What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-23 compared with 2025-02-24 · 506 added, 383 removed, 1413 unchanged (39% of the section changed)

30 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Dipsol Chemicals Co., Ltd.

and its subsidiaries (“Dipsol”) from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired by the Company in a purchase business combination during 2025.

We have also excluded Dipsol from our audit of internal control over financial reporting.

Dipsol is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 4% and 3%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

8 unchanged sentences

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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Annual Goodwill Impairment Assessment for the EMEA Reporting Unit

As described in Notes 1, 15, and 23 to the consolidated financial statements, the Company’s consolidated goodwill balance was $519 million as of December 31, 2024, of which $80 million relates to the EMEA reporting unit.

Management completes its annual goodwill impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units.

In completing a quantitative goodwill impairment test, management compares the reporting unit’s fair value, primarily based on future discounted cash flows, to its carrying value in order to determine if an impairment charge is warranted.

The determination of the estimated fair value requires management’s judgment and involves the use of significant estimates and assumptions, including revenue growth rates, gross margin levels, operating expenses, and weighted average cost of capital, among other items.

Management completed its annual impairment assessment as of October 1, 2024, and concluded no impairment existed.

The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment for the EMEA reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the EMEA reporting unit;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates and gross margin levels;

Acquisition of Dipsol Chemical Co, Ltd.

– Valuation of Product Technology, Inventories, Land, Building and Improvements, and Personal Property

As described in Notes 1 and 2 to the consolidated financial statements, in April 2025, the Company acquired Dipsol Chemicals Co., Ltd.

and its subsidiaries, (“Dipsol”) for a net purchase price of approximately $155.5 million.

Of the acquired assets, $18.0 million of product technology, $18.0 million of inventories, and $39.5 million of property, plant & equipment was recorded.

The Company accounts for business combinations under the acquisition method of accounting, which requires the recording of acquired assets, including separately identifiable intangible assets, and assumed liabilities at their respective acquisition date estimated fair values.

The determination of the estimated fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates and assumptions.

The preliminary product technology intangible asset fair value was determined using the relief from royalty method.

This valuation methodology required the use of several assumptions and estimates, including, but not limited to, the discount rate, the projected revenue, the royalty rate, and the economic life.

The preliminary inventories fair value was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date.

The preliminary land’s fair value was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while building and improvements and personal property’s fair value was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives.

The principal considerations for our determination that performing procedures relating to the valuation of product technology, inventories, land, building and improvements, and personal property acquired in the acquisition of Dipsol is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the product technology, inventories, land, building and improvements, and personal property acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the royalty rate for product technology, selling prices and current replacement cost for inventories, reproduction/replacement cost for land, and floor value, physical deterioration and reproduction/replacement cost for building and improvements and personal property;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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 EMEA reporting unit.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the EMEA reporting unit;

(ii) evaluating the appropriateness of the discounted cash flow model used by management;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model;

and (iv) evaluating the reasonableness of significant assumptions used by management related to the revenue growth rates and gross margin levels.

Evaluating management’s assumptions related to the revenue growth rates and gross margin levels, involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the EMEA reporting unit;

(ii) whether the assumptions were consistent with evidence obtained in other areas of the audit;

and (iii) for revenue growth rates, whether the assumptions were consistent with external market and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s discounted cash flow model.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the product technology, inventories, land, building and improvements, and personal property acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the product technology, inventories, land, building and improvements, and personal property acquired;

(iii) evaluating the appropriateness of the relief from royalty, net realizable value, sales comparison, and cost approaches used by management;

(iv) testing the completeness and accuracy of the underlying data used in the relief from royalty, net realizable value, sales comparison, and cost approaches;

and (v) evaluating the reasonableness of the significant assumptions used by management related to the royalty rate for product technology, selling prices and current replacement cost for inventories, reproduction/replacement cost for land, and floor value, physical deterioration and reproduction/replacement cost for building and improvements and personal property.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief from royalty, net realizable value, sales comparison, and cost approaches and (ii) the reasonableness of the royalty rate assumption for product technology, selling prices and current replacement cost assumptions for inventories, reproduction/replacement cost assumption for land, and floor value, physical deterioration, and reproduction/replacement cost assumptions for building and improvements and personal property.

/s/ PricewaterhouseCoopers LLP

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Operating income 52,986 194,706 214,495

Other income (expense), net 1,354 ( 10,672 ) ( 12,607 )

Interest expense, net ( 41,002 ) ( 50,699 ) ( 32,579 )

Other (expense) income, net ( 1,909 ) 1,354 ( 10,672 )

Interest expense ( 44,048 ) ( 41,002 ) ( 50,699 )

Income before taxes and equity in net income of associated companies 7,029 155,058 153,124

Taxes on income before equity in net income of associated companies 24,607 49,300 55,585

Income (loss) before equity in net income of associated companies 105,758 97,539 ( 17,807 )

(Loss) income before equity in net income of associated companies ( 17,578 ) 105,758 97,539

Equity in net income of associated companies 15,177 10,971 15,333

Net income (loss) 116,729 112,872 ( 15,842 )

Net (loss) income ( 2,401 ) 116,729 112,872

Net income attributable to noncontrolling interest 87 85 124

Net income (loss) attributable to Quaker Chemical Corporation $ 116,644 $ 112,748 $ ( 15,931 )

Net (loss) income attributable to Quaker Chemical Corporation $ ( 2,488 ) $ 116,644 $ 112,748

Per share data:

Net income (loss) attributable to Quaker Chemical Corporation common shareholders – basic $ 6.51 $ 6.27 $ ( 0.89 )

Net income (loss) attributable to Quaker Chemical Corporation common shareholders – diluted $ 6.51 $ 6.26 $ ( 0.89 )

Net (loss) income attributable to Quaker Chemical Corporation common shareholders – basic $ ( 0.14 ) $ 6.51 $ 6.27

Net (loss) income attributable to Quaker Chemical Corporation common shareholders – diluted $ ( 0.14 ) $ 6.51 $ 6.26

The accompanying notes are an integral part of these consolidated financial statements.

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2025 2024 2023

Net income (loss) $ 116,729 $ 112,872 $ ( 15,842 )

Other comprehensive (loss) income, net of tax

Net (loss) income $ ( 2,401 ) $ 116,729 $ 112,872

Other comprehensive income (loss), net of tax

Currency translation adjustments 88,376 ( 77,496 ) 16,725

Defined benefit retirement plans

Net gain (loss) arising during the period, other 105 ( 5,792 ) 8,177

Net (loss) gain arising during the period, other ( 1,196 ) 105 ( 5,792 )

Amortization of actuarial loss (gain) 258 301 ( 385 )

Amortization of prior service cost (gain) 19 34 ( 228 )

Amortization of prior service cost 17 19 34

Current period change in fair value of derivatives ( 1,235 ) ( 159 ) 1,407

Unrealized (loss) gain on available-for-sale securities ( 30 ) ( 46 ) 1,817

Other comprehensive (loss) income ( 77,276 ) 13,806 ( 74,300 )

Comprehensive income (loss) 39,453 126,678 ( 90,142 )

Other comprehensive income (loss) 86,190 ( 77,276 ) 13,806

Comprehensive income 83,789 39,453 126,678

Comprehensive income attributable to noncontrolling interest ( 319 ) ( 13 ) ( 106 )

Comprehensive income (loss) attributable to Quaker Chemical Corporation $ 39,440 $ 126,572 $ ( 90,181 )

Comprehensive income attributable to Quaker Chemical Corporation $ 83,470 $ 39,440 $ 126,572

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities

Net income (loss) $ 116,729 $ 112,872 $ ( 15,842 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Amortization of debt issuance costs 1,413 1,413 2,942

Net (loss) income $ ( 2,401 ) $ 116,729 $ 112,872

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 93,453 84,119 81,987

1 unchanged sentence

Deferred income taxes ( 30,428 ) ( 10,033 ) ( 11,442 )

Uncertain tax positions (non-deferred portion) ( 2,372 ) ( 644 ) ( 6,398 )

Deferred compensation and other, net 4,867 5,711 2,613

Restructuring and related charges 35,130 6,530 7,588

Share-based compensation 13,611 14,991 14,605

Loss on extinguishment of debt — — 5,246

Gain on disposal of property, plant, equipment and other assets ( 2,204 ) ( 810 ) ( 1,307 )

Inventory step-up amortization 6,022 — —

Impairment charges 88,840 — —

Restructuring and related charges 6,530 7,588 3,163

Uncertain tax positions (non-deferred portion) ( 5,708 ) ( 2,372 ) ( 644 )

Pension and other postretirement benefits ( 4,132 ) ( 4,460 ) ( 2,079 )

Increase (decrease) in cash from changes in current assets and current liabilities, net of acquisitions:

Other adjustments ( 5,564 ) 6,280 7,124

Increase (decrease) in change in operating assets and liabilities, net of acquisitions

Accounts receivable 24,232 24,975 32,169

Inventories ( 12,239 ) ( 3,244 ) 49,751

Prepaid expenses and other current assets ( 6,242 ) ( 21 ) 3,705

Prepaid expenses and other assets 3,069 ( 6,242 ) ( 21 )

Accrued restructuring ( 26,598 ) ( 7,595 ) ( 9,786 )

Accounts payable and accrued liabilities ( 30,268 ) ( 8,637 ) 5,937

Estimated taxes on income (loss) ( 2,920 ) 3,415 ( 2,688 )

Estimated taxes on (loss) income ( 1,714 ) ( 2,920 ) 3,415

Net cash provided by operating activities 136,453 204,578 279,020

3 unchanged sentences

Proceeds from disposition of assets 2,995 4,676 11,179

Other investing activities 2,951 — —

Net cash used in investing activities ( 214,119 ) ( 76,420 ) ( 27,621 )

1 unchanged sentence

Payments of long-term debt ( 34,722 ) ( 57,221 ) ( 38,932 )

Proceeds from long-term debt — — 750,000

Borrowings (payments) on revolving credit facilities, net 174,242 17,916 ( 164,769 )

Borrowings (payments) on other debt, net 1,441 ( 506 ) ( 1,629 )

Financing-related debt issuance costs — — ( 3,734 )

(Payments) borrowings on other debt, net ( 386 ) 1,441 ( 506 )

Dividends paid ( 34,393 ) ( 33,170 ) ( 31,650 )

1 unchanged sentence

Other stock related activity ( 1,387 ) ( 2,383 ) ( 2,749 )

Net cash (used in) provided by financing activities ( 122,664 ) ( 238,606 ) 24,672

Net cash provided by (used in) financing activities 61,833 ( 122,664 ) ( 238,606 )

Effect of foreign exchange rate changes on cash 6,782 ( 11,141 ) 771

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Cash paid during the year for:

Income taxes, net of refunds $ 60,581 $ 57,410 $ 35,327

Interest 42,788 44,536 54,892

Non-cash activities:

Change in accrued purchases of property, plant and equipment, net $ 11,282 $ ( 746 ) $ 278

Accrued purchases of property, plant and equipment, net $ 8,987 $ 12,654 $ 2,975

The accompanying notes are an integral part of these consolidated financial statements.

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Balance as of December 31, 2022 $ 17,950 $ 928,288 $ 469,920 $ ( 138,240 ) $ 667 $ 1,278,585

Net (loss) income — — ( 15,931 ) — 89 ( 15,842 )

Amounts reported in other comprehensive (loss) income — — — ( 74,250 ) ( 50 ) ( 74,300 )

Net income — — 112,748 — 124 112,872

Amounts reported in other comprehensive income (loss) — — — 13,825 ( 19 ) 13,806

Dividends declared ($ 1.78 per share)

— — ( 32,027 ) — — ( 32,027 )

Distributions to noncontrolling affiliate shareholders — — — — ( 169 ) ( 169 )

Share issuance and equity-based compensation plans, net 42 11,813 — — — 11,855

1 unchanged sentence

Net income — — 116,644 — 85 116,729

Amounts reported in other comprehensive income (loss) — — — 13,825 ( 19 ) 13,806

Amounts reported in other comprehensive (loss) income — — — ( 77,204 ) ( 72 ) ( 77,276 )

Dividends declared ($ 1.88 per share)

— — ( 33,554 ) — — ( 33,554 )

Distributions to noncontrolling interest affiliate shareholders — — — — ( 169 ) ( 169 )

Shares purchased under share repurchase program, net of excise taxes ( 313 ) ( 49,346 ) — — — ( 49,659 )

Share issuance and equity-based compensation plans, net ( 5 ) 13,026 — — — 13,021

Balance as of December 31, 2024 17,674 903,781 633,731 ( 201,619 ) 616 1,354,183

Net income — — 116,644 — 85 116,729

Amounts reported in other comprehensive (loss) income — — — ( 77,204 ) ( 72 ) ( 77,276 )

Net (loss) income — — ( 2,488 ) — 87 ( 2,401 )

Amounts reported in other comprehensive income — — — 85,958 232 86,190

Noncontrolling interest from acquisition — — — — 2,451 2,451

Dividends declared ($ 1.99 per share)

13 unchanged sentences

Restructuring and Related Activities

Other Income (Expense), net

Other (Expense) I ncome , net

Earnings Per Share

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Some transactions are made in currencies different from an entity’s functional currency.

Gains and losses from remeasurement of these foreign currency transactions, and the impact of related hedges, are generally reflected in “Other income (expense), net” in the consolidated income statements as they occur.

See Note 9, Other Income (Expense), Net , and our policy on accounting for hyperinflation below, for additional information.

Gains and losses from remeasurement of these foreign currency transactions, and the impact of related hedges, are generally reflected in “Other (expense) income, net” in the Consolidated Statement of Operations as they occur.

See Note 9, Other (expense) income, net , and our policy on accounting for hyperinflation below, for additional information.

Hyper-inflationary accounting:

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For the years ended December 31, 2025, 2024 and 2023, the Company recorded $ 2.2 million, $ 0.8 million, and $ 7.8 million, respectively, of remeasurement losses associated with the applicable currency conversions related to Argentina and Türkiye.

These losses were recorded within foreign exchange losses, net, which is a component of Other income (expense), net, in the Company’s Consolidated Statements of Operations.

These losses were recorded within foreign exchange losses, net, which is a component of Other (expense) income, net, in the Company’s Consolidated Statements of Operations.

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the Chief Operating Decision Maker assesses the Company’s performance.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

During the first quarter of 2023, the Company reorganized its executive management team to align with its new business structure.

The Company’s new structure includes three reportable segments:

(i) Americas;

(ii) Europe, Middle East and Africa (“EMEA”);

and (iii) Asia/Pacific.

Prior to the Company’s reorganization, the Company’s historical reportable segments were:

(i) Americas;

(iii) Asia/Pacific;

and (iv) Global Specialty Businesses.

Prior period information has been recast to align with the Company’s business structure as of January 1, 2023, including reportable segments and customer industry disaggregation.

As a result of the Company’s new organizational structure effective January 1, 2023, the Company reallocated goodwill previously held by the former Global Specialty Businesses segment to the remaining business segments as of January 1, 2023.

However, the Company did not recast the carrying amount of goodwill for the year ended December 31, 2022.

See Notes 4, 5, and 15 for additional information.

Reclassifications:

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The determination of the estimated fair value of assets acquired and liabilities assumed requires significant estimates and assumptions.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Dipsol Chemicals Co., Ltd.

and its subsidiaries, (“Dipsol”) to the fair value of the net assets acquired.

The preliminary fair value of customer-related intangible assets was determined using the multi-period excess earnings method, while the preliminary fair value of product technology and trademarks were determined using the relief from royalty method.

These valuation methodologies required the use of several assumptions and estimates, including, but not limited to, the customer attrition rate, the discount rate, net sales attributable to existing customers, the economic life, the EBITDA margin, and the contributory asset charge for the customer-related intangible assets, and the discount rate, the projected revenue, the royalty rate, and the economic life for the product technology and trademark intangible assets.

The preliminary fair value of inventory was determined using the net realizable value approach, which includes the use of several estimates, including the selling prices and current replacement cost as of the valuation date.

The preliminary fair value of land was determined using a sales comparison approach, which includes the use of several assumptions and estimates, including reproduction/replacement cost, while the preliminary fair value of building and improvements and personal property was determined using the cost approach, which includes the use of several assumptions and estimates, including the building condition, floor value, physical deterioration, functional and economic obsolescence, reproduction/replacement cost, and remaining useful lives.

Based on the assessment of additional information during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of assets acquired and liabilities assumed.

32 unchanged sentences

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company records license fees received from third-parties in Other income (expense), net, in its Consolidated Statements of Operations, which generally include sales-based royalties in exchange for the license of intellectual property.

The Company records license fees received from third-parties in Other (expense) income, net, in its Consolidated Statements of Operations, which generally include sales-based royalties in exchange for the license of intellectual property.

These license fees are recognized in accordance with their agreed-upon terms and when performance obligations are satisfied, which is generally when the third party has a subsequent sale.

30 unchanged sentences

The fair value of market-based PSUs, for which the performance measure is total shareholder return (“TSR”), is determined using a Monte Carlo simulation model.

Prior to 2023, the Company elected to assume an estimated forfeiture rate of 13 % based on historical experience.

Beginning in 2023, the Company elected to account for forfeitures on new awards as they occur.

The Company elected to account for forfeitures on awards as they occur.

See Note 8, Equity , for additional information.

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Comprehensive income (loss):

The Company presents Other comprehensive (loss) income in its Statements of Comprehensive Income (Loss).

The Company presents Other comprehensive income (loss) in its Statements of Comprehensive Income (Loss).

The Company discloses significant amounts reclassified from each component of AOCI, the related tax amounts and the income statement line items affected by such reclassifications.

33 unchanged sentences

The Company capitalizes costs incurred with the implementation of a cloud computing arrangement that is a service contract, consistent with its policy for software for internal use.

The capitalized costs are reflected in "Other non-current assets" on its Consolidated Balance Sheets and expensed over the term of the related hosting arrangement.

The capitalized costs are reflected in “Prepaid expenses and other current assets” and "Other non-current assets" on its Consolidated Balance Sheets and expensed over the term of the related hosting arrangement.

Goodwill and other intangible assets:

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These tests will be performed more frequently if triggering events indicate potential impairment.

In completing a quantitative goodwill impairment test, the Company compares a reporting unit’s fair value, primarily based on future discounted cash flows, to its carrying value in order to determine if an impairment charge is warranted.

In completing a quantitative goodwill impairment test, the Company compares a reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment charge is warranted.

Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from 5 to 24 years.

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Interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur.

The Company uses fixed-for-fixed cross-currency swap agreements to manage risk, including to hedge the variability of exchange rates of our foreign net investments.

The fixed-for-fixed cross-currency swap agreements are designated as net investment hedges and, as such, the agreements are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI.

The Company uses the spot method to evaluate the effectiveness of the net investment hedges.

The Company uses foreign exchange forward contracts to economically hedge the impact of variability in exchange rates on certain assets and/or liabilities denominated in foreign currencies.

Forward contracts are marked-to-market at each reporting date, with changes in the fair value of the underlying instruments, as well as gains and losses on the hedged foreign currency transactions, recognized in earnings in Other income (expense), net.

The fair value of forward contracts are determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments.

5 unchanged sentences

See Note 25, Commitments and Contingencies , for additional information.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 2 – Business Combinations

Recent Acquisition Activity

Subsequent to the date of these financial statements, in February 2025, the Company acquired Chemical Solutions & Innovations (Pty) Ltd.

(“CSI”), for approximately $ 3.9 million, subject to routine and customary post-closing adjustments.

CSI is based in South Africa and is a supplier of metalworking fluids and lubricants to the South African market.

CSI will be reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s position in South Africa and expands the Company’s presence in that region.

As of the date of this Report, purchase accounting has not been finalized.

In April 2025, the Company acquired 100 % of the outstanding equity interests of Dipsol for approximately $ 185.6 million ( 27.7 billion JPY), which included approximately $ 30.1 million ( 4.5 billion JPY) of acquired cash for a net purchase price of approximately $ 155.5 million ( 23.2 billion JPY).

In July 2025, the Company satisfied all routine and customary post-closing conditions and finalized the purchase price with no adjustments.

The Company funded the acquisition purchase price with borrowings under its existing credit facility.

In connection with the acquisition of Dipsol, the Company entered into foreign currency forward contracts, which resulted in a $ 187.0 million cash payment and a $ 1.4 million foreign currency loss recognized during the year ended December 31, 2025.

Dipsol is headquartered in Japan and is a leading supplier of surface treatment and plating solutions and services primarily for the automotive and other industrial applications end markets.

Dipsol has operations in several countries, and these operations are reported within the Company’s respective Americas, EMEA, and Asia/Pacific segments.

This acquisition expands the Company’s advanced solutions businesses in attractive end markets with solid growth characteristics.

Dipsol also provides significant cross-selling opportunities and enhances the Company’s ability to meet the needs of our customers across the globe.

The following table presents the preliminary estimated fair values of Dipsol assets acquired and liabilities assumed as of the acquisition date:

Dipsol Assets Acquired and Liabilities Assumed

Dollars in thousands

Estimated Fair Value (1)

Fair value of assets acquired

Cash and cash equivalents $ 30,084

Accounts receivable 16,481

Inventories 17,962

Prepaid expenses and other current assets 1,231

Property, plant and equipment 39,450

Right-of-use lease assets 2,534

Other intangible assets 55,000

Investments in associated companies 5,096

Deferred tax assets 989

Other non-current assets 4,165

Total Assets Acquired $ 172,992

Fair value of liabilities assumed

Accounts payable $ 6,763

Accrued compensation 1,528

Other accrued liabilities 2,415

Long-term lease liabilities 1,446

Deferred income tax liabilities 25,836

Total Liabilities Assumed $ 37,988

Noncontrolling interest ( 2,451 )

Goodwill 53,059

Total Consideration $ 185,612

(1) The Company recorded approximately $ 0.2 million of net measurement period adjustments during the year ended December 31, 2025 to reflect changes in net working capital and tax balances.

All measurement period adjustments were offset against goodwill.

As of December 31, 2025, the allocation of the purchase price has not been finalized and the one-year measurement period has not ended.

Further adjustments may be necessary, primarily for working capital adjustments and tax balances, as a result of the Company’s ongoing assessment of additional information related to the fair value of assets acquired and liabilities assumed.

The Company allocated $ 55.0 million of the purchase price to intangible assets across the Americas, EMEA, and Asia/Pacific segments.

Customer relationships, product technologies, and trademarks will be amortized over 14 years, 8 years, and 13 years, respectively.

QUAKER CHEMICAL CORPORATION

1 unchanged sentence

(Dollars in thousands, except per share amounts, unless otherwise stated)

In July 2024, the Company acquired the Sutai Group (“Sutai”), for approximately $ 16.2 million, including an initial cash payment of $ 14.6 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels, as well as earn-out provisions with an initial estimated payout of $ 1.6 million related to the finalization of 2024 and 2025 earnings.

The following table presents the intangible assets recognized for each reportable segment:

Americas EMEA Asia/Pacific Total

Customer Relationships $ 3,500 $ 200 $ 26,300 $ 30,000

Product Technologies — — 18,000 18,000

Trademarks — — 7,000 7,000

Total Intangibles $ 3,500 $ 200 $ 51,300 $ 55,000

The Company recognized $ 53.1 million of goodwill, which is comprised of $ 46.9 million in the Asia/Pacific segment, $ 5.8 million in the Americas segment, and $ 0.4 million in the EMEA segment.

The goodwill is not deductible for tax purposes.

The goodwill is primarily attributable to expected synergies.

Total sales included in the Consolidated Statement of Operations for the year ended December 31, 2025 was $ 62.7 million.

Total loss before taxes included in the Consolidated Statement of Operations for the year ended December 31, 2025 was $ 5.4 million, which includes $ 6.0 million amortization of the fair value step-up in inventories and $ 4.9 million depreciation expense recorded in connection with the fair value step-up of property, plant, and equipment and amortization expense recorded for its definite-lived intangible assets.

In April 2025, the Company acquired 100 % of the outstanding equity interests of Natech, Ltd., (“Natech”) for approximately $ 6.5 million, which includes an initial cash payment of $ 6.0 million and a deferred payment of $ 0.5 million, subject to routine and customary post-closing adjustments, including an adjustment for working capital.

Assets acquired included cash and cash equivalents of $ 1.5 million.

The Company recorded incremental income of $ 0.4 million during the year ended December 31, 2024 relating to adjustments to these earnout provisions in Other income (expense), net on the Consolidated Statements of Operations.

As of December 31, 2024, the Company has remaining earnout liabilities recorded on its Consolidated Balance Sheets of $ 1.2 million.

Natech is based in the United Kingdom and is a manufacturer of surface treatment chemicals for a variety of industrial applications.

Natech is reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s overall surface treatment product and application capabilities within Europe.

The Company allocated $ 2.1 million of the purchase price to intangible assets and recognized $ 2.6 million of goodwill in the EMEA segment, none of which is deductible for tax purposes.

The goodwill is primarily attributable to expected growth synergies.

During the third quarter of 2025, the Company settled the working capital adjustment for an immaterial amount.

As of December 31, 2025, the allocation of the purchase price has been finalized.

In February 2025, the Company acquired 100 % of the outstanding equity interests of Chemical Solutions & Innovations (Pty) Ltd.

(“CSI”), for approximately $ 3.9 million, subject to routine and customary post-closing adjustments, including an adjustment for working capital.

CSI is based in South Africa and is a supplier of metalworking fluids and lubricants to the South African market.

CSI is reported as part of the EMEA reportable segment.

This acquisition strengthens Quaker Houghton’s position in South Africa and expands the Company’s presence in that region.

The Company allocated $ 1.4 million of the purchase price to intangible assets and recognized $ 1.7 million of goodwill in the EMEA segment, none of which is deductible for tax purposes.

The goodwill is primarily attributable to expected growth synergies.

During the third quarter of 2025, the Company settled the working capital adjustment for an immaterial amount.

As of December 31, 2025, the allocation of the purchase price has been finalized.

Previous Acquisitions

In July 2024, the Company acquired 100 % of the outstanding equity interests of the Sutai Group (“Sutai”), for approximately $ 16.2 million, including an initial cash payment of $ 14.6 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels, as well as earn-out provisions with an initial estimated payout of $ 1.6 million related to the finalization of 2024 and 2025 earnings.

Assets acquired included cash and cash equivalents of $ 5.5 million.

The Company recorded incremental income of $ 0.8 million during the year ended December 31, 2025 relating to adjustments to these earnout provisions in Other (expense) income, net on the Consolidated Statements of Operations.

As of December 31, 2025, the Company does not have any remaining earnout liabilities recorded on its Consolidated Balance Sheets.

Sutai is based in Japan and provides impregnation treatment products and services to the automotive and other industries.

3 unchanged sentences

The goodwill is primarily attributable to expected synergies.

As of December 31, 2024, the allocation of the purchase price has not been finalized.

During February 2024, the Company acquired I.K.V.

During the first quarter of 2025, the Company settled the working capital adjustment for an immaterial amount which impacted the residual goodwill recorded.

As of December 31, 2025, the allocation of the purchase price has been finalized.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

During February 2024, the Company acquired 100 % of the outstanding equity interests of I.K.V.

Tribologie IKVT and its subsidiaries (“IKV”) for $ 35.2 million, including an initial cash payment of $ 29.7 million, subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels as well as earn-out provisions related to the finalization of 2023 earnings.

9 unchanged sentences

As of December 31, 2025, the allocation of the purchase price has been finalized.

The results of operations of Sutai and IKV subsequent to the acquisition dates are included in the Consolidated Statements of Operations for the year ended December 31, 2024.

Previous Acquisitions

In October 2022, the Company acquired a business that provides pickling and rinsing products and services, which is part of the EMEA reportable segment, for approximately $ 3.5 million.

The Company allocated $ 2.8 million of the purchase price to intangible assets, comprised of $ 2.3 million of customer relationships to be amortized over 10 years;

$ 0.2 million of existing product technologies to be amortized over 10 years;

and $ 0.3 million of licensed trademarks to be amortized over 10 years.

In addition, the Company recorded $ 0.8 million of goodwill related to expected value not allocated to other acquired assets.

In January 2022, the Company acquired a business that provides pickling inhibitor technologies, drawing lubricants and stamping oil, and various other lubrication, rust preventative, and cleaner applications, which is part of the Americas reportable segment for approximately $ 8.0 million.

The Company allocated $ 5.6 million of the purchase price to intangible assets, comprised of $ 5.1 million of customer relationships to be amortized over 14 years;

and $ 0.5 million of existing product technologies to be amortized over 14 years.

In addition, the Company recorded $ 1.8 million of goodwill related to expected value not allocated to other acquired assets, all of which is expected to be tax deductible in various jurisdictions in which the Company operates.

In January 2022, the Company acquired a business related to the sealing and impregnation of metal castings for the automotive sector, as well as impregnation resin and impregnation systems for metal parts, which is part of the EMEA reportable segment for approximately $ 1.4 million.

The results of operations of each acquisition completed prior to December 31, 2024 and subsequent to the respective acquisition dates are included in the Consolidated Statements of Operations.

Applicable transaction expenses associated with these acquisitions are included in SG&A in the Company’s Consolidated Statements of Operations.

The results of operations of Dipsol, Natech, CSI, Sutai and IKV subsequent to the acquisition dates are included in the Consolidated Statements of Operations for the year ended December 31, 2025.

During the year ended December 31, 2025, the Company recognized $ 12.0 million of acquisition-related expenses including legal, financial, consulting and other costs, compared to $ 1.9 million during the year ended December 31, 2024.

There were no acquisition-related expenses recognized during the year ended December 31, 2023.

These costs are included in Selling, general and administrative expenses (“SG&A”) in the Consolidated Statements of Operations.

Certain pro forma and other information is not presented, as the operations of the acquired assets and businesses are not considered material to the overall operations of the Company for the periods presented.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 3 – Recently Issued Accounting Standards

Recently Adopted Accounting Standards

The Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures in this Report and will adopt the interim reportable segment disclosure requirements in the first quarter of 2025.

The Company has adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures beginning with the 2024 Form 10-K and the Form 10-Q for the period ended March 31, 2025.

This ASU expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, defined as those expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included in the reported measure of segment profit or loss.

The Company disclosed that the CODM, which is the Chief Executive Officer, assesses segment performance and makes decisions about allocating resources to its operating segments using segment operating earnings.

The Company disclosed that the CODM assesses segment performance and makes decisions about allocating resources to its operating segments using segment operating earnings.

Based on the Company’s assessment, the Company determined that product costs are significant segment expenses that are regularly provided to the CODM and included in segment operating earnings.

The Company disclosed product costs and other operating expenses included in segment operating earnings by reportable segment.

See Note 4, Business Segments , for additional information.

The Company has adopted ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures on a prospective basis in this Report.

Pursuant to this ASU, the Company disclosed additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the “rate reconciliation”) for federal, state, and foreign income taxes, which required greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeded a specified threshold.

Additionally, the Company disclosed income taxes paid disaggregated by federal, state, and foreign taxes and further disaggregated these disclosures in certain jurisdictions where income taxes paid exceeded a certain threshold.

See Note 10, Income Taxes , for additional information.

Recently Issued Accounting Standards Not Yet Adopted

The FASB issued ASU 2023-09, Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures in December 2023.

This ASU requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the “rate reconciliation”) for federal, state, and foreign income taxes, requiring greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold.

The ASU also requires public business entities to disclose income taxes paid disaggregated by federal, state, and foreign taxes.

Further disaggregation is also required in jurisdictions where income taxes paid exceeds a certain threshold.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

The FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The FASB issued ASU 2025-06, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software in September 2025.

This ASU removes all references to prescriptive and sequential software development stages and will now require PBEs to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended.

The ASU also specifies that the disclosures in Subtopic 360-10, Property, Plant, and Equipment- Overall are required for all capitalized internal-use software costs.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

The FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements in December 2025.

This ASU amends Topic 270, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.

Additionally, the amendment requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

Note 4 – Business Segments

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization and the manner by which the Chief Operating Decision Maker, which is the Company’s Chief Executive Officer, allocates resources and assesses performance.

The Chief Operating Decision Maker evaluates performance for the Company’s operating segments based on segment operating earnings.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other operating expenses.

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization and the manner by which the CODM, which is the Company’s Chief Executive Officer, allocates resources and assesses performance.

The CODM evaluates performance for the Company’s operating segments based on segment operating earnings.

Segment operating earnings for each of the Company’s reportable segments are comprised of the segment’s net sales less directly related product costs and other segment items.

Operating expenses not directly attributable to the net sales of each respective segment, such as certain corporate and administrative costs, impairment charges, and restructuring charges, are not included in segment operating earnings.

Other items not specifically identified with the Company’s reportable segments include Interest expense, net and Other income (expense), net.

The Chief Operating Decision Maker uses segment operating earnings to allocate resources for each segment predominantly in the annual budget and forecasting process.

The Chief Operating Decision Maker considers budget-to-actual variances on a monthly basis for segment operating earnings when making decisions about allocating capital and personnel to the segments.

The Chief Operating Decision Maker also uses segment operating earnings to assess the performance for each segment and in the compensation of certain employees.

Other items not specifically identified with the Company’s reportable segments include Interest expense and Other (expense) income, net.

The CODM uses segment operating earnings to allocate resources for each segment predominantly in the annual budget and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis for segment operating earnings when making decisions about allocating capital and personnel to the segments.

The CODM also uses segment operating earnings to assess the performance for each segment and in the compensation of certain employees.

Segment asset information is not regularly provided to or reviewed by the CODM.

Therefore, the Company does not disclose segment asset information for each reportable segment.

QUAKER CHEMICAL CORPORATION

4 unchanged sentences

Net sales (1)

$ 865,332 $ 548,110 $ 475,192 $ 1,888,634

Significant segment expenses

1 unchanged sentence

429,432 293,351 251,855 974,638

Other operating expenses (2)

Other segment items (3)

208,331 158,119 99,114 465,564

1 unchanged sentence

Net sales (1)

$ 882,131 $ 536,435 $ 421,120 $ 1,839,686

Significant segment expenses

1 unchanged sentence

427,399 286,330 216,432 930,161

Other operating expenses (2)

Other segment items (3)

210,775 150,679 81,950 443,404

1 unchanged sentence

Net sales (1)

$ 977,095 $ 571,347 $ 404,871 $ 1,953,313

Significant segment expenses

1 unchanged sentence

497,690 318,279 209,422 1,025,391

Other operating expenses (2)

Other segment items (3)

213,369 148,257 76,991 438,617

Segment operating earnings $ 266,036 $ 104,811 $ 118,458 $ 489,305

(1) Net sales relate to external customers only.

All intersegment sales are eliminated in consolidation.

(2) Product costs include the costs of raw materials and are recorded in Cost of goods sold in the Company’s Consolidated Statements of Operations.

(3) Other operating expenses include overhead costs of operating the Company’s production facilities and providing chemical management services to customers and direct SG&A costs.

(4) Product costs includes the $ 6.0 million amortization of the fair value step-up in Dipsol's inventories as a result of the acquisition for the year ended December 31, 2025, which is comprised of approximately $ 2.6 million in the Americas segment, $ 3.0 million in the Asia/Pacific segment, and $ 0.4 million in the EMEA segment.

(5) Product costs includes a $ 2.9 million gain related to immaterial out-of-period adjustments for inventory for the year ended December 31, 2025, which was comprised of a $ 0.7 million gain in the Americas segment and a $ 2.2 million gain in the EMEA segment.

The following table presents a reconciliation of the Company’s segment operating earnings to income before taxes and equity in net income of associated companies in the Company’s Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023.

6 unchanged sentences

Operating income $ 52,986 $ 194,706 $ 214,495

Other income (expense), net 1,354 ( 10,672 ) ( 12,607 )

Interest expense, net ( 41,002 ) ( 50,699 ) ( 32,579 )

Other (expense) income, net ( 1,909 ) 1,354 ( 10,672 )

Interest expense ( 44,048 ) ( 41,002 ) ( 50,699 )

Income before taxes and equity in net income of associated companies $ 7,029 $ 155,058 $ 153,124

The following tables present information regarding the Company’s reportable segments’ assets and long-lived assets, excluding goodwill, as of December 31, 2024, 2023 and 2022.

Management does not use goodwill by segment to evaluate performance or allocate resources.

Segment assets, excluding goodwill 2024 2023 2022

Americas $ 834,327 $ 903,319 $ 1,196,906

EMEA 650,045 703,338 583,861

Asia/Pacific 607,383 595,036 525,847

Total segment assets $ 2,091,755 $ 2,201,693 $ 2,306,614

QUAKER CHEMICAL CORPORATION

1 unchanged sentence

(Dollars in thousands, except per share amounts, unless otherwise stated)

Segment long-lived assets 2024 2023 2022

Americas $ 164,450 $ 159,015 $ 150,294

EMEA 80,668 83,488 87,279

Asia/Pacific 133,906 123,846 120,761

Total segment long-lived assets $ 379,024 $ 366,349 $ 358,334

The following tables present information regarding the Company’s reportable segments’ capital expenditures and depreciation for identifiable assets for the years ended December 31, 2024, 2023 and 2022:

Capital expenditures 2024 2023 2022

Americas $ 21,191 $ 25,650 $ 19,121

EMEA 11,989 7,561 6,065

Asia/Pacific 8,614 5,589 3,353

Total segment capital expenditures $ 41,794 $ 38,800 $ 28,539

The following tables present information regarding the Company’s reportable segments’ depreciation for identifiable assets for the years ended December 31, 2025, 2024 and 2023:

Depreciation 2025 2024 2023

3 unchanged sentences

Total segment depreciation $ 27,628 $ 25,895 $ 23,833

The following tables summarize net sales and long-lived assets attributable to U.S.

domiciled operations for the years ended December 31, 2024, 2023 and 2022:

The following tables summarize net sales attributed to geographic regions based on the country of origin and long-lived assets attributed to geographic regions based on asset location for the years ended December 31, 2025, 2024 and 2023:

Net sales 2025 2024 2023

5 unchanged sentences

United States $ 241,261 $ 217,687 $ 217,834

China 57,106 32,082 24,317

Foreign operations 190,991 129,255 124,198

Total long-lived assets $ 489,358 $ 379,024 $ 366,349

Total net sales and operating earnings by segment include inter-segment sales which are generally recorded at cost-plus a specified fee or at a negotiated fixed price.

All inter-segment transactions have been eliminated from each reportable segment’s net sales and earnings for all periods presented in the above tables.

The following table summarizes inter-segment revenues for the years ended December 31, 2024, 2023 and 2022:

Inter-segment revenues 2024 2023 2022

Americas $ 9,300 $ 9,005 $ 11,552

EMEA 19,781 24,865 44,605

Asia/Pacific 6,397 2,651 957

Note 5 – Net Sales and Revenue Recognition

Arrangements Resulting in Net Reporting

As part of the Company’s Fluidcare TM business, certain third-party product sales to customers are managed by the Company.

The Company transferred third-party products under arrangements recognized on a net reporting basis of $ 75.5 million, $ 81.8 million and $ 83.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Customer Concentration

9 unchanged sentences

Net sales of each of the Company’s major product lines are generally spread throughout all three of the Company’s segments, and in most cases, approximately proportionate to the level of total sales in each segment.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The following tables present disaggregated information regarding the Company’s net sales, first by major product lines that represent more than 10 % of the Company’s consolidated net sales for the years ended December 31, 2025, 2024 and 2023, and followed then by a disaggregation of the Company’s net sales by segment and customer industry for the years ended December 31, 2025, 2024 and 2023.

3 unchanged sentences

Hydraulic fluids 12.2 % 14.2 % 14.1 %

Surface solutions 10.9 % 5.2 % 5.0 %

Net sales for the year ending December 31, 2025

19 unchanged sentences

In addition, the Company has land use leases with remaining lease terms up to 89 years.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company’s finance leases are included in PP&E in the Consolidated Balance Sheets.

1 unchanged sentence

The Company has no material variable lease costs or sublease income for the years ended December 31, 2025, 2024 and 2023.

During the year ended December 31, 2024, the Company entered into a new lease agreement for office and laboratory space in Radnor, PA for the purposes of relocating its global headquarters.

The lease is expected to commence in the third quarter of 2025 with a total lease commitment of $ 79.7 million.

During the year ended December 31, 2024, the Company entered into a new lease agreement for office and laboratory space in Radnor, PA for the purpose of relocating its global headquarters.

The lease for one portion of the laboratory space is expected to commence in the second quarter of 2026.

The lease for the remaining portions of laboratory and office space is expected to commence upon the completion of the lessor owned leasehold improvements, which is expected to be in the second half of 2026.

The lease agreement for the office and laboratory space is expected to expire during 2041.

The cumulative future lease commitment for laboratory and office space is $ 79.7 million.

The future lease commitments relating to this lease were not included in the lease liabilities balance as of December 31, 2025.

The components of the Company’s lease expense for the years ended December 31, 2025, 2024 and 2023 are as follows:

2 unchanged sentences

Short-term lease expense 572 807 760

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Supplemental cash flow information related to the Company’s leases is as follows:

23 unchanged sentences

Present value of lease liabilities (1)

(1) The $ 79.7 million of future lease commitments for the office and laboratory lease that is expected to commence in the third quarter of 2025 was not included in the lease liabilities balance as of December 31, 2024.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

(1) The $ 79.7 million of future lease commitments for the office and laboratory lease expected to commence during 2026 were not included in the lease liabilities balance as of December 31, 2025.

Note 7 – Restructuring and Related Activities

1 unchanged sentence

As of December 31, 2025, the program included restructuring and associated severance costs to reduce headcount by approximately 440 positions globally.

These actions are expected to be substantially complete in the first half of 2025.

Employee separation benefits vary depending on local regulations within certain foreign countries and include severance and other benefits.

The exact timing to complete, and final costs associated with, all actions will depend on a number of factors and are subject to change.

In addition to the global cost and optimization program described above, the Company continues to take actions to optimize its facilities’ footprint.

Restructuring costs incurred during the years ended December 31, 2024, 2023 and 2022 include employee severance, asset related and facility closure costs, including non-cash asset write-offs, that are recorded in Restructuring and related charges, net in the Company’s Consolidated Statements of Operations.

These actions are expected to be substantially complete by the end of 2026.

Employee separation benefits vary depending on local regulations across countries.

The timing to finalize costs associated with all actions will depend on a number of factors and is subject to change.

In addition to the global cost and optimization program described above, the Company continues to take actions to optimize its facility footprint.

Restructuring costs incurred during the years ended December 31, 2025, 2024 and 2023 include employee severance and asset-related and facility closure costs, including non-cash asset write-offs, which are recorded in Restructuring and related charges, net in the Company’s Consolidated Statements of Operations.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Activity in the Company’s accrual for its restructuring program and facility closure actions for the years ended December 31, 2025 and 2024 are as follows:

8 unchanged sentences

Cash payments ( 26,598 )

Reductions against the reserve ( 2,620 )

Currency translation adjustments 142

1 unchanged sentence

In connection with the plans for closure of certain manufacturing and non-manufacturing facilities, the Company made available for sale certain facilities and properties.

During the years ended December 31, 2024, 2023 and 2022, the Company completed the sale of certain facilities previously classified as held-for-sale for a net gain of $ 0.4 million, $ 1.4 million and $ 0.2 million, respectively, which is recorded in Other income (expense), net on the Consolidated Statements of Operations.

As of December 31, 2024, the Company classified a property in the EMEA segment with an aggregate book value of approximately $ 0.7 million as held-for-sale and recorded it in Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets.

The Company expects to complete the sale of this property over the next twelve months.

As of December 31, 2025, the Company classified properties in the Americas segment with an aggregate book value of approximately $ 1.2 million as held-for-sale.

These assets are recorded in Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets.

The Company expects to complete the sale of these properties over the next 12 months.

During the years ended December 31, 2025, 2024 and 2023, the Company completed the sale of certain facilities previously classified as held-for-sale for a net gain of $ 2.2 million, $ 0.4 million and $ 1.4 million, respectively, which is recorded in Other (expense) income, net on the Consolidated Statements of Operations.

The Company will continue to evaluate its existing facilities and footprint, which may include making other facilities or property available for sale in the future.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 8 – Equity

2 unchanged sentences

2025 2024 2023

Stock options $ 215 $ 1,039 $ 1,774

Non-vested stock awards and restricted stock units 9,996 9,305 6,679

Director stock ownership plan 138 86 63

Performance stock units 4,642 4,175 3,150

Before-tax share-based compensation expense $ 13,611 $ 14,991 $ 14,605

3 unchanged sentences

No cost was capitalized during the years ended December 31, 2025, 2024 and 2023.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Stock Options

8 unchanged sentences

Options exercised 2,587 136.64

Options forfeited 1,978 152.65

Options expired 5,661 189.17

Options outstanding as of December 31, 2025 50,364 $ 196.23 2.4 $ —

Options expected to vest after December 31, 2024 7,033 $ 178.29 4.2 $ —

Options exercisable as of December 31, 2025 50,364 $ 196.23 2.4 $ —

The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was approximately $ 0.1 million, $ 3.6 million and $ 0.8 million, respectively.

The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 were approximately less than $ 0.1 million, $ 0.1 million and $ 3.6 million, respectively.

The intrinsic value is calculated as the difference between the current market price of the underlying security and the strike price of a related option.

As of December 31, 2024, unrecognized compensation expense related to stock options was an inconsequential amount to be recognized over a weighted average period of 0.2 years.

The Company used a Black-Scholes option pricing model to determine the fair value of stock option awards and used the assumptions set forth in the table below:

July 2022 Grant March 2022 Grant

Number of stock options granted 4,837 27,077

Dividend yield 0.79 % 0.80 %

Expected volatility 40.47 % 38.60 %

Risk-free interest rate 2.87 % 2.07 %

Expected term (years) 4.0 4.0

As of December 31, 2025, all compensation expense related to outstanding stock options was recognized.

Restricted Stock Awards

5 unchanged sentences

Non-vested restricted stock awards, December 31, 2024 29,751 $ 177.12

Granted 872 200.48

Vested 22,777 178.94

9 unchanged sentences

Share-based compensation for time-based RSUs is recognized on a graded basis over the vesting periods.

Additionally, during the fourth quarter of 2024, the Company granted 9,820 time-based RSUs subject to a performance modifier based on the Company’s relative TSR compared to the S&P 1500 Chemicals Index that vest on the third anniversary of the grant.

Additionally, during the fourth quarter of 2024, the Company granted 9,820 time-based RSUs subject to a performance modifier based on the Company’s relative TSR compared to the S&P Composite 1500 Chemicals Index that vest on the third anniversary of the grant.

The target number of RSUs that vest may range from 75 % to 125 % of the target number of RSUs depending on the achievement of the relative TSR performance criteria measured at the end of the three-year performance period.

21 unchanged sentences

For PSUs granted prior to 2024, the Company’s peer group was the S&P Midcap 400 Materials group.

For PSUs subject to relative TSR performance granted in 2024, the Company made an election to change peer groups to the S&P 1500 Chemicals Group .

In 2024, the Company made an election to change peer groups to the S&P Composite 1500 Chemicals Index.

For PSUs subject to relative TSR performance granted in 2024 and 2025, the peer group was the S&P Composite 1500 Chemicals Index .

QUAKER CHEMICAL CORPORATION

8 unchanged sentences

The fair value of PSUs granted with a ROIC condition is based on the trading price of the Company’s common stock on the date of grant.

PSUs granted with a relative TSR condition are valued using a Monte Carlo simulation on the grant date.

PSUs granted with a relative TSR condition are valued using a Monte Carlo simulation as of the grant date.

The grant-date fair value of the PSUs valued using a Monte Carlo simulation included the following assumptions set forth in the table below:

12 unchanged sentences

The Company has 30,000,000 shares of common stock authorized with a par value of $ 1.00 , and 17,331,779 and 17,673,607 shares issued and outstanding as of December 31, 2025 and 2024, respectively.

The change in shares issued and outstanding during 2024 was primarily related to 312,997 shares repurchased by the Company under the share repurchase program described below, 12,784 shares surrendered from employees in payment of the vesting of restricted stock awards or units, 7,294 shares forfeited by employees under equity compensation plans, offset by 14,694 share issuances relating to equity compensation plans.

The Company is authorized to issue 10,000,000 shares of preferred stock with $ 1.00 par value, subject to approval by the Board.

The change in shares issued and outstanding during 2025 was primarily related to 364,797 shares repurchased by the Company under the share repurchase program as described below, 12,182 shares surrendered from employees in payment of the vesting of restricted stock awards or units, 2,617 shares forfeited by employees under equity compensation plans, offset by 37,768 share issuances relating to equity compensation plans.

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $ 1.00 , subject to approval by the Board.

The Board may designate one or more series of preferred stock and the number of shares, rights, preferences, and limitations of each series.

As of December 31, 2025, no preferred stock had been issued.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Share Repurchase Program

On February 28, 2024, the Board approved a new share repurchase program (“2024 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $ 150 million of the Company’s outstanding common stock and replacing the prior share repurchase program, under which no repurchases were made in 2024.

As previously disclosed, the Board of Directors of the Company has approved a share repurchase program (“2024 Share Repurchase Program”), authorizing the Company to repurchase up to an aggregate of $ 150 million of the Company’s outstanding common stock and replacing the prior share repurchase program.

The 2024 Share Repurchase Program was effective immediately upon approval and has no expiration date.

The number of shares to be repurchased and the timing of such transactions depend on a variety of factors, including market conditions.

The number of shares to be repurchased and the timing of such transactions depends on a variety of factors, including market conditions.

As of December 31, 2025, there was approximately $ 59.2 million of capacity remaining under the 2024 Share Repurchase Program.

The Company repurchased 312,997 shares under the 2024 Share Repurchase Program for the year ended December 31, 2024.

The Company did not repurchase any shares in 2024 under the prior repurchase program or for the years ended December 31, 2023 and 2022.

The Company repurchased 364,797 and 312,997 shares under the 2024 Share Repurchase Program for the year ended December 31, 2025 and 2024, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Under the 2024 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

2 unchanged sentences

The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors.

Note 9 – Other Income (Expense), net

Other income (expense), net for the years ended December 31, 2024, 2023 and 2022 are as follows:

Note 9 – Other (Expense) income, net

Other (expense) income, net for the years ended December 31, 2025, 2024 and 2023 are as follows:

2025 2024 2023

2 unchanged sentences

Gain on disposals of property, plant, equipment and other assets, net 2,204 810 1,307

Non-income tax refunds and other related credits (expense) 3,742 1,339 ( 1,613 )

Pension and postretirement benefit (costs) income, non-service components ( 1,827 ) ( 2,033 ) 1,704

Loss on extinguishment of debt — — ( 6,763 )

Non-income tax refunds and other related credits 2,922 3,742 1,339

Pension and postretirement benefit costs, non-service components ( 1,676 ) ( 1,827 ) ( 2,033 )

Facility remediation recoveries, net — — 2,141

2 unchanged sentences

Earnout liability adjustment 454 400 —

Interest income 2,594 — —

Multiemployer plan withdrawal charge ( 923 ) — —

Other non-operating income, net 60 242 149

Total other income (expense), net $ 1,354 $ ( 10,672 ) $ ( 12,607 )

Total other (expense) income, net $ ( 1,909 ) $ 1,354 $ ( 10,672 )

Non-income tax refunds and other related credits includes $ 1.8 million of indirect tax credits and interest received during the year ended December 31, 2025 relating to the Brazil Supreme Court ruling in regard to certain non-income (indirect) taxes that have been previously charged and paid.

Foreign exchange losses, net, during the years ended December 31, 2025, 2024 and 2023, include foreign currency transaction losses of approximately $ 2.2 million, $ 0.8 million and $ 7.8 million, respectively, related to hyper-inflationary accounting.

See Note 1, Basis of Presentation and Significant Accounting Policies , for additional information.

Gain on disposals of property, plant, equipment and other assets, net, includes losses related to certain fixed asset disposals resulting from the property damage caused by flooding of the Company’s Conshohocken, Pennsylvania headquarters in 2022, as described in Note 25, Commitments and Contingencies .

This caption also includes gains recognized in 2024, 2023 and 2022 for the sale of certain facilities previously classified as held-for-sale, as described in Note 7, Restructuring and Related Activities.

Foreign exchange losses, net also includes a $ 1.4 million foreign exchange loss recognized during the year ended December 31, 2025 relating to the change in fair value of the foreign exchange forward contracts entered into in connection with the acquisition of Dipsol.

See Note 24, Hedging Activities , for more information.

Gain on disposals of property, plant, equipment and other assets, net, includes gains recognized in 2025, 2024 and 2023 for the sale of certain property previously classified as held for sale.

See Note 7, Restructuring and Related Activities , for more information.

Multiemployer plan withdrawal charge during the year ended December 31, 2025 represents a $ 0.9 million expense related to the Company withdrawing from the Cleveland Bakers and Teamsters Pension Fund, a multiemployer defined benefit pension plan, in connection with a site closure under the Company’s restructuring program and facility closure actions.

Business interruption insurance proceeds for the year ended December 31, 2024 reflects an insurance recovery of $ 1.0 million related to production losses due to an electrical fire in 2021 that resulted in temporary shutdown of production at one of the Company’s production facilities.

1 unchanged sentence

Product liability claim costs, net represents expense related to payments by the Company in connection with product liability disputes with customers, net of insurance recoveries during the year ended December 31, 2024.

Facility remediation recoveries, net, for the years ended December 31, 2023 and 2022 reflects insurance recoveries of costs for remediation and restoration of property damage.

See Note 25, Commitments and Contingencies, for additional discussion regarding the Company’s insurance recoveries for facility remediation and property damage.

Facility remediation recoveries, net, for the year ended December 31, 2023 reflects insurance recoveries of costs for remediation and restoration of property damage.

QUAKER CHEMICAL CORPORATION

1 unchanged sentence

(Dollars in thousands, except per share amounts, unless otherwise stated)

Loss on extinguishment of debt during the year ended December 31, 2022 includes the write-off of certain previously unamortized deferred financing costs as well as a portion of the third-party and creditor debt issuance costs incurred to execute an amendment to the Company’s primary credit facility.

See Note 19, Debt , for additional information.

Note 10 – Income Taxes

7 unchanged sentences

subsidiaries.

As of December 31, 2024, $ 11.6 million in installments have been paid with the remaining $ 3.9 million to be paid in 2025.

As of December 31, 2025, the $ 15.5 million transition liability has been fully paid.

The Company may also be subject to other taxes, such as withholding taxes and dividend distribution taxes, if these undistributed earnings are ultimately remitted to the U.S.

On July 4, 2025, H.R.

1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law.

The OBBB includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act.

Among other things, the legislation restores 100% bonus depreciation for eligible property, reinstates expensing for domestic research and experimental expenditures, imposes new limitations on interest expense deductibility, and expands disallowed deductions for certain employee remuneration.

The legislation has multiple effective dates, with certain provisions effective in 2025 and other provisions implemented through 2027.

The provisions effective in 2025 do not have a material impact to our consolidated financial statements.

The Company is continuing to evaluate the potential impacts of the provisions effective in 2026 and 2027.

Taxes on income before equity in net income of associated companies for the years ended December 31, 2025, 2024 and 2023 are as follows:

52 unchanged sentences

The amount of such undistributed earnings at December 31, 2025 was approximately $ 429.2 million.

Any tax liability which might result from ultimate remittance of these earnings is expected to be substantially offset by foreign tax credits (subject to certain limitations);

Any tax liability which might result from ultimate remittance of these earnings is expected to be substantially offset by foreign tax credits (“FTCs”) (subject to certain limitations);

however, certain withholding taxes could apply.

12 unchanged sentences

An additional partial valuation allowance of $ 3.7 million has been established against certain other foreign deferred tax assets.

Foreign tax credits may be carried forward for 10 years.

Management analyzed the expected impact of the utilization of foreign tax credits based on certain assumptions such as projected U.S.

FTCs may be carried forward for 10 years.

Management analyzed the expected impact of the utilization of FTCs based on certain assumptions such as projected U.S.

taxable income, overall domestic loss recapture, and applicable limitations if any.

The Company had a foreign tax credit carry forward of $ 19.2 million and $ 13.0 million as of December 31, 2024 and 2023, respectively, with a $ 17.2 million and $ 12.5 million valuation allowance as of December 31, 2024 and 2023, respectively, reflecting the amount of credits that are not expected to be utilized before expiration.

The Company had an FTCs carry forward of $ 23.1 million and $ 19.2 million as of December 31, 2025 and 2024, respectively, with a $ 20.6 million and $ 17.2 million valuation allowance as of December 31, 2025 and 2024, respectively, reflecting the amount of credits that are not expected to be utilized before expiration.

The following are the changes in the Company’s deferred tax asset valuation allowance for the years ended December 31, 2025, 2024 and 2023:

3 unchanged sentences

Release of valuation allowance $ ( 1,228 ) $ ( 1,882 ) $ ( 1,941 )

Purchase accounting adjustments $ 1,330 $ — $ —

Balance at December 31, $ 33,376 $ 27,993 $ 24,182

The following is a reconciliation of income taxes at the Federal statutory rate with income taxes recorded by the Company for the years ended December 31, 2024, 2023 and 2022:

Payments for income taxes including withholding taxes, net for the year ended December 31, 2025 are as follows ($ in thousands):

Federal $ 7,163

Brazil 11,592

Total income taxes paid, net $ 59,711

(1) During the year ended December 31, 2025, there were no individual state jurisdictions with cash taxes paid that equaled or exceeded 5% of total income taxes paid.

Payments for income taxes including withholding taxes, net for the years ended December 31, 2024 and 2023 was $ 69.0 million and $ 68.6 million, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The following is a reconciliation of income taxes at the Federal statutory rate with income taxes recorded by the Company for the year ended December 31, 2025:

Income tax provision at the Federal statutory tax rate 1,476 21.0 %

State and local income taxes, net of federal (1)

1,351 $— 19.2 %

Effect of cross-border tax laws

Global Intangible Low-Taxed Income (GILTI), net of FTC's 2,100 29.9 %

Foreign-Derived Intangible Income (FDII) ( 1,180 ) ( 16.8 ) %

Foreign branch income, net of FTC's ( 5,060 ) ( 72.0 ) %

Subpart F income, net of FTC's 182 2.6 %

Other Cross-Border Tax 224 3.2 %

R&D ( 566 ) ( 8.1 ) %

Changes in valuation allowances 3,480 49.5 %

Nontaxable or nondeductible items

Share-based compensation 1,642 23.4 %

Other nontaxable or nondeductible items 254 3.6 %

Other adjustments

Other ( 852 ) ( 12.1 ) %

Change in unrecognized tax benefits ( 5,708 ) ( 81.2 ) %

Foreign tax effects:

Statutory income tax rate differential 2,949 42.0 %

Other ( 198 ) ( 2.8 ) %

Withholding taxes 4,100 58.3 %

R&D deduction ( 1,402 ) ( 19.9 ) %

Other 266 3.8 %

Non-deductible impairment 3,197 45.5 %

Other ( 229 ) ( 3.3 ) %

Non-deductible impairment 5,257 74.8 %

Other ( 835 ) ( 11.9 ) %

Withholding taxes 1,760 25.0 %

Statutory income tax rate differential ( 3,166 ) ( 45.0 ) %

Other 1,009 14.4 %

Statutory income tax rate differential 1,896 27.0 %

Other 599 8.5 %

Other 2,060 29.3 %

Non-deductible impairment 1,605 22.8 %

Other 141 2.0 %

United Kingdom

Non-deductible impairment 2,451 34.9 %

Other foreign jurisdictions 5,801 82.5 %

Effective Tax Rate $ 24,607 350.1 %

(1) During the year ended December 31, 2025, state taxes in Indiana, Pennsylvania, and Michigan comprised greater than 50% of the tax effect in this category.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The following is a reconciliation of income taxes at the Federal statutory rate with income taxes recorded by the Company for the years ended December 31, 2024 and 2023:

Income tax provision at the Federal statutory tax rate $ 32,562 $ 32,156

4 unchanged sentences

Withholding taxes 8,418 11,193

Foreign tax credits ( 6,898 ) ( 3,432 ) ( 5,850 )

FTC's ( 6,898 ) ( 3,432 )

Share-based compensation 2,345 1,814

12 unchanged sentences

For the years ended December 31, 2025 and 2024, the Company had accrued approximately $ 0.0 million and $ 0.8 million, respectively, for cumulative penalties and $ 1.8 million and $ 2.6 million, respectively, for cumulative interest.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company continues to recognize interest and penalties associated with uncertain tax positions as a component of tax expense on income before equity in net income of associated companies in its Consolidated Statements of Operations.

The Company recognized a benefit of $ 0.2 million for penalties and a benefit of $ 0.2 million for interest (net of expirations and settlements) in its Consolidated Statements of Operations for the year ended December 31, 2024, a benefit of $ 0.4 million for penalties and an expense of $ 0.1 million for interest (net of expirations and settlements) in its Consolidated Statement of Operations for the year ended December 31, 2023, and a benefit of $ 1.7 million for penalties and a benefit of $ 0.3 million for interest (net of expirations and settlements) in its Consolidated Statement of Operations for the year ended December 31, 2022.

The Company estimates that during the year ending December 31, 2024, it will reduce its cumulative liability for gross unrecognized tax benefits by approximately $ 3.6 million due to the expiration of the statute of limitations with regard to certain tax positions.

This estimated reduction in the cumulative liability for unrecognized tax benefits does not consider any increase in liability for unrecognized tax benefits with regard to existing tax positions or any increase in cumulative liability for unrecognized tax benefits with regard to new tax positions for the year ending December 31, 2024.

The Company recognized a benefit of $ 0.8 million for penalties and a benefit of $ 0.8 million for interest (net of expirations and settlements) in its Consolidated Statements of Operations for the year ended December 31, 2025, a benefit of $ 0.2 million for penalties and a benefit of $ 0.2 million for interest (net of expirations and settlements) in its Consolidated Statement of Operations for the year ended December 31, 2024, and a benefit of $ 0.4 million for penalties and an expense of $ 0.1 million for interest (net of expirations and settlements) in its Consolidated Statement of Operations for the year ended December 31, 2023.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023, respectively, is as follows:

5 unchanged sentences

Decrease in unrecognized tax benefits due to audit settlements ( 506 ) — —

(Decrease) increase due to foreign exchange rates ( 747 ) 403 ( 1,016 )

Increase (decrease) due to foreign exchange rates 1,230 ( 747 ) 403

Unrecognized tax benefits as of December 31 $ 12,379 $ 13,949 $ 15,659

The amount of net unrecognized tax benefits above that, if recognized, would impact the Company’s tax expense and effective tax rate is $ 4.9 million, $ 8.3 million and $ 10.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company and its subsidiaries are subject to U.S.

13 unchanged sentences

Positions challenged by the taxing authorities may be settled or applied by the Company.

As a result, income tax uncertainties are recognized in the Company’s financial statements in accordance with the accounting for income taxes, when applicable.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 11 – Earnings Per Share

1 unchanged sentence

2025 2024 2023

Basic earnings (loss) per common share

Net income (loss) attributable to Quaker Chemical Corporation $ 116,644 $ 112,748 $ ( 15,931 )

(income) loss allocated to participating securities ( 375 ) ( 555 ) 92

Net income (loss) available to common shareholders $ 116,269 $ 112,193 $ ( 15,839 )

Basic earnings per common share

Net (loss) income attributable to Quaker Chemical Corporation $ ( 2,488 ) $ 116,644 $ 112,748

loss (income) allocated to participating securities 20 ( 375 ) ( 555 )

Net (loss) income available to common shareholders $ ( 2,468 ) $ 116,269 $ 112,193

Basic weighted average common shares outstanding 17,472,907 17,850,462 17,892,461

Basic earnings (loss) per common share $ 6.51 $ 6.27 $ ( 0.89 )

Diluted earnings (loss) per common share

Net income (loss) attributable to Quaker Chemical Corporation $ 116,644 $ 112,748 $ ( 15,931 )

(income) loss allocated to participating securities ( 375 ) ( 554 ) 92

Net income (loss) available to common shareholders $ 116,269 $ 112,194 $ ( 15,839 )

Basic (loss) earnings per common share $ ( 0.14 ) $ 6.51 $ 6.27

Diluted earnings per common share

Net (loss) income attributable to Quaker Chemical Corporation $ ( 2,488 ) $ 116,644 $ 112,748

loss (income) allocated to participating securities 20 ( 375 ) ( 554 )

Net (loss) income available to common shareholders $ ( 2,468 ) $ 116,269 $ 112,194

Basic weighted average common shares outstanding 17,472,907 17,850,462 17,892,461

1 unchanged sentence

Diluted weighted average common shares outstanding 17,472,907 17,870,067 17,914,809

Diluted earnings (loss) per common share $ 6.51 $ 6.26 $ ( 0.89 )

Diluted (loss) earnings per common share $ ( 0.14 ) $ 6.51 $ 6.26

Certain stock options, restricted stock units and PSUs are not included in the diluted earnings per share calculation when the effect would be anti-dilutive.

The number of anti-dilutive shares were 79,144 , 32,353 , and 10,621 for the years ended December 31, 2025, 2024 and 2023, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 12 – Accounts Receivable and Allowance for Credit Losses

13 unchanged sentences

Total inventories $ 265,776 $ 227,472

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 14 – Property, Plant and Equipment

7 unchanged sentences

Total property, plant and equipment, net $ 313,423 $ 229,532

As of December 31, 2024, PP&E includes $ 1.0 million of finance lease assets and future minimum lease payments.

As of December 31, 2025 and 2024, PP&E includes $ 1.4 million and $ 1.0 million, respectively, of finance lease assets and future minimum lease payments.

See Note 6, Leases , for additional information.

The Company recorded $ 30.4 million.

$ 25.9 million, and $ 23.8 million of depreciation expense during the years ended December 31, 2025, 2024 and 2023, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 15 – Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 were as follows:

Americas EMEA Asia/Pacific Global Specialty Businesses Total

Balance as of December 31, 2023 283,103 65,940 163,475 512,518

Reallocation of reporting units (1)

63,697 31,711 18,759 ( 114,167 ) —

Balance as of January 1, 2023 279,596 66,278 169,134 — 515,008

Currency translation and other adjustments 3,507 ( 338 ) ( 5,659 ) — ( 2,490 )

Goodwill recognized for Sutai acquisition — — 5,511 5,511

Goodwill recognized for IKV — 16,448 — 16,448

Currency translation adjustments ( 6,228 ) ( 1,984 ) ( 7,371 ) ( 15,583 )

Balance as of December 31, 2024 276,875 80,404 161,615 518,894

Goodwill from acquisitions — 16,448 5,511 — 21,959

Currency translation and other adjustments ( 6,228 ) ( 1,984 ) ( 7,371 ) — ( 15,583 )

Goodwill recognized for Dipsol acquisition 5,770 380 46,909 53,059

Goodwill recognized for Natech acquisition — 2,625 — 2,625

Goodwill recognized for CSI acquisition — 1,721 — 1,721

Goodwill recognized for Sutai acquisition (1)

— — ( 233 ) ( 233 )

Currency translation adjustments 4,383 3,710 6,401 14,494

Goodwill impairments — ( 88,840 ) — ( 88,840 )

Balance as of December 31, 2025 $ 287,028 $ — $ 214,692 $ 501,720

(1) In connection with the Company’s reorganization and the associated change in reportable segments and reporting units during the first quarter of 2023, the Company reallocated goodwill previously held by the former Global Specialty Businesses segment to the remaining business segments as of January 1, 2023.

(1) During the year ended December 31, 2025, the Company finalized the working capital settlements which impacted the goodwill recorded.

See Note 2, Business Combinations , for additional information.

2025 2024 2023

3 unchanged sentences

Goodwill, net $ 501,720 $ 518,894 $ 512,518

(1) Accumulated impairment losses are attributable to the non-cash impairment charge of $ 93.0 million to write down the carrying value of the EMEA reporting unit during the fourth quarter of 2022 and includes the impact of currency translation.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

(1) Accumulated impairment losses are attributable to the non-cash impairment charges of $ 88.8 million and $ 93.0 million to write down the carrying value of the EMEA reporting unit during the second quarter of 2025 and fourth quarter of 2022, respectively.

These amounts include the impact of currency translation.

Gross carrying amounts and accumulated amortization for definite-lived intangible assets as of December 31, 2025 and 2024 were as follows:

15 unchanged sentences

For the year ended December 31, 2030 60,897

As of December 31, 2024 and December 31, 2023, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $ 185.3 million and $ 193.2 million, re spectively.

As of December 31, 2025 and December 31, 2024, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $ 201.2 million and $ 185.3 million, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company completes its annual goodwill and indefinite-lived intangible asset impairment tests during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units.

During the fourth quarter of 2022, the Company recorded a non-cash impairment charge of $ 93.0 million to write down the carrying value of the EMEA reporting unit goodwill to its estimated fair values.

In connection with the Company’s reorganization and the associated change in reportable segments and reporting units during the first quarter of 2023, the Company performed the required impairment assessments directly before and immediately after the change in reporting units and concluded that it was not more likely than not that the fair values of any of the Company’s previous or new reporting units were less than their respective carrying amounts.

Additionally, the Company completed its annual impairment assessment as of October 1, 2023 and October 1, 2024 and concluded in each case that no impairment existed.

See Note 23, Fair Value Measures , for additional information.

The Company continually evaluates financial performance, economic conditions and other recent developments in assessing if a triggering event indicates that the carrying value of goodwill, indefinite-lived, or long-lived assets might be impaired.

Notwithstanding the results of the Company’s impairment assessments during 2023 and 2024, if the Company is unable to maintain the actions aimed at improving the financial performance of the EMEA reporting unit, or interest rates rise, which leads to an increase in the cost of capital, then these conditions could result in a triggering event for the EMEA reporting unit.

This assessment could result in an impairment of the EMEA reporting unit’s remaining goodwill, indefinite-lived intangible assets, or long-lived assets.

During the second quarter of 2025, the Company concluded that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill, as well as the related asset group.

As a result of this conclusion, the Company completed an interim quantitative impairment assessment as of June 30, 2025 for its EMEA reporting unit and the related asset group.

The Company concluded that the undiscounted cash flows exceeded the carrying value of the EMEA asset group, and therefore that the long-lived assets are not impaired.

In completing a quantitative goodwill impairment test, the Company compares the reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment of goodwill exists.

The estimates of future discounted cash flows involve considerable judgment and are based upon certain significant assumptions including the weighted average cost of capital (“WACC”) as well as projected EBITDA, which includes assumptions related to revenue growth rates, gross margin levels and operating expenses.

As a result of the impact of the uncertainty around tariffs, and continued soft end market conditions driving lower current year EMEA earnings and a decline in projected future EMEA earnings, as well as an increase in the WACC assumption utilized in the Company’s 2024 annual impairment assessment, the Company concluded that the estimated fair value of the EMEA reporting unit was less than its carrying value.

As a result, a pre-tax, non-cash impairment charge of $ 88.8 million ($ 86.7 million after-tax) to write down the remaining carrying value amount of the EMEA reporting unit Goodwill was recorded in the second quarter of 2025, reflected in “Impairment charges” in the Consolidated Statements of Operations for the year ended December 31, 2025.

Note 16 – Investments in Associated Companies

1 unchanged sentence

(“Nippon Japan”), Kelko Quaker Chemical, S.A.

(“Kelko Panama”) and Houghton Korea, and held a 32 % investment in and had significant influence over Primex, Ltd.

(“Kelko Panama”) and Houghton Korea, held a 32 % investment in and had significant influence over Primex, Ltd.

(“Primex”), and a 30 % investment in and had significant influence over Surteckariya (Thailand) Co., Ltd.

(“SKT”), which was acquired as part of the Dipsol acquisition during the second quarter of 2025.

The carrying amount of the Company’s equity investments as of December 31, 2025 was $ 106.9 million, which includes investments of $ 65.6 million in Houghton Korea;

1 unchanged sentence

$ 6.7 million in Nippon Japan;

and $ 0.5 million in Kelko Panama.

$ 5.0 million in SKT, and $ 0.5 million in Kelko Panama.

The carrying amount of the Company’s equity investments as of December 31, 2024 was $ 98.0 million, which includes investments of $ 66.3 million in Houghton Korea;

3 unchanged sentences

Dividends and distributions received from associated companies by investment were $ 8.8 million, $ 9.1 million, and $ 4.2 million in the years ended December 31, 2025, 2024 and 2023.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The following table is a summary of equity income in associated companies by investment for the years ending December 31, 2025, 2024 and 2023:

5 unchanged sentences

Total equity in net income of associated companies $ 15,177 $ 10,971 $ 15,333

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 17 – Other Non-Current Assets

4 unchanged sentences

Interest rate swap (See Note 24) — 1,621

Net investment hedge (See Note 24) 10,053 —

Long-term note receivable 1,030 925

Cost investments 1,835 —

Trust investment 1,491 1,566

1 unchanged sentence

Supplemental retirement income program (See Notes 20 and 23) 311 297

Cloud computing implementation costs 2,037 —

Other 2,061 2,593

Total other non-current assets $ 30,283 $ 17,360

As of December 31, 2024, two of the Company’s foreign pension plans’ fair value of plan assets exceeded its gross benefit obligation and were therefore over-funded, which is represented by the line Pension assets in the table above.

As of December 31, 2023, one of the Company’s foreign pension plans’ fair value of plan assets exceeded its gross benefit obligation and was therefore over-funded.

Approximately $ 1.0 million of payments related to the foreign pension plan’s have been made to escrow and are excluded from the plan’s net benefit obligation as of December 31, 2023.

No such payments related to this plan has been made to escrow as of December 31, 2024.

As of December 31, 2025 and 2024, three and two of the Company’s foreign pension plans’ fair value of plan assets exceeded its gross benefit obligation, respectively, and were therefore over-funded for both years, which is presented within Pension assets in the table above.

See Note 20 for additional information.

2 unchanged sentences

Non-income taxes $ 29,345 $ 25,455

Short-term lease liabilities (See Note 6) 10,619 11,965

Selling expenses and freight accruals 10,716 7,789

Current income taxes payable (See Note 10) 10,929 12,772

Selling expenses and freight accruals 9,848 10,716

Short-term lease liabilities (See Note 6) 12,536 10,619

Professional fees, legal, and acquisition-related accruals 7,009 5,340

Accrued interest (See Note 19) 1,289 2,630

Customer advances and sales return reserves 4,833 3,855

1 unchanged sentence

Accrued environmental reserves (See Note 25) 1,516 1,235

Earnout liability (See Note 2) 1,160 —

Accrued interest (See Note 19) 1,312 1,289

Accrued rent and facilities 956 1,129

Multiemployer plan withdrawal charge (See Note 9) 901 —

Accrued non-pension benefits 678 833

Foreign currency forward contracts (See Note 24) 67 159

Deferred acquisition payment (See Note 2) 538 —

Earnout liability (See Note 2) — 1,160

Other 845 224

25 unchanged sentences

The Company has the right to increase the amount of the Credit Facility by an aggregate amount not to exceed the greater of $ 300.0 million or 100 % of Consolidated EBITDA, subject to certain conditions including the agreement to provide financing by any lender providing such increase.

In addition, the Credit Facility also:

(i) eliminated the requirement that material foreign subsidiaries must guaranty the Original Euro Term Loan;

(ii) replaced the U.S.

Dollar borrowings reference rate from LIBOR to SOFR;

(iii) extended the maturity date of the Original Credit Facility from August 2024 to June 2027;

(iv) effected other less significant changes to the Original Credit Facility.

The Company used the proceeds of the Credit Facility to repay all outstanding loans under the Original Credit Facility, unpaid accrued interest and fees on the closing date under the Original Credit Facility and certain expenses and fees.

9 unchanged sentences

If the consolidated net leverage ratio is less than 2.50 to 1.00, then the Company is no longer subject to restricted payments.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Financial covenants contained in the Credit Facility include a consolidated interest coverage ratio test and a consolidated net leverage ratio test.

4 unchanged sentences

As of December 31, 2025 and December 31, 2024, the Company was in compliance with all of the Credit Facility covenants.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The weighted average variable interest rate incurred on the outstanding borrowings under the Credit Facility during the twelve months ended December 31, 2025 was approximately 5.2 %.

5 unchanged sentences

See Note 24, Hedging Activities , for additional information.

In connection with executing the Credit Facility, the Company recorded a loss on extinguishment of debt of approximately $ 6.8 million in Other income (expense), net on the Consolidated Statement of Operations during the year ended December 31, 2022.

The loss on extinguishment of debt included the write-off of certain previously unamortized deferred financing costs as well as a portion of the third-party and creditor debt issuance costs incurred to execute the Credit Facility.

The Company capitalized third-party and credit debt issuance costs attributed to the Euro Term Loan, U.S.

Term Loan and Revolver in connection to the amended Credit Facility during the second quarter of 2022.

Term Loan and Revolver during the second quarter of 2022.

Capitalized costs attributed to the Euro Term Loan and U.S.

1 unchanged sentence

Capitalized costs attributed to the Revolver are recorded within Other assets on the Consolidated Balance Sheets.

These capitalized costs will collectively be amortized into Interest expense over the five year term of the Credit Facility.

These capitalized costs are amortized into Interest expense over the five year term of the Credit Facility.

As of December 31, 2025 and 2024, the Company had $ 0.7 million and $ 1.1 million, respectively, of debt issuance costs recorded as a reduction of Long-term debt and $ 1.4 million and $ 2.4 million, respectively, of debt issuance costs recorded within Other assets.

8 unchanged sentences

The Company’s total bank letters of credit and guarantees outstanding as of December 31, 2025 were approximately $ 7 million.

The Company incurred the following debt related expenses included within Interest expense, net, in the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022:

The Company incurred the following debt related expenses included within Interest expense in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023:

2025 2024 2023

2 unchanged sentences

Total $ 44,047 $ 44,636 $ 54,995

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Based on the variable interest rates associated with the Credit Facility, as of December 31, 2025 and 2024, the amounts at which the Company’s total debt were recorded are not materially different from their fair market value.

6 unchanged sentences

Total maturities on debt in the next five fiscal years 869,796

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 20 – Pension and Other Postretirement Benefits

8 unchanged sentences

Interest cost 5,902 3,571 9,473 5,817 3,672 9,489 61 61

Effect of plan amendments — — — — ( 15 ) ( 15 ) — —

Curtailment (gain) loss ( 19 ) — ( 19 ) ( 213 ) — ( 213 ) — —

Curtailment gain — — — ( 19 ) — ( 19 ) — —

Plan settlements ( 689 ) — ( 689 ) — — — — —

Benefits paid ( 6,674 ) ( 6,488 ) ( 13,162 ) ( 6,377 ) ( 6,519 ) ( 12,896 ) ( 253 ) ( 156 )

14 unchanged sentences

Employer contributions 3,397 2,594 5,991 2,043 3,751 5,794 253 156

Plan settlements ( 689 ) — ( 689 ) — — — — —

Benefits paid ( 6,674 ) ( 6,488 ) ( 13,162 ) ( 6,377 ) ( 6,519 ) ( 12,896 ) ( 253 ) ( 156 )

33 unchanged sentences

Expected return on plan assets ( 5,537 ) ( 2,710 ) ( 8,247 ) ( 5,571 ) ( 2,562 ) ( 8,133 )

Curtailment (gain) loss ( 19 ) — ( 19 ) ( 213 ) 15 ( 198 )

Settlement gain ( 136 ) — ( 136 ) — — —

Curtailment gain — — — ( 19 ) — ( 19 )

Actuarial loss amortization 572 23 595 481 24 505

4 unchanged sentences

Expected return on plan assets ( 5,271 ) ( 2,799 ) ( 8,070 )

Settlement gain ( 71 ) — ( 71 )

Curtailment charge 207 — 207

Curtailment (gain) loss ( 213 ) 15 ( 198 )

Actuarial loss amortization 388 22 410

Prior service credit amortization 3 7 10

Net periodic benefit income $ ( 131 ) $ ( 987 ) $ ( 1,118 )

Prior service cost amortization 28 6 34

Net periodic benefit costs $ 1,414 $ 1,121 $ 2,535

Other changes recognized in other comprehensive income – pension plans:

1 unchanged sentence

Net loss (gain) arising during the period $ 266 $ ( 701 ) $ ( 435 ) $ 1,985 $ ( 1,631 ) $ 354

Settlement loss — ( 24 ) ( 24 ) — ( 23 ) ( 23 )

Prior service cost — — — — ( 15 ) ( 15 )

Settlement gain (loss) 130 — 130 — ( 24 ) ( 24 )

Actuarial loss ( 566 ) ( 26 ) ( 592 ) ( 481 ) — ( 481 )

6 unchanged sentences

(Dollars in thousands, except per share amounts, unless otherwise stated)

Net gain arising during period $ ( 7,008 ) $ ( 3,555 ) $ ( 10,563 )

Net loss arising during period $ 8,605 $ 398 $ 9,003

Settlement loss — ( 23 ) ( 23 )

Prior service credit (cost) 303 ( 7 ) 296

Actuarial (loss) gain ( 587 ) 1,247 660

Prior service cost — ( 15 ) ( 15 )

Actuarial loss ( 388 ) ( 92 ) ( 480 )

Curtailment recognition ( 28 ) — ( 28 )

Effect of exchange rates on amounts included in AOCI 560 — 560

Total recognized in other comprehensive income ( 8,464 ) ( 2,638 ) ( 11,102 )

Total recognized in net periodic benefit cost and other comprehensive income $ ( 8,595 ) $ ( 3,625 ) $ ( 12,220 )

Total recognized in other comprehensive loss 8,749 268 9,017

Total recognized in net periodic benefit cost and other comprehensive loss $ 10,163 $ 1,389 $ 11,552

Components of net periodic benefit costs – other postretirement plan:

2025 2024 2023

Service cost $ — $ — $ —

Interest cost 61 61 69

4 unchanged sentences

2025 2024 2023

Net gain arising during period $ ( 61 ) $ ( 150 ) $ ( 263 )

Net (loss) gain arising during period $ 210 $ ( 61 ) $ ( 150 )

Recognition of amortizations in net periodic benefit cost — — —

56 unchanged sentences

As of December 31, 2025, the foreign pension plan commingled funds included approximately 37 percent of investments in equity securities, 48 percent of investments in fixed income securities, and 15 percent of other non-related investments, primarily real estate.

As of December 31, 2023, the foreign pension plan commingled funds included approximately 35 percent of investments in equity securities, 50 percent of investments in fixed income securities, and 14 percent of other non-related investments, primarily real estate.

As of December 31, 2024, the foreign pension plan commingled funds also included approximately 37 percent of investments in equity securities, 48 percent of investments in fixed income securities, and 15 percent of other non-related investments, primarily real estate.

Pooled Separate Accounts

11 unchanged sentences

Both the cash surrender value and the vested benefit obligation are determined based on unobservable inputs, which are contractually or actuarially determined, regarding returns, fees, the present value of the future cash flows of the contract and benefit obligations.

During 2023, one of the Company’s foreign pension plans invested in an insurance contract that is valued at the value available for the Company at year end (i.e.

the vested benefit obligation).

The vested benefit obligation is determined based on unobservable inputs, which are actuarially determined, regarding returns, the present value of the future cash flows of the contract and benefit obligations.

Both this contract and the contract described above are classified as Level 3 investments.

Diversified Equity Securities - Registered Investment Companies

10 unchanged sentences

There were no such investments as of December 31, 2025 and 2024.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Other – Alternative Investments

2 unchanged sentences

These alternative investments are classified as Level 3 investments.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

and foreign pension plans’ investment in real estate consists of investments in property funds.

17 unchanged sentences

Real estate — — — —

Other - alternative investments $ 1,321 $ — $ — $ 1,321

Subtotal foreign pension assets in fair value hierarchy $ 127,713 $ 1,417 $ 11,791 $ 114,505

27 unchanged sentences

Total pension assets $ 182,511

During the third quarter of 2023, one of the Company’s pension plans in the U.K.

liquidated approximately $ 50 million of its invested assets and subsequently funded and entered into an insurance annuity contract, which will provide for the pension plan’s defined benefit obligations to participants.

Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value hierarchy.

3 unchanged sentences

Balance as of December 31, 2023 $ 118,393 $ 5,918 $ 124,311

Purchases (Sales) 47,640 ( 303 ) 47,337

Unrealized gains (losses) 7,621 ( 2,867 ) 4,754

Sales ( 1,310 ) ( 2,952 ) ( 4,262 )

Unrealized losses ( 4,620 ) ( 128 ) ( 4,748 )

Currency translation adjustment ( 4,666 ) ( 27 ) ( 4,693 )

4 unchanged sentences

Balance as of December 31, 2025 $ 113,184 $ 1,321 $ 114,505

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Company contributes to a multiemployer defined benefit pension plan under terms of a collective bargaining union contract (the Cleveland Bakers and Teamsters Pension Fund, Employer Identification Number:

The Company contributed to a multiemployer defined benefit pension plan under terms of a collective bargaining union contract (the Cleveland Bakers and Teamsters Pension Fund, Employer Identification Number:

34-0904419-001).

The expiration date of the collective bargaining contract is May 1, 2025.

As of January 1, 2024, the last valuation date available for the multiemployer plan, total plan liabilities were approximately $ 555 million.

As of December 31, 2024, the last valuation date available for the multiemployer plan, total plan liabilities were approximately $ 555 million.

As of December 31, 2024, the multiemployer pension plan had total plan assets of approximately $ 350 million.

2 unchanged sentences

The Employee Retirement Income Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments Act of 1980, imposes certain contingent liabilities upon an employer who is a contributor to a multiemployer pension plan if the employer withdraws from the plan or the plan is terminated or experiences a mass withdrawal.

In connection with a site closure, the Company intends to withdraw from the multiemployer pension plan during the first half of 2025 and will be charged for its share of the multiemployer pension plan’s unfunded liability.

The Company will record a withdrawal liability once an amount is determined and reasonably estimable in 2025.

While the Company may also have additional liabilities imposed by law as a result of its participation in the multiemployer defined benefit pension plan, there is no liability as of December 31, 2024.

In connection with a site closure under the Company’s restructuring program and facility closure actions, the Company withdrew from the multiemployer pension plan during the third quarter of 2025, which resulted in a $ 0.9 million withdrawal charge recorded within Other (expense) income, net.

See Note 9, Other (Expense) Income, net , for additional information.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

The Pension Protection Act of 2006 (the “PPA”) also added special funding and operational rules generally applicable to plan years beginning after 2007 for multiemployer plans with certain classifications based on a multitude of factors (including, for example, the plan’s funded percentage, cash flow position and whether the plan is projected to experience a minimum funding deficiency).

16 unchanged sentences

Benefits payable under the plan are based on a combination of years of service and existing postretirement benefits.

Included in total pension costs are charges of $ 0.6 million for both the years ended December 31, 2024 and 2023, respectively, and $ 0.7 million for the year ended December 31, 2022, representing the annual accrued benefits under this plan.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Included in total pension costs are charges of $ 0.6 million each for the years ended December 31, 2025, 2024 and 2023, respectively, representing the annual accrued benefits under this plan.

Defined Contribution Plan

11 unchanged sentences

Uncertain tax positions, including interest and penalties (See Note 10) $ 14,256 $ 17,257

Non-current income taxes payable (See Note 10) — 4,695

Environmental reserves (See Note 25) 2,512 2,941

Net investment hedge (See Note 24) 1,541 —

Deferred and other long-term compensation 3,011 2,833

Acquisition-related earnout liability (See Note 2) — 475

Other 872 1,414

Total other non-current liabilities $ 22,192 $ 24,445

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 22 – Accumulated Other Comprehensive Loss

The following table shows the reclassifications from and resulting balances of AOCI for the years ended December 31, 2025, 2024 and 2023:

Adjustments Defined

Adjustments (1)

Plans Unrealized

8 unchanged sentences

Balance as of December 31, 2023 ( 115,417 ) ( 10,738 ) 333 1,407 ( 124,415 )

Other comprehensive income (loss) before reclassifications 16,744 ( 7,702 ) 1,753 1,828 12,623

Other comprehensive (loss) income before reclassifications ( 77,424 ) 250 ( 44 ) ( 207 ) ( 77,425 )

Amounts reclassified from AOCI — 265 ( 14 ) — 251

5 unchanged sentences

Balance as of December 31, 2025 $ ( 104,697 ) $ ( 11,234 ) $ 257 $ 13 $ ( 115,661 )

(1) Includes mark-to-market impacts associated with net investment hedges.

See Note 24, Hedging Activities , for more information.

All reclassifications related to Unrealized (loss) gain on available-for-sale securities relate to the Company’s equity interest in a captive insurance company and are recorded in Equity in net income of associated companies.

The amounts reported in Other comprehensive (loss) income for non-controlling interest are related to currency translation adjustments.

The amounts reported in Other comprehensive income (loss) for non-controlling interest are related to currency translation adjustments.

Note 23 – Fair Value Measures

2 unchanged sentences

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

• Level 2 - Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability.

1 unchanged sentence

Refer to Note 24, Hedging Activities , for a description of the Company’s derivative instruments including the valuation techniques used to determine fair value and support for their classification within Level 2 of the fair value hierarchy.

The Company values its long-term debt at fair value based quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities and terms.

Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.

The Company values its company-owned life insurance policies at fair value based on quotes for like instruments with similar credit ratings and terms.

During June 2023, the Company surrendered and liquidated $ 1.9 million of these life insurance policies.

As a result, the Company owns an immaterial remaining amount of company-owned life insurance policies as of the year ended December 31, 2025.

The Company did not own any Level 3 investments as of December 31, 2024 and 2023, respectively.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Items Measured at Fair Value on Nonrecurring Basis

2 unchanged sentences

The determination of the estimated fair values of intangible assets and goodwill requires management’s judgment and involves the use of significant estimates and assumptions, including revenue growth rates, gross margin levels, operating expenses, the weighted average cost of capital (“WACC”), and royalty rates, among other items.

Significant unobservable inputs used to estimate the fair values as of the Company’s October 1, 2024 goodwill impairment assessment included WACCs of 10.0 %, 10.5 % and 10.0 % for the Company’s Americas, EMEA and Asia/Pacific reporting units, respectively.

See Note 15, Goodwill and Other Intangible Assets , for additional information.

1 unchanged sentence

The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk.

To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements.

To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts, interest rate swap agreements, and cross-currency swap agreements.

The Company does not hold or enter into derivative financial instruments for trading or speculative purposes.

2 unchanged sentences

These forward contracts are marked-to-market at each reporting date.

Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other income (expense), net.

Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other (expense) income, net.

The fair value of the forward contract is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments.

6 unchanged sentences

Total $ 27,800

In connection with the acquisition of Dipsol as described in Note 2, Business Combinations , in March 2025, the Company entered into multiple foreign exchange forward contracts with various financial institutions with an aggregate notional amount totaling $ 155.3 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and Japanese yen.

These foreign exchange forward contracts settled on April 1, 2025.

The Company recognized a $ 1.4 million foreign currency loss during the year ended December 31, 2025 in Other (expense) income, net relating to the change in fair value of these instruments as of the settlement date.

Open foreign exchange forward contracts as of December 31, 2025 had maturities occurring over a period of one month .

2 unchanged sentences

See Note 19, Debt, for additional information.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

These interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective and reclassified to interest expense in the period during which the hedged transaction affects earnings or it becomes probable that the forecasted transaction will not occur.

1 unchanged sentence

As such, in accordance with the Company’s accounting policy, these derivative instruments are recorded on a net basis within the Consolidated Balance Sheets.

The fair value of the Company’s interest rate swaps and forward exchange contracts is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments, using standard pricing models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments.

Net Investment Hedges

In June 2025, the Company entered into a fixed-for-fixed cross currency swap for a notional amount of $ 75.0 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and the European euro.

Under the terms of the cross-currency swap agreement, the Company notionally exchanged $ 75.0 million at an interest rate of 1.9 % for 65.8 million EUR at an interest rate of 0.0 %.

The cross-currency swap is designated as a net investment hedge on a pre-tax basis and expires in June 2027.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

In April 2025, the Company entered into fixed-for-fixed cross currency swaps with an aggregate notional amount totaling $ 100.0 million to hedge the variability of exchange rate impacts between the U.S.

Dollar and Japanese yen.

Under the terms of the cross-currency swap agreements, the Company notionally exchanged $ 100.0 million at a weighted average interest rate of 3.1 % for 14.3 billion JPY at a weighted average interest rate of 0.0 %.

The cross-currency swaps are designated as net investment hedges on an after-tax basis and expire in April 2028.

The fixed-for-fixed cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI.

The Company uses the spot method to evaluate the effectiveness of the net investment hedges.

The fair value of the Company’s interest rate swaps, forward exchange contracts, and cross-currency swap agreements are determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments, using standard pricing models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments.

These standard pricing models utilize inputs that are derived from or corroborated by observable market data such as interest rate yield curves as well as currency spot and forward rates;

2 unchanged sentences

Derivative instruments Consolidated Balance Sheet Location December 31,

Net investment hedges Other non-current assets $ 10,053 $ —

Net investment hedges Other non-current liabilities 1,541 —

Interest rate swaps Prepaid expenses and other current assets 16 —

Interest rate swaps Other non-current assets — 1,621

Foreign currency forward contracts Other accrued liabilities 5 67

The following table presents the net unrealized loss deferred to AOCI:

Derivatives designated as cash flow hedges

The following table presents the net unrealized gain deferred to AOCI:

Derivative instruments:

Consolidated Balance Sheet Location 2025 2024

Net investment hedges AOCI $ 6,554 $ —

Interest rate swaps AOCI 13 1,248

The following table presents the net gain or loss recognized in the Company’s Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022:

Derivative instruments Consolidated Statements of Operations Location 2024 2023 2022

Interest rate swaps Interest expense, net $ 4,770 $ 3,555 $ —

The following table presents the net gain (loss) recognized in the Company’s Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023:

For the Years Ended December 31,

Derivative instruments Condensed Consolidated Statements of Operations 2025 2024 2023

Net investment hedges Interest expense $ 2,951 $ — $ —

Interest rate swaps Interest expense 1,887 4,770 3,555

Foreign exchange forward contracts Other (expense) income, net 1,880 ( 2,026 ) 2,134

Total $ 6,718 $ 2,744 $ 5,689

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

Note 25 – Commitments and Contingencies

5 unchanged sentences

In 2014, ACP ceased operation at one of its two groundwater treatment systems, as it had met the above condition for closure.

In 2020, the Santa Ana Regional Water Quality Control Board asked that ACP conduct some additional indoor and outdoor soil vapor testing on and near the ACP site to confirm that ACP continues to meet the applicable local standards.

ACP began to perform such testing program work in 2022, and an additional round of testing is expected to commence in 2025.

As of December 31, 2024, ACP believes it is close to meeting the conditions for closure of the remaining groundwater treatment system but continues to operate this system while in discussions with the relevant authorities.

As of December 31, 2024, the Company believes that the range of potential-known liabilities associated with the balance of the ACP water remediation program is approximately $ 0.1 million to $ 1.0 million.

The low and high ends of the range are based on the length of operation of the treatment system as determined by groundwater modeling.

Costs of operation include the operation and maintenance of the extraction well, groundwater monitoring, program management, and soil vapor testing.

QUAKER CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars in thousands, except per share amounts, unless otherwise stated)

In 2020, the Santa Ana Regional Water Quality Control Board asked that ACP conduct periodic indoor and outdoor soil vapor testing on and near the ACP site to confirm that ACP continues to meet the applicable local standards.

ACP has performed such testing program work with an additional round of testing done in 2025.

It is expected that additional testing may occur in 2026.

As of December 31, 2025, ACP believes it has met the conditions for closure of the remaining groundwater treatment system but continues to operate this system while in discussions with the relevant authorities.

The Company’s Sao Paulo, Brazil site was required under Brazilian environmental, health and safety regulations to perform an environmental assessment as part of a permit renewal process.

6 unchanged sentences

In 2020, the site submitted a report on the activities completed including the revised site conceptual model and results of the remedial feasibility study and recommended remedial strategy for the site.

Additionally, the Company is party to environmental matters related to certain domestic and foreign properties.

The site believes it will achieve the remedial objectives in June 2027, at which time a request for closure of the treatment system will be submitted.

The Company is also party to other environmental matters related to certain domestic and foreign properties.

These environmental matters primarily require the Company to perform ongoing monitoring and maintenance at each of the applicable sites.

During the year ended December 31, 2025, there have been no significant changes to the facts or circumstances of these matters.

Based on the Company’s current obligations, historical costs incurred, and projected costs to be incurred over the next 24 years, the Company estimated the present value range of costs for all of these environmental matters, on a discounted basis, to be between approximately $ 3.5 million and $ 6.0 million as of December 31, 2024, for which $ 3.6 million is accrued within other accrued liabilities and other non-current liabilities on the Company’s Consolidated Balance Sheets as of December 31, 2024.

Comparatively, as of December 31, 2023, the Company had $ 5.1 million accrued for these matters.

The Company had accrued obligations of $ 3.4 million and $ 3.6 million as of December 31, 2025 and 2024, respectively, for these environmental matters.

These obligations are included in other accrued liabilities and other non-current liabilities on the Company’s Consolidated Balance Sheets.

These accrued amounts are inclusive of the Brazilian environmental matter discussed below.

Other environmental matters include participation in certain payments in connection with four currently active environmental consent orders related to certain hazardous waste cleanup activities under the U.S.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data