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Item 8. Financial Statements and Supplementary Data

2024-02-27 compared with 2023-03-01 · 561 added, 603 removed, 769 unchanged (60% of the section changed)

28 unchanged sentences

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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

Asbestos-Related Liabilities and Insurance Receivables

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The insurance usage analysis considers, among other things, applicable deductibles, retentions and policy limits, the solvency and historical payment experience of various insurance carriers, the likelihood of recovery as estimated by external legal counsel and existing insurance settlements.

The principal considerations for our determination that performing procedures relating to asbestos related liabilities and insurance receivables is a critical audit matter are (i) the significant judgment by management when determining the asbestos-related liabilities and insurance receivables;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to the number of claims that might be received, type and severity of the disease alleged by each claimant, average indemnity costs, average defense costs, and dismissal rates used in the claim projection analysis;

The principal considerations for our determination that performing procedures relating to asbestos related liabilities and insurance receivables is a critical audit matter are (i) the significant judgement by management when determining the asbestos-related liabilities and insurance receivables;

(ii) a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to the number of claims that might be received, type and severity of the disease alleged by each claimant, average indemnity costs, average defense costs, and dismissal rates used in the claim projection analysis;

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

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Phoenix, Arizona

March 1, 2023

February 26, 2024

We have served as the Company’s auditor since 2015.

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For each of the fiscal years in the three-year period ended December 31, 2023

(Dollars and shares in thousands, except per share amounts) 2022 2021 2020

(Dollars and shares in millions, except per share amounts) 2023 2022 2021

Net sales $ 908.4 $ 971.2 $ 932.9

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Equity income in unconsolidated joint ventures 1.8 4.4 7.0

Pension settlement charges — ( 534 ) ( 55 )

Other income (expense), net ( 0.7 ) 1.1 4.6

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For each of the fiscal years in the three-year period ended December 31, 2023

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Net income $ 56.6 $ 116.6 $ 108.1

1 unchanged sentence

Pension and other postretirement benefits:

Pension settlement (benefits) charges, net of tax (Note 4) — — ( 48 )

Actuarial net gain (loss) incurred, net of tax (Note 2) ( 0.4 ) ( 0.2 ) ( 0.8 )

Pension settlement charges, net of tax (Note 2) 0.1 — —

Amortization of loss, net of tax (Note 2) 0.3 0.2 0.2

Derivative instrument designated as cash flow hedge:

Change in unrealized loss before reclassifications, net of tax (Note 4) — — ( 1,504 )

Unrealized loss (gain) reclassified into earnings, net of tax (Note 4) — — 2,476

Other comprehensive income (loss) 18.8 ( 40.0 ) ( 25.6 )

4 unchanged sentences

As of December 31,

(Dollars and share amounts in thousands, except par value of capital stock) 2022 2021

(Dollars and share amounts in millions, except par value of capital stock) 2023 2022

Current assets

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Accounts receivable, less allowance for credit losses of $ 1.1 and $ 1.0

177,413 163,092

Contract assets 45.2 38.9

Inventories 182,402 133,384

Prepaid income taxes 4,042 1,921

Inventories, net 153.5 182.4

Asbestos-related insurance receivables, current portion 4.3 3.9

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Property, plant and equipment, net of accumulated depreciation of $ 385.7 and $ 381.6

358,415 326,967

Investments in unconsolidated joint ventures 14,082 16,328

Deferred income taxes 50,649 32,671

Operating lease right-of-use assets 18.9 13.0

Goodwill 359.8 352.4

Other intangible assets, net of amortization 123.9 133.7

Pension assets 5,251 5,123

Asbestos-related insurance receivables, non-current portion 52.2 55.9

Investments in unconsolidated joint ventures 11.1 14.1

Deferred income taxes 49.7 50.6

Other long-term assets 8.4 8.2

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Accrued income taxes payable 2.0 5.5

Operating lease obligations, current portion 3.5 2.8

Asbestos-related liabilities, current portion 5.5 5.0

Finance lease obligations, current portion 498 198

Other accrued liabilities 24.0 37.7

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Borrowings under revolving credit facility 30.0 215.0

Pension and other postretirement benefits liabilities 1,501 1,618

Operating lease obligations, non-current portion 15.4 10.7

Asbestos-related liabilities, non-current portion 56.0 60.1

Finance lease obligations, non-current portion 1,295 209

Non-current income tax 7.2 10.0

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18.6 and 18.6 shares issued and outstanding, respectively

18,574 18,730

Additional paid-in capital 151.8 140.7

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For each of the fiscal years in the three-year period ended December 31, 2023

(Dollars and share amounts in thousands) 2022 2021 2020

(Dollars and share amounts in millions) 2023 2022 2021

Capital Stock

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Shares issued for vested restricted stock units, net of shares withheld for taxes — 0.1 —

Shares issued for employee stock purchase plan 6 14 13

Shares issued to directors 7 10 5

Shares repurchased — ( 0.2 ) —

Other capital stock activity — — —

Balance, end of period 18.6 18.6 18.7

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Shares issued for vested restricted stock units, net of shares withheld for taxes ( 3.2 ) ( 10.9 ) ( 2.9 )

Shares issued for employee stock purchase plan 944 1,548 1,347

Shares issued to directors ( 7 ) ( 10 ) ( 5 )

Equity compensation expense 14.3 11.8 17.0

Shares repurchased — ( 24.8 ) —

Other additional paid-in capital activity — 1.0 1.5

Balance, end of period 151.8 140.7 163.6

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For each of the fiscal years in the three-year period ended December 31, 2023

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Operating Activities:

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Dividends received from unconsolidated joint ventures 4.3 4.7 5.0

Pension settlement charges — 534 ( 63 )

Pension and other postretirement benefits 21 ( 471 ) ( 160 )

Asbestos-related provision (benefit) 30 ( 220 ) ( 682 )

Loss (gain) on sale or disposal of property, plant and equipment 460 ( 880 ) 41

Gain on sale of business ( 0.7 ) — —

(Gain) loss on sale or disposal of property, plant and equipment ( 2.6 ) 0.5 ( 0.9 )

Impairment charges — 65.1 0.5

UTIS fire fixed asset and inventory write-offs — 0.2 1.9

Provision (benefit) for credit losses 208 ( 279 ) 223

Other non-cash charges (benefits), net 0.6 0.2 ( 0.5 )

Changes in assets and liabilities:

Accounts receivable ( 10.8 ) ( 32.3 ) ( 26.2 )

Proceeds from insurance/government subsidies related to operations 1,153 400 —

Proceeds from insurance related to operations 25.6 1.2 0.4

Contract assets ( 5.9 ) ( 3.9 ) ( 10.0 )

Inventories ( 51,610 ) ( 34,413 ) 34,687

Pension and postretirement benefit contributions ( 94 ) ( 160 ) ( 253 )

Inventories, net 28.3 ( 51.6 ) ( 34.4 )

Other current assets 4.2 ( 6.3 ) 1.7

4 unchanged sentences

Acquisition of business, net of cash received — ( 3.6 ) ( 168.2 )

Disposition of business 1.7 — —

Capital expenditures ( 57.0 ) ( 116.8 ) ( 71.1 )

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Proceeds from borrowings under revolving credit facility — 100.0 190.0

Line of credit issuance costs — — ( 1,862 )

Repayment of debt principal and finance lease obligations ( 185.4 ) ( 75.3 ) ( 29.6 )

Line of credit issuance costs ( 1.7 ) — —

Payments of taxes related to net share settlement of equity awards ( 3.2 ) ( 10.8 ) ( 2.9 )

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Interest, net of amounts capitalized $ 10.4 $ 9.7 $ 2.4

Income taxes $ 60,772 $ 33,788 $ 29,983

Income taxes, net of refunds $ 6.9 $ 60.8 $ 33.8

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

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The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries, after elimination of intercompany balances and transactions.

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States (U.S.

The preparation of financial statements, in conformity with U.S.

GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

Through the fourth quarter of 2020, we operated three strategic operating segments:

Advanced Connectivity Solutions (ACS), Elastomeric Material Solutions (EMS) and Power Electronics Solutions (PES), with the remaining operations, which represented our non-core businesses, being reported in a four th operating segment, the Other operating segment.

In the first quarter of 2021, we completed the realignment of our strategic business segments to reflect the combination of our ACS and PES businesses resulting in a new strategic business segment, Advanced Electronics Solutions (AES).

The combination of these two complementary businesses with capabilities in both high power and high frequency applications is expected to enhance our overall value proposition to customers in multiple high-growth markets.

As a result of our organizational and reporting structure changes, we re-evaluated the chief operating decision maker’s review and assessment of the Company’s operating performance for purposes of performance monitoring and resource allocation.

We determined, based on the financial data utilized by the chief operating decision maker to assess segment performance and allocate resources among the Company’s strategic business segments, that we have three operating segments under this new organizational and reporting structure:

Our reporting structure is comprised of three operating segments:

AES, EMS and Other.

Reported results for the AES operating segment prior to 2021 represent the aggregation of the results for our former ACS and PES operating segments.

Advanced Electronics Solutions

Our AES operating segment designs, develops, manufactures and sells circuit materials, ceramic substrate materials, busbars and cooling solutions for applications in electric and hybrid electric vehicles (EV/HEV), wireless infrastructure (i.e., power amplifiers, antennas and small cells), automotive (i.e., advanced driver assistance systems (ADAS), telematics and thermal solutions, aerospace and defense (i.e., antenna systems, communication systems and phased array radar systems), mass transit, clean energy (i.e., variable frequency drives, renewable energy), connected devices (i.e., mobile internet devices and thermal solutions) and wired infrastructure (i.e., computing and internet protocol (IP) infrastructure) markets.

Our AES operating segment designs, develops, manufactures and sells circuit materials, ceramic substrate materials, busbars and cooling solutions for applications in EV/HEV, automotive (e.g., ADAS), aerospace and defense (e.g., antenna systems, communication systems and phased array radar systems), renewable energy (e.g., wind and solar), wireless infrastructure (e.g., power amplifiers, antennas and small cells), mass transit, industrial (e.g., variable frequency drives), connected devices (e.g., mobile internet devices and thermal solutions) and wired infrastructure (e.g., computing and internet protocol infrastructure) markets.

We believe these materials have characteristics that offer performance and other functional advantages in many market applications, which serve to differentiate our products from other commonly available materials.

AES products are sold globally to converters, fabricators, distributors and original equipment manufacturers (OEMs).

AES products are sold globally to converters, fabricators, distributors and OEMs.

Trade names for our AES products include:

curamik ® , ROLINX ® , RO4000 ® Series, RO3000 ® Series, RT/duroid ® , CLTE Series ® , TMM ® , AD Series ® , DiClad ® Series, CuClad ® Series, Kappa ® , COOLSPAN ® , TC Series ® , 92ML™, IsoClad ® Series, MAGTREX ® , XTremeSpeed™ RO1200™ Laminates, IM Series™, 2929 Bondply, SpeedWave ® Prepreg, RO4400™/RO4400T™ Series and Radix™.

curamik ® , ROLINX ® , RO4000 ® Series, RO3000 ® Series, RT/duroid ® , CLTE Series ® , TMM ® , AD Series ® , DiClad ® Series, CuClad ® Series, Kappa ® , COOLSPAN ® , TC Series ® , IsoClad ® Series, MAGTREX ® , IM Series™, 2929 Bondply, SpeedWave ® Prepreg, RO4400™/RO4400T™ Series and Radix™.

As of December 31, 2023, our AES operating segment had manufacturing and administrative facilities in Chandler, Arizona;

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Our EMS operating segment designs, develops, manufactures and sells engineered material solutions for a wide variety of applications and markets.

These include polyurethane and silicone materials used in cushioning, gasketing and sealing, and vibration management applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense, footwear and impact mitigation and printing markets;

customized silicones used in flex heater and semiconductor thermal applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense and medical markets;

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We also own 50 % of two unconsolidated joint ventures:

(1) Rogers Inoac Corporation (RIC), a joint venture established in Japan to design, develop, manufacture and sell PORON ® products predominantly for the Japanese market and (2) Rogers INOAC Suzhou Corporation (RIS), a joint venture established in China to design, develop, manufacture and sell PORON ® products primarily for RIC customers in various Asian countries.

(1) RIC, a joint venture established in Japan to design, develop, manufacture and sell PORON ® products predominantly for the Japanese market and (2) RIS, a joint venture established in China to design, develop, manufacture and sell PORON ® products primarily for RIC customers in various Asian countries.

INOAC Corporation owns the remaining 50 % of both RIC and RIS.

RIC has manufacturing facilities at the INOAC facilities in Nagoya and Mie, Japan, and RIS has manufacturing facilities at Rogers’ facilities in Suzhou, China.

Our Other operating segment consists of elastomer components for applications in general industrial market, as well as elastomer floats for level sensing in fuel tanks, motors, and storage tanks applications in the general industrial and automotive markets.

Our Other operating segment consists of elastomer components for applications in the general industrial market, as well as elastomer floats for level sensing in fuel tanks, motors, and storage tanks applications in the general industrial and automotive markets.

We sell our elastomer components under our ENDUR ® trade name and our floats under our NITROPHYL ® trade name.

Summary of Significant Accounting Policies

Cash Equivalents

Highly liquid investments with original maturities of three months or less are considered cash equivalents.

Cash and Cash Equivalents

Highly liquid investments with original maturities of three months or less are considered cash and cash equivalents.

These investments are stated at cost, which approximates fair value

Investments in Unconsolidated Joint Ventures

We account for our investments in and advances to unconsolidated joint ventures, both of which are 50 % owned, using the equity method of accounting.

Restricted cash is subject to contractual restrictions and not readily available.

Our restricted cash balance recorded in cash and cash equivalents, totaled $ 2.2 million as of December 31, 2023 and 2022, serves as collateral for letters of credit related to our environmental and workers’ compensation liabilities.

Foreign Currency

All balance sheet accounts of foreign subsidiaries are translated or remeasured at exchange rates in effect at each year end, and income statement items are translated using the average exchange rates for the year.

Translation adjustments for those entities that operate under a local currency are recorded directly to a separate component of shareholders’ equity, while remeasurement adjustments for those entities that operate under the parent’s functional currency are recorded to the income statement as a component of “Other income (expense), net.” Currency transaction gains and losses are reported as income or expense, respectively, in the consolidated statements of operations as a component of “Other income (expense), net.” Such adjustments resulted in losses of $ 1.7 million, gains of $ 3.0 million and gains of $ 0.9 million in 2022, 2021 and 2020, respectively.

Currency transaction gains and losses are recorded as income or expense, respectively, in the “Other income (expense), net” line item in the consolidated statements of operations.

Such adjustments resulted in gains of $ 1.1 million, losses of $ 1.7 million and gains of $ 3.0 million in 2023, 2022 and 2021, respectively.

Accounts Receivable

Our accounts receivable, net of allowance for credit losses line item in the consolidated statements of financial position include trade receivables, insurance receivables, tax receivables and other miscellaneous receivables.

As of December 31, 2023 and 2022, our trade receivables balances, net of allowance for credit losses, were $ 143.2 million and $ 149.2 million, respectively.

Allowance for Credit Losses

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The allocation of fixed production overheads to the inventory cost is based on the normal capacity of the production facilities.

Our “Inventories” line item in the consolidated statements of financial position consisted of the following:

As of December 31,

(Dollars in thousands) 2022 2021

Raw materials $ 87,851 $ 60,208

Work-in-process 45,100 29,078

Finished goods 49,451 44,098

Total inventories $ 182,402 $ 133,384

Property, Plant and Equipment

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Net capitalized software and development costs were $ 62.1 million and $ 58.9 million as of December 31, 2023 and 2022, respectively.

The December 31, 2022 balance is almost entirely attributable to our planned implementation of a new enterprise resource planning system.

Capitalized software is included within “Property, plant and equipment, net of accumulated depreciation” in the consolidated statements of financial position.

The December 31, 2023 and 2022 balances were almost entirely attributable to our planned implementation of a new enterprise resource planning system, for which useful lives will be determined upon implementation/completion of the project.

Capitalized software is included within the “Property, plant and equipment, net of accumulated depreciation” line item in the consolidated statements of financial position.

The Company determines whether an arrangement is a lease at contract inception by establishing if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

Lease right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of all minimum lease payments over the lease term.

We use an incremental borrowing rate representative of our ability to borrow on a collateralized basis over a similar lease term.

Lease terms may include options to extend or terminate the lease.

These options are included in the lease term when it is reasonably certain that we will exercise that option.

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

We have elected the following policy elections on adoption:

separating lease and non-lease components, exclusion of short-term leases on the balance sheet and recognition of lease payments for short-term leases in the consolidated statements of operations on a straight-line basis.

Goodwill and Other Intangible Assets

14 unchanged sentences

Upon performing the quantitative assessment, if the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to that excess, not to exceed the carrying amount of goodwill.

The application of the annual goodwill impairment test requires significant judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units and determination of the fair value of each reporting unit.

Determining the fair value is subjective and requires the use of significant estimates and assumptions, including financial projections for net sales, gross margin and operating margin, discount rates, terminal growth rates and future market conditions, among others.

We estimated the fair value of our reporting units using an income approach based on the present value of future cash flows through a five-year discounted cash flow analysis.

The discounted cash flow analysis utilized the discount rates for each of the reporting units ranging from 11.1 % for EMS to 13.6 % for ECD, and terminal growth rates ranging from 3.4 % for EMS to 3.5 % for RF Solutions, curamik ® and ECD.

We believe this approach yields the most appropriate evidence of fair value as our reporting units are not easily compared to other corporations involved in similar businesses.

We further believe that the assumptions and rates used in our annual goodwill impairment test are reasonable, but inherently uncertain.

We currently have four reporting units with goodwill:

RF Solutions, EMS, curamik ® and Elastomer Components Division (ECD).

Consistent with historical practice, the annual impairment test on these reporting units was performed as of November 30, 2023.

In 2023, we elected to utilize a qualitative assessment.

There were no impairment charges resulting from our goodwill impairment assessment for the year ended December 31, 2023.

1 unchanged sentence

Indefinite-lived other intangible assets are evaluated for impairment annually, and between annual impairment assessments if events or changes in circumstances indicate the carrying value may be impaired, by first performing a qualitative assessment to determine whether a quantitative indefinite-lived other intangible asset impairment assessment is necessary.

If it is determined, based on qualitative factors, the fair value of the indefinite-lived other intangible asset may be more likely than not less than its

carrying amount or if significant changes to macro-economic factors related to the indefinite-lived other intangible asset have occurred that could materially impact fair value, a quantitative indefinite-lived other intangible asset impairment assessment would be required.

If it is determined, based on qualitative factors, the fair value of the indefinite-lived other intangible asset may be more likely than not less than its carrying amount or if significant changes to macro-economic factors related to the indefinite-lived other intangible asset have occurred that could materially impact fair value, a quantitative indefinite-lived other intangible asset impairment assessment would be required.

We can elect to forgo the qualitative assessment and perform a quantitative assessment.

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Such assumptions are subject to variability from year to year and are directly impacted by global market conditions.

There were $ 17.9 million of impairment charges resulting from our definite-lived other intangible assets impairment analysis for the year ended December 31, 2022.

There were no impairment charges resulting from our definite-lived other intangible assets impairment analysis for the year ended December 31, 2023.

Our RF Solutions, EMS and curamik ® reporting units had definite-lived other intangible assets of $ 0.9 million, $ 115.3 million and $ 3.4 million, respectively, as of December 31, 2023.

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We are required, as an employer, to:

(a) recognize in our consolidated statements of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status;

(a) recognize in the consolidated statements of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status;

(b) measure a plan’s assets and a plan’s obligations that determine our funded status as of the end of the year;

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Our estimates of asbestos-related contingent liabilities and related insurance receivables are based on a claim projection analysis and an insurance usage analysis prepared annually by third parties.

The claim projection analysis contains numerous assumptions, including number of claims that might be received, the type and severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, dismissal rates, average indemnity costs, average defense costs, costs of medical treatment, the financial resources of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, and the impact of potential changes in legislative or judicial standards, including potential tort reform.

The claim projection analysis contains numerous assumptions, including number of claims that might be received, the type and

severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, dismissal rates, average indemnity costs, average defense costs, costs of medical treatment, the financial resources of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, and the impact of potential changes in legislative or judicial standards, including potential tort reform.

Furthermore, any predictions with respect to these assumptions are subject to even greater uncertainty as the projection period lengthens.

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We believe that it is reasonably possible that we may incur additional charges for our asbestos liabilities and defense costs in the future that could exceed existing reserves and insurance recoveries.

Investments in Unconsolidated Joint Ventures

We account for our investments in and advances to unconsolidated joint ventures, both of which are 50 % owned, using the equity method of accounting.

Fair Value of Financial Instruments

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The fair value of our borrowings under our revolving credit facility are determined using discounted cash flows based upon our estimated current interest cost for similar type borrowings or current market value, which falls under Level 2 of the fair value hierarchy.

Based on our credit characteristics as of December 31, 2022, borrowings would generally bear interest at London interbank offered rate (LIBOR) plus 175.0 basis points.

As the current borrowings under the Fourth Amended Credit Agreement bear interest at adjusted 1-month LIBOR plus 175.0 basis points, we believe the carrying value of our borrowings approximates fair value.

For additional information on the calculation of fair value measurements, refer to “Note 2 – Fair Value Measurements.”

Hedging Transactions and Derivative Financial Instruments

From time to time, we use derivative instruments to manage commodity, interest rate and foreign currency exposures.

Derivative instruments are viewed as risk management tools and are not used for trading or speculative purposes.

Based on our credit characteristics as of December 31, 2023, borrowings would generally bear interest at SOFR plus 162.5 basis points.

As the current borrowings under the Fifth Amended Credit Agreement bear interest at adjusted 1-month SOFR plus 162.5 basis points, we believe the carrying value of our borrowings approximates fair value.

For additional information on the calculation of fair value measurements, refer to “Note 3 – Derivatives and Hedging.”

Derivative Financial Instruments and Hedging Transactions

We are exposed to certain risks related to our ongoing business operations, and, from time to time, we manage these risk exposures by utilizing derivative financial instruments.

We do not utilize derivative financial instruments for trading or speculative purposes.

The primary risks being managed through our use of derivative instruments are foreign currency exchange rate risk and commodity pricing risk (primarily related to copper).

To qualify for hedge accounting treatment, derivatives used for hedging purposes must be designated and deemed effective as a hedge of the identified underlying risk exposure at the inception of the contract.

Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract.

Derivatives used to hedge forecasted cash flows associated with interest rates, foreign currency commitments, or forecasted commodity purchases are accounted for as cash flow hedges.

The derivative hedging instrument will be reclassified to earnings when the hedged item impacts earnings.

For those derivative instruments that do not qualify for hedge accounting treatment, any related gains and losses are recognized in the consolidated statements of operations as a component of “Other income (expense), net.” For additional information, refer to “Note 3 – Hedging Transactions and Derivative Financial Instruments.”

For those derivative instruments that qualify for hedge accounting treatment, if the hedge is highly effective, all changes in the fair value of the derivative hedging instrument are recorded as a component of “Other comprehensive income (loss)” in the consolidated statements of comprehensive income, with the derivative hedging instrument impacts being reclassified to earnings when the hedged item impacts earnings.

For those derivative instruments that do not qualify for hedge accounting treatment, any related gains and losses are recognized as a component of “Other income (expense), net” in the consolidated statements of operations.

For additional information, refer to “Note 3 – Derivatives and Hedging.”

Concentration of Credit and Investment Risk

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and in numerous foreign jurisdictions.

We account for income taxes following Accounting Standards Codification (ASC) 740, Income Taxes , recognizing deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between book and tax basis of recorded assets and liabilities.

We account for income taxes following ASC 740, Income Taxes , recognizing deferred tax assets and liabilities using enacted tax rates for the effect of temporary differences between book and tax basis of recorded assets and liabilities.

Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of a deferred tax asset will not be realized.

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Advertising Costs

Advertising costs are expensed as incurred and amounted to $ 3.3 million, $ 2.7 million and $ 2.2 million in 2022, 2021 and 2020, respectively.

Note 2 – Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As a result of our pension termination and settlement efforts in late 2019 and the first half of 2020, we had a pension surplus investment balance, which was accounted for as an available-for-sale investment.

For additional information regarding this balance, refer to “Note 11 – Pension Benefits and Other Postretirement Benefits.” Available-for-sale investments measured at fair value on a recurring basis, categorized by the level of inputs used in the valuation, were as follows:

Available-for-Sale Investment at Fair Value as of December 31, 2022

Pension surplus investment Level 1 Level 2 Level 3 Total

$ — $ — $ — $ —

Available-for-Sale Investment at Fair Value as of December 31, 2021

Level 1 Level 2 Level 3 Total(1)

Pension surplus investment (1)

Advertising costs are expensed as incurred and included in the "Selling, general and administrative expenses” line item of the consolidated statements of operations, amounted to $ 3.5 million, $ 3.3 million and $ 2.7 million in 2023, 2022 and 2021, respectively.

Reclassification

Certain reclassifications have been made in the 2022 and 2021 financial statements and notes to conform to the 2023 presentation.

Note 2 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss by component for each of the fiscal years in the two-year period ended December 31, 2023 were as follows:

(Dollars and accompanying footnotes in millions) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefits (1)

Balance as of December 31, 2021 $ ( 35.6 ) $ ( 9.6 ) $ ( 45.2 )

Other comprehensive income (loss) before reclassifications ( 40.0 ) ( 0.2 ) ( 40.2 )

Amounts reclassified to earnings — 0.2 0.2

Net other comprehensive income (loss) for period ( 40.0 ) — ( 40.0 )

Balance as of December 31, 2022 ( 75.6 ) ( 9.6 ) ( 85.2 )

Other comprehensive income (loss) before reclassifications 18.8 ( 0.4 ) 18.4

Amounts reclassified to earnings — 0.4 0.4

Net other comprehensive income (loss) for period 18.8 — 18.8

Balance as of December 31, 2023 $ ( 56.8 ) $ ( 9.6 ) $ ( 66.4 )

(1) Net of taxes of $ 1.8 million, $ 1.9 million and $ 2.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The impacts to the consolidated statements of operations related to items reclassified to earnings were as follows:

Years Ended December 31,

(Dollars in millions) Financial Statement Line Item 2023 2022

Amortization/settlement of pension and other postretirement benefits

Pension settlement charges (1)

Other income (expense), net (1)

( 0.4 ) ( 0.4 )

(1) This balance was invested in a money market fund and was recorded in the “Other long-term assets” line item in the condensed consolidated statements of financial position.

As of December 31, 2021, the fair value of this investment approximated its carrying value.

From time to time we enter into various instruments that require fair value measurement, including foreign currency contracts, copper derivative contracts and interest rate swaps.

Derivative instruments measured at fair value on a recurring basis, categorized by the level of inputs used in the valuation, include:

Derivative Instruments at Fair Value as of December 31, 2022

(Dollars in thousands) Level 1 Level 2 Level 3 Total (1)

Foreign currency contracts $ — $ ( 82 ) $ — $ ( 82 )

Copper derivative contracts $ — $ 500 $ — $ 500

Derivative Instruments at Fair Value as of December 31, 2021

(Dollars in thousands) Level 1 Level 2 Level 3 Total (1)

Foreign currency contracts $ — $ ( 16 ) $ — $ ( 16 )

Copper derivative contracts $ — $ 1,344 $ — $ 1,344

(1) All balances were recorded in the “Other current assets” or “Other accrued liabilities” line items in the consolidated statements of financial position.

For additional information on our derivative contracts, refer to “Note 3 – Hedging Transactions and Derivative Financial Instruments.”

Note 3 – Hedging Transactions and Derivative Financial Instruments

We are exposed to certain risks related to our ongoing business operations.

The primary risks being managed through our use of derivative instruments are foreign currency exchange rate risk, commodity pricing risk (primarily related to copper) and interest rate risk.

We do not use derivative financial instruments for trading or speculative purposes.

The valuation of derivative contracts used to manage each of these risks is described below:

Income tax (expense) benefit 0.1 0.2

Net income $ ( 0.4 ) $ ( 0.2 )

(1) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost.

For additional details, refer to “Note 8 – Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plan.”

Note 3 – Derivatives and Hedging

The valuation of our derivative contracts used to manage their respective risks is described below:

• Foreign Currency – The fair value of any foreign currency option derivative is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics.

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price of the underlying instrument, time to expiration, strike price, interest rate and volatility.

The intrinsic valuation model reflects the difference between the

strike price of the underlying copper derivative instrument and the current prevailing copper prices in an over-the-counter market at period end.

The intrinsic valuation model reflects the difference between the strike price of the underlying copper derivative instrument and the current prevailing copper prices in an over-the-counter market at period end.

The time value valuation model incorporates changes in the price of the underlying copper derivative instrument, the time value of money, the underlying copper derivative instrument’s strike price and the remaining time to the underlying copper derivative instrument’s expiration date from the period end date.

• Interest Rates – The fair value of interest rate swap instruments is derived by comparing the present value of the interest rate forward curve against the present value of the swap rate, relative to the notional amount of the swap.

The net value represents the estimated amount we would receive or pay to terminate the agreements.

Settlement amounts for an “in the money” swap would be adjusted down to compensate the counterparty for cost of funds, and the adjustment is directly related to the counterparties’ credit ratings.

The guidance for the accounting and disclosure of derivatives and hedging transactions requires companies to recognize all of their derivative instruments as either assets or liabilities at fair value in the statements of financial position.

The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies for hedge accounting treatment as defined under the applicable accounting guidance.

For derivative instruments that are designated and qualify for hedge accounting treatment as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss).

This gain or loss is reclassified into earnings in the same line item of the consolidated statements of operations associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.

As of December 31, 2023, we did not have any derivative contracts that qualified for hedge accounting treatment.

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In 2023, we entered into U.S.

dollar, Korean won, and euro forward contracts.

dollar, euro, Korean won, and Japanese yen forward contracts.

We entered into these foreign currency forward contracts to mitigate certain global transactional exposures.

These contracts do not qualify for hedge accounting treatment.

As a result, any fair value adjustments required on these contracts are recorded in “Other income (expense), net” in our consolidated statements of operations in the period in which the adjustment occurred.

As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in the consolidated statements of operations in the period in which the adjustment occurred.

As of December 31, 2023, the notional values of these foreign currency forward contracts were as follows:

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EUR/USD € 12,600,000

JPY/EUR ¥ 250,000,000

As of December 31, 2023, we had 12 outstanding contracts to hedge exposure related to the purchase of copper in our AES operating segment.

These contracts are held with financial institutions and are intended to offset rising copper prices and do not qualify for hedge accounting treatment.

As a result, any fair value adjustments required on these contracts are recorded in “Other income (expense), net” in our con solidated statements of operations in the period in which the adjustment occurred.

As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in the con solidated statements of operations in the period in which the adjustment occurred.

As of December 31, 2023, the volume of our copper contracts outstanding were as follows:

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October 2024 - December 2024 69 metric tons per month

Interest Rates

In March 2017, we entered into an interest rate swap to hedge the variable interest rate on $ 75.0 million of our $ 450.0 million revolving credit facility.

We terminated the interest rate swap in September 2020.

As a result, we settled the interest rate swap for $ 2.4 million in October 2020, representing the fair value of the interest rate swap on the date of termination.

Both Rogers Corporation and the counterparties released each other from all obligation under the interest rate swap agreement, including the obligation to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to the agreed upon notional principal amount of $ 75.0 million.

Effects on Financial Statements

The following table presents the impact from these instruments on the statement of operations and statements of comprehensive income:

The following table presents the impact from these instruments on the consolidated statements of operations and consolidated statements of comprehensive income:

Years Ended December 31,

(Dollars in thousands) Financial Statement Line Item 2022 2021 2020

(Dollars in millions) Financial Statement Line Item 2023 2022 2021

Foreign Currency Contracts

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Contracts not designated as hedging instruments Other income (expense), net $ ( 0.6 ) $ 0.8 $ 3.9

Interest Rate Swap Contract

Contract designated as hedging instrument Other comprehensive income (loss) $ — $ — $ 1,254

Note 4 – Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss by component for each of the fiscal years in the two-year period ended December 31, 2022 were as follows:

(Dollars and accompanying footnotes in thousands) Foreign Currency Translation Adjustments Pension and Other Postretirement Benefits (1)

Balance as of December 31, 2020 $ ( 10,571 ) $ ( 9,004 ) $ ( 19,575 )

Other comprehensive income (loss) before reclassifications ( 25,070 ) ( 823 ) ( 25,893 )

Amounts reclassified to earnings — 225 225

Net other comprehensive income (loss) for period ( 25,070 ) ( 598 ) ( 25,668 )

Balance as of December 31, 2021 ( 35,641 ) ( 9,602 ) ( 45,243 )

Other comprehensive income (loss) before reclassifications ( 39,934 ) ( 244 ) ( 40,178 )

Amounts reclassified to earnings — 157 157

Net other comprehensive income (loss) for period ( 39,934 ) ( 87 ) ( 40,021 )

Balance as of December 31, 2022 $ ( 75,575 ) $ ( 9,689 ) $ ( 85,264 )

(1) Net of taxes of $ 1,926 , $ 2,125 and $ 1,951 for the years ended December 31, 2022, 2021 and 2020, respectively.

The impacts to the consolidated statements of operations related to items reclassified to earnings were as follows:

Years Ended December 31,

(Dollars in thousands) Financial Statement Line Item 2022 2021

Amortization/settlement of pension and other postretirement benefits

Pension settlement charges $ — $ —

Other income (expense), net (1)

( 405 ) ( 290 )

Income tax (expense) benefit 248 65

Net income $ ( 157 ) $ ( 225 )

(1) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost.

For additional details, refer to “Note 11 – Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plan.”

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair values of derivative instruments measured at fair value on a recurring basis, categorized by contract type and level of inputs used in the valuation, were as follows:

Derivative Instruments at Fair Value as of December 31, 2023

(Dollars in millions) Level 1 Level 2 Level 3 Total (1)

Foreign currency contracts $ — $ ( 0.2 ) $ — $ ( 0.2 )

Copper derivative contracts $ — $ 0.4 $ — $ 0.4

Derivative Instruments at Fair Value as of December 31, 2022

(Dollars in millions) Level 1 Level 2 Level 3 Total (1)

Foreign currency contracts $ — $ ( 0.1 ) $ — $ ( 0.1 )

Copper derivative contracts $ — $ 0.5 $ — $ 0.5

(1) All balances were recorded in the “Other current assets” or the “Other accrued liabilities” line items in the consolidated statements of financial position.

Note 4 – Inventories, net

The “Inventories, net” line item in the consolidated statements of financial position consisted of the following:

As of December 31,

(Dollars in millions) 2023 2022

Raw materials $ 71.5 $ 87.9

Work-in-process 45.6 45.1

Finished goods 36.4 49.4

Total inventories, net $ 153.5 $ 182.4

Note 5 – Property, Plant and Equipment

Our “Property, plant and equipment, net” line item in the consolidated statements of financial position consisted of the following:

The “Property, plant and equipment, net” line item in the consolidated statements of financial position consisted of the following:

As of December 31,

(Dollars in thousands) 2022 2021

(Dollars in millions) 2023 2022

Land and improvements $ 16.8 $ 23.9

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Property, plant and equipment, net 222.0 207.4

Equipment in process 151,049 126,284

Construction in process 144.3 151.0

Total property, plant and equipment, net $ 366.3 $ 358.4

Depreciation expense was $ 37.7 million, $ 29.5 million and $ 29.0 million in 2023, 2022 and 2021, respectively.

Additionally, we recognized $ 47.2 million, $ 0.5 million and $ 0.6 million of impairment charges in 2022, 2021 and 2020, respectively.

For additional information related to the impairment charges, refer to “ Note 15 – Supplemental Financial Information.

Note 6 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the period ending December 31, 2022, by operating segment, were as follows:

(Dollars in thousands) Advanced Electronics Solutions Elastomeric Material Solutions Other Total

December 31, 2021 $ 119,567 $ 248,398 $ 2,224 $ 370,189

Purchase accounting adjustment — ( 926 ) — ( 926 )

Foreign currency translation adjustment ( 4,215 ) ( 12,683 ) — ( 16,898 )

December 31, 2022 $ 115,352 $ 234,789 $ 2,224 $ 352,365

Other Intangible Assets

The carrying amount of other intangible assets were as follows:

December 31, 2022 December 31, 2021

(Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Customer relationships $ 178,605 $ 85,569 $ 93,036 $ 198,095 $ 77,870 $ 120,225

Technology 82,349 59,052 23,297 88,445 54,900 33,545

Trademarks and trade names 19,098 6,639 12,459 25,504 8,968 16,536

Covenants not to compete 1,919 1,199 720 2,693 1,137 1,556

Total definite-lived other intangible assets 281,971 152,459 129,512 314,737 142,875 171,862

Indefinite-lived other intangible asset 4,212 — 4,212 4,491 — 4,491

Total other intangible assets $ 286,183 $ 152,459 $ 133,724 $ 319,228 $ 142,875 $ 176,353

In the table above, gross carrying amounts and accumulated amortization may differ from prior periods due to foreign exchange rate fluctuations.

Amortization expense was $ 16.4 million, $ 14.3 million and $ 42.1 million in 2022, 2021 and 2020, respectively.

Additionally, in 2022, we impaired $ 17.9 million of customer relationships, technology and trademarks and trade names definite-lived other intangible assets related to our high-performance engineered cellular elastomer business.

Additionally, we recognized $ 47.2 million and $ 0.5 million of impairment charges in 2022 and 2021, respectively.

For additional information related to the impairment charges, refer to “ Note 14 – Supplemental Financial Information.

” The estimated annual future amortization

expense is $ 13.2 million, $ 12.1 million, $ 10.6 million, $ 10.2 million and $ 9.8 million in 2023, 2024, 2025, 2026 and 2027, respectively.

These amounts could vary based on changes in foreign currency exchange rates.

The weighted average amortization period as of December 31, 2022, by definite-lived other intangible asset class, is presented in the table below:

Definite-Lived Other Intangible Asset Class Weighted Average Remaining Amortization Period

Customer relationships 7.7

Technology 3.6

Trademarks and trade names 10.1

Covenants not to compete 1.0

Total definite-lived other intangible assets 7.2

Note 7 – Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding.

Diluted earnings per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding.

The following table sets forth the computation of basic and diluted earnings per share:

Years Ended December 31,

(Dollars and shares in thousands, except per share amounts) 2022 2021 2020

Net income $ 116,629 $ 108,133 $ 49,990

Weighted average shares outstanding - basic 18,784 18,731 18,681

Effect of dilutive shares 169 132 25

Weighted average shares outstanding - diluted 18,953 18,863 18,706

Basic earnings per share $ 6.21 $ 5.77 $ 2.68

Diluted earnings per share $ 6.15 $ 5.73 $ 2.67

Dilutive shares are calculated using the treasury stock method and primarily include unvested restricted stock units.

Anti-dilutive shares are excluded from the calculation of diluted shares and diluted earnings per share.

For 2022, 2021 and 2020, 18,444 , 721 and 8,454 shares were excluded, respectively.

Note 8 – Capital Stock and Equity Compensation

Capital Stock

Our 2019 Long-Term Equity Compensation Plan, which was approved by our shareholders in May 2019, permits the granting of restricted stock units and certain other forms of equity awards to officers and other key employees.

Under this plan, we also grant each non-management director deferred stock units, which permit non-management directors to receive, at a later date, one share of Rogers capital stock for each deferred stock unit, with no payment of any consideration by the director at the time the shares were received.

Shares of capital stock reserved for possible future issuance were as follows:

As of December 31,

Shares reserved for issuance under outstanding restricted stock unit awards 255,310 320,381

Deferred compensation to be paid in stock, including deferred stock units 6,850 9,500

Additional shares reserved for issuance under Rogers Corporation 2019 Long-Term Equity Compensation Plan 914,439 869,516

Shares reserved for issuance under the Rogers Corporation Global Stock Ownership Plan for Employees (1)

59,611 65,163

Total 1,236,210 1,264,560

(1) This is an employee stock purchase plan within the meaning of Section 432(b) of the Internal Revenue Code of 1986, as amended, that was suspended as of December 31, 2021, pursuant to the then-pending merger agreement with DuPont.

Share Repurchases

In 2015, we initiated a share repurchase program (the Program) of up to $ 100.0 million of the Company’s capital stock.

We initiated the Program to mitigate potentially dilutive effects of stock options and shares of restricted stock granted by the Company, in addition to enhancing shareholder value.

The share repurchase program has no expiration date and may be suspended or discontinued at any time without notice.

As of December 31, 2022, $ 24.0 million remained of our $ 100.0 million share repurchase program.

In 2022, we purchased 237,806 shares for a total value of $ 25.0 million.

There were no share repurchases in 2021 or 2020.

Equity Compensation

Performance-Based Restricted Stock Units

As of December 31, 2022, we had performance-based restricted stock units from 2021 and 2020 outstanding.

These awards generally cliff vest at the end of a three-year measurement period.

However, employees whose employment terminates during the measurement period due to death, disability, or, in certain cases, retirement may receive a pro-rata payout based on the number of days they were employed during the measurement period.

Participants are eligible to be awarded shares ranging from 0 % to 200 % of the original award amount, based on certain defined performance measures.

The outstanding awards have one measurement criteria:

the three-year total shareholder return (TSR) on our capital stock as compared to that of a specified group of peer companies.

The TSR measurement criteria of the awards is considered a market condition.

As such, the fair value of this measurement criteria is determined on the grant date using a Monte Carlo simulation valuation model.

We recognize compensation expense on all of these awards on a straight-line basis over the vesting period with no changes for final projected payout of the awards.

We account for forfeitures as they occur.

Below were the assumptions used in the Monte Carlo calculation for each material award granted in 2021 and 2020:

February 10, 2021 February 12, 2020

Expected volatility 51.0 % 41.0 %

Expected term (in years) 2.9 2.9

Risk-free interest rate 0.18 % 1.41 %

Expected volatility – In determining expected volatility, we have considered a number of factors, including historical volatility.

Expected term – We use the vesting period of the award to determine the expected term assumption for the Monte Carlo simulation valuation model.

Risk-free interest rate – We use an implied “spot rate” yield on U.S.

Treasury Constant Maturity rates as of the grant date for our assumption of the risk-free interest rate.

Expected dividend yield – We do not currently pay dividends on our capital stock;

therefore, a dividend yield of 0 % was used in the Monte Carlo simulation valuation model.

A summary of activity of the outstanding performance-based restricted stock units for 2021 and 2020 is presented below:

2022 2021 2020

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 114,554 $ 196.23 111,059 $ 170.84 106,943 $ 161.33

Awards granted 26,819 176.33 41,507 258.17 87,244 131.99

Stock issued ( 60,053 ) 179.72 — — ( 75,486 ) 111.54

Awards forfeited ( 15,807 ) 204.69 ( 38,012 ) 189.69 ( 7,642 ) 179.89

Awards outstanding as of December 31 65,513 $ 201.18 114,554 $ 196.23 111,059 $ 170.84

We recognized $ 2.3 million, $ 7.7 million and $ 5.8 million of compensation expense related to performance-based restricted stock units in 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was $ 1.9 million of total unrecognized compensation cost related to unvested performance-based restricted stock units.

That cost is expected to be recognized over a weighted average period of 0.5 years.

Time-Based Restricted Stock Units

As of December 31, 2022, we had time-based restricted stock unit awards from 2022, 2021 and 2020 outstanding.

The outstanding awards all ratably vest on the first, second and third anniversaries of the original grant date.

Each time-based restricted stock unit represents a right to receive one share of the Rogers’ capital stock at the end of the vesting period.

The fair value of the award is determined by the market value of the underlying stock price at the grant date.

We recognize compensation expense on all of these awards on a straight-line basis over the vesting period.

We account for forfeitures as they occur.

A summary of activity of the outstanding time-based restricted stock units for 2022, 2021 and 2020 is presented below:

2022 2021 2020

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 96,989 $ 157.49 102,142 $ 120.16 101,685 $ 122.68

Awards granted 96,620 219.60 50,640 180.19 58,807 116.87

Stock issued ( 48,253 ) 183.00 ( 46,329 ) 146.45 ( 50,868 ) 111.16

Awards forfeited ( 21,072 ) 223.90 ( 9,464 ) 146.58 ( 7,482 ) 122.87

Awards outstanding as of December 31 124,284 $ 194.60 96,989 $ 157.49 102,142 $ 120.16

We recognized $ 8.2 million, $ 7.6 million and $ 6.0 million of compensation expense related to time-based restricted stock units in 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was $ 16.1 million of total unrecognized compensation cost related to unvested time-based restricted stock units.

That cost is expected to be recognized over a weighted average period of 0.9 years.

Deferred Stock Units

We grant deferred stock units to non-management directors.

These awards are fully vested on the date of grant and the related shares are generally issued on the 13 -month anniversary of the grant date unless the individual elects to defer the receipt of those shares.

Each deferred stock unit results in the issuance of one share of Rogers’ capital stock.

The grant of deferred stock units is typically done annually during the second quarter of each year.

The fair value of the award is determined by the market value of the underlying stock price at the grant date.

A summary of activity of the outstanding deferred stock units for 2022, 2021 and 2020 is presented below:

2022 2021 2020

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 9,500 $ 173.82 12,450 $ 113.96 7,150 $ 170.89

Awards granted 4,800 272.12 6,450 188.60 10,400 108.88

Stock issued ( 7,450 ) 183.20 ( 9,400 ) 104.68 ( 5,100 ) 183.40

Awards outstanding as of December 31 6,850 $ 232.51 9,500 $ 173.82 12,450 $ 113.96

We recognized $ 1.3 million, $ 1.2 million and $ 1.1 million of compensation expense related to deferred stock units in 2022, 2021 and 2020, respectively.

Note 9 – Debt

In October 2020, we entered into the Fourth Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A, as administrative agent, and the lenders party thereto (the Fourth Amended Credit Agreement).

The Fourth Amended Credit Agreement amends and restates the Third Amended Credit Agreement, and provides for a revolving credit facility with up to a $ 450.0 million borrowing capacity, with sublimits for multicurrency borrowings, letters of credit and swing-line notes, in addition to a $ 175.0 million accordion feature.

Borrowings may be used to finance working capital needs, for letters of credit and for general corporate purposes in the ordinary course of business, including the financing of permitted acquisitions (as defined in the Fourth Amended Credit Agreement).

The Fourth Amended Credit Agreement extends the maturity, the date on which all amounts borrowed or outstanding under the Fourth Amended Credit Agreement are due, from October 16, 2020 to March 31, 2024.

All obligations under the Fourth Amended Credit Agreement are guaranteed by each of our existing and future material domestic subsidiaries, as defined in the Fourth Amended Credit Agreement (the Guarantors).

The obligations are also secured by a Fourth Amended and Restated Pledge and Security Agreement, dated as of October 16, 2020, entered into by us and the Guarantors which grants to the administrative agent, for the benefit of the lenders, a security interest, subject to certain exceptions, in substantially all of our and the Guarantors’ non-real estate assets.

These assets include, but are not limited to, receivables, equipment, intellectual property, inventory, and stock in certain subsidiaries.

In March 2021, the U.K.

Financial Conduct Authority (“FCA”) publicly announced that immediately after December 31, 2021, publication of most Euro, Swiss Franc, Japanese Yen and Pound Sterling LIBOR settings will permanently cease.

In October 2021, Rogers Corporation and JPMorgan Chase Bank, N.A.

entered into an amendment (Amendment No 1) to the Fourth Amended Credit Agreement to adopt a new benchmark interest rate to replace the discontinued LIBOR reference rates.

Borrowings under the Fourth Amended Credit Agreement can be made as alternate base rate loans, euro-currency loans, or RFR loans.

Alternate base rate loans bear interest at a base reference rate plus a spread of 62.5 to 100.0 basis points, depending on our leverage ratio.

The base reference rate is the greatest of (a) the prime rate in effect on such day, (b) the NYFRB rate in effect on such day plus ½ of 1%, or (c) the adjusted LIBOR for a one-month interest period in dollars on such day (or if such day is not a business day, the immediately preceding business day) plus 1 %.

Euro-currency loans bear interest based on adjusted LIBOR plus a spread of 162.5 to 200.0 basis points, depending on our leverage ratio.

RFR loans bears interest based upon the Sterling Overnight Index Average (SONIA) plus 0.0326 % plus a spread of 162.5 to 200.0 basis points.

Based on our leverage ratio as of December 31, 2022, the spread was 175.0 basis points.

In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Fourth Amended Credit Agreement, we incur an annual fee of 25 to 35 basis points (based upon our leverage ratio), paid quarterly, of the unused amount of the lenders’ commitments under the Fourth Amended Credit Agreement.

The Fourth Amended Credit Agreement contains customary representations and warranties, covenants, mandatory prepayments and events of default under which our payment obligations may be accelerated.

If an event of default occurs, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

The financial covenants include requirements to maintain (1) a total net leverage ratio of no more than 3.25 to 1.00, subject to a one-time election to increase the maximum total net leverage ratio to 3.50 to 1.00 for one fiscal year in connection with a permitted acquisition, and (2) an interest coverage ratio of no less than 3.00 to 1.00.

We are permitted to net up to $ 50.0 million of unrestricted domestic cash and cash equivalents against indebtedness in the calculation of the total net leverage ratio.

The Fourth Amended Credit Agreement generally permits us to pay cash dividends to our shareholders, provided that (i) no default or event of default has occurred and is continuing or would result from the dividend payment and (ii) our total net leverage ratio does not exceed 2.75 to 1.00.

If our total net leverage ratio exceeds 2.75 to 1.00, we may nonetheless make up to $ 20.0 million in restricted payments, including cash dividends, during the fiscal year, provided that no default or event of default has occurred and is continuing or would result from the payments.

Our total net leverage ratio did not exceed 2.75 to 1.00 as of December 31, 2022.

In 2022, we borrowed $ 100.0 million under our revolving credit facility for use in various operations.

In 2021, we borrowed $ 190.0 million under our revolving credit facility, which was primarily used to fund our acquisition of Silicone Engineering Limited.

In 2020, we borrowed $ 150.0 million under our revolving credit facility as a precautionary measure of increasing our cash position and preserving our financial flexibility with the uncertainty in the global markets resulting from the COVID-19 pandemic.

In 2022, 2021 and 2020, we made discretionary principal payments on our revolving credit facility of $ 75.0 million, $ 25.0 million and $ 248.0 million, respectively.

We had $ 215.0 million of outstanding borrowings under our revolving credit facility as of December 31, 2022, and $ 190.0 million as of December 31, 2021.

We had $ 0.9 million and $ 1.6 million of outstanding line of credit issuance costs as of December 31, 2022 and 2021, respectively, which will be amortized over the life of the Fourth Amended Credit Agreement.

Note 6 – Leases

Finance Leases

We had a finance lease obligation related to our manufacturing facility in Eschenbach, Germany.

Under the terms of the lease agreement, we had an option to purchase the property upon the expiration of the lease on June 30, 2021 at a price which was the greater of (i) the then-current market value or (ii) the residual book value of the land including the buildings and installations thereon.

We exercised this purchase option with a net cash payment of $ 5.0 million on June 30, 2021, extinguishing the remaining finance lease obligation and finance lease right-of-use asset related to this facility.

Our finance lease obligation related to this facility was $ 4.2 million just prior to the exercise of the purchase option and $ 4.2 million as of December 31, 2021.

The finance lease right-of-use asset balance for this facility was $ 6.1 million just prior to the exercise of the purchase option and $ 6.1 million as of December 31, 2021, respectively.

Accumulated amortization related to this finance lease right-of-use asset was $ 4.5 million just prior to the exercise of the purchase option and as of December 31, 2022.

The aggregate of all other finance lease obligations, finance lease right-of-use assets and related accumulated amortization, were immaterial as of December 31, 2022 and December 31, 2021.

Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the consolidated statements of operations, was immaterial for each of the years ended December 31, 2023, 2022 and 2021.

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Operating Leases

We have operating leases primarily related to building space and vehicles.

Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option.

The exercise of lease renewal options is at our sole discretion.

We account for lease components separately from non-lease components.

The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term.

We have operating leases primarily related to manufacturing and R&D facilities, as well as vehicles.

Our expenses and payments for operating leases were as follows:

Year Ended December 31,

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Operating leases expense $ 4.1 $ 2.8 $ 3.0

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Lease Balances in Statements of Financial Position

Our assets and liabilities balances related to finance and operating leases reflected in the consolidated statements of financial position were as follows:

The assets and liabilities balances related to finance and operating leases reflected in the consolidated statements of financial position were as follows:

As of December 31,

(Dollars in thousands) Financial Statement Line Item 2022 2021

(Dollars in millions) Financial Statement Line Item 2023 2022

Finance lease right-of-use assets Property, plant and equipment, net $ 1.5 $ 1.7

Operating lease right-of-use assets Other long-term assets $ 13,013 $ 17,161

Finance lease obligations, current portion Finance lease obligations, current portion $ 498 $ 198

Finance lease obligations, non-current portion Finance lease obligations, non-current portion $ 1,295 $ 209

Operating lease right-of-use assets Operating lease right-of-use assets $ 18.9 $ 13.0

Finance lease obligations, current portion Other accrued liabilities $ 0.4 $ 0.5

Finance lease obligations, non-current portion Other long-term liabilities $ 1.1 $ 1.3

Total finance lease obligations $ 1.5 $ 1.8

Operating lease obligations, current portion Other accrued liabilities $ 2,842 $ 2,810

Operating lease obligations, non-current portion Other long-term liabilities $ 10,689 $ 14,965

Operating lease obligations, current portion Operating lease obligations, current portion $ 3.5 $ 2.8

Operating lease obligations, non-current portion Operating lease obligations, non-current portion $ 15.4 $ 10.7

Total operating lease obligations $ 18.9 $ 13.5

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Finance Operating

(Dollars in thousands) Leases Signed Less:

(Dollars in millions) Leases Signed Less:

Leases Not Yet Commenced Leases in Effect Leases Signed Less:

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The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:

Leases Operating

Weighted Average Remaining Lease Term 4.6 years 6.5 years

Weighted Average Remaining Lease Term

Finance leases 4.0 years 4.6 years

Operating leases 7.0 years 6.5 years

Weighted Average Discount Rate

Practical Expedients

We have elected to recognize lease payments in the consolidated statements of operations on a straight-line basis over the term of the lease for short-term leases.

We also elected the package of practical expedients that allows us to carry forward the historical lease classification and accounting for indirect costs for any existing leases.

Finance leases 4.14 % 3.89 %

Operating leases 5.35 % 5.24 %

Note 7 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the period ending December 31, 2023, by operating segment, were as follows:

(Dollars in millions) Advanced Electronics Solutions Elastomeric Material Solutions Other Total

December 31, 2022 $ 115.4 $ 234.8 $ 2.2 $ 352.4

Foreign currency translation adjustment 2.3 5.1 — 7.4

December 31, 2023 $ 117.7 $ 239.9 $ 2.2 $ 359.8

Other Intangible Assets

The carrying amount of other intangible assets were as follows:

December 31, 2023 December 31, 2022

(Dollars in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Customer relationships $ 177.9 $ 90.0 $ 87.9 $ 178.6 $ 85.6 $ 93.0

Technology 77.4 58.1 19.3 82.4 59.1 23.3

Trademarks and trade names 19.4 7.4 12.0 19.1 6.6 12.5

Covenants not to compete 1.3 0.9 0.4 1.9 1.2 0.7

Total definite-lived other intangible assets 276.0 156.4 119.6 282.0 152.5 129.5

Indefinite-lived other intangible asset 4.3 — 4.3 4.2 — 4.2

Total other intangible assets $ 280.3 $ 156.4 $ 123.9 $ 286.2 $ 152.5 $ 133.7

In the table above, gross carrying amounts and accumulated amortization may differ from prior periods due to foreign exchange rate fluctuations.

Amortization expense was $ 13.4 million, $ 16.4 million and $ 14.3 million in 2023, 2022 and 2021, respectively.

For additional information related to the impairment charges, refer to “ Note 14 – Supplemental Financial Information.

” The estimated annual future amortization expense is $ 12.4 million, $ 10.8 million, $ 10.4 million, $ 10.0 million and $ 7.8 million in 2024, 2025, 2026, 2027 and 2028, respectively.

These amounts could vary based on changes in foreign currency exchange rates.

The weighted average amortization period as of December 31, 2023, by definite-lived other intangible asset class, is presented in the table below:

Definite-Lived Other Intangible Asset Class Weighted Average Remaining Amortization Period

Customer relationships 7.4 years

Technology 3.3 years

Trademarks and trade names 10.0 years

Covenants not to compete 0.5 years

Total definite-lived other intangible assets 7.0 years

Note 8 – Pension Benefits, Other Postretirement Benefits and Employee Savings and Investment Plan

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the Union Plan.

In June 2020, we completed the remaining settlement efforts for the Rogers Corporation Defined Benefit Pension Plan (following its merger with the Hourly Employees Pension Plan of Arlon LLC, Microwave Material and Silicone Technologies Divisions, Bear, Delaware (collectively, the Merged Plan)), which had been terminated and substantially settled in late 2019.

There are no plans to terminate the Union Plan.

Additionally, we sponsor non-qualified noncontributory defined benefit pension plans and postretirement benefit plans including multiple fully insured or self-funded medical plans and life insurance plans for certain retirees.

The measurement date for all plans is December 31 st for each respective plan year.

Pension Plan Termination & Settlement

In October 2019, our Chief Executive Officer approved the termination of the Merged Plan.

We provided participants of the Merged Plan an option to elect either a lump sum distribution or an annuity.

A group annuity contract was purchased with an insurance company for all participants who did not elect a lump sum distribution.

The insurance company became responsible for administering and paying pension benefit payments effective January 1, 2020.

Upon completion of the pension termination and settlement processes for the Merged Plan, we had a $ 9.7 million remaining pension surplus investment balance.

In July 2020 and December 2021, we transferred $ 9.2 million of the pension surplus investment balance to a suspense account held within a trust for the Rogers Employee Savings and Investment Plan (RESIP), a 401(k) plan for domestic employees.

In December 2021, we transferred the remaining pension investment balance not initially transferred, to the RESIP trust suspense account.

In 2021, $ 0.5 million of the pension surplus investment balance was used for further settlement efforts for the Merged Plan termination.

The funds in the RESIP trust suspense account were used to fund certain employer contributions.

In 2022, we exhausted the pension surplus investment balance.

Plan Assets and Plan Benefit Obligations

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Pension Benefits Other Postretirement Benefits

(Dollars in thousands) 2022 2021 2022 2021

(Dollars in millions) 2023 2022 2023 2022

Change in plan assets:

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Actual return on plan assets 1.9 ( 5.6 ) — —

Settlement ( 0.3 ) — — —

Employer contributions 0.3 — — —

Benefit payments ( 1.5 ) ( 1.6 ) — —

Transfer related to plan termination — — — —

Pension settlements — — — —

Fair value of plan assets as of December 31 $ 26.7 $ 26.3 $ — $ —

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Actuarial (gain) loss 0.8 ( 6.6 ) — ( 0.1 )

Settlement ( 0.3 ) — — —

Benefit payments ( 1.5 ) ( 1.5 ) — —

Pension settlements — — — —

Fair value of plan benefit obligations as of December 31 $ 21.4 $ 21.3 $ 1.6 $ 1.4

Amount overfunded (underfunded) $ 5.3 $ 5.0 $ ( 1.6 ) $ ( 1.4 )

The decreases in our plan benefit obligations in 2022 and 2021 were primarily driven by actuarial gains and benefit payments, partially offset by interest costs.

Our pension-related balances reflected in the consolidated statements of financial position consisted of the following:

The increase in our pension plan benefit obligations in 2023 was primarily driven by actuarial losses and interest costs, partially offset by benefit payments and settlements.

The decrease in our pension plan benefit obligations in 2022 was primarily driven by actuarial gains and benefit payments, partially offset by interest costs.

The pension-related balances reflected in the consolidated statements of financial position consisted of the following:

Pension Benefits Other Postretirement Benefits

As of December 31, As of December 31,

(Dollars in thousands) 2022 2021 2022 2021

(Dollars in millions) 2023 2022 2023 2022

Assets & Liabilities:

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Net actuarial (loss) gain $ ( 11.6 ) $ ( 11.8 ) $ 0.2 $ 0.2

Prior service benefit — — — —

Accumulated other comprehensive (loss) income $ ( 11.6 ) $ ( 11.8 ) $ 0.2 $ 0.2

The projected benefit obligation (PBO), accumulated benefit obligation (ABO), and fair value of plan assets for the pension plan with a PBO or ABO in excess of its plan assets were immaterial as of December 31, 2022 and 2021.

The PBO, ABO, and fair value of plan assets for the pension plan with plan assets in excess of its PBO or ABO were $ 21.0 million, $ 21.0 million and $ 26.3 million, respectively, as of December 31, 2022.

The PBO, ABO, and fair value of plan assets for the pension plans with plan assets in excess of their PBO or ABO were $ 28.3 million, $ 28.3 million and $ 33.5 million, respectively, as of December 31, 2021.

The PBO and ABO of plan assets for the other postretirement benefit plans with a PBO or ABO in excess of plan assets were both $ 1.4 million as of December 31, 2022.

The PBO and ABO of plan assets for the other postretirement benefit plans with a PBO or ABO in excess of plan assets were both $ 1.4 million as of December 31, 2021.

The other postretirement benefit plans did no t have any plan assets as of December 31, 2022 or 2021.

The PBO, ABO, and fair value of plan assets for our pension plan with plan assets in excess of its PBO or ABO were as follows:

(Dollars in millions) 2023 2022

Projected benefit obligation $ 21.5 $ 21.0

Accumulated benefit obligation $ 21.5 $ 21.0

Fair value of plan assets $ 26.7 $ 26.3

The PBO and ABO of plan assets for our other postretirement benefit plans with a PBO or ABO in excess of plan assets were as follows:

(Dollars in millions) 2023 2022

Projected benefit obligation $ ( 1.6 ) $ ( 1.4 )

Accumulated benefit obligation $ ( 1.6 ) $ ( 1.4 )

Fair value of plan assets $ — $ —

The PBO, ABO, and fair value of plan assets for our pension plan with a PBO or ABO in excess of its plan assets were immaterial as of December 31, 2023 and 2022.

Components of Net Periodic Benefit Cost (Credit)

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Years Ended December 31, Years Ended December 31,

(Dollars in thousands) 2022 2021 2020 2022 2021 2020

(Dollars in millions) 2023 2022 2021 2023 2022 2021

Service cost $ — $ — $ — $ 0.1 $ 0.1 $ 0.1

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Amortization of net loss (gain) 0.5 0.4 0.4 — — —

Settlement charge — — ( 63 ) — — —

Settlement 0.1 — — — — —

Net periodic benefit cost (credit) $ 0.3 $ ( 0.2 ) $ ( 0.4 ) $ 0.2 $ 0.1 $ —

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Fair Value of Plan Assets as of December 31, 2023

(Dollars in thousands) Level 1 Level 2 Level 3 Total

(Dollars in millions) Level 1 Level 2 Level 3 Total

Fixed income bonds $ 0.2 $ 22.3 $ — $ 22.5

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Fair Value of Plan Assets as of December 31, 2022

(Dollars in thousands) Level 1 Level 2 Level 3 Total

(Dollars in millions) Level 1 Level 2 Level 3 Total

Fixed income bonds $ — $ 22.2 $ — $ 22.2

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The following table presents a summary of changes in the fair value of the guaranteed deposit account’s Level 3 assets for the year ended December 31, 2023:

Guaranteed Deposit Account

(Dollars in millions) Guaranteed Deposit Account

Balance as of December 31, 2022 $ 1.1

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We were not required to make any contributions to our qualified noncontributory defined benefit pension plan in 2023 and 2022.

We made expected benefit payments for our qualified defined benefit pension plan through the utilization of plan assets for the funded pension plans in 2022 and 2021.

We made expected benefit payments for our qualified noncontributory defined benefit pension plan through the utilization of plan assets in 2023 and 2022.

As there is no funding requirement for the non-qualified noncontributory defined benefit pension plans and other postretirement benefit plans, we funded benefit payments, which were immaterial in 2023 and 2022, as incurred using cash from operations.

The benefit payments are based on the same assumptions used to measure our benefit obligations as of December 31, 2023.

The following table sets forth the expected benefit payments to be paid for the pension plans and the other postretirement benefit plans:

Pension Benefits Other Postretirement Benefits

The following table sets forth the expected benefit payments to be paid for our pension plans and our other postretirement benefit plans:

(Dollars in millions) Pension Benefits Other Postretirement Benefits

2024 $ 1.7 $ 0.2

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RESIP related expense amounted to $ 4.6 million, $ 11.8 million and $ 5.6 million in 2023, 2022 and 2021, respectively.

The increase in expense in 2022 was primarily due to a $ 6.5 million discretionary RESIP contribution related to the previously anticipated merger with DuPont.

The higher expense in 2022 was primarily due to a $ 6.5 million discretionary RESIP contribution related to the previously anticipated merger with DuPont.

Note 9 – Debt

In October 2020, we entered into the Fourth Amended Credit Agreement.

The Fourth Amended Credit Agreement amended and restated the Third Amended Credit Agreement, and provided for a revolving credit facility with up to a $ 450.0 million borrowing capacity, with sublimits for multicurrency borrowings, letters of credit and swing-line notes, in addition to a $ 175.0 million accordion feature.

Borrowings may have been used to finance working capital needs, for letters of credit and for general corporate purposes in the ordinary course of business, including the financing of permitted acquisitions (as defined in the Fourth Amended Credit Agreement).

The Fourth Amended Credit Agreement extended the maturity, the date on which all amounts borrowed or outstanding under the Fourth Amended Credit Agreement were due, from February 17, 2022 to March 31, 2024.

All obligations under the Fourth Amended Credit Agreement were guaranteed by each of our existing and future material domestic subsidiaries, as defined in the Fourth Amended Credit Agreement (the Guarantors).

The obligations were also secured by a Fourth Amended and Restated Pledge and Security Agreement, dated as of February 17, 2022, entered into by us and the Guarantors which granted to the administrative agent, for the benefit of the lenders, a security interest, subject to certain exceptions, in substantially all of our and the Guarantors’ non-real estate assets.

These assets included, but were not limited to, receivables, equipment, intellectual property, inventory, and stock in certain subsidiaries.

In March 2021, the FCA publicly announced that immediately after December 31, 2021, publication of most Euro, Swiss Franc, Japanese Yen and Pound Sterling LIBOR settings would permanently cease.

In October 2021, Rogers Corporation and

JPMorgan Chase entered into an amendment (Amendment No 1) to the Fourth Amended Credit Agreement to adopt a new benchmark interest rate to replace the discontinued LIBOR reference rates.

Borrowings under the Fourth Amended Credit Agreement could have been made as alternate base rate loans, euro-currency loans, or RFR loans.

Alternate base rate loans bear interest at a base reference rate plus a spread of 62.5 to 100.0 basis points, depending on our leverage ratio.

The base reference rate was the greatest of (a) the prime rate in effect on such day, (b) the NYFRB rate in effect on such day plus ½ of 1%, and (c) the adjusted LIBOR for a one-month interest period in dollars on such day (or if such day was not a business day, the immediately preceding business day) plus 1 %.

Euro-currency loans bear interest based on adjusted LIBOR plus a spread of 162.5 to 200.0 basis points, depending on our leverage ratio.

RFR loans bears interest based upon the SONIA plus 0.0326 % plus a spread of 162.5 to 200.0 basis points.

In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Fourth Amended Credit Agreement, we incurred an annual fee of 25 to 35 basis points (based upon our leverage ratio), paid quarterly, of the unused amount of the lenders’ commitments under the Fourth Amended Credit Agreement.

The Fourth Amended Credit Agreement contained customary representations and warranties, covenants, mandatory prepayments and events of default under which our payment obligations may have been accelerated.

If an event of default occurred, the lenders may have, among other things, terminated their commitments and declared all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

The financial covenants included requirements to maintain (1) a total net leverage ratio of no more than 3.25 to 1.00, subject to a one-time election to increase the maximum total net leverage ratio to 3.50 to 1.00 for one fiscal year in connection with a permitted acquisition, and (2) an interest coverage ratio of no less than 3.00 to 1.00.

We were permitted to net up to $ 50.0 million of unrestricted domestic cash and cash equivalents against indebtedness in the calculation of the total net leverage ratio.

The Fourth Amended Credit Agreement generally permitted us to pay cash dividends to our shareholders, provided that (i) no default or event of default had occurred and was continuing or would have resulted from the dividend payment and (ii) our total net leverage ratio does not exceed 2.75 to 1.00.

If our total net leverage ratio exceeded 2.75 to 1.00, we may have nonetheless made up to $ 20.0 million in restricted payments, including cash dividends, during the fiscal year, provided that no default or event of default had occurred and was continuing or would have resulted from the payments.

On March 24, 2023, we entered into the Fifth Amended Credit Agreement which amends and restates the Fourth Amended Credit Agreement, and provides for (1) a revolving credit facility with up to $ 450.0 million of revolving loans, with sub-limits for multicurrency borrowings, letters of credit and swing-line notes, and (2) a $ 225.0 million expansion feature.

The Fifth Amended Credit Agreement extends the maturity, the date on which all amounts borrowed or outstanding under the Fifth Amended Credit Agreement are due, from March 31, 2024 to March 24, 2028.

All obligations under the Fifth Amended Credit Agreement are guaranteed by each of our existing and future material domestic subsidiaries, as defined in the Fifth Amended Credit Agreement (the Guarantors).

The obligations are also secured by a Fifth Amended and Restated Pledge and Security Agreement, dated as of March 24, 2023, entered into by us and the Guarantors which grants to the administrative agent, for the benefit of the lenders, a security interest, subject to certain exceptions, in substantially all of the non-real estate assets of ours and the Guarantors.

These assets include, but are not limited to, receivables, equipment, intellectual property, inventory, and stock in certain subsidiaries.

Borrowings under the Fifth Amended Credit Agreement bear interest based on one of two options.

Alternate base rate loans will bear interest at a rate that includes a base reference rate plus a spread of 62.5 to 100.0 basis points, depending on our leverage ratio.

The base reference rate will be the greater of the (1) prime rate, (2) federal funds effective rate plus 50.0 basis points, and (3) one-month Term SOFR plus 110.0 basis points.

Loans bearing an interest rate determined by reference to the Adjusted Term SOFR Rate, the Adjusted EURIBOR, or the Adjusted TIBOR (each as defined in the Fifth Amended Credit Agreement) will bear interest based on the screen rate plus a spread of 162.5 to 200.0 basis points, depending on our leverage ratio.

Based on our leverage ratio as of December 31, 2023, the spread was 162.5 basis points.

In addition to interest payable on the principal amount of indebtedness outstanding, we incur an annual fee of 25.0 to 35.0 basis points (based upon our leverage ratio), paid quarterly, of the unused amount of the lenders’ commitments under the Fifth Amended Credit Agreement.

The Fifth Amended Credit Agree ment contains customary representations and warranties, covenants, mandatory prepayments and events of default under which the Company’s payment obligations may be accelerated.

The financial covenants include a requirement to maintain (1) a total net leverage ratio of no more than 3.25 to 1.00, subject to a one-time election to increase the maximum total net leverage ratio to 3.75 to 1.00 for one fiscal year in connection with a permitted acquisition, and (2) an interest coverage ratio of no less than 3.00 to 1.00.

We are permitted to net up to $ 50.0 million of unrestricted domestic cash and cash equivalents in the calculation of the total net leverage ratio.

The Fifth Amended Credit Agreement generally permits

us to pay cash dividends to our shareholders, provided that (i) no default or event of default has occurred and is continuing or would result from the dividend payment and (ii) our total net leverage ratio does not exceed 2.75 to 1.00.

Our total net leverage ratio did not exceed 2.75 to 1.00 and our interest coverage ratio was greater than or equal to 3.00 to 1.00 as of December 31, 2023.

There were no new borrowings under our revolving credit facility in 2023, and $ 100.0 million and $ 190.0 million in new borrowings under our revolving credit facility in 2022 and 2021, respectively.

Our new borrowings in 2022 were for use in various operations, while our new borrowings in 2021 were primarily used to fund our acquisition of Silicone Engineering.

We made discretionary principal payments on our revolving credit facility of $ 185.0 million, $ 75.0 million and $ 25.0 million in 2023, 2022 and 2021, respectively.

We had $ 30.0 million and $ 215.0 million of outstanding borrowings under our revolving credit facility as of December 31, 2023 and 2022, respectively.

We had $ 2.1 million and $ 0.9 million of outstanding line of credit issuance costs as of December 31, 2023 and 2022, respectively, which will be amortized over the life of the Fifth Amended Credit Agreement.

Note 10 – Commitments and Contingencies

Environmental & Legal

We are currently engaged in the following environmental and legal proceedings:

Voluntary Corrective Action Program

Our location in Rogers, Connecticut is part of the Connecticut Voluntary Corrective Action Program (VCAP).

As part of this program, we partnered with the Connecticut Department of Energy and Environmental Protection (CT DEEP) to determine the corrective actions to be taken at the site related to contamination issues.

We evaluated this matter and completed internal due

diligence work related to the site in the fourth quarter of 2015.

Remediation activities on the site are ongoing and are recorded as reductions to the accrual as they are incurred.

We have incurred aggregate remediation costs of $ 1.9 million through December 31, 2022, and the accrual for future remediation efforts is $ 0.7 million.

Legal & Environmental

We are currently engaged in the following legal and environmental proceedings:

Asbestos Products Litigation

We, like many other industrial companies, have been named as a defendant in a number of lawsuits filed in courts across the country by persons alleging personal injury from exposure to products containing asbestos.

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Most of the claims filed against us involve numerous defendants, sometimes as many as several hundred.

In virtually all of the cases against us, the plaintiffs are seeking unspecified damages above a jurisdictional minimum against multiple defendants who may have manufactured, sold or used asbestos-containing products to which the plaintiffs were allegedly exposed and from which they purportedly suffered injury.

Most of these cases are being litigated in Maryland, Illinois, Missouri and New York;

however, we are also defending cases in other states.

We continue to vigorously defend these cases, primarily on the basis of the plaintiffs’ inability to establish compensable loss as a result of exposure to our products.

The indemnity and defense costs of our asbestos-related product liability litigation to date have been substantially covered by insurance.

The following table summarizes the change in number of asbestos claims outstanding during 2023 and 2022:

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Pending claims concluded (1)

( 167 ) ( 135 )

Claims outstanding as of December 31 506 537

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To date, the indemnity and defense costs of our asbestos-related product liability litigation have been substantially covered by insurance.

Although we have exhausted coverage under some of our insurance policies, we believe that we have applicable primary, excess and/or umbrella coverage for claims arising with respect to most of the years during which we manufactured and marketed asbestos-containing products.

and marketed asbestos-containing products.

In addition, we have entered into a cost sharing agreement with most of our primary, excess and umbrella insurance carriers to facilitate the ongoing administration and payment of claims covered by the carriers.

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However, projecting future events, such as the number of new claims to be filed each year, the average cost of disposing of such claims, the length of time it takes to dispose of such claims, coverage issues among insurers and the continuing solvency of various insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the U.S., could cause the actual liability and insurance recoveries for us to be higher or lower than those projected or recorded.

The full extent of our financial exposure to asbestos-related litigation remains very difficult to estimate and could include both compensatory and punitive damage awards.

Changes recorded in the estimated liability and estimated insurance recovery based on the projections of asbestos litigation and corresponding insurance coverage, result in the recognition of expense or income.

We recognized an immaterial amount of expense and an immaterial amount of income in 2022 and 2021, respectively, as well as income of $ 0.7 million in 2020.

The benefit recognized in 2020 was primarily due to a favorable change in the defense cost assumptions.

We recognized an immaterial impact to the statements of operations in 2023, 2022 and 2021.

Our projected asbestos-related claims and insurance receivables were as follows:

As of December 31,

(Dollars in thousands) 2022 2021

(Dollars in millions) 2023 2022

Asbestos-related liabilities $ 61.5 $ 65.1

Asbestos-related insurance receivables $ 56.5 $ 59.8

Environmental Voluntary Corrective Action Program

Our location in Rogers, Connecticut is part of the Connecticut Voluntary Corrective Action Program (VCAP).

We evaluated this matter and completed internal due diligence work related to the site in the fourth quarter of 2015.

Remediation activities on the site are ongoing and are recorded as reductions to the accrual as they are incurred.

We have incurred aggregate remediation costs of $ 2.0 million through December 31, 2023, and the accrual for future remediation efforts is $ 0.7 million.

Other Matters

In addition to the above issues, the nature and scope of our business brings us in regular contact with the general public and a variety of businesses and government agencies.

Such activities inherently subject us to the possibility of litigation, including environmental and product liability matters that are defended and handled in the ordinary course of business.

We have established accruals for matters for which management considers a loss to be probable and reasonably estimable.

It is the opinion of management that facts known at the present time do not indicate that such litigation will have a material adverse impact on our results of operations, financial position or cash flows.

Note 13 – Income Taxes

The “Income before income tax expense” line item in the consolidated statements of operations consisted of:

(Dollars in thousands) 2022 2021 2020

Domestic $ 58,390 $ 34,435 $ ( 4,371 )

International 81,990 91,845 72,905

Total $ 140,380 $ 126,280 $ 68,534

The “Income tax expense” line item in the consolidated statements of operations consisted of:

(Dollars in thousands) Current Deferred Total

Domestic $ 26,666 $ ( 18,730 ) $ 7,936

International 17,641 ( 1,826 ) 15,815

Total $ 44,307 $ ( 20,556 ) $ 23,751

Domestic $ 5,155 $ ( 2,938 ) $ 2,217

International 16,187 ( 257 ) 15,930

Total $ 21,342 $ ( 3,195 ) $ 18,147

Domestic $ 5,340 $ ( 11,012 ) $ ( 5,672 )

International 26,610 ( 2,394 ) 24,216

Such activities inherently subject us to the possibility of litigation, including other production liability and environmental matters, commercial disputes, intellectual property matters, personal injury claims, tax claims and employment matters, which are defended and handled in the ordinary course of business.

Although the outcome of no legal matter can be predicted with certainty, it is the opinion of management that facts known at the present time do not indicate that such litigation, either individually or in the aggregate, will have a material adverse effect on our business, results of operations, cash flows or financial position.

Note 11 – Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding.

Diluted earnings per share is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding.

The following table sets forth the computation of basic and diluted earnings per share:

Years Ended December 31,

(Dollars and shares in millions, except per share amounts) 2023 2022 2021

Net income $ 56.6 $ 116.6 $ 108.1

Weighted average shares outstanding - basic 18.6 18.8 18.7

Effect of dilutive shares 0.1 0.2 0.2

Weighted average shares outstanding - diluted 18.7 19.0 18.9

Basic earnings per share $ 3.04 $ 6.21 $ 5.77

Diluted earnings per share $ 3.03 $ 6.15 $ 5.73

Dilutive shares are calculated using the treasury stock method and primarily include unvested restricted stock units.

Anti-dilutive shares are excluded from the calculation of diluted shares and diluted earnings per share.

For 2023, 2022 and 2021, an immaterial number of shares were excluded each year.

Note 12 – Capital Stock and Equity Compensation

Capital Stock

Shares of capital stock reserved for possible future issuance were as follows:

As of December 31,

Shares reserved for issuance under outstanding restricted stock unit awards 248,055 255,310

Deferred compensation to be paid in stock, including deferred stock units 8,100 6,850

Additional shares reserved for issuance under Rogers Corporation 2019 Long-Term Equity Compensation Plan 842,046 914,439

Shares reserved for issuance under the Rogers Corporation Employee Stock Purchase Plan 59,611 59,611

Total 1,157,812 1,236,210

Deferred tax assets and liabilities as of December 31, 2022 and 2021, were comprised of the following:

(Dollars in thousands) 2022 2021

Deferred tax assets

Accrued employee benefits and compensation $ 8,678 $ 10,647

Net operating loss carryforwards 4,433 3,785

Tax credit carryforwards 2,823 13,170

Reserves and accruals 4,716 5,145

Operating leases 4,227 4,191

Capitalized research and development 21,305 16,622

Other 10,205 5,299

Total deferred tax assets 56,387 58,859

Less deferred tax asset valuation allowance ( 2,843 ) ( 9,775 )

Total deferred tax assets, net of valuation allowance 53,544 49,084

Deferred tax liabilities

Depreciation and amortization 14,368 32,669

Postretirement benefit obligations 687 2,071

Unremitted earnings 2,551 2,335

Operating leases 4,618 4,422

Other 4,228 4,367

Total deferred tax liabilities 26,452 45,864

Net deferred tax asset (liability) $ 27,092 $ 3,220

As of December 31, 2022, we had state net operating loss carryforwards totaling $ 7.1 million in various state taxing jurisdictions, which expire between 2023 and 2042, and approximately $ 3.6 million of state research credit carryforwards, which will expire between 2023 and 2040.

We believe that it is more likely than not that the benefit from certain of the state net operating loss and state R&D credits carryforwards will not be realized.

In recognition of this risk, we have provided a valuation allowance of $ 2.8 million relating to these carryforwards.

We currently have approximately $ 4.7 million of foreign tax credits that begin to expire in 2028.

We had a valuation allowance of $ 2.8 million as of December 31, 2022 and $ 9.8 million as of December 31, 2021, against certain of our deferred tax assets, primarily carryforwards expected to expire unused and deferred tax assets that are capital in nature.

No valuation allowance has been provided on our other deferred tax assets, as we believe it is more likely than not that all such assets will be realized in the applicable jurisdictions.

Differences between forecasted and actual future operating results or changes in carryforward periods could adversely impact the amount of deferred tax asset considered realizable.

Income tax expense differs from the amount computed by applying the U.S.

federal statutory income tax rate to income before income taxes.

The reasons for this difference were as follows:

(Dollars in thousands) 2022 2021 2020

Tax expense at Federal statutory income tax rate $ 29,480 $ 26,519 $ 14,392

Impact of foreign operations 1,531 2,020 1,193

Foreign source income, net of tax credits ( 6,461 ) ( 4,944 ) 1,050

State tax, net of federal 6,898 175 ( 313 )

Unrecognized tax benefits 1,921 ( 8,823 ) 5,800

Equity compensation excess tax deductions ( 3,025 ) 262 ( 791 )

General business credits ( 821 ) ( 867 ) ( 931 )

Distribution related foreign taxes 1,504 2,516 2,332

Executive compensation limitation 2,859 1,570 900

Valuation allowance change ( 6,932 ) 525 ( 5,375 )

Disproportionate tax effect of pension settlement charges — — —

Other ( 3,203 ) ( 806 ) 287

Income tax expense (benefit) $ 23,751 $ 18,147 $ 18,544

Our effective income tax rate for 2022 was 16.9 % compared to 14.4 % for 2021.

The 2022 rate increase was primarily due to the impact of the decrease in the reversals of unrecognized tax positions in China.

We did not make any changes in 2022 to our position on the permanent reinvestment of our historical earnings from foreign operations.

With the exception of certain Chinese subsidiaries, we continue to assert that historical foreign earnings are indefinitely reinvested.

As of December 31, 2022 and 2021, we had recorded a deferred tax liability of $ 2.5 million and $ 2.3 million, respectively, for Chinese withholding tax on undistributed earnings that are not indefinitely reinvested.

The other remaining foreign subsidiaries have both the intent and ability to indefinitely reinvest their undistributed earnings and we estimate that, if these undistributed earnings are distributed, they may give rise to an estimated $ 2.1 million of additional tax liabilities.

If circumstances change and it becomes apparent that some, or all of the undistributed earnings as of December 31, 2022 will not be indefinitely reinvested, the provision for the tax consequences, if any, will be recorded in the period when circumstances change.

Distributions out of current and future earnings are permissible to fund discretionary activities such as business acquisitions.

However, when distributions are made, this could result in a higher effective tax rate.

Unrecognized tax benefits, excluding potential interest and penalties, for the years ended December 31, 2022 and 2021, were as follows:

(Dollars in thousands) 2022 2021

Beginning balance as of January 1 $ 6,583 $ 15,688

Gross increases - current period tax positions 3,402 1,046

Gross increases - tax positions in prior periods 237 1,150

Gross decreases - tax positions in prior periods ( 178 ) ( 9,151 )

Foreign currency exchange ( 147 ) ( 10 )

Settlements ( 1,028 ) ( 2,140 )

Ending balance as of December 31 $ 8,869 $ 6,583

Included in the balance of unrecognized tax benefits as of December 31, 2022 were $ 7.8 million of tax benefits that, if recognized, would impact the effective tax rate.

We recognized interest accrued related to unrecognized tax benefit as income tax expense.

Related to the unrecognized tax benefits noted above, as of December 31, 2022 and 2021, we had accrued potential interest and penalties of approximately $ 1.1 million.

We are subject to taxation in the U.S.

and various state and foreign jurisdictions.

Our tax years from 2018 through 2022 are subject to examination by the tax authorities.

With few exceptions, we are no longer subject to U.S.

federal, state, local and foreign examinations by tax authorities for the years before 2018.

Share Repurchases

In 2015, we initiated a share repurchase program (the Program) of up to $ 100.0 million of the Company’s capital stock to mitigate the dilutive effects of stock options exercises and vesting of restricted stock units granted by the Company, in addition to enhancing shareholder value.

The Program has no expiration date and may be suspended or discontinued at any time without notice.

There were no share repurchases in 2023 or 2021.

In 2022, we purchased 237,806 shares for a total value of $ 25.0 million using cash from operations and cash on hand.

As of December 31, 2023, $ 24.0 million remained available to purchase under the Program.

Equity Compensation

Performance-Based Restricted Stock Units

As of December 31, 2023, we had performance-based restricted stock units from 2023 and 2021 outstanding.

These awards generally cliff vest at the end of a three-year measurement period.

Participants are eligible to be awarded shares ranging from 0 % to 200 % of the original award amount, based on certain defined performance measures.

The outstanding awards have one measurement criteria:

the three-year total shareholder return (TSR) on our capital stock as compared to that of a specified group of peer companies.

The TSR measurement criteria of the awards is considered a market condition.

As such, the fair value of this measurement criteria is determined on the grant date using a Monte Carlo simulation valuation model.

We recognize compensation expense on all of these awards on a straight-line basis over the vesting period with no changes for final projected payout of the awards.

We account for forfeitures as they occur.

Below were the assumptions used in the Monte Carlo calculation for each material award granted in 2023 and 2021:

February 9, 2023 February 10, 2021

Expected volatility 53.2 % 51.0 %

Expected term 2.9 years 2.9 years

Risk-free interest rate 4.08 % 0.18 %

Expected volatility – In determining expected volatility, we have considered a number of factors, including historical volatility.

Expected term – We use the vesting period of the award to determine the expected term assumption for the Monte Carlo simulation valuation model.

Risk-free interest rate – We use an implied “spot rate” yield on U.S.

Treasury Constant Maturity rates as of the grant date for our assumption of the risk-free interest rate.

Expected dividend yield – We do not currently pay dividends on our capital stock;

therefore, a dividend yield of 0 % was used in the Monte Carlo simulation valuation model.

A summary of activity of the outstanding performance-based restricted stock units for 2023, 2022 and 2021 is presented below:

2023 2022 2021

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 65,513 $ 201.18 114,554 $ 196.23 111,059 $ 170.84

Awards granted 50,551 241.47 26,819 176.33 41,507 258.17

Stock issued ( 8,775 ) 147.58 ( 60,053 ) 179.72 — —

Awards forfeited ( 33,761 ) 174.43 ( 15,807 ) 204.69 ( 38,012 ) 189.69

Awards outstanding as of December 31 73,528 $ 247.55 65,513 $ 201.18 114,554 $ 196.23

We recognized $ 3.7 million, $ 2.3 million and $ 7.7 million of compensation expense related to performance-based restricted stock units in 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 8.2 million of total unrecognized compensation cost related to unvested performance-based restricted stock units.

That cost is expected to be recognized over a weighted average period of 1.0 year.

Time-Based Restricted Stock Units

As of December 31, 2023, we had time-based restricted stock unit awards from 2023, 2022 and 2021 outstanding.

The outstanding awards all ratably vest on the first, second and third anniversaries of the original grant date.

Each time-based restricted stock unit represents a right to receive one share of the Rogers’ capital stock at the end of the vesting period.

The fair value of the award is determined by the market value of the underlying stock price at the grant date.

We recognize compensation expense on all of these awards on a straight-line basis over the vesting period.

We account for forfeitures as they occur.

A summary of activity of the outstanding time-based restricted stock units for 2023, 2022 and 2021 is presented below:

2023 2022 2021

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 124,284 $ 194.60 96,989 $ 157.49 102,142 $ 120.16

Awards granted 67,734 148.85 96,620 219.60 50,640 180.19

Stock issued ( 62,251 ) 173.52 ( 48,253 ) 183.00 ( 46,329 ) 146.45

Awards forfeited ( 28,768 ) 213.84 ( 21,072 ) 223.90 ( 9,464 ) 146.58

Awards outstanding as of December 31 100,999 $ 171.43 124,284 $ 194.60 96,989 $ 157.49

We recognized $ 9.2 million, $ 8.2 million and $ 7.6 million of compensation expense related to time-based restricted stock units in 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 10.9 million of total unrecognized compensation

cost related to unvested time-based restricted stock units.

That cost is expected to be recognized over a weighted average period of 0.9 years.

Deferred Stock Units

We grant deferred stock units to non-management directors.

Each deferred stock unit results in the issuance of one share of Rogers’ capital stock.

The grant of deferred stock units is typically done annually during the second quarter of each year.

The fair value of the award is determined by the market value of the underlying stock price at the grant date.

A summary of activity of the outstanding deferred stock units for 2023, 2022 and 2021 is presented below:

2023 2022 2021

Awards Outstanding Weighted-

Grant Date Fair Value Awards Outstanding Weighted-

Grant Date Fair Value

Awards outstanding as of January 1 6,850 $ 232.51 9,500 $ 173.82 12,450 $ 113.96

Awards granted 8,100 161.90 4,800 272.12 6,450 188.60

Stock issued ( 6,850 ) 232.51 ( 7,450 ) 183.20 ( 9,400 ) 104.68

Awards outstanding as of December 31 8,100 $ 161.9 6,850 $ 232.51 9,500 $ 173.82

We recognized $ 1.3 million, $ 1.3 million and $ 1.2 million of compensation expense related to deferred stock units in 2023, 2022 and 2021, respectively.

Note 13 – Operating Segment and Geographic Information

Our reporting structure is comprised of the following strategic operating segments:

The remaining operations, which represent our non-core businesses, are reported in the Other operating segment.

Our remaining operations, which represent our non-core businesses, are reported in the Other operating segment.

We believe this structure aligns our external reporting presentation with how we currently manage and view our business internally.

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inter-segment sales have been eliminated from the net sales data:

(Dollars in thousands) Advanced Electronics Solutions Elastomeric Material Solutions Other Total

(Dollars in millions) Advanced Electronics Solutions Elastomeric Material Solutions Other Total

December 31, 2023

2 unchanged sentences

Total net sales $ 509.7 $ 379.0 $ 19.7 $ 908.4

Operating income (loss) $ 77,163 $ 60,351 $ 6,918 $ 144,432

Operating income $ 2.6 $ 76.1 $ 6.6 $ 85.3

Total assets $ 762.8 $ 742.0 $ 12.4 $ 1,517.2

7 unchanged sentences

Total net sales $ 530.2 $ 420.0 $ 21.0 $ 971.2

Operating income (loss) $ 50,198 $ 60,051 $ 6,933 $ 117,182

Operating income $ 77.1 $ 60.4 $ 6.9 $ 144.4

Total assets $ 854.2 $ 778.7 $ 13.3 $ 1,646.2

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The following table presents net sales by our operating segment operations by geographic area for the years indicated:

(Dollars in thousands) Net Sales (1)

(Dollars in millions) Net Sales (1)

Region/Country Advanced Electronics Solutions Elastomeric Material Solutions Other Total

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The table above lists individual countries with 10% or more of net sales for the periods indicated.

Contract Assets

We had contract assets primarily related to unbilled revenue for revenue recognized related to products that are deemed to have no alternative use whereby we have the right to payment.

Revenue is recognized in advance of billing to the customer in these circumstances as billing is typically performed at the time of shipment to the customer.

The unbilled revenue is included in the contract assets on the consolidated statements of financial position.

The unbilled revenue is included in the “Contract assets” financial statement line item in the consolidated statements of financial position.

Our contract assets by operating segment were as follows:

As of December 31,

(Dollars in thousands) 2022 2021

(Dollars in millions) 2023 2022

Advanced Electronics Solutions $ 41.4 $ 33.8

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We did not have any contract liabilities as of December 31, 2023 or 2022.

No impairment losses were recognized in 2022, 2021 or 2020 on any receivables or contract assets arising from our contracts with customers.

No impairment losses were recognized in 2023, 2022 or 2021 on any contract assets arising from our contracts with customers.

Long-Lived Assets by Geographic Area

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As of December 31,

(Dollars in thousands) 2022 2021

(Dollars in millions) 2023 2022

United States $ 384.1 $ 401.2

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(1) Long-lived assets are based on the location of the asset and are comprised of goodwill, other intangible assets, property, plant and equipment and right-of-use assets.

Countries with 10% of more of long-lived assets have been disclosed.

Countries with 10% or more of long-lived assets have been disclosed.

Note 14 – Supplemental Financial Information

Restructuring and Impairment Charges

The components of “Restructuring and impairment charges” line item in the condensed consolidated statements of operations, were as follows:

The components of the “Restructuring and impairment charges” line item in the consolidated statements of operations were as follows:

Years Ended December 31,

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Restructuring charges

Global workforce reduction $ 8.8 $ — $ —

Facility consolidations 8.1 0.4 —

Manufacturing footprint optimization — 1.1 3.1

footprint consolidation 363 — —

Restructuring charges 1,477 3,115 12,348

Total restructuring charges 16.9 1.5 3.1

Impairment charges

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Other impairment charges — 17.9 —

Impairment charges 65,085 455 639

Total impairment charges — 65.1 0.5

Total restructuring and impairment charges $ 16.9 $ 66.6 $ 3.6

Restructuring Charges - Manufacturing Footprint Optimization

During the third quarter of 2020, we commenced manufacturing footprint optimization plans involving certain Europe and Asia manufacturing locations, primarily impacting our AES operating segment, in order to achieve greater cost competitiveness as well as align capacity with end market demand.

The majority of the restructuring activities were completed in the first half of 2021.

We incurred restructuring charges and related expenses of $ 1.1 million and $ 3.1 million in 2022 and 2021.

Severance and related benefits activity related to the manufacturing footprint optimization plan is presented in the table below for the year ended December 31, 2022:

(Dollars in thousands) Manufacturing Footprint Optimization Restructuring Severance and Related Benefits

Restructuring Charges - Global Workforce Reduction

On February 16, 2023, we announced a plan to reduce our global workforce that was substantially completed in the first half of 2023, and concluded in the fourth quarter of 2023.

The plan significantly reduced our manufacturing costs and operating expenses.

We incurred $ 8.8 million in pre-tax restructuring charges related to this plan, all of which was in the form of cash-based expenditures and substantially all of which were related to employee severance and other termination benefits.

(Dollars in millions) Global Workforce Reduction Restructuring Severance and Related Benefits

Balance as of December 31, 2022 $ —

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Balance as of December 31, 2023

Restructuring Charges - Facility Consolidations

In late 2022 and early 2023, we announced our intention to exit certain facilities in the U.S.

The plan significantly reduced our manufacturing costs and operating expenses.

We incurred $ 8.1 million in pre-tax restructuring charges related to these facility consolidations, most of which were in the form of accelerated depreciation.

As part of our facility consolidations plan, on February 17, 2023, we entered into an asset purchase agreement to sell our high-performance engineered cellular elastomer business in our EMS operating segment for a purchase price of $ 1.8 million, which was completed in early September 2023.

The assets primarily comprised of the property, plant and equipment, including the facility, accounts receivable, contract assets and inventories, net, while the liabilities were primarily comprised of accounts payable and other accrued liabilities, along with the previously recognized accrual against the net assets of the business based on the estimated fair value of the business in December 2022.

We incurred $ 1.2 million of selling costs in 2023, which were recorded in the “Selling, general and administrative expenses” line item in the consolidated statements of operations.

Further, on September 22, 2023, we completed the sale of one of our Suzhou, China facilities, which had a carrying value of $ 3.0 million, for $ 6.8 million, resulting in a pre-tax gain of $ 1.9 million, inclusive of selling and disposal costs.

The sale was completed in December 2023.

The net impact of this transaction was recorded in the “Other operating (income) expense, net” line item in the consolidated statements of operations.

As of December 31, 2023, we recognized $ 13.1 million of assets held for sale within the “Other current assets” financial statement line item of our consolidated statements of financial position.

This includes $ 13.1 million for land and building at our Price Road facility in Chandler, Arizona.

Restructuring Charges - Manufacturing Footprint Optimization

The majority of the restructuring activities were completed in the first half of 2021.

We incurred restructuring charges and related expenses of $ 1.1 million and $ 3.1 million in 2022 and 2021, respectively.

Impairment Charges

We recognized $ 65.1 million, $ 0.5 million and $ 0.6 million of impairment charges in 2022, 2021 and 2020, respectively.

We recognized $ 65.1 million and $ 0.5 million of impairment charges in 2022 and 2021, respectively.

The impairment charges in 2022 primarily related to certain AES operating segment equipment-in-process in the U.S.

as well as certain EMS operating segment intangibles and fixed assets related to our high-performance engineered cellular elastomer business in the U.S.

The impairment charges in 2021 and 2020 were both primarily related to AES operating segment fixed assets in Belgium.

as well as certain EMS operating segment intangible assets and fixed assets related to our high-performance engineered cellular elastomer business in the U.S.

The impairment of the equipment-in-process in our AES operating segment was triggered by our decision in November 2022 to exit the Price Road facility in Arizona.

The impairment of certain intangibles and fixed assets related to our high-performance engineered cellular elastomer business in our EMS operating segment was triggered upon committing to a plan in late 2022 to divest ourselves of this business by early 2023 and the subsequent fair valuing of assets and liabilities.

In addition to the impairment charges, we recognized an additional $ 2.6 million accrual against the remaining net assets of the business based on the estimated fair value of the business.

As the high-performance engineered cellular elastomer business met the criteria of held for sale accounting as of December 31, 2022, the remaining $ 4.6 million in assets and $ 3.3 million in liabilities were designated as assets held for sale and liabilities held for sale, respectively, which are captured in the “Other current assets” and “Other accrued liabilities” financial statement line items of our Statements of Financial Position.

The assets are primarily comprised of accounts receivables, contract assets and inventories, while the liabilities are primarily comprised of accounts payables and other accrued liabilities.

On February 17, 2023 we entered into an asset purchase agreement to sell our high-performance engineered cellular elastomer business for a net purchase price of $ 1.8 million.

The business disposition is scheduled to be completed in early March.

The impairment charges in 2021 were primarily related to AES operating segment fixed assets in Belgium.

Allocation of Restructuring and Impairment Charges to Operating Segments

1 unchanged sentence

Years Ended December 31,

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Advanced Electronics Solutions

5 unchanged sentences

Total restructuring and impairment charges $ 16.9 $ 66.6 $ 3.6

Subsequent Event - Restructuring Charges

On February 16, 2023, we announced a reduction in force plan of our global workforce that is expected to be completed in the first half of 2023.

The plan is expected to significantly reduce our manufacturing costs and operating expenses, and are being done in conjunction with other previously announced cost reduction initiatives.

We estimate that we will incur approximately $ 10 million to $ 13 million in pre-tax restructuring charges related to this plan, all of which are expected to be in the form of cash-based expenditures and substantially all of which are expected to be related to employee severance and other termination benefits.

Other Operating (Income) Expense, Net

The components of “Other operating (income) expense, net” were as follows:

The components of the “Other operating (income) expense, net” line item in the consolidated statements of operations were as follows:

Years Ended December 31,

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Fixed assets write-offs $ — $ — $ 1.1

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Loss (gain) on sale or disposal of property, plant and equipment ( 2.6 ) 0.5 ( 0.9 )

Economic incentive grants — — ( 145 )

Total other operating (income) expense, net $ ( 33.1 ) $ ( 144.0 ) $ 5.3

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Commercial production at our new location in Siheung, South Korea commenced in late-January 2023.

In 2023, in connection with the UTIS fire, we recognized insurance recoveries of $ 31.4 million related to our business interruption and property damage insurance claims and incurred $ 0.9 million for various professional services.

In 2022, in connection with the UTIS fire, we recognized insurance recoveries of $ 6.6 million related to our ongoing insurance claim for property damage and compensation and benefits of hourly employees, incurred $ 1.4 million for various professional services and incurred $ 2.4 million for compensation and benefits for UTIS manufacturing employees subsequent to the fire.

5 unchanged sentences

Interest Expense, Net

The components of “Interest expense, net” were as follows:

The components of the “Interest expense, net” line item in the consolidated statements of operations were as follows:

Years Ended December 31,

(Dollars in thousands) 2022 2021 2020

(Dollars in millions) 2023 2022 2021

Interest on revolving credit facility $ 9.6 $ 9.0 $ 0.9

Interest rate swap settlements — — 3,191

Line of credit fees 0.8 0.5 1.1

Debt issuance amortization costs 0.7 0.7 0.7

Interest on finance leases 23 287 134

Interest income ( 1.2 ) ( 0.7 ) ( 0.5 )

1 unchanged sentence

Total interest expense, net $ 10.1 $ 9.5 $ 2.5

Note 15 – Income Taxes

The “Income before income tax expense” line item in the consolidated statements of operations consisted of:

(Dollars in millions) 2023 2022 2021

Domestic $ 9.1 $ 58.4 $ 34.4

Foreign 67.2 82.0 91.9

Total $ 76.3 $ 140.4 $ 126.3

The “Income tax expense” line item in the consolidated statements of operations consisted of:

(Dollars in millions) Current Deferred Total

Domestic $ 0.4 $ ( 0.6 ) $ ( 0.2 )

Foreign 22.9 ( 3.0 ) 19.9

Total $ 23.3 $ ( 3.6 ) $ 19.7

Domestic $ 26.8 $ ( 18.8 ) $ 8.0

Foreign 17.6 ( 1.8 ) 15.8

Total $ 44.4 $ ( 20.6 ) $ 23.8

Domestic $ 5.2 $ ( 2.9 ) $ 2.3

Foreign 16.2 ( 0.3 ) 15.9

Total $ 21.4 $ ( 3.2 ) $ 18.2

Deferred tax assets and liabilities as of December 31, 2023 and 2022, were comprised of the following:

(Dollars in millions) 2023 2022

Deferred tax assets

Accrued employee benefits and compensation $ 7.7 $ 8.7

Net operating loss carryforwards 11.8 4.4

Tax credit carryforwards 6.7 2.8

Reserves and accruals 5.7 4.7

Operating leases 3.6 4.2

Capitalized research and development 25.6 21.3

Other 6.9 10.2

Total deferred tax assets 68.0 56.3

Less deferred tax asset valuation allowance ( 11.4 ) ( 2.8 )

Total deferred tax assets, net of valuation allowance 56.6 53.5

Deferred tax liabilities

Depreciation and amortization 17.7 14.4

Postretirement benefit obligations 0.7 0.7

Unremitted earnings 1.5 2.6

Operating leases 4.1 4.6

Other 5.8 4.2

Total deferred tax liabilities 29.8 26.5

Net deferred tax asset (liability) $ 26.8 $ 27.0

As of December 31, 2023, we had state net operating loss carryforwards totaling $ 8.1 million in various state taxing jurisdictions, which expire between 2024 and 2043, and approximately $ 3.6 million of state research credit carryforwards, which will expire between 2024 and 2040.

We also had a $ 0.8 million federal research and development (R&D) credit carryforward that will expire in 2043.

We believe that it is more likely than not that the benefit from certain of the state net operating loss and state R&D credits carryforwards will not be realized.

In recognition of this risk, we have provided a valuation allowance of $ 1.5 million relating to these carryforwards.

We currently have approximately $ 3.1 million of foreign tax credits that begin to expire in 2028.

As of December 31, 2023, we had foreign net operating loss carryforwards totaling $ 52.7 million.

Luxembourg losses totaled $ 31.4 million, of which $ 3.9 million will expire between 2034 and 2039, and the rest will be carried forward indefinitely.

We believe it is more likely than not that these losses will expire unused, and have provided a valuation allowance for all Luxembourg net operating loss carryforwards.

China losses totaled $ 14.7 million, which expire between 2024 and 2028.

We believe it is more likely than not that these losses will expire unused, and have provided a valuation allowance for all China net operating loss carryforwards.

Korea losses totaled $ 6.6 million, which expire between 2036 and 2038.

We had a valuation allowance of $ 11.4 million as of December 31, 2023 and $ 2.8 million as of December 31, 2022, against certain of our deferred tax assets, primarily carryforwards expected to expire unused and deferred tax assets that are capital in nature.

No valuation allowance has been provided on our other deferred tax assets, as we believe it is more likely than not that all such assets will be realized in the applicable jurisdictions.

Differences between forecasted and actual future operating results or changes in carryforward periods could adversely impact the amount of deferred tax asset considered realizable.

Income tax expense differs from the amount computed by applying the U.S.

federal statutory income tax rate to income before income taxes.

The reasons for this difference were as follows:

(Dollars in millions) 2023 2022 2021

Tax expense at Federal statutory income tax rate $ 16.0 $ 29.5 $ 26.5

Impact of foreign operations 4.0 1.5 2.0

Foreign source income, net of tax credits ( 2.3 ) ( 6.5 ) ( 4.9 )

State tax, net of federal ( 0.5 ) 6.9 0.2

Deferred tax adjustment 1.2 — —

Unrecognized tax benefits ( 0.2 ) 1.9 ( 8.8 )

Equity compensation excess tax deductions 0.3 ( 3.0 ) 0.3

General business credits ( 2.4 ) ( 0.8 ) ( 0.9 )

Distribution related foreign taxes 1.1 1.5 2.5

Executive compensation limitation 0.9 2.9 1.6

Valuation allowance change 0.7 ( 6.9 ) 0.5

Other 0.9 ( 3.2 ) ( 0.8 )

Income tax expense $ 19.7 $ 23.8 $ 18.2

Our effective income tax rate for 2023 was 25.8 % compared to 16.9 % for 2022.

The 2023 rate increase was primarily due to the impact of the 2022 valuation allowance releases not recurring in 2023.

We did not make any changes in 2023 to our position on the permanent reinvestment of our historical earnings from foreign operations.

With the exception of certain Chinese subsidiaries, we continue to assert that historical foreign earnings are indefinitely reinvested.

As of December 31, 2023 and 2022, we had recorded a deferred tax liability of $ 1.5 million and $ 2.5 million, respectively, for Chinese withholding tax on undistributed earnings that are not indefinitely reinvested.

If circumstances change and it becomes apparent that some, or all of the undistributed earnings as of December 31, 2023 will not be indefinitely reinvested, the provision for the tax consequences, if any, will be recorded in the period when circumstances change.

Distributions out of current and future earnings are permissible to fund discretionary activities such as business acquisitions.

However, when distributions are made, this could result in a higher effective tax rate.

Unrecognized tax benefits, excluding potential interest and penalties, for the years ended December 31, 2023 and 2022, were as follows:

(Dollars in millions) 2023 2022 2021

Beginning balance as of January 1 $ 8.9 $ 6.6 $ 15.7

Gross increases - current period tax positions 1.1 3.4 1.0

Gross increases - tax positions in prior periods — 0.2 1.2

Gross decreases - tax positions in prior periods ( 0.5 ) ( 0.2 ) ( 9.2 )

Foreign currency exchange 0.1 ( 0.1 ) —

Settlements 0.1 ( 1.0 ) ( 2.1 )

Lapse of statue of limitations $ ( 1.2 ) $ — $ —

Ending balance as of December 31 $ 8.5 $ 8.9 $ 6.6

Included in the balance of unrecognized tax benefits as of December 31, 2023 were $ 6.9 million of tax benefits that, if recognized, would impact the effective tax rate.

We recognized interest accrued related to unrecognized tax benefit as income tax expense.

Related to the unrecognized tax benefits noted above, as of December 31, 2023 and 2022, we had accrued potential interest and penalties of approximately $ 1.4 million and $ 1.1 million, respectively.

We are subject to taxation in the U.S.

and various state and foreign jurisdictions.

Our tax years from 2019 through 2023 are subject to examination by the tax authorities.

With few exceptions, we are no longer subject to U.S.

federal, state, local and foreign examinations by tax authorities for the years before 2019.

Note 16 – Mergers and Acquisitions

Acquisition of Silicone Engineering Ltd.

On October 8, 2021, we acquired Silicone Engineering Ltd.

(Silicone Engineering), a leading European manufacturer of silicone material solutions based in Blackburn, England, for a combined purchase price of $ 172.3 million for the company, net of cash acquired, and its facility.

As part of the agreement, there is a $ 4.1 million holdback, upon which we can issue claims against until six months after the close of the acquisition, at which point in time the holdback amount, less any holdback claims, is paid to the previous owners of Silicone Engineering.

On October 8, 2021, we acquired Silicone Engineering, a leading European manufacturer of silicone material solutions based in Blackburn, England, for a combined purchase price of $ 172.3 million for the company, net of cash acquired, and its facility.

As part of the agreement, there was a $ 4.1 million holdback, upon which we could issue claims against until six months after the close of the acquisition, at which point in time the holdback amount, less any holdback claims, was to be paid to the previous owners of Silicone Engineering.

In April 2022, we paid $ 1.3 million of the holdback in exchange for a 6-month extension of the holdback period.

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Substantially all of our $ 190.0 million in borrowings under our existing credit facility in October 2021 were used to fund the transaction, with the remaining amounts being used for general corporate purposes.

Silicone Engineering expands our existing advanced silicones platform in our EMS operating segment and provides us a European Center of Excellence to service customers requiring premium silicone solutions for applications in the EV/HEV, industrial, medical and other markets.

The acquisition has been accounted for in accordance with applicable purchase accounting guidance.

We recorded goodwill primarily related to the expected synergies from combining operations and the value of Silicone Engineering’s workforce, which is expected to be deductible for tax purposes.

We also recorded other intangible assets related to the acquired customer relationships, developed technology, trademarks and trade names and covenants not to compete.

The following table represents the fair values assigned to the acquired assets and liabilities assumed in the transaction.

As of the filing date of this Form 10-K, the purchase accounting and purchase price allocation for the Silicone Engineering transaction have been completed.

(Dollars in thousands) October 8, 2021

Accounts receivable $ 6,721

Other current assets 1,516

Inventories 1,787

Property, plant and equipment 9,840

Goodwill 107,231

Other intangible assets 73,628

Other long-term assets 850

Total assets 201,573

Accounts payable 3,933

Accrued income taxes payable 1,383

Other accrued liabilities 2,102

Non-current income tax 1,444

Deferred income taxes 20,039

Other long-term liabilities 393

Total liabilities 29,294

Fair value of net assets acquired $ 172,279

The other intangible assets consist of customer relationships valued at $ 48.9 million, developed technology valued at $ 9.2 million, trademarks and trade names valued at $ 13.6 million, a covenant not to compete valued at $ 1.4 million and an order backlog valued at $ 0.5 million.

The fair value of acquired identified other intangible assets was determined by applying the income approach, using several significant unobservable inputs for projected cash flows as well as a customer attrition rate and a discount rate.

These inputs are considered Level 3 under the fair value measurements and disclosure guidance.

At the acquisition date, the weighted average amortization period for the other intangible asset classes was 9.5 years for customer relationships, 3.9 years for developed technology, 11.6 years for trademarks and trade names, 1.6 years for the covenant not to compete and 0.1 years for the order backlog, resulting in amortization expenses ranging from $ 2.8 million to $ 5.2 million annually.

The estimated annual future amortization expense is $ 5.2 million for 2022, $ 4.7 million for 2023, $ 4.6 million for 2024, $ 4.3 million for 2025, and $ 4.2 million for 2026.

In 2022 and 2021, we incurred transaction costs of $ 0.8 million and $ 3.9 million, respectively related to the Silicone Engineering acquisition, which were recorded within selling, general and administrative (SG&A) expenses in the consolidated statements of operations.

The results of Silicone Engineering have been included in our consolidated financial statements for the period subsequent to the completion of the acquisition on October 8, 2021, through December 31, 2021.

Silicone Engineering’s net sales for that period totaled $ 8.3 million.

Silicone Engineering has expanded our existing advanced silicones platform in our EMS operating segment and provides us a European Center of Excellence to service customers requiring premium silicone solutions for applications in the EV/HEV, industrial, medical and other markets.

Pro-Forma Financial Information

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For the Years Ended December 31,

(Dollars in thousands) 2021 2020

(Dollars in millions) 2021

Net sales $ 973.2

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Terminated Merger Agreement with DuPont

On November 1, 2021, we entered into a definitive merger agreement to be acquired by DuPont de Nemours, Inc.

(DuPont) in an all-cash transaction at a price of $ 277.00 per share of the Company’s capital stock.

The merger agreement provided for the acquisition of Rogers Corporation by DuPont through the merger of Cardinalis Merger Sub, Inc., a wholly owned subsidiary of DuPont, with and into Rogers Corporation, with Rogers Corporation surviving the merger as a wholly owned subsidiary of DuPont.

Company shareholders approved the merger agreement at a special shareholder meeting held on January 25, 2022.

The merger agreement provided both Rogers Corporation and DuPont with a right to terminate the merger agreement if the merger had not closed on or before November 1, 2022.

Consummation of the merger was subject to various customary closing conditions, including regulatory approval by the State Administration for Market Regulation of China (SAMR).

As of November 1, 2022, the parties had not received regulatory approval from SAMR.

On November 1, 2022, the Company received from DuPont a notice of termination of the merger agreement.

Pursuant to the terms of the merger agreement, the Company received a regulatory termination fee from DuPont in the amount of $ 162.5 million, before taxes, and incurred a transaction-related fee of $ 20.4 million.

(Dollars in thousands) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

On November 1, 2021, we entered into a definitive merger agreement to be acquired by DuPont in an all-cash transaction.

Our shareholders approved the merger agreement at a special shareholder meeting held on January 25, 2022.

Consummation of the merger was subject to various customary closing conditions, including regulatory approval by the SAMR, and either party had the right to terminate the merger agreement if the merger had not closed on or before November 1, 2022.

As of November 1, 2022, the parties had not received regulatory approval from SAMR and on that date, DuPont issued a notice of termination of the merger agreement.

Pursuant to the terms of the merger agreement, we received a regulatory termination fee in the amount of $ 162.5 million, before taxes, and incurred a transaction-related fee of $ 20.4 million.

Note 17 - Recent Accounting Standards

Recently Issued Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU 2023-07 enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures.

This amendment will improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Adoption of the standard requires using the retrospective approach.

We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements and accompanying notes.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This update also includes certain other amendments to improve the effectiveness of income tax disclosures.

The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

Adoption of the standard should be applied on a prospective basis and retrospective application to all periods presented is permitted.

We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements and accompanying notes.

(Dollars in millions) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

Allowance for Credit Losses

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December 31, 2021 $ 1.7 $ 0.4 $ ( 0.2 ) $ ( 0.7 ) $ 1.2

(Dollars in thousands) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

(Dollars in millions) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

Inventory E&O Reserves

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December 31, 2021 $ 22.4 $ 8.4 $ ( 7.4 ) $ ( 7.0 ) $ 16.4

(Dollars in thousands) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

(Dollars in millions) Balance at Beginning of Period Charged to (Reduction of) Costs and Expenses Taken Against Allowance Other (Deductions) Recoveries Balance at End of Period

Valuation on Allowance for Deferred Tax Assets

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What changed 10-K

Item 8. Financial Statements and Supplementary Data