesia Incorporated, a Delaware corporation (the “Company”), do hereby Rafhan Maize Products Co. Ltd. –—. Pakistan constitute and appoint Christine M. Castellano as my true and lawful Raymond & White River LLC —— Indiana attorney-in-fact and agent, for me and in my name, place and stead, to Specialty Blends, Inc. —— Maryland sign the Annual Report on Form —-K of the Company for the †scal Texture Innovation Company de Mexico, S. de R.L. —— Mexico The Chicago, Peoria and Western Railway Company —— Illinois year ended December , š—›, and any and all amendments thereto, TIC Gums China —— China and to †le the same and other documents in connection therewith TIC Gums, Inc. —— Maryland with the Securities and Exchange Commission, granting unto said

(°) With respect to certain companies, shares in the names of nominees and qualifying shares in the names attorney-in-fact full power and authority to do and perform each and of directors are included in the above percentages.. every act and thing requisite and necessary to be done in the premises, as fully to all intents and purposes as I might or could do in Exhibit ˆ. person, hereby ratifying and con†rming all that said attorney-in-fact Consent of Independent Registered Public Accounting Firm may lawfully do or cause to be done by virtue thereof. The Board of Directors Ingredion Incorporated: IN WITNESS WHEREOF, I have executed this instrument this ššnd day We consent to the incorporation by reference in the registration of February, š—–. statements (No.  š, -––, -–˜, -——, - —››—, -–›, -š˜, -›, -›—›š, -–—, /s/ Luis Aranguren-Trellez and -š—˜››˜) on Form S-˜ and to the incorporation by reference in Luis Aranguren-Trellez the registration statement (No. -š–) on Form S- of Ingredion /s/ David B. Fischer Incorporated of our report dated February šš, š—–, with respect to the David B. Fischer consolidated balance sheets of Ingredion Incorporated and subsidiar- /s/ Ilene S. Gordon ies as of December , š—› and š—, and the related consolidated Ilene S. Gordon statements of income, comprehensive income, equity and redeemable /s/ Paul Hanrahan equity, and cash ³ows for each of the years in the three-year period Paul Hanrahan ended December , š—›, and the e®ectiveness of internal control /s/ Rhonda L. Jordan over †nancial reporting as of December , š—›, which report appears Rhonda L. Jordan in the December , š—› annual report on Form — K of Ingredion Incorporated (“the Company”). /s/ Gregory B. Kenny Our report dated February šš, š—– on the e®ectiveness of internal Gregory B. Kenny control over †nancial reporting as of December , š—›, contains an /s/ Barbara A. Klein explanatory paragraph that states the scope of management’s Barbara A. Klein assessment of the e®ectiveness of internal control over †nancial /s/ Victoria J. Reich reporting includes all of the Company’s consolidated subsidiaries Victoria J. Reich

except for businesses acquired by the Company during š—› of /s/ Jorge A. Uribe Shandong Huanong Specialty Corn Development Co., LTD and TIC Jorge A. Uribe Gums Incorporated associated with total assets of ª million and /s/ Dwayne A. Wilson total net sales of ª—. million included in the consolidated †nancial Dwayne A. Wilson statements of the Company as of and for the year ended December , š—›. Our audit of internal control over †nancial reporting of the

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 70 3/14/17 10:36 PM Exhibit ˆ. . The registrant’s other certifying o‘cer and I have disclosed, based Certi­cation of Chief Executive O›cer on our most recent evaluation of internal control over †nancial I, Ilene S. Gordon, certify that: reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the . I have reviewed this annual report on Form —-K of Ingredion equivalent functions): Incorporated; (a) All signi†cant de†ciencies and material weaknesses in the design or operation of internal control over †nancial reporting š. Based on my knowledge, this report does not contain any untrue which are reasonably likely to adversely a®ect the registrant’s statement of a material fact or omit to state a material fact ability to record, process, summarize and report †nancial necessary to make the statements made, in light of the circum- information; and stances under which such statements were made, not misleading (b) Any fraud, whether or not material, that involves management with respect to the period covered by this report; or other employees who have a signi†cant role in the regis- trant’s internal control over †nancial reporting. . Based on my knowledge, the †nancial statements, and other †nancial information included in this report, fairly present in all Date: February šš, š—– material respects the †nancial condition, results of operations and /s/ Ilene S. Gordon cash ³ows of the registrant as of, and for, the periods presented in Ilene S. Gordon this report; Chairman, President and Chief Executive O‘cer

. The registrant’s other certifying o‘cer and I are responsible for establishing and maintaining disclosure controls and procedures Exhibit ˆ. (as de†ned in Exchange Act Rules a-(e) and d-(e)) and Certi­cation of Chief Financial O›cer internal control over †nancial reporting (as de†ned in Exchange Act I, Jack C. Fortnum, certify that: Rules a- (f) and d-(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused . I have reviewed this annual report on Form —-K of Ingredion such disclosure controls and procedures to be designed under Incorporated; our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made š. Based on my knowledge, this report does not contain any untrue known to us by others within those entities, particularly during statement of a material fact or omit to state a material fact the period in which this report is being prepared; necessary to make the statements made, in light of the circum- (b) Designed such internal control over †nancial reporting, or stances under which such statements were made, not misleading caused such internal control over †nancial reporting to be with respect to the period covered by this report; designed under our supervision, to provide reasonable assurance regarding the reliability of †nancial reporting and the . Based on my knowledge, the †nancial statements, and other preparation of †nancial statements for external purposes in †nancial information included in this report, fairly present in all accordance with generally accepted accounting principles; material respects the †nancial condition, results of operations and (c) Evaluated the e®ectiveness of the registrant’s disclosure cash ³ows of the registrant as of, and for, the periods presented in controls and procedures and presented in this report our this report; conclusions about the e®ectiveness of the disclosure controls and procedures, as of the end of the period covered by this . The registrant’s other certifying o‘cer and I are responsible for report based on such evaluation; and establishing and maintaining disclosure controls and procedures (d) Disclosed in this report any change in the registrant’s internal (as de†ned in Exchange Act Rules a-(e) and d-(e)) and control over †nancial reporting that occurred during the internal control over †nancial reporting (as de†ned in Exchange Act registrant’s most recent †scal quarter (the Registrant’s fourth Rules a- (f) and d-(f)) for the registrant and have: †scal quarter in the case of an annual report) that has (a) Designed such disclosure controls and procedures, or caused materially a®ected, or is reasonably likely to materially a®ect, such disclosure controls and procedures to be designed under the registrant’s internal control over †nancial reporting; and our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 71 3/14/17 10:36 PM (b) Designed such internal control over †nancial reporting, or Exhibit ˆ. caused such internal control over †nancial reporting to be Certi­cation Pursuant to ‘ U.S.C. Section ˆ, as Adopted designed under our supervision, to provide reasonable Pursuant to Section ‰ of the Sarbanes-Oxley Act of  assurance regarding the reliability of †nancial reporting and the preparation of †nancial statements for external purposes in I, Ilene S. Gordon, the Chief Executive O‘cer of Ingredion Incorpo- accordance with generally accepted accounting principles; rated, certify that to my knowledge (i) the report on Form —-K for the (c) Evaluated the e®ectiveness of the registrant’s disclosure †scal year ended December , š—› as †led with the Securities and controls and procedures and presented in this report our Exchange Commission on the date hereof (the “Report”) fully complies conclusions about the e®ectiveness of the disclosure controls with the requirements of Section (a) or (d) of the Securities and procedures, as of the end of the period covered by this Exchange Act of  and (ii) the information contained in the Report report based on such evaluation; and fairly presents, in all material respects, the †nancial condition and (d) Disclosed in this report any change in the registrant’s internal results of operations of Ingredion Incorporated. control over †nancial reporting that occurred during the registrant’s most recent †scal quarter (the Registrant’s fourth /s/ Ilene S. Gordon †scal quarter in the case of an annual report) that has Ilene S. Gordon materially a®ected, or is reasonably likely to materially a®ect, Chief Executive O‘cer the registrant’s internal control over †nancial reporting; and February šš, š—–

A signed original of this written statement required by Section Á±¼ has been provided to Ingredion Incorporated and will be retained by Ingredion Incorporated and furnished to the Securities and Exchange . The registrant’s other certifying o‘cer and I have disclosed, based Commission or its sta® upon request. on our most recent evaluation of internal control over †nancial reporting, to the registrant’s auditors and the audit committee of Exhibit ˆ. the registrant’s board of directors (or persons performing the Certi­cation Pursuant to ‘ U.S.C. Section ˆ, as Adopted equivalent functions): Pursuant to Section ‰ of the Sarbanes-Oxley Act of  (a) All signi†cant de†ciencies and material weaknesses in the design or operation of internal control over †nancial reporting I, Jack C. Fortnum, the Chief Financial O‘cer of Ingredion Incorpo- which are reasonably likely to adversely a®ect the registrant’s rated, certify that to my knowledge (i) the report on Form —-K for the ability to record, process, summarize and report †nancial †scal year ended December , š—› as †led with the Securities and information; and Exchange Commission on the date hereof (the “Report”) fully complies (b) Any fraud, whether or not material, that involves management with the requirements of Section (a) or (d) of the Securities or other employees who have a signi†cant role in the regis- Exchange Act of  and (ii) the information contained in the Report trant’s internal control over †nancial reporting. fairly presents, in all material respects, the †nancial condition and results of operations of Ingredion Incorporated. Date: February šš, š—–

/s/ Jack C. Fortnum /s/ Jack C. Fortnum Jack C. Fortnum Jack C. Fortnum Executive Vice President and Chief Financial O‘cer Chief Financial O‘cer February šš, š—–

A signed original of this written statement required by Section Á±¼ has been provided to Ingredion Incorporated and will be retained by Ingredion Incorporated and furnished to the Securities and Exchange Commission or its sta® upon request.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 72 3/14/17 10:36 PM Shareholder Cumulative Total Return

The performance graph below shows the cumulative total return to This performance share peer group is the same as the comparator shareholders (stock price appreciation or depreciation plus reinvested group that has been used for grants of performance shares since dividends) during the -year period from December , š— to February š—. The following criteria or “†lters” were utilized in December , š—›, for our common stock compared to the cumulative constructing this group: total return during the same period for the Russell ——— Index and a • Commodity price sensitivity, peer group index. The Russell ——— Index is a comprehensive common • Overseas operations, stock price index representing equity investments in the ,——— larger • Basic ingredient, food additives and midstream manufacturing/inputs, companies measured by market capitalization of the ,——— companies • Market capitalization between ª billion and ª— billion, in the Russell ——— Index. The Russell ——— Index is value weighted • Select international companies in related segments and/or and includes only publicly traded common stocks belonging to competitors and corporations domiciled in the U.S. and its territories. • Generally capital intensive. Our peer group index consists of the following ˜ companies:

Agrium Inc. Huntsman Corporation Albemarle Corporation Innophos Holdings, Inc Archer-Daniels-Midland Company International Flavors & Fragrances Inc Bemis Company, Inc Kerry Group plc Crown Holdings Inc The Mosaic Company E. I. du Pont de Nemours and Company Potash Corporation of Saskatchewan, Inc Ecolab Inc. Sealed Air Corporation FMC Corporation Sensient Technologies Corporation Grace (W R) and Company Tate & Lyle PLC

INGREDION ¾¹½±

¾¹±± RUSSELL §¨¨¨ INDEX

¾°½±

PEER GROUP ¾°±±

¾½±

¾±

Ingredion Incorporated ¾°±±.±± °¹».»¼ °º½.º± °¿°.»» °Á¿.¼¿ ¹¼°.¿º Russell °±±± Index ¾°±±.±± °°¼.»¹ °½».Á¿ °¿½.»Á °¿¿.°± °ÁÀ.»» Peer Group ¾°±±.±± °°º.°¼ °»°.°¹ °½».¹¼ °ºÀ.¼» °½½.À» Dec. ©§, ª¨§§ Dec. ©§, ª¨§ª Dec. ©§, ª¨§© Dec. ©§, ª¨§« Dec. ©§, ª¨§¬ Dec. ©§, ª¨§®

Comparison of Cumulative Total Return among our Company, the Russell §¨¨¨ Index and our Peer Group Index (For the period from December º°, ¹±°° to December º°, ¹±°¼. Source: Standard & Poor’s) The graph assumes that: • as of the market close on December º°, ¹±°°, you made one-time ¾°±± investments in our common stock and in market capital base-weighted amounts which were apportioned among all the companies whose equity securities constitute each of the other three named indices, and • all dividends were automatically reinvested in additional shares of the same class of equity securities constituting such investments at the frequency with which dividends were paid on such securities during the applicable time frame.

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 73 3/14/17 10:36 PM Financial Performance Metrics Unaudited

Reconciliation of GAAP Diluted Earnings Per Share (“EPS”) to Non-GAAP Adjusted Diluted EPS Year Ended Year Ended Year Ended Year Ended Year Ended Dec. º°, ¹±°¼ Dec. º°, ¹±°½ Dec. º°, ¹±°» Dec. º°, ¹±°º Dec. º°, ¹±°¹ Diluted earnings per common share of Ingredion $6.55 $5.51 $4.74 $5.05 $5.47 Add back (deduct): Income tax settlement (i) 0.36 – – – – Impairment/restructuring charges, net of income tax bene†t (ii) 0.20 0.25 0.44 – 0.29 Acquisition/integration costs, net of income tax bene†t (iii) 0.03 0.10 0.02 – 0.03 Charge for fair value mark-up of acquired inventory, net of income tax bene†t (iv) – 0.09 – – – Litigation settlement, net of income tax bene†t (v) – 0.06 – – – Gain on sale of plant, net of income tax (vi) – (0.12) – – – Reversal of Korean deferred tax asset valuation allowance (vii) – – – – (0.16) Gain from change in bene†t plan, net of income tax (viii) – – – – (0.04) Gain from sale of land, net of income tax (ix) – – – – (0.02) Non-GAAP adjusted diluted earnings per common share of Ingredion $7.13 $5.88 $5.20 $5.05 $5.57

i. The Company has been pursuing relief from double taxation under the US and Canadian tax treaty for the years ¹±±» through ¹±°º. During the fourth quarter of ¹±°¼, a tentative agreement was reached between the two countries for the speci†c issues being contested. The Company recorded income tax expense of ¾¹¿ million as a result of the settlement and related reserve in the fourth quarter of ¹±°¼. ii. In ¹±°¼, the Company recorded a ¾°Á million pre-tax restructuring charge consisting of ¾°° million of employee severance-related and other costs associated with the execution of IT outsourcing contracts, ¾¼ million of employee severance-related costs associated with the Company’s optimization initiatives in North America and South America and ¾¹ million of costs attributable to the Port Colborne plant sale. In ¹±°½, the Company recorded ¾¹À million of pre-tax impairment/restructuring costs consisting of a ¾°± million charge for impaired assets and ¾¹ million of employee severance-related costs associated with our manufacturing network optimization in Brazil, ¾» million of employee severance-related and other costs associated with our Port Colborne plant sale and ¾°¹ million for employee severance-related costs associated with the Penford acquisition. In ¹±°», the Company recorded an impairment charge of ¾ºº million to write-o® goodwill at our Southern Cone of South America reporting unit. In ¹±°¹, the Company recorded ¾º¼ million of pre-tax charges for restructurings/impairments in Kenya, China, Colombia and at certain of its North American facilities. iii. The ¹±°¼, ¹±°½ and ¹±°» periods include costs related to the acquisition and integration of the businesses acquired from Penford and/or Kerr. The ¹±°¼ period also includes costs related to the acquisitions of TIC Gums Incorporated and Shandong Huanong Specialty Corn Development Co., Ltd and the then-pending acquisition of Sun Flour Industry Co, Ltd. The ¹±°¹ period includes costs associated with the integration of National Starch. iv. The ¹±°½ period includes the ³ow-through of costs associated with the sale of Penford and Kerr inventory that was adjusted to fair value at the acquisition date in accordance with business combination accounting rules. v. The ¹±°½ period includes costs relating to a litigation settlement. vi. The ¹±°½ period includes a gain from the sale of the Port Colborne plant. vii. The ¹±°¹ period includes the reversal of a ¾°º million valuation allowance that had been recorded against net deferred tax assets of our Korean subsidiary. viii. The ¹±°¹ period includes a ¾½ million pre-tax gain (¾º million after-tax) from a change in a bene†t plan in North America. ix. The ¹±°¹ period includes a ¾¹ million gain from the sale of land.

Return on Capital Employed

(dollars in millions) ¹±°¼ ¹±°½ ¹±°» ¹±°º ¹±°¹ Total equity* $2,180 $2,207 $2,429 $2,459 $2,133 Add: Cumulative translation adjustment* 1,025 701 489 335 306 Share-based payments subject to redemption* 24 22 24 19 15 Total debt* 1,838 1,821 1,803 1,791 1,941 Less: Cash and cash equivalents* (434) (580) (574) (609) (401) Capital employed* (a) $4,633 $4,171 $4,171 $3,995 $3,994 Operating income $÷«808 $÷«660 $÷«581 $÷«613 $÷«668 Adjusted for: Impairment/restructuring charges (ii) 19 28 33 – 36 Acquisition/integration costs (iii) 3 10 2 – 4 Charge for fair value mark-up of acquired inventory (iv) – 10 – – – Litigation settlement (v) – 7 – – – Gain on sale of plant (vi) – (10) – – – Gain from change in bene†t plan (viii) – – – – (5) Gain from sale of land (ix) – – – – (2) Adjusted operating income $÷«830 $÷«705 $÷«616 $÷«613 $÷«701 Income taxes (at e®ective tax rates of š.Ã, .˜Ã, š˜.Ã, š›.à and —.Ã in š—›, š—, š—, š—, and š—š, respectively)** (244) (224) (174) (161) (213) Adjusted operating income, net of tax (b) $÷«586 $÷«481 $÷«442 $÷«452 $÷«488 Return on Capital Employed (b/a) 12.6% 11.5% 10.6% 11.3% 12.2%

* Balance sheet amounts used in computing capital employed represent beginning of period balances. ** Listed on page ¿º is a schedule that reconciles the Company’s e®ective income tax rate under US GAAP to the adjusted Non-GAAP e®ective income tax rate.

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 74 3/14/17 10:36 PM Non-GAAP E•ective Tax Rate

Income before Income Taxes (a) Provision for Income Taxes (b) E®ective Income Tax rate (b/a) (dollars in millions) ¹±°¼ ¹±°½ ¹±°» ¹±°º ¹±°¹ ¹±°¼ ¹±°½ ¹±°» ¹±°º ¹±°¹ ¹±°¼ ¹±°½ ¹±°» ¹±°º ¹±°¹ As reported $742 $599 $520 $547 $601 $246 $187 $157 $144 $167 33.1% 31.2% 30.2% 26.3% 27.8% Add back (deduct): Income tax settlement (i) –––––(27) –––– Impairment/restructuring charges (ii) 19 28 33 – 36 5 10 ––13 Acquisition/integration costs (iii) 3 10 2–4 13––2 Charge for fair value mark up of acquisition inventory (iv) – 10 ––– –4––– Litigation settlement cost (v) –7––– –2––– Gain on sale of plant (vi) – (10) ––– –(1) ––– Reversal of Korea deferred tax asset valuation allowance (vii) ––––– ––––13 Adjusted Non-GAAP $764 $644 $555 $547 $641 $225 $205 $157 $144 $195 29.4% 31.8% 28.3% 26.3% 30.4%

Net Debt to Adjusted EBITDA Ratio

(dollars in millions) ¹±°¼ ¹±°½ ¹±°» Short-term debt $÷«106 $÷÷«19 $÷÷«23 Long-term debt 1,850 1,819 1,798 Less: Cash and cash equivalents (512) (434) (580) Short-term investments (4) (6) (34) Total net debt (a) $1,440 $1,398 $1,207 Net income attributable to Ingredion $÷«485 $÷«402 $÷«355 Add back: Impairment/restructuring charges (ii) 19 28 33 Acquisition/integration costs (iii) 3 10 2 Charge for fair value mark up of acquisition inventory (iv) – 10 – Litigation settlement cost (v) – 7 – Gain on sale of plant (vi) – (10) – Net income attributable to non-controlling interests 11 10 8 Provision for income taxes 246 187 157 Financing costs, net of interest income 66 61 61 Depreciation and amortization 196 194 195 Adjusted EBITDA (b) $1,026 $÷«899 $÷«811 Net Debt to Adjusted EBITDA ratio (a/b) 1.4 1.6 1.5

Net Debt to Capitalization Percentage

(dollars in millions) ¹±°¼ ¹±°½ ¹±°» Short-term debt $÷«106 $÷÷«19 $÷÷«23 Long-term debt 1,850 1,819 1,798 Less: Cash and cash equivalents (512) (434) (580) Short-term investments (4) (6) (34) Total net debt (a) $1,440 $1,398 $1,207 Deferred income tax liabilities $÷«171 $÷«139 $÷«180 Share-based payments subject to redemption 30 24 22 Total equity 2,595 2,180 2,207 Total capital $2,796 $2,343 $2,409 Total net debt and capital (b) $4,236 $3,741 $3,616 Net Debt to Capitalization percentage (a/b) 34.0% 37.4% 33.4%

INGREDION INCORPORATED 

INGR AR16 financials_Keyline_r1.pdf 75 3/14/17 10:36 PM Directors and O‘cers As of April », ¹±°¿

Board of Directors Rhonda L. Jordan š Jorge A. Uribe  Luis Aranguren-Trellez  Former President, Global Health Former Global Productivity and Executive President & Wellness, and Sustainability Organization Transformation O‘cer Arancia, S.A. de C.V. Kraft Foods Inc. The Procter & Gamble Company Age ; Director since š—— Age ; Director since š— Age ›—; Director since š—

David B. Fischer š Gregory B. Kenny  Dwayne A. Wilson š Former President and Former President and Former Senior Vice President Chief Executive O‘cer Chief Executive O‘cer Fluor Corporation Greif, Inc. General Cable Corporation Age ˜; Director since š—— Age ; Director since š— Age ›; Director since š——

Ilene S. Gordon Barbara A. Klein  Chairman, President and Former Senior Vice President Chief Executive O‘cer and Chief Financial O‘cer Ingredion Incorporated CDW Corporation Age ›; Director since š—— Age ›š; Director since š——

Paul Hanrahan *  Victoria J. Reich  * Lead Director Former Chief Executive O‘cer Former Senior Vice President Committees of the Board American Capital Energy & and Chief Financial O‘cer ° Audit Committee, Ms. Klein is Chairman. ¹ Compensation Committee, Mr. Wilson is Chairman. Infrastructure Management, LLC Essendant Inc. º Corporate Governance and Nominating Committee, Age ; Director since š——› Age ; Director since š— Mr. Kenny is Chairman.

Corporate O›cers Diane J. Frisch Martin Sonntag Ilene S. Gordon Senior Vice President, Human Resources Senior Vice President, Strategy and Chairman, President and Age ›š; joined Company in š—— Global Business Development Chief Executive O‘cer Age š; joined Company in š— Age ›; joined Company in š—— James D. Gray Executive Vice President and Robert J. Stefansic Christine M. Castellano Chief Financial O‘cer Senior Vice President, Operating Excellence, Senior Vice President, Age —; joined Company in š— Sustainability, Information Technology and General Counsel, Corporate Secretary Chief Supply Chain O‘cer and Chief Compliance O‘cer Jorgen Kokke Age ; joined Company in š—— Age ; joined Company in › Senior Vice President and President, Asia-Paci†c and EMEA C. Kevin Wilson Anthony P. DeLio Age ˜; joined Company in š—— Vice President and Corporate Treasurer Senior Vice President and Age ; joined Company in š— Chief Innovation O‘cer Stephen K. Latreille Age ›; joined Company in š—— Vice President and Corporate Controller James P. Zallie Age —; joined Company in š— Executive Vice President, Jack C. Fortnum Global Specialties and Executive Vice President and Richard O’Shanna President, Americas Advisor to CEO Vice President, Tax Age ; joined Company in š—— Age ›—; joined Company in ˜ Age ; joined Company in š——

 INGREDION INCORPORATED

INGR AR16 financials_Keyline_r1.pdf 76 3/14/17 10:36 PM Shareholder Information

CORPORATE HEADQUARTERS INVESTOR AND SHAREHOLDER CONTACT 5 Westbrook Corporate Center Investor Relations Department Westchester, IL 60154 708.551.2592 708.551.2600 [email protected] 708.551.2700 fax www.ingredion.com COMPANY INFORMATION Copies of the Annual Report, the Annual Report on Form 10-K and STOCK EXCHANGE quarterly reports on Form 10-Q may be obtained, without charge, by The common shares of Ingredion Incorporated trade on the New York writing to Investor Relations at the corporate headquarters address, by Stock Exchange under the ticker symbol INGR. Our Company is a calling 708.551.2603, by emailing [email protected] or member of the Russell 1000 Index and the S&P MidCap 400 Index. by visiting our website at www.ingredion.com.

STOCK PRICES AND DIVIDENDS ANNUAL MEETING OF SHAREHOLDERS Common stock market price The 2017 Annual Meeting of Shareholders will be held on Wednesday, Cash May 17, 2017, at 9:00 a.m. local time, at the Westbrook Corporate Center Dividends Meeting Facility located on the ground floor of the annex between Declared High Low per Share Towers 2 and 5 of the Westbrook Corporate Center, in Westchester, IL 60154. A formal notice of that meeting, proxy statement and proxy 2016 voting card are being made available to shareholders in accordance Q4 $137.62 $113.92 $0.50 with U.S. Securities and Exchange Commission regulations. Q3 $140.00 $128.18 $0.50 Q2 $129.42 $104.24 $0.45 INDEPENDENT AUDITORS Q1 $108.00 $84.57 $0.45 KPMG LLP 2015 200 East Randolph Drive Q4 $99.64 $85.85 $0.45 Chicago, IL 60601 Q3 $93.87 $79.31 $0.45 312.665.1000 Q2 $83.00 $76.26 $0.42 Q1 $86.80 $75.11 $0.42 BOARD COMMUNICATION Interested parties may communicate directly with any member of our SHAREHOLDERS Board of Directors, including the Lead Director, or the non-management As of January 31, 2017, there were 4,446 shareholders of record. directors or the independent directors, as a group, by writing in care of Corporate Secretary, Ingredion Incorporated, 5 Westbrook Corporate TRANSFER AGENT, DIVIDEND DISBURSING Center, Westchester, IL 60154. AGENT AND REGISTRAR Computershare 866.517.4574 or 201.680.6685 (outside the U.S.) SAFE HARBOR or 888.269.5221 (hearing impaired – TTY phone) Certain statements in this Annual Report that are neither reported financial results nor other historical information are forward-looking SHAREHOLDER ASSISTANCE statements. Such forward-looking statements are not guarantees of Ingredion Incorporated future performance and are subject to risks and uncertainties that c/o Computershare could cause actual results and Company plans and objectives to differ P.O. Box 30170 materially from those expressed in the forward-looking statements. College Station, TX 77842-3170

Send overnight correspondence to: Ingredion Incorporated c/o Computershare 211 Quality Circle, Suite 210 College Station, TX 77845 This entire report was printed with soy-based inks on recycled paper that contains Shareholder website: 10% post-consumer waste, is Green Seal certified and is acid-free. Classic is dedicated www.computershare.com/investor to the preservation of the environment and releases almost no VOC emissions into the atmosphere. Classic also recycles all of the plates, waste paper and unused inks, further reducing our carbon footprint. Shareholder online inquiries: https://www-us.computershare.com/investor/contact Copyright © 2017 Ingredion Incorporated. All Rights Reserved. Ingredion Incorporated 5 Westbrook Corporate Center Westchester, IL 60154 708.551.2600 www.ingredion.com Ingredion Incorporated 2016 Annual Report