What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-19 compared with 2024-02-22 · 420 added, 371 removed, 1615 unchanged (33% of the section changed)

24 unchanged sentences

February 19, 2025

FORTSON /S/ MARY DEAN HALL

Fortson Mary Dean Hall

President and Chief Executive Officer Executive Vice President and Chief Financial Officer

/S/ LUIS FERNANDEZ-MORENO /S/ MARY DEAN HALL

Luis Fernandez-Moreno Mary Dean Hall

Interim President and Chief Executive Officer Executive Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

28 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Interim and Annual Goodwill Impairment Assessments – Performance Chemicals Reporting Unit

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $ 527.5 million as of December 31, 2023, of which $ 349.4 million relates to the Performance Chemicals reporting unit.

Annual Goodwill Impairment Assessment – Advanced Polymer Technologies Reporting Unit

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated goodwill balance was $175.2 million as of December 31, 2024, of which $170.9 million relates to the Advanced Polymer Technologies reporting unit.

Management conducts an annual review of goodwill for potential impairment at October 1, or sooner if events or changes in circumstances indicate that the fair value of a reporting unit is below its carrying value.

During the third quarter of 2023, management concluded that a triggering event occurred for the Performance Chemical’s reporting unit and, as a result management performed an analysis of the reporting unit’s goodwill as of September 1, 2023.

The fair value of the reporting unit was determined using both the income approach and market approach.

The fair value of the reporting unit was determined by management using both the income approach and market approach.

The income approach determines fair value based on a discounted cash flow model derived from a reporting unit’s long-term forecasted cash flows, and the market approach determines fair value based on the application of earnings multiples of comparable companies to projected earnings of the reporting unit.

1 unchanged sentence

The calculated estimated fair value of the reporting unit reflects a number of significant management assumptions and estimates including forecasted revenue growth rates, forecasted Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) margins, and discount rate.

Management concluded that there was no impairment for the quarter ended September 30, 2023 or for the year ended December 31, 2023.

The principal considerations for our determination that performing procedures relating to the interim and annual goodwill impairment assessments of the Performance Chemicals reporting unit is a critical audit matter are (i) the significant judgment by management when determining the fair value estimates of the reporting unit, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenue growth rates, forecasted EBITDA margins, and discount rate used in the income approach;

Management concluded that there was no impairment for the year ended December 31, 2024.

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

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenue growth rates, forecasted EBITDA margins, and discount rate used in the discounted cash flow model;

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

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s interim and annual goodwill impairment assessments, including controls over the valuation of the Performance Chemicals reporting unit.

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

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

These procedures included testing the effectiveness of controls relating to management’s annual goodwill impairment assessment, including controls over the valuation of the Advanced Polymer Technologies reporting unit.

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

(ii) evaluating the appropriateness of the income and market approaches;

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

and (iv) evaluating the reasonableness of the significant assumptions used by management related to the forecasted revenue growth rates, forecasted EBITDA margins, and discount rate.

Evaluating management’s significant assumptions related to the forecast of forecasted revenue growth rates and forecasted EBITDA margins involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of the Performance Chemicals reporting unit;

(ii) the consistency with external market data;

15 unchanged sentences

Restructuring and other (income) charges, net 186.2 170.2 13.8

Goodwill impairment charge 349.1 — —

Acquisition-related costs 0.3 3.6 5.0

17 unchanged sentences

Foreign currency translation adjustment ( 18.6 ) 20.2 ( 74.9 )

Unrealized gain (loss) on net investment hedges, net of tax provision (benefit) of zero , $ 3.2 , and $ 2.3

Total foreign currency adjustments, net of tax provision (benefit) of zero , $ 3.2 , and $ 2.3

Reclassification of foreign currency translation losses ( 0.2 ) — —

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

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

( 18.8 ) 20.2 ( 64.2 )

43 unchanged sentences

Total Liabilities 1,827.4 1,991.9

Commitments and contingencies (Note 18)

Preferred stock (par value $ 0.01 per share;

7 unchanged sentences

Accumulated other comprehensive income (loss) ( 41.4 ) ( 26.7 )

Treasury stock, common stock, at cost ( 7,213,421 and 5,929,183 shares at 2023 and 2022, respectively)

Treasury stock, common stock, at cost ( 7,279,786 shares - 2024 and 7,213,421 shares - 2023)

( 512.6 ) ( 509.5 )

26 unchanged sentences

Common stock issued 183.7 — — — — — —

Exercise of stock options, net 41.2 — 2.2 — — — 2.2

Tax payments related to vested restricted stock units — — — — — ( 3.1 ) ( 3.1 )

Share repurchase program — — — — — ( 92.1 ) ( 92.1 )

Share-based compensation plans — — 11.9 — — — 11.9

13 unchanged sentences

Restructuring and other (income) charges, net 186.2 170.2 13.8

CTO resales 52.7 22.0 —

LIFO reserve ( 18.7 ) 72.9 10.0

Share-based compensation 11.9 10.6 16.1

Gain on sale of strategic investment ( 19.3 ) — —

(Gain) loss on strategic investment 11.4 ( 19.3 ) —

Pension and other postretirement benefit costs 1.5 1.6 1.4

Goodwill impairment charge 349.1 — —

Other non-cash items 17.0 36.2 18.4

8 unchanged sentences

Income taxes ( 13.8 ) 6.4 4.9

Litigation verdict charge and interest 3.0 — 85.0

Operating leases ( 21.7 ) ( 22.5 ) ( 18.8 )

Pension contribution ( 2.0 ) — —

Restructuring and other spending ( 59.3 ) ( 44.0 ) ( 13.8 )

17 unchanged sentences

Proceeds from revolving credit facility and other borrowings 404.5 376.3 1,164.7

Payments on revolving credit facility ( 382.9 ) ( 336.7 ) —

Payments on revolving credit facility and other borrowings ( 470.6 ) ( 382.9 ) ( 336.7 )

Payments on long-term borrowings — — ( 628.1 )

2 unchanged sentences

Financing lease obligations, net ( 1.0 ) ( 0.7 ) ( 0.9 )

Borrowings (repayments) of notes payable and other short-term borrowings, net — — ( 1.9 )

Tax payments related to withholdings on vested equity awards ( 3.1 ) ( 4.8 ) ( 2.2 )

46 unchanged sentences

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, publication inks, oil exploration and production and automotive components.

We operate in three reporting segments:

Our products are used in a variety of demanding applications, including adhesives, agrochemicals, asphalt paving, bioplastics, coatings, elastomers, lubricants, paint for road markings, oil drilling, and automotive components.

We operate in three reportable segments:

Performance Materials, Performance Chemicals and Advanced Polymer Technologies.

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.

Our Performance Materials segment manufactures products in the form of powder, granular, extruded pellets, extruded honeycombs, and activated carbon sheets.

1 unchanged sentence

To maximize the productivity of our manufacturing assets, we also produce several other activated carbon products for food, water, beverage, and chemical purification applications.

Our Performance Chemicals segment consists of our road technologies (previously named pavement technologies) and industrial specialties product lines.

Performance Chemicals products serve as critical inputs used in a variety of high-performance applications, including pavement construction, pavement preservation, pavement reconstruction and recycling, road markings (road technologies product line), as well as agrochemical dispersants, paper chemicals, and other diverse industrial uses (industrial specialties product line).

On November 1, 2023 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 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 $ 300.0 million of net sales.

The announced actions include 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 Advance Polymer Technologies reportable segment, as well as additional corporate and business cost reduction actions.

Our Performance Chemicals segment consists of our road technologies and industrial specialties product lines.

Performance Chemicals products serve as critical inputs used in a variety of high-performance applications, including pavement construction, pavement preservation, pavement reconstruction and recycling, and paint for road markings (road technologies product line), as well as agrochemical dispersants, lubricants, certain adhesives, rubber, and other diverse industrial uses (industrial specialties product line).

Our Advanced Polymer Technologies segment produces caprolactone and caprolactone-based specialty polymers for use in coatings, resins, elastomers, adhesives, bioplastics, and medical devices.

8 unchanged sentences

Actual results may differ from those estimates.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Cash equivalents:

7 unchanged sentences

Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.

Allowance for credit losses at December 31, 2023 and 2022, was $ 1.1 million and $ 0.5 million, respectively.

Allowance for credit losses at December 31, 2024 and 2023, were $ 0.6 million and $ 1.1 million, respectively.

Concentration of credit risk:

The financial instruments that potentially subject Ingevity to concentrations of credit risk are accounts receivable.

We limit our credit risk by performing ongoing credit evaluations and, when necessary, requiring letters of credit, guarantees, or collateral.

We limit our credit risk by performing ongoing credit evaluations and, when necessary, requiring

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

letters of credit, guarantees, or collateral.

Our largest customer as of December 31, 2024 had accounts receivable of $ 8.3 million and $ 7.5 million as of December 31, 2024 and 2023, respectively.

Sales to our largest customer were approximately four percent of total net sales for each of the years ended December 31, 2023, 2022, and 2021, respectively.

Sales to our largest customer were approximately six percent of total Net sales for the year ended December 31, 2024, and four percent of total Net sales for the years ended December 31, 2023, and 2022, respectively.

Sales to the automotive industry, which represents our largest industry concentration, were approximately 40 percent of our consolidated Net sales.

1 unchanged sentence

Inventories, net:

Inventories are valued at lower of cost or net realizable value, except for inventories determined using the last-in, first-out method (“LIFO”), which are valued at the lower of LIFO or market cost.

The value of our U.S.

inventories is determined using LIFO for the majority of our raw materials, finished goods, and production materials.

The value of all other inventories, including stores and supplies inventories and inventories of non-U.S.

operations, is determined by the first-in, first-out ("FIFO") or average costs methods.

We value our U.S.

inventories at the lower of cost or market, with cost for the majority of our U.S.

inventories determined using the last-in first-out (“LIFO”) basis.

We value all other inventories at the lower of cost and net realizable value, with cost determined using methods that approximate cost computed on a first-in first-out inventory valuation (“FIFO”) basis.

Elements of cost in inventories include raw materials, direct labor, and manufacturing overhead.

9 unchanged sentences

We expense routine repair and maintenance costs as we incur them.

We defer expenses incurred during planned major maintenance activities and record these amounts to Prepaid and other current assets on our consolidated balance sheet.

We defer expenses incurred during planned major maintenance activities and record these amounts to Prepaid and other current assets on our consolidated balance sheets.

Deferred amounts are recognized as expense ratably over the shorter of the estimated interval until the next major maintenance activity or the life of the deferred item.

4 unchanged sentences

The following table provides details on the useful lives and proportion of our machinery and equipment (“M&E”) in each useful life category.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

M&E Cost Depreciable Life in Years Types of Assets

12 unchanged sentences

lease term, currency, and the economic environment for the physical location of the leased asset.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

Our operating leases principally relate to the following leased asset classes:

4 unchanged sentences

Warehousing and storage facilities 3 to 10 years

Vehicles 3 to 5 years

Rail cars 0 to 10 years

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets.

Lease expense is recognized on a straight-line basis over the expected lease term.

9 unchanged sentences

Upon the retirement of the long-lived asset, we either settle the obligation for its recorded amount or incur a gain or loss.

The carrying amounts for the AROs for the years ended December 31, 2023 and 2022 are $ 12.9 million and $ 4.3 million , respectively, and are included in Accrued expenses and Other liabilities on the consolidated balance sheet.

The carrying amounts for the AROs for the years ended December 31, 2024 and 2023 are $ 16.3 million and $ 12.9 million , respectively, and are included in Accrued expenses and Other liabilities on the consolidated balance sheets.

Impairment of long-lived assets:

2 unchanged sentences

If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available.

If quoted market prices are not available, the estimate of fair value is based on various valuation techniques,

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

including a discounted value of estimated future cash flows.

If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows.

We report an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.

14 unchanged sentences

and (v) other relevant entity-specific events that impact our reporting units.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

The determination of whether goodwill is impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the estimated fair values of our reporting units.

3 unchanged sentences

It is possible that the assumptions used by management related to the evaluation may change or that actual results may vary significantly from management’s estimates.

Our fiscal year 2023 annual goodwill impairment test was performed as of October 1, 2023.

We determined that the fair value of our reporting units were in excess of their carrying value and therefore concluded that no goodwill impairment existed.

There were no events or circumstances indicating that goodwill might be impaired as of December 31, 2023.

No impairment charges have been recognized historically.

Other intangible assets are comprised of finite-lived intangible assets consisting primarily of brands (representing trademarks, trade names and know-how), customer contracts and relationships, and developed technology.

12 unchanged sentences

For strategic investments that are accounted for under the equity method of accounting, our initial investment is recorded at cost.

Subsequently, the carrying value for these investments will be impacted by our proportionate share of

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

undistributed earnings or loss, distributions, amortization or accretion of basis differences, and other-than-temporary impairments.

Subsequently, the carrying value for these investments will be impacted by our proportionate share of undistributed earnings or loss, distributions, amortization or accretion of basis differences, and other-than-temporary impairments.

Subsequent adjustments to our initial investment are recorded within Other (income) expense, net on the consolidated statement of operations.

15 unchanged sentences

generally, this occurs with the transfer of control of our products.

For certain limited contracts, where we are producing goods with no alternative use and for which we have an enforceable right to payment for performance completed to date, we are recognizing revenue as goods are manufactured, rather than when they are shipped.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

manufactured, rather than when they are shipped.

Revenues are presented as Net sales on the consolidated statements of operations.

20 unchanged sentences

Costs are expensed as incurred and primarily include employee compensation, technical equipment costs, material testing, and innovation-related expenses.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Restructuring and other (income) charges, net:

11 unchanged sentences

Non-operating income and expenses are included within Other (income) expense, net on the consolidated statement of operations.

Included within Other (income) expense, net, among other items, are gains and losses associated with crude tall oil ("CTO") resales.

As further described in Note 1 and Note 15, 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.

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

Included within Other (income) expense, net, among other items, are gains and losses associated with crude tall oil ("CTO") resales and CTO supply contract termination charges.

As further described in Note 15, due to the actions taken and the corresponding reduced CTO refining capacity, we were obligated, under an existing CTO supply contract, to purchase CTO volumes through 2025 at amounts in excess of required CTO volumes.

To manage this excess inventory, we sold CTO volumes (herein referred to as "CTO resales") in the open market.

Our Performance Chemicals reportable segment is in the business of producing, primarily from CTO-based feedstocks, derivative specialty chemicals for sale to third-party customers.

As a result of the Performance Chemicals’ repositioning, we are selling excess CTO volumes, which is outside of the ordinary course of business, that is, not a normal ongoing part of our operations and not core to our business.

As a result of the Performance Chemicals repositioning, we sold excess CTO volumes, which is outside of the ordinary course of business, that is, not a normal ongoing part of our operations and not core to our business.

The excess CTO volumes, calculated as the volume directly attributable to reduced CTO refining capacity as defined under the contractual terms of the CTO supply contract, on hand at period end will be valued at the lower of cost or expected selling price, less costs to sell.

Volumes on hand at period end and any pending CTO resale receivables will be recorded to Other current assets on the consolidated balance sheet.

Any liabilities associated with the purchases of the excess CTO volumes will be recorded to Accrued expenses on the consolidated balance sheet.

We will recognize the net gains or losses associated with the CTO resale activities within Other (income) expenses, net on the consolidated statement of operations.

Volumes on hand at period end and any pending CTO resale receivables will be recorded to Other current assets on the consolidated balance sheets.

Any payables associated with the purchases of the excess CTO volumes will be recorded to Accrued expenses on the consolidated balance sheets.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

recognize the net gains or losses associated with the CTO resale activities within Other (income) expenses, net on the consolidated statement of operations.

On July 1, 2024, we terminated our last long-term CTO supply contract.

As a result of the termination, the purchases under the CTO supply contract ended effective June 30, 2024.

The CTO resale activity described above ended in 2024 and no excess CTO volumes were on hand at December 31, 2024.

Income taxes:

14 unchanged sentences

In periods where we incur a net loss, stock-based compensation awards are excluded from the calculation of earnings per share as their inclusion would have an anti-dilutive effect.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Pension and postretirement benefits:

16 unchanged sentences

Our operating segments are Performance Materials, Performance Chemicals, and Advanced Polymer Technologies.

Our operating segments were determined based upon the nature of the products produced, the nature of the production process, the type of customer for the products, the similarity of economic characteristics, and the manner in which management reviews results.

Our operating segments were determined based upon the nature of the products produced, the nature of

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

the production process, the type of customer for the products, the similarity of economic characteristics, and the manner in which management reviews results.

Our chief operating decision maker evaluates the business at the segment level when making decisions about allocating resources and assessing the performance of Ingevity as a whole.

20 unchanged sentences

Cash flow hedges are derivative financial instruments designated as and used to hedge the exposure to variability in expected future cash flows that are attributable to a particular risk.

The derivative financial instruments that are

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

designated and qualify as a cash flow hedge are recorded on the consolidated balance sheet at fair value, and the changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the anticipated cash flows of the underlying exposures being hedged.

The derivative financial instruments that are designated and qualify as a cash flow hedge are recorded on the consolidated balance sheetsat fair value, and the changes in fair value of these hedging instruments are offset in part or in whole by corresponding changes in the anticipated cash flows of the underlying exposures being hedged.

The gains and losses arising from qualifying hedging instruments are reported as a component of Accumulated other comprehensive income (loss) (“AOCI”) located within the consolidated balance sheets and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

The reclassification gain or losses of the hedge from AOCI are recorded in the same financial statement caption on the consolidated statements of operations as the hedged item.

The reclassification gains or losses of the hedge from AOCI are recorded in the same financial statement caption on the consolidated statements of operations as the hedged item.

For example, designated cash flow hedges entered to minimize foreign currency exchange risk of forecasted revenue transactions are recorded to Net sales on the consolidated statements of operations when the forecasted transaction occurs.

Designated commodity cash flow hedges gains or losses recorded in AOCI are recognized within Cost of sales on the consolidated statements of operations when the inventory is sold.

Designated interest rate cash flow hedge gains or losses are recorded in Accumulated other comprehensive income (loss) AOCI and are recognized in Interest expense on the consolidated statements of operations on a straight-line basis over the remaining maturity of the underlying debt.

Net investment hedges:

Net investment hedges are defined as derivative or non-derivative instruments, which are designated as and used to hedge the foreign currency exposure of the net investment in certain foreign operations.

The net of the change in the hedge instrument and the item being hedged against for qualifying net investment hedges is reported as a component of the foreign currency adjustments ("CTA") within AOCI on the consolidated balance sheet.

The gains (losses) on net investment hedges are reclassified to earnings only when the related CTA are required to be reclassified, usually upon the sale or liquidation of the investment.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

Treasury stock:

25 unchanged sentences

Certain prior year amounts have been reclassified to conform with the current year's presentation.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

New Accounting Guidance

8 unchanged sentences

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 consolidated financial statements 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 Consolidated Financial Statements and related disclosures.

We adopted this standard which is effective beginning with our 2024 fiscal year Form 10-K, and it has been applied to all prior periods presented in the Consolidated Financial Statements.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

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.

1 unchanged sentence

The guidance is effective beginning with our 2025 fiscal year Consolidated Financial Statements.

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

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

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which is intended to enhance disclosures regarding significant expenses.

The purpose of the amendment is to provide readers of the financial statements with information to better understand an entity’s overall performance, assess potential future cash flows, and compare an entity's performance over time and with that of other entities.

The guidance is effective beginning with our 2027 fiscal year Consolidated Financial Statements.

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

Disaggregation of Net sales

The following tables present our Net sales disaggregated by product line and geography.

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

Years Ended December 31,

1 unchanged sentence

Performance Materials segment $ 609.6 $ 586.0 $ 548.5

Performance Chemicals segment

Road Technologies product line 342.3 369.8 241.3

369.8 241.3 195.4

Industrial Specialties product line (1)

Total $ 902.1 $ 875.1 $ 688.9

265.9 532.3 633.8

Performance Chemicals segment $ 608.2 $ 902.1 $ 875.1

Advanced Polymer Technologies segment $ 188.6 $ 204.0 $ 244.7

1 unchanged sentence

_______________

(1) Previously named Pavement Technologies

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

(1) The reduction in the industrial specialties product line from 2023 to 2024 was due to the repositioning action taken to improve the Performance Chemicals reportable segment, refer to Note 15 for more information.

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

2 unchanged sentences

North America (1)

$ 820.9 $ 1,069.5 $ 983.2

Asia Pacific (1)

346.0 364.0 398.7

Europe, Middle East, and Africa 187.0 215.5 242.2

1 unchanged sentence

Net sales $ 1,406.4 $ 1,692.1 $ 1,668.3

_______________

(1) Countries with Net sales in excess of 10 percent of consolidated Net sales for the years ended December 31, 2024, 2023, and 2022 are the U.S., which totaled $ 736.0 million, $ 972.1 million, and $ 897.1 million, respectively, and China, which totaled $ 184.3 million, $ 202.7 million, and $ 220.6 million, respectively.

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 from contracts with certain customers.

2 unchanged sentences

For all periods presented, we had no contract liabilities.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

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

Year Ended December 31,

5 unchanged sentences

_______________

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

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

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

Fair Value Measurements

25 unchanged sentences

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 $ 16.5 million and $ 14.9 million at December 31, 2024 and 2023, respectively.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

Nonrecurring Fair Value Measurements

There were no nonrecurring fair value measurements on the consolidated balance sheet during the years ended December 31, 2023 and 2022.

There were no nonrecurring fair value measurements on the consolidated balance sheetsduring the years ended December 31, 2024 and 2023.

Strategic Investments

1 unchanged sentence

The aggregate carrying value of all strategic equity method investments was $ 15.4 million and $ 16.0 million at December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, respectively, we had approximately $ 5.3 million and $ 5.6 million of unfunded commitments, associated with a venture capital fund investment accounted for under the equity method of accounting, which we anticipate will be paid over a period of 10 years.

During the first quarter of 2023, we sold a strategic equity method investment for $ 31.5 million, resulting in a $ 19.3 million gain, recorded within "Other (income) expense, net" on the consolidated statement of operations.

We recognized an additional $ 0.1 million gain associated with the equity method investment sale during the period ended December 31, 2024.

There were no adjustments to the carrying value of equity method investments for impairment for the periods ended, December 31, 2024 and 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 December 31, 2023 and 2022, respectively, we had approximately $ 5.6 million and $ 6.7 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 $ 1.7 million and $ 0.7 million at December 31, 2023 and 2022, respectively .

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Measurement Alternative Investments

The aggregate carrying value of all measurement alternative investments where fair value is not readily determinable totaled $ 71.9 million and $ 83.2 million at December 31, 2024 and 2023, 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 December 31, 2023 or 2022.

For the year ended December 31, 2024, the Company identified triggering events indicating that investments being accounted for under the measurement alternative may be impaired, and recognized impairment charges of $ 11.5 million, recorded in Other (income) expense, net on the consolidated statement of operations.

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

Restricted Investment

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

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

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

5 unchanged sentences

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 December 31, 2023 and 2022, the carrying value of our restricted investment, which is accounted for as HTM and therefore held at amortized costs, was $ 79.1 million and $ 78.0 million, net of an allowance for credit losses of $ 0.2 million and $ 0.6 million and included restricted cash of $ 15.4 million and $ 7.0 million, respectively.

At December 31, 2024 and 2023, the carrying value of our restricted investment was $ 81.6 million and $ 79.1 million, net of an allowance for credit losses of $ 0.2 million and $ 0.2 million, and included restricted cash of $ 18.2 million and $ 15.4 million, respectively.

The fair value at December 31, 2024 and 2023 was $ 80.3 million and $ 76.7 million, respectively, based on Level 1 inputs.

6 unchanged sentences

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

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

Debt and Finance Lease Obligations

At December 31, 2024 and 2023, the carrying value of finance lease obligations was $ 100.0 million and $ 101.1 million, respectively, and the fair value was $ 102.2 million and $ 105.7 million, respectively.

The fair value of our finance lease obligations is based on the period-end quoted market prices for the obligations, using Level 2 inputs.

The fair value of our finance lease obligation associated with our Performance Materials' Wickliffe, Kentucky manufacturing plant, 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 value, excluding debt issuance fees, of our variable rate debt was $ 821.4 million and $ 828.0 million as of December 31, 2023 and 2022, respectively.

The carrying value of our variable rate debt, excluding debt issuance fees and adjusted for our $ 200.0 million floating-to-fixed interest rate swap, was $ 555.2 million, and $ 821.4 million as of December 31, 2024 and 2023, respectively.

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

At December 31, 2024 and 2023, the carrying value of our fixed rate debt was $ 550.0 million and $ 550.0 million, respectively, and the fair value was $ 503.2 million and $ 494.6 million, respectively, based on Level 2 inputs.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Inventories, net

5 unchanged sentences

LIFO reserve ( 82.0 ) ( 100.7 )

( 100.7 ) ( 27.8 )

Inventories, net $ 226.8 $ 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.

As of December 31, 2024, approximately 41 percent, 11 percent, and 48 percent of our Inventories, net, were accounted for under the FIFO, average cost, and LIFO methods, respectively.

As of December 31, 2023, approximately 27 percent, 8 percent, and 65 percent of our Inventories, net, were accounted for under the FIFO, average cost, and LIFO methods, respectively.

The repositioning actions taken to improve our Performance Chemicals reportable segment has reduced overall LIFO inventory (refer to Note 15 for more detail).

During the year ended December 31, 2024, inventory quantities carried on a LIFO basis, primarily in our Performance Chemicals reportable segment domestic inventory, were reduced which led to liquidations of LIFO inventory quantities.

These reductions resulted in a pre-tax decrease of $ 6.9 million, recorded in Cost of sales on our consolidated statement of operations.

No such reductions occurred during the year ended December 31, 2023.

Property, Plant, and Equipment, net

Property, plant, and equipment, net consist of the following:

In millions 2024 2023

9 unchanged sentences

_______________

(1) As a result of the Performance Chemicals repositioning, as further described in Note 15, we accelerated the depreciation of certain property, plant and equipment assets in 2023.

This resulted in $ 46.3 million of additional expense in 2023, which is included in Restructuring and other (income) charges, net within the consolidated statement of operations.

(2) This includes finance leases related to machinery and equipment of $ 94.2 million and $ 94.3 million, and net carrying value of $ 22.7 million and $ 25.2 million;

buildings and leasehold improvements of $ 39.2 million and $ 39.6 million, and net carrying value of $ 32.3 million and $ 34.9 million, respectively.

Amortization expense associated with these finance leases is included within depreciation expense.

The payments remaining under these finance lease obligations are included within Note 13.

Depreciation expense was $ 81.5 million, $ 70.9 million, and $ 70.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.

(1) As a result of the Performance Chemicals repositioning, as further described in Note 15, we accelerated the depreciation of certain property, plant, and equipment assets in 2024 and 2023.

This resulted in $ 92.6 million and $ 46.3 million of additional expense for the years ended December 31, 2024 and 2023, respectively, which is included in Restructuring and other (income) charges, net within the consolidated statement of operations.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

(2) Includes finance leases related to machinery and equipment of $ 93.7 million and $ 94.2 million, and net carrying value of $ 20.3 million and $ 22.7 million;

buildings and leasehold improvements of $ 39.2 million and $ 39.2 million, and net carrying value of $ 29.9 million and $ 32.3 million, respectively.

Amortization expense associated with these finance leases is included within depreciation expense.

The payments remaining under these finance lease obligations are included within Note 13.

Depreciation expense, excluding accelerated depreciation included in Restructuring and other (income) charges, net, was $ 71.6 million, $ 81.5 million, and $ 70.9 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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

In millions Performance Materials Performance Chemicals Advanced Polymer Technologies Total

December 31, 2021 $ 4.3 $ 437.7 $ — $ 442.0

Foreign currency translation — ( 33.3 ) — ( 33.3 )

Goodwill acquired (1)

Balance as of December 31, 2022

$ 4.3 $ 514.2 $ — $ 518.5

December 31, 2022 $ 4.3 $ 514.2 $ — $ 518.5

Segment change reallocation — ( 165.0 ) 165.0 —

Foreign currency translation — 0.2 8.8 9.0

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

Balance as of December 31, 2023

$ 4.3 $ 349.4 $ 173.8 $ 527.5

(1) See Note 16 for more information about our acquisitions.

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 road 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.

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

Our fiscal year 2023 annual goodwill impairment test was performed as of October 1, 2023.

Goodwill impairment charge — ( 349.1 ) — ( 349.1 )

Foreign currency translation — ( 0.3 ) ( 2.9 ) ( 3.2 )

Balance as of December 31, 2024

Goodwill 4.3 349.1 170.9 524.3

Accumulated impairment losses — ( 349.1 ) — ( 349.1 )

$ 4.3 $ — $ 170.9 $ 175.2

Impairment Assessment(s) and Goodwill Impairment Charge

Impairment Assessment

Our fiscal year 2024 annual goodwill impairment assessment was performed as of October 1, 2024.

We determined that the fair value of our reporting units were in excess of their carrying value and therefore concluded that no goodwill impairment existed.

The results of our October 1st annual review calculated that our APT reporting unit headroom, defined as the percentage difference between the fair value of a reporting unit and its carrying value, is 12 percent.

Since the fair value of our APT reporting unit is higher than the carrying value, we have concluded that no impairment to goodwill is necessary.

Our analysis includes 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.

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

Goodwill Impairment Charge

Beginning in fiscal year 2023, we began to see depressed volumes in our industrial end markets, constraining our ability to offset the continued crude tall oil (“CTO”) price inflation we were experiencing, and negatively impacting earnings and cash flow within our Performance Chemicals reporting unit, particularly in our industrial specialties product line.

As a result, we concluded that a triggering event occurred in the third quarter of 2023.

Our third quarter 2023 impairment analysis included significant assumptions, such as the execution of several measures in 2023 to pursue greater cost efficiency, including a reorganization to streamline certain functions and reduce ongoing costs, and expectations of decreased CTO costs beginning in the second half of 2024.

We concluded that no impairment was necessary as a result of that third quarter 2023 interim analysis or at our annual impairment assessment, dated October 1, 2023.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

During the second quarter of 2024, our contracted long-term supplier of CTO provided new information regarding the cost of CTO for the second half of 2024, which significantly exceeded our forecasted costs, resulting in a triggering event for our Performance Chemicals reporting unit.

We performed an analysis of the reporting unit’s goodwill, intangibles, and long-lived assets.

Our analysis included significant assumptions such as:

revenue growth rate, EBITDA margin, and discount rate, which are judgmental, and variations in any assumptions could result in materially different calculations of fair value.

Our analysis reassessed the expected cash flows in light of current performance and expected lack of near term recovery in our industrial specialties product line, resulting in lower volume and profitability expectations.

As a result, we concluded that the carrying amount of the Performance Chemicals reporting unit exceeded its fair value, resulting in a non-cash goodwill impairment charge of $ 349.1 million, which represented all of the goodwill within the Performance Chemicals' reportable segment.

The charge was is included within Goodwill impairment charge on the consolidated statements of operations for the year ended December 31, 2024.

Specific to our long-lived assets, we determined that the undiscounted cash flows were in excess of the carrying values and therefore concluded that no impairment existed.

Other Intangible Assets

In millions Customer contracts and relationships Brands (1)

Developed Technology Other Total

Developed Technology Total

Gross Asset Value

December 31, 2022 $ 388.5 $ 89.2 $ 88.5 $ 566.2

Acquisitions (2)

88.6 15.0 23.5 — 127.1

Retirements — — — ( 0.5 ) ( 0.5 )

Foreign currency translation 8.0 3.4 3.2 14.6

1 unchanged sentence

Retirements (2)

( 129.0 ) — ( 1.9 ) ( 130.9 )

Foreign currency translation ( 2.6 ) ( 1.2 ) ( 1.1 ) ( 4.9 )

3 unchanged sentences

Amortization (4)

Retirements — — — 0.5 0.5

( 63.5 ) ( 5.7 ) ( 10.1 ) ( 79.3 )

Foreign currency translation ( 2.1 ) ( 0.7 ) ( 1.2 ) ( 4.0 )

3 unchanged sentences

Retirements (2)

129.0 — 1.9 130.9

Foreign currency translation 0.9 0.4 0.6 1.9

4 unchanged sentences

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

(2) See Note 16 for more information about our acquisitions.

(3) The weighted average amortization period remaining for all intangibles is 10.8 years, while the weighted average amortization period remaining for customer contracts and relationships, brands, developed technology and other intangibles is 11.4 years, 11.4 years, 7.6 years, and zero years , respectively.

(4) As a result of the Performance Chemicals' repositioning, as further described in Note 15, we accelerated the amortization of certain customer contract and relationship finite-lived intangible assets in 2023.

This resulted in $ 37.4 million of additional expense in 2023, which is included in Restructuring and other (income) charges, net within the consolidated statement of operations.

(2) As a result of the Performance Chemicals repositioning, as further described in Note 15, we retired certain customer contract and relationships, and developed technology finite-lived intangible assets.

(3) The weighted average amortization period remaining for all intangibles is 10.7 years, while the weighted average amortization period remaining for customer contracts and relationships, brands, and developed technology is 11.8 years, 10.4 years, and 7.0 years, respectively.

(4) As a result of the Performance Chemicals repositioning, as further described in Note 15, we accelerated the amortization of certain customer contract and relationship finite-lived intangible assets.

This resulted in $ 22.1 million and $ 37.4 million of additional expense for the years ended December 31, 2024 and 2023, which is included in Restructuring and other (income) charges, net within the consolidated statements of operations.

Ingevity Corporation

8 unchanged sentences

_______________

(1) Refer to footnote 4 in the preceding Other Intangible Asset table for more information on the change in amortization in 2023.

(1) Refer to footnote 4 in the preceding Other Intangible Assets table for more information on the change in amortization in 2024.

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

16 unchanged sentences

The fair value of our net investment hedge was a net asset (liability) of zero at December 31, 2024 and 2023.

During the years ended December 31, 2023, 2022, and 2021, we recognized net interest income associated with this financial instrument of zero , $ 1.1 million, and $ 0.5 million, respectively.

During the years ended December 31, 2024, 2023, and 2022, we recognized net interest income associated with this financial instrument of zero , zero , and $ 1.1 million, respectively.

Cash Flow Hedges

4 unchanged sentences

These contracts are generally designated as cash flow hedges.

As of December 31, 2023, open foreign currency exchange contracts hedge forecasted transactions until June 2024.

As of December 31, 2024, open foreign currency exchange contracts hedge a portion of forecasted transactions until January 2026.

Designated cash flow hedges entered to minimize foreign currency exchange risk of forecasted revenue transactions are recorded to Net sales on the consolidated statement of operations when the forecasted transaction occurs.

As of December 31, 2024, there were $ 6.5 million in open foreign currency derivative contracts.

The fair value of the designated foreign currency hedge contracts was an asset (liability) of zero and $( 0.5 ) million as of December 31, 2023 and 2022, respectively.

The fair value of the designated foreign currency hedge contracts was an asset (liability) of $ 0.1 million and zero as of December 31, 2024 and 2023, respectively.

Ingevity Corporation

5 unchanged sentences

To mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to the pricing of natural gas purchases, from time to time, we will enter into swap contracts and zero cost collar option contracts and designate these contracts as cash flow hedges.

As of December 31, 2023, we had 0.8 million and 0.2 million mmBTUs (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 December 31, 2023, open commodity contracts hedge forecasted transactions until December 2024.

The fair value of the outstanding designated natural gas commodity hedge contracts was a net asset (liability) of $( 0.9 ) million and $( 1.6 ) million as of December 31, 2023 and 2022, respectively.

As of December 31, 2024, we had 1.8 million mmBTUS (millions of British Thermal Units) in open natural gas derivative contracts, designated as cash flow hedges.

As of December 31, 2024, open natural gas derivative contracts hedge a portion of forecasted transactions until December 2025.

The fair value of the open natural gas derivative contracts was a net asset (liability) of $ 0.3 million and $( 0.9 ) million as of December 31, 2024 and 2023, respectively.

Interest Rate Risk Management

During the third quarter of 2024, we entered into a floating-to-fixed interest rate swap with a notional amount of $ 200.0 million to manage the variability of cash flows in the interest rate payments associated with our existing Secured Overnight Financing Rate ("SOFR") based interest payments, effectively converting $ 200.0 million of our floating rate debt to a fixed rate.

In accordance with the terms of this instrument, we receive floating rate interest payments based upon one-month U.S.

dollar SOFR and in return are obligated to pay interest at a fixed rate of 3.84 percent until August 2026.

The fair value of outstanding interest rate instruments at December 31, 2024 and 2023 was an asset of $ 0.6 million and zero , respectively.

During 2022, we had floating-to-fixed interest rate swaps with a combined notional amount of $ 166.2 million to manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest payments, effectively converting $ 166.2 million of our floating rate debt to a fixed rate.

3 unchanged sentences

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

The fair value of outstanding interest rate instruments at December 31, 2023 and 2022 was an asset (liability) of zero .

Effect of Cash Flow and Net Investment Hedge Accounting on AOCI

19 unchanged sentences

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

Within the next twelve months, we expect to reclassify $ 2.0 million of losses from AOCI to earnings before taxes.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

Within the next twelve months, we expect to reclassify $ 0.2 million of losses from AOCI to earnings before taxes.

Fair-Value Measurements

1 unchanged sentence

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

There were no non-recurring fair value measurements related to derivative assets and liabilities on our consolidated balance sheet during the fiscal years ending December 31, 2023, 2022, or 2021, respectively.

There were no non-recurring fair value measurements related to derivative assets and liabilities on our consolidated balance sheetsduring the fiscal years ending December 31, 2024, 2023, or 2022, respectively.

December 31, 2024

In millions Level 1 (1)

Currency exchange contracts (4)

Natural gas contracts (4)

$ — $ 0.4 $ — $ 0.4

Currency exchange contracts (4)

Interest rate swap contracts (5)

Total assets $ — $ 1.2 $ — $ 1.2

5 unchanged sentences

In millions Level 1 (1)

Currency exchange contracts (4)

$ — $ 0.5 $ — $ 0.5

Total assets $ — $ 0.5 $ — $ 0.5

Natural gas contracts (6)

6 unchanged sentences

(3) Significant unobservable inputs.

(4) Included within "Prepaid and other current assets" on the consolidated balance sheet.

(5) Included within "Accrued expenses" on the consolidated balance sheet.

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

(5) Included within "Other assets" on the consolidated balance sheets.

(6) Included within "Accrued expenses" on the consolidated balance sheets.

Ingevity Corporation

20 unchanged sentences

The trust is presented as Restricted investments on the consolidated balance sheets in the amount of $ 81.6 million and $ 79.1 million as of December 31, 2024 and 2023, respectively.

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

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

Revolving Credit Facility

2 unchanged sentences

Borrowings under the revolving credit facility bear interest at a rate per annum equal to either (a) the Secured Overnight Financing Rate ("SOFR"), subject to a zero floor, or (b) a base rate, in each case, plus an applicable margin of 1 percent to 1.75 percent for term benchmark loans and 0.00 percent to 0.75 percent for base rate loans.

The weighted average interest rate associated with our revolving credit facility was 6.36 percent and 3.99 percent for the periods ended December 31, 2023, and 2022, respectively.

There were no borrowings associated with our revolving credit facility as of December 31, 2021.

Fees of zero , $ 3.0 million, and zero were incurred in 2023, 2022, and 2021, respectively, to secure the various amendments associated with our revolving credit facility.

The weighted average interest rate associated with our revolving credit facility, exclusive of any floating-to-fixed interest rate instrument, was 6.69 percent and 6.36 percent for the periods ended December 31, 2024, and 2023, respectively.

Fees of zero , zero , and $ 3.0 million were incurred in 2024, 2023, and 2022, respectively, to secure the various amendments associated with our revolving credit facility.

These fees have been deferred and will be amortized over the term of the facility.

23 unchanged sentences

The Facility enables us to borrow, on a revolving basis, up to a maximum of $ 100.0 million based upon eligible trade receivables.

The Facility expires in October 2024, unless renewed by the mutual consent of the parties.

The program's effective borrowing cost is based upon an asset-backed commercial paper conduit rate plus a negotiated margin.

3 unchanged sentences

Ingevity maintains continuing involvement as it acts as the servicer for the eligible trade receivables and guarantees payment to the bank.

Such receivables, recorded on the consolidated balance sheet, totaled $ 81.3 million as of December 31, 2023.

The borrowings will be presented on the consolidated balance sheet as short-term debt, and cash flows will be presented as financing on our cash flow statement.

Such receivables, recorded on the consolidated balance sheet, totaled $ 58.3 million and $ 81.3 million as of December 31, 2024 and 2023, respectively.

The borrowings are presented on the consolidated balance sheets as short-term debt, and cash flows will be presented as financing on our cash flow statement.

Fees of $ 0.4 million were incurred in 2023 to secure the Facility.

These fees have been deferred and will be amortized over the term of the Facility.

The interest rate associated with our accounts receivable securitization program was 5.61 percent for the period ended December 31, 2023.

The weighted average interest rate associated with our Facility was 5.35 percent and 5.61 percent for the periods ended December 31, 2024 and 2023, respectively.

Debt Covenants

Our indentures contain 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 note 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 December 31, 2023.

The credit agreements governing our revolving credit facility contain 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.

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 December 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.

The occurrence of an uncured event of default under the credit agreement could result in all loans and other obligations becoming immediately due and payable and our revolving credit facility being terminated.

1 unchanged sentence

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 December 31, 2023 we re 2.5 and our actual interest coverage for the four consecutive quarters ended December 31, 2023 was 6.2 .

As calculated per the credit agreement, our net leverage for the four consecutive quarters ended December 31, 2024 was 3.1 and our actual interest coverage for the four consecutive quarters ended December 31, 2024 was 4.7 .

We were in compli ance with all covenants at December 31, 2024.

4 unchanged sentences

Equity Incentive Plan

The Ingevity Corporation 2016 Omnibus Incentive Plan, adopted on May 15, 2016, grants certain corporate officers, key employees, and non-employee directors of Ingevity and subsidiaries different forms of benefits, including stock options, RSU, DSU, and PSU.

The Ingevity Corporation 2016 Omnibus Incentive Plan has a maximum shares reserve of 4,000,000 for the grant of equity awards.

14 unchanged sentences

As of December 31, 2024, 319,611 shares under the ESPP are still available for issuance.

During fiscal year 2023, there were 34,036 shares issued under the ESPP at an average price of $ 55.82 .

All purchases under the ESPP were suspended during the third quarter of 2023.

During fiscal year 2024, there were zero shares issued under the ESPP as all purchases under the ESPP were suspended during the third quarter of 2023.

Our share-based compensation and ESPP expense is included in the table below.

15 unchanged sentences

All stock options vest in accordance with vesting conditions set by the Compensation Committee.

The Compensation Committee, with the addition of rTSR to the PSUs, did not grant stock options in 2023.

The Compensation Committee, with the addition of rTSR to the PSUs, did not grant stock options in 2024 or 2023.

Stock options granted to date have vesting periods of one to three years from the date of grant.

15 unchanged sentences

Forfeited ( 20 ) 75.02

Cancelled — —

Outstanding, December 31, 2024 257 $ 63.12 3.0 $ 510

2 unchanged sentences

The amount changes based on the fair market value of Ingevity's stock.

As of December 31, 2023, $ 0.3 million of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted-average period of 0.5 years.

As of December 31, 2024, there is no remaining unrecognized compensation expense related to stock options.

Restricted Stock Units, Deferred Stock Units, and Performance-based Restricted Stock Units

3 unchanged sentences

We periodically assess the probability of achievement of the performance criteria and adjust the amount of compensation expense accordingly.

Beginning in 2023, certain granted PSUs include a rTSR modifier that, when combined with the performance criteria could modify the final PSU payout by +/- 15 percent depending on the Company's rTSR performance over a three year performance period.

Beginning in 2023, certain granted PSUs include a rTSR modifier that, when combined with the performance criteria could modify the final PSU payout by +/- 15 to 30 percent depending on the Company's rTSR performance over a three year performance period.

The rTSR component of the 2024 PSU awards is a market condition requiring the use of a Monte Carlo simulation on the grant date to estimate the fair value.

28 unchanged sentences

(2) Excludes 19,068 non-employee director shares that were vested but unissued at December 31, 2024.

As of December 31, 2023, $ 13.8 million of unrecognized share-based compensation expense related to RSUs, DSUs and PSUs is expected to be recognized over a weighted-average period of 1.3 years.

As of December 31, 2024, $ 11.6 million of unrecognized share-based compensation expense related to RSUs, DSUs and PSUs is expected to be recognized over a weighted-average period of 1 year.

Ingevity Corporation

8 unchanged sentences

Net gains (losses) on foreign currency translation ( 18.6 ) 20.2 ( 74.9 )

Reclassification of foreign currency translation losses ( 0.2 ) — —

Gains (losses) on net investment hedges — — 13.9

31 unchanged sentences

In millions 2024 2023 2022

Foreign currency

Foreign currency translation adjustment (1)

$ 0.2 $ — $ —

Total before tax 0.2 — —

(Provision) benefit for income taxes — — —

Amount included within net income (loss) $ 0.2 $ — $ —

Derivative Instruments

12 unchanged sentences

Recognized gain (loss) due to curtailment and settlement (3)

( 0.2 ) — ( 0.2 )

Total before tax ( 0.3 ) ( 0.1 ) ( 0.3 )

2 unchanged sentences

_______________

(1) Included within "Restructuring and other (income) charges, net" on the consolidated statements of operations.

(2) Included within "Net sales" on the consolidated statements of operations.

4 unchanged sentences

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 current repurchase 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 year ended December 31, 2023, we repurchased $ 92.1 million (inclusive of $ 0.8 million in excise tax) in common stock, representing 1,269,373 shares of our common stock at a weighted average cost per share of $ 71.93 .

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 year ended December 31, 2024, we repurchased zero common stock.

At December 31, 2024, $ 353.4 million remained unused under our Board-authorized repurchase program.

During the year ended December 31, 2022 and 2021, we repurchased $ 145.2 million and $ 109.4 million in common stock, representing 2,112,463 and 1,421,379 shares of our common stock at a weighted average cost per share of $ 68.73 and $ 76.98 , respectively.

During the years ended December 31, 2023 and 2022, we repurchased $ 92.1 million (inclusive of $ 0.8 million in excise tax) and $ 145.2 million in common stock, representing 1,269,373 and 2,112,463 shares of our common stock at a weighted average cost per share of $ 71.93 and $ 68.73 , respectively.

Ingevity Corporation

23 unchanged sentences

Our finance lease obligations of $ 100.0 million and $ 101.1 million at December 31, 2024 and 2023, respectively, primarily consist of two leases.

The first obligation of $ 80.0 million, at December 31, 2023, is owed to the city of Wickliffe, Kentucky, associated with Performance Materials' Wickliffe, Kentucky, manufacturing site, which is due at maturity in 2027.

The first obligation of $ 80.0 million, at December 31, 2024, is owed to the city of Wickliffe, Kentucky, associated with Performance Materials' Wickliffe, Kentucky, manufacturing plant, which is due at maturity in 2027.

This obligation will be settled upon maturity utilizing liquid assets that have been placed into a trust established strictly for this purpose.

2 unchanged sentences

The lease commenced in July 2020, with a term of 15 years, and is structured as a traditional rental with payments due on a monthly basis.

We also have a finance lease obligation due in 2031 for certain assets located at our Performance Materials' Waynesboro, Georgia, manufacturing facility.

We also have a finance lease obligation due in 2031 for certain assets located at our Performance Materials' Waynesboro, Georgia, manufacturing plant.

The lease is with the Development Authority of Burke County (“Authority”).

37 unchanged sentences

Lease Term and Discount Rate

In millions, except percentages 2023 2022

In millions, except percentages and years 2024 2023

Weighted-average remaining lease term (years)

68 unchanged sentences

(1) The accumulated benefit obligation for all years presented equals the projected benefit obligation for each plan, respectively.

(2) Asset balance is included within "Other assets" and liability balances are included within "Other liabilities" on the consolidated balance sheet.

(2) Asset balance is included within "Other assets" and liability balances are included within "Other liabilities" on the consolidated balance sheets.

Ingevity Corporation

52 unchanged sentences

(3) Amounts are recorded to "Other (income) expense, net" on our consolidated statements of operations.

(4) Our pension and postretirement settlement and curtailment (income) charges are related to the acceleration of prior service costs as a result of a reduction in the number of participants within the Union Hourly defined benefit pension plan during 2022.

Contributions

We made a $ 2.0 million voluntary cash contribution to our domestic hourly union defined benefit pension plan during the year ended December 31, 2023.

There were no voluntary cash contributions to our domestic hourly union defined benefit pension plan in the years ended December 31, 2022, and 2021.

We made zero and $ 2.0 million voluntary cash contributions to our domestic hourly union defined benefit pension plan during the years ended December 31, 2024 and 2023, respectively.

There were no voluntary cash contributions to our domestic hourly union defined benefit pension plan in the year ended December 31, 2022.

The minimum required contribution to our domestic hourly union defined benefit plan for fiscal year 2025 is $ 1.4 million.

52 unchanged sentences

Year ended December 31, 2024

Other — — — —

$ 10.1 $ 40.1 $ 124.8 $ 175.0

Performance Chemicals' repositioning 8.6 1.5 103.0 113.1

9.8 0.1 2.6 12.5

Year ended December 31, 2023

$ 18.4 $ 1.6 $ 105.6 $ 125.6

Other — — — —

1 unchanged sentence

$ — $ — $ — $ —

_______________

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

2 unchanged sentences

(3) During 2023, we incurred severance and asset charges associated with targeted workforce reduction initiatives.

Throughout 2023 we initiated several measures across the organization to pursue greater cost efficiency which included a reorganization to streamline certain functions and reduce ongoing costs.

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

These actions are referred to as Performance Chemicals' repositioning.

The Performance Chemicals' repositioning, when combined with earlier 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.

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 of December 31, 2023.

As a result, we have recorded $ 19.7 million of non-cash, lower of cost or market, inventory charges to adjust the carrying value of the impacted inventory to what we will realize upon disposal, less disposal costs.

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

Since these inventory charges are directly attributable to the Performance Chemicals’

During 2024, we took further steps to streamline our Performance Chemicals cost structure and improve the profitability of the segment, resulting in additional restructuring charges of $ 2.3 million, including $ 1.6 million in asset disposal charges, $ 0.2 million in foreign currency translation adjustments, and $ 0.2 million in other charges.

Performance Chemicals Repositioning

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 increased our focus on growing our most profitable Performance Chemicals product lines, such as road technologies, and diversifying our raw material stream to non-CTO based fatty acids.

The repositioning focused on reducing exposure to lower margin 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's historical annualized net sales.

The repositioning included the permanent closure of our Performance Chemicals CTO refinery and our manufacturing plant located in DeRidder, Louisiana (the “DeRidder Plant”), including the polyol production assets associated with the APT reportable segment.

All production at the DeRidder Plant ceased in the first quarter of 2024.

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

Additionally, in July 2024, we announced plans to transition the refining of oleo-based products manufactured for our Performance Chemicals reportable segment from our Crossett, Arkansas manufacturing plant (the “Crossett Facility”) to our North Charleston, South Carolina manufacturing plant.

This action included the closure of the Crossett Facility, as well as additional corporate and business cost reduction actions.

We ceased production at the Crossett Facility in the third quarter of 2024.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

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, refer to Note 19 for more information.

We expect to incur aggregate charges of approximately $ 280.0 million associated with the Performance Chemicals' repositioning, 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 in 2024.

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.

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 estimated aggregate charges 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 $ 30.0 million to $ 80.0 million of incremental losses in 2024.

The actions referenced above, when combined with other targeted workforce reduction initiatives, during 2024 and 2023 resulted in the reduction of Ingevity's global workforce by 23 percent.

Specific to Performance Chemicals, the reduction represented approximately 40 percent of the reportable segment's workforce.

Expected Charges

We expect to incur total charges of approximately $ 350.0 million, excluding CTO resale activity as described below, associated with the Performance Chemicals repositioning, consisting of approximately $ 250.0 million in asset-related charges, approximately $ 25.0 million in severance and other employee-related costs, and approximately $ 75.0 million in other restructuring costs including decommissioning, dismantling and removal charges, and contract termination costs.

We expect approximately $ 250.0 million of the total charges to be non-cash and $ 100.0 million to be settled in cash.

Through December 31, 2024, we have incurred $ 311.8 million associated with these actions, including $ 244.8 million of non-cash asset-related charges, excluding $ 7.4 million related to an asset retirement obligation ("ARO"), and $ 67.0 million of charges to be settled in cash, which includes the aforementioned ARO.

As of December 31, 2024, $ 54.5 million of the charges to be settled in cash have been paid and all non-cash charges have been incurred.

In total, we expect approximately $ 100 million of cash charges, including approximately $ 20 -$ 25 million during 2025.

Inventory Charges

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

As a result, in the years ended December 31, 2024 and 2023, we recorded $ 6.3 million and $ 19.7 million, respectively, of non-cash, lower of cost or market, inventory charges to adjust the carrying value of the impacted inventory to what we will realize upon disposal, less disposal costs.

These inventory charges are recorded to Cost of sales on the 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 excluded such impact from the financial results of our Performance Chemicals reportable segment.

Refer to Note 19 for more information.

CTO Resale Activity

The DeRidder Plant closure, and the corresponding reduced CTO refining capacity, significantly reduced our CTO volume requirements.

However, we were obligated under an existing CTO supply contract to purchase CTO volumes through 2025 at amounts in excess of the CTO volumes needed to support our business operations.

To manage this excess inventory, we sold CTO volumes (herein referred to as "CTO resales") in the open market.

During the years ended December 31, 2024 and 2023, we incurred $ 52.7 million and $ 22.0 million of CTO resale losses, which are recorded as Other (income) expense, net on the consolidated statements of operations.

Refer to Note 2, under the section:

Non-operating income and expense , for more information.

During the year ended December 31, 2023, we incurred $ 5.1 million in cash charges and $ 127.7 million in non-cash charges related to the strategic actions initiated during the fourth quarter of 2023.

On July 1, 2024, we terminated the CTO supply contract that resulted in these excess CTO volumes.

As consideration for the early termination of the CTO supply contract, we made cash payments totaling $ 100.0 million during 2024.

The charge was recorded within Other (income) expense, net on the consolidated statements of operations for the year ended December 31, 2024.

As a result of the termination, the purchases under the CTO supply contract ended effective June 30, 2024.

The CTO resale activity described above ended in 2024 and no excess CTO volumes were on hand at December 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.

4 unchanged sentences

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

During the year ended December 31, 2023, we incurred $ 22.1 million in costs, including $ 8.8 million in asset disposal costs.

During the years ended December 31, 2024 and 2023, we incurred zero and $ 22.1 million in costs, including zero and $ 8.8 million in asset disposal costs, respectively.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

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.

Our North Charleston, South Carolina Performance Chemicals manufacturing plant has historically been co-located with a Smurfit 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.

1 unchanged sentence

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 year ended December 31, 2023, we incurred $ 14.8 million of expense, including $ 4.3 million in asset disposal costs.

We expect to incur an additional $ 3 - 5 million of costs as we complete this transition in the first half of 2024.

During the years ended December 31, 2024 and 2023, we incurred charges of $ 11.2 million and $ 14.8 million, including $ 4.8 million and $ 4.3 million in asset disposal costs, respectively.

Business transformation costs

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

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

This business transformation initiative concluded in the fourth quarter of 2023.

Costs incurred, during the years ended December 31, 2023, 2022, and 2021, of $ 7.7 million, $ 13.8 million, and $ 16.1 million, respectively, represent costs directly associated with the business transformation initiative that, in accordance with GAAP, could not be capitalized.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

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

Costs incurred, during the years ended December 31, 2024, 2023, and 2022, of zero , $ 7.7 million, and $ 13.8 million, respectively, represent costs directly associated with the business transformation initiative that, in accordance with GAAP, could not be capitalized.

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.

Balance at Change in Cash Balance at Change in Cash Balance at

12/31/2021 (1)

Payments 12/31/2022 (1)

The following table 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

In millions 12/31/2023 (1)

Payments Other (3)

12/31/2024 (1)

Severance and other employee-related costs $ 7.3 10.1 ( 13.0 ) ( 0.2 ) $ 4.2

Other charges (income) 0.9 40.1 ( 39.9 ) ( 0.2 ) 0.9

Restructuring 8.2 50.2 ( 52.9 ) ( 0.4 ) 5.1

Other (income) charges, net — 6.4 ( 6.4 ) — —

Restructuring and Other (income) charges, net reserves $ 8.2 56.6 ( 59.3 ) ( 0.4 ) $ 5.1

Balance at Change in Cash Balance at

In millions 12/31/2022 (1)

Payments Other (3)

12/31/2023 (1)

Severance and other employee-related costs $ — 8.6 ( 1.5 ) 0.2 $ 7.3

Other charges (income) 0.5 11.4 ( 11.0 ) — 0.9

Restructuring 0.5 20.0 ( 12.5 ) 0.2 8.2

Other (income) charges, net — 31.5 ( 31.5 ) — —

Restructuring and Other (income) charges, net reserves $ 0.5 51.5 ( 44.0 ) 0.2 $ 8.2

_______________

(1) Included in "Accrued expenses" and "Other liabilities" on the consolidated balance sheet.

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

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

(2) Includes severance and other employee-related costs, exited leases, CTO supply 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.

Ozark Materials

On October 3, 2022, we completed our acquisition of Ozark Materials, LLC (“OM”), and Ozark Logistics, LLC (“OL” and, together with OM, “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 road 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 Consolidated Financial Statements for the year ended December 31, 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 5 for an additional explanation of Level 2 and Level 3 inputs.

We finalized the purchase price allocation in the third quarter of 2023, with no material adjustments recorded.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

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 $ 0.9 million was expensed during each of the years ended December 31, 2023 and December 31, 2022, respectively.

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 $ 10.9 million for the year ended December 31, 2023.

Estimated amortization expense is as follows:

2024 - $ 10.9 million, 2025 - $ 10.7 million, 2026 - $ 10.0 million, 2027 - $ 10.0 million, and 2028 - $ 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 8 for further information regarding our allocation of goodwill among our reporting segments.

Ozark Materials

On October 3, 2022, pursuant to that certain Equity Purchase Agreement (the “Purchase Agreement”), by and among Ingevity, Ozark Materials, LLC (“OM”), Ozark Logistics, LLC (“OL” and, together with OM, “Ozark Materials”) and Ozark Holdings, Inc.

(“Seller”), we completed the acquisition of all of the issued and outstanding limited liability company membership interests of Ozark Materials for an aggregate purchase price of $ 344.5 million (the "Acquisition").

The purchase price allocation was finalized in the third quarter of 2023, with no material adjustments recorded.

The Acquisition has been integrated into our Performance Chemicals reportable segment and is included within our road 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 Consolidated Financial Statements for all periods presented;

therefore, proforma results of operations have not been presented.

Acquisition and other-related (income) costs

8 unchanged sentences

_______________

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

(1) Fair value of finished goods inventories acquired included a step-up in the value of $ 1.8 million, of which $ 0.9 million was expensed

during each of the years ended December 31, 2023 and 2022, respectively.

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

statement of operations.

Inventories are accounted for on a FIFO basis of accounting.

Ingevity Corporation

19 unchanged sentences

Provision (benefit) for income taxes $ ( 105.3 ) $ ( 4.7 ) $ 58.0

We recorded zero , $ 4.5 million, and $ 4.2 million of deferred tax provision (benefit) expense within components of other comprehensive income during the years ended December 31, 2023, 2022, and 2021, respectively.

We recorded $ 1.3 million, zero , and $ 4.5 million of deferred tax provision (benefit) expense within components of other comprehensive income during the years ended December 31, 2024, 2023, and 2022, respectively.

Ingevity Corporation

10 unchanged sentences

Foreign derived intangible income ( 1.4 ) ( 2.4 ) ( 5.9 )

Meals & entertainment 0.3 0.2 0.1

Lobbying 0.3 0.2 —

Officers compensation 0.4 0.9 0.6

Goodwill impairment 26.8 — —

Excess share-based compensation 1.0 ( 1.1 ) ( 0.1 )

Federal and state tax credits ( 11.3 ) ( 4.2 ) ( 4.8 )

Deferred adjustments 0.2 0.1 0.3

Legislative tax rate change ( 0.1 ) 0.5 0.8

Sustainably sourced carbon benefit ( 0.7 ) ( 1.3 ) —

Sustainably sourced feedstock benefit ( 0.8 ) ( 0.7 ) ( 1.3 )

Uncertain tax positions 1.0 0.5 0.5

Tax on foreign royalties 0.4 0.4 0.5

Tax on Dividends, Deemed Dividends, and GILTI (1)

4 unchanged sentences

(1) GILTI is defined as Global Intangible Low Tax Income

The decrease in our effective tax rate from 2023 to 2024 was mainly driven by the mix of earnings, with extensive U.S.

losses, primarily due to the Performance Chemicals goodwill impairment (see Note 8) and restructuring activities (see Note 15), driving an overall global loss and tax benefit for the year.

Approximately 31 % of the goodwill impaired had an impact to the tax rate, offsetting the overall tax benefit.

Significant increases in federal and state tax credits further increased the overall tax benefit as compared to prior years.

The increase in our effective tax rate from 2022 to 2023 was mainly driven by the mix of earnings, with U.S.

2 unchanged sentences

taxable earnings drove a decrease in the foreign derived intangible income benefit as compared to prior years skewing the effective tax rate.

The decrease in our effective tax rate from 2021 to 2022 was primarily driven by the recognition of the UK's six percent legislative rate increase in 2021.

During 2022, our effective tax rate benefited from reduced taxes at our China manufacturing plant associated with the purchases of our sustainably sourced raw material feedstock.

This reduction was partially offset by an increase in foreign earnings deemed taxable in the U.S.

mainly due to final U.S.

foreign tax credit regulations modifying the definition of what foreign taxes qualify as creditable taxes, denying Brazilian taxes paid as qualifying taxes.

Ingevity Corporation

5 unchanged sentences

Employee benefits $ 15.4 $ 13.3

Intangibles (including goodwill) 30.5 —

Net operating losses 18.6 10.6

10 unchanged sentences

Fixed assets $ 96.9 $ 115.9

Intangibles 29.3 34.6

Inventory — 7.3

Intangibles (including goodwill) — 29.3

Leases 14.6 18.4

4 unchanged sentences

_______________

(1) Presentation in the table above is on a gross basis, however, due to jurisdictional netting, our net deferred tax asset and liability recorded on the consolidated balance sheets is $ 11.6 million and $ 70.9 million, respectively, as of December 31, 2023, and $ 5.7 million and $ 106.5 million, respectively, as of December 31, 2022.

Our net deferred tax liability decreased $ 41.5 million at December 31, 2023 as compared to December 31, 2022.

As part of Tax Cuts and Jobs Act ("TCJA") enacted in December 2017 under Internal Revenue Code ("IRC") Section 174, beginning in 2022 we were required to capitalize and amortize research and experimental expenditures.

(1) Presentation in the table above is on a gross basis, however, due to jurisdictional netting, our net deferred tax asset and liability recorded on the consolidated balance sheets were $ 117.9 million and $ 56.2 million, respectively, as of December 31, 2024, and $ 11.6 million and $ 70.9 million, respectively, as of December 31, 2023.

Our net deferred tax liability changed to an overall net deferred tax asset in 2024 compared to 2023, with a total change of $ 121.0 million.

The pre-tax Performance Chemicals reporting unit goodwill impairment charge of $ 349.1 million (refer to Note 8 for more detail) and additional Performance Chemicals repositioning restructuring spending (refer to Note 15 for more detail) during 2024 resulted in a change from a deferred liability to an asset.

Due to taxable losses in the U.S.

in 2024, additional net operating losses were generated, further increasing the deferred tax asset for the year.

As part of Tax Cuts and Jobs Act ("TCJA") enacted in December 2017 under Internal Revenue Code ("IRC") Section 174, we were required to capitalize and amortize research and experimental expenditures.

This requirement continued to increase the deferred tax asset for 2024.

1 unchanged sentence

business interest expense deductions as a function of adjusted taxable income.

In 2023 due to a reduction in taxable income, Ingevity was subject to these limitations creating a new deferred tax asset for 2023, labeled above as interest limitation.

The increase in the LIFO reserve in 2023 flipped our 2022 deferred tax liability to a deferred tax asset in 2023.

Further acceleration of book amortization on intangibles drove a decline in the overall deferred tax liability for the year.

In 2024 due to overall taxable losses, Ingevity's interest expense deduction was fully limited, increasing the deferred tax asset for 2024.

We have deferred tax assets, including net operating loss and state tax credit carryforwards, which are available to offset future taxable income.

1 unchanged sentence

In 2024, we recognized tax expense of $ 1.4 million due to our expected inability to recognize the benefit associated with state tax credits prior to their expiration.

At December 31, 2023, foreign net operating loss carryforwards totaled $ 32.9 million;

of this total, $ 0.1 million will expire in 1 year and $ 32.8 million has no expiration date.

Due to the global nature of our operations, a portion of our cash is held outside the U.S.

The cash and cash equivalent balance at December 31, 2023 included $ 90.7 million held by our foreign subsidiaries.

At December 31, 2023, 2022, and 2021, no deferred income taxes have been provided for our share of undistributed net earnings of foreign operations due to management’s intent to reinvest such amounts indefinitely.

The determination of the amount of taxes that may be due if

At December 31, 2024, net operating loss carryforwards totaled $ 64.4 million of which we have recorded deferred tax assets of $ 18.6 million.

Of this total, $ 0.1 million will expire in 10 years, $ 0.3 million will expire in 15 years, $ 0.9 million will expire in 20 years, and $ 17.3 million will never expire.

Ingevity Corporation

1 unchanged sentence

December 31, 2024

earnings are remitted is not practicable because such liability, if any, is dependent on circumstances that exist if and when remittance occurs.

Due to the global nature of our operations, a portion of our cash is held outside the U.S.

The cash and cash equivalent balance at December 31, 2024 included $ 63.9 million held by our foreign subsidiaries.

At December 31, 2024, 2023, and 2022, no deferred income taxes have been provided for our share of undistributed net earnings of foreign operations due to management’s intent to reinvest such amounts indefinitely.

The determination of the amount of taxes that may be due if earnings are remitted is not practicable because such liability, if any, is dependent on circumstances that exist if and when remittance occurs.

The circumstances that would affect the calculations include the source location and amount of the distribution, the underlying tax rate already paid on the earnings, foreign withholding taxes, the opportunity to use foreign tax credits, and the potential impact of future tax reform.

9 unchanged sentences

_______________

(1) Included in "Other liabilities" on the consolidated balance sheet.

(1) Included in "Other liabilities" on the consolidated balance sheets.

As of December 31, 2024, 2023, and 2022, $ 2.4 million, $ 1.4 million, and $ 0.9 million, respectively, of unrecognized tax benefit, including penalties and interest, would, if recognized, impact our effective tax rate.

We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.

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, thirteen 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 year ended December 31, 2024.

Ingevity Corporation

12 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.

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 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 intend to appeal.

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.

Ingevity believes in the strength of its intellectual property and the merits of its position and intends to pursue all legal relief available to challenge these outcomes in the Delaware Proceeding.

Final resolution of these matters could take up to 24 months.

Final resolution of these matters could take up to 15 months from the date of this Annual Report on Form 10-K.

As of December 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 verdict, $ 85.0 million, is accrued within Other liabilities on the consolidated balance sheet as of December 31, 2023 and the charge was included within Other (income) expense, net on the consolidated statement of operations for the year ended December 31, 2021.

The full amount of the trebled jury verdict, $ 85.0 million, is accrued within Other liabilities on the consolidated balance sheets as of December 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 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 we may ultimately incur could be more or less than the amount accrued.

3 unchanged sentences

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’s operating segments are (i) Performance Materials, (ii) Performance Chemicals, and (iii) Advanced Polymer Technologies.

A description of our operating segments is included in Note 1.

Segment EBITDA is the primary measure used by the chief operating decision maker ("CODM"), the Interim CEO and President of Ingevity, to evaluate the performance of and allocate resources among our operating segments.

The CODM utilizes Segment EBITDA for each operating segment in the annual budgeting and forecasting process.

Segment EBITDA enables the CODM to compare each business and make informed and consistent resource allocation decisions.

Years Ended December 31,

In millions 2024 2023 2022

Performance Materials $ 586.0 $ 548.5 $ 516.8

Performance Chemicals 902.1 875.1 688.9

Advanced Polymer Technologies 204.0 244.7 185.8

Total net sales (1)

$ 1,692.1 $ 1,668.3 $ 1,391.5

Segment EBITDA (1)(2)

7 unchanged sentences

(Provision) benefit for income taxes 105.3 4.7 ( 58.0 )

Depreciation and amortization - Performance Materials ( 38.3 ) ( 36.1 ) ( 36.8 )

Depreciation and amortization - Performance Chemicals ( 53.2 ) ( 43.1 ) ( 40.0 )

Depreciation and amortization - Advanced Polymer Technologies ( 31.3 ) ( 29.6 ) ( 33.1 )

Depreciation and amortization ( 108.3 ) ( 122.8 ) ( 108.8 )

Restructuring and other income (charges), net (3)

( 186.2 ) ( 170.2 ) ( 13.8 )

Goodwill impairment charge (4)

( 349.1 ) — —

Acquisition and other-related income (costs), net (5)

( 0.3 ) ( 4.5 ) ( 5.9 )

Inventory charges (6)

( 6.3 ) ( 19.7 ) —

Loss on CTO resales (7)

( 52.7 ) ( 22.0 ) —

CTO supply contract termination charges (7)

( 100.0 ) — —

Gain (loss) on sale of strategic investment (8)

Litigation verdict charge (7)

( 11.4 ) 19.3 —

Pension and postretirement settlement and curtailment income (charges), net (9)

( 0.2 ) — ( 0.2 )

Net income (loss) $ ( 430.3 ) $ ( 5.4 ) $ 211.6

_______________

(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.

(1) 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 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 on sale of 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.

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

Ingevity Corporation

1 unchanged sentence

December 31, 2024

(2) Segment expenses included within the primary measure used by our CODM are included within the below table.

Years Ended December 31,

2024 2023 2022

In millions, except per share data PM PC APT PM PC APT PM PC APT

Net sales (1)

$ 609.6 $ 608.2 $ 188.6 $ 586.0 $ 902.1 $ 204.0 $ 548.5 $ 875.1 $ 244.7

Cost of sales (2) (3)

233.9 515.5 129.9 254.2 743.2 135.2 237.6 614.2 180.0

Selling, general, and administrative expenses (2) (4)

56.8 73.3 22.3 46.1 92.8 22.1 58.8 99.6 28.5

Other income (expense), net (2) (5)

0.2 ( 4.7 ) ( 1.2 ) 0.9 ( 0.4 ) ( 2.2 ) 0.1 ( 0.9 ) 3.8

Segment EBITDA $ 319.1 $ 14.7 $ 35.2 $ 286.6 $ 65.7 $ 44.5 $ 252.2 $ 160.4 $ 40.0

_______________

(1) Relates to external customers only.

Refer to Note 4 for a reconciliation to consolidated Net sales.

(2) Excludes Depreciation and amortization.

(3) Inventory charges representing lower of cost or market charges associated with the Performance Chemicals repositioning and restructuring actions were not allocated in the measurement of Performance Chemicals reportable segment profitability used by our CODM.

Amounts are included in Cost of sales on the consolidated statements of operations.

(4) Includes Research and technical expenses.

(5) We have excluded the following items from Other income (expense), net:

gain (loss) on sale of strategic investments, loss on CTO resales, CTO supply contract termination charges, depreciation, and amortization.

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

These costs are excluded from our reportable segment results.

The table below provides an allocation of Restructuring and other income (charges), net 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.

Years Ended December 31,

In millions 2024 2023 2022

4 unchanged sentences

$ 186.2 $ 170.2 $ 13.8

_________________

(1) Included in the charges for the year ended December 31, 2023 was $ 13.3 million of asset disposal charges associated with Advanced Polymer Technologies polyol production assets located at the DeRidder Plant.

(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.

(2) Refer to Note 15 for more information.

(4) For the year ended December 31, 2024, charges relate to the Performance Chemicals reportable segment.

Refer to Note 8 for more information.

(5) The table below provides an allocation of Acquisition and other-related income (costs), net 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.

For more detail on these charges see Note 16.

5 unchanged sentences

Acquisition and other-related (income) costs, net $ 0.3 $ 4.5 $ 5.9

(5) For the year ended December 31, 2023, charges relates to the Performance Chemicals reportable segment.

(6) For the year ended December 31, 2024 and 2023, inventory charges represent lower of cost or market charges associated with the Performance Chemicals’ repositioning and restructuring actions.

These charges were not allocated in the measurement of Performance Chemicals reportable segment profitability used by our CODM.

Amounts are included in Cost of sales on the consolidated statements of operations.

(7) For the year ended December 31, 2024, CTO supply contract termination charges relate to the Performance Chemicals reportable segment.

Refer to Note 2, under the section:

Non-operating income and expense , for more information.

(6) For the year ended December 31, 2023, gains related to our Performance Materials reportable segment.

We exclude gains and losses from sales of 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.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

(8) We exclude gains and losses from sales of strategic investments from our segment results 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.

2 unchanged sentences

Strategic Investments, for more information.

(7) For the year ended December 31, 2021, litigation verdict charge relates to the Performance Materials segment.

Refer to Note 18 for additional information.

(8) For the year ended December 31, 2022 the charges relate to the Performance Materials reportable segment.

Years Ended December 31,

In millions 2024 2023 2022

Performance Materials $ ( 0.1 ) $ ( 19.3 ) $ —

Performance Chemicals 9.3 — —

Advanced Polymer Technologies 2.2 — —

(Gain) loss on sale of strategic investment $ 11.4 $ ( 19.3 ) $ —

(9) Our pension and postretirement settlement and curtailment charges (income) are related to the acceleration of prior service costs, as a result of a reduction in the number of participants within the Union Hourly defined benefit pension plan.

1 unchanged sentence

We continue to include the service cost, amortization of prior service cost, interest costs, expected return on plan assets, and amortized actual gains and losses in our segment EBITDA.

(9) 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.

Years Ended December 31,

In millions 2024 2023 2022

Restructuring charges (1)

$ 125.6 $ — $ 0.1

Other (income) charges, net (1)

44.6 13.8 16.1

Performance Chemicals' repositioning inventory charges (2)

Restructuring and other (income) charges, net $ 189.9 $ 13.8 $ 16.2

_________________

(1) Amounts are recorded within Restructuring and other (income) charges, net on the consolidated statement of operations, refer to Note 15 for more information.

(2) Amounts are recorded within Cost of sales on the condensed consolidated statement of operations, refer to Note 15 for more information.

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2023

Depreciation and amortization Capital expenditures

Years Ended December 31, Years Ended December 31,

Performance Materials $ — $ — $ 0.2

Performance Chemicals 0.2 — —

Advanced Polymer Technologies — — —

Pension and postretirement settlement and curtailment (income) charges, net $ 0.2 $ — $ 0.2

Depreciation and amortization Years Ended December 31,

In millions 2024 2023 2022

2 unchanged sentences

Advanced Polymer Technologies 30.8 31.3 29.6

Total $ 122.8 $ 108.8 $ 109.9 $ 109.8 $ 142.5 $ 103.8

Total depreciation and amortization $ 108.3 $ 122.8 $ 108.8

Capital expenditures Years Ended December 31,

In millions 2024 2023 2022

Performance Materials $ 38.5 $ 36.4 $ 59.8

Performance Chemicals 22.9 49.6 62.4

Advanced Polymer Technologies 16.2 23.8 20.3

Total capital expenditures $ 77.6 $ 109.8 $ 142.5

Ingevity Corporation

Notes to the Consolidated Financial Statements

December 31, 2024

Property, plant, and equipment, net December 31,

1 unchanged sentence

North America (1)

$ 482.3 $ 581.0

Asia Pacific (1)

2 unchanged sentences

Property, plant, and equipment, net $ 658.9 $ 762.2

_______________

(1) The countries with Property, plant, and equipment, net in excess of 10 percent of consolidated Property, plant, and equipment, net at December 31, 2024 and 2023 are the U.S., which totaled $ 482.3 million and $ 581.0 million, the U.K., which totaled $ 112.5 million and $ 108.8 million, and China, which totaled $ 63.2 million and $ 71.3 million, respectively.

Total assets December 31,

9 unchanged sentences

_______________

(1) On January 1, 2023, w e separated our engineered polymers product line from the Performance Chemicals reportable segment into its own reportable segment, Advanced Polymer Technologies.

As a result of this separation, we allocated $ 165.0 million of Performance Chemicals goodwill to the newly created Advanced Polymer Technologies reportable segment.

Refer to Note 8 for more information.

(1) The decline in the Performance Chemicals segment in 2024, as compared to 2023, was driven by our Performance Chemicals repositioning actions and Goodwill impairment charge.

Refer to Notes 8 and 15 for more information.

(2) Segment assets exclude assets not specifically managed as part of one specific segment herein referred to as "Corporate and other."

4 unchanged sentences

Years Ended December 31,

In millions (except share and per share data) 2023 2022 2021

In millions (except share (in thousands) and per share data) 2024 2023 2022

Net income (loss) $ ( 430.3 ) $ ( 5.4 ) $ 211.6

7 unchanged sentences

(1) Diluted earnings (loss) per share is calculated using net income (loss) available to common stockholders divided by diluted weighted average shares of common shares outstanding during each period, which includes the dilutive effect of outstanding equity awards.

(2) Shares are presented in thousands.

(3) For the year ended December 31, 2023, 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.

(2) For the years ended December 31, 2024 and 2023, 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:

20 unchanged sentences

Currency exchange and natural gas contracts (Note 9) 0.6 0.5

Assets held for sale 3.7 —

Other 5.4 5.6

7 unchanged sentences

Deferred compensation plan assets (Note 5) 20.2 17.9

Interest rate swap contracts (Note 9) 0.6 —

Finance lease assets, net (Note 13) — 0.1

32 unchanged sentences

Foreign currency transaction (gain)/loss 4.2 3.7 2.3

CEO severance charges 4.8 — —

Loss on CTO resales (Note 2) 52.7 22.0 —

Litigation verdict charge (Note 18) — — 85.0

CTO supply contract termination charges (Note 2) 100.0 — —

Other (income)/expense, net ( 3.3 ) ( 0.7 ) ( 4.0 )

26 unchanged sentences

(1) Write-offs are net of recoveries.

(2) Allowance for credit losses on accounts receivable is included within Accounts receivable, net on the consolidated balance sheet.

(3) Allowance for credit losses on held-to-maturity debt securities is included within Restricted investment on the consolidated balance sheet.

(2) Allowance for credit losses on accounts receivable is included within Accounts receivable, net on the consolidated balance sheets.

(3) Allowance for credit losses on held-to-maturity debt securities is included within Restricted investment on the consolidated balance sheets.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data