Ecovyst Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective because of the material weakness in internal control over financial reporting as discussed below. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process, designed by, or under the supervision of the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures are made only in accordance with management and board authorizations; and providing reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria for effective internal control over financial reporting described in the “Internal Control-Integrated Framework” (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). 65 Table of Con ten ts Based on the assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting was not effective. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness exists in relation to the Company’s controls over the accounting of its Zeolyst Joint Venture. The Company does not have sufficient controls designed to ensure its proportionate share of the earnings from the Zeolyst Joint Venture, an equity method investee underlying the Company’s financial statements, were completely, accurately, and timely recorded. This material weakness resulted in immaterial adjustments to our equity in net income from affiliated companies and investments in affiliated companies as of and for the fiscal years ended December 31, 2024, 2023 and 2022, and for the interim periods contained within those fiscal years. This material weakness could result in a material misstatement of our equity in net income from affiliated companies and investments in affiliated companies that would not be prevented or detected on a timely basis. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8. Plan for Remediation of Material Weakness We are in the process of developing a plan to remediate the material weakness described above. Our plan will include designing and implementing appropriate controls designed to ensure our proportionate share of the earnings from the Zeolyst Joint Venture are completely, accurately, and timely recorded in our financial statements. This material weakness will not be considered remediated until the applicable controls are designed, implemented and operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Changes in Internal Control Over Financial Reporting No changes in our internal control over financial reporting occurred during the quarter ended December 31, 2024 that materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Trading Arrangements During the year ended December 31, 2024, none of the Company’s directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each item is defined in Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 66 Table of Con ten ts PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. A copy of our form of insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. The remaining information required by this Item 10 will be included in our 2025 Proxy Statement, which we intend to file with the SEC within 120 days of our December 31, 2024 fiscal year end, and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. The information required by this Item 11 will be included in our 2025 Proxy Statement, which we intend to file with the SEC within 120 days of our December 31, 2024 fiscal year end, and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information required by this Item 12 will be included in our 2025 Proxy Statement, which we intend to file with the SEC within 120 days of our December 31, 2024 fiscal year end, and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by this Item 13 will be included in our 2025 Proxy Statement, which we intend to file with the SEC within 120 days of our December 31, 2024 fiscal year end, and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information required by this Item 14 will be included in our 2025 Proxy Statement, which we intend to file with the SEC within 120 days of our December 31, 2024 fiscal year end, and is incorporated herein by reference. 67 Table of Con ten ts PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES. (a) The following documents are filed as part of this report: (1) and (2) The response to this portion of Item 15 is submitted as a separate section of this report beginning on page F-1. All other schedules have been omitted as inapplicable or are not required, or because the required information is included in the consolidated financial statements or accompanying notes. (3) The exhibits filed as part of this report are listed in the accompanying index. Incorporated by Reference Exhibit No. Exhibit Description Filed Herewith Form File No. Exhibit Filing Date 2.1 Stock Purchase Agreement, dated as of February 28, 2021, by and among PQ Group Holdings Inc. and Sparta Aggregator L.P. 8-K 001-38221 2.1 03/04/2021 2.2 Amendment No. 1 to Stock Purchase Agreement, dated as of June 24, 2021, by and among PQ Group Holdings Inc. and Sparta Aggregator L.P. 8-K 001-38221 2.1 6/30/2021 2.3 Amendment No. 2 to Stock Purchase Agreement, dated as of July 12, 2021, by and among PQ Group Holdings Inc. and Sparta Aggregator L.P. 8-K 001-38221 2.1 7/15/2021 3.1 Second Restated Certificate of Incorporation 10-Q 001-38221 3.1 11/14/2017 3.2 Certificate of Amendment of Certificate of Incorporation 8-K 001-38221 3.1 8/3/2021 3.3 Certificate of Correction of Certificate of Amendment of Certificate of Incorporation 10-Q 001-38221 3.3 11/9/2021 3.4 Second Amended and Restated Bylaws of Ecovyst Inc. 8-K 001-38221 3.2 8/3/2021 3.5 Certificate of Amendment of Certificate of Incorporation 8-K 001-38221 3.1 5/9/2024 4.1 Indenture, dated as of May 4, 2016, among PQ Corporation, as Issuer, the Guarantors from time to time party thereto and Wells Fargo Bank, National Association, as Trustee and Collateral Agent, including the form of Global Note attached as Exhibit A thereto S-1 333-218650 4.2 6/9/2017 4.2 Indenture, dated as of December 11, 2017, among PQ Corporation, as Issuer, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee 8-K 001-38221 4.1 12/13/2017 4.3 Description of Ecovyst Inc.’s common stock 10-K 001-38221 4.3 3/1/2022 10.1 Partnership Agreement, dated as of February 1, 1988, by and between PQ Corporation and Shell Polymers and Catalysts Enterprises Inc. S-1/A 333-218650 10.10 8/14/2017 10.2 First Amendment to Partnership Agreement, dated January 1, 1993, by and among PQ Corporation, Shell Catalyst Ventures Inc. and CRI Zeolites Inc. S-1/A 333-218650 10.11 8/14/2017 10.3 Second Amendment to Partnership Agreement, dated October 18, 2002, by and between PQ Corporation and Shell Catalyst Ventures Inc. S-1/A 333-218650 10.12 8/14/2017 10.4 Third Amendment to Partnership Agreement, dated January 1, 2005, by and between PQ Corporation and CRI Zeolites Inc. S-1/A 333-218650 10.13 8/14/2017 10.5 Form of Amended and Restated Stockholders Agreement between PQ Group Holdings Inc. and certain stockholders of PQ Group Holdings Inc. S-1/A 333-218650 10.5 9/1/2017 10.6* Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated S-8 333-262180 4.1 1/14/2022 68 Table of Con ten ts Incorporated by Reference Exhibit No. Exhibit Description Filed Herewith Form File No. Exhibit Filing Date 10.7* Form of Stock Option Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.7 3/1/2022 10.8* Form of Restricted Stock Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.8 3/1/2022 10.9* Form of Restricted Stock Unit Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.9 3/1/2022 10.10* Form of 2019 Performance Stock Unit Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.10 3/1/2022 10.11* Form of 2020 Performance Stock Unit Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.11 3/1/2022 10.12* PQ Group Holdings Inc. Stock Incentive Plan S-1 333-218650 10.6 6/9/2017 10.13* Form of Nonqualified Stock Option Award Agreement under the PQ Group Holdings Inc. Stock Incentive Plan S-1 333-218650 10.7 6/9/2017 10.14* Form of Restricted Stock Agreement under the PQ Group Holdings Inc. Stock Incentive Plan S-1 333-218650 10.8 6/9/2017 10.15* Form of Director and Officer Indemnification Agreement S-1/A 333-218650 10.9 9/1/2017 10.16* Severance Agreement, dated September 25, 2017, by and between PQ Corporation and Joseph S. Koscinksi 10-K 001-38221 10.37 2/27/2020 10.17 Term Loan Credit Agreement, dated as of June 9, 2021 among CPQ Midco I Corporation, PQ Corporation, Ecovyst Catalyst Technologies LLC, Eco Services Operations Corp., Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and the lenders from time to time party thereto, with Citibank, N.A., Credit Suisse Loan Funding LLC, BofA Securities, Inc., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, KeyBanc Capital Markets Inc. and Truist Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners 8-K 001-38221 10.1 6/11/2021 10.18 Third Amendment Agreement, dated as of June 9, 2021, to the ABL Credit Agreement, dated as of May 4, 2016, by and among PQ Corporation, CPQ Midco I Corporation, the Canadian Borrowers from time to time party thereto, the European Borrowers from time to time party thereto, the Lenders from time to time party thereto and Citibank, N.A., as Administrative Agent and Issuing Bank, with Citigroup Global Markets Inc., Credit Suisse Loan Funding LLC, Bank of America, N.A., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, KeyBanc Capital Markets Inc. and Truist Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners 8-K 001-38221 10.2 6/11/2021 10.19* Amendment to Form of Director and Officer Indemnification Agreement 10-Q 001-38221 10.3 8/9/2021 10.20* Form of Ecovyst Inc. Director and Officer Indemnification Agreement 10-Q 001-38221 10.4 8/9/2021 10.21* Form of 2021 Performance Stock Unit Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-K 001-38221 10.38 3/1/2022 69 Table of Con ten ts Incorporated by Reference Exhibit No. Exhibit Description Filed Herewith Form File No. Exhibit Filing Date 10.22 * Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Kurt J. Bitting 8-K 001-38221 10.1 12/16/2022 10.23* Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Michael Feehan 8-K 001-38221 10.2 12/16/2022 10.24* Amended and Restated Severance Agreement, dated December 16, 2022, between Ecovyst Catalyst Technologies LLC and Joseph S. Koscinski 8-K 001-38221 10.3 12/16/2022 10.25 First Amendment Agreement, dated February 9, 2023 to the Term Loan Credit Agreement, dated June 9, 2021, by and among Ecovyst Catalyst Technologies LLC , Ecovyst Midco II Inc, Eco Services Operations Corp and Credit Suisse AG 10-K 001-38221 10.27 2/28/2023 10.26 Fourth Amendment, dated February 17, 2023 to the ABL Credit Agreement, dated May 4, 2016 by and among Ecovyst Catalyst Technologies LLC, Ecovyst Catalyst Technologies UK Limited, Ecovyst Midco II Inc. and Citibank, N.A. 10-K 001-38221 10.28 2/28/2023 10.27* Letter of employment, dated July 19, 2022, between Ecoservices and George L. Vann 10-K 001-38221 10.30 2/28/2023 10.28* Letter of employment, dated November 28, 2022, between Ecovyst Catalyst Technologies LLC and Paul Whittleston 10-K 001-38221 10.31 2/28/2023 10.29* Form of 2024 Performance Stock Unit Award Agreement under the Ecovyst Inc. 2017 Omnibus Incentive Plan, as Amended and Restated 10-Q 001-38221 10.1 5/03/2024 10.30 Second Amendment Agreement, dated as of June 12, 2024, by and among the Borrowers, Ecovyst Midco II Inc., UBS AG Cayman Islands Branch, as administrative agent, and the lenders party thereto. 10-Q 001-38221 10.1 8/02/2024 10.31 Third Amendment Agreement, dated as of January 30, 2025, by and among the Borrowers, Ecovyst Midco II Inc., UBS AG, Stamford Branch, as administrative agent, and the lenders party thereto. 8-K 001-38221 10.1 01/31/2025 19.1 Form of Insider Trading Policy X 21.1 Subsidiaries of Ecovyst Inc. X 23.1 Consent of PricewaterhouseCoopers LLP related to the consolidated financial statements and financial statement schedule of Ecovyst Inc. as of December 31, 2024 and 2023 and for each of the three years in the period ended December 31, 2024 X 23.2 Consent of PricewaterhouseCoopers LLP related to the financial statements of Zeolyst International as of December 31, 2024 and 2023 and for each of the three years in the period ended December 31, 2024 X 31.1 Certification of Chief Executive Officer of Ecovyst Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of Chief Financial Officer of Ecovyst Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 70 Table of Con ten ts Incorporated by Reference Exhibit No. Exhibit Description Filed Herewith Form File No. Exhibit Filing Date 32.1 Certification of Chief Executive Officer of Ecovyst Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 Certification of Chief Financial Officer of Ecovyst Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97.1 Policy relating to Recovery of Erroneously Awarded Compensation 10-K 001-38221 97.1 2/29/2024 101 The following financial statements from the Annual Report on Form 10-K of Ecovyst Inc. for the year ended December 31, 2024, formatted in Inline XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags X 104 The cover page from the Annual Report on Form 10-K of Ecovyst Inc. for the year ended December 31, 2024, formatted in Inline XBRL X * Management contract or compensatory plan ITEM 16. FORM 10-K SUMMARY. None. 71 Table of Con ten ts SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ECOVYST INC. Date: February 28, 2025 By: /s/ MICHAEL FEEHAN Michael Feehan Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) 72 Table of Con ten ts Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ KURT J. BITTING Chief Executive Officer and Director February 28, 2025 Kurt J. Bitting (Principal Executive Officer) /s/ MICHAEL FEEHAN Vice President and Chief Financial Officer February 28, 2025 Michael Feehan (Principal Financial and Accounting Officer) /s/ KEVIN M. FOGARTY Chairperson of the Board February 28, 2025 Kevin M. Fogarty /s/ DAVID A. BRADLEY Director February 28, 2025 David A. Bradley /s/ BRYAN K. BROWN Director February 28, 2025 Bryan K. Brown /s/ ANNA CATALANO Director February 28, 2025 Anna Catalano /s/ SUSAN F. WARD Director February 28, 2025 Susan F. Ward /s/ SARAH LORANCE Director February 28, 2025 Sarah Lorance /s/ DONALD ALTHOFF Director February 28, 2025 Donald Althoff 73 Table of Con ten ts INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ECOVYST INC. AND SUBSIDIARIES Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) F- 2 Consolidated Statements of (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022 F- 6 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022 F- 7 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 8 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022 F- 9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F- 10 Notes to Consolidated Financial Statements F- 12 Schedule I—Parent Company Financial Information F- 67 ZEOLYST INTERNATIONAL Audited Financial Statements Report of Independent Auditors F- 71 Statements of Operations and Accumulated Earnings for the Years Ended December 31, 2024, 2023 and 2022 F- 73 Balance Sheets as of December 31, 2024 and 2023 F- 74 Statements of Changes in Partners’ Capital for the Years Ended December 31, 2024, 2023 and 2022 F- 75 Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 F- 76 Notes to the Financial Statements F- 77 F-1 Table of Con ten ts Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Ecovyst Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Ecovyst Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of (loss) income, of comprehensive (loss) income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and schedule I – parent company financial information as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date related to the ineffective design and maintenance of controls over ensuring the proportionate share of the earnings from the Zeolyst Joint Venture, an equity investee underlying the Company’s financial statements, are completely, accurately and timely recorded. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is described in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management’s report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. F-2 Table of Con ten ts Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Goodwill Impairment Assessment — Advanced Materials & Catalysts Reporting Unit As described in Notes 2 and 14 to the consolidated financial statements, the Company’s goodwill balance was $404.1 million as of December 31, 2024, and the goodwill associated with the Advanced Materials & Catalysts reporting unit was $77.5 million. Management is required to test goodwill associated with each of its reporting units for impairment at least annually and whenever events or circumstances indicate that it is more likely than not that goodwill may be impaired. Management performs its annual goodwill impairment test as of October 1. Goodwill is tested for impairment at the reporting unit level. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized. Management determined the fair value of its reporting units using both a market approach and an income, or discounted cash flow, approach. Management estimates reporting unit market approach fair value using publicly traded comparable company values and applies the selected market multiples to each reporting unit’s trailing twelve months adjusted earnings before interest, taxes, depreciation and amortization (EBITDA.) Management estimates reporting unit income-based fair value using the discounted cash flow approach, which requires use of significant assumptions including revenue growth rates, operating margin growth rates, the perpetual growth rate, and the discount rate. The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Advanced Materials & Catalysts reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Advanced Materials & Catalysts reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to market multiples, revenue growth rates, operating margin growth rates, and the discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. F-3 Table of Con ten ts Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Advanced Materials & Catalysts reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Advanced Materials & Catalysts reporting unit; (ii) evaluating the appropriateness of the market and income approaches used by management; (iii) testing the completeness and accuracy of underlying data used in the market and income approaches; and (iv) evaluating the reasonableness of the significant assumptions used by management related to market multiples, revenue growth rates, operating margin growth rates, and discount rate. Evaluating management’s assumptions related to revenue growth rates and operating margin growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Advanced Materials & Catalysts reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the market and income approaches and (ii) the reasonableness of the market multiples and discount rate assumptions. Investment Impairment Assessment — Zeolyst International As described in Notes 2 and 10 to the consolidated financial statements, the Company’s investments in affiliated companies balance was $349.3 million as of December 31, 2024, of which a substantial portion related to the investment in Zeolyst International. Management evaluates the equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the fair value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. During the year ended December 31, 2024, the Company recognized an impairment charge of $65 million on the investment in the Zeolyst Joint Venture, related to the investment in Zeolyst International, to reduce the carrying value of the investment to its estimated fair value. Management estimated the fair value of the investment using a combination of an income, or discounted cash flow approach, and market value approach. Management estimates investments in affiliated companies market approach fair value using publicly traded comparable company values and applies a control premium and the selected market multiples to the investment’s trailing twelve months adjusted EBITDA. Management estimates investments in affiliated companies income-based fair value using the discounted cash flow approach, which requires use of significant assumptions including revenue growth rates, operating margin growth rates, a perpetual growth rate, selling, general and administrative expenses growth rates, and a discount rate. The principal considerations for our determination that performing procedures relating to the investment impairment assessment of Zeolyst International is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the investment in Zeolyst International; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to control premium, market multiples, revenue growth rates, operating margin growth rates, perpetual growth rate, selling, general and administrative expenses growth rates, and the discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. As described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section, a material weakness was identified related to the Company’s accounting for the investment in the Zeolyst Joint Venture. F-4 Table of Con ten ts Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s investments in affiliated companies impairment assessment, including controls over the valuation of the investment in Zeolyst International. These procedures also included, among others (i) evaluating the Company’s accounting for its investment in Zeolyst International; (ii) testing management’s process for developing the fair value estimate of the investment in Zeolyst International; (iii) evaluating the appropriateness of the market and income approaches used by management; (iv) testing the completeness and accuracy of underlying data used in the market and income approaches; and (v) evaluating the reasonableness of the significant assumptions used by management related to control premium, market multiples, revenue growth rates, operating margin growth rates, perpetual growth rate, selling, general and administrative expenses growth rates, and discount rate. Evaluating management’s assumptions related to revenue growth rates, operating margin growth rates, and selling, general and administrative expenses growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Zeolyst International business; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the market and income approaches and (ii) the reasonableness of the control premium, market multiples, perpetual growth rate, and discount rate assumptions. /s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 28, 2025 We have served as the Company’s auditor since 2015. F-5 Table of Con ten ts ECOVYST INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF (LOSS) INCOME (in thousands, except share and per share amounts) Years ended December 31, 2024 2023 2022 Sales $ 704,493 $ 691,118 $ 820,159 Cost of goods sold 502,971 493,153 595,529 Gross profit 201,522 197,965 224,630 Selling, general and administrative expenses 83,876 79,215 85,334 Other operating expense, net 19,552 22,100 34,911 Operating income 98,094 96,650 104,385 Equity in net (income) from affiliated companies ( 15,112 ) ( 30,624 ) ( 27,725 ) Impairment of investment in affiliated companies 65,000 — — Interest expense, net 49,426 44,730 37,217 Debt extinguishment costs 4,560 — — Other (income) expense, net ( 758 ) 605 158 (Loss) income before income taxes ( 5,022 ) 81,939 94,735 Provision for income taxes 1,630 10,785 24,940 Net (loss) income from continuing operations ( 6,652 ) 71,154 69,795 Net income from discontinued operations, net of tax — — 3,902 Net (loss) income $ ( 6,652 ) $ 71,154 $ 73,697 Net (loss) income per share: Basic (loss) income per share—continuing operations $ ( 0.06 ) $ 0.60 $ 0.52 Diluted (loss) income per share—continuing operations $ ( 0.06 ) $ 0.60 $ 0.52 Basic income per share—discontinued operations $ — $ — $ 0.03 Diluted income per share—discontinued operations $ — $ — $ 0.03 Basic (loss) income per share $ ( 0.06 ) $ 0.60 $ 0.55 Diluted (loss) income per share $ ( 0.06 ) $ 0.60 $ 0.55 Weighted average shares outstanding: Basic 116,719,437 118,367,214 133,601,322 Diluted 116,719,437 119,487,709 135,088,172 See accompanying notes to consolidated financial statements. F-6 Table of Con ten ts ECOVYST INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Years ended December 31, 2024 2023 2022 Net (loss) income $ ( 6,652 ) $ 71,154 $ 73,697 Other comprehensive income (loss), net of tax: Pension and postretirement benefits 855 1,120 ( 2,676 ) Net (loss) gain from hedging activities ( 2,644 ) ( 12,126 ) 24,382 Foreign currency translation ( 4,660 ) 4,056 ( 9,922 ) Total other comprehensive (loss) income ( 6,449 ) ( 6,950 ) 11,784 Comprehensive (loss) income $ ( 13,101 ) $ 64,204 $ 85,481 See accompanying notes to consolidated financial statements. F-7 Table of Con ten ts ECOVYST INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2024 2023 ASSETS Cash and cash equivalents $ 146,013 $ 88,365 Accounts receivable, net 77,937 81,314 Inventories, net 57,126 45,115 Derivative assets 6,532 13,419 Prepaid and other current assets 16,106 17,774 Total current assets 303,714 245,987 Investments in affiliated companies 349,308 440,198 Property, plant and equipment, net 569,275 576,904 Goodwill 404,102 404,470 Other intangible assets, net 98,413 116,550 Right-of-use lease assets 33,558 24,281 Other long-term assets 43,951 29,361 Total assets $ 1,802,321 $ 1,837,751 LIABILITIES Current maturities of long-term debt $ 8,730 $ 9,000 Accounts payable 43,928 40,195 Operating lease liabilities—current 9,267 8,193 Accrued liabilities 53,201 61,693 Total current liabilities 115,126 119,081 Long-term debt, excluding current portion 852,099 858,946 Deferred income taxes 105,395 115,791 Operating lease liabilities—noncurrent 24,189 16,030 Other long-term liabilities 5,052 22,439 Total liabilities 1,101,861 1,132,287 Commitments and contingencies (Note 23) EQUITY Common stock ($ 0.01 par); authorized shares 450,000,000 ; issued shares 140,872,846 and 140,744,045 on December 31, 2024 and 2023, respectively; outstanding shares 116,534,803 and 116,116,895 on December 31, 2024 and 2023, respectively 1,409 1,407 Preferred stock ($ 0.01 par); authorized shares 50,000,000 ; no shares issued or outstanding on December 31, 2024 and 2023, respectively — — Additional paid-in capital 1,106,792 1,102,581 Accumulated deficit ( 177,508 ) ( 170,856 ) Treasury stock, at cost; shares 24,338,043 and 24,627,150 on December 31, 2024 and 2023, respectively ( 222,826 ) ( 226,710 ) Accumulated other comprehensive loss ( 7,407 ) ( 958 ) Total equity 700,460 705,464 Total liabilities and equity $ 1,802,321 $ 1,837,751 See accompanying notes to consolidated financial statements. F-8 Table of Con ten ts ECOVYST INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share data) Shares of Common stock Common stock Additional paid-in capital Accum. deficit Shares of Treasury stock Treasury stock, at cost Accum. other comp. income (loss) Total Balance, December 31, 2021 137,820,971 $ 1,378 $ 1,073,409 $ ( 315,707 ) ( 882,213 ) $ ( 12,551 ) $ ( 5,792 ) $ 740,737 Net income — — — 73,697 — — — 73,697 Other comprehensive income — — — — — — 11,784 11,784 Repurchases of common shares — — — — ( 16,470,763 ) ( 136,741 ) — ( 136,741 ) Tax withholdings on equity award vesting — — — — ( 32,058 ) ( 332 ) — ( 332 ) Stock compensation expense — — 17,469 — — — — 17,469 Shares issued under equity incentive plan, net of forfeitures 1,750,301 18 597 — — — — 615 Balance, December 31, 2022 139,571,272 1,396 1,091,475 ( 242,010 ) ( 17,385,034 ) ( 149,624 ) 5,992 707,229 Net income — — — 71,154 — — — 71,154 Other comprehensive loss — — — — — — ( 6,950 ) ( 6,950 ) Repurchases of common shares — — — — ( 7,541,494 ) ( 78,718 ) — ( 78,718 ) Tax withholdings on equity award vesting — — — — ( 315,635 ) ( 3,372 ) — ( 3,372 ) Excise tax on repurchase of common shares — — — — — ( 638 ) — ( 638 ) Stock compensation expense — — 16,252 — — — — 16,252 Shares issued under equity incentive plan, net of forfeitures 1,172,773 11 ( 5,146 ) — 615,013 5,642 — 507 Balance, December 31, 2023 140,744,045 1,407 1,102,581 ( 170,856 ) ( 24,627,150 ) ( 226,710 ) ( 958 ) 705,464 Net loss — — — ( 6,652 ) — — — ( 6,652 ) Other comprehensive loss — — — — — — ( 6,449 ) ( 6,449 ) Repurchases of common shares — — — — ( 552,081 ) ( 5,010 ) — ( 5,010 ) Tax withholdings on equity award vesting — — — — ( 128,801 ) ( 1,218 ) — ( 1,218 ) Stock compensation expense — — 14,037 — — — — 14,037 Shares issued under equity incentive plan, net of forfeitures 128,801 2 ( 9,826 ) — 969,989 10,112 — 288 Balance, December 31, 2024 140,872,846 $ 1,409 $ 1,106,792 $ ( 177,508 ) ( 24,338,043 ) $ ( 222,826 ) $ ( 7,407 ) $ 700,460 See accompanying notes to consolidated financial statements. F-9 Table of Con ten ts ECOVYST INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years ended December 31, 2024 2023 2022 Cash flows from operating activities: Net (loss) income $ ( 6,652 ) $ 71,154 $ 73,697 Net income from discontinued operations — — ( 3,902 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 75,282 70,551 65,121 Amortization 14,080 14,047 14,042 Intangible asset impairment charge 3,900 — — Amortization of deferred financing costs and original issue discount 1,659 2,076 2,031 Debt extinguishment costs 90 — — Foreign currency exchange loss (gain) 339 ( 589 ) 978 Deferred income tax (benefit) provision ( 7,927 ) ( 17,072 ) 1,652 Net loss on asset disposals 2,351 4,137 3,594 Stock compensation 14,043 16,031 20,632 Equity in net (income) from affiliated companies ( 15,112 ) ( 30,624 ) ( 27,725 ) Dividends received from affiliated companies 38,000 28,000 35,000 Impairment of investment in affiliated companies 65,000 — — Other, net ( 14,331 ) 647 ( 2,660 ) Working capital changes that provided (used) cash: Receivables 3,102 ( 6,093 ) 5,503 Inventories ( 11,180 ) ( 1,399 ) 9,902 Prepaids and other current assets 3,437 ( 985 ) 5 Accounts payable 2,367 2,351 ( 10,127 ) Accrued liabilities ( 18,558 ) ( 14,635 ) ( 7,448 ) Net cash provided by operating activities, continuing operations 149,890 137,597 180,295 Net cash provided by operating activities, discontinued operations — — 6,311 Net cash provided by operating activities 149,890 137,597 186,606 Cash flows from investing activities: Purchases of property, plant and equipment ( 68,953 ) ( 65,335 ) ( 58,870 ) Investment in non-marketable equity securities ( 4,500 ) — — Payments for business divestiture, net of cash — — ( 3,744 ) Business combinations, net of cash acquired — — ( 488 ) Other, net — — 81 Net cash used in investing activities, continuing operations ( 73,453 ) ( 65,335 ) ( 63,021 ) F-10 Table of Con ten ts Years ended December 31, 2024 2023 2022 Cash flows from financing activities: Draw down of revolving credit facilities — 14,500 — Repayments of revolving credit facilities — ( 14,500 ) — Issuance of long-term debt, net of original issue discount and financing fees 870,817 — — Repayments of long-term debt ( 879,683 ) ( 9,000 ) ( 9,000 ) Repurchases of common shares ( 5,010 ) ( 78,717 ) ( 136,741 ) Tax withholdings on equity award vesting ( 1,218 ) ( 3,372 ) ( 332 ) Repayments of financing obligation ( 2,957 ) ( 2,847 ) ( 2,692 ) Other, net 210 438 579 Net cash used in financing activities, continuing operations ( 17,841 ) ( 93,498 ) ( 148,186 ) Effect of exchange rate changes on cash and cash equivalents ( 948 ) ( 1,319 ) ( 5,368 ) Net change in cash and cash equivalents 57,648 ( 22,555 ) ( 29,969 ) Cash and cash equivalents at beginning of period 88,365 110,920 140,889 Cash and cash equivalents at end of period $ 146,013 $ 88,365 $ 110,920 For supplemental cash flow disclosures, see Note 25. See accompanying notes to consolidated financial statements. F-11 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 1. Background and Basis of Presentation: Description of Business Ecovyst Inc. and subsidiaries (the “Company” or “Ecovyst”) is a leading integrated and innovative global provider of advanced materials, specialty catalysts and services. The Company supports customers globally through its strategically located network of manufacturing facilities. The Company believes that its products and services contribute to improving the sustainability of the environment. Basis of Presentation On August 1, 2021, the Company completed the sale of its Performance Chemicals business for $ 1,100,000 . The financial results of this business are presented as discontinued operations in the consolidated financial statements for the 2022 period presented. See Note 4 to these consolidated financial statements for further information on this transaction. The Company has two uniquely positioned specialty businesses: Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides high quality and high strength virgin sulfuric acid for industrial and mining applications. Ecoservices also provides chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry. Advanced Materials & Catalysts , through its Advanced Silicas business, provides finished silica catalysts, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry, and through the Zeolyst Joint Venture, innovates and supplies specialty zeolites used in catalysts that support the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical processes. Effective November 28, 2023, the Company renamed the Catalyst Technologies segment to Advanced Materials & Catalysts. The segment results and disclosures included in the Company’s consolidated financial statements reflect the new segment name for all periods presented. This change to the Company’s segment name does not change the Company’s consolidated balance sheets, statements of income or cash flows for the prior periods or the way the Company’s chief operating decision maker (“CODM,” the “Company’s Chief Executive Officer,” or “CEO”) evaluated the business. The Company’s regeneration services product group, which is a part of the Company’s Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations result in higher sales and working capital requirements in the second and third quarters. The notes to the consolidated financial statements, unless otherwise indicated, are on a continuing operations basis. F-12 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies: Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Investments in affiliated companies are recorded at cost plus any fair value adjustments and the Company’s equity in their undistributed earnings. All intercompany transactions have been eliminated. Foreign Currency Translation. All assets and liabilities of foreign subsidiaries and affiliated companies are translated to U.S. dollars using exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates during the year. Adjustments resulting from translation of the balance sheets and statements of income are included in stockholders’ equity as part of accumulated other comprehensive income (loss) (“AOCI”), and are included in earnings only upon the sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in earnings based on differences between foreign currency exchange rates on the transaction date and on the settlement date. Adjustments resulting from translation of certain intercompany loans, which are not considered permanent and are denominated in foreign currencies, are included in other expense (income), net in the consolidated statements of income. The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid. For the years ended December 31, 2024, 2023 and 2022, all intercompany loan arrangements were determined to be non-permanent based on management’s intention as well as actual lending and repayment activity. Therefore, the foreign currency transaction gains or losses associated with the int ercompany loans were recorded in the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022. Net foreign currency exchange (gains) and losses included in other expense (income), net were $ 339 , $( 589 ) and $ 978 for the years ended December 31, 2024, 2023 and 2022 , respectively. The n et foreign currency (gains) and losses realized during these years were primarily driven by the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt denominated in a foreign currency and translated to U.S. dollars. Cash and Cash Equivalents. Cash and cash equivalents include highly liquid investments with original terms to maturity of 90 days or less from the time of purchase. Restricted Cash. Restricted cash, which is restricted as to withdrawal or usage, is classified separately from cash and cash equivalents on the Company’s consolidated balance sheets. The Company had no restricted cash balances as of December 31, 2024 and 2023. Accounts Receivable and Allowance for Credit Losses. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable and is reviewed during each reporting period over their contractual life. The Company recognizes an allowance for credit losses based on historical collection experience, current regional economic and market conditions, the aging of accounts receivable and assessments of current creditworthiness of customers. Account balances are charged against the allowance when the Company believes it is probable that the associated receivables will not be recovered. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required. The Company does not have any off-balance sheet credit exposure related to its customers. The Company’s allowance for credit losses was not material as of December 31, 2024 and 2023. Inventories. Certain domestic inventories are stated at the lower of cost or market and valued using the last-in, first-out (“LIFO”) method. All other inventories are stated at the lower of cost or net realizable value and valued using the weighted average cost or first-in, first-out (“FIFO”) methods. Property, Plant and Equipment. Property, plant and equipment are carried at cost and include expenditures for new facilities, major renewals and betterments. The Company capitalizes the cost of furnace rebuilds as part of property, plant and equipment. Maintenance, repairs and minor renewals are charged to expense as incurred. The Company capitalizes certain internal costs associated with the implementation of purchased software. When property, plant and equipment is retired or otherwise disposed of, the net carrying amount is eliminated with any gain or loss on disposition recognized in earnings at that time. F-13 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Depreciation is provided on the straight-line method based on the estimated useful lives of the assets, which generally range from 15 to 33 years for buildings and improvements and 3 to 10 years for machinery and equipment. Leasehold improvements are depreciated using the straight-line method based on the shorter of the useful life of the improvement or remaining lease term. The Company capitalizes the interest cost associated with the development and construction of significant new plant and equipment and depreciates that amount over the lives of the related assets. Capitalized interest recorded during the years ended December 31, 2024, 2023 and 2022 was $ 1,008 , $ 1,964 and $ 1,442 , respectively. Lea ses . The Company has operating and finance lease agreements with remaining lease terms as of December 31, 2024 of up to 17 years, including leases of land, buildings, railcars, vehicles, manufacturing equipment and general office equipment. Some leases include options to terminate or extend for one or more years. These options are incorporated in the Compan y’s lease term when it is reasonably certain that the option will be exercised. Some leases include options to purchase, which the Company assesses under the guidance to determine if these leases should be classified as finance lease agreements. When the Company enters into an arrangement, at inception, the Company determines if the arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance). The Company accounts for the lease and non-lease components separately based on the estimated standalone price of each component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate and these are initially measured using the index or rate in effect at the commencement date. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognizes a right-of-use lease asset and lease liability at the lease commencement date based on the present value of the remaining lease payments over the lease term. The Company assesses its leasing arrangements to determine the rate implicit in the lease arrangement. Historically, the Company’s leasing arrangements do not contain the information necessary to determine the rate implicit in the lease. As such, the Company utilizes its incremental borrowing rate over the relevant lease term, which is the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The incremental borrowing rate is determined at the lease commencement date and is developed utilizing a readily available market interest rate curve adjusted for the Company’s credit quality. The Company has elected to use a portfolio approach to apply its incremental borrowing rate to individual leases based on lease term and geographic jurisdiction. Short-term leases, which have an initial term of twelve months or less, are not recorded on the Company’s balance sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for financing leases is bifurcated into two components, with the amortization expense component of the right-of-use asset recognized on a straight-line basis and the interest expense component recognized using the effective interest method over the lease term. The amortization expense component of the right-of-use lease asset is included in cost of goods sold and in selling, general and administrative expenses and the interest expense component is included in interest expense, net on the consolidated statements of income. Spare Parts. Spare parts are maintained by the Company’s facilities to keep machinery and equipment in working order. Spare parts are capitalized and included in other long-term assets. Spare parts are measured at cost and are not depreciated or expensed until utilized; however, reserves may be provided on aged spare parts. When a spare part is utilized as part of an improvement to property, plant and equipment, the carrying value is depreciated over the applicable life once placed in service. Otherwise, the spare part is expensed and charged as a cost of production when utilized. Investments in Affiliated Companies. Investments in affiliated companies are accounted for using the equity method of accounting if the investment provides the Company with the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investments in equity-method investees are F-14 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) recorded in the consolidated balance sheets as investments in affiliated companies, and the Company’s share of the investees’ earnings or losses, together with other than temporary impairments in value, is recorded as equity in net income from affiliated companies in the consolidated statements of income. Any differences between the Company’s cost of an equity method investment and the underlying equity in the net assets of the investment, such as fair value step-ups resulting from acquisitions, are accounted for according to their nature and impact the amounts recognized as equity in net income from affiliated companies in the consolidated statements of income. The Company evaluates all distributions received from its equity method investments using the nature of distribution approach. Under this approach, the Company evaluates the nature of activities of the investee that generated the distribution. The distributions received are either classified as a return on investment, which is presented as a component of operating activities on the Company’s consolidated statements of cash flows, or as a return of investment, which is presented as a component of investing activities on the Company’s consolidated statements of cash flows. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the fair value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Goodwill and Intangible Assets. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company is required to test goodwill associated with each of its reporting units for impairment at least annually and whenever events or circumstances indicate that it is more likely than not that goodwill may be impaired. The Company completed its annual goodwill impairment test as of October 1. Goodwill is tested for impairment at the reporting unit level. In performing tests for goodwill impairment, the Company is able to use its discretion to first perform an optional qualitative assessment about the likelihood of the carrying value of a reporting unit exceeding its fair value. The qualitative assessment need not be applied to all reporting units. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount based on the qualitative assessment, the Company will perform a quantitative goodwill impairment test to identify the potential goodwill impairment and measure the amount of the goodwill impairment loss, if any, to be recognized for that reporting unit. For the annual assessments in 2024 and 2023, the Company bypassed the option to perform the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test for each of its reporting units. The quantitative test identifies both the potential existence of impairment and the amount of impairment loss. In applying the quantitative test, the Company calculates and compares the reporting unit’s estimated fair value to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill is not impaired. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. An impairment loss cannot exceed the carrying value of goodwill assigned to a reporting unit and the loss establishes a new basis in the goodwill. Subsequent reversal of an impairment loss is not permitted. For intangible assets other than goodwill, definite-lived intangible assets are amortized over their respective estimated useful lives. Intangible assets with indefinite lives are not amortized, but rather are tested for impairment at least annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. The Company tests its indefinite-lived intangible assets as of October 1 of each year in conjunction with its annual goodwill impairment test. Impairment Assessment of Long-Lived Assets. The Company performs an impairment review of property, plant and equipment and definite-lived intangible assets when facts and circumstances indicate that the carrying value of an asset or asset group may not be recoverable from its undiscounted future cash flows. When evaluating long-lived assets for impairment, if the carrying amount of an asset or asset group is found not to be recoverable, a potential impairment loss may be recognized. An impairment loss is measured by comparing the carrying amount of the asset or asset group to its fair value. Fair value is determined using quoted market prices when available, or other techniques including discounted cash flows. The Company’s estimates of future cash flows involve assumptions concerning future operating performance, economic conditions and technological changes that may affect the future useful lives of the assets. F-15 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Derivative Financial Instruments. The Company utilizes certain derivative financial instruments to enhance its ability to manage risk, including exposure to interest rate fluctuations that exist as part of ongoing business operations. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. All derivatives designated as hedges are recognized on the consolidated balance sheets at fair value. The Company may designate a derivative as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge), a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), a foreign currency fair-value or cash-flow hedge (foreign currency hedge), or a hedge of a net investment in a foreign operation (net investment hedge). The Company’s hedging strategies include derivatives designated as cash flow hedges. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income and subsequently reclassified into earnings in the same period(s) in which the hedged transaction affects earnings. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a hedge of a net investment in a foreign operation are recorded in the foreign currency translation adjustment account within AOCI, where the associated gains and losses will remain until such time that the hedged net investment (foreign subsidiary) is sold or liquidated. Changes in the fair value of a derivative that is not designated or does not qualify as a hedge are recorded in the consolidated statements of income. Cash flows from derivative instruments are reported in the same cash flow category as the cash flows from the items being hedged. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. The Company also formally assesses whether each hedging relationship is highly effective in achieving offsetting changes in fair values or cash flows of the hedged item during the period, both at the inception of the hedge and on an ongoing basis. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly-effective hedge, hedge accounting is discontinued with respect to that derivative prospectively. Fair Value Measurements. The Company measures fair value using the guidelines under U.S. generally accepted accounting principles (“GAAP”). An asset’s fair value is defined as the price at which the asset could be exchanged in a current transaction between market participants. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor. The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these items. See Note 6 to these consolidated financial statements for further information regarding the application of fair value measurements on the Company’s recurring and non-recurring bases and Note 16 regarding the fair value of debt. Treasury Stock. The Company records repurchases of its common stock for treasury at cost. Upon the reissuance of the Company’s common stock from treasury, differences between the proceeds from reissuance and the average cost of the treasury stock are credited or charged to capital in excess of par value to the extent of prior credits related to the reissuance of treasury stock. If no such credits exist, the differences are charged to retained earnings. See Note 7 of these consolidated financial statements for further information regarding the Company’s treasury stock repurchases. Revenue Recognition. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Company will collect the consideration to which it is entitled. F-16 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The Company may recognize revenue from bill-and-hold arrangements initiated by a customer. Under these bill-and-hold arrangements, a customer pays for the goods, but does not take physical possession immediately. The Company considers satisfaction of performance obligations when they have finished manufacturing the products based on the agreed upon specifications in accordance with the order. These products are custom made to each customer’s specifications and cannot be made available for use with another customer’s order. Once the goods have been segregated in a designated space in the warehouse and the customer has been invoiced, title to the goods and risk of loss has transferred to the customer. The customers have access to their products to inspect and can take possession prior to the scheduled delivery dates. The Company may offer rebates to customers who have reached a specified volume of optional purchases. The Company recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate. Rebates are recognized at the time revenue is recorded. The Company measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement. Shipping and Handling. Amounts billed to a customer in a sale transaction related to shipping and handling, if any, represent revenues earned for the goods provided and are classified as revenue. Costs related to shipping and handling of products shipped to customers are classified as cost of goods sold. See Note 5 of these consolidated financial statements for disclosures regarding the recognition of revenue for shipping and handling costs that are billed to customers. Research and Development. Research and development costs of $ 6,814 , $ 7,797 and $ 7,232 for the years ended December 31, 2024, 2023 and 2022, respectively, were expensed as incurred and reported in selling, general and administrative expenses in the consolidated statements of income. Income Taxes. The Company operates within multiple taxing jurisdictions and is subject to tax filing requirements and potential audits within these jurisdictions. The Company uses the asset and liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. The Company evaluates its deferred tax assets each period to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing, to result in their realizability. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets, unless it is more likely than not that those assets will be realized. Generally, APB 23 of ASC Topic 740, Income Taxes (“ASC 740”), provides guidance with respect to establishing deferred income taxes on earnings from foreign subsidiaries, to the extent that these earnings are considered to be available for repatriation. Further, ASC 740-30 requires that deferred taxes be established with respect to the earnings of a foreign subsidiary, unless existing tax law provides a means by which the investment in a subsidiary can be recovered tax-free. The Company has determined that it is able to repatriate the non-permanently reinvested earnings of its foreign subsidiaries in a tax-free manner. As such, the Company is able to assert, for purposes of ASC 740-30, that no deferred income taxes are needed with respect to earnings from foreign subsidiaries. The Company recognizes a financial statement benefit for positions taken for tax return purposes when it will be more likely than not (i.e. greater than 50%) that the positions will be sustained upon tax examination, based solely on the technical merits of the tax positions. Otherwise, no tax benefit is recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Tax examinations are often complex as tax authorities may disagree with the treatment of items reported by the Company and may require several years to resolve. These accrued liabilities represent a provision for taxes that are reasonably expected to be incurred on the basis of available information but which are not certain. F-17 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Environmental Expenditures. Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with the Company’s capitalization policy for property, plant and equipment. Expenditures that result from the remediation of an existing condition caused by past operations and that do not contribute to current or future revenues are expensed. Liabilities are recognized for remedial activities when the remediation is probable and the cost can be reasonably estimated. Recoveries of expenditures for environmental remediation are recognized as assets only when recovery is deemed probable. See Note 23 to these consolidated financial statements for further information regarding commitments and contingencies. Deferred Financing Costs. Financing costs incurred in connection with the issuance of long-term debt are deferred and presented as a direct reduction from the related debt instruments on the Company’s consolidated balance sheets. Deferred financing costs are amortized as interest expense using the effective interest method over the respective terms of the associated debt instruments. Stock-Based Compensation. The Company applies the fair value based method to account for stock options, restricted stock awards, restricted stock units and performance stock units issued in connection with its equity incentive plans. Stock-based compensation expense is recognized on a straight-line basis over the vesting periods of the respective awards, and the Company accounts for forfeitures of equity incentive awards as they occur. In connection with the vesting of restricted stock awards, restricted stock units and performance stock units, shares of common stock may be delivered to the Company by employees to satisfy withholding tax obligations at the instruction of the employee award holders. These transactions, when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting event. See Note 21 to these consolidated financial statements regarding compensation expense associated with the Company’s equity incentive awards. Pensions and Postretirement Benefits. The Company sponsors two funded defined benefit pension plans that cover certain employees. Benefits for the plans are generally based on average final pay and years of service. The Company’s funding policy is to fund the minimum required contributions consistent with statutory requirements based on actuarial computations utilizing the projected unit credit method of calculation. The pension plans’ assets include equity and fixed income securities. Certain assumptions are made regarding the occurrence of future events affecting pension costs, such as mortality, withdrawal, disa blement and retirement, changes in compensation and benefits, and discount rates to reflect the time value of money. The major elements in determining pension income and expense are pension liability discount rates and the expected return on plan assets. The Company references rates of return on high quality, fixed income investments when estimating the discount rate, and the expected period over which payments will be made based upon historical experience. The long-term rate of return used to calculate the expected return on plan assets is the average rate of return estimated to be earned on invested funds for providing pension benefits. In addition to pension benefits, the Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The Company uses explicit assumptions using the best estimates available of the plan’s future experience. Principal actuarial assumptions include: discount rates, present value factors, retirement age, participation rates, mortality rates, cost trend rates, Medicare reimbursement rates and per capita claims cost by age. Current interest rates as of the measurement date are used for discount rates in present value calculations. The Company also has defined contribution plans covering domestic employees of the Company and certain subsidiaries. F-18 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a loss has been incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed, including the approximate term, how the guarantee arose, and the events or circumstances that would require the guarantor to perform under the guarantee. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Correction of Errors . Net loss for the year ended December 31, 2024 included an adjustment of $ 1,025 related to the Company’s LIFO inventory valuation and an adjustment of $ 939 for the Company’s equity in net income of affiliated companies related to revised Zeolyst International results for the years ended December 31, 2023 and 2022. The total 2024 net benefit of $ 1,964 from these adjustments was not material to the consolidated financial statements for the current period nor the prior interim or annual periods . 3. New Accounting Standards: Accounting Standards Recently Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance to improve the disclosures related to public business entities reportable segments. This new guidance requires entities to provide information regarding significant segment expenses, especially those segment expenses that are regularly reported to the Company’s CODM. The guidance also requires public entities to disclose the nature, type and amounts of other segment items by reportable segment. Public business entities will also have to report all annual disclosures about segments profits or losses that are required by ASC 280 on an interim basis, including the significant segment expenses and other segment items. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has applied the guidance as required for the fiscal year ended December 31, 2024. Accounting Standards Not Yet Adopted In November 2024, FASB issued guidance requiring public business entities to disclose additional information on the nature of certain expenses presented in the income statement. The new guidance requires tabular disclosure of significant expense categories and qualitative descriptions for amounts not disaggregated from relevant expense categories. Public business entities are required to define selling expenses and disaggregate the components. The new guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The requirements must be applied prospectively however public business entities have the option to apply the guidance retrospectively. The disclosure will be implemented as required for the fiscal year ended December 31, 2027. The Company is currently evaluating the impact of this guidance. In December 2023, FASB issued guidance to improve disclosures related to incomes taxes. This new guidance requires public business entities to disaggregate information on the effective tax rate reconciliation and income taxes paid to provide greater transparency. Public business entities will be required to provide additional information in specified categories related to effective tax rate reconciliation in tabular form and provide income taxes paid by F-19 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) jurisdictions, with further disaggregation needed if amounts exceed 5% of the total. The new guidance is effective for fiscal years beginning after December 15, 2024. The disclosure will be implemented as required for the fiscal year ended December 31, 2025. The Company is currently evaluating the impact of this guidance. In October 2023, FASB issued guidance to amend either presentation or disclosure requirements related to fourteen subtopics in the FASB Accounting Standards Codification, that are currently in the SEC Regulation S-X or Regulation S-K. The new guidance was issued in response to the SEC’s ruling on disclosure simplification. For entities subject to existing SEC disclosure requirements, the effective date of each amendment of the topics will be the date that the SEC removes the related disclosure from Regulation S-X or Regulation S-K. The guidance must be applied prospectively, with no early adoption permitted for entities subject to those existing SEC disclosures. The Company is currently evaluating the impact of the new guidance as it pertains to the fourteen subtopics that would impact the business and will apply prospectively once in effect. In August 2023, FASB issued guidance for entities that meet the definition of a joint venture or a corporate joint venture, to adopt a new basis of accounting upon the formation of the joint venture. The new guidance requires the initial measurement of contributed net assets and liabilities at fair value on the formation date, recognition of goodwill for the difference between the fair value of the joint venture’s equity and net assets, and disclosures about the nature and financial impact of the transaction. The new guidance requires prospective application and is effective for all joint ventures that are formed on or after January 1, 2025, with early adoption permitted. Joint ventures that formed before January 1, 2025 may elect to retrospectively apply the new guidance. The Company will apply the guidance to any new joint ventures formed after the effective date. 4. Divestitures: Performance Chemicals On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business to Sparta Aggregator L.P. (the “Buyer”), a partnership established by Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P. for a purchase price of $ 1,100,000 subject to certain adjustments including indebtedness, cash, working capital and transaction expenses. The Company completed the sale of its Performance Chemicals business effective on August 1, 2021. The net cash proceeds to the Company from the sale were $ 978,449 after certain customary adjustments for indebtedness, working capital and cash at the closing of the transaction. In March 2022, the Company made a payment to the buyer for $ 3,744 , representing the final adjustments to the sale price. The Company classified this payment within net cash used in investing activities – continuing operations in the consolidated statements of cash flows. During the year ended December 31, 2022, the Company recognized $ 2,409 of other operating expense, net, $ 6,311 of benefit for income taxes and $ 3,902 of net income from discontinued operations, net of tax. This related to the sale of the Performance Chemicals business for an income tax benefit upon the finalization of the Company’s U.S. income tax returns, partially offset by a tax indemnity claim resulting from the transaction. Financing Obligation In connection with the divestiture of the Performance Chemicals business, the Company entered into a five-year contract manufacturing agreement effective on August 2, 2021 with PQ Silicas UK Ltd., a subsidiary of the Buyer, related to a facility in Warrington, United Kingdom. Pursuant to this agreement, the Buyer will manufacture and sell advanced silica finished good products to the Company, which are finished good products sold within the Company’s Advanced Materials & Catalysts segment. Additionally, certain machinery, equipment, and other tangible personal property assets identified in the Agreement (“Catalyst Production Assets”) owned by the Buyer will be used exclusively in the manufacture of advanced silica products for the Company. The Company did not meet the requirements for a sale-leaseback transaction as described in Accounting Standards Codification 842-40, Leases - Sale-Leaseback Transactions. Under the failed sale-leaseback accounting model, the Company is deemed under GAAP to still own the Catalyst Production Assets, which the Company must continue to reflect in its consolidated balance sheet and depreciate over the F-20 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) assets’ remaining useful lives. The Company recorded a financing obligation of £ 11,648 (equivalent $ 16,005 ) as part of this transaction. The agreement has an initial term of five years , with an option to renew, as well as an “Option Bill of Sale” which provides for the transfer from the Buyer to the Company of the Catalyst Production Assets upon the Company’s exercise of a one-dollar purchase option. The table below presents the financing obligation assets and liabilities recognized on the consolidated balance sheet as of December 31, 2024 and 2023: December 31, Balance Sheet location 2024 2023 Assets Financing obligation Property, plant and equipment, net $ 14,173 $ 19,878 Total $ 14,173 $ 19,878 Liabilities Current: Financing obligation Accrued liabilities $ 3,043 $ 2,999 Noncurrent: Financing obligation Other long-term liabilities 1,815 4,927 Total $ 4,858 $ 7,926 Payments made to the Buyer under the contact manufacturing agreement were $ 9,171 , $ 8,416 and $ 7,872 for the years ended December 31, 2024, 2023 and 2022, respectively . Included in these payments were $ 2,957 , $ 2,847 and $ 2,692 of principal on the financing obligation for the years ended December 31, 2024, 2023 and 2022 , respectively, and $ 185 , $ 266 and $ 336 of interest on the financing obligation for the years ended December 31, 2024 , 2023 and 2022 , respectively. Principal payments are included in financing activities and interest payments are included in operating activities on the Company’s consolidated statement of cash flows. The remaining lease term is 1.6 years with a weighted average discount rate of 2.86 % as of December 31, 2024. Maturities of the financing obligation as of December 31, 2024 are as follows: Year Finance Obligation 2025 $ 3,142 2026 1,833 2027 — 2028 — 2029 — Thereafter — Total lease payments 4,975 Less: Interest 117 Total lease liabilities (1) $ 4,858 (1) Refer to the table above regarding the Company’s classification of financing obligation in the Company’s consolidated balance sheet as of December 31, 2024. F-21 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) In addition to the contract manufacturing agreement noted above, the Company also entered into certain supply agreements with the Buyer, as well as a Transition Services Agreement, pursuant to which the Buyer was receiving and performing certain services to provide for the orderly transition of various functions and processes after the closing of the transaction. The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services. These services were provided for a period of six months , which ended in January 2022. Billings under the Transition Services Agreement to the Buyer during the year ended December 31, 2022 were immaterial. T hose billings are included in selling, general and administrative expenses in the consolidated financial statements for the year ended December 31, 2022 . 5. Revenue from Contracts with Customers: Revenue Recognition Model As described in Note 2, the Company applies the five-step revenue recognition model to each contract with its customers. Evidence of a contract between the Company and its customers may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer. The Company and certain of its customers enter into MSAs that establish the terms, including prices, under which orders to purchase goods may be placed. In cases where the MSA contains a distinct order for goods or contains an enforceable minimum quantity to be purchased by the customer, the Company considers the MSA to be evidence of a contract between the Company and its customer as the MSA creates enforceable rights and obligations. In cases where the MSA does not contain a distinct order for goods, the Company’s contract with a customer is the purchase order issued under the MSA. Customers of the Company may also negotiate orders via pricing quotes, which typically detail product pricing, delivery terms and payment information. When a customer procures goods under this method, the Company considers the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, the Company considers an individual purchase order remitted by a customer to create enforceable rights and obligations. The Company identifies a performance obligation in a contract for each promised good that is separately identifiable from other promises in the contract and for which the customer can benefit from the good. The majority of the Company’s contracts have a single performance obligation, which is the promise to transfer individual goods to the customer. Single performance obligations are satisfied according to the shipping terms noted within the MSA or purchase order. The Company has certain contracts that include multiple performance obligations under which the purchase price for each distinct performance obligation is defined in the contract. Revenue from product sales are recorded at the sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Company and its customers. The Company recognizes revenues when performance obligations under the terms of a contract with its customer are satisfied, which generally occurs at a point in time by transferring control of a product to the customer. The Company determines the point in time when a customer obtains control of a product and the Company satisfies the performance obligation by considering factors including when the Company has a right to payment for the product, the customer has legal title to the product, the Company has transferred possession of the product, the customer has assumed the risks and rewards of ownership of the product and the customer has accepted the product. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The Company does not have any significant payment terms as payment is received at, or shortly after, the point of sale. F-22 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Ecoservices Contracts between the Company’s Ecoservices segment and its customers are typically evidenced by entering into a MSA which generally has a stated contract term in excess of one year. Though each MSA is unique, the terms typically stipulate promises that the Company has determined represent one distinct performance obligation, which is to provide a specified quantity of regenerated acid. MSAs within the Ecoservices segment may contain raw material pricing adjustments which are typically based on a commodity index or Ecoservices’ cost to acquire the commodity. The Company’s exposure to fluctuations in raw material prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price. These raw material pass-through provisions reset on a periodic basis and prospectively adjust the raw material cost component of the goods sold to the customer. The Company accounts for the raw material costs on a prospective basis, as the price changes affect the future consideration of the sale of goods. Certain of the Company’s Ecoservices MSAs contain minimum purchase requirements that expire within the calendar year, creating enforceable rights and obligations during the period of the minimum purchase requirement. In cases where the MSA contains an enforceable minimum quantity to be purchased by the customer, the Company considers the MSA to be evidence of a contract between the Company and its customer as the MSA creates enforceable right and obligations. The Company reviews each contract with minimum purchase requirements to determine if the customer will meet the provisions within the current calendar year. During the years ended December 31, 2024, 2023 and 2022, there have been no material issues in which Ecoservices customers failed to meet their contractual obligations. Advanced Materials & Catalysts The Company’s Advanced Materials & Catalysts segment sells customized products to its customers through its Advanced Silicas product group. These customized products are reformulations of existing Advanced Materials & Catalysts products, tailored to meet individual customer specifications. Prior to entering into an arrangement, the Company will allow a customer to obtain a sample of goods to ensure that it meets their needs. The customer will enter into a long-term supply arrangement that outlines the specification of the products to be sold and contains terms and conditions under which purchase orders are issued. These supply arrangements typically have a duration from one to ten years . Although the duration of these supply arrangements are in excess of one year, a contract is formed between the Company and its customer upon receipt of a purchase order. Contract Assets and Liabilities A contract asset is a right to consideration in exchange for goods that the Company has transferred to a customer when that right is conditional on something other than the passage of time. A contract liability exists when the Company receives consideration in advance of the fulfillment of its performance obligations. The Company has no contract assets or material contract liabilities recorded on its consolidated balance sheets as of December 31, 2024 and 2023, respectively. Practical Expedients and Accounting Policy Elections The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the revenue recognition guidance. The majority of the Company’s contracts with customers are based on an individual purchase order or a MSA in combination with an individual purchase order; thus, the duration of these contracts are for one year or less. As described above, the Company’s performance obligations reset either monthly or at the end of the calendar year. The Company has made an accounting policy election to omit certain disclosures related to these performance obligations, as the initial term of the Company’s performance obligations are for a term of one year or less. The Company uses an output method to recognize revenues related to performance obligations satisfied over time. These performance obligations, as described above, are satisfied within a calendar year. As such, the Company has elected to utilize the “as-invoiced” practical expedient, which permits the Company to recognize revenue in the amount to which it has a right to invoice the customer, provided that the amount corresponds directly with the value provided by the performance obligation as completed to date. F-23 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) When the Company performs shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities as opposed to separate performance obligations, and the Company recognizes revenue upon the transfer of control to the customer. Accordingly, the costs associated with these shipping and handling activities are accrued when the related revenue is recognized under the Company’s policy election. The Company does not utilize sales-based commissions plans, and as a result, the Company does not capitalize any costs which could be considered incremental costs of obtaining a contract. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from revenues. Disaggregated Revenue The Company’s primary means of disaggregating revenues is by reportable segments, which can be found in Note 13 to these consolidated financial statements. The Company’s portfolio of products is integrated into a variety of end uses, which are described in the table below. Key End Uses Key Products Clean fuels, emission control & other • Refining hydrocracking catalysts • Emission control catalysts • Catalyst supports used in production of sustainable fuels such as renewable diesel • Catalysts used in production of sustainable aviation fuels • Catalyst activation • Aluminum sulfate solution • Ammonium bisulfite solution Polyethylene, polymers & engineered plastics • Catalysts and catalyst supports for high-density polyethylene and chemicals syntheses • Antiblock for film packaging • Catalyst for advanced recycling Regeneration and treatment services • Sulfuric acid regeneration services • Hazardous waste treatment services Industrial, mining & automotive • Virgin sulfuric acid for mining • Virgin sulfuric derivatives for industrial production • Virgin sulfuric derivatives for nylon production F-24 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following tables disaggregate the Company’s sales, by segment and end uses, for the years ended December 31, 2024, 2023 and 2022, respectively: Year ended December 31, 2024 Ecoservices Advanced Materials & Catalysts (2) Total Clean fuels, emission control & other $ 33,996 $ — $ 33,996 Polyethylene, polymers & engineered plastics — 106,198 106,198 Regeneration and treatment services (1) 357,376 — 357,376 Industrial, mining & automotive 206,923 — 206,923 Total segment sales $ 598,295 $ 106,198 $ 704,493 Year ended December 31, 2023 Ecoservices Advanced Materials & Catalysts (2) Total Clean fuels, emission control & other $ 29,850 $ — $ 29,850 Polyethylene, polymers & engineered plastics — 106,273 106,273 Regeneration and treatment services (1) 354,606 — 354,606 Industrial, mining & automotive 200,388 — 200,388 Total segment sales $ 584,844 $ 106,273 $ 691,117 Year ended December 31, 2022 Ecoservices Advanced Materials & Catalysts (2) Total Clean fuels, emission control & other $ 28,966 $ — $ 28,966 Polyethylene, polymers & engineered plastics — 117,687 117,687 Regeneration and treatment services (1) 342,645 — 342,645 Industrial, mining & automotive 330,861 — 330,861 Total segment sales $ 702,472 $ 117,687 $ 820,159 (1) As described in Note 1 to these consolidated financial statements, the Company experiences seasonal sales fluctuations to customers in the regeneration services product group. (2) The Company does not record its proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method as revenue and such sales are not consolidated within its results of operations. See Note 10 to these consolidated financial statements for further information . F-25 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 6. Fair Value Measurements: Fair values are based on quoted market prices when available. When market prices are not available, fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair values using methods, models and assumptions that management believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment that becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used. The Company’s financial assets and liabilities carried at fair value have been classified based upon a fair value hierarchy. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). The classification of an asset or a liability is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Fair value on a recurring basis The following tables present information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2024 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative assets: Interest rate caps (Note 18) $ 12,500 $ — $ 12,500 $ — Derivative liabilities: Interest rate caps (Note 18) $ 710 $ — $ 710 $ — December 31, 2023 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative assets: Interest rate caps (Note 18) $ 19,021 $ — $ 19,021 $ — Derivative liabilities: Interest rate caps (Note 18) $ 2,496 $ — $ 2,496 $ — F-26 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Derivative contracts Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment. As of December 31, 2024, the Company had interest rate caps that were fair valued using Level 2 inputs. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to Ecovyst. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets. Fair value on a non-recurring basis Non-marketable equity securities The Company’s non-marketable equity securities consist of an investment in a privately-held company without readily determinable market values. Non-marketable equity securities are accounted for using the measurement alternative, defined as cost less impairment, if any, plus or minus adjustments from observable price changes for identical or similar securities of the same issuer. Adjustments to fair value or impairments, if any, are recorded in the consolidated statements of income. On July 24, 2024, the Company paid $ 4,500 for a minority equity investment in Pajarito Powder LLC (“Pajarito”), an innovative materials science company that focuses on supports and catalysts required for the manufacture and operation of electrolyzers and fuel cells. The investment is recorded in other long-term assets in the consolidated balance sheet and within cash flows from investing activities in the consolidated statements of cash flows. As of December 31, 2024, the carrying value in Pajarito was $ 4,500 . There was no remeasurement events or recognized gains or losses for the year ended December 31, 2024. F-27 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 7. Stockholders' Equity: Accumulated Other Comprehensive Loss The following table presents the components of AOCI, net of tax, as of December 31, 2024 and 2023: December 31, 2024 2023 Amortization and unrealized gains on pension and postretirement plans, net of tax expense of $( 4,628 ) and $( 4,344 ) respectively $ 1,467 $ 612 Net changes in fair values of derivatives, net of tax expense of $( 3,504 ) and $( 4,385 ) respectively 9,901 12,546 Foreign currency translation adjustments ( 18,775 ) ( 14,116 ) AOCI $ ( 7,407 ) $ ( 958 ) The following table presents the tax effects of each component of other comprehensive income (loss) for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, 2024 2023 2022 Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Pre-tax amount Tax benefit/ (expense) After-tax amount Defined benefit and other postretirement plans: Net gain (loss) $ 1,169 $ ( 291 ) $ 878 $ 1,511 $ ( 297 ) $ 1,214 $ ( 3,344 ) $ 826 $ ( 2,518 ) Net prior service cost ( 30 ) 7 ( 23 ) ( 125 ) 31 ( 94 ) ( 210 ) 52 ( 158 ) Benefit plans, net 1,139 ( 284 ) 855 1,386 ( 266 ) 1,120 ( 3,554 ) 878 ( 2,676 ) Net (loss) gain from hedging activities ( 3,525 ) 881 ( 2,644 ) ( 17,312 ) 5,186 ( 12,126 ) 33,194 ( 8,812 ) 24,382 Foreign currency translation ( 4,660 ) — ( 4,660 ) 4,056 — 4,056 ( 9,922 ) — ( 9,922 ) Other comprehensive (loss) income $ ( 7,046 ) $ 597 $ ( 6,449 ) $ ( 11,870 ) $ 4,920 $ ( 6,950 ) $ 19,718 $ ( 7,934 ) $ 11,784 F-28 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following table presents the changes in AOCI, net of tax, by component for the years ended December 31, 2024 and 2023: Defined benefit and other postretirement plans Net gain (loss) from hedging activities Foreign currency translation Total December 31, 2022 $ ( 508 ) $ 24,672 $ ( 18,172 ) $ 5,992 Other comprehensive income before reclassifications 1,085 5,031 4,056 10,172 Amounts reclassified from AOCI (1) 35 ( 17,157 ) — ( 17,122 ) Net current period other comprehensive income (loss) 1,120 ( 12,126 ) 4,056 ( 6,950 ) December 31, 2023 612 12,546 ( 14,116 ) ( 958 ) Other comprehensive income (loss) before reclassifications 883 10,254 ( 4,660 ) 6,477 Amounts reclassified from AOCI (1) ( 28 ) ( 12,898 ) — ( 12,926 ) Net current period other comprehensive income (loss) 855 ( 2,644 ) ( 4,660 ) ( 6,449 ) December 31, 2024 $ 1,467 $ 9,902 $ ( 18,776 ) $ ( 7,407 ) (1) See the following table for details about these reclassifications. Amounts in parentheses indicate debits. The following table presents the reclassifications out of AOCI for the years ended December 31, 2024 and 2023. Details about AOCI Components Amount reclassified from AOCI (1) Affected line item where Income is presented Years ended December 31, 2024 2023 Amortization of defined benefit and other postretirement items: Net loss $ 8 $ 59 Other (expense) income (2) Net prior service cost (credit) 30 ( 125 ) Other (expense) income (2) 38 ( 66 ) Total before tax ( 10 ) 31 Tax benefit (expense) $ 28 $ ( 35 ) Net of tax Gains and losses on cash flow hedges: Interest rate caps $ 17,197 $ 22,731 Interest expense ( 4,299 ) ( 5,574 ) Tax expense 12,898 17,157 Net of tax Total reclassifications for the period $ 12,926 $ 17,122 Net of tax (1) Amounts in parentheses indicate debits to profit/loss. (2) These AOCI components are components of net periodic pension and other postretirement cost. See Note 20 to these consolidated financial statements for additional details. F-29 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Treasury Stock Repurchases 2022 Stock Repurchase Program On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $ 450,000 of the Company’s common stock over the four-year period from the date of approval. Under the plan, the Company is permitted to repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions with an equity sponsor in accordance with applicable federal securities laws, with the Company determining the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors. During the year ended December 31, 2024, the Company repurchased 552,081 shares on the open market at an average price of $ 9.05 per share, for a total of $ 4,998 , excluding brokerage commissions and accrued excise tax. As of December 31, 2024, $ 229,594 was available for share repurchases under the program. During the year ended December 31, 2024, t he Company did not need to accrue excise tax related to these repurchases, net of shares issued under the Company’s equity incentive program (see Note 19 to these consolidated financial statements). During the year ended December 31, 2023, the Company repurchased 541,494 shares on the open market at an average price of $ 9.85 per share, for a total of $ 5,333 , excluding brokerage commissions and accrued excise tax. Additionally, in connection with secondary offerings of the Company’s common stock by an equity sponsor in March and May 2023, the Company repurchased 7,000,000 shares of its common stock sold in the offerings from the underwriters at a weighted average price of $ 10.48 per share concurrently with the closing of the offerings, for a total of $ 73,373 , excluding accrued excise tax. During the year ended December 31, 2023, the Company accrued excise tax of $ 638 related to these repurchases, net of shares issued under the Company’s equity incentive program. This amount is included in accrued liabilities in the consolidated balance sheet and is treated by the Company as a cost of the treasury stock transactions in equity. Tax Withholdings on Equity Award Vesting In connection with the vesting of restricted stock awards (“RSA” or “RSAs”), restricted stock units (“RSU” or “RSUs”) and performance stock units (“PSU” or “PSUs”), shares of common stock may be delivered to the Company by employees to satisfy withholding tax obligations at the instruction of the employee award holders. These transactions, when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting event. There were 128,801 and 315,635 shares delivered to the Company to cover tax payments for the years ended December 31, 2024 and 2023 , respectively and the fair value of those shares withheld were $ 1,218 and $ 3,372 for the years ended December 31, 2024 and 2023 , respectively. F-30 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 8. Other Operating Expense, Net: A summary of other operating expense, net is as follows: Years ended December 31, 2024 2023 2022 Amortization expense $ 10,585 $ 10,565 $ 10,562 Transaction and other related costs 428 2,954 6,988 Restructuring, integration and business optimization costs (1) 955 2,655 11,566 Net loss on asset disposals 2,351 4,137 3,594 Intangible asset impairment charge (Note 14) 3,900 — — Other, net 1,333 1,789 2,201 Total operating expense, net $ 19,552 $ 22,100 $ 34,911 (1) During the year ended December 31, 2022, the Company’s results were impacted by costs associated with severance charges for certain former executives and employees. The severance charges were not related to a specific restructuring plan of the Company, but rather were incurred primarily in connection with the leadership transition in April 2022 and the retirement of several executives. 9. Inventories, Net: Inventories, net are classified and valued as follows: December 31, 2024 2023 Finished products and work in process $ 54,124 $ 41,658 Raw materials 3,002 3,457 Total inventory, net $ 57,126 $ 45,115 Valued at lower of cost or market: LIFO basis $ 31,650 $ 24,815 Valued at lower of cost and net realizable value: FIFO or average cost basis 25,476 20,300 Total inventory, net $ 57,126 $ 45,115 The domestic inventory acquired as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016 (“the 2016 business combination”) is valued based on the LIFO method. Therefore, the fair value allocated to the acquired LIFO inventory was treated as the new base inventory value. If inventories valued under the LIFO basis had been valued using the FIFO method, inventories would have been $ 5,700 and $ 3,529 lower than reported as of December 31, 2024 and 2023, respectively, driven primarily by the purchase accounting fair value step-up of the LIFO inventory base value associated with the 2016 business combination. F-31 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 10. Investments in Affiliated Companies: The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of December 31, 2024 are as follows: Company Country Percent Ownership Zeolyst International USA 50 % Zeolyst C.V. Netherlands 50 % Following is summarized information of the combined investments (1) : December 31, 2024 2023 Current assets $ 254,541 $ 291,825 Noncurrent assets 166,999 183,717 Current liabilities 27,226 36,799 Noncurrent liabilities 5,649 5,797 December 31, 2024 2023 2022 Sales $ 286,283 $ 345,002 $ 306,511 Gross profit 78,043 107,865 105,693 Operating income 37,230 70,783 67,169 Net income 37,746 74,053 68,255 (1) Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above. The Company’s investments in affiliated companies balance as of December 31, 2024 and 2023 includes net purchase accounting fair value adjustments of $ 155,138 and $ 224,614 , respectively, related to the 2016 business combination consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income from affiliates is net of $ 3,761 , $ 6,403 and $ 6,402 of amortization expense related to purchase accounting fair value adjustments for the years ended December 31, 2024, 2023 and 2022, respectively. During the year ended December 31, 2024, the Company recognized a $ 65,000 other than temporary impairment charge on its investment in the Zeolyst Joint Venture to reduce the carrying value of the Company’s investment to its estimated fair value. This impairment was an adjustment to the goodwill and trade name components of the purchase accounting fair value adjustments recorded as a result of the 2016 business combination. The Company had receivables due from affiliates of $ 2,794 and $ 3,231 as of December 31, 2024 and 2023, respectively, which were included in prepaid and other current assets in the consolidated balance sheets. The Company had payables from affiliates of $ 929 and $ 1,351 as of December 31, 2024 and 2023, which were included in accrued liabilities in the consolidated balance sheets. Receivables and payables due from affiliates are generally non-trade. Sales to affiliates were $ 3,811 , $ 2,457 and $ 5,915 for the years ended December 31, 2024, 2023 and 2022, respectively. There were no purchases from affiliates during the years ended December 31, 2024 and 2022, respectively and $ 236 for the year ended December 31, 2023. F-32 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The Advanced Materials & Catalysts segment includes equity in net income from Zeolyst International and Zeolyst C.V. (collectively, the “Zeolyst Joint Venture”), each of which are 50/50 joint ventures with CRI Zeolites Inc. (a wholly-owned subsidiary of Royal Dutch Shell). The Zeolyst Joint Venture is accounted for using the equity method in the Company’s consolidated financial statements. The Company’s management evaluates the Advanced Materials & Catalysts segment’s performance, including the Zeolyst Joint Venture, on a proportionate consolidation basis. The Company’s equity in net income from affiliated companies in the consolidated results includes amortization expense related to purchase accounting fair value adjustments associated with the Zeolyst Joint Venture as a result of the 2016 business combination. The Company’s consolidated results include equity in net income from affiliated companies of $ 15,112 , $ 30,624 and $ 27,725 for the years ended December 31, 2024, 2023 and 2022, respectively. This represents the primary component of equity in net income in the Advanced Materials & Catalysts segment from the Zeolyst Joint Venture. During the year ended December 31, 2024, the Company recognized an other than temporary impairment charge of $ 65,000 on its investment in the Zeolyst Joint Venture, specifically related to our investment in Zeolyst International, to reduce the carrying value of the Company’s investment to its estimated fair value. This impairment was a partial reduction to the goodwill and trade name components of the purchase accounting fair value adjustments recorded as a result of the 2016 business combination. The Company estimated the fair value of the investment using a combination of an income and market value approach, using level 3 inputs. The Company estimated market approach fair value using publicly traded comparable company values and applied a control premium and the selected market multiples to the investee’s trailing twelve months Adjusted EBITDA. The Company estimated income-based fair value using the discounted cash flow approach. This approach requires the use of significant assumptions about future cash flows and is based on management’s assessment of a number of factors. The key assumptions include revenue growth rates, operating margin growth rates, the perpetual growth rate, selling, general and administrative expenses growth rates and the weighted average cost of capital, as well as the investee’s recent performance and its ability to execute on planned future strategic initiatives. Discount rate assumptions are based on an assessment of the risk inherent in those future cash flows. The fair value declined primarily due to the demand outlook for catalyst materials used in emission control applications and the production of sustainable fuels, which has resulted in revised projections of future operating results. The following table summarizes the activity related to the Company’s investments in affiliated companies balance on the consolidated balance sheets: December 31, 2024 2023 Balance at beginning of period $ 440,198 $ 436,013 Equity in net income of affiliated companies 18,873 37,027 Charges related to purchase accounting fair value adjustments ( 3,761 ) ( 6,403 ) Dividends received ( 38,000 ) ( 28,000 ) Impairment of investment in affiliated companies ( 65,000 ) — Foreign currency translation adjustments ( 3,002 ) 1,561 Balance at end of period $ 349,308 $ 440,198 In December 2013 and annually thereafter, the Company and its joint venture, Zeolyst International, entered into ten year real estate tax abatement agreements with the Unified Government of Wyandotte County in Kansas City, Kansas (the “Unified Government”). The agreements utilize an Industrial Revenue Bond (“IRB,” “IRBs”) financing structure to achieve a 75 % real estate tax abatement on the value of the improvements that were constructed during the expansion of the then-current fiscal year to the Company and Zeolyst International’s facilities at the jointly-operated Kansas City, Kansas plant. The IRB financing structure requires the Company to lease its rights to the facility improvements to the Unified Government, which leases the improvements back to the Company. The Company’s rental payments under the sub-leases of the improvements are equal to the amount of the interest payable on the IRBs that the Unified Government sells to the Company. The Company’s sublease payment obligations and the IRB interest payment receivables have been F-33 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) presented net, as the sublease rental payment obligations and the IRB interest payment receivables meet the criteria for right of set off conditions under GAAP. 11. Property, Plant and Equipment: A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: December 31, 2024 2023 Land $ 97,163 $ 96,833 Buildings and improvements 94,324 84,860 Machinery and equipment 872,875 820,509 Construction in progress 40,868 42,000 Property, plant and equipment, gross 1,105,230 1,044,202 Less: accumulated depreciation ( 535,955 ) ( 467,298 ) Total property, plant and equipment, net $ 569,275 $ 576,904 Depreciation expense was $ 75,282 , $ 70,551 and $ 65,121 for the years ended December 31, 2024, 2023 and 2022, respectively. 12. Leases: Operating lease costs of $ 10,997 , $ 10,828 and $ 10,318 are included in cost of goods sold and in selling, general and administrative expenses on the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022, respectively. Finance lease costs of $ 74 , $ 77 and $ 36 are included in cost of goods sold and in selling, general, and administrative expenses on the consolidated statement of income for the years ended December 31, 2024, 2023 and 2022, respectively. Lease income is not material to the results of operations for the years ended December 31, 2024, 2023 and 2022, respectively. The table below presents the operating and finance leases right-of-use assets and liabilities recognized on the consolidated balance sheet as of December 31, 2024 and 2023: December 31, Balance Sheet location 2024 2023 Assets Operating lease Right-of-use lease assets $ 33,558 $ 24,281 Finance lease Property, plant and equipment, net 1,116 1,269 Total leased assets $ 34,674 $ 25,550 Liabilities Current: Operating lease Operating lease liabilities—current $ 9,267 $ 8,193 Finance lease Accrued liabilities 23 70 Noncurrent: Operating lease Operating lease liabilities—noncurrent 24,189 16,030 Finance lease Other long-term liabilities — 28 Total leased liabilities $ 33,479 $ 24,321 F-34 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of December 31, 2024 and 2023 are as follows: December 31, 2024 2023 Weighted average remaining lease term (in years): Operating leases 4.73 3.96 Finance leases 0.44 1.33 Weighted average discount rate: Operating leases 6.22 % 5.95 % Finance leases 4.09 % 3.91 % Maturities of lease liabilities as of December 31, 2024 are as follows: Year Operating Leases Finance Leases 2025 $ 10,979 $ 23 2026 8,813 — 2027 6,928 — 2028 4,423 — 2029 3,020 — Thereafter 4,595 — Total lease payments 38,758 23 Less: Interest ( 5,302 ) — Total lease liabilities (1) $ 33,456 $ 23 (1) Refer to the above table regarding the Company’s right-of-use lease assets and lease liabilities for the classification of lease liabilities in the Company’s consolidated balance sheet as of December 31, 2024. The following table presents other information related to the Company’s operating and finance leases and the impact on the Company’s consolidated statement of cash flows: Years ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Payments on operating leases included in operating cash flows $ 10,996 $ 10,813 Interest payments under finance leases included in operating cash flows 2 5 Principal payments under finance leases included in financing cash flows 76 72 Right-of-use assets obtained in exchange for new lease liabilities (non-cash): Operating leases 18,612 8,105 F-35 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 13. Reportable Segments: Sales The Company has organized its business around two operating segments based on the review of discrete financial results for each of the operating segments by the CODM, for performance assessment and resource allocation purposes. Each of the Company’s operating segments represents a reportable segment under GAAP. The Company’s reportable segments are organized based on the nature and economic characteristics of the Company’s products. The Company’s two reportable segments are as follows: (1) Ecoservices, which provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining and industrial applications; and (2) Advanced Materials & Catalysts, which serves the polymers and engineered plastics and the global refining, petrochemical and emissions control industries. The following table summarizes sales for the Company’s reportable segments: Years ended December 31, 2024 2023 2022 Sales: Ecoservices $ 598,295 $ 584,845 $ 702,472 Advanced Materials & Catalysts (1) 106,198 106,273 117,687 Total $ 704,493 $ 691,118 $ 820,159 (1) The Company does not record its proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method as revenue and such sales are not consolidated within its results of operations. See Note 10 to these consolidated financial statements for further information. The Company’s proportionate share of sales from the Zeolyst Joint Venture is $ 116,539 , $ 156,481 and $ 132,588 for the years ended December 31, 2024, 2023 and 2022, respectively. Adjusted EBITDA The Company’s management evaluates the operating results of each reportable segment based upon adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”). The Company defines Adjusted EBITDA as EBITDA, which is a measure defined as net income before interest, income taxes, depreciation and amortization (each of which is included in the Company’s consolidated statements of income), adjusted for certain items as noted in the reconciliations below. Adjusted EBITDA should not be considered as an alternative to net income or as an indicator of the Company’s operating performance. Adjusted EBITDA, as defined by the Company, may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies. For each reportable segment, the CODM uses segment Adjusted EBITDA to allocate resources (including employees, property and financial or capital resources) for each segment primarily in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. The CODM also uses segment Adjusted EBITDA to evaluate the return on assets of each segment in connection with performance evaluation and to inform the compensation for certain employees. Corporate overhead costs are not included in segment results as they relate to corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments. F-36 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following table summarizes Adjusted EBITDA for the Company’s reportable segments: Years ended December 31, 2024 2023 2022 Adjusted EBITDA: Ecoservices $ 200,287 $ 199,966 $ 227,760 Advanced Materials & Catalysts (1) 64,728 81,892 77,978 Adjusted EBITDA from reportable segments $ 265,015 $ 281,858 $ 305,738 (1) The Adjusted EBITDA for the Company’s Advanced Materials & Catalysts segment reflects the Company’s 50 % portion of the earnings from the Zeolyst Joint Venture that have been recorded as equity in net income in its consolidated statements of income and includes Zeolyst Joint Venture adjustments on a proportionate basis based on the Company’s 50 % ownership interest. For the year ended December 31, 2024, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 32,212 , which includes $ 15,112 of equity in net income plus $ 3,761 of amortization of investment in affiliate step-up and $ 13,339 of joint venture depreciation, amortization and interest. For the year ended December 31, 2023, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 50,490 , which includes $ 30,695 of equity in net income plus $ 6,403 of amortization of investment in affiliate step-up and $ 13,392 of joint venture depreciation, amortization and interest. For the year ended December 31, 2022, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 50,331 , which includes $ 27,931 of equity in net income plus $ 6,403 of amortization of investment in affiliate step-up and $ 15,997 of joint venture depreciation, amortization and interest. F-37 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following tables reconcile sales to Adjusted EBITDA from reportable segments: Year ended December 31, 2024 Ecoservices Advanced Materials & Catalysts Total Sales (2) $ 598,295 $ 106,198 Less: (3) Cost of goods sold 373,839 58,752 Selling, general and administrative expenses 25,636 14,354 Other segment items (4) ( 1,467 ) 576 Add: Adjusted EBITDA from the Zeolyst Joint Venture — 32,212 Adjusted EBITDA from reportable segments $ 200,287 $ 64,728 $ 265,015 Year ended December 31, 2023 Ecoservices Advanced Materials & Catalysts Total Sales (2) $ 584,845 $ 106,273 Less: (3) Cost of goods sold 361,958 60,035 Selling, general and administrative expenses 23,615 14,255 Other segment items (4) ( 694 ) 581 Add: Adjusted EBITDA from the Zeolyst Joint Venture — 50,490 Adjusted EBITDA from reportable segments $ 199,966 $ 81,892 $ 281,858 Year ended December 31, 2022 Ecoservices Advanced Materials & Catalysts Total Sales (2) $ 702,472 $ 117,687 Less: (3) Cost of goods sold 454,602 77,933 Selling, general and administrative expenses 20,713 12,428 Other segment items (4) ( 603 ) ( 321 ) Add: Adjusted EBITDA from the Zeolyst Joint Venture — 50,331 Adjusted EBITDA from reportable segments $ 227,760 $ 77,978 $ 305,738 (2) The Company does not record its proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method as revenue and such sales are not consolidated within its results of operations. See Note 10 to these consolidated financial statements for further information. The Company’s proportionate share of sales from the Zeolyst Joint Venture is $ 116,539 , $ 156,481 and $ 132,588 for the years ended December 31, 2024, 2023 and 2022, respectively. F-38 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) (3) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. All lines exclude depreciation, amortization and other items as noted in the reconciliation below. (4) Other segment items include other operating (income) expense, foreign currency exchange (gains) losses and other (income) expense. Other income primarily relates to sale of environmental credits. The following table reconciles Adjusted EBITDA from reportable segments to income from continuing operations before income taxes: Years ended December 31, 2024 2023 2022 Adjusted EBITDA from reportable segments $ 265,015 $ 281,858 $ 305,738 Less: Interest expense, net 49,426 44,730 37,217 Depreciation and amortization 89,362 84,598 79,163 Unallocated corporate expenses 26,776 21,990 29,042 Joint venture depreciation, amortization and interest 13,339 13,392 15,997 Amortization of investment in affiliate step-up 3,761 6,403 6,402 Impairment of investment in affiliated companies 65,000 — — Intangible asset impairment charge 3,900 — — Debt extinguishment costs 4,560 — — Net loss on asset disposals 2,351 4,137 3,594 Foreign currency exchange (gain) loss ( 182 ) ( 1,340 ) 1,388 LIFO (benefit) expense ( 2,171 ) 3,473 ( 165 ) Transaction and other related costs 428 2,954 6,988 Equity-based compensation 14,043 16,031 20,632 Restructuring, integration and business optimization expenses 955 2,655 11,566 Other ( 1,511 ) 896 ( 821 ) (Loss) income before income taxes $ ( 5,022 ) $ 81,939 $ 94,735 Capital Expenditures The following table shows capital expenditures for the Company’s reportable segments: Years ended December 31, 2024 2023 2022 Capital expenditures: Ecoservices $ 54,689 $ 53,705 $ 47,770 Advanced Materials & Catalysts (1) 14,712 8,441 8,194 Other (2) ( 448 ) 3,189 2,906 Capital expenditures per the consolidated statements of cash flows $ 68,953 $ 65,335 $ 58,870 (1) Excludes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture. (2) Includes the cash impact from changes in capital expenditures in accounts payable and capitalized interest. F-39 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Sales by Geography Sales by geographic area are presented in the following table. Sales are attributed to countries based upon location of products shipped. Years ended December 31, 2024 2023 2022 Sales (1) : United States $ 666,342 $ 649,652 $ 774,119 Foreign countries 38,151 41,466 46,040 Total $ 704,493 $ 691,118 $ 820,159 (1) Except for the United States, no sales in an individual country exceeded 10% of the Company’s total sales. Sales by Customers The Company sold products through its Ecoservices and Advanced Materials & Catalysts segments to two customers having 10% or more of total net sales. Customer A accounted for 13.6 %, 13.2 % and 12.3 % of the Company’s total net sales for the years ended December 31, 2024, 2023 and 2022, respectively. Customer B accounted for 11.1 % of total net sales for the year ended December 31, 2024 and was less than 10% for the years ended December 31, 2023 and 2022, respectively. Long-lived Assets by Geography Long-lived assets by geographic area is presented in the following table. Long-lived assets includes property, plant and equipment, net and right-of-use lease assets. December 31, 2024 2023 Long-lived assets: United States $ 578,450 $ 575,536 Foreign countries 24,383 25,649 Total $ 602,833 $ 601,185 Total assets by segment are not disclosed by the Company because the information is not prepared or used by the CODM to assess performance or to allocate resources. F-40 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 14. Goodwill and Other Intangible Assets: The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 is summarized as follows: Ecoservices Advanced Materials & Catalysts Total Balance as of December 31, 2022 $ 326,589 $ 76,574 $ 403,163 Foreign exchange impact — 1,307 1,307 Balance as of December 31, 2023 326,589 77,881 404,470 Foreign exchange impact — ( 368 ) ( 368 ) Balance as of December 31, 2024 $ 326,589 $ 77,513 $ 404,102 The Company completed its annual goodwill impairment test as of October 1, 2024 and 2023. For the annual assessments, the Company bypassed the option to perform the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test for each of its reporting units. The quantitative test identifies both the potential existence of impairment and the amount of impairment loss. For each of the October 1, 2024 and 2023 assessments, the Company identified two reporting units, which align with the Company’s operating segments. The Company determined the fair value of its reporting units using both a market approach and an income, or discounted cash flow, approach. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company estimates reporting unit market approach fair value using publicly traded comparable company values and applies the selected market multiples to each reporting unit’s trailing twelve months Adjusted EBITDA. The Company estimates reporting unit income-based fair value using the discounted cash flow approach. This approach requires use of significant assumptions about future cash flows and based on management’s assessment of a number of factors. Such factors include reporting unit revenue growth rates from implementation of strategic plans, operating margin growth rates, the perpetual growth rate, and the weighted average cost of capital, as well as the reporting unit’s recent performance and management’s ability to execute on planned future strategic initiatives. Discount rate assumptions are based on an assessment of the risk inherent in those future cash flows. As of October 1, 2024, the fair values of each of the Company’s reporting units exceeded their respective carrying values and therefore, no goodwill impairment exists for the year ended December 31, 2024. Although the estimated fair value of the Advanced Materials & Catalysts reporting unit exceeded its carrying value by approximately 15 %, the Company has experienced unfavorable effects on current operations resulting from certain macroeconomic and industry factors in specific end uses during the year ended December 31, 2024. Prolonged unfavorable effects could adversely impact the estimated fair value of the Advanced Materials & Catalysts reporting unit in future periods and may result in impairment charges. In addition to the annual goodwill impairment assessment, the Company also performed the annual impairment test over its other indefinite-lived intangible assets as of October 1, 2024 and 2023. As part of the October 1, 2024 test, the Company recognized an impairment charge of $ 3,900 related to the Advanced Materials & Catalysts in-process research and development (“IPR&D”) intangible asset upon the conclusion that the associated project could no longer support the valuation due to extended time to commercialization and reductions in associated forecasted revenues. The fair values of the Company’s indefinite-lived trade names were in excess of their carrying amounts as of the respective testing dates, and as such, there was no further impairment of the Company’s indefinite-lived intangible assets for the years ended December 31, 2024 and 2023. F-41 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Gross carrying amounts and accumulated amortization for intangible assets other than goodwill are as follows: December 31, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Impairment Charge Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Technical know-how $ 55,217 $ ( 30,907 ) $ — $ 24,310 $ 55,350 $ ( 27,472 ) $ 27,878 Customer relationships 130,834 ( 86,348 ) — 44,486 130,912 ( 76,634 ) 54,278 Non-compete agreements 700 ( 537 ) — 163 700 ( 397 ) 303 Trademarks 7,484 ( 4,324 ) — 3,160 7,521 ( 3,844 ) 3,677 Trade names 1,600 ( 613 ) 987 1,600 ( 453 ) 1,147 Total definite-lived intangible assets 195,835 ( 122,729 ) — 73,106 196,083 ( 108,800 ) 87,283 Indefinite-lived trade names 25,307 — — 25,307 25,367 — 25,367 IPR&D 3,900 — ( 3,900 ) — 3,900 — 3,900 Total intangible assets $ 225,042 $ ( 122,729 ) $ ( 3,900 ) $ 98,413 $ 225,350 $ ( 108,800 ) $ 116,550 The Company amortizes technical know-how over periods that range from ten years to twenty years , customer relationships over periods that range from ten years to fifteen years , non-compete agreements over five years , trademarks over fifteen years , and trade names over ten years . IPR&D intangible assets are considered indefinite-lived until such time as the associated projects are completed, at which time amortization commences on the assets, or abandoned, which results in the impairment of the assets. Amortization expense related to technical know-how is included in cost of goods sold in the consolidated statements of income and was $ 3,495 , $ 3,482 and $ 3,480 for the years ended December 31, 2024, 2023 and 2022, respectively. Amortization expense related to customer relationships, non-compete agreements, trademarks, and trade names is included in other operating expense, net in the consolidated statements of income and was $ 10,585 , $ 10,565 and $ 10,562 for the years ended December 31, 2024, 2023 and 2022, respectively. Estimated future aggregate amortization expense of intangible assets is as follows: Year Amount 2025 $ 14,067 2026 12,912 2027 12,370 2028 12,221 2029 10,033 Thereafter 11,503 Total estimated future aggregate amortization expense $ 73,106 F-42 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 15. Accrued Liabilities: The following table summarizes the components of accrued liabilities as follows: December 31, 2024 2023 Compensation and bonus $ 22,530 $ 16,594 Interest 10,190 11,976 Property tax 2,039 3,657 Environmental reserves (Note 23) 783 434 Income taxes 2,094 7,708 Finance lease and financing obligation liabilities 3,065 3,069 Dividends payable — 641 Derivative liabilities 235 — Other 12,265 17,614 Total accrued liabilities $ 53,201 $ 61,693 16. Long-term Debt: The summary of long-term debt is as follows: December 31, 2024 2023 2024 Term Loan Facility $ 870,817 $ 877,500 ABL Facility — — Total debt 870,817 877,500 Original issue discount ( 7,201 ) ( 6,162 ) Deferred financing costs ( 2,787 ) ( 3,392 ) Total debt, net of original issue discount and deferred financing costs 860,829 867,946 Less: current portion ( 8,730 ) ( 9,000 ) Total long-term debt, excluding current portion $ 852,099 $ 858,946 Term Loan Facility On June 9, 2021, PQ Corp and Ecovyst Catalyst Technologies LLC (“Ecovyst LLC” and, following the closing of the sale of the Performance Chemicals business, the “Borrower”), an indirect, wholly owned subsidiary of the Company, entered into an agreement (the “2021 Credit Agreement”) for the 2021 Term Loan Facility in an aggregate principal amount of $ 900,000 with an original issue discount of 0.25 % and interest at a floating rate of LIBOR (with a 0.50 % minimum LIBOR floor) plus 2.75 % per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50 %). The 2021 Term Loan Facility required scheduled quarterly amortization payments, each equal to 0.25 % of the original principal amount of the loans under the 2021 Term Loan Facility. The proceeds of the 2021 Term Loan Facility were used to pay in full the senior secured term loan facility we entered into an agreement in 2020, partially pay the senior secured term loan facility the Company entered into an agreement in 2018 and pay the associated fees and expenses. On February 9, 2023, the Company amended the 2021 Term Loan Facility to replace LIBOR with a Secured Overnight Financing Rate (“SOFR”) as the benchmark interest rate. Following this amendment, the 2021 Term Loan Facility bear interest at an adjusted SOFR rate (with a 0.50 % minimum floor) plus 2.75 % per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50 %). F-43 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) On June 12, 2024, the Company amended the 2021 Term Loan Facility to, among other things, (a) reduce the interest rate applicable to all outstanding SOFR term loans to term SOFR plus 2.25 % per annum from a maximum of adjusted term SOFR plus 2.75 % per annum, (b) reduce the interest rate applicable to all outstanding base rate term loans to the alternate base rate plus 1.25 % per annum from a maximum of the alternate base rate plus 1.75 % per annum and (c) extend the maturity date of all outstanding term loans to June 12, 2031 (the amended term loans, the “2024 Term Loan Facility”). As a result of the amendment, there is no longer a credit spread adjustment of 10 basis points. On January 30, 2025, the Company amended the 2024 Term Loan Facility to, among other things, (a) reduce the interest rate applicable to all outstanding SOFR term loans to term SOFR plus 2.00 % per annum from a maximum of term SOFR plus 2.25 % per annum and (b) reduce the interest rate applicable to all outstanding base rate term loans to the alternate base rate plus 1.00 % per annum from a maximum of the alternate base rate plus 1.25 % per annum. The interest rate on the 2024 Term Loan Facility was 6.84 % as of December 31, 2024. The 2024 Term Loan Facility is guaranteed by Ecovyst Catalyst Technologies LLC and Ecoservices Operations Corp, as well as other material U.S. subsidiaries of the Company. The obligations under the 2024 Term Facility are secured (i) by a first-priority security interest in, among other things, a pledge of substantially all of the Borrower’s and the guarantors’ assets (other than collateral securing the ABL Facility on a first-priority basis) and (ii) by a second-priority security interest in receivables, inventory, deposit accounts and other collateral of the Borrower and the U.S. subsidiary guarantors securing the ABL Facility. The Company may at any time voluntarily prepay loans under the 2024 Term Loan Facility in whole or in part without premium or penalty (other than a premium that would be payable in the event of a repricing of the 2024 Term Loan Facility occurring on or prior to July 30, 2025). Debt extinguishment costs resulting from Term Loan amendments In June 2024, the Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt. As a result, the Company recorded $ 4,471 of third-party financing costs as debt extinguishment costs in the consolidated income statement for the year ended December 31, 2024 and capitalized $ 2,183 of original issued discount within long-term debt, excluding current portion on the consolidated balance sheets as of December 31, 2024. In addition, previous unamortized deferred financing costs of $ 30 and original issue discount of $ 59 associated with the previously outstanding debt were written off as debt extinguishment costs for the year ended December 31, 2024. In January 2025, the Company re-priced the 2024 Term Loan Facility to reduce the applicable interest rate. The terms of the facility were substantially consistent following the re-pricing, except that borrowings under the facility will bear interest at a rate equal to term SOFR plus 2.00 % per annum. ABL Facility On May 4, 2016, PQ Corporation (“PQ Corp”), an indirect, wholly owned subsidiary of the Company prior to the closing of the sale of the Performance Chemical business entered into a $ 200,000 senior secured asset-based revolving credit facility (the “ABL Facility”), which provided for $ 200,000 revolving credit commitments. On March 20, 2020, PQ Corp amended its existing ABL Facility to increase the aggregate amount of the revolving loan commitments available by $ 50,000 to $ 250,000 , consisting of up to $ 195,000 in U.S. commitments, up to $ 15,000 in Canadian commitments and up to $ 40,000 in European commitments. The maturity of the facility was extended to March 20, 2025. In addition, there was an annual commitment fee equal to 0.375 %, with a step-down to 0.25 % based on average usage of the revolving credit borrowings available Following the amendment, the borrowings under the amended ABL Facility bear interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 %, respectively. F-44 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) On June 9, 2021, PQ Corp and Ecovyst LLC (as defined below) entered into a third amendment agreement (the “ABL Amendment”), which amended its ABL Credit Agreement, dated as of May 4, 2016 (the “ABL Credit Agreement” and, as amended by the ABL Amendment, the “Amended ABL Credit Agreement”). The ABL Amendment, among other things, following the sale of Performance Chemicals, decreased the aggregate amount of revolving loan commitments available to the borrowers thereunder by an aggregate amount of $ 150,000 to $ 100,000 , consisting of $ 90,000 in U.S. commitments and $ 10,000 in European commitments and extended the maturity date with respect to borrowings under the Amended ABL Credit Agreement to August 2, 2026. On February 17, 2023, the Company amended the ABL Facility to replace LIBOR with SOFR as the benchmark interest rate. Following this amendment, the borrowings under the ABL Facility bears interest at a rate equal to an adjusted term SOFR, which includes a credit spread adjustment of 10 basis points or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 %, respectively. The interest rate on the ABL Facility was 7.75 % as of December 31, 2024. As of December 31, 2024, there were no revolving credit borrowings outstanding under the ABL Facility. Revolving credit borrowings are payable at the option of the Borrower throughout the term of the ABL Facility with the balance due August 2, 2026. The Company has the ability to request letters of credit under the ABL Facility. The Company had $ 3,330 of letters of credit outstanding as of December 31, 2024, which reduce available borrowings under the ABL Facility by such amounts. The obligations of the Borrower under the ABL Facility are guaranteed by the same U.S. subsidiary guarantors that guarantee the 2024 Term Loan Facility (as described below) and the obligations of the European Borrowers under the ABL Facility are guaranteed by a certain European subsidiary of the Borrower. The obligations of the borrowers and guarantors under the ABL Facility are secured (i) by a first-priority security interest in, among other things, substantially all of their receivables, inventory, deposit accounts and other collateral securing the ABL Facility on a first-priority basis and (ii) by a second-priority security interest in the property and assets of the Borrower and the U.S. subsidiary guarantors that secure the 2024 Term Loan Facility. In addition, the ABL Facility is secured by the equity interests in, and substantially all of the assets of, certain foreign guarantors in connection with the Euro-denominated availability. The ABL Facility and the 2024 Term Loan Facility contain various restrictive covenants. Each limits the ability of the Borrower and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks, and certain other non-financial restrictive covenants. The ABL Facility also contains one financial covenant which applies when minimum availability under the ABL Facility exceeds a certain threshold. During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1 .0 to 1.0. The Company was in compliance with all debt covenants as of December 31, 2024 and 2023, respectively. Fair Value of Debt The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As of December 31, 2024 and 2023, the fair value of the Company’s term loan facility was $ 874,083 and $ 876,403 , respectively. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 6 to these consolidated financial statements for further information on fair value measurements). F-45 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Aggregate Long-term Debt Maturities The aggregate long-term debt maturities are: Year Amount 2025 $ 8,730 2026 8,730 2027 8,730 2028 8,730 2029 8,730 Thereafter 827,167 $ 870,817 17. Other Long-term Liabilities: The following table summarizes the components of other long-term liabilities as follows: December 31, 2024 2023 Pension plan liabilities $ 2,122 $ 4,937 Other postretirement benefit plan liabilities 442 457 Derivative liabilities 475 2,496 Finance lease and financing obligation liabilities 1,815 4,955 Reserve for uncertain tax positions 110 9,523 Other 88 71 Total other long-term liabilities $ 5,052 $ 22,439 18. Financial Instruments: The Company uses interest rate related derivative instruments to manage its exposure to changes in interest rates on its variable-rate debt instruments. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high quality counterparties. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with the Company’s derivative instruments is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. F-46 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Use of Derivative Financial Instruments to Manage Interest Rate Risk. The Company is exposed to fluctuations in interest rates on its senior secured credit facilities. Changes in interest rates will not affect the market value of such debt but will affect the Company’s interest payments over the term of the loans. Likewise, an increase in interest rates could have a material impact on the Company’s consolidated statements of cash flows. The Company hedges the interest rate fluctuations on debt obligations through interest rate cap agreements. The Company records these agreements at fair value as assets or liabilities in the consolidated balance sheets. As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the interest rate cap agreements are recorded in stockholders’ equity as a component of other comprehensive income, net of tax. Reclassifications of the gains and losses on the interest rate cap agreements into earnings are recorded as part of interest expense in the consolidated statements of income as the Company makes its interest payments on the hedged portion of its senior secured credit facilities. Fair value is determined based on estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices. The following table provides a summary of the Company’s interest rate cap agreements: Financial instrument Number of instruments In effect as of December 31, 2024 Current notional amount of instruments in effect Annuitized premium of instruments in effect Interest rate cap 4 3 $ 625,000 $ 35,285 The current notional amounts of the three interest rate cap agreements in effect at December 31, 2024 are $ 250,000 , $ 175,000 and $ 200,000 . The Company entered into a $ 250,000 interest rate cap to mitigate interest rate volatility from September 2023 to October 2025, a $ 175,000 interest rate cap agreement to mitigate interest rate volatility from August 2024 to July 2026 and a $ 200,000 interest rate cap agreement to mitigate interest rate volatility from November 2024 to October 2025. The Company had a $ 150,000 interest rate cap agreement to mitigate interest rate volatility from August 2023 to July 2024. The $ 200,000 interest rate cap agreement will increase to $ 450,000 to mitigate interest rate volatility from November 2025 to October 2026. The cap rates in effect at December 31, 2024 was 1.00 %. The Company also entered into a $ 200,000 forward starting interest rate cap agreement to mitigate interest volatility from August 2026 to July 2028. In February 2023, the Company amended all existing interest rate cap agreements to replace LIBOR with SOFR as the benchmark interest rate, with all other terms of the agreements remaining the same. This amendment changed the previously annuitized premiums on the existing interest rate cap agreements. The fair values of derivative instruments held as of December 31, 2024 and 2023, respectively are shown below: December 31, Balance sheet location 2024 2023 Derivative assets: Derivatives designated as cash flow hedges: Interest rate caps Prepaid and other current assets $ 6,532 $ 13,419 Interest rate caps Other long-term assets 5,968 5,602 Total derivative assets $ 12,500 $ 19,021 Derivative liabilities: Derivatives designated as cash flow hedges: Interest rate caps Accrued liabilities $ 235 $ — Interest rate caps Other long-term liabilities 475 2,496 Total derivative liabilities $ 710 $ 2,496 F-47 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI and the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022, respectively: Amount of gain (loss) recognized in OCI December 31, 2024 2023 Interest rate caps $ 13,672 $ 5,419 Amount of gain (loss) reclassified from AOCI December 31, 2024 2023 Interest rate caps $ ( 17,197 ) $ ( 22,731 ) Amount of (gain) loss reclassified into Income Years ended December 31, 2024 2023 2022 Interest rate caps $ 17,197 $ 22,731 $ ( 683 ) The following table shows the amounts for the line items presented on the consolidated statements of income in which the effects of cash flow hedges are recorded for the years ended December 31, 2024, 2023 and 2022, respectively: Years ended December 31, Location and amount of gain (loss) recognized in income on cash flow hedging relationships 2024 2023 2022 Derivatives designated as cash flow hedges: Interest rate caps Interest (expense) income $ ( 49,426 ) $ ( 44,730 ) $ ( 37,217 ) The amount of net unrealized gains in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the consolidated statement of income over the next twelve months is $ 6,893 as of December 31, 2024. F-48 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 19. Income Taxes: Income before income taxes within or outside the United States are shown below: Years ended December 31, 2024 2023 2022 Domestic $ ( 17,186 ) $ 73,774 $ 86,695 Foreign 12,164 8,165 8,040 Total $ ( 5,022 ) $ 81,939 $ 94,735 The provision for income taxes as shown in the accompanying consolidated statements of income consists of the following: Years ended December 31, 2024 2023 2022 Current: Federal $ 6,044 $ 21,647 $ 18,210 State 2,691 3,695 3,100 Foreign 822 2,515 1,978 9,557 27,857 23,288 Deferred: Federal $ ( 7,053 ) $ ( 3,644 ) $ 4,544 State ( 2,747 ) ( 11,993 ) ( 2,288 ) Foreign 1,873 ( 1,435 ) ( 604 ) ( 7,927 ) ( 17,072 ) 1,652 Provision for income taxes $ 1,630 $ 10,785 $ 24,940 A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax expense is as follows: Years ended December 31, 2024 2023 2022 Tax at statutory rate $ ( 1,055 ) $ 17,207 $ 19,894 State income taxes, net of federal income tax benefit 183 748 248 Changes in uncertain tax positions ( 9,413 ) 985 558 State credit - valuation allowance release — ( 10,203 ) — Rate changes — ( 101 ) — Stock compensation 427 1,803 1,876 Compensation disallowance under 162(m) 148 2,344 3,146 Foreign tax credits ( 900 ) ( 848 ) — Impairment of investment in affiliated companies 13,272 — — Research and development tax credits ( 600 ) ( 400 ) ( 366 ) Other, net ( 432 ) ( 750 ) ( 416 ) Provision for income taxes $ 1,630 $ 10,785 $ 24,940 F-49 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) For the year ended December 31, 2024, certain components of the rate reconciliation have been aggregated within “Other, net” in the income tax rate reconciliation table, including the tax related to the US Foreign inclusion provisions, the effect of rates different than statutory, return-to-provision tax impact and a few immaterial items, as the impact of the $ 65,000 impairment to the investment in affiliated companies to the Company’s pre-tax book income (loss) resulted in a significantly reduced pre-tax book income (loss) for the year ended December 31, 2024. Deferred tax assets (liabilities) are comprised of the following: December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 13,820 $ 14,680 Interest disallowance carryforward 2,968 1,169 Pension 288 569 Operating lease liability 8,281 5,940 Other 18,367 10,806 State credits 14,359 14,659 Foreign withholding tax credits 9,083 9,083 Total deferred tax assets, gross 67,166 56,906 Valuation allowance ( 16,824 ) ( 18,325 ) Total deferred tax assets, net 50,342 38,581 Deferred tax liabilities: Depreciation $ ( 68,361 ) $ ( 66,816 ) Inventory ( 3,306 ) ( 3,427 ) Intangibles ( 69,953 ) ( 67,250 ) Operating lease right-of-use assets ( 8,307 ) ( 5,954 ) Other ( 5,452 ) ( 8,675 ) Total deferred tax liabilities ( 155,379 ) ( 152,122 ) Net deferred tax liabilities $ ( 105,037 ) $ ( 113,541 ) Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized for tax purposes during the year may be carried forward, subject to statutory limitations, to reduce taxable income or taxes payable in a future year. As of December 31, 2024, the Company has indefinite carryforwards of $ 9,083 foreign withholding tax credits. The Company has recorded a full valuation allowance against the foreign withholding tax credits as it is more likely than not that the benefit from these foreign tax credits will never be realized. The Company has $ 14,359 of deferred tax assets related to state tax credits, which are subject to a 16-year carryforward period. The Company expects to fully utilize its state tax credits before each expiration. As of December 31, 2024, the valuation allowance associated with its state tax credits was zero . The Company has $ 13,820 of deferred tax assets related to state net operating losses and foreign losses, which are subject to various carryforward periods of 5 to 20 years or an indefinite carryforward period. A partial valuation allowance of $ 7,741 has been recorded due to the expected expiration of these state and foreign net operating losses before they are able to be utilized. F-50 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The change in net deferred tax liabilities for the years ended December 31, 2024 and 2023 was primarily related to differences between book and tax basis depreciation, activity connected to book amortization of intangible assets with no corresponding tax basis reducing those deferred tax liabilities, activity with respect to tax deductible goodwill, activity with respect to interest rate caps recorded against other comprehensive income, activity with respect to the interest disallowance carryforward, activity with respect to the capitalization and related amortization of research and experimentation costs and activity with respect to the investment in the Zeolyst Joint Venture. The net change in the total valuation allowance was a decrease of $ 1,501 in 2024. The valuation allowance at December 31, 2024 was related to state and foreign net operating loss carryforwards and foreign withholding tax credits that, in the judgment of management, are not more likely than not to be realized. In assessing the ability to realize deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies that are prudent in making this assessment. In order to fully realize deferred tax assets, the Company will need to generate future taxable income prior to the expiration of the net operating loss and credit carryforwards. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The cumulative unremitted earnings of foreign subsidiaries outside the United States are considered permanently reinvested, for which no withholding taxes have been provided. Such earnings are expected to be reinvested indefinitely and, as a result, no deferred tax liability has been recognized with regard to such earnings. Determination of the deferred withholding tax liability on these unremitted earnings is not practicable. Undistributed earnings of foreign subsidiaries and related companies that are deemed to be indefinitely reinvested amounted to $ 199,650 at December 31, 2024. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits. The amounts listed in the below table also represents the total unrecognized tax benefits that, if recognized, would impact the effective tax rate as of December 31, 2024 and 2023, respectively: Years ended December 31, 2024 2023 Balance at beginning of period $ 8,110 $ 7,787 Increases related to prior year tax positions — 323 Uncertain tax benefit sustained due to lapsing of statue of limitations ( 8,023 ) — Balance at end of period $ 87 $ 8,110 To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period for which the event occurs requiring the adjustment. The total amount of interest and penalties recognized in provision for income taxes on continuing operations was $ 1,390 and $ 855 for the years ended December 31, 2024 and 2023, respectively. The Company recorded cumulative accrued interest and penalties amounting to $ 23 as of December 31, 2024 in other long-term liabilities on its consolidated balance sheets. F-51 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. The following describes the open tax years, by significant tax jurisdiction, as of December 31, 2024: Jurisdiction Period United States-Federal 2021-2024 United States-State 2020-2024 Given that the Company has utilized state net operating loss in the current and prior years, the statute for examination by the state taxing authorities will typically remain open for a period following the use of such net operating loss carryforwards, extending the period for examination beyond the years indicated above. As of December 31, 2024, it is reasonably possible that the Company may recognize approximately $ 87 of previously net unrecognized tax benefits, excluding interest and penalties, related to various U.S. federal tax positions, primarily due to the expiration of statutes of limitations within the next twelve months. As of December 31, 2024 and 2023, the Company no longer has a federal net operating loss or foreign tax credit carryforward. Cash payments for income taxes, net of refunds, are as follows: Years ended December 31, 2024 2023 2022 Domestic $ 22,860 $ 21,973 $ 13,277 Foreign 3,399 464 359 $ 26,259 $ 22,437 $ 13,636 On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $1 billion for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. Historically the Company has made discretionary share repurchases under its share repurchase programs. Beginning in 2023, these transactions will be subject to the excise tax of the IRA. See Note 7 to these consolidated financial statements for information on the accrued excise tax related to these stock repurchases. 20. Benefit Plans: The Company sponsors two funded defined benefit pension plans that cover certain employees. Benefits for the plans are generally based on average final pay and years of service. The Company’s funding policy is to fund the minimum required contributions consistent with statutory requirements based on actuarial computations utilizing the projected unit credit method of calculation. The Company sponsors an unfunded plan to provide health care benefits to certain retired employees. The plan pays a stated percentage of medical expenses reduced by deductibles and other coverage and obligations are paid out of the Company’s operations. The Company uses a December 31 measurement date for all of its defined benefit pension and postretirement medical plans. The Company has two defined benefit pension plans: the Eco Services Hourly Pension Plan which was frozen to future accruals as of December 31, 2020 and the Eco Services Pension Equity Plan which was frozen to future accruals as of December 31, 2016. The retiree healthcare plan was closed to new retirees effective July 1, 2017. F-52 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following tables summarize changes in the benefit obligation, plan assets and funded status of the Company’s defined benefit pension plans and other postretirement benefit plan: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Change in benefit obligation: Benefit obligation at beginning of period $ 66,556 $ 66,879 $ 475 $ 446 Interest cost 3,227 3,453 24 24 Plan settlements ( 1,348 ) ( 2,543 ) — — Benefits paid ( 3,254 ) ( 2,798 ) — ( 1 ) Premiums paid — — ( 3 ) ( 3 ) Actuarial (gain) loss ( 3,460 ) 1,565 ( 33 ) 9 Benefit obligation at end of the period 61,721 66,556 463 475 Change in plan assets: Fair value of plan assets at beginning of period $ 61,618 $ 60,629 $ — $ — Actual return on plan assets 1,048 6,330 — — Employer contributions 1,625 — 3 4 Plan settlements ( 1,348 ) ( 2,543 ) — — Benefits paid ( 3,254 ) ( 2,798 ) — ( 1 ) Premiums paid — — ( 3 ) ( 3 ) Fair value of plan assets at end of the period 59,689 61,618 — — Funded status of the plans (underfunded) $ ( 2,032 ) $ ( 4,938 ) $ ( 463 ) $ ( 475 ) Defined Benefit Pension Plans — The actuarial gain for the year ended December 31, 2024 was $ 3,460 , which was driven by increases in the discount rates of $ 2,760 and improvements in general demographic experience of $ 700 . The actuarial loss for the year ended December 31, 2023 was $ 1,565 , which was driven by decreases in the discount rates of $ 1,365 and declines in general demographic experience of $ 200 . Other Postretirement Benefit Plan — The actuarial gain for the year ended December 31, 2024 was $ 33 , which was driven by increases in the discount rates. The actuarial loss for the year ended December 31, 2023 was $ 9 , which was driven by decreases in the discount rates. F-53 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) As of December 31, 2024, one of the defined benefit pension plans changed to a funded asset position, compared to an underfunded liability position in December 31, 2023. Amounts recognized in the consolidated balance sheets consist of: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Noncurrent asset $ 90 $ — $ — $ — Current liability — — ( 20 ) ( 18 ) Noncurrent liability ( 2,122 ) ( 4,937 ) ( 443 ) ( 457 ) AOCI, net of tax 1,386 567 81 79 Net amount recognized $ ( 646 ) $ ( 4,370 ) $ ( 382 ) $ ( 396 ) The net amount of projected benefit obligation and plan assets for all underfunded plans was classified as noncurrent liabilities in the consolidated balance sheets. Amounts recognized in AOCI consist of: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Prior service cost $ — $ — $ — $ 30 Net gain 1,849 751 107 75 Gross amount recognized 1,849 751 107 105 Deferred income taxes ( 463 ) ( 184 ) ( 26 ) ( 26 ) Net amount recognized $ 1,386 $ 567 $ 81 $ 79 Components of net periodic benefit cost consist of: Defined Benefit Pension Plans Other Postretirement Benefit Plan Years ended December 31, Years ended December 31, 2024 2023 2022 2024 2023 2022 Interest cost $ 3,227 $ 3,453 $ 2,569 $ 24 $ 24 $ 18 Expected return on plan assets ( 3,367 ) ( 3,305 ) ( 3,433 ) — — — Amortization of prior service credit — — — ( 30 ) ( 125 ) ( 210 ) Amortization of net (gain) loss — — — ( 2 ) ( 2 ) 3 Settlement (gain) loss ( 6 ) 61 38 — — — Net periodic (benefit) expense $ ( 146 ) $ 209 $ ( 826 ) $ ( 8 ) $ ( 103 ) $ ( 189 ) All components of net periodic benefit cost other than service cost are presented within other expense (income), net in the Company’s consolidated statements of income. F-54 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Components of other changes in plan assets and benefit obligations recognized in other comprehensive income consists of: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Net (gain) loss $ ( 1,136 ) $ ( 1,461 ) $ ( 33 ) $ 9 Amortization of prior service credit — — 30 125 Amortization or settlement recognition of net gain (loss) 6 ( 61 ) 2 2 Total recognized in other comprehensive (income) loss ( 1,130 ) ( 1,522 ) ( 1 ) 136 Total recognized in net periodic benefit cost and other comprehensive (income) loss $ ( 1,280 ) $ ( 1,313 ) $ ( 9 ) $ 33 The following table presents selected information about the Company’s pension plans with projected benefit obligations and accumulated benefit obligations in excess of plan assets: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Projected benefit obligation $ 18,305 $ 66,555 $ 463 $ 475 Accumulated benefit obligation 18,305 66,555 — — Fair value of plan assets 16,183 61,618 — — Significant weighted average assumptions used in determining the pension obligations include the following: Defined Benefit Pension Plans Other Postretirement Benefit Plan December 31, December 31, 2024 2023 2024 2023 Discount rate 5.67 % 5.17 % 5.70 % 5.20 % Rate of compensation increase N/A N/A N/A N/A The discount rate for net periodic benefit costs is determined by utilizing a yield curve model. The model develops a spot rate curve based on the yields available from a broad-based universe of high quality corporate bonds. The discount rate is then set as the weighted average spot rate, using the respective plan’s expected benefit cash flows as the weights. Significant weighted average assumptions used in determining net periodic benefit cost include the following: Defined Benefit Pension Plans Other Postretirement Benefit Plan Years ended December 31, Years ended December 31, 2024 2023 2022 2024 2023 2022 Discount rate 5.23 % 5.39 % 2.90 % 5.20 % 5.50 % 2.90 % Expected return on assets 5.76 % 5.74 % 4.90 % — % — % — % Rate of compensation increase N/A N/A N/A N/A N/A N/A F-55 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Fair value of plan assets The investment objective for the plans is to generate returns sufficient to meet future obligations. The strategy to meet the objective includes generating attractive returns using higher returning assets such as equity securities and balancing risk using less volatile assets such as fixed income securities. The plans invest in an allocation of assets across the two broadly-defined financial asset categories of equity and fixed income securities. The target allocations for the plan assets across the two U.S. plans are as follows: 30 % equity securities and 70 % fixed income investments for the Eco Services Pension Equity Plan; and 20 % equity securities and 80 % fixed income investments for the Eco Services Hourly Pension Plan. The Company classifies plan assets based upon a fair value hierarchy where each asset within the hierarchy is based on the lowest level input that is significant to its measurement. The fair value hierarchy consists of three levels as follows: • Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Level 1 assets primarily include investments in publicly traded equity securities and mutual funds. These securities (or the underlying investments of the funds) are actively traded and valued using quoted prices for identical securities from the market exchanges. • Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves. Level 2 assets primarily consist of fixed-income securities and commingled funds that are not actively traded or whose underlying investments are valued using observable marketplace inputs. The fair value of plan assets invested in fixed-income securities is generally determined using valuation models that use observable inputs such as interest rates, bond yields, low-volume market quotes and quoted prices for similar assets. Plan assets that are invested in commingled funds are valued using a unit price or net asset value (“NAV”) that is based on the underlying investments of the fund. • Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Level 3 assets include investments covered by insurance contracts and real estate funds valued using significant unobservable inputs. F-56 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The following tables set forth by level, within the fair value hierarchy, plan assets at fair value: December 31, 2024 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ — $ — $ — $ — Equity securities: Domestic stocks 8,248 8,248 — — International stocks 5,335 5,335 — — Fixed income securities: Treasury funds 11,853 11,853 — — Corporate and other bonds 34,253 34,253 — — Total $ 59,689 $ 59,689 $ — $ — December 31, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 264 $ 264 $ — $ — Equity securities: Domestic stocks 11,539 11,539 — — International stocks 7,546 7,546 — — Fixed income securities: Treasury funds 11,691 11,691 — — Corporate and other bonds 30,578 30,578 — — Total $ 61,618 $ 61,618 $ — $ — The following benefit payments, which reflect expected future service as appropriate, are expected to be paid: Year Defined Benefit Pension Plans Other Postretirement Benefit Plan 2025 $ 7,356 $ 20 2026 4,561 22 2027 4,542 23 2028 4,720 25 2029 4,552 27 2030-2034 22,539 163 The Company expects to contribute $ 500 to its defined benefit pension plans and $ 20 to the other postretirement benefit plan in 2025. There are no Medicare subsidy receipts expected in future periods. Defined Contribution Plans The Company has defined contribution plans covering domestic employees of the Company and a foreign subsidiary. The Company recorded expenses of $ 7,619 , $ 7,015 and $ 7,113 related to these plans for the years ended December 31, 2024, 2023 and 2022, respectively. F-57 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 21. Stock-Based Compensation: The Company has an equity incentive plan under which it grants common stock awards to employees, directors and affiliates of the Company. At December 31, 2024, 8,083,573 shares of common stock were available for issuance under the plan. Beginning on July 1, 2023, the Company settles these awards through the issuance of treasury shares under its equity incentive plan. The Company has granted RSAs, RSUs and PSUs as part of its equity incentive compensation program. Stock Options The Company has issued stock options to purchase Ecovyst Inc. common stock as part of its equity incentive compensation program. There are various vesting conditions associated with stock options issued prior to the launch of the Company’s initial public offering (“IPO”) in September 2017, including satisfaction of certain service and/or performance based conditions. Subsequent to the IPO, the Company’s stock option grants have been subject to graded vesting conditions based on service. The maximum contractual term of the Company’s stock options is ten years . The following table summarizes the activity of common stock options for the period from December 31, 2021 through the year ended December 31, 2024: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 1,884,351 $ 6.99 (1) Exercised ( 199,970 ) $ 3.06 Forfeited ( 51,860 ) $ 3.98 Expired ( 111,524 ) $ 11.97 Outstanding at December 31, 2022 1,520,997 $ 7.24 Exercised ( 197,941 ) $ 2.58 Forfeited ( 284,956 ) $ 3.39 Expired ( 328,677 ) $ 12.36 Outstanding at December 31, 2023 709,423 $ 7.73 Exercised ( 93,962 ) $ 3.04 Outstanding at December 31, 2024 615,461 $ 8.44 2.26 $ 1,054 Exercisable at December 31, 2024 615,461 $ 8.44 2.26 $ 1,054 (1) On August 4, 2021, the Company’s Board of Directors declared a special cash dividend of $ 3.20 per share to the stockholders of record as of the close of business on August 12, 2021, using the after tax cash proceeds from the sale of the Performance Chemicals business. This reflects the impact of the reduction in the strike price on all outstanding vested and unvested stock options by $ 3.20 per share. The aggregate intrinsic value per the above table represents the difference between the fair value the Company’s common stock on the last trading day of the reporting period (determined in accordance with the plan terms) and the exercise price of in-the-money stock options multiplied by the respective number of stock options as of that date. The total intrinsic value of stock options exercised were $ 472 , $ 1,693 and $ 1,306 during the years ended December 31, 2024, 2023 and 2022 respectively. Additionally, cash proceeds received by the Company from the exercise of stock options were no t material for the years ended December 31, 2024, 2023 and 2022 respectively. There were no stock option awards granted during the years ended December 31, 2024, 2023 and 2022. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock option grants. F-58 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Restricted Stock Awards, Restricted Stock Units and Performance Stock Units RSA The Company has granted RSAs subject to vesting conditions based on (1) service only, (2) performance only or (3) a combination of service and performance conditions, dependent on which event occurs first. The vesting requirements for the majority of these awards were based upon the achievement of a performance condition. As defined in the award agreements, each award subject to the performance condition fully vests upon the occurrence of a defined liquidity event upon which certain investment funds affiliated with CCMP, a former stockholder, receive proceeds exceeding certain thresholds. Although achievement of the performance condition is subject to continued service with the Company, the terms of awards issued with performance conditions stipulate that the performance vesting condition can be attained for a period of six months following separation from service under certain circumstances, depending on the means of separation from the Company and subject to other factors such as individual separation agreements. The same performance vesting condition for the Company’s RSAs also governs the achievement of the performance vesting condition for the Company’s stock options. During the year ended December 31, 2024, the Company granted 4,540 of RSAs with a weighted average grant date fair value of $ 8.81 per share that immediately vested. As of December 31, 2024, the Company did not have any outstanding unvested RSAs subject to performance vesting condition. RSU During the year ended December 31, 2024, the Company granted 1,126,166 RSUs under its equity incentive plan. Each RSU provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the year ended December 31, 2024, generally requires approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees. The value of the RSUs granted during the year ended December 31, 2024 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards. Compensation expense related to the RSUs is recognized on a straight-line basis over the respective vesting period. PSU 2024 Grants During the year ended December 31, 2024, the Company granted 535,629 PSUs (at target) under its equity incentive plan. The PSUs granted during the year ended December 31, 2024 provide the recipients with the right to receive shares of common stock dependent on 50 % of a Company-specific financial performance target and 50 % on the relative increase in the total shareholder return (“TSR”) goal (“the Performance measures”). The Performance measures are measured independently of each other, but achievement of both metrics is measured on the same three-year performance period from January 1, 2024 through December 31, 2026 (“Performance period”). Depending on the Company’s performance relative to the Performance measures, each PSU award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from 0 % to 200 %. The PSUs, to the extent earned, will vest on the date the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) certifies the achievement of the Performance measures for the Performance period, which will occur subsequent to the end of the Performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2026. Achievement of the Company-specific financial performance target is measured based on the actual three-year cumulative results across the Performance period. The TSR goal is based on the Company’s actual TSR performance against companies in the S&P 1500 Specialty Chemicals Index over the Performance period. The TSR goal, which determines how much of the 50 % of the PSUs granted during 2024 may be earned, is considered a market condition as opposed to a vesting condition. Because a market condition is not considered a vesting condition, it is reflected in the grant date fair value of the award and the associated compensation cost based on the fair value of the award is recognized over the Performance period, regardless of whether the Company actually achieves the market condition or the level of achievement, as long as service is provided by the recipient. F-59 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 2023 Grants During the year ended December 31, 2023, the Company granted 721,537 PSUs (at target) under its equity incentive plan. The PSUs granted during the year ended December 31, 2023 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award. The performance period for the TSR goal is measured based on a three-year performance period from January 1, 2023 through December 31, 2025. The TSR goal is based on the Company’s actual TSR percentage increase over the performance period. Depending on the Company’s performance relative to the TSR goal, each PSU award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %. The PSUs, to the extent earned, will vest on the date the Compensation Committee certifies the achievement of the performance metric for the three-year period ending December 31, 2025, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2025. 2022 Grants During the year ended December 31, 2022, the Company granted 295,132 PSUs (at target) under its equity incentive plan. The PSUs granted during the year ended December 31, 2022 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award. The performance period for the TSR goal is measured based on a three-year performance period from January 1, 2022 through December 31, 2024. The TSR goal is based on the Company’s actual TSR percentage increase over the performance period. Depending on the Company’s performance relative to the TSR goal, each PSU award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %. The PSUs, to the extent earned, will vest on the date the Compensation Committee certifies the achievement of the performance metric for the three-year period ending December 31, 2024, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2024. 2021 Grants In February 2024, the Compensation Committee certified the achievement of the performance metrics for the three-year period ended December 31, 2023, related to the PSUs granted during the year ended December 31, 2021. The PSUs granted during the year ended December 31, 2021 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award. The TSR goal was based on the Company’s actual TSR percentage increase over the performance period. The awards vested during the year ended December 31, 2024 with no percentage of the TSR goal earned. Weighted Average Assumptions The following table shows the weighted average assumptions for each of the unvested grants: 2024 Grants 2023 Grants 2022 Grants Weighted average fair value based on Monte Carlo simulation $ 11.64 (1) $ 12.27 $ 8.82 Expected dividend yield — % — % — % Risk-free interest rate 4.09 % 3.80 % 1.51 % Expected volatility 39.45 % 48.82 % 44.51 % Expected term (in years) 2.95 2.96 2.91 (1) Relative to the TSR performance measure only. F-60 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Award Activity The following table summarizes the activity of restricted stock awards, restricted stock units and performance stock units for the period from December 31, 2021 through the year ended December 31, 2024: Restricted Stock Awards Restricted Stock Units Performance Stock Units Number of Shares Weighted Average Grant Date Fair Value (per share) Number of Units Weighted Average Grant Date Fair Value (per share) Number of Units Weighted Average Grant Date Fair Value (per share) Nonvested as of December 31, 2021 633,724 $ 15.84 (1) 2,507,421 $ 15.68 1,117,555 (1) $ 16.91 Granted — $ — 2,779,690 $ 10.28 295,132 $ 8.82 Vested ( 84,903 ) $ 8.83 ( 1,550,969 ) $ 15.08 ( 496,442 ) $ 15.41 Forfeited ( 271,765 ) $ 15.84 ( 1,271,424 ) $ 12.27 ( 276,713 ) $ 12.33 Nonvested as of December 31, 2022 277,056 $ 15.66 2,464,718 $ 11.73 639,532 (1) $ 16.32 Granted 5,081 $ 9.84 1,195,835 $ 9.84 721,537 $ 12.28 Vested ( 5,081 ) $ 9.84 ( 1,436,301 ) $ 11.84 ( 200,204 ) $ 20.16 Forfeited ( 277,056 ) $ 15.66 ( 261,424 ) $ 11.27 ( 201,648 ) $ 18.57 Nonvested as of December 31, 2023 — $ — 1,962,828 $ 10.55 959,217 (1) $ 11.84 Granted 4,540 $ 8.81 1,126,166 $ 8.84 535,629 $ 10.23 Vested ( 4,540 ) $ 8.81 ( 1,000,288 ) $ 11.10 — $ — Forfeited — $ — ( 111,333 ) $ 9.27 ( 141,437 ) $ 12.82 Nonvested as of December 31, 2024 — $ — 1,977,373 $ 9.37 1,353,409 (1) $ 11.10 (1) Based on target. Cash proceeds received by the Company from the exercise of stock options were not material for the year ended December 31, 2024. The total fair value of RSAs that vested during the years ended December 31, 2024, 2023 and 2022 was $ 40 , $ 50 and $ 749 , respectively. The total fair value of RSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $ 11,102 , $ 17,008 and $ 15,579 , respectively. The total fair value of PSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $ 0 , $ 4,035 and $ 5,277 , respectively. F-61 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) Prior to the Company’s IPO, the Company issued restricted stock awards and stock options with performance conditions that were based on the occurrence of a defined liquidity event upon which certain investment funds affiliated with CCMP receive proceeds exceeding defined thresholds. In addition to the defined liquidity event, subsequent to the Company’s IPO, the performance vesting condition can also be achieved if the average closing trading price of the Company’s common stock on the NYSE over any consecutive ten-day trading period equals or exceeds a price that would be equivalent to the achievement of the threshold proceeds to CCMP. When a liquidity event occurred on March 7, 2023, the investment funds affiliated with CCMP received proceeds that did not exceed the defined thresholds. As a result, all of the Company’s RSAs and stock options subject to the performance condition were forfeited and cancelled. See Note 22 to these consolidated financial statements for further information on the number of RSAs and stock options outstanding subject to performance-based vesting. Stock-Based Compensation Expense For the years ended December 31, 2024, 2023 and 2022, total stock-based compensation expense for the Company was $ 14,043 , $ 16,031 and $ 20,632 , respectively. The associated income tax benefit recognized in the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 was $ 3,091 , $ 1,826 and $ 2,799 , respectively. As of December 31, 2024, there was no unrecognized compensation cost related to nonvested restricted stock awards subject to service vesting conditions. As of December 31, 2024, unrecognized compensation cost was $ 8,697 for restricted stock units and $ 5,320 for performance stock units. The weighted-average period over which these costs are expected to be recognized at December 31, 2024 is 1.64 years for the restricted stock units and 1.55 years for the performance stock units. No expense has been recognized for any stock options subject to the performance condition for the years ended December 31, 2024, 2023 and 2022, and no expense has been recognized for any restricted stock awards subject to the performance condition for the years ended December 31, 2024 and 2023, as the performance-based criteria was not achieved nor considered probable of achievement. 22. Earnings per Share: Basic earnings per share is calculated as income available to common stockholders, divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes RSAs that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares (see Note 21 to these consolidated financial statements for further information regarding outstanding nonvested restricted stock awards). Diluted earnings per share is calculated as income available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period, if dilutive. Potential common shares reflect (1) unvested RSAs and RSUs with service vesting conditions, (2) PSUs with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method. The reconciliation from basic to diluted weighted average shares outstanding is as follows: Years ended December 31, 2024 2023 2022 Weighted average shares outstanding – Basic 116,719,437 118,367,214 133,601,322 Dilutive effect of unvested common shares and RSUs with service conditions, PSUs considered probable of vesting and assumed stock option exercises and conversions — 1,120,495 1,486,850 Weighted average shares outstanding – Diluted 116,719,437 119,487,709 135,088,172 F-62 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) The Company reported a net loss for the year ended December 31, 2024, therefore excluded 728,001 of dilutive effect of unvested common shares, RSUs with service conditions, PSUs considered probably of vesting and assumed stock option exercises and conversions from the computation of weighted average diluted shares outstanding. Basic and diluted income per share are calculated as follows: Years ended December 31, 2024 2023 2022 Numerator: (Loss) income from continuing operations attributable to Ecovyst Inc. $ ( 6,652 ) $ 71,154 $ 69,795 Income from discontinued operations attributable to Ecovyst Inc. — — 3,902 Net (loss) income attributable to Ecovyst Inc. $ ( 6,652 ) $ 71,154 $ 73,697 Denominator: Weighted average shares outstanding – Basic 116,719,437 118,367,214 133,601,322 Weighted average shares outstanding – Diluted 116,719,437 119,487,709 135,088,172 Net (loss) income per share: Basic (loss) income per share - continuing operations $ ( 0.06 ) $ 0.60 $ 0.52 Diluted (loss) income per share - continuing operations $ ( 0.06 ) $ 0.60 $ 0.52 Basic income per share - discontinued operations $ — $ — $ 0.03 Diluted income per share - discontinued operations $ — $ — $ 0.03 Basic (loss) income per share $ ( 0.06 ) $ 0.60 $ 0.55 Diluted (loss) income per share $ ( 0.06 ) $ 0.60 $ 0.55 The table below presents additional details of the Company’s weighted average equity-based awards outstanding during each respective year that were excluded from the calculation of diluted earnings per share: Years ended December 31, 2024 2023 2022 RSAs with performance only targets not yet achieved — — 539,688 Stock options with performance only targets not yet achieved — 51,526 309,984 Anti-dilutive RSUs and PSUs 387,078 286,729 20,497 Anti-dilutive stock options 367,100 508,623 776,594 RSAs and stock options with performance only vesting conditions were not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. These awards and stock options were canceled on March 7, 2023 (see Note 21 to these consolidated financial statements for additional information). Certain stock options to purchase shares of common stock were excluded from the computation of diluted earnings per share for the respective periods because the options’ exercise price was greater than the average market price of the common shares. These stock options and anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share or reducing diluted loss per share. F-63 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 23. Commitments and Contingent Liabilities: Environmental Contingencies There is a risk of environmental impact in the Company’s manufacturing operations. The Company’s environmental policies and practices are designed to comply with existing laws and regulations and to minimize the possibility of significant environmental impact. The Company is also subject to various other lawsuits and claims with respect to matters such as governmental regulations, labor and other actions arising out of the normal course of business. All claims that are probable and reasonably estimable have been accrued for in the Company’s consolidated financial statements. When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its consolidated financial position, results of operations or liquidity. The Company has recorded a reserve of $ 530 and $ 313 as of December 31, 2024 and 2023, respectively, to address remaining subsurface remedial and wetlands/marsh management activities at the Company’s Martinez, California site. Although currently a sulfuric acid regeneration plant, the site was originally operated by Mountain Copper Company (“Mococo”) as a copper smelter. Also, the site sold iron pyrite to various customers and allowed their customers to deposit waste iron pyrite cinder and slag on the site. The property is adjacent to the now capped former Peyton Slough, where Mococo had a permitted discharge point from its process and the current Peyton Slough. In 1997, the San Francisco Bay Regional Water Quality Control Board (“RWQCB”) required characterization and remediation of former Peyton Slough for Copper, Zinc and Acidic Soils. Various remediation activities were undertaken and completed, including the excavation of a new Peyton Slough, which is the current site. The site received final concurrence from the Army Corps with respect to the completed work. The RWQCB agreed that Ecoservices has achieved the goals for vegetative cover. The current marsh condition is being sustained by the opening and subsequent closing of the tide gates on a periodic basis. Through facilitation between the Company, the RWQCB and various other governmental and private stakeholders, an alliance was formed and recently culminated in an independent environmental-related settlement agreement between the RWQCB and a company not associated with the facilitation efforts. Under the settlement agreement, another company agreed to fund a Supplemental Environmental Project for the Peyton Slough Marshes Water Quality Improvements and Management Project (Peyton Slough SEP). The Peyton Slough SEP will be managed by the Contra Costa Resource Conservation District and is intended to improve water circulation and water quality within the marshes adjacent to Carquinez Strait, including the Peyton Slough Channel and McNabney Marsh, by automating tide gate operations to improve exchange between Peyton Slough and Carquinez Strait. The project will also assess sediment quality and distribution within the system to evaluate methods of further enhancing water quality and marsh habitat. In addition, the Company is currently in the process of negotiating modified permits with various governmental agencies, including the RWQCB for the long-term maintenance of the capped Peyton Slough and the associated levees and berms. As of December 31, 2024 and 2023, the Company has recorded a reserve of $ 216 and $ 121 , respectively, for subsurface remediation, including the Soil Vapor Extraction Project, at the Company’s Dominguez, California site. In the 1980s and 1990s, the EPA and the Los Angeles Regional Water Quality Control Board conducted investigations of the site due to historic chlorinated pesticide and chlorinated solvent use. Soil and groundwater beneath the site were impacted by chlorinated solvents and associated breakdown products, petroleum hydrocarbons, chlorinated pesticides and metals. A Corrective Measures Plan approved in October 2011 requires (1) soil vapor extraction (“SVE”) in affected areas, (2) covering of unpaved areas containing pesticide impacted soil, and (3) annual groundwater monitoring of the perched water-bearing zone. Annual groundwater sampling and soil vapor monitoring indicates that the SVE system has been effective in reducing subsurface contaminant levels. The Company is moving in the direction of rendering the SVE system dormant and potentially closing this matter within the next few years following rebound testing, including the preparation of soil vapor and groundwater cleanup goals as requested by the California Department of Toxic Substances Control. Annual inspection of the now covered areas containing pesticide impacted soil and repairs, as warranted, are expected to continue. F-64 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) As of December 31, 2024, the Company recorded a reserve of $ 37 for the ongoing groundwater monitoring efforts associated with the Company’s Hammond, Indiana site. Numerous environmental-related investigations have been conducted at the site, including, but not limited to, under a Voluntary Corrective Action Agreement (“VCAA”) executed by one of the Company’s predecessors (Rhodia Inc.) with the Indiana Department of Environmental Management (“IDEM”) on April 28, 2010 and most recently in accordance with an 2018 Corrective Measures Proposal (“CMP”). Groundwater monitoring has been conducted at the site since 2011 to address chlorinated volatile organic compound (“CVOC”) impacts from a former railcar unloading area in the northern portion of the site. The Company only uses this area for loading virgin acid and unloading spent acid. The CMP established monitored natural attenuation (“MNA”) as the corrective measure for addressing CVOCs present in groundwater in the northern portion of the site and offsite beneath the adjacent Northern Indiana Commuter Transportation District (“NICTD”) property and a gas station; and has been and continues to be implemented since 2018. In light of increasing CVOC concentrations in one deep perimeter well, the criteria for ceasing monitoring under the CMP has not yet been achieved. The Company plans to meet with IDEM to discuss potential options for closing out this matter. Letters of Credit At December 31, 2024, the Company had outstanding letters of credit of $ 3,330 . Letters of credit are guarantees of payment to third parties. The Company’s letters of credit are used primarily as collateral for various items, including energy and insurance payments. The letters of credit are supported by the Company’s ABL facility. 24. Related Party Transactions: The Company maintains certain policies and procedures for the review, approval and ratification of related party transactions to ensure that all transactions with selected parties are fair, reasonable and in the Company’s best interests. All significant relationships and transactions are separately identified by management if they meet the definition of a related party or a related party transaction. Related party transactions include transactions that occurred during the year, or are currently proposed, in which the Company was or will be a participant, and for which any related person had or will have a direct or indirect material interest. All related party transactions are reviewed, approved and documented by the appropriate level of the Company’s management in accordance with these policies and procedures. Joint Venture Agreement The Company entered into a joint venture agreement (the “ZI Partnership Agreement”) in 1988 with Shell Catalysts & Technologies, an affiliate of Royal Dutch Shell plc, to form Zeolyst International, a 50/50 joint venture partnership (the “Partnership”). Under the terms of the ZI Partnership Agreement, the Partnership leases certain land used in its Kansas City production facilities from Ecovyst. This lease, which has been recorded as an operating lease and terms are evergreen as long as the ZI Partnership Agreement is in place, provided for rental payments to the Company of $ 310 during the years ended December 31, 2024, 2023 and 2022, respectively. These rental payments were included in cost of goods sold in the consolidated statements of income. The Partnership had no sales to the Company for the years ended December 31, 2024 and 2022, respectively, and sales of $ 236 to the Company for the year ended December 31, 2023. The Partnership purchases certain raw materials from the Company and was charged for various manufacturing costs incurred at the Company’s Kansas City production facility. The amount of these costs charged to the Partnership were $ 17,315 , $ 20,594 and $ 23,699 for the years ended December 31, 2024, 2023 and 2022, respectively and were included in cost of goods sold in the consolidated statements of income. In addition, the Partnership was charged certain product demonstration costs of $ 1,029 , $ 1,819 and $ 1,621 during the years ended December 31, 2024, 2023 and 2022, respectively, which were also included in cost of goods sold in the consolidated statements of income. Certain administrative, marketing, engineering, management-related and research and development services are provided to the Partnership by the Company. The Partnership was charged $ 17,203 , $ 14,758 and $ 13,908 for the years ended December 31, 2024, 2023 and 2022, respectively and were included in selling, general and administrative expenses in the consolidated statements of income. The Company had an accounts receivable from the Partnership of $ 2,794 and $ 3,164 as of December 31, 2024 and 2023, respectively, which were included in prepaid and other current assets in the consolidated balance sheet. There were no accounts payable with the Partnership as of December 31, 2024 and 2023, respectively. F-65 Table of Contents ECOVYST INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts) 25. Supplemental Cash Flow Information: The following table presents supplemental cash flow information for the Company: Years ended December 31, 2024 2023 2022 Cash paid during the year for: Income taxes, net of refunds $ 26,259 $ 22,437 $ 25,556 Interest (1) 48,972 42,081 35,370 Non-cash investing activity: Capital expenditures acquired on account but unpaid as of the year end 4,882 3,427 4,653 Non-cash financing activities (2) : Accrued excise tax on share repurchases (Note 7) — 638 — (1) Cash paid for interest is shown net of capitalized interest and includes the cash received or paid on the Company’s interest rate cap agreements designated as cash flow hedges for the periods presented (see Note 18 to these consolidated financial statements for details). (2) For the supplemental non-cash information on lease liabilities arising from obtaining right-of-use lease assets, see Note 12 to these consolidated financial statements for further information. 26. Subsequent Events: In January 2025, the Company re-priced the 2024 Term Loan Facility to reduce the applicable interest rate. The terms of the facility were substantially consistent following the re-pricing, except that borrowings under the term loan will bear interest at a rate equal to term SOFR plus 2.00 % per annum. See Note 16 to these consolidated financial statements for further information on the transaction. Other than this item, the Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose. F-66 Table of Contents SCHEDULE I ECOVYST INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED STATEMENTS OF (LOSS) INCOME (in thousands) Years ended December 31, 2024 2023 2022 Stock compensation expense $ 14,043 $ 16,031 $ 20,632 Equity in net (income) from subsidiaries ( 7,391 ) ( 87,185 ) ( 94,329 ) Net (loss) income ( 6,652 ) 71,154 73,697 Other comprehensive income (loss), net of tax: Pension and postretirement benefits 855 1,120 ( 2,676 ) Net (loss) gain from hedging activities ( 2,644 ) ( 12,126 ) 24,382 Foreign currency translation ( 4,660 ) 4,056 ( 9,922 ) Total other comprehensive (loss) income ( 6,449 ) ( 6,950 ) 11,784 Comprehensive (loss) income $ ( 13,101 ) $ 64,204 $ 85,481 See accompanying notes to condensed financial statements. F-67 Table of Contents SCHEDULE I ECOVYST INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2024 2023 ASSETS Investment in subsidiaries $ 700,460 $ 705,464 Total assets $ 700,460 $ 705,464 LIABILITIES Total liabilities $ — $ — STOCKHOLDERS' EQUITY Common stock ( 0.01 par); authorized shares 450,000,000 ; issued shares 140,872,846 and 140,744,045 on December 31, 2024 and 2023, respectively; outstanding shares 116,534,803 and 116,116,895 on December 31, 2024 and 2023, respectively 1,409 1,407 Preferred stock ( 0.01 par); authorized shares 50,000,000 ; no shares issued or outstanding on December 31, 2024 and 2023, respectively — — Additional paid-in capital 1,106,792 1,102,581 Accumulated deficit ( 177,508 ) ( 170,856 ) Treasury stock, at cost; shares 24,338,043 and 24,627,150 on December 31, 2024 and 2023, respectively ( 222,826 ) ( 226,710 ) Accumulated other comprehensive loss ( 7,407 ) ( 958 ) Total equity 700,460 705,464 Total liabilities and equity $ 700,460 $ 705,464 See accompanying notes to condensed financial statements. F-68 Table of Contents SCHEDULE I ECOVYST INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION CONDENSED STATEMENTS OF CASH FLOWS (in thousands) Years ended December 31, 2024 2023 2022 Cash flows from operating activities: Net (loss) income $ ( 6,652 ) $ 71,154 $ 73,697 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in net (income) from subsidiaries ( 7,391 ) ( 87,185 ) ( 94,329 ) Stock compensation expense 14,043 16,031 20,632 Net cash provided by operating activities — — — Effect of exchange rate changes on cash and cash equivalents — — — Net change in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — Cash and cash equivalents at end of period $ — $ — $ — See accompanying notes to condensed financial statements. F-69 Table of Contents SCHEDULE I ECOVYST INC. AND SUBSIDIARIES (PARENT) CONDENSED FINANCIAL INFORMATION NOTES TO CONDENSED SCHEDULE I 1. Description of Ecovyst Inc. and Subsidiaries Ecovyst Inc. (“Ecovyst” or the “Parent Company”) is a holding company that conducts substantially all of its business operations through its wholly owned subsidiary, Ecovyst Catalyst Technologies LLC. As specified in certain of Ecovyst Catalyst Technologies LLC’s debt agreements, there are restrictions on the ability of Ecovyst Catalyst Technologies LLC to make payments to its stockholder, Ecovyst, on behalf of its equity interests (refer to Note 16 to the Ecovyst consolidated financial statements for further information regarding Ecovyst debt). 2. Basis of Presentation The accompanying condensed Parent Company financial statements are required in accordance with Rule 4-08(e)(3) of Regulation S-X. These condensed financial statements have been presented on a “parent-only” basis and are not the general-purpose financial statements of Ecovyst. Under a parent-only presentation, the Parent Company’s investment in its consolidated subsidiary is recorded based upon its proportionate share of the subsidiary’s net assets, similar to presenting it under the equity method of accounting. Under the equity method, the investment in subsidiary is stated at cost plus contributions and equity in undistributed income (loss) of the subsidiary, less distributions received since the date of acquisition. These parent-only financial statements should be read in conjunction with Ecovyst’s audited consolidated financial statements and the accompanying notes thereto. 3. Stock-Based Compensation Refer to Note 21 of the notes to the Ecovyst consolidated financial statements for a description of stock-based compensation. F-70 Table of Contents Report of Independent Auditors To the Management Committee of Zeolyst International Opinion We have audited the accompanying financial statements of Zeolyst International (the “Partnership”), which comprise the balance sheets as of December 31, 2024 and 2023, and the related statements of operations and accumulated earnings, of changes in partners’ capital and of cash flows for the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the three years in the period ended December 31, 2024 in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Partnership and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis Of Matter As discussed within Footnote 15 to the financial statements, the Partnership has significant related party transactions. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Partnership’s ability to continue as a going concern for one year after the date the financial statements are available to be issued. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. F-71 Table of Contents In performing an audit in accordance with US GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Partnership's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. /s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 28, 2025 F-72 Table of Contents ZEOLYST INTERNATIONAL STATEMENTS OF OPERATIONS AND ACCUMULATED EARNINGS (in thousands) Years ended December 31, 2024 2023 2022 Sales $ 233,079 $ 312,963 $ 265,060 Cost of goods sold 157,139 206,583 151,852 Gross profit 75,940 106,380 113,208 Selling, general and administrative expenses (SG&A) 40,176 37,203 38,462 Other operating (income) expense, net 540 (217) (31) Operating income 35,224 69,394 74,777 Interest expense (income), net (705) (453) 270 Other expense (income), net 2,557 (497) 510 Net income 33,372 70,344 73,997 Accumulated earnings at beginning of year 277,007 262,663 258,666 Dividends paid (76,000) (56,000) (70,000) Accumulated earnings at end of year $ 234,379 $ 277,007 $ 262,663 See accompanying notes to financial statements. F-73 Table of Contents ZEOLYST INTERNATIONAL BALANCE SHEETS (in thousands) December 31, 2024 December 31, 2023 ASSETS Cash $ 35,267 $ 8,417 Trade receivables, net: Receivables from third parties 41,217 70,562 Receivables from affiliates 3,666 43,260 Inventories 123,428 117,326 Other current assets 1,942 1,783 Total current assets 205,520 241,348 Property, plant and equipment, net 96,015 105,211 Intangible assets 2,850 3,900 Right-of-use lease asset 5,581 5,708 Other long-term assets 9,529 7,083 Total assets $ 319,495 $ 363,250 LIABILITIES Trade accounts payable $ 9,996 $ 9,349 Accounts payable to affiliates 13,336 12,178 Operating lease liability—current 131 109 Accrued liabilities 1,273 4,078 Total current liabilities 24,736 25,714 Operating lease liability—noncurrent 5,450 5,599 Revolver — — Total liabilities 30,186 31,313 Commitments and contingencies (Note 14) PARTNERS’ CAPITAL Contributed capital 54,930 54,930 Accumulated earnings 234,379 277,007 Net partners’ capital 289,309 331,937 Total liabilities and partners' capital $ 319,495 $ 363,250 See accompanying notes to financial statements. F-74 Table of Contents ZEOLYST INTERNATIONAL STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (in thousands) Contributed capital Accumulated earnings Net partners' capital Ecovyst Inc.: Balance, December 31, 2021 $ 27,465 $ 129,333 $ 156,798 Dividends paid (35,000) (35,000) Net income 36,999 36,999 Balance, December 31, 2022 $ 27,465 $ 131,332 $ 158,797 Dividends paid (28,000) (28,000) Net income 35,172 35,172 Balance, December 31, 2023 $ 27,465 $ 138,504 $ 165,969 Dividends paid (38,000) (38,000) Net income 16,686 16,686 Balance, December 31, 2024 $ 27,465 $ 117,190 $ 144,655 Shell Catalysts & Technologies: Balance, December 31, 2021 $ 27,465 $ 129,333 $ 156,798 Dividends paid (35,000) (35,000) Net income 36,999 36,999 Balance, December 31, 2022 $ 27,465 $ 131,332 $ 158,797 Dividends paid (28,000) (28,000) Net income 35,172 35,172 Balance, December 31, 2023 $ 27,465 $ 138,504 $ 165,969 Dividends paid (38,000) (38,000) Net income 16,686 16,686 Balance, December 31, 2024 $ 27,465 $ 117,190 $ 144,655 Total partners' capital at December 31, 2022 $ 54,930 $ 262,663 $ 317,593 Total partners' capital at December 31, 2023 $ 54,930 $ 277,007 $ 331,937 Total partners' capital at December 31, 2024 $ 54,930 $ 234,379 $ 289,309 See accompanying notes to financial statements. F-75 Table of Contents ZEOLYST INTERNATIONAL STATEMENTS OF CASH FLOWS (in thousands) Years ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income $ 33,372 $ 70,344 $ 73,997 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,937 16,282 20,393 Loss on sale or disposal of capital assets 21 79 37 Amortization of deferred financing fees 33 33 51 Net change in returns allowance 135 — 37 Net change in inventory reserve (1,520) 1,319 300 Other (2,562) (3,597) (3,326) Working capital changes that provided (used) cash: Receivables, including affiliates 68,804 (25,010) (15,675) Inventories (4,582) 15,292 (27,410) Other current assets (192) 90 (747) Accounts payable, including affiliates 1,443 (1,352) (6,207) Other current liabilities (2,783) (198) (2,571) Net cash provided by operating activities 108,106 73,282 38,879 Cash flows from investing activities: Purchases of property, plant and equipment (5,256) (4,273) (3,122) Net cash used in investing activities (5,256) (4,273) (3,122) Cash flows from financing activities: Draw down of revolver 5,000 20,000 46,000 Payments on revolver (5,000) (30,000) (36,000) Payments of cash dividends (76,000) (56,000) (70,000) Net cash used in financing activities (76,000) (66,000) (60,000) Net change in cash 26,850 3,009 (24,243) Cash at beginning of period 8,417 5,408 29,651 Cash at end of period $ 35,267 $ 8,417 $ 5,408 Non-cash investing activity: Capital expenditures acquired on account but unpaid $ 1,880 $ 1,518 $ 1,066 See accompanying notes to financial statements. F-76 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) 1. Organization: Zeolyst International is a Kansas general partnership (“Partnership”) by and between Ecovyst Catalyst Technologies LLC (“Ecovyst”) and Shell Catalysts & Technologies (formerly referred to as CRI Zeolites Inc. (“CRI”)), a Royal Dutch Shell affiliate (collectively, the “Partners”) formed pursuant to a Partnership Agreement dated February 1, 1988, as amended (“the Agreement”). Pursuant to a Contribution, Assignment, and Assumption Agreement dated July 29, 2021 (the “Contribution Agreement”) by and between Ecovyst and PQ Corporation (“PQ”), PQ transferred and Ecovyst assumed PQ’s interest in the Partnership and the Agreement. The percentage interests as of December 31, 2024 and 2023 are as follows: Ecovyst 50% Shell Catalysts & Technologies 50% The Partnership was formed pursuant to the Kansas Uniform Partnership Act. The Agreement specifies that the partners share equally in capital contributions. The Agreement states that the profits and losses of the Partnership will be allocated in accordance with the partners’ interests in the Partnership. The intent of the Partnership is to develop, manufacture, and sell zeolites and zeolite-containing catalysts. The Partnership has significant transactions with its partners and related affiliates. See Note 15 for further information on related party transactions. 2. Partnership Business: The Partnership manufactures zeolites and zeolytic catalysts that are used by refiners to capture impurities in the processing of petroleum based feed streams while increasing value. The selectivity and activity of zeolites used for this purpose can improve yields and have a general life cycle of 3-4 years. As a result, a significant portion of the Partnership’s customer base tends to change on an annual basis. A significant percentage of the base materials purchased for the Partnership’s manufacturing process are acquired from related parties. In addition, a significant portion of the Partnership’s sales are transacted through Shell Catalysts & Technologies (“Shell”). The Partnership compensates Shell with a 2% sales commission or royalty fee on specific sales transactions. 3. Summary of Significant Accounting Policies: These financial statements have been prepared in accordance with generally accepted accounting principles. These financial statements are accounted for on a historical cost basis and do not reflect the results of any purchase accounting adjustments recorded in the Partners’ respective financial statements. Cash and Cash Equivalents. Cash and cash equivalents include investments with original terms to maturity of 90 days or less from the time of purchase. Restricted Cash. Restricted cash, which is restricted as to withdrawal or usage, is classified separately from cash and cash equivalents on the Partnership’s balance sheets. The Partnership had no restricted cash balances as of December 31, 2024 and 2023. Trade Accounts Receivables and Allowance for Doubtful Accounts. Trade accounts receivables are recorded at the invoiced amount and do not bear interest. The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Allowances for doubtful accounts are based on historical experience and known factors regarding specific customers. If the financial condition of the Partnership’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances would be required. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. Inventories. Inventories are stated at the lower of cost or net realizable value, valued on the first-in, first-out (“FIFO”) method. The Partnership establishes reserves for slow-moving and obsolete inventory. F-77 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) Property, Plant and Equipment. Property, plant, and equipment are carried at cost and include expenditures for new facilities and major renewals and betterments. Interest is capitalized on capital projects as applicable. Maintenance, repairs and minor renewals are charged to expense as incurred. When assets are sold or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the results of operations. Depreciation is generally provided on the straight-line method based on estimated useful lives of the assets, ranging up to 33 years for buildings and improvements and 10 years for machinery and equipment. We perform an impairment review of property, plant and equipment and other long-lived assets when events and circumstances indicate that those assets may be impaired by comparing the carrying amount of the assets to their fair value. Fair value is determined using quoted market prices where available, or other techniques including discounted cash flows. The Partnership’s estimates of future cash flows involve assumptions concerning future operating performance, economic conditions, and technological changes that may affect the future useful lives of the assets. Leases . The Partnership has an evergreen land lease agreement with a remaining lease term of 27 years as of December 31, 2024. Accounting Standards Codification Topic 842, Leases (“ASC 842”), does not provide definitive guidance as to determining the length of evergreen leasing arrangements. As such, the Partnership estimated the term of the lease agreement to be commensurate with the estimated useful life of the buildings located on the land that is being leased. Upon adoption of ASC 842 on January 1, 2019, the Partnership assigned a 33 year life to the land lease agreement. When the Partnership enters into an arrangement, at inception, the Partnership determines if the arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. The Partnership’s lease arrangement only contains lease components. The Partnership’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Partnership recognizes a right-of-use lease asset and lease liability at the lease commencement date based on the present value of the remaining lease payments over the lease term. The Partnership was unable to readily determine the discount rate implicit in the lease agreement in accordance with the policy. As such, the Partnership utilized its incremental borrowing rate over the relevant lease term, which is the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Short-term leases, which have an initial term of twelve months or less, are not recorded on the Partnership’s balance sheet. Lease expense for the operating lease is recognized on a straight-line basis over the lease term. The amortization expense component of the right-of-use lease asset is included in cost of goods sold and in selling, general and administrative expenses on the accompanying statements of operations and accumulated earnings. Intangibles and Other Long-term Assets. Other long-term assets primarily include intangible assets, at cost and spare parts. In May 2017, the Partnership made a $6,500 strategic investment for license of materials-based solutions for catalytic and separations processes. In April 2018, the Partnership made a $4,000 strategic investment to buy down royalty obligations related to certain license agreements. The Partnership amortizes these intangible assets over a ten-year period and includes the expense in selling, general and administrative expenses on the accompanying statements of operations and accumulated earnings. The Partnership incurred intangible asset related amortization expense of $1,050 for the years ended December 31, 2024, 2023 and 2022, respectively, related to these investments. F-78 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) Estimated future aggregate amortization expense of intangible assets is as follows: Year Amount 2025 $ 1,050 2026 1,050 2027 617 2028 133 2029 — Thereafter — Total estimated future aggregate amortization expense $ 2,850 Revenue Recognition. In determining the appropriate amount of revenue to be recognized as the Partnership fulfills its obligations under its agreements, the Partnership performs the following steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Partnership satisfies each performance obligation. The Partnership identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Partnership will collect the consideration to which it is entitled. The Partnership may recognize revenue from bill-and-hold arrangements initiated by a customer. Under these bill-and-hold arrangements, a customer pays for the goods, but does not take physical possession immediately. The Partnership considers satisfaction of performance obligations when they have finished manufacturing the products based on the agreed upon specifications in accordance with the order. These products are custom made to each customer’s specifications and cannot be made available for use with another customer’s order. Once the goods have been segregated in a designated space in the warehouse and the customer has been invoiced, title to the goods and risk of loss has transferred to the customer. The customers have access to their products to inspect and can take possession prior to the scheduled delivery dates. The Partnership may offer rebates to customers who have reached a specified volume of optional purchases. The Partnership recognizes rebates given to customers as a reduction of revenue based on an allocation of the cost of honoring rebates earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate. Rebates are recognized at the time revenue is recorded. The Partnership measures the rebate obligation based on the estimated amount of sales that will result in a rebate at the adjusted sales price per the respective sales agreement. The Partnership recognizes revenue when all essential elements of the sales order have shipped and both title and risk of loss has passed to the customer. Hydrocracking and specialty catalyst orders are typically filled by a number of individual shipments, and those shipments may span the end of a fiscal quarter or year. If a portion of the order has not shipped and it is essential to the functionality of the customer’s end use, revenue is recognized when the order is completed. A shipment is considered essential if each individual shipment has no value to the customer on a stand-alone basis and if the remaining shipment is not considered inconsequential and perfunctory. The Partnership currently reserves approximately 2% of the Hydrocracking catalyst sales due to a clause in the contract that allows customers to return up to 5% of the unused products they purchase within 90 days, and based on historical experience. The total sales returns reserve was $1,188 and $1,052 for the years ended December 31, 2024 and 2023, respectively. Shipping and Handling. Amounts billed to a customer in a sale transaction related to shipping and handling, if any, represent revenues earned for the goods provided and are classified as revenue. Costs related to shipping and handling of F-79 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) products shipped to customers are classified as cost of goods sold. See Note 5 for disclosures regarding the recognition of revenue for shipping and handling costs that are billed to customers. Research and Development: Research and development costs of $17,667, $15,388 and $15,102 for the years ended December 31, 2024, 2023 and 2022, respectively, were expensed as incurred and reported in selling, general and administrative expenses in the accompanying statements of operations and accumulated earnings. Costs include salaries, contractor fees, building costs, utilities and administrative expenses. Foreign Exchange Transactions. The functional currency of the Partnership is the U.S. Dollar. The Partnership enters into transactions that are denominated in other currencies. Gains and losses on foreign currency transactions are included in other (income) / expense, net on the accompanying statements of operations and accumulated earnings. Foreign exchange (gain) loss of $1,296, $(67) and $1,049 were recognized for the years ended December 31, 2024, 2023 and 2022, respectively. Fair Value Measurements. The Partnership’s financial assets and liabilities are reflected in the financial statements at amortized cost which approximates fair market value. Fair value is defined as the price at which an asset could be exchanged in a current transaction between willing market participants. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with a creditor. The Partnership’s cash balances approximate fair value due to their short-term maturity. Use of Estimates. The preparation of the Partnership’s financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Revision of Previously Issued Financial Statements. During the preparation of the financial statements for the year ended December 31, 2024, the Partnership identified an error in prior period cost of goods sold. Although the Partnership has determined that this error did not have a material impact on its previously issued financial statements, it has revised the accompanying financial statements to correct for this error and to reflect the associated decrease in cost of goods sold of $5.9 million and $2.6 million for the years ended December 31, 2023 and December 31, 2022, respectively. The revision had no net impact on cash flows from operating, investing or financing activities in the accompanying statements of cash flows. The applicable notes to the accompanying financial statements have also been revised to correct for this error. The following table summarizes the effect of the revision on the affected line items within the accompanying statements of operations and accumulated earnings: Year ended December 31, 2023 Year ended December 31, 2022 As reported Adjustment As revised As reported Adjustment As revised Cost of goods sold $ 212,513 $ (5,930) $ 206,583 $ 154,498 $ (2,646) $ 151,852 Gross profit 100,450 5,930 106,380 110,562 2,646 113,208 Operating income 63,464 5,930 69,394 72,131 2,646 74,777 Net income 64,414 5,930 70,344 71,351 2,646 73,997 Accumulated earnings at beginning of year 266,089 (3,426) 262,663 264,738 (6,072) 258,666 Accumulated earnings at end of year 274,503 2,504 277,007 266,089 (3,426) 262,663 F-80 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) The following table summarizes the effect of the revision on the affected line items within the balance sheets: December 31, 2023 As reported Adjustment As revised ASSETS Inventories $ 114,822 $ 2,504 $ 117,326 Total current assets 238,844 2,504 241,348 Total assets 360,746 2,504 363,250 PARTNERS’ CAPITAL Accumulated earnings 274,503 2,504 277,007 Net partners' capital 329,433 2,504 331,937 Total liabilities and partners' capital 360,746 2,504 363,250 The following table summarizes the effect of the revision on the affected line items within the statements of cash flows: Year ended December 31, 2023 Year ended December 31, 2022 As reported Adjustment As revised As reported Adjustment As revised Cash flows from operating activities: Net income $ 64,414 $ 5,930 $ 70,344 $ 71,351 $ 2,646 $ 73,997 Working capital changes that provided (used) cash: Inventories 21,222 (5,930) 15,292 (24,764) (2,646) (27,410) 4. Recently Issued Accounting Standards: In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance requiring public business entities to disclose additional information on the nature of certain expenses presented in the income statement. The new guidance requires tabular disclosure of significant expense categories and qualitative descriptions for amounts not disaggregated from relevant expense categories. Public business entities are required to define selling expenses and disaggregate the components. The new guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The requirements must be applied prospectively however public business entities have the option to apply the guidance retrospectively. The disclosure will be implemented as required for the fiscal year ended December 31, 2027. The Partnership is currently evaluating the impact of this guidance. In October 2023, FASB issued guidance to amend either presentation or disclosure requirements related to fourteen subtopics in the FASB Accounting Standards Codification, that are currently in the SEC Regulation S-X or Regulation S-K. The new guidance was issued in response to the SEC’s ruling on disclosure simplification. For entities subject to existing SEC disclosure requirements, the effective date of each amendment of the topics will be the date that the SEC removes the related disclosure from Regulation S-X or Regulation S-K. The guidance must be applied prospectively, with no early adoption permitted for entities subject to those existing SEC disclosures. The Partnership is currently evaluating the impact of the new guidance as it pertains to the fourteen subtopics that would impact the business and will apply prospectively once in effect. F-81 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) 5. Revenue from Contracts with Customers: The Partnership applies the five-step revenue recognition model to each contract with its customers. Evidence of a contract between the Partnership and its customers may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer. The Partnership and certain of its customers enter into MSAs that establish the terms, including prices, under which orders to purchase goods may be placed. In cases where the MSA contains a distinct order for goods or contains an enforceable minimum quantity to be purchased by the customer, the Partnership considers the MSA to be evidence of a contract between the Partnership and its customer as the MSA creates enforceable rights and obligations. In cases where the MSA does not contain a distinct order for goods, the Partnership’s contract with a customer is the purchase order issued under the MSA. Customers of the Partnership may also negotiate orders via pricing quotes, which typically detail product pricing, delivery terms and payment information. When a customer procures goods under this method, the Partnership considers the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, the Partnership considers an individual purchase order to create enforceable rights and obligations. The Partnership identifies a performance obligation in a contract for each promised good that is separately identifiable from other promises in the contract and for which the customer can benefit from the good. The Partnership’s contracts have a single performance obligation, which is the promise to transfer individual goods to the customer. Single performance obligations are satisfied according to the shipping terms noted within the MSA or purchase order. As described above, the Partnership’s MSAs with its customers may outline prices for individual products or contract provisions. Revenue from product sales are recorded at the sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Partnership and its customers. The Partnership recognizes revenues when performance obligations under the terms of a contract with its customer are satisfied, which generally occurs at a point in time by transferring control of a product to the customer. The Partnership determines the point in time when a customer obtains control of a product and the Partnership satisfies the performance obligation by considering factors including when the Partnership has a right to payment for the product, the customer has legal title to the product, the Partnership has transferred possession of the product, the customer has assumed the risks and rewards of ownership of the product and the customer has accepted the product. Revenue is measured as the amount of consideration the Partnership expects to receive in exchange for transferring goods. The Partnership does not have any significant payment terms as payment is received at, or shortly after, the point of sale. Contract Assets and Liabilities A contract asset is a right to consideration in exchange for goods that the Partnership has transferred to a customer when that right is conditional on something other than the passage of time. A contract liability exists when the Partnership receives consideration in advance of performance obligations. The Partnership has not recorded any contract assets or contract liabilities on its balance sheet as of December 31, 2024 and 2023. Practical Expedients and Accounting Policy Elections The Partnership has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the revenue recognition guidance. Certain of the Partnership’s contracts with customers are based on an individual purchase order; thus, the duration of these contracts are for one year or less. The Partnership has made an accounting policy election to omit certain disclosures related to remaining performance obligations for contracts which have an initial term of one year or less. The Partnership uses an output method to recognize revenues related to performance obligations. These performance obligations, as described above, are satisfied within a calendar year. As such, the Partnership has elected to utilize the “as-invoiced” practical expedient, which permits the Partnership to recognize revenue in the amount to which it has a right to invoice the customer, provided that the amount corresponds directly with the value provided by the performance obligation as completed to date. F-82 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) When the Partnership performs shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities as opposed to separate performance obligations, and the Partnership recognizes revenue upon the transfer of control to the customer. Accordingly, the costs associated with these shipping and handling activities are accrued when the related revenue is recognized under the Partnership’s policy election. The Partnership expenses incremental costs of obtaining a contract as incurred if the expected amortization period of the asset that the Partnership would have recognized is one year or less. Sales, value added and other taxes the Partnership collects concurrent with revenue producing activities are excluded from revenues. Disaggregated Revenue The following table disaggregates the Partnership’s sales by end use for the years ended December 31, 2024, 2023 and 2022: Years ended December 31, 2024 2023 2022 Clean fuels, emission control & other $ 180,506 $ 254,066 $ 206,907 Polyethylene, polymers & engineered plastics 52,573 58,897 58,153 Total $ 233,079 $ 312,963 $ 265,060 6. Accounts Receivable and Allowance for Doubtful Accounts: The components of accounts receivable are as follows: December 31, 2024 2023 Trade accounts receivable $ 46,071 $ 114,874 Allowance (1,188) (1,052) $ 44,883 $ 113,822 7. Inventories: Inventories were classified is as follows: December 31, 2024 2023 Finished products and work in process $ 116,593 $ 108,987 Raw materials and containers 6,835 8,339 $ 123,428 $ 117,326 F-83 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) 8. Property, Plant and Equipment: A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows: December 31, 2024 2023 Buildings and improvements $ 70,265 $ 69,647 Machinery and equipment 222,162 218,146 Construction in progress 2,819 2,441 295,246 290,234 Less: accumulated depreciation (199,231) (185,023) $ 96,015 $ 105,211 Depreciation expense was $14,871, $15,217 and $19,254 for the years ended December 31, 2024, 2023 and 2022, respectively. Disposal of assets reduced gross property, plant and equipment by $610, $521 and $1,014, respectively with a loss of $21, $79 and $37 for the years ended December 31, 2024, 2023 and 2022, respectively. 9. Leases: Operating lease costs of $310 are included in cost of goods sold on the accompanying statements of operations and accumulated earnings for the years ended December 31, 2024, 2023 and 2022, respectively. Cash payments on operating leases included in operating cash flows was $310 for the years ended December 31, 2024, 2023 and 2022, respectively. The remaining lease term is 27 years with a weighted average discount rate of 3.25%. The current portion of the lease liability is included on the Partnership’s balance sheets in other current liabilities. There were no finance lease costs for the year ended December 31, 2024. Maturities of lease liabilities as of December 31, 2024 are as follows: Year Operating Lease 2025 $ 310 2026 310 2027 310 2028 310 2029 310 Thereafter 6,820 Total lease payments 8,370 Less: Interest (2,789) Total lease liabilities $ 5,581 F-84 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) 10. Accrued Liabilities: A summary of accrued liabilities is as follows: December 31, 2024 2023 Royalties and license fees $ 763 $ 2,111 Commissions 6 1,212 Rebates 91 124 Property tax 238 211 Other 175 420 $ 1,273 $ 4,078 11. Revolver: On March 2, 2016, the Partnership entered into a five-year revolving line of credit facility of $60,000, which carries an initial interest rate of LIBOR or the base rate plus an interest margin of 0.75% per annum. On May 26, 2020, this agreement was amended to extend the term to May 25, 2022. On November 30, 2021, this agreement was amended again to extend the term to November 29, 2026. The interest rate on the facility was LIBOR or the base rate plus an interest margin of 1.00% per annum. On March 13, 2023, the Partnership amended the revolving line to replace LIBOR with SOFR as the benchmark interest rate. Following this amendment, the revolving line of credit facility will bear interest at an adjusted term SOFR rate or the base rate plus an interest margin of 1.00% per annum. As of December 31, 2024, availability under this agreement was $60,000. A commitment fee is paid to the bank for this agreement. The revolving credit agreement contains certain restrictions and covenants that require the Partnership to maintain a minimum partners’ equity, as defined, of $200,000 plus 10% of net income, and a minimum EBITDA of $40,000 on a last twelve month basis measured quarterly. The Partnership was in compliance with all covenants during 2024. Cash payments for interest were approximately $174, $157 and $306 for the years ended December 31, 2024, 2023 and 2022, respectively. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction. The carrying amount of the revolving line of credit approximates fair value because it is a short term liquidity tool to fund operations, which is drawn down and paid back with cash generated from operations. F-85 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) 12. Partners’ Contributions: In accordance with the Agreement, in the event that cash flow from operations is insufficient to meet the Partnership’s requirements, following a majority vote by the Management Committee of the Partnership to request capital from the partners, the partners will provide additional capital to enable the Partnership to meet its obligations. No such contributions were made during the years ended December 31, 2024, 2023 or 2022 as the Partnership had the ability to finance operations through cash flow from operations and borrowings under the Partnership’s revolving line of credit facility. 13. Income Taxes: As a partnership, Zeolyst International is not liable for the payment of taxes on income in the U.S. Net income and losses are allocated to the respective partners on an annual basis, and it is the partners’ responsibility to pay income taxes, if any, thereon according to their respective tax positions. 14. Commitments and Contingent Liabilities: In 1998, the Partnership entered into a ten year tolling agreement (“the Tolling Agreement”) with Shell, a related party, for the manufacture of specialty extruded products. Effective January 2004, the 1998 Tolling Agreement was replaced by a new evergreen ten-year tolling agreement. Both parties can terminate this agreement without cause with twenty-four months notice. By letter dated January 19, 2024, Shell provided a notice of termination of the Tolling Agreement effective twenty-four months from the date of such letter. Negotiations are advancing between the parties to create a replacement for the Tolling Agreement, which is set to terminate in January 2026. The Partnership pays Shell for materials utilized plus a daily charge rate based on the actual days of production. This charge is included in cost of goods sold and totaled $27,610, $28,698 and $20,134 for the years ended December 31, 2024, 2023 and 2022, respectively. In addition, for certain capital expenditures, that are beneficial to the Partnership, the parties will mutually agree on future adjustments to the daily charge rates or propose an alternative method of the Partnership’s contribution to those costs. 15. Related Party Transactions: The Partnership maintains certain policies and procedures for the review, approval, and ratification of related party transactions. All significant relationships and transactions are separately identified by management if they meet the definition of a related party or a related party transaction. Related party transactions include transactions that occurred during the year, in which the Partnership was or will be a participant and which any related person had or will have a direct or indirect material interest. Due to the nature of the Partnership, material related party transactions are identified on a transaction-based approach. The types of transactions identified and reviewed include, but are not limited to, sales of products, purchases of inventory, tolling costs, sales and marketing costs, research and development and management-related fees. All related party transactions are reviewed, approved and documented by the appropriate level of the Partnership’s management in accordance with these policies and procedures. F-86 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) Ecovyst Pursuant to the Contribution Agreement, PQ transferred and Ecovyst assumed PQ’s interest in a lease agreement by and between PQ and the Partnership dated February 1, 1988 (the “Lease”) pursuant to which the Partnership leases certain land used in its Kansas City production facilities, and PQ transferred to Ecovyst the land underlying the Partnership’s Kansas City production facility. The Lease, which has been recorded as an operating lease, provided for rental payments of $310 for the years ended December 31, 2024, 2023 and 2022, respectively. The rent expense is included in the cost of goods sold line item in the accompanying statements of operations and accumulated earnings. The term of the Lease continues as long as the agreement is in effect. The Partnership purchases certain of its raw materials from Ecovyst and is charged for various manufacturing costs incurred at the Ecovyst Kansas City production facility. The amount of these costs charged to the Partnership by Ecovyst during the years ended December 31, 2024, 2023 and 2022 were $17,315, $20,594 and $23,699, respectively. These costs are a component of production costs and are included in the cost of goods sold line item in the accompanying statements of operations and accumulated earnings when the inventory is sold. Certain administrative, marketing, engineering, management-related and research and development services are provided to the Partnership by Ecovyst. During the years ended December 31, 2024, 2023 and 2022, the Partnership was charged by Ecovyst $17,203, $14,758 and $13,908, respectively, for these services. These amounts are included in the selling, general and administrative line item in the accompanying statements of operations and accumulated earnings. In addition, certain product demonstration costs of $1,029, $1,819 and $1,621 during the years ended December 31, 2024, 2023 and 2022, respectively, were recorded in the cost of goods sold line of the accompanying statements of operations and accumulated earnings. The Partnership recognized no sales to Ecovyst for the year ended December 31, 2024, $236 of sales to Ecovyst for the year ended December 31, 2023 and no sales to Ecovyst during the year ended December 31, 2022. As of December 31, 2024 and 2023, the accounts payable to affiliates consisted of $2,794 and $3,164 due to Ecovyst. As of December 31, 2024 and 2023, there were no trade receivables due from Ecovyst. In December 2013 and annually thereafter, Ecovyst and the Partnership entered into ten year real estate tax abatement agreements with the Unified Government of Wyandotte County in Kansas City, Kansas (the “Unified Government”). The agreements utilize an Industrial Revenue Bond (“IRB,” “IRBs”) financing structure to achieve a 75% real estate tax abatement on the value of the improvements that were constructed during the expansion of the then-current fiscal year to Ecovyst and the Partnership’s facilities at the jointly-operated Kansas City, Kansas plant. The IRB financing structure requires Ecovyst to lease its rights to the facility improvements to the Unified Government, which leases the improvements back to Ecovyst. Ecovyst’s rental payments under the sub-leases of the improvements are equal to the amount of the interest payable on the IRBs that the Unified Government sells to Ecovyst. Ecovyst’s sublease payment obligations and the IRB interest payment receivables have been presented net, as the sublease rental payment obligations and the IRB interest payment receivables meet the criteria for right of set off conditions under GAAP. Shell Catalysts & Technologies Shell Catalysts & Technologies include CRI, Criterion, Shell Development Company, Shell Research and Technology Center-Amsterdam, CRI Center Marketing Asia Pacific, Shell International Oil Products, CRI Belgium, CRI Technology Services and Royal Dutch Shell affiliates. As described in Note 2, a significant portion of the Partnership’s sales are transacted through Shell. During the years ended December 31, 2024, 2023 and 2022, the Partnership recognized sales transacted through Shell of $101,223, $133,618 and $108,584, respectively. The Partnership purchases certain of its raw materials and is charged for tolling, customer distribution and packaging costs incurred by Shell. The amount of these costs charged to the Partnership during the years ended December 31, 2024, 2023 and 2022 were $29,502, $32,282 and $23,799, respectively. These costs are a component of production costs and are included in the cost of goods sold line item in the accompanying statements of operations and accumulated earnings when the inventory is sold. Certain engineering, management-related, broker-related, and research and development services are provided to the Partnership by Shell. During the years ended December 31, 2024, 2023 and 2022, the Partnership was charged $23,388, $20,699 and $19,554, respectively, for these services. These amounts are included in the selling, general and administrative line item in the accompanying statements of operations and accumulated earnings. Shell constructed a manufacturing asset at its facility wherein the Partnership agreed to share the cost of construction as both parties benefit from the associated asset. The asset was placed in service in 2024 and is being F-87 Table of Contents ZEOLYST INTERNATIONAL NOTES TO FINANCIAL STATEMENTS (in thousands) depreciated using the straight-line method over its estimated useful life. As of December 31, 2024, the balance of this asset amounted to $9,309, and is recorded in other long-term assets on the balance sheet. Depreciation expense related to this asset is $78 for the year ended December 31, 2024. As of December 31, 2024 and 2023, the accounts payable to affiliates balance consisted of $5,770 and $9,014, respectively, due to Shell. Included in trade accounts receivable as of December 31, 2024 and 2023 was $3,666 and $36,149, respectively, of receivables related to sales transacted through Shell, as described above. Zeolyst C.V. Zeolyst C.V. is a limited partnership formed in 1993 pursuant to a joint venture agreement between PQ Zeolites B.V. and Shell for the purpose of the production of Zeolite powders. The Partnership entered into an agreement with Zeolyst C.V. to purchase Zeolite powders manufactured by Zeolyst C.V. Under the terms of the agreement, products manufactured by Zeolyst C.V. are supplied solely to the Partnership. The Partnership has performed a qualitative and quantitative analysis and concluded that for Zeolyst C.V. for which it holds a variable interest but will not absorb a majority of the expected losses or residual returns, the Partnership is not the primary beneficiary and therefore, this VIE was not consolidated in the Partnership’s financial statements. The Partnership has no unfunded commitments or guarantees as a result of its involvement with Zeolyst C.V. The total carrying value of assets and liabilities for Zeolyst C.V was $105,242 and $5,484 as of December 31, 2024 and was $114,797 and $11,284 as of December 31, 2023, respectively. The Partnership currently does not have any exposure to any losses by Zeolyst C.V. The Partnership has purchased $49,585, $48,906 and $39,027 through the sales agreement during the years ended December 31, 2024, 2023 and 2022, respectively. These costs are a component of production costs and are included in the cost of goods sold line item in the accompanying statements of operations and accumulated earnings when the inventory is sold. There were no accounts receivable from affiliates due from Zeolyst C.V. as of December 31, 2024 and $7,111 of accounts receivable from affiliates due from Zeolyst C.V. as of December 31, 2023. There were $4,772 of accounts payable due to Zeolyst C.V. as of December 31, 2024 and no accounts payable due to Zeolyst C.V. as of December 31, 2023. 16. Subsequent Events: The Partnership has evaluated subsequent events from the balance sheet date through February 28, 2025 and determined there are no further items to disclose. F-88