What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 307 added, 408 removed, 462 unchanged (61% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions, except per share data 2024 2023

17 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

3 unchanged sentences

Foreign currency translation adjustment ( 9.1 ) 10.5

Unrealized gain (loss) on net investment hedges, net of tax provision (benefit) of zero , $ 1.0 , zero , $ 3.2

Total foreign currency adjustments, net of tax provision (benefit) of zero , $ 1.0 , zero , $ 3.2

( 21.4 ) ( 51.9 ) ( 6.9 ) ( 114.2 )

Total foreign currency adjustments, net of tax provision (benefit) of zero and zero

Derivative instruments:

Unrealized gain (loss), net of tax provision (benefit) of $( 0.1 ), $ 0.8 , $( 0.8 ), $ 3.5

( 0.1 ) 2.7 ( 2.5 ) 11.4

Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of $ 0.3 , $( 0.7 ), $ 0.7 , $( 1.7 )

1.1 ( 2.4 ) 2.2 ( 5.7 )

Total derivative instruments, net of tax provision (benefit) of $ 0.2 , $ 0.1 , $( 0.1 ), $ 1.8

1.0 0.3 ( 0.3 ) 5.7

Pension & other postretirement benefits:

Reclassifications of net actuarial and other (gain) loss and amortization of prior service cost, included in net income, net of tax of zero for all periods

Total pension and other postretirement benefits, net of tax of zero for all periods

Other comprehensive income (loss), net of tax provision (benefit) of $ 0.2 , $ 1.1 , $( 0.1 ), $ 5.0

Unrealized gain (loss), net of tax provision (benefit) of $( 0.1 ) and $( 0.7 )

( 0.3 ) ( 2.3 )

Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax (provision) benefit of $ 0.2 and $( 0.1 )

Total derivative instruments, net of tax provision (benefit) of $ 0.1 and $( 0.8 )

Other comprehensive income (loss), net of tax provision (benefit) of $ 0.1 and $( 0.8 )

Comprehensive income (loss) $ ( 64.9 ) $ 58.7

2 unchanged sentences

Condensed Consolidated Balance Sheets

In millions, except share and par value data September 30, 2023 December 31, 2022

In millions, except share and par value data March 31, 2024 December 31, 2023

Assets (Unaudited)

Cash and cash equivalents $ 88.5 $ 95.9

Accounts receivable , net of allowance for credit losses of $ 0.5 - 2023 and $ 0.5 - 2022

Accounts receivable , net of allowance of $ 1.2 - 2024 and $ 1.1 - 2023

Inventories, net 325.5 308.8

6 unchanged sentences

Deferred income taxes 23.8 11.6

Restricted investment , net of allowance for credit losses of $ 0.3 - 2023 and $ 0.6 - 2022

Restricted investment , net of allowance of $ 0.1 - 2024 and $ 0.2 - 2023

Strategic investments 94.1 99.2

16 unchanged sentences

50,000,000 shares authorized;

zero issued and outstanding - 2023 and 2022)

zero issued and outstanding at 2024 and 2023, respectively)

Common stock (par value $ 0.01 per share;

300,000,000 shares authorized;

43,443,512 - 2023 and 43,228,172 - 2022;

36,231,063 - 2023 and 37,298,989 - 2022)

43,585,084 and 43,446,513 issued and 36,324,153 and 36,233,092 outstanding at 2024 and 2023, respectively)

Additional paid-in capital 169.2 164.9

8 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

5 unchanged sentences

Deferred income taxes ( 18.4 ) ( 0.9 )

Disposal/impairment of assets 12.6 1.9

Restructuring and other (income) charges, net 62.8 5.6

Loss on CTO resales 26.5 —

LIFO reserve ( 6.8 ) 22.3

Share-based compensation 4.3 4.0

Gain on sale of strategic investment ( 19.3 ) —

(Gain) loss on strategic investment 4.8 ( 19.2 )

Other non-cash items 5.8 4.7

7 unchanged sentences

Income taxes ( 0.8 ) 9.5

Pension contribution ( 2.0 ) —

Restructuring and other spending, net ( 10.0 ) ( 5.6 )

Operating leases ( 5.7 ) ( 5.2 )

CTO resales spending, net ( 19.8 ) —

Changes in other operating assets and liabilities, net 0.6 ( 3.9 )

3 unchanged sentences

Proceeds from sale of strategic investment — 31.4

Purchase of strategic investment ( 2.4 ) ( 62.8 )

Net investment hedge settlement — 14.7

Other investing activities, net 0.3 ( 3.5 )

1 unchanged sentence

Cash provided by (used in) financing activities:

Proceeds from revolving credit facility $ 237.1 $ 788.0

Payments on revolving credit facility ( 240.1 ) ( 279.0 )

Payments on long-term borrowings — ( 628.1 )

Debt issuance costs — ( 3.0 )

Debt repayment costs — ( 3.8 )

Proceeds from revolving credit facility and other borrowings $ 81.4 $ 90.3

Payments on revolving credit facility and other borrowings ( 55.0 ) ( 60.3 )

Finance lease obligations, net ( 0.4 ) ( 0.3 )

Borrowings (repayments) of notes payable and other short-term borrowings, net 2.4 —

Tax payments related to withholdings on vested equity awards ( 2.6 ) ( 4.5 )

8 unchanged sentences

$ 105.1 $ 86.1

(1) Includes restricted cash of $ 0.6 million and $ 0.5 million and cash and cash equivalents of $ 84.5 million and $ 72.3 million at September 30, 2023 and 2022, respectively.

Restricted cash is included within "Prepaid and other current assets" within the condensed consolidated balance sheets.

(1) Includes restricted cash of $ 16.6 million and $ 8.2 million and cash and cash equivalents of $ 88.5 million and $ 77.9 million at March 31, 2024 and 2023, respectively.

Restricted cash is included within "Prepaid and other current assets" and "Restricted investment" within the condensed consolidated balance sheets.

Supplemental cash flow information:

2 unchanged sentences

Purchases of property, plant, and equipment in accounts payable 2.7 4.3

Leased assets obtained in exchange for new finance lease liabilities 0.2 —

Leased assets obtained in exchange for new operating lease liabilities 0.4 3.9

2 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Description of Business

Ingevity Corporation ("Ingevity," "the company," "we," "us," or "our") provides products and technologies that purify, protect, and enhance the world around us.

Through a team of talented and experienced people, we develop, manufacture, and bring to market solutions that help customers solve complex problems and make the world more sustainable.

During the first quarter of 2023, we realigned our segment reporting structure to increase transparency for our investors and better align with how our chief operating decision maker intends to measure segment operating performance and allocate resources across our operating segments.

We separated our engineered polymers product line from the Performance Chemicals reportable segment into its own reportable segment, Advanced Polymer Technologies.

This reportable segment change also resulted in our Performance Chemicals reporting unit for goodwill being split into two separate reporting units for the purposes of goodwill impairment testing.

Through a diverse team of talented and experienced people, we develop, manufacture, and bring to market solutions that are largely renewably sourced and help customers solve complex problems while making the world more sustainable.

Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, pavement markings, oil exploration and production and automotive components.

We operate in three reportable segments:

Performance Chemicals, which includes specialty chemicals and pavement technologies;

Advanced Polymer Technologies, which includes biodegradable plastics and polyurethane materials;

and Performance Materials, which includes activated carbon.

Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, pavement markings, publication inks, oil exploration and production and automotive components.

Performance Materials, Performance Chemicals and Advanced Polymer Technologies.

Basis of Consolidation and Presentation

1 unchanged sentence

Accordingly, the accompanying Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for full financial statements and should be read in conjunction with the Annual Consolidated Financial Statements for the years ended December 31, 2023, 2022 and 2021, collectively referred to as the “Annual Consolidated Financial Statements,” included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report").

In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments which include only normal recurring adjustments necessary to fairly state the condensed consolidated results for the interim periods presented.

In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments which include only normal recurring adjustments necessary to fairly present the financial position, results of operations, and cash flows for the interim periods presented and contain adequate disclosures to make the information presented not misleading.

The consolidated results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

6 unchanged sentences

We consider the applicability and impact of all ASUs.

Recently issued ASUs that are not listed within this Form 10-Q have been assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

Recently issued ASUs that are not listed within this Form 10-Q have been assessed and determined to be either not applicable or are not expected to have a material impact on the Condensed Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures”, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The purpose of the amendment is to provide readers of the financial statements with information to better understand an entity’s overall performance and assess potential future cash flows.

The guidance is effective beginning with our 2024 fiscal year Form 10-K and will be applied to all prior periods presented in the financial statements.

We are currently evaluating the potential impact of adopting this new guidance on our Condensed Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which is intended to enhance income tax disclosures around the rate reconciliation and income taxes paid.

The purpose of the amendment is to provide readers of the financial statements with information to better assess the differences between the effective tax rate and the statutory tax rate across multiple jurisdictions, enabling them to understand tax implications around operational

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Disaggregation of Revenue

March 31, 2024

opportunities and potential future cash flows.

The guidance is effective beginning with our 2025 fiscal year.

Early adoption is permitted and we are currently evaluating the potential impact of adopting this new guidance on our Condensed Consolidated Financial Statements and related disclosures.

Disaggregation of Net Sales

The following table presents our Net sales disaggregated by reportable segment and product line.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

1 unchanged sentence

Performance Chemicals segment

Pavement Technologies product line 129.7 88.3 316.4 194.0

Road Technologies product line 45.7 45.8

Industrial Specialties product line 101.3 139.8

Total $ 147.0 $ 185.6

Advanced Polymer Technologies segment $ 48.0 $ 65.6

1 unchanged sentence

The following table presents our Net sales disaggregated by geography, based on the delivery address of our customer.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

5 unchanged sentences

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers.

The contract assets primarily relate to our rights to consideration for products produced but not billed at the reporting date.

The contract assets are recognized as accounts receivables when the rights become unconditional and the customer has been billed.

The contract assets are recognized as accounts receivables when we have an enforceable right to payment for performance completed to date and the customer has been billed.

Contract liabilities represent obligations to transfer goods to a customer for which we have received consideration from our customer.

For all periods presented, we had no contract liabilities.

The following table provides information about contract assets from contracts with certain customers.

Contract Asset

September 30,

In millions 2024 2023

5 unchanged sentences

(1) Included within "Prepaid and other current assets" on the condensed consolidated balance sheets.

Fair Value Measurements

Recurring Fair Value Measurements

The following information is presented for assets and liabilities that are recorded in the condensed consolidated balance sheets at fair value measured on a recurring basis.

There were no transfers of assets and liabilities that were recorded at

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

fair value between the three-level fair value hierarchy during the periods reported.

March 31, 2024

Fair Value Measurements

Recurring Fair Value Measurements

The following information is presented for assets and liabilities that are recorded on the condensed consolidated balance sheets at fair value measured on a recurring basis.

There were no transfers of assets and liabilities that were recorded at fair value between the three-level fair value hierarchy during the periods reported.

In millions Level 1 (1)

September 30, 2023

March 31, 2024

Deferred compensation plan investments (4)

4 unchanged sentences

Total liabilities $ 16.1 $ — $ — $ 16.1

In millions Level 1 (1)

December 31, 2023

9 unchanged sentences

(3) Significant unobservable inputs.

(4) Consists of a deferred compensation arrangement, through which we hold various investment securities.

Both the asset and liability are recorded at fair value, and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively.

In addition to the investment securities, we also have company-owned life insurance ("COLI") related to the deferred compensation arrangement.

COLI is recorded at cash surrender value and included in "Other assets" on the condensed consolidated balance sheets in the amount of $ 13.8 million and $ 13.3 million at September 30, 2023 and December 31, 2022, respectively.

(4) Consists of a deferred compensation arrangement through which we hold various investment securities recognized on our condensed consolidated balance sheets.

Both the asset and liability related to investment securities are recorded at fair value and are included within "Other assets" and "Other liabilities" on the condensed consolidated balance sheets, respectively.

In addition to the investment securities, we also had company-owned life insurance related to the deferred compensation arrangement recorded at cash surrender value in "Other assets" of $ 15.8 million and $ 14.9 million at March 31, 2024 and December 31, 2023, respectively.

Nonrecurring Fair Value Measurements

There were no nonrecurring fair value measurements in the condensed consolidated balance sheet during the quarters ended September 30, 2023, and December 31, 2022.

There were no nonrecurring fair value measurements on the condensed consolidated balance sheets during the periods ended March 31, 2024, and December 31, 2023.

Strategic Investments

Equity Method Investments

The aggregate carrying value of all strategic equity method investments totaled $ 16.1 million and $ 28.2 million at September 30, 2023 and December 31, 2022, respectively.

The aggregate carrying value of all strategic equity method investments totaled $ 15.7 million and $ 16.0 million at March 31, 2024 and December 31, 2023, respectively.

During the first quarter of 2023, we sold a strategic equity method investment for $ 31.4 million, resulting in a $ 19.2 million gain, recorded within "Other (income) expense, net" on the condensed consolidated statement of operations.

There were no adjustments to the carrying value of equity method investments for impairment for the periods ended September 30, 2023 and December 31, 2022.

Measurement Alternative Investments

The aggregate carrying value of all measurement alternative investments where fair value is not readily determinable totaled $ 83.2 million and $ 80.8 million at September 30, 2023 and December 31, 2022, respectively.

There were no adjustments to the carrying value of the measurement alternative method investments for impairment or observable price changes for the periods ended September 30, 2023 and December 31, 2022.

There were no adjustments to the carrying value of equity method investments for impairment for the periods ended March 31, 2024 and December 31, 2023.

During 2022, we entered into an investment with a venture capital fund for $ 0.8 million, which is accounted for under the equity method of accounting.

As of March 31, 2024 and December 31, 2023, respectively, we had approximately $ 5.6 million of unfunded commitments, which we anticipate will be paid over a period of 10 years.

The carrying value of our strategic equity investment was $ 1.6 million and $ 1.7 million at March 31, 2024 and December 31, 2023 , respectively.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Measurement Alternative Investments

The aggregate carrying value of all measurement alternative investments where fair value is not readily determinable totaled $ 78.4 million and $ 83.2 million at March 31, 2024 and December 31, 2023, respectively.

During the period ended March 31, 2024, the company identified a triggering event indicating that an investment being accounted for under the measurement alternative may be impaired.

For the three months ended March 31, 2024, the Company recognized an impairment of $ 4.8 million, recorded in Other (income) expense, net on the condensed consolidated statement of operations.

Restricted Investment

At September 30, 2023 and December 31, 2022, the carrying value of our restricted investment, which is accounted for as held-to-maturity ("HTM") and therefore recorded at amortized costs, was $ 80.2 million and $ 78.0 million, net of an allowance for credit losses of $ 0.3 million and $ 0.6 million, and included cash of $ 9.1 million and $ 7.0 million, respectively.

The fair value at September 30, 2023 and December 31, 2022 was $ 76.4 million and $ 74.7 million, respectively, based on Level 1 inputs.

Our restricted investment is a trust managed in order to secure repayment of the finance lease obligation associated with our Performance Materials' Wickliffe, Kentucky, manufacturing site at maturity.

The trust, presented as Restricted investment on our condensed consolidated balance sheets, originally purchased long-term bonds that mature through 2026.

The principal received at maturity of the bonds, along with interest income that is reinvested in the trust, are expected to be equal to or more than the $ 80.0 million finance lease obligation that is due in 2027.

Because the provisions of the trust provide us the ability, and it is our intent, to hold the investments to maturity, the investments held by the trust are accounted for as held to maturity ("HTM");

therefore, they are held at their amortized cost.

The investments held by the trust earn interest at the stated coupon rate of the invested bonds.

Interest earned on the investments held by the trust is recognized and presented as interest income on our condensed consolidated statement of operations.

As interest from the bonds is received and as bonds mature, any proceeds not reinvested are held in highly liquid securities and treated as restricted cash.

At March 31, 2024 and December 31, 2023, the carrying value of our restricted investment was $ 79.8 million and $ 79.1 million, net of an allowance for credit losses of $ 0.1 million and $ 0.2 million, and included restricted cash of $ 16.0 million and $ 15.4 million, respectively.

The fair value at March 31, 2024 and December 31, 2023 was $ 77.2 million and $ 76.7 million, respectively, based on Level 1 inputs.

The following table shows the total amortized cost of our HTM debt securities by credit rating, excluding the allowance for credit losses and cash.

2 unchanged sentences

HTM Debt Securities

In millions AA+ AA AA- A A- BBB+ Total

September 30, 2023 $ 13.3 — 10.4 13.2 24.4 10.1 $ 71.4

In millions AA+ AA- A A- BBB+ Total

March 31, 2024 $ 13.3 10.4 13.2 17.0 10.0 $ 63.9

December 31, 2023 $ 13.3 10.4 13.2 17.0 10.0 $ 63.9

Debt and Finance Lease Obligations

At September 30, 2023 and December 31, 2022, the carrying value of finance lease obligations was $ 101.3 million and $ 101.9 million, respectively, and the fair value was $ 103.6 million and $ 106.2 million, respectively.

At March 31, 2024 and December 31, 2023, the carrying value of finance lease obligations was $ 100.8 million and $ 101.1 million, respectively, and the fair value was $ 104.3 million and $ 105.7 million, respectively.

The fair value of our finance lease obligation associated with our Performance Materials' Wickliffe, Kentucky manufacturing site, is based on the period-end quoted market prices for the obligations, using Level 2 inputs.

The fair value of all other finance lease obligations approximates their carrying values.

The carrying amount, excluding debt issuance fees, of our variable interest rate long-term debt was $ 825.0 million and $ 828.0 million as of September 30, 2023 and December 31, 2022, respectively.

The carrying value is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt.

At September 30, 2023 and December 31, 2022, the carrying value of our fixed rate debt was $ 550.0 million and $ 550.0 million, respectively, and the fair value was $ 453.9 million and $ 471.8 million, respectively, based on Level 2 inputs.

The carrying value, excluding debt issuance fees, of our variable interest rate debt was $ 847.6 million and $ 821.4 million as of March 31, 2024 and December 31, 2023, respectively.

The carrying value of our variable rate debt is a reasonable estimate of the fair value.

At March 31, 2024 and December 31, 2023, the carrying value of our fixed rate debt was $ 550.0 million and $ 550.0 million, respectively, and the fair value was $ 497.3 million and $ 494.6 million, respectively, based on Level 2 inputs.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

Inventories, net

In millions September 30, 2023 December 31, 2022

In millions March 31, 2024 December 31, 2023

Raw materials $ 129.9 $ 128.3

3 unchanged sentences

LIFO reserve ( 93.9 ) ( 100.7 )

( 90.4 ) ( 27.8 )

Inventories, net $ 325.5 $ 308.8

(1) The increase in the LIFO balance in 2023 is primarily attributable to the significant inflation in the price of crude tall oil ("CTO") which is the primary raw material for our Performance Chemicals reportable segment.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Property, Plant, and Equipment, net

In millions September 30, 2023 December 31, 2022

In millions March 31, 2024 December 31, 2023

Machinery and equipment $ 1,262.8 $ 1,244.6

4 unchanged sentences

accumulated depreciation (1)

( 867.5 ) ( 818.9 )

Property, plant, and equipment, net $ 726.5 $ 762.2

_______________

(1) As a result of the Performance Chemicals' repositioning, as further described in Note 11, we accelerated the depreciation of certain property, plant and equipment assets.

This resulted in $ 31.6 million of additional expense for the three months ended March 31, 2024, which is included in Restructuring and other (income) charges, net within the condensed consolidated statement of operations.

Goodwill and Other Intangible Assets, net

As described in Note 1, we reorganized our segment reporting structure to increase transparency for our investors and better align with the markets and customers we serve through each of our segments.

This structure is also consistent with the manner in which information is presently used internally by our chief operating decision maker to evaluate performance and make resource allocation decisions.

This reportable segment change impacted the identification of our Performance Chemicals reporting unit, resulting in two reporting units, Performance Chemicals and Advanced Polymer Technologies.

We have reallocated goodwill as of January 1, 2023 to align to our new reporting unit structure by using a relative fair value approach and tested goodwill for impairment immediately before and after the realignment;

no impairment was identified.

Reporting Units

1 unchanged sentence

December 31, 2023 $ 4.3 $ 349.4 $ 173.8 $ 527.5

Segment change reallocation — ( 165.0 ) 165.0 —

Foreign currency translation — ( 0.1 ) ( 1.5 ) ( 1.6 )

September 30, 2023 $ 4.3 $ 349.2 $ 166.6 $ 520.1

During the third quarter of 2023, continued reduction in demand in industrial end markets has negatively impacted our ability to offset elevated CTO costs through pricing actions within our Performance Chemicals’ reportable segment, particularly in our industrial specialties product line.

CTO is essential to our industrial specialties and some of our pavement technologies product lines within our Performance Chemicals reportable segment.

As a result, we concluded that a triggering event occurred for our Performance Chemicals’ reporting unit, and we performed an analysis of the reporting unit’s goodwill, intangibles and long-lived assets as of September 1, 2023.

Our analysis included significant assumptions such as:

revenue growth rate, Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") margin, and discount rate which are judgmental and variations in any assumptions could result in materially different calculations of fair value.

Based on our analysis, the headroom associated with our Performance Chemicals’ reporting unit, which is defined as the percentage difference between the fair value of a reporting unit and its carrying value, is 19 percent at September 30, 2023.

Consequently, we concluded that there was no impairment for the quarter ended September 30, 2023.

March 31, 2024 $ 4.3 $ 349.3 $ 172.3 $ 525.9

There were no events or circumstances indicating that goodwill might be impaired as of March 31, 2024.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Other Intangible Assets

3 unchanged sentences

December 31, 2023 $ 396.5 $ 92.6 $ 91.7 $ 580.8

Retirements (2)

( 129.0 ) — ( 1.9 ) ( 130.9 )

Foreign currency translation ( 1.3 ) ( 0.6 ) ( 0.5 ) ( 2.4 )

September 30, 2023 $ 389.9 $ 89.8 $ 89.1 $ 568.8

March 31, 2024 $ 266.2 $ 92.0 $ 89.3 $ 447.5

Accumulated Amortization

1 unchanged sentence

Amortization (3)

( 27.5 ) ( 1.4 ) ( 2.7 ) ( 31.6 )

Retirements (2)

129.0 — 1.9 130.9

Foreign currency translation 0.3 0.2 0.2 0.7

September 30, 2023 $ ( 134.1 ) $ ( 28.2 ) $ ( 30.9 ) $ ( 193.2 )

March 31, 2024 $ ( 77.6 ) $ ( 31.5 ) $ ( 35.6 ) $ ( 144.7 )

Other intangibles, net $ 188.6 $ 60.5 $ 53.7 $ 302.8

1 unchanged sentence

(1) Represents trademarks, trade names, and know-how.

(2) As a result of the Performance Chemicals' repositioning, as further described in Note 11, we retired certain customer contract and relationships, and developed technology finite-lived intangible assets.

(3) As a result of the Performance Chemicals' repositioning, as further described in Note 11, we accelerated the amortization of certain customer contract and relationship finite-lived intangible assets.

This resulted in $ 22.1 million of additional expense for the three months ended March 31, 2024, and $ 37.4 million of additional expenses for the twelve months ended December 31, 2023, which is included in Restructuring and other (income) charges, net within the condensed consolidated statement of operations.

Intangible assets subject to amortization were attributed to our business segments as follows:

In millions September 30, 2023 December 31, 2022

In millions March 31, 2024 December 31, 2023

Performance Materials $ 1.4 $ 1.5

2 unchanged sentences

Other intangibles, net $ 302.8 $ 336.1

Amortization expense related to our intangible assets is included in Selling, general and administrative expenses on the condensed consolidated statement of operations.

During the three and nine months ended September 30, 2023, we recognized amortization expense of $ 10.5 million and $ 31.4 million, respectively, and during the three and nine months ended September 30, 2022, we recognized amortization expense of $ 7.9 million and $ 23.8 million, respectively.

The increase in amortization expense in 2023 as compared to 2022 was due to the Ozark Materials, LLC (“OM”), and Ozark Logistics, LLC (“OL” and, together with OM, “Ozark Materials”) acquisition as further described in Note 16.

The amortization expense related to our intangible assets in the table above is shown in the table below.

Three Months Ended March 31,

In millions 2024 2023

Selling, general, and administrative expenses $ 9.5 $ 10.3

Restructuring and other (income) charges, net (1)

Total amortization expense $ 31.6 $ 10.3

_______________

(1) Amounts recorded to Restructuring and other (income) charges, net are not included within segment depreciation and amortization.

Based on the current carrying values of intangible assets, estimated pre-tax amortization expense for the next five years is as follows:

1 unchanged sentence

The estimated pre-tax amortization expense may fluctuate due to changes in foreign currency exchange rates.

Financial Instruments and Risk Management

Net Investment Hedges

In the third quarter of 2022, we terminated our fixed-to-fixed cross-currency interest rate swaps, accounted for as net investment hedges.

During the three and nine months ended September 30, 2023, we recognized net interest income associated with this financial instrument of zero and zero , respectively, and during the three and nine months ended September 30, 2022, we recognized net interest income associated with this financial instrument of $ 0.1 million and $ 2.8 million, respectively.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Financial Instruments and Risk Management

Cash Flow Hedges

Foreign Currency Exchange Risk Management

As of September 30, 2023, there were $ 6.0 million open foreign currency derivative contracts.

The fair value of the designated foreign currency hedge contracts was a net asset (liability) of $ 0.1 million and $( 0.5 ) million at September 30, 2023 and December 31, 2022, respectively.

As of March 31, 2024, there were $ 1.9 million open foreign currency derivative contracts.

The fair value of the designated foreign currency hedge contracts was a net asset (liability) of zero at March 31, 2024 and December 31, 2023, respectively.

Commodity Price Risk Management

As of September 30, 2023, we had 0.8 million and 0.1 million mm BTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively, designated as cash flow hedges.

As of September 30, 2023, open commodity contracts hedge forecasted transactions until May 2024.

The fair value of the outstanding designated natural gas commodity hedge contracts as of September 30, 2023 and December 31, 2022, was a net asset (liability) of $( 0.8 ) million and $( 1.6 ) million, respectively.

Interest Rate Risk Management

During 2022, we had floating-to-fixed interest rate swaps effectively converting a portion of our floating rate debt to a fixed rate.

In the second quarter of 2022, we terminated the interest rate swap instruments.

Upon termination of the interest rate swap instruments, we reclassified a $ 1.7 million gain from AOCI into Interest expense, net on the condensed consolidated statement of operations.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

As of March 31, 2024, we had 1.3 million and 0.1 million mm BTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively, designated as cash flow hedges.

As of March 31, 2024, open commodity contracts hedge forecasted transactions until May 2025.

The fair value of the outstanding designated natural gas commodity hedge contracts as of March 31, 2024 and December 31, 2023, was a net asset (liability) of $( 0.5 ) million and $( 0.9 ) million, respectively.

Effect of Cash Flow and Net Investment Hedge Accounting on AOCI

In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income Location of Gain (Loss) Reclassified from AOCI in Net income

Three Months Ended September 30,

2023 2022 2023 2022

Cash flow hedging derivatives

Currency exchange contracts $ 0.1 $ 0.5 $ ( 0.2 ) $ 0.8 Net sales

Natural gas contracts ( 0.3 ) 3.0 ( 1.2 ) 2.3 Cost of sales

Interest rate swap contracts — — — — Interest expense, net

Total $ ( 0.2 ) $ 3.5 $ ( 1.4 ) $ 3.1

Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Recognized in Income on Derivative

(Amount Excluded from Effectiveness Testing) Location of Gain or (Loss) Recognized in Income on Derivative

(Amount Excluded from

Effectiveness Testing)

Three Months Ended September 30,

2023 2022 2023 2022

Net investment hedging derivative

Currency exchange contracts (1)

$ — $ 4.4 $ — $ 0.1 Interest expense, net

Total $ — $ 4.4 $ — $ 0.1

In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income Location of Gain (Loss) Reclassified from AOCI in Net income

Nine Months Ended September 30,

In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Net income (loss) Location of Gain (Loss) Reclassified from AOCI in Net income (loss)

Three Months Ended March 31,

2024 2023 2024 2023

2 unchanged sentences

Natural gas contracts ( 0.4 ) ( 2.9 ) ( 0.7 ) 0.5 Cost of sales

Interest rate swap contracts — 5.7 — 1.7 Interest expense, net

Total $ ( 0.4 ) $ ( 3.0 ) $ ( 0.7 ) $ 0.3

In millions Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Recognized in Income on Derivative

(Amount Excluded from Effectiveness Testing) Location of Gain or (Loss) Recognized in Income on Derivative

(Amount Excluded from

Effectiveness Testing)

Nine Months Ended September 30,

2023 2022 2023 2022

Net investment hedging derivative

Currency exchange contracts (1)

$ — $ 13.9 $ — $ 2.8 Interest expense, net

Total $ — $ 13.9 $ — $ 2.8

(1) Reclassifications from AOCI to Net Income were zero for all periods presented.

Gains and losses would be reclassified from AOCI to Other (income) expense, net.

Within the next twelve months, we expect to reclassify $ 1.7 million of net gains from AOCI to income, before taxes.

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Fair Value Measurements

1 unchanged sentence

There were no transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during the periods reported.

There were no nonrecurring fair value measurements related to derivative assets and liabilities on the condensed consolidated balance sheets as of September 30, 2023, or December 31, 2022.

September 30, 2023

There were no nonrecurring fair value measurements related to derivative assets and liabilities on the condensed consolidated balance sheets as of March 31, 2024, or December 31, 2023.

March 31, 2024

In millions Level 1 (1)

2 unchanged sentences

Total assets $ — $ 0.1 $ — $ 0.1

Currency exchange contracts (5)

$ — $ 0.4 $ — $ 0.4

Natural gas contracts (5)

$ — $ 0.5 $ — $ 0.5

Currency exchange contracts (5)

Total liabilities $ — $ 0.6 $ — $ 0.6

1 unchanged sentence

In millions Level 1 (1)

Currency exchange contracts (4)

$ — $ 0.5 $ — $ 0.5

Total assets $ — $ 0.5 $ — $ 0.5

Natural gas contracts (5)

9 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Debt, including Finance Lease Obligations

Current and long-term debt including finance lease obligations consisted of the following:

In millions, except percentages September 30, 2023 December 31, 2022

In millions, except percentages March 31, 2024 December 31, 2023

Revolving Credit Facility and other lines of credit (1)(2)

2 unchanged sentences

Finance lease obligations (3)

Accounts receivable securitization (4)

Other notes payable 2.0 2.1

5 unchanged sentences

______________

(1) Letters of credit outstanding under the revolving credit facility were $ 2.3 million and $ 2.3 million and available funds under the facility were $ 172.7 million and $ 169.7 million at September 30, 2023 and December 31, 2022, respectively.

(1) Letters of credit outstanding under the revolving credit facility were $ 2.5 million and $ 2.5 million and available funds under the facility were $ 233.5 million and $ 259.5 million at March 31, 2024 and December 31, 2023, respectively.

(2) The weighted average interest rate associated with our revolving credit facility was 6.68 percent and 6.36 percent for the period ended March 31, 2024 and December 31, 2023, respectively.

(3) At March 31, 2024 and December 31, 2023, $ 80.0 million of the finance lease obligation upon maturity will be settled utilizing liquid assets that have been placed into a trust established strictly for this purpose.

The trust is presented as Restricted investments on the condensed consolidated balance sheets in the amount of $ 79.8 million and $ 79.1 million as of March 31, 2024 and December 31, 2023, respectively.

Refer to Note 4, under the section:

Restricted Investment , for more information.

(4) The interest rate associated with our accounts receivable securitization program was 5.54 percent and 5.61 percent for the period ended March 31, 2024 and December 31, 2023, respectively.

(5) Debt maturing within one year is included in "Notes payable and current maturities of long-term debt" on the condensed consolidated balance sheets.

Debt Covenants

Our Senior Notes indenture contains certain customary covenants (including covenants limiting Ingevity's and its restricted subsidiaries’ ability to grant or permit liens on certain property securing debt, declare or pay dividends, make distributions on or repurchase or redeem capital stock, make investments in unrestricted subsidiaries, engage in sale and lease-back transactions, and engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of the assets of Ingevity and our restricted subsidiaries, taken as a whole) and events of default (subject in certain cases to customary exceptions, as well as grace and cure periods).

Our indenture contains certain customary covenants (including covenants limiting Ingevity's and its restricted subsidiaries’ ability to grant or permit liens on certain property securing debt, declare or pay dividends, make distributions on or repurchase or redeem capital stock, make investments in unrestricted subsidiaries, engage in sale and lease-back transactions, and engage in a consolidation or merger, or sell, transfer or otherwise dispose of all or substantially all of the assets of Ingevity and our restricted subsidiaries, taken as a whole) and events of default (subject in certain cases to customary exceptions, as well as grace and cure periods).

The occurrence of an event of default under the 2028 Senior Notes could result in the acceleration of the notes of such series and could cause a cross-default resulting in the acceleration of other indebtedness of Ingevity and its subsidiaries.

We were in compliance with all covenants under the indenture as of September 30, 2023.

We were in compliance with all covenants under the indenture as of March 31, 2024.

The credit agreement governing our revolving credit facility contains customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-compliance with covenants and cross-defaults to other material indebtedness.

2 unchanged sentences

The revolving credit facility financial covenants require Ingevity to maintain on a consolidated basis a maximum total net leverage ratio of 4.0 to 1.0 (which may be increased to 4.5 to 1.0 under certain circumstances) and a minimum interest coverage ratio of 3.0 to 1.0.

As calculated per the credit agreement, our net leverage for the four consecutive quarters ended September 30, 2023 was 2.5 , and our actual interest coverage for the four consecutive quarters ended September 30, 2023 was 6.8 .

We were in compliance with all covenants under the credit agreement at September 30, 2023.

As calculated per the credit agreement, our net leverage for the four consecutive quarters ended March 31, 2024 was 2.8 , and our actual interest coverage for the four consecutive quarters ended March 31, 2024 was 5.6 .

We were in compliance with all covenants under the credit agreement at March 31, 2024.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

The tables below provide a roll forward of equity.

March 31, 2024

In millions, shares in thousands Shares Amount Additional paid in capital Retained earnings Accumulated

10 unchanged sentences

Balance at March 31, 2024 43,585 $ 0.4 $ 169.2 $ 946.3 $ ( 35.6 ) $ ( 512.1 ) $ 568.2

Net income (loss) — — — 35.5 — — 35.5

Other comprehensive income (loss) — — — — 5.3 — 5.3

Common stock issued 22 — — — — — —

Exercise of stock options, net — — — — — — —

Tax payments related to vested restricted stock units — — — — — — —

Share repurchase program — — — — — ( 58.7 ) ( 58.7 )

Share-based compensation plans — — 4.7 — — 1.6 6.3

Balance at June 30, 2023 43,430 $ 0.4 $ 163.6 $ 1,093.9 $ ( 33.5 ) $ ( 510.3 ) $ 714.1

Net income (loss) — — — 25.2 — — 25.2

Other comprehensive income (loss) — — — — ( 20.4 ) — ( 20.4 )

Common stock issued 13 — — — — — —

Exercise of stock options, net — — — — — — —

Tax payments related to vested restricted stock units — — — — — ( 0.2 ) ( 0.2 )

Share repurchase program — — — — — — —

Share-based compensation plans — — ( 1.0 ) — — 1.0 —

Balance at September 30, 2023 43,443 $ 0.4 $ 162.6 $ 1,119.1 $ ( 53.9 ) $ ( 509.5 ) $ 718.7

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

In millions, shares in thousands Shares Amount Additional paid in capital Retained earnings Accumulated

10 unchanged sentences

Balance at March 31, 2023 43,408 $ 0.4 $ 158.9 $ 1,058.4 $ ( 38.8 ) $ ( 453.2 ) $ 725.7

Net income (loss) — — — 59.8 — — 59.8

Other comprehensive income (loss) — — — — ( 46.7 ) — ( 46.7 )

Common stock issued 18 — — — — — —

Exercise of stock options, net 2 — 0.1 — — — 0.1

Tax payments related to vested restricted stock units — — — — — ( 0.2 ) ( 0.2 )

Share repurchase program — — — — — ( 49.5 ) ( 49.5 )

Share-based compensation plans — — 3.3 — — 1.4 4.7

Balance at June 30, 2022 43,200 $ 0.4 $ 143.0 $ 916.7 $ ( 43.7 ) $ ( 362.1 ) $ 654.3

Net income (loss) — — — 75.4 — — 75.4

Other comprehensive income (loss) — — — — ( 51.6 ) — ( 51.6 )

Common stock issued 8 — — — — ( 0.2 ) ( 0.2 )

Exercise of stock options, net 5 — 0.3 — — — 0.3

Tax payments related to vested restricted stock units — — — — — — —

Share repurchase program — — — — — ( 49.3 ) ( 49.3 )

Share-based compensation plans — — 4.2 — — 0.8 5.0

Balance at September 30, 2022 43,213 $ 0.4 $ 147.5 $ 992.1 $ ( 95.3 ) $ ( 410.8 ) $ 633.9

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Accumulated other comprehensive income (loss)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

2 unchanged sentences

Net gains (losses) on foreign currency translation ( 9.1 ) 10.5

Gains (losses) on net investment hedges — 4.4 — 13.9

tax provision (benefit) — 1.0 — 3.2

Net gains (losses) on net investment hedges — 3.4 — 10.7

Other comprehensive income (loss), net of tax ( 9.1 ) 10.5

12 unchanged sentences

Beginning balance $ 0.5 $ 0.4

Unrealized actuarial gains (losses) and prior service (costs) credits — — — —

tax provision (benefit) — — — —

Net actuarial gains (losses) and prior service (costs) credits — — — —

Amortization of actuarial and other (gains) losses, prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income — — 0.1 0.1

tax (provision) benefit — — — —

Net actuarial and other (gains) losses, amortization of prior service cost (credits), and settlement and curtailment (income) charge reclassified to net income — — 0.1 0.1

Other comprehensive income (loss), net of tax — —

Ending balance $ 0.5 $ 0.4

Total AOCI ending balance at September 30 $ ( 53.9 ) $ ( 95.3 ) $ ( 53.9 ) $ ( 95.3 )

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Total AOCI ending balance at March 31 $ ( 35.6 ) $ ( 38.8 )

Reclassifications of accumulated other comprehensive income (loss)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

3 unchanged sentences

Natural gas contracts (2)

( 1.2 ) 2.3 ( 2.2 ) 4.1

Net investment hedge contract (3)

Total before tax ( 0.7 ) 0.3

1 unchanged sentence

Amount included in net income (loss) $ ( 0.5 ) $ 0.2

Pension and other post retirement benefits

Amortization of prior service costs (2)

______________

Total before tax — — 0.1 0.1

(Provision) benefit for income taxes — — — —

Amount included in net income (loss) $ — $ — $ 0.1 $ 0.1

______________

(1) Included within "Net sales" on the condensed consolidated statement of operations.

(2) Included within "Cost of sales" on the condensed consolidated statement of operations.

(3) Included within "Interest expense, net" on the condensed consolidated statement of operations.

Share Repurchases

On July 25, 2022, our Board of Directors authorized the repurchase of up to $ 500 million of our common stock, and rescinded the prior outstanding repurchase authorization with respect to the shares that remained unused under the prior authorization.

Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market prevailing conditions and other factors, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

During the three and nine months ended September 30, 2023, we repurchased zero and $ 92.1 million, inclusive of $ 0.8 million in excise tax, in common stock, representing zero and 1,269,373 shares of our common stock at a weighted average cost per share of zero and $ 71.93 , respectively.

At September 30, 2023, $ 353.4 million remained unused under our Board-authorized repurchase program.

During the three and nine months ended September 30, 2022, we repurchased $ 49.3 million and $ 139.2 million in common stock, representing 697,523 and 2,027,206 shares of our common stock at a weighted average cost per share of $ 70.75 and $ 68.68 , respectively.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Share Repurchases

On July 25, 2022, our Board of Directors authorized the repurchase of up to $ 500.0 million of our common stock (the "2022 Authorization"), and rescinded the prior outstanding repurchase authorization with respect to the shares that remained unused under the prior authorization.

Shares under the 2022 Authorization may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of market prevailing conditions and other factors, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

During the three months ended March 31, 2024 and 2023, we repurchased zero and $ 33.4 million, inclusive of $ 0.2 million excise tax, in common stock, representing zero and 449,475 shares of our common stock at a weighted average cost per share of zero and $ 73.86 , respectively.

At March 31, 2024, $ 353.4 million remained unused under the 2022 Authorization.

Restructuring and Other (Income) Charges, net

Detail on the restructuring charges and other (income) charges, net, is provided below.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions 2024 2023

Severance and other employee-related costs (1)

$ 1.5 $ — $ 8.9 $ —

Restructuring charges $ 62.3 $ 3.1

Alternative Feedstock Transition

11.8 — 18.4 —

North Charleston Plant Transition 9.8 — 12.7 —

Business transformation costs 1.5 3.3 6.7 10.6

Other (income) charges, net 0.5 2.5

Total Restructuring and other (income) charges, net $ 62.8 $ 5.6

_______________

(1) Represents severance and employee benefit charges.

(2) Primarily represents other miscellaneous exit costs.

Restructuring Charges

Beginning in the first quarter of 2023, we initiated several measures to pursue greater cost efficiency which included a reorganization to streamline certain functions and reduce ongoing costs.

During the second and third quarters, we expanded our cost reduction actions to reorganize our operations and in the fourth quarter we announced further actions as described in Note 17.

The combined restructuring program is expected to cost approximately $ 12 - 14 million and is expected to be completed over the remainder of 2023.

During the three and nine months ended September 30, 2023, we recorded $ 1.5 million and $ 8.9 million in severance and other employee-related costs and zero and $ 2.7 million in other restructuring charges, including asset write-offs associated with our reorganization, respectively.

Restructuring Reserves

Restructuring reserves which are included within Accrued expenses on the condensed consolidated balance sheets were $ 3.2 million and $ 0.5 million at September 30, 2023 and December 31, 2022, respectively.

Other (income) charges, net

Alternative Fatty Acid Transition

In April 2023, we began the feedstock transition of our Crossett, Arkansas manufacturing plant (“Crossett”).

This transition will convert Crossett from a CTO based feedstock production facility to produce fatty acids from alternative plant based feedstocks.

To initiate this transition, we halted all production at Crossett in April.

During the three and nine months ended September 30, 2023, we incurred $ 11.8 million and $ 18.4 million in costs, respectively.

We expect to incur approximately $ 20 - 25 million of expense in 2023, representing non-capital retooling and stranded costs, with modest levels of capital expenditure.

North Charleston Plant Transition

Our North Charleston, South Carolina Performance Chemicals manufacturing plant is co-located with a WestRock Company (“WestRock”) paper mill.

WestRock provides certain critical operating services to us including steam, water and wastewater.

WestRock also disposes of brine, a by-product resulting from our conversion of black liquor soap skimmings into CTO and provides other non-critical services that support our operations.

In May 2023, WestRock announced that it will permanently cease operating its North Charleston paper mill by August 31, 2023 and notified us that it is terminating the shared services in accordance with our operating agreement.

In millions Severance and other employee-related costs Other charges (income) (1)

Asset disposal charges (2)

Performance Chemicals' repositioning $ 2.1 $ 5.2 $ 55.0 $ 62.3

Three Months Ended March 31, 2024 $ 2.1 $ 5.2 $ 55.0 $ 62.3

Other $ 3.0 $ 0.1 $ — $ 3.1

Three Months Ended March 31, 2023 $ 3.0 $ 0.1 $ — $ 3.1

_______________

(1) Primarily represents costs associated with contract terminations, plant and equipment decommissioning charges and other miscellaneous exit costs.

(2) Primarily represents property, plant and equipment and finite-lived intangible asset write-downs, accelerated depreciation and amortization, and impairment charges on certain assets, which were or are to be disposed of or abandoned.

Also included, to the extent incurred, the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations related to asset disposal charges that are included within restructuring charges.

On November 1, 2023, we announced a number of strategic actions designed to reposition our Performance Chemicals reportable segment to improve profitability and reduce the cyclicality of the Company as a whole.

These actions increase our focus on growing our most profitable Performance Chemicals' product lines, such as road technologies, and accelerate our transition to non-crude tall oil ("CTO") based fatty acids.

This initiative will result in the reduction, and in some cases exit, of certain historical end-use markets of our industrial specialties product line, such as adhesives, publication inks, and oilfield, representing approximately 45 percent of our industrial specialties product line historical annualized net sales.

This initiative includes the permanent closure of our Performance Chemicals' CTO refinery and the closure of our manufacturing plant located in DeRidder, Louisiana (the “DeRidder Plant”), including the polyol production assets associated with the Advanced Polymer Technologies (“APT”) reportable segment.

As of March 31, 2024, all production at the DeRidder Plant has ceased with the APT polyol production assets being shuttered in December 2023, and the CTO refinery and other Performance Chemicals’ production assets shuttered in February 2024.

The above actions are referred to as the "Performance Chemicals' repositioning."

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

We expect to incur approximately $ 15 - 20 million of non-capital transition costs in 2023 as we continue to transition those shared services and minimize disruption to our operations and are continuing to evaluate the future impact.

During the three and nine months ended September 30, 2023, we incurred $ 9.8 million and $ 12.7 million in costs, respectively.

March 31, 2024

The Performance Chemicals’ repositioning initiative included additional corporate and business cost reduction actions executed in November 2023.

The Performance Chemicals' repositioning, when combined with other targeted workforce reduction initiatives during 2023, resulted in the reduction of Ingevity's global workforce by almost 20 percent, 25 percent of these reductions being employees directly associated with commercial sales activities of the soon-to-be exited and/or reduced end-use markets of our industrial specialties product line.

Specific to Performance Chemicals, the reduction represented approximately 30 percent of the reportable segment's workforce.

Expected Charges

We expect to incur aggregate charges of approximately $ 280 million associated with the Performance Chemicals' repositioning, consisting of approximately $ 185 million in asset-related charges, approximately $ 15 million in severance and other employee-related costs, and approximately $ 80 million in other restructuring costs including decommissioning, dismantling and removal charges, and contract termination costs.

Through March 31, 2024, we have incurred $ 197.6 million associated with these actions, including $ 180.2 million of non-cash asset-related charges and $ 17.4 million of charges to be settled in cash.

As of March 31, 2024, $ 13.4 million of the charges to be settled in cash have been paid.

We expect approximately $ 185 million of the total charges to be non-cash and $ 95 million to be settled in cash.

The remainder of the non-cash and 50 - 60 percent of cash charges are expected to be recognized in 2024.

Charges Related to Exited End-Market Inventory

The collective actions of workforce, operational, and regional business exits, we believe will hinder our ability to dispose of the associated inventory on hand.

As a result, we recorded $ 19.7 million and $ 2.5 million of non-cash, lower of cost or market, inventory charges during the three months ended December 31, 2023 and March 31, 2024, respectively, to adjust the carrying value of the impacted inventory to what we expect to realize upon disposal, less disposal costs.

These inventory charges are recorded to Cost of sales on the condensed consolidated statement of operations.

Since these inventory charges are directly attributable to the Performance Chemicals’ repositioning, that is, they do not represent normal, recurring expenses necessary to operate our business, we have combined these charges with the restructuring charges noted above, and have excluded such impact from the financial results of our Performance Chemicals reportable segment.

Please refer to Note 14 for more information.

CTO Resale Activity

Due to the DeRidder Plant closure and the corresponding reduced CTO refining capacity, we may be obligated, under an existing CTO supply contract, to purchase CTO volumes through 2025 at amounts in excess of required CTO volumes needed to support our current business operations.

We intend to manage our CTO volumes by reselling excess volumes (herein referred to as "CTO resales") in the open market.

Excluded from the estimated $ 280.0 million of aggregate charges relating to the Performance Chemicals' repositioning are potential costs we may incur associated with the CTO resales which, based on what we believe to be market rates today, may result in $ 50 million to $ 80 million of incremental losses in 2024.

This is updated from our previously disclosed estimate of $ 30 million to $ 80 million based on our current expectations on CTO procurement costs for 2024, which we expect to be offset by spot market CTO resales.

For the three months ended March 31, 2024, we have incurred $ 26.5 million of CTO resale losses, which are recorded as Other (income) expense, net on the condensed consolidated statement of operations.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

The charges we currently expect to incur in connection with these actions are subject to a number of assumptions and risks, and actual results may differ materially.

We may also incur other material charges not currently contemplated due to events that may occur as a result of, or in connection with, these actions.

Restructuring and Other (Income) Charges, net Reserves

The following table ( in millions ) shows a roll forward of restructuring reserves that will result in cash spending, the majority of which relate to the Performance Chemicals' repositioning.

Balance at Change in Cash Balance at

12/31/2023 (1)

Payments Other (3)

3/31/2024 (1)

$ 8.2 7.8 ( 10.0 ) — $ 6.0

_______________

(1) Included in "Accrued expenses" on the condensed consolidated balance sheets.

(2) Includes severance and other employee-related costs, exited leases, contract terminations and other miscellaneous exit costs.

Any asset write-downs including accelerated depreciation and impairment charges are not included in the above table.

(3) Primarily foreign currency translation adjustments.

Other (income) charges, net

North Charleston plant transition

Our North Charleston, South Carolina Performance Chemicals manufacturing plant has historically been co-located with a WestRock Company (“WestRock”) paper mill.

In May 2023, WestRock announced that it would permanently cease operating its North Charleston paper mill by August 31, 2023 and notified us that it was terminating the shared services in accordance with our operating agreement.

WestRock ceased production at their North Charleston paper mill in June 2023.

During 2023, we executed a transition plan to separate certain critical operating services WestRock had historically provided to us such as steam, water and wastewater treatment.

During the three months ended March 31, 2024 and 2023, we incurred charges of $ 0.5 million and zero , respectively.

We expect to incur an additional $ 2 - 4 million of costs as we complete this transition in the first half of 2024.

Business transformation costs

We embarked upon a business transformation initiative that includes the implementation of an upgraded enterprise resource planning ("ERP") system.

The implementation of our new ERP occurred in multiple phases beginning with our pilot deployment which occurred during the first quarter of 2022 and concluded with our final deployment in the first quarter of 2023.

Costs incurred, during the three and nine months ended September 30, 2023, totaled $ 1.5 million and $ 6.7 million, respectively, and during the three and nine months ended September 30, 2022, totaled $ 3.3 million and $ 10.6 million, respectively.

Costs are directly associated with the business transformation initiative that, in accordance with GAAP, cannot be capitalized.

We expect to complete this initiative by the end of 2023 and anticipate incurring an additional $ 1 - 2 million in non-capitalizable costs.

Our enterprise resource planning tool implementation and associated business transformation initiative concluded in the fourth quarter of 2023.

Costs incurred, during the three months ended March 31, 2024 and 2023, totaled zero and $ 2.5 million, respectively.

The effective tax rates, including discrete items, were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Effective tax rate 22.1 % 20.9 %

10 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

The below table provides a reconciliation between our reported effective tax rates and the EAETR.

Three Months Ended September 30,

Three Months Ended March 31,

In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact

2 unchanged sentences

Restructuring and other (income) charges, net (1)

Sale of strategic investment (2)

64.8 15.1 3.0 0.7

Other tax only discrete items

— 2.3 — ( 0.3 )

Total discrete items 1.4 2.7 — ( 0.3 )

Consolidated operations, before discrete items $ 33.5 $ 9.6 $ 95.8 $ 20.1

28.7 % 21.0 %

Nine Months Ended September 30,

In millions, except percentages Before tax Tax Effective tax rate % impact Before tax Tax Effective tax rate % impact

Consolidated operations $ 143.9 $ 32.5 22.6 % $ 249.9 $ 53.9 21.6 %

Discrete items:

Restructuring and other (income) charges, net (1)

Sale of strategic investment (2)

Gain (loss) on strategic investments (2)

4.8 1.1 ( 19.2 ) ( 4.5 )

6 unchanged sentences

(2) See Note 4 for further information.

(3) I ncrease in EAETR for three and nine months ended September 30, 2023, as compared to September 30, 2022, is due to an overall change in the mix of forecasted earnings in various tax jurisdictions with varying rates, a significant decrease in the foreign derived intangible income benefit, and the corporate tax rate in the UK increasing from 19% to 25% on April 1, 2023.

Furthermore, changes in estimates used in the EAETR during the third quarter of 2023 as compared to the second quarter of 2023 attributed to the increase in the EAETR during the three months ended September 30, 2023.

At September 30, 2023 and December 31, 2022, we had deferred tax assets of $ 10.3 million and $ 9.2 million, respectively, resulting from certain historical net operating losses from our Brazil and China operations and U.S.

(3) Increase in EAETR for three months ended March 31, 2024, as compared to March 31, 2023, is due to an overall change in the mix of forecasted earnings in various tax jurisdictions with varying rates, most notably in the U.S.

Additionally, there was a significant reduction in the foreign-derived intangible income deduction due to reduced taxable income in the U.S., which further increased the EAETR.

The EAETR tax percentage shown, may not precisely recalculate due to rounding.

At March 31, 2024 and December 31, 2023, we had deferred tax assets of $ 11.0 million and $ 11.1 million, respectively, resulting from certain historical net operating losses from our Brazil and China operations and U.S.

state tax credits for which a valuation allowance has been established.

1 unchanged sentence

In evaluating the realizability of these deferred tax assets, we consider projected future taxable income and tax planning strategies in making our assessment.

As of September 30, 2023, we cannot objectively assert that these deferred tax assets are more likely than not to be realized and therefore we have maintained a valuation allowance.

As of March 31, 2024, we cannot objectively assert that these deferred tax assets are more likely than not to be realized and therefore we have maintained a valuation allowance.

We intend to continue maintaining a valuation allowance on these deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

2 unchanged sentences

However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve.

Pillar Two, released by the Organisation for Economic Cooperation and Development (OECD), went into effect on January 1, 2024.

Pillar Two’s intent is to create a 15% global minimum tax for all jurisdictions in which multinational enterprises operate.

To date, ten of our reporting jurisdictions have enacted final legislation adopting Pillar Two.

While we do not anticipate that this legislation will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate.

No tax impacts of Pillar Two were recorded for the quarter ending March 31, 2024.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Undistributed earnings of Ingevity’s foreign subsidiaries have historically been indefinitely reinvested offshore.

Management does not currently expect to repatriate cash earnings from our foreign operations to fund U.S.

however, during the second quarter of 2023, we determined that the current year's earnings of our China subsidiaries are no longer permanently reinvested.

No deferred tax liability was recorded as a result of this change in our assertion, as the impacts will be captured in the year current earnings are distributed.

March 31, 2024

Commitments and Contingencies

9 unchanged sentences

On May 18, 2023, the court in the Delaware Proceeding entered judgment on the jury’s verdict, which commenced the post-trial briefing stage.

In addition, BASF is seeking pre-judgment interest and has indicated it will seek attorneys’ fees and costs in amounts that they will have to support at a future date.

On February 13, 2024, the court in the Delaware Proceeding denied BASF’s motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative.

In addition, BASF has indicated it will seek attorneys’ fees and costs in amounts that they will allege and have to demonstrate at a future date.

Unless the judgment is set aside, BASF will be entitled to post-judgment interest pursuant to the rate provided under federal law.

We disagree with the verdict, including the court’s application of the law and entry of judgment, and are seeking judgment as a matter of law, or a new trial in the alternative, in the Delaware Proceeding post-trial briefing stage and intend to do so on appeal, if necessary.

In addition, we may challenge the U.S.

We disagree with the verdict, including the court’s application of the law and entry of judgment.

Therefore, on March 13, 2024, we appealed the verdict as well as the U.S.

District Court’s November 2020 dismissal of our patent infringement claims against BASF.

1 unchanged sentence

Final resolution of these matters could take up to 18 months.

As of September 30, 2023, nothing has occurred in the post-trial proceedings to warrant any change to our conclusions as disclosed within our 2022 Annual Report.

The full amount of the trebled jury's verdict, $ 85.0 million, is accrued in Other liabilities on the condensed consolidated balance sheet as of September 30, 2023.

In addition, as a result of the judgment being officially entered on May 18, 2023, we have started accruing for the post-judgment interest.

As of March 31, 2024, nothing has occurred in the post-trial proceedings to warrant any change to our conclusions as disclosed within our 2023 Annual Report.

The full amount of the trebled jury's verdict, $ 85.0 million, is accrued in Other liabilities on the condensed consolidated balance sheet as of March 31, 2024 and the charge was included within Other (income) expense, net on the consolidated statement of operations for the year ended December 31, 2021.

In addition, as a result of the judgment being entered on May 18, 2023, we have started accruing for post-judgment interest at the legally mandated interest rate.

The amount of any liability we may ultimately incur could be more or less than the amount accrued.

Segment Information

Segment change

As described in Note 1, effective in the first quarter of 2023, we separated our engineered polymers product line from the Performance Chemicals reportable segment into its own reportable segment, Advanced Polymer Technologies.

We have recast the data below to reflect the changes in our reportable segments to conform to the current year presentation.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Three Months Ended September 30, Nine Months Ended September 30,

March 31, 2024

Segment Information

Three Months Ended March 31,

In millions 2024 2023

17 unchanged sentences

( 65.3 ) ( 5.6 )

Acquisition and other-related costs (4)

Acquisition and other-related income (costs), net (4)(8)

( 0.3 ) ( 2.7 )

Gain on sale of strategic investment (5)

Loss on CTO resales (5)

Gain (loss) on strategic investments (6)

Net income (loss) $ ( 56.0 ) $ 50.7

1 unchanged sentence

(1) Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation.

(2) Segment EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and allocate

resources among our operating segments.

Segment EBITDA is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, research and technical expenses, other (income) expense, net, excluding depreciation and amortization).

(2) Segment EBITDA is the primary measure used by our chief operating decision maker to evaluate the performance of and allocate resources among our operating segments.

Segment EBITDA is defined as segment net sales less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses, research and technical expenses, other (income) expense, net, excluding depreciation and amortization).

We have excluded the following items from segment EBITDA:

interest expense, net, associated with corporate debt facilities, income taxes, depreciation, amortization, restructuring and other (income) charges, net, acquisition and other related costs, litigation verdict charges, (losses) and gains from the sale of strategic investments, and pension and postretirement settlement and curtailment (income) charges, net.

(3) For the three and nine months ended September 30, 2023, charges of $ 1.3 million and $ 7.5 million relate to the Performance Materials segment, charges of $ 18.3 million and $ 34.0 million relate to the Performance Chemicals segment, and charges of $ 0.4 million and $ 2.3 million relate to the Advanced Polymer Technologies segment, respectively.

For the three and nine months ended September 30, 2022, charges of $ 1.1 million and $ 3.7 million relate to the Performance Materials segment, charges of $ 1.7 million and $ 5.4 million relate to the Performance Chemicals segment, and charges of $ 0.5 million and $ 1.5 million relate to the Advanced Polymer Technologies segment, respectively.

For more detail on the charges incurred see Note 11.

(4) For the three and nine months ended September 30, 2023 and September 30, 2022, all charges relate to the acquisition and integration of Ozark Materials into the Performance Chemicals segment.

For more detail see Note 16.

(5) For the three and nine months ended September 30, 2023, gain on sale of strategic investment relates to the Performance Materials segment.

For more detail see Note 4.

(6) Excludes $ 4.6 million and $ 5.6 million of depreciation and amortization for the three and nine months ended September 30, 2023, relating to the alternative feedstock transition and North Charleston plant transition within our Performance Chemicals reportable segment.

interest expense associated with corporate debt facilities, interest income, income taxes, depreciation, amortization, restructuring and other income (charges), net, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related income (costs), litigation verdict charges, gain (loss) on strategic investments, loss on CTO resales, pension and postretirement settlement and curtailment income (charges), net.

(3) The table below provides an allocation of these charges between our three reportable segments to provide investors, potential investors, securities analysts and others with the information, should they choose, to apply such (income) charges to each respective reportable segment for which the charges relate.

Three Months Ended March 31,

In millions 2024 2023

Performance Materials $ 0.1 $ 1.7

Performance Chemicals 65.3 3.1

Advanced Polymer Technologies ( 0.1 ) 0.8

Restructuring and other (income) charges, net $ 65.3 $ 5.6

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

March 31, 2024

(4) The table below provides an allocation of these charges between our three reportable segments to provide investors, potential investors, securities analysts and others with the information, should they choose, to apply such (income) charges to each respective reportable segment for which the charges relate.

Three Months Ended March 31,

In millions 2024 2023

Performance Materials $ — $ —

Performance Chemicals 0.3 2.7

Advanced Polymer Technologies — —

Acquisition and other-related (income) costs, net $ 0.3 $ 2.7

(5) For the three months ended March 31, 2024, charges relate to the Performance Chemicals reportable segment.

Refer to Note 11 for more information.

(6) For the three months ended March 31, 2024, gain (loss) on strategic investments relates to a measurement alternative investment associated with the Performance Chemicals reportable segment.

For the three months ended March 31, 2023, gain (loss) on strategic investments relates to the Performance Materials segment.

We exclude gains and losses from strategic investments from our segment results, as well as our non-GAAP financial measures, because we do not consider such gains or losses to be directly associated with the operational performance of the segment.

We believe that the inclusion of such gains or losses, would impair the factors and trends affecting the historical financial performance of our reportable segments.

We continue to include undistributed earnings or loss, distributions, amortization or accretion of basis differences, and other-than-temporary impairments for equity method investments that we believe are directly attributable to the operational performance of such investments, in our reportable segment results.

Refer to Note 4, under the section:

Strategic Investments , for more information.

(7) We regularly perform strategic reviews and assess the return on our operations, which sometimes results in a plan to restructure the business.

These costs are excluded from our reportable segment results;

details of which are included in the table below.

Three Months Ended March 31,

In millions 2024 2023

Restructuring charges (1)

Other (income) charges, net (1)

Performance Chemicals' repositioning inventory charges (2)

Restructuring and other (income) charges, net $ 65.3 $ 5.6

_________________

(1) Amounts are recorded within Restructuring and other (income) charges, net on the condensed consolidated statement of operations, refer to Note 11 for more information.

(2) Amounts are recorded within Cost of sales on the condensed consolidated statement of operations, refer to Note 11 for more information.

(8) Charges represent (gains) losses incurred to complete and integrate acquisitions and other strategic investments.

Charges may include the expensing of the inventory fair value step-up resulting from the application of purchase accounting for acquisitions and certain legal and professional fees associated with the completion of acquisitions and strategic investments.

Three Months Ended March 31,

In millions 2024 2023

Legal and professional service fees $ 0.3 $ 1.9

Acquisition-related (income) costs $ 0.3 $ 1.9

Inventory fair value step-up amortization (1)

Acquisition and other-related (income) charges $ 0.3 $ 2.7

_________________

(1) Included in Cost of sales on the condensed consolidated statement of operations.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

March 31, 2024

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares and potentially dilutive common shares outstanding for the period.

The calculation of diluted net income per share excludes all antidilutive common shares.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In millions (except share and per share data) 2024 2023

7 unchanged sentences

Shares - diluted basis (1)

36,264 37,546

_______________

(1) For the quarter ended March 31, 2024, all potentially dilutive common shares were excluded from the calculation of diluted earnings (loss) per share as we had a net loss for the period.

The following average number of potential common shares were antidilutive, and therefore, were not included in the diluted earnings per share calculation:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

In thousands 2024 2023

Average number of potential common shares - antidilutive 304 182

Ozark Materials

On October 3, 2022, we completed our acquisition of Ozark Materials, pursuant to that certain Equity Purchase Agreement (the “Purchase Agreement”), by and among Ingevity, Ozark Materials and Ozark Holdings, Inc.

In accordance with the Purchase Agreement, we acquired from Seller, all of the issued and outstanding limited liability company membership interests of Ozark Materials for a purchase price of $ 325.0 million, subject to customary adjustments for working capital, indebtedness and transaction expenses (the "Acquisition").

The Acquisition has been integrated into our Performance Chemicals segment and is included within our pavement technologies product line.

We funded the Acquisition through a combination of borrowings under our existing credit facilities and cash on hand.

The Acquisition is not considered significant to our condensed consolidated financial statements for the three and nine months ended September 30, 2023;

therefore, proforma results of operations have not been presented.

Purchase Price Allocation

Ozark Materials is considered an acquisition of a business under business combinations accounting guidance, and therefore we applied acquisition accounting.

Acquisition accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.

The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date using primarily Level 2 and Level 3 inputs.

These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates.

Additionally, estimated fair values are based, in part, upon outside appraisals for certain assets, including specifically-identified intangible assets.

See Note 4 for an additional explanation of Level 2 and Level 3 inputs.

We finalized the purchase price allocation in the third quarter of 2023.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Purchase Price Allocation

In millions Weighted Average Amortization Period Fair Value

Cash and cash equivalents $ 8.0

Accounts receivable 28.7

Inventories (1)

Prepaid and other current assets 2.0

Property, plant and equipment 43.1

Intangible assets (2)

Brands 10 years 15.0

Customer relationships 15 years 88.6

Developed technology 7 years 23.5

Other assets, including operating leases 0.1

Total fair value of assets acquired $ 367.2

Accounts payable 13.9

Other liabilities 2.6

Total fair value of liabilities assumed $ 16.5

Cash acquired ( 8.0 )

Amounts due from Seller 1.8

Total cash paid, less cash and restricted cash acquired $ 344.5

_______________

(1) Fair value of finished goods inventories acquired included a step-up in the value of $ 1.8 million, of which zero and $ 0.8 million was expensed in the three and nine months ended September 30, 2023.

The expense is included within "Cost of sales" on the consolidated statement of operations.

Inventories are accounted for on a FIFO basis of accounting.

(2) The aggregate amortization expense was $ 2.7 million and $ 8.2 million for the three and nine months ended September 30, 2023.

Estimated amortization expense is as follows:

$ 2.7 million for the remainder of 2023, 2024 - $ 10.9 million, 2025 - $ 10.7 million, 2026 - $ 10.0 million, and 2027 - $ 10.0 million.

(3) Goodwill largely consists of expected cost synergies and economies of scale resulting from the business combination.

We expect the full amount to be deductible for income tax purposes.

This acquired goodwill has been included within our Performance Chemicals reporting unit.

See Note 7 for further information regarding our allocation of goodwill among our reporting units.

Acquisition and other-related costs

Costs incurred to complete and integrate acquisitions and other strategic investments are expensed as incurred on our consolidated statement of operations.

The following table summarizes the costs incurred associated with these combined activities.

Three Months Ended September 30, Nine Months Ended September 30,

In millions 2023 2022 2023 2022

Legal and professional service fees $ 0.1 $ 1.9 $ 3.8 $ 1.9

Acquisition-related costs 0.1 1.9 3.8 1.9

Inventory fair value step-up amortization (1)

Acquisition and other-related costs $ 0.1 $ 1.9 $ 4.6 $ 1.9

_______________

(1) Included within "Cost of sales" on the consolidated statement of operations.

INGEVITY CORPORATION

Notes to the Condensed Consolidated Financial Statements

September 30, 2023

Subsequent Events

On November 1, 2023, we announced a number of strategic actions designed to further reposition our Performance Chemicals segment to improve the profitability and reduce the cyclicality of the Performance Chemicals business and the Company as a whole.

These actions increase our focus on growing our most profitable Performance Chemicals product lines such as Pavement Technologies and accelerate our transition to non-CTO-based fatty acids.

The announced actions include the permanent closure of our Performance Chemicals manufacturing plant located in DeRidder, Louisiana (the “DeRidder Plant”) as well as additional corporate and business cost reduction actions.

We expect to close the DeRidder Plant by the end of the first half of 2024.

We expect to incur aggregate charges of approximately $ 280.0 million associated with these actions, consisting of approximately $ 180.0 million in asset-related charges, approximately $ 15.0 million in severance and other employee-related costs, and approximately $ 85.0 million in other restructuring costs including decommissioning, dismantling and removal charges, and contract termination costs.

We expect approximately $ 180.0 million of the total charges to be non-cash.

The majority of non-cash charges and 50 - 60 percent of cash charges are expected to be recognized by the end of the first half of 2024.

Excluded from the $ 280.0 million of estimated aggregate charges are potential costs we may incur associated with excess volumes of CTO that we may be obligated to purchase through October 2025 under existing long-term CTO supply contracts.

We intend to manage our CTO inventories by reselling excess volumes in the open market which, based on what we believe to be market rates today, may result in $ 30.0 million to $ 80.0 million of incremental losses in 2024.

The charges we currently expect to incur in connection with these actions are subject to a number of assumptions and risks, and actual results may differ materially.

We may also incur other material charges not currently contemplated due to events that may occur as a result of, or in connection with, these actions.

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-Q

Item 1. Financial Statements