What changed in this filing

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Item 1A. Risk Factors

2025-02-19 compared with 2024-02-22 · 83 added, 91 removed, 200 unchanged (47% of the section changed)

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Operational Risks

There may be negative impacts to our business arising out of the closure of our plant in DeRidder, Louisiana.

On November 1, 2023, we announced our plan to close our plant in DeRidder, Louisiana (the “DeRidder Plant”).

The anticipated timing, charges, and costs of the closure of the DeRidder Plant could materially differ from our estimates if the plant closure results in adverse legal or regulatory actions, if personnel required to effect the shutdown become unavailable, or we are affected by other factors not currently contemplated.

As a result of the Deridder Plant closing and 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 needed CTO volumes.

We intend to manage our CTO inventories by reselling excess volumes in the open market.

Depending on the then current market price for CTO at the time of such sales, we may have to sell the CTO at a loss when our contracted price exceeds market, which may adversely affect our financial condition and results of operations.

The repositioning of our Performance Chemicals business has reduced our net sales and may otherwise adversely affect our financial condition and results of operations during this transition period.

On November 1, 2023 and July 31, 2024, we announced a number of strategic actions designed to further reposition our Performance Chemicals reportable segment to improve the profitability and reduce the cyclicality of the Company as a whole.

These initiatives, including the closure of our plants in DeRidder, Louisiana and Crossett, Arkansas (the “Plant Closures”), focus on reducing exposure to lower margin end-use markets of our industrial specialties product line.

The anticipated timing, charges, costs and results of the closure of the Plant Closures and other current or future repositioning activities are subject to a number of assumptions and risks and the actual results could materially differ from our estimates if such actions result in adverse legal or regulatory actions, if personnel required to effect the shutdown become unavailable, or we are affected by other factors not currently contemplated.

These actions have, and may continue to, adversely affect the Company’s financial condition and results of operations.

Our review of strategic alternatives for the industrial specialties product line and North Charleston, South Carolina crude tall oil (“CTO”) refinery may not result in a transaction and any transaction entered into may not yield the expected results or benefits.

On January 16, 2025, we announced plans to explore strategic alternatives for our industrial specialties product line and North Charleston, South Carolina CTO refinery, including a potential divestiture of portions of the North Charleston site.

While it is our intent to identify and pursue a transaction that will strengthen the Performance Chemicals segment and improve the Company’s financial performance, and benefit our stockholders by enabling us to focus on higher growth and higher margin opportunities, there can be no guarantee that this strategic review will result in such a transaction or achieve such expected results or benefits.

We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.

We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., steam, compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our Covington, Virginia Performance Materials facility, at our Warrington, United Kingdom Advanced Polymer Technologies facility, and at the following Performance Chemicals facilities:

Crossett, Arkansas and North Charleston, South Carolina.

The third party providers of critical and non-critical services at our location in North Charleston, South Carolina have announced the cessation of these services.

The services in North Charleston are currently being wound down, with only certain water supply and treatment services to be transitioned in 2024.

We have incurred and expect to incur significant costs to provide these services ourselves or obtain these services from other third parties.

While we are executing our plans to minimize disruption to our business, there is no guarantee that we will be able to replace these services on a timely and cost-effective basis.

The costs associated with replacing these services may be significant and any delay in our ability to replace these services could result in interruptions to our operations, both of which could adversely affect our financial condition and results of operations.

For the third-party services that remain, any such services would be at risk if any of the counterparties were to idle or permanently shut down the associated mill or plant, or if operations at the associated mill or plant were disrupted due to natural or other disaster, or by reason of strikes or other labor disruptions, or if there were a significant contractual dispute between the parties.

We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., steam, compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our Covington, Virginia Performance Materials facility and at our Warrington, United Kingdom Advanced Polymer Technologies facility.

The services provided by third parties would be at risk if any of the counterparties were to idle or permanently shut down the associated mill or plant, or if operations at the associated mill or plant were disrupted due to natural or other disaster, or by reason of strikes or other labor disruptions, or if there were a significant contractual dispute between the parties.

The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has announced plans to discontinue operations at its Warrington, United Kingdom plant, but continues to provide services to us.

In the event that the applicable counterparty were to fail to provide the contracted services, we would be required to obtain these services from other third parties, most likely at an increased cost, or to expend capital to provide these services ourselves.

The expenses associated with obtaining or providing these services, as well as any interruption in our operations as a result of the failure of the counterparty to provide these services, may be significant and may adversely affect our financial condition and results of operations.

Furthermore, in the event that WestRock’s Covington, VA paper mill’s wastewater treatment operations do not comply with permits or applicable law and WestRock is unable to determine the cause of such non-compliance, then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.

Furthermore, in the event that Smurfit WestRock’s Covington, VA paper mill’s wastewater treatment operations do not comply with permits or applicable law and Smurfit WestRock is unable to determine the cause of such non-compliance,

then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.

These costs and expenses may be significant and may adversely impact our financial condition and results of operations.

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Disruptions at any of our facilities could negatively impact our production, financial condition and results of operations.

Disruptions to any of our manufacturing operations or other facilities, due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood, fire or other unanticipated problems such as labor difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, could cause operational disruptions of varied duration.

Disruptions to any of our manufacturing operations or other facilities due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, could cause operational disruptions of varied duration.

Also, many of our production employees are governed by collective bargaining agreements (“CBAs”).

The CBA at our Warrington, United Kingdom Advanced Polymer Technologies manufacturing facility with GMB Union expired on January 15, 2024.

The parties began contract renewal negotiations during the first quarter of 2024 and continue to operate under the expired CBA while negotiations are pending.

Further, the CBA at our Crossett, Arkansas Performance Chemicals' manufacturing facility with the International Association of Machinists and Aerospace Workers Union ("IAM") expires on March 1, 2024.

The parties began contract renewal negotiations during the first quarter of 2024.

The CBA at our Warrington, United Kingdom Advanced Polymer Technologies manufacturing facility with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.

The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers on behalf of its affiliated Local Union 464 expired on January 15, 2025.

The parties began negotiations in the fourth quarter of 2024 and will continue to operate under the same terms and conditions while negotiations are pending.

The CBA at our Crossett, Arkansas Performance Chemicals manufacturing facility with the International Association of Machinists and Aerospace Workers Union ("IAM") expires on March 1, 2025.

The parties will begin contract renewal negotiations during the first quarter of 2025.

Further, the CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers will expire on December 1, 2025.

It is anticipated that the parties will begin contract renewal negotiations during the fourth quarter of 2025.

While the Company has generally positive relations with its labor unions, there is no guarantee the Company will be able to successfully negotiate new union contracts without work stoppages, labor difficulties or unfavorable terms.

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Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.

In certain cases, we have products, such as our extruded honeycomb and caprolactone products, that are only made at one facility.

In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, and industrial specialties products, that are only made at a single site, such as our Covington, Virginia Performance Materials plant .

While we have some redundancies within the facilities that are the sole manufacturer of certain products, we have limited ability to make these products at other facilities .

Supply Chain Risks

Our Performance Chemicals segment is highly dependent on CTO as a raw material, which is in limited supply, and has been and may continue to be subject to significant price increases resulting in costs that we may not be able to pass through to customers.

CTO is a key raw material in our industrial specialties and some of our road technologies product lines within our Performance Chemicals segment.

Availability of CTO is directly linked to (as it is a co-product of) the production output of kraft paper mills using softwood, primarily pine trees, as their feedstock, (i.e., pulp).

Softwood pulp is the predominant fiber source for packaging grades of paper as well as fluff pulp for personal care products.

As a result, there is a finite global supply of CTO, with global demand for softwood pulp driving the global supply of CTO.

Further, some pulp or paper mills may choose to consume their production of CTO to meet their energy needs or reduce their carbon footprint rather than sell the CTO to third parties, further constraining the availability of CTO and increasing inflationary pricing pressure as a result.

Weather conditions have in the past and may in the future affect the availability and quality of pine trees used in the kraft pulping process and, therefore, the availability of CTO that meets Ingevity’s quality standards.

Geopolitical risk factors could constrain C TO availability.

For example, sanctions imposed on Russia in 2022 have constrained the global CTO supply by approximately 10 perc ent.

CTO-based biofuel has been deemed to meet the EU’s Renewable Energy Directive, second phase (“RED II”) biofuel sustainability criteria.

As a consequence of RED II and related government incentives, there has been a significant increase in demand for CTO and its derivatives resulting in exponential price increases for CTO and its derivatives.

Pricing for CTO (which accounted for approximately 26 percent of all of our cost of sales and 51 percent of our raw materials purchases for 2023) is subject to pricing pressures due to limited supply elasticity of the product and competing demands for its use.

The impacts of RED II coupled with a reduction in demand in industrial end markets have negatively impacted our ability to pass through any increases in our cost of CTO to our customers, with a resulting negative impact on our results of operations.

If we remain unable to pass through the increased CTO costs to our customers or transition to lower cost raw materials on a timely and cost-effective basis, our results of operations could continue to be negatively impacted and we may be placed at a competitive disadvantage relative to certain competitors who rely on different primary raw materials or who have more favorable terms with their CTO suppliers.

We typically source our CTO needs through supply contracts.

Some of our CTO supply contracts permit periodic adjustment or negotiation of pricing and other terms that may result in an unfavorable impact on our financial results.

There can be no guarantee that pricing, CTO volume, and other terms will not be materially impacted as a result of these adjustments or negotiations.

If any of our suppliers fail to meet their respective obligations under our supply agreements or we are otherwise unable to procure an adequate supply of CTO, or are unable to pass through significant cost increases to customers, our current level of production could be constrained and our results of operations could be materially and adversely affected.

We purchase a variety of other raw materials, which are also subject to pricing pressures and limited availability;

We purchase a variety of raw materials, which are subject to pricing pressures and limited availability;

inability to procure these raw materials or to pass on price increases could negatively impact our operations or financial results.

The Company purchases a variety of other raw materials from third parties for its manufacturing operations, including, but not limited to, hardwood sawdust, phosphoric acid, ethylene amines, black liquor, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates.

The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, CTO, hardwood sawdust, phosphoric acid, ethylene amines, black liquor, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates.

Each raw material is subject to its own supply and demand dynamics which may, at times, limit availability and/or cause price volatility.

The Company may be unable to procure the quantities of raw materials it needs which could negatively impact our operations or we may be unable to pass through price increases to our customers which could negatively impact our financial results.

For example, our Performance Chemicals segment produces many products derived from lignin, which, like CTO, is a co-product of the kraft pulping process.

Lignin is in limited supply and if we are unable to secure a sufficient amount of lignin on a cost-effective basis we could suffer disruption to our road technologies business, which could negatively impact our financial results and our results of operations.

Disruptions within our supply chain have negatively impacted, and could continue to negatively impact, our production, financial condition and results of operations.

We have been, and could continue to be, adversely affected by disruptions within our supply chain and transportation network.

For example, our Performance Chemicals segment produces many products derived from CTO and lignin, which are co-products of the kraft pulping process.

While we have taken aggressive action to limit the Company’s exposure to the volatility of the CTO market, its limited availability and competing demands for its use could again impact our financial results and results of operations if we are unable to source a sufficient supply at a reasonable cost.

Lignin is also in limited supply and if we are unable to secure a sufficient amount of lignin on a cost-effective basis we could suffer disruption to our road technologies product line, which could negatively impact our financial results and our results of operations.

Disruptions within our supply chain could negatively impact, our production, financial condition and results of operations.

We could be adversely affected by disruptions within our supply chain and transportation network.

Our products are transported by truck, rail, barge or ship primarily by third-party providers.

The costs of transporting our products could be negatively affected by factors outside of our control, including rail service interruptions or rate increases, extreme weather events, tariffs, rising fuel costs, and capacity constraints.

Recently, the Panama Canal drought and Suez Canal attacks have, and could continue to, adversely impact the reliability and cost of our export shipments to customers.

The costs of transporting our products could be negatively affected by factors outside of our control, including rail service interruptions or rate increases, extreme weather events, local hostilities, tariffs, rising fuel costs, and capacity constraints.

For example, port strikes within the U.S.

have adversely impacted, and could continue to adversely impact, the reliability and cost of our export shipments to customers.

Significant delays or increased costs relating to transportation could materially affect our financial condition and results of operations.

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governmental agencies, and therefore, when government spending is reduced, our customers’ demand for our products is similarly reduced.

While we do not do business directly with governmental agencies, our customers provide paving services to, for example, the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.

While we do not do business directly with governmental agencies, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.

Government business is, in general, subject to special risks and challenges, including:

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For example, demand for our Advanced Polymer Technologies products in the automotive market, where our products are formulated into automotive resins and coatings and various components, may be affected by technological advances, changing automotive original equipment manufacturer ("OEM") specifications, and global automobile production levels.

Demand for our Advanced Polymer Technologies products which are sold into footwear adhesives and structural support, may be affected by consumer discretionary spending and changes in consumer preferences.

Additionally, sales of our industrial specialties products may be negatively impacted due to reduced global industrial demand.

The impact of these changes may lead to increased competition from competing and substitute products and downward pricing pressures on our customers, and therefore, our Advanced Polymer Technologies and industrial specialties product offerings.

Demand for our Advanced Polymer Technologies products which are sold into automotive applications, footwear adhesives and structural support, may be affected by consumer discretionary spending and changes in consumer preferences.

Additionally, sales of our industrial specialties and Advanced Polymer Technologies products have, and may continue to be, negatively impacted due to reduced global industrial demand.

The impact of these changes may lead to increased competition from competing and substitute products and downward pricing pressures on our customers, and therefore, on our Advanced Polymer Technologies and industrial specialties product offerings.

We face competition from new technologies and new or emerging competitors.

Our industries and the end-use markets into which we sell our products experience periodic technological change and product improvement.

Our industries and the end-use markets into which we sell our products experience periodic technological change and product innovation.

Our future growth depends on our ability to gauge the direction of commercial and technological progress in key end-use markets, to swiftly identify and respond to disruptive technologies, and to fund and successfully develop, manufacture, and market products in such changing end-use markets.

If we fail to keep pace with the evolving or disruptive technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected .

If we fail to keep pace with the evolving or disruptive

technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected .

In the Performance Materials segment, there is competition from other activated carbon manufacturers.

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The process of designing and developing new technology and related products is complex, costly, and uncertain and may require us to retain and recruit talent in areas of expertise outside of our current core competencies.

There can be no assurance that such advances in technology will be feasible or will occur in a timely and efficient manner .

There can be no assurance that such advances in technology will be feasible or successful, or will occur in a timely and efficient manner .

In the Advanced Polymer Technologies segment, there is competition from other caprolactone manufacturers, including new market entrants.

If we are unable to successfully compete in our end-use markets, our financial condition and results of operations could be adversely affected.

Certain of our products face competition from substitute products where the costs of different raw material inputs can impact the price competitiveness of our products and negatively impact our sales and/or profits as we respond to substitute product competition.

Gum rosin-based products and hydrocarbon resins compete with our TOR-based resins in the adhesives market.

The price of gum rosin has a significant impact on the market price for TOR and rosin derivatives and is driven by labor rates for harvesting, land leasing costs, and various other factors that are not within our control.

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Availability and pricing are determined by the supply/demand dynamics for synthetic rubber as well as the price of crude oil as the feedstock for isoprene and various other factors that are not within our control.

Animal and plant based fatty acids compete with TOFA products in lubricant and industrial specialties.

The market price for our TOFA and oleochemical products are impacted by the prices of other fats and

oils, and the prices for other fats and oils are driven by actual and expected harvest rates, petroleum oil prices, and the biofuel market.

Animal and plant based fatty acids compete with TOFA products in industrial specialties.

The market price for our TOFA and oleochemical products are impacted by the prices of other fats and oils, and the prices for other fats and oils are driven by actual and expected harvest rates, petroleum oil prices, and the biofuel market.

Other monomers, thermoplastics, and polyols compete with our caprolactone-based products.

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Additionally, the price of energy may directly or indirectly impact demand, pricing or profitability for certain of our products.

As petroleum oil prices can change rapidly, Ingevity products may be disadvantaged due to the fact that CTO is a thinly traded commodity with pricing commonly established for periods ranging from one quarter to one-year periods of time.

As petroleum oil prices can change rapidly, Performance Chemical segment products may be disadvantaged due to the fact that CTO is a thinly traded commodity with pricing commonly established for periods ranging from one quarter to one-year periods of time.

Due to this, alternative technologies which compete with product offerings provided by Ingevity may be advantaged from time to time in the marketplace.

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In addition, pricing for competing oleochemicals such as palm or soybean is likely to put further pressure on pricing of the Company’s products during periods of depressed petroleum prices.

We are diversifying our raw materials to include oleochemical based products, however, there can be no guarantee that we will be able to produce and commercialize oleochemical based products on an efficient and profitable basis in the near term.

We are dependent on certain large customers.

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The secure processing, storage, and transmission of sensitive, confidential, and personal data is critical to our operations and business strategy.

We have instituted a system of security policies, procedures, capabilities, internal controls and audits based on our pursuit of ISO 27001 certification, designed to protect this information.

We have instituted a system of security policies, procedures, capabilities, internal controls and audits aligned with our ISO 27001 certification, designed to protect this information.

Additionally, we engage third-party threat detection, penetration testing, and monitoring services which includes a global cybersecurity incident response team.

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GDPR, which applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries, mandates new compliance obligations and imposes significant fines and sanctions for violations.

CCPA requires companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.

CCPA requires

companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.

Implementing and complying with these laws and regulations may be more costly or take longer than we anticipate, or could otherwise affect our business operations.

Information security breaches, cyber incidents, and disruptions, or failure to comply with laws and regulations related to information security or privacy, could result in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties or judgements, disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, which could adversely affect our business, financial condition or results of operations .

Complications with the design or implementation of our new enterprise resource planning (“ERP”) system could adversely impact our business and operations.

We have recently completed a complex, multi-year implementation of a new ERP system that was necessary due to the finite life of the existing operating system.

The ERP system implementation required the integration of the new ERP system with multiple new and existing information systems and business processes in order to maintain the accuracy of our books and records and to provide our management team with information important to the operation of our business.

If the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be negatively impacted .

International Operations Risks

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In 2024, sales to customers outside of the U.S.

made up approximately 37 percent of our total sales, and we sell our products to customers in approximately 75 c ountries.

made up approximately 42 percent of our total sales, and we sell our products to customers in approximately 70 countries.

We have exposure to risks of operating outside the U.S., including:

fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen and Chinese renminbi;

fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen, Brazilian Real, and Chinese renminbi;

restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.;

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earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

geopolitical and economic instability, including the wars in Ukraine and the Gaza region;

geopolitical and economic instability, including the wars in Ukraine and the Middle East;

general country strikes or work stoppages;

unforeseen public health crises, such as pandemic and epidemic diseases;

import and export restrictions, tariffs, and other trade barriers or retaliatory actions;

import and export restrictions;

difficulties in maintaining overseas subsidiaries and international operations;

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and government mandated price controls.

Tariffs and other trade barriers or retaliatory actions could also negatively impact our business.

For example, the new U.S.

administration has increased the tariff on Chinese products to 10 percent and has imposed, or is considering imposing, tariffs on products from other countries.

Whether and to what extent these tariffs will be imposed is presently unknown, however such tariffs (and any retaliatory action taken as a result) could lead to increased costs, which could cause decreased customer demand for our products as well as our customers’ products that incorporate our products due to increased pricing, and adversely affect our financial condition and results of operations.

Any one or more of the above factors could adversely affect our international operations and could significantly affect our financial condition and results of operations.

For example, Chinese government agencies have in the past required companies to reduce or suspend manufacturing operations from time to time, with little or no notice, for reasons such as energy restrictions and air quality concerns.

For example, Chinese government agencies ha ve in the past required companies to reduce or suspend manufacturing operations from time to time, with little or no notice, for reasons such as energy restrictions and air quality concerns.

The timing and length of these suspensions, which are expected to continue occurring, are difficult to predict.

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operations, which could reduce demand for our products.

international operations and activities expand, we inevitably have greater exposure to the risks associated with operating in many foreign countries .

As our international operations and activities expand, we inevitably have greater exposure to the risks associated with operating in many foreign countries .

Legal and Regulatory Risks

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Our patents and other intellectual property rights may be challenged, invalidated, circumvented, and rendered unenforceable or otherwise compromised.

We are currently involved in several legal actions relative to the intellectual property associated with the 844 Patent.

We are currently involved in several legal actions related to the intellectual property associated with

the 844 Patent.

On September 15, 2021, a jury in the lawsuit filed by the Company against BASF Corporation for patent infringement in the U.S.

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

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 and our motion seeking judgment as a matter of law, or a new trial in the alternative.

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 may seek post-judgment interest and attorneys’ fees and costs in amounts that they will have to prove at a future date.

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District Court dismissed the Company’s patent infringement claims against BASF alleging BASF infringed the 844 Patent and invalidated some, but not all, of the claims in our 844 patent, which expired in March 2022 .

The Company disagrees with the verdict, including the court’s application of the law and entry of judgment, and intends to appeal.

The Company also intends to challenge the U.S.

District Court’s previous dismissal of the Company’s patent infringement claims against BASF in the Delaware Proceedings.

The final resolution of these matters could take up to twenty-four months and there can be no assurance that the Company will prevail in its attempts to challenge the verdict.

The Company disagrees 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.

As of December 31, 2024 , the final resolution of these matters could take up to 15 months and there can be no assurance that the Company will prevail in its attempts to challenge the verdict.

Because the outcome of the Company’s post-trial motions and possible appeal is difficult to predict, as of December 31, 2024, the Company has accrued a total of $85.0 million , the full amount of the jury’s verdict (including treble damages).

The amount accrued for this matter is included within Other liabilities on the consolidated balance sheet as of December 31, 2024, and the charge is included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021.

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

As of December 31, 2024 and 2023, the total amount accrued, inclusive of post-judgement interest, was $91.4 million and $87.4 million, respectively.

The amount of any liability the Company may ultimately incur related to the Delaware Proceeding could be more or less than the amount accrued.

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We also rely heavily upon unpatented proprietary technology, know-how, and other trade secrets to maintain our competitive position.

While we maintain policies to enter into confidentiality agreements with our employees and third parties to protect our proprietary expertise and other trade secrets, these agreements may not be enforceable or, even if legally

enforceable, we may not have adequate remedies for breaches of such agreements.

We also may not be able to readily detect breaches of such agreements.

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For those countries that have not significantly regulated gasoline vapor emissions, enacting more stringent regulations governing gasoline vapor emissions represents a significant upside to our Performance Materials’ automotive carbon business.

However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or shelved entirely, in one or more countries or regions.

As the adoption of more stringent regulations governing gasoline vapor emissions is expected to drive significant growth in our automotive carbon applications, the failure to enact such regulations will have an impact on the growth prospects for these products .

However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or

shelved entirely, in one or more countries or regions.

As the adoption of more stringent regulations governing gasoline vapor emissions is expected to drive significant growth in our automotive carbon applications, the failure to enact such regulations would have a negative impact on the growth prospects for these products .

Our business involves hazards associated with chemical manufacturing, storage, transportation and disposal;

the legal and regulatory environment related to such chemicals and other environmental impacts (such as climate change and extreme weather) could require expenditures or changes to our product formulations and operations.

the legal and regulatory environment related to such chemicals could require expenditures or changes to our product formulations and operations.

There are hazards associated with the chemicals we manufacture and the related storage and transportation of our raw materials, including common solvents, such as toluene and methanol, and reactive chemicals, such as acrylic acid, all of which fall under the OSHA Process Safety Management Code.

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These hazards may cause personal injury and loss of life, damage to property, and contamination of the environment, which could lead to government fines, work stoppage injunctions, lawsuits by injured persons, damage to our public reputation and brand, and diminished product acceptance.

While we have insurance coverage intended to assist with any financial impacts the financial resources of the Company could be impacted.

If such actions are determined adversely to us, or there is an associated economic impact on our business, we may have inadequate insurance or cash flow to offset any associated costs .

Increasing weather-related impacts on our operations and plant sites may impact the cost or availability of insurance.

Furthermore, the potential impact of climate change and related regulations on our suppliers and customers is highly uncertain and there can be no assurance that it will not have an adverse effect on the availability over time of our suppliers’ and customers’ businesses, and on our financial condition and results of operations .

Our operations are subject to a wide range of general and industry-specific environmental laws and regulations;

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Additional regulation of or requirements for such chemicals could require us to change our operations, and these changes could affect the quality or types of products we manufacture and/or materially increase our costs .

Increased focus by governmental entities on environmental issues and sustainability may result in new or increased regulations.

Changes in environmental laws and regulations, or their application, could subject Ingevity to significant additional

capital expenditures and operating expenses in future years.

Increased focus by governmental entities on environmental issues and sustainability have resulted in a complex landscape of new or increased regulations.

Changes in environmental laws and regulations, or their application, could subject Ingevity to significant additional capital expenditures and operating expenses.

Additionally, changes in the regulation of greenhouse gases, as well as future climate change laws and regulations, depending on their nature and scope, could subject our operations to significant additional costs or limits on operations.

Our manufacturing facilities use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gas that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.

Our manufacturing facilities use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.

Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in facilities and equipment or limit our ability to grow.

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Independent of any such regulation, increased public awareness and adverse publicity about potential impacts on climate change or environmental harm from us or our industry could harm our reputation or otherwise impact Ingevity adversely.

In recent years, investors have also begun to show increased interest about sustainability and climate change as it relates to their investment decisions.

We have set targets for greenhouse gas reductions and related sustainability goals.

In recent years, some investors have also begun to show increased interest about sustainability and climate change as it relates to their investment decisions.

We have set targets for greenhouse gas emissions and related sustainability goals.

There can be no assurance that we will meet these targets and goals.

If we fail to achieve our sustainability goals or reduce our impact on the environment or if we are unable to respond or are perceived to be inadequately responding to sustainability concerns, we may receive adverse publicity, and certain investors may divert from, or avoid investing in, our securities, which could have a negative impact on our business and reputation .

Adverse weather conditions and other environmental impacts (such as climate change and extreme weather) may impact our operations and the demand for some of our products, which could negatively affect our financial condition and results of operations.

Our road technologies product line is seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year.

Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the road technologies product line if such conditions result in lower customer demand due to a shortened season.

Increasing weather-related impacts on our operations and plant sites may impact the cost or availability of insurance.

Financial and Economic Risks

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What changed 10-K

Item 1A. Risk Factors